Pidilite Industries Ltd. — AGM Information 2021

Jul 15, 2021

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15[th] July, 2021

The Secretary The Secretary BSE Ltd. National Stock Exchange of India Ltd. Corporate Relationship Dept., Exchange Plaza, Plot no. C/1, G Block, 14[th] floor, P. J. Tower, Bandra-Kurla Complex, Dalal Street, Fort Bandra (E), Mumbai - 400 001 Mumbai - 400 051 Stock Code – 500331 Stock Code - PIDILITIND

Sub: Revised Annual Report

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Dear Sir/ Madam,

Further to our letter dated 14[th] July, 2021, we have noted that inadvertently in the Annual Report for the Financial Year 2020-21 uploaded on the website of the Stock Exchange, page numbers 146-159 were placed after Page Number 79.

We have corrected this and are enclosing the revised Annual Report for FY 2020-21 alongwith Notice. Request you to kindly take the same on record.

This is for your information and records.

Thanking You,

Yours faithfully,

For Pidilite Industries Limited

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Puneet Bansal Company Secretary

Encl as above

CIN : L24100MH1969PLC014336

Pidilite Industries Limited

Registered Office: Regent Chambers, 7[th] Floor, Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai 400 021.

Notice

Notes:

NOTICE is hereby given that the 52[nd] ANNUAL GENERAL MEETING of the Members of the Company will be held on Wednesday, 11[th] August 2021 at 3.00 p.m. IST through Video Conferencing (“VC”)/Other Audio Visual Means (“OAVM”), to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt:

2. a. the audited standalone financial statements of the Company for the financial year ended 31[st] March 2021 together with the reports of Board of Directors and the Auditors’ thereon; and

3. b. the audited consolidated financial statements of the Company for the financial year ended 31[st] March 2021 together with the report of the Auditors’ thereon.

4. To declare Dividend on equity shares.

5. To appoint a Director in place of Shri A N Parekh (DIN:00111366), who retires by rotation and being eligible, offers himself for re-appointment.

6. To appoint a Director in place of Shri Debabrata Gupta (DIN:01500784), who retires by rotation and being eligible, offers himself for re-appointment.

SPECIAL BUSINESS:

1. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions, if any, of the Companies Act, 2013 (the Act) and the Companies (Appointment and Qualification of Directors) Rules, 2014 and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment thereof for the time being in force), and pursuant to the recommendation of the Nomination and Remuneration Committee, Shri Rajeev Vasudeva (DIN:02066480), who was appointed as an Additional Director (Independent) of the Company in terms of Section 161 of the Act by the Board of Directors with effect from 10[th] September 2020 and who holds office upto the date of this Annual General Meeting (AGM) and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Act proposing his candidature for the office of a Director, and being eligible, be and is hereby appointed as an Independent Director of the Company to hold office for 5 consecutive years upto 9[th] September 2025 and he shall not be liable to retire by rotation.”

“RESOLVED FURTHER THAT the Board of Directors and/or the Company Secretary be and are hereby authorised to do all such acts, deeds and things as may be necessary, expedient and desirable for the purpose of giving effect to this resolution.”

• 6 To consider and, if thought fit, to pass, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions, if any, of the Companies Act,

2013 (the Act) and the Companies (Appointment and Qualification of Directors) Rules, 2014 and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s), or re-enactment thereof for the time being in force) and pursuant to the recommendation by Nomination and Remuneration Committee, Shri Vinod Dasari (DIN: 00345657), who was appointed as an Independent Director of the Company for five consecutive years from 47[th] Annual General Meeting (AGM) upto the conclusion of 52[nd] AGM and in respect of whom the Company has received a notice in writing under Section 160 of the Act from a member proposing his candidature for the office of a Director, and being eligible, be and is hereby re-appointed as an Independent Director of the Company to hold office for a second term commencing from the conclusion of 52[nd] AGM upto 31[st] August 2025 and he shall not be liable to retire by rotation.”

“RESOLVED FURTHER THAT the Board of Directors and/or the Company Secretary be and are hereby authorised to do all such acts, deeds and things as may be necessary, expedient and desirable for the purpose of giving effect to this resolution.”

1. To consider and if thought fit, to pass, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), the Cost Auditors M/s. V J Talati & Co., Cost Accountants, (Registration No. 00213) appointed by the Board of Directors of the Company, on the recommendation of Audit Committee, to conduct the audit of the cost records of the Company for the financial year ending 31[st] March 2022, be paid the remuneration as set out in the explanatory statement annexed to the Notice convening this meeting and the same is hereby ratified and approved.”

“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all such acts, deeds, matters and things and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

BY ORDER OF THE BOARD OF DIRECTORS

Place : Mumbai PUNEET BANSAL Date : 12[th] May 2021 COMPANY SECRETARY

Registered Office: Regent Chambers, 7[th] floor,

Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai 400 021.

Tel : 91 22 2835 7000 Fax : 91 22 2821 6007 E-mail : investor.relations@pidilite.co.in Website : www.pidilite.com

CIN : L24100MH1969PLC014336

1. In view of the continuing COVID-19 pandemic, the on the Company’s website www.pidilite.com, websites Ministry of Corporate Affairs (the MCA) has, vide its of the Stock Exchanges i.e. BSE Limited and National circular dated 13[th] January 2021 and Securities and Stock Exchange of India Limited at www.bseindia.com Exchange Board of India (the SEBI) has, vide its circular and www.nseindia.com respectively and on the website dated 15[th] January 2021 permitted the holding of the of NSDL htps://www.evoting.nsdl.com Annual General Meeting (AGM/Meeting) through 10. Members attending the AGM through VC/OAVM shall Video Conferencing (“VC”) or other Audio Visual be counted for the purpose of reckoning the quorum Means (“OAVM”), without the physical presence of the under Section 103 of the Act. Members at a common venue. In compliance with the provisions of the Companies Act, 2013 (“Act”), SEBI 11. In accordance with the provisions of Regulation 36(3) of SEBI Listing Regulations and applicable

(Listing Obligations and Disclosure Requirements) provisions of Secretarial Standard- 2, a brief profile

Regulations, 2015 (“SEBI Listing Regulations”) and of Shri A N Parekh, Shri Debabrata Gupta,

MCA Circulars, the 52[nd] Annual General Meeting (the Shri Rajeev Vasudeva and Shri Vinod Dasari, nature

AGM) of the Company is being held through VC/OAVM. The deemed venue for the AGM shall be the Registered of their expertise in specific functional areas, names Office of the Company. of companies in which they hold directorships and

1. In accordance with the provisions of Regulation 36(3) of SEBI Listing Regulations and applicable provisions of Secretarial Standard- 2, a brief profile of Shri A N Parekh, Shri Debabrata Gupta, Shri Rajeev Vasudeva and Shri Vinod Dasari, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships/ chairmanships of committees of directors, their shareholding and relationships between directors inter se and other information, is set out and the same forms part of this Notice.

2. Since this AGM is being held pursuant to the MCA Circulars through VC/OAVM, physical attendance of Members has been dispensed with. Accordingly, the facility for appointment of proxies by the Members will not be available for the AGM and hence the Proxy Form and Attendance Slip are not annexed to this Notice.

3. The Register of Members and Share Transfer Books of the Company will be closed from Thursday, 29[th] July 2021 to Wednesday, 11[th] August 2021 (both days inclusive) for the purpose of payment of dividend on equity shares and the AGM. The Record date will be Wednesday, 28[th] July 2021 for determining entitlement of members for payment of dividend for the financial year ended 31[st] March 2021.

4. Corporate members are requested to send to the Company a scanned copy (PDF/JPG Format) certified copy of the Board Resolution/Authorisation authorizing their representative to attend and vote on their behalf through remote evoting at investor.relations@pidilite.co.in. The said Resolution/ Authorisation shall also be sent to the Scrutinizer by email through its registered email address to shethmm_cs@yahoo.co.in with a copy marked to evoting@nsdl.co.in

5. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are required to submit their PAN as well as bank details to their Depository Participants and Members holding shares in physical form shall submit their PAN as well as bank details to the Company/ TSR Darashaw Consultants Private Limited, the Company’s Registrar & Share Transfer Agents (Company’s R & T Agents).

6. In case of joint holders attending the AGM, only such joint holder who is higher in the order of names will be entitled to vote.

7. A statement pursuant to Section 102(1) of the Act, setting out all material facts relating to item nos. 5 to 7 of the Notice is annexed herewith and the same should be taken as part of this Notice.

8. As per Regulation 40 of the SEBI Listing Regulations, as amended, securities of listed companies can be transferred only in dematerialized form w.e.f 1[st] April 2019, except in case of request received for transmission or transposition of securities. In view of this and to eliminate all risks associated with physical shares and for ease of portfolio management, members holding shares in physical form are requested to consider converting their holdings to dematerialized form. Members can contact the Company or Company’s R & T Agents for assistance in this regard.

9. Notes given in the Notice to the extent applicable also forms part of the Explanatory Statement.

10. Members seeking any information with regard to the accounts, inspection of documents or any matter to be placed at the AGM, are requested to write to the Company on or before 31[st] July 2021 through email on queries_documents@pidilite.com. The same will be replied by the Company suitably.

11. The Members are requested to inform of changes, if any, pertaining to their name, postal address, email address, telephone/ mobile numbers, PAN, mandates, nominations, power of attorney, bank details such as, name of the bank and branch details, bank account number, MICR code, IFSC, etc., immediately to:

12. Since the AGM will be held through VC/OAVM, the Route Map of the venue of AGM is not annexed to this Notice.

13. In compliance with the aforesaid MCA Circulars and SEBI Circular dated 15[th] January 2021, Notice of the AGM along with the Annual Report 2020-21 is being sent only through electronic mode to those Members whose email addresses are registered with the Company/ Depositories. Members may note that the Notice and Annual Report 2020-21 will also be available

14. (i) Company’s R & T Agents in case of shares held in Physical Form; or

15. (ii) Depository Participants (DP) in case of shares held in Electronic Form.

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1. To prevent fraudulent transactions, Members are advised to exercise due diligence and notify the Company of any change in address or demise of any member as soon as possible. Periodic statement of holdings should be obtained from the concerned DP and holdings should be verified.

2. Members can avail nomination facility in terms of extant legal provisions in this regard. On request, the necessary Form SH-13 can be obtained from the Company’s R & T Agents.

3. To support the ‘Green Initiative’, Members who have not yet registered their email addresses are requested to register the same with their DPs in case the shares are held by them in electronic form and with Company’s R & T Agents in case the shares are held by them in physical form.

4. Shareholders may note that the Income Tax Act, 1961, as amended by the Finance Act, 2020, mandates that dividends paid or distributed by a Company after 1[st] April 2020 shall be taxable in the hands of the shareholders. The Company shall therefore be required to deduct Tax at Source (TDS) at the time of making the final dividend. In order to enable us to determine the appropriate TDS rate as applicable, Members are requested to submit the documents in accordance with the provisions of the Income Tax Act, 1961.

5. A) For Resident Shareholders, TDS shall be made under Section 194 of the Income Tax Act, 1961 at 10% (Ten percent) on the amount of Dividend declared and paid by the Company during financial year 2021-22 provided PAN is registered by the Shareholder. If PAN is not registered, TDS would be deducted @ 20% (Twenty percent) as per Section 206AA of the Income Tax Act, 1961. However, no tax shall be deducted on the Dividend payable to a Resident Individual if the total dividend to be received by them during financial year 2021-22 does not exceed 5,000/-. In cases where the shareholder provides Form 15G (applicable to any person other than a Company or a Firm or HUF)/Form 15H (applicable to an Individual above the age of 60 years), provided that the eligibility conditions are being met, no TDS shall be deducted.

6. B) For Non-resident Shareholders, taxes are required to be withheld in accordance with the provisions of Section 195 of the Income Tax Act, 1961 at the rates in force. As per the relevant provisions of the Income Tax Act, 1961, the withholding tax shall be at the rate of 20% (Twenty percent) (plus applicable surcharge and cess) on the amount of Dividend payable to them. However, as per Section 90 of the Income Tax Act, 1961, the non-resident shareholder has the option to be governed by the provisions of the Double Tax Avoidance Agreement (DTAA) between India and the country of tax residence of the shareholder, if they are more beneficial to them. For this purpose, i.e. to avail the Tax Treaty benefits, the non-resident shareholder will have to provide the following:.

   • Self-attested copy of Tax Residency Certificate (TRC) obtained from the tax authorities of the country of which the Shareholder is resident.

7. Self declaration in Form 10F if all the details required in this form are not mentioned in the TRC.

8. Self-attested copy of the PAN Card allotted by the Indian Income Tax authorities.

9. Self-declaration certifying the following points:

   • i. Member is and will continue to remain a tax resident of the country of its residence during the financial year 2021-22;

   • ii. Member is eligible to claim the beneficial DTAA rate for the purposes of tax withholding on dividend declared by the Company;

   • iii. Member has no reason to believe that its claim for the benefits of the DTAA is impaired in any manner;

   • iv. Member is the ultimate beneficial owner of its shareholding in the Company and Dividend receivable from the Company; and

   • v. Member does not have a taxable presence or a permanent establishment in India during the financial year 2021-22.

10. C) Please note that the Company is not obligated to apply the beneficial DTAA rates at the time of tax deduction/withholding on dividend amounts. Application of beneficial DTAA rate shall depend upon the completeness and satisfactory review by the Company of the documents submitted by Non-Resident shareholder.

11. D) Accordingly, in order to enable us to determine the appropriate TDS/withholding tax rate applicable, we request you to provide these details and documents as mentioned above before 25[th] July 2021.

12. E) Kindly note that the aforementioned documents are required to be submitted at htps://tcpl.linkintime. co.in/formsreg/submission-of-form-15g-15h.html on or before 25[th] July 2021 in order to enable the Company to determine and deduct appropriate TDS/withholding tax rate. No communication on the tax determination/deduction shall be entertained post 25[th] July 2021. It may be further noted that in case the tax on said dividend is deducted at a higher rate in absence of receipt of the aforementioned details/ documents from you, there would still be an option available with you to file the return of income and claim an appropriate refund, if eligible.

13. F) The soft copy of TDS certificate shall be emailed to you at your registered e-mail ID in accordance with the provisions of the Income Tax Act, 1961 after filing of the quarterly TDS Returns of the Company, post payment of the said Dividend.

14. G) Separate email communication was sent to the shareholders on Thursday, 1[st] July 2021, informing the said change in Income Tax Act, 1961 as well as relevant procedure to be adopted by the shareholders for availing the applicable tax rate.

15. A. Pursuant to Section 205A of the Companies Act,1956 all unclaimed /unpaid dividend upto the financial year ended 31[st] March 1994 have been transferred to the General Revenue Account of the Central Government. Those Members who have so far not claimed their dividends for the said periods may claim the same by submitting an application in the prescribed form to the Registrar of Companies, Maharashtra.

16. B. The Company has transferred unclaimed/unpaid dividend (including the Interim Dividend declared during the Financial year 2001-2002) in respect of Financial Years ended 31[st] March 1995 to 31[st] March 2013 to the Investor Education and Protection Fund (IEPF).

17. C. Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules’), both of which were made applicable with effect from 7[th] September 2016, also contain similar provisions for transfer of such amounts to IEPF. Accordingly, all unclaimed/ unpaid dividend, as well as the principal redemption amount of preference shares, as applicable, remaining unclaimed/unpaid for a period of seven years from the date they became due for payment, in relation to the Company, have been transferred to the IEPF established by the Central Government. No claim shall be entertained against the Company for the amounts so transferred.

18. D. As per Section 124(6) of the Act read with the IEPF Rules as amended, all the shares in respect of which dividend has remained unpaid/unclaimed for seven consecutive years or more as referred to in the said section read with the relevant Rules, have been transferred to the IEPF Demat Account.

19. E. The Company has sent notice to all the Members whose dividends for the financial year ending 31[st] March 2014 are lying unpaid/unclaimed against their name. Members are requested to claim the same. As mentioned in the said notice, in case the dividends are not claimed by 30[th] July 2021, necessary steps will be initiated by the Company to transfer the shares and dividend held by the concerned Members to IEPF, without further notice. Please note that no claim shall lie against the Company in respect of the shares so transferred to IEPF.

20. F. In the event of transfer of shares and the unclaimed dividends to IEPF, Members are entitled to claim the same from IEPF by submitting an online application in the prescribed Form IEPF-5 available on the website www.iepf.gov.in and sending a physical copy of the same duly signed to the Company along with the requisite documents enumerated in the Form IEPF-5.

21. G. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 10[th] September 2020 (date of last AGM) on the website of the Company (www.pidilite.com) and also on the Ministry of Corporate Affairs website.

22. Members who have not yet encashed their Dividend Warrants for the years ended 31[st] March 2014 to 31[st ] March 2020 are requested to contact the R & T Agents, M/s. TSR Darashaw Consultants Private Ltd., Unit: Pidilite Industries Limited, C-101, 1[st] Floor, 247 Park, Lal Bahadur Shastri Marg, Vikhroli (West), Mumbai 400 083.

23. In March 2008, some of the members of Vinyl Chemicals (India) Limited (VCIL) were allotted 6% Secured Redeemable Preference Shares of 10/- each (Preference Shares) by the Company pursuant to the Scheme of Demerger of VAM Manufacturing Unit of VCIL into the Company. The said Preference Shares were redeemed on 5[th] September 2008 and the Company had despatched Preference Dividend-cum-Redemption Warrants to all Preference Shareholders without surrender of the Preference Share Certificates. The unclaimed preference shares redemption amount and the dividend pertaining to the same have been transferred to IEPF and hence no claim shall lie in respect thereof against the Company.

22. Voting through electronic means

• I. In compliance with provisions of Section 108 of the Act and Rules issued thereunder and Regulation 44 of SEBI Listing Regulations, Members are provided with the facility to cast their vote by electronic means through the remote e-voting platform as well as e-voting on the date of AGM has been provided by National Securities Depository Limited (NSDL) on all resolutions set out in this Notice. Resolutions passed by the Members through e-voting is/are deemed to have been passed, as if they have been passed at the AGM.

• II. The Members who have casted their vote by remote e-voting prior to the AGM may also attend/ participate in the AGM through VC/OAVM but shall not be entitled to cast their vote again.

• III. The details of the process and manner for remote e-voting are explained herein below:

Step 1: Access to NSDL e-voting

• A. Login method for e-Voting and joining virtual meeting for Individual shareholders holding securities in demat mode

In terms of SEBI circular dated 9[th] December 2020 on e-Voting facility provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Depositories and Depository Participants. Shareholders are advised to update their mobile number and email Id in their demat accounts in order to access e-Voting facility.

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Login method for Individual shareholders holding securities in demat mode is given below

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Type of shareholders Login Method
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Type of shareholders	Login Method	Login Method	Login Method
Individual Shareholders holding securities in demat mode with NSDL	1. 2. 3.		Existing IDeAS user can visit the e-Services website of NSDL viz htps://eservices.nsdl.com either on a Personal Computer or on a mobile. On the e-Services home page click on the “Benefcial Owner” icon under “Login” which is available under ‘IDeAS’ section, this will prompt you to enter your existing User ID and Password. Afer successful authentication, you will be able to see e-Voting services under Value added services. Click on “Access to e-Voting” under e-Voting services and you will be able to see e-Voting page. Click on company name or e-Voting service provider name and you will be re-directed to e-Voting service provider website for casting your vote during the remote e-Voting period or joining virtual meeting & voting during the meeting. If you are not registered for IDeAS e-Services, option to register is available athtps://eservices.nsdl. com.Select “Register Online for IDeAS Portal” or click athtps://eservices.nsdl.com/SecureWeb/ IdeasDirectReg.jsp Visit the e-Voting website of NSDL. Open web browser by typing the following URL:htps://www. evoting.nsdl.com/ either on a Personal Computer or on a mobile. Once the home page of e-Voting system is launched, click on the icon “Login” which is available under ‘Shareholder/Member’ section. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password/OTP and a Verifcation Code as shown on the screen. Afer successful authentication, you will be redirected to NSDL Depository site wherein you can see e-Voting page. Click on company name or e-Voting service provider name and you will be redirected to e-Voting service provider website for casting your vote during the remote e-Voting period or joining virtual meeting & voting during the meeting.
	4.		Shareholders/Members can also download NSDL Mobile App “NSDL Speede” facility by scanning the QR code mentioned below for seamless voting experience. NSDL Mobile App is available on
Individual Shareholders holding securities in demat mode with CDSL	1 2. 3.		Existing users who have opted for Easi/Easiest, can login through their user id and password. Option will be made available to reach e-Voting page without any further authentication. The URL for users to login to Easi/Easiest ishtps://web.cdslindia.com/myeasi/home/login or www.cdslindia. com and click on New System Myeasi. Afer successful login of Easi/Easiest the user will also be able to see the e-Voting Menu. The Menu will have links of ESP i.e. NSDL portal. Click on NSDL to cast your vote. If the user is not registered for Easi/Easiest, option to register is available athtps://web.cdslindia. com/myeasi/Registration/EasiRegistration.Alternatively, the user can directly access e-Voting page by providing demat account number and PAN from a link in www.cdslindia.com home page. The system will authenticate the user by sending OTP on registered Mobile and e-mail as recorded in the demat account. Afer successful authentication, user will be provided links for the respective ESP i.e. NSDL where the e-Voting is in progress.
Individual Shareholders (holding securities in demat mode) login through their depository participants	1. 2. 3.		You can also login using the login credentials of your demat account through your Depository Participant registered with NSDL for e-Voting facility. Upon logging in, you will be able to see e-Voting option. Click on e-Voting option, you will be redirected to NSDL Depository site afer successful authentication, wherein you can see e-Voting feature. Click on company name or e-Voting service provider name and you will be redirected to e-Voting service provider website for casting your vote during the remote e-Voting period or joining virtual meeting & voting during the meeting.

Note: Members who are unable to retrieve User ID/Password are advised to use Forgot User ID and Forgot Password option available at respective websites

• B. Login Method for e-Voting and joining virtual meeting shareholders other than Individual shareholders holding securities in demat mode and shareholders holding securities in physical mode.

How to Login to NSDL e-voting website?

• i. Step 1 - Visit the e-Voting website of NSDL. Open web browser by typing the following URL: htps://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile.

• ii. Once the home page of e-Voting system is launched, click on the icon “Login” which is available under ‘Shareholder/ Member’ section.

• iii. A new screen will open. You will have to enter your User ID, your Password and a Verification Code as shown on the screen.

Alternatively, if you are registered for NSDL eservices i.e. IDEAS, you can log-in at htps://eservices.nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL eservices after using your log-in credentials, click on e-Voting and you can proceed to Step 2 i.e. Cast your vote electronically.

• iv. Your User ID details are given below:

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Manner of holding Your User ID is:
shares i.e. Demat
(NSDL or CDSL) or
Physical
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Manner of holding shares i.e. Demat (NSDL or CDSL) or Physical	Manner of holding shares i.e. Demat (NSDL or CDSL) or Physical	Your User ID is:
a.	For Members who hold shares in demat account with NSDL.	8 Character DP ID followed by 8 Digit Client ID For example if your DP ID is IN300 and Client ID is 12 then your user ID is IN30012**
b.	For Members who hold shares in demat account with CDSL.	16 Digit Benefciary ID For example if your Benefciary ID is 12** then your user ID is 12**
c.	For Members holding shares in Physical Form.	EVEN Number followed by Folio Number registered with the company For example if folio number is 001 and EVEN is 101456 then user ID is 101456001

• v. Your password details are given below:

• a) If you are already registered for e-Voting, then you can use your existing password to login and cast your vote.

• b) If you are using NSDL e-Voting system for the first time, you will need to retrieve the ‘initial password’ which was communicated to you. Once you retrieve your ‘initial password’, you need to enter the ‘initial password’ and the system will force you to change your password.

• c) How to retrieve your ‘initial password’?

  • (i) If your email ID is registered in your demat account or with the Company, your ‘initial password’ is communicated to you on your email ID. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e. a .pdf file. Open the .pdf file. The password to open the .pdf file is your 8 digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your ‘User ID’ and your ‘initial password’.

  • (ii) If your email ID is not registered, please follow instructions mentioned below in this notice.

• vi. If you are unable to retrieve or have not received the “initial password” or have forgotten your password:

• a) Click on “Forgot User Details/Password?” (If you are holding shares in your demat account with NSDL or CDSL) option available on www. evoting.nsdl.com.

• b) “Physical User Reset Password?” (If you are holding shares in physical mode) option available on www.evoting.nsdl.com.

• c) If you are still unable to get the password by aforesaid two options, you can send a request at evoting@nsdl.co.in mentioning your demat account number/folio number, your PAN, your name and your registered address.

• d) Members can also use the one-time password (OTP) based login for casting the votes on the e-Voting system of NSDL.

• vii. After entering your password, tick on Agree to “Terms and Conditions” by selecting on the check box.

viii. Now, you will have to click on “Login” button.

• ix. After you click on the “Login” button, Home page of e-Voting will open.

• Step 2: Cast your vote electronically on NSDL e-Voting system

• i. After successful login at Step 1, you will be able to see the Home page of e-Voting. Click on e-Voting. Then, click on Active Voting Cycles.

• ii. After click on Active Voting Cycles, you will be able to see all the companies “EVEN” in which you are holding shares and whose voting cycle is in active status.

• iii. Select “EVEN” of the Company.

• iv. Now you are ready for e-Voting as the Voting page opens.

• v. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of shares for which you wish to cast your vote and click on “Submit” and also “Confirm” when prompted.

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• vi. Upon confirmation, the message “Vote cast successfully” will be displayed.

• The details of the person who may be contacted for any grievances connected with the facility for e-Voting on the day of the AGM shall be the same person mentioned for Remote e-voting.

• vii. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page.

General Guidelines for shareholders

• viii. Once you confirm your vote on the resolution, you will not be allowed to modify your vote.

• i. Institutional shareholders (i.e. other than individuals,

• will not be allowed to modify your vote. HUF, NRI etc.) are required to send scanned copy

• Process for registration of email id for obtaining Annual (PDF/JPG Format) of the relevant Board Resolution/ Report and updation of bank account mandate for receipt of Authority letter etc. with attested specimen signature dividend of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer by e-mail to

• Physical Holding Send a signed letter to the Company’s R shethmm_cs@yahoo.co.in with a copy marked to & T Agents providing Folio No., name of evoting@nsdl.co.in.

• Physical Holding Send a signed letter to the Company’s R & T Agents providing Folio No., name of shareholder along with copy of PAN (self attested) and email-id details for registering email address.

• ii. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the “Forgot User Details/Password?” or “Physical User Reset Password?” option available on www.evoting.nsdl.com to reset the password.

• For updating bank account mandate, hard copies of the following documents are to be sent to R & T Agents:

• a. Signed letter mentioning your Name, Folio Number, complete address and following details relating to Bank Account in which the dividend is to be received:

• iii. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Shareholders and e-voting user manual for Shareholders available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800 1020 990 /1800 224 430 or send a request at evoting@nsdl.co.in.

• i) Name and Branch of Bank and Bank Account type;

• ii) Bank Account Number allotted by your Bank after implementation of Core Banking Solutions and;

  • iv. Any person, holding shares in physical form and non-individual shareholders who acquires shares of the Company and becomes member of the Company after dispatch of the notice and holding shares as of the cutoff date i.e. 4[th] August 2021, may obtain the login ID and password by sending a request at evoting@nsdl.co.in or Issuer/RTA. However, if you are already registered with NSDL for remote e-voting, then you can use your existing user ID and password for casting your vote. If you forgot your password, you can reset your password by using “Forgot User Details/Password” or “Physical User Reset Password” option available on www.evoting.nsdl.com or call on toll free

• iii) 11 digit IFSC Code.

• b. Cancelled cheque in original bearing the name of the Member or first holder, in case shares are held jointly;

• c. Self-attested copy of the PAN Card and; d. Self-attested copy of any document (viz. Aadhar Card, Driving License, Election Identity Card, Passport) for address verification of the Member as registered with the Company/ R & T Agents.

no. 1800 1020 990 and 1800 22 44 30. In case of

Individual Shareholders holding securities in demat mode who acquires shares of the Company and becomes a Member of the Company after sending of the Notice and holding shares as of the cut-off date i.e. 4[th] August 2021 may follow steps mentioned in the Notice of the AGM under “Access to NSDL e-Voting system”.

Demat Holding Please contact your Depository Participant (DP) and register your email address and bank account details in your demat account, as per the process advised by your DP.

THE INSTRUCTIONS FOR MEMBERS FOR e-VOTING ON THE DAY OF THE AGM ARE AS UNDER:-

• v. The remote e-voting period shall commence on Sunday, 8[th] August 2021 at 9.00 a.m. and would end on Tuesday, 10[th] August 2021 at 5.00 p.m. During this period, shareholders of the Company, holding shares either in physical form or in dematerialized form as on 4[th] August 2021 (cut-off date) may cast their vote electronically. The remote e-voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution is casted by the Shareholder, the shareholder shall not be allowed to change/modify it subsequently or cast the vote again.

• The procedure for e-Voting on the day of the AGM remains same as the instructions mentioned above for remote e-voting.

• Only those Members/ shareholders, who will be present in the AGM through VC/OAVM facility and have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system in the AGM.

• vi. The voting rights of Shareholders shall be in proportion to the share in the paid up equity share capital of the Company as on 4[th] August 2021, the cut off date. Any person who is not a Member as on the cut-off date should treat this Notice for information purposes only.

INSTRUCTIONS FOR MEMBERS FOR ATTENDING THE AGM THROUGH VC / OAVM ARE AS UNDER:

• A. Member will be provided with a facility to attend the AGM through VC/OAVM through the NSDL e-Voting system. Members may access by following the steps mentioned above for Access to NSDL e-Voting system. After successful login, you can see link of “VC/OAVM link” placed under “Join General meeting” menu against company name. You are requested to click on VC/OAVM link placed under Join General Meeting menu. The link for VC/OAVM will be available in Shareholder/Member login where the EVEN of Company will be displayed. Please note that the members who do not have the User ID and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by following the remote e-Voting instructions mentioned in the notice to avoid last minute rush.

• B. Members who do not have the User ID and Password for e-voting or have forgotten the User ID and Password may retrieve the same by following the remote e-voting instructions mentioned in the Notice. Further Members can also use the OTP based login for logging into the e-voting system of NSDL.

• C. Facility of joining the AGM through VC / OAVM shall open 30 minutes before the time scheduled for the AGM and will be available for Members on first come first served basis.

• D. Members are advised to join the Meeting using stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches and disturbance during the meeting.

• E. Members who need assistance before or during the AGM, can contact NSDL on evoting@nsdl.co.in/ 1800 1020 990 /1800 224 430 or contact Mr. Amit Vishal, Senior Manager – NSDL or Ms. Soni Singh at evoting@nsdl.co.in or call at 1800 1020 990 / 1800 224 430

• F. Members who would like to express their views or ask questions during the AGM may register themselves as a speaker by sending their request from their registered email address mentioning their name, DP ID and Client ID/folio number, PAN, mobile number at queries_documents@pidilite.com from 5[th] August 2021 to 7[th] August 2021. Those Members who have registered themselves as a speaker will only be allowed to express their views/ask questions during the AGM. The Company reserves the right to restrict the number of speakers and number of questions depending on the availability of time for the AGM.

• Shri M M Sheth, Practising Company Secretary (Membership No. FCS 1455 CP No.729) or failing him, Smt. Ami M Sheth (Membership No. ACS 24127 CP No. 13976) have been appointed as the ‘Scrutinizer’ to scrutinize remote e-voting process and also e-voting at the AGM in a fair and transparent manner.

• The Scrutinizer shall immediately after the conclusion of voting at the AGM, first scrutinise the votes cast at the AGM, thereafter unlock the votes cast through remote e-voting and shall make not later than 48 hours of conclusion of the Meeting, a consolidated Scrutiniser’s Report of the total votes cast in favour or against, if any, to the Chairman or a person authorised by him in writing who shall countersign the same.

• The Results alongwith the Scrutinizer’s Report shall be placed on the Company’s website www.pidilite.com and on the website of NSDL within 48 hours of conclusion of the 52[nd] AGM of the Company and communicated to BSE Limited and National Stock Exchange of India Limited.

8

Explanatory Statement

Pursuant to Section 102 of the Companies Act, 2013 (the ‘Act’)

Item No. 5

Pursuant to the provisions of Section 161(1) of the Act and the Articles of Association of the Company, the Board of Directors (the Board) has appointed Shri Rajeev Vasudeva (DIN: 02066480) as an Additional Director (Independent) of the Company with effect from 10[th] September 2020 who holds office upto the date of the ensuing Annual General Meeting.

Shri Vasudeva is not disqualified from being appointed as a Director in terms of Section 164 of the Act and has given his consent to act as a Director.

The Nomination and Remuneration Committee has recommended the appointment of Shri Vasudeva as an Independent Director for a period of five consecutive years.

The Company has received a declaration from Shri Vasudeva stating that he meets with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act including under Rule 6(3) of Companies (Appointment and Qualifications of Directors) Rules, 2014 for inclusion of his name in Independent Director’s Database and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). Shri Vasudeva is independent of the management and possesses appropriate skills, experience and knowledge, inter alia, in the field of leadership and governance, business and senior management, finance and accounts, legal and regulatory framework. Brief profile of Shri Vasudeva as stipulated under Regulation 36(3) of the Listing Regulations is given as an annexure to this Notice.

In the opinion of the Board, Shri Vasudeva fulfills the conditions for his appointment as an Independent Director as specified in the Act and the Listing Regulations.

Keeping in view his expertise and vast knowledge, it will be in the interest of the Company to appoint Shri Vasudeva as an Independent Director, not liable to retire by rotation.

Shri Vasudeva shall be paid remuneration by way of fee for attending meetings of the Board or Committees thereof or for any other purpose whatsoever as may be decided by the Board, reimbursement of expenses for participating in the Board and other meetings and profit related commission within the limits stipulated under Section 197 of the Act. Copy of the draft letter of appointment of Shri Vasudeva as an Independent Director setting out the terms and conditions is available for inspection by the Members through electronic mode, on the basis of request being sent

on queries_documents@pidilite.com.

Except Shri Vasudeva, none of the other Directors, Key Managerial Personnel of the Company and their relatives are concerned or interested (financially or otherwise), in this resolution.

This statement may also be regarded as an appropriate disclosure under the Act and the Listing Regulations.

The Board recommends the Ordinary Resolution, as set out in Item No.5 of the Notice, for approval by the Members.

Item No. 6

Shri Vinod Dasari (DIN: 00345657) was appointed as an Independent Director of the Company and he holds office as an Independent Director upto the conclusion of 52[nd] AGM.

Shri Dasari has been associated with the Company since 2015. Considering the expertise and rich experience of Shri Dasari and his valuable contributions to the Company, the Nomination and Remuneration Committee and the Board, have recommended the re-appointment of Shri Vinod Dasari as an Independent Director for a second term from the conclusion of the 52[nd] AGM upto 31[st] August 2025.

The Board, based on the performance evaluation and as per the recommendation of the Nomination and Remuneration Committee, considers that, given his background, experience and contributions made by him during his tenure, the continued association of Shri Dasari would be beneficial to the Company and it is desirable to continue to avail his services as an Independent Director. Accordingly, it is proposed to re-appoint Shri Vinod Dasari as an Independent Director of the Company, not liable to retire by rotation, for a second term commencing from the conclusion of 52[nd] AGM upto 31[st] August 2025.

Shri Dasari is not disqualified from being appointed as a Director in terms of Section 164 of the Act and has given his consent to act as a Director. The Company has also received declaration from Shri Dasari stating that he meets the criteria of independence as prescribed under Section 149(6) of the Act including under Rule 6(3) of Companies (Appointment and Qualifications of Directors) Rules, 2014 for inclusion of his name in Independent Director’s Database and the Listing Regulations. Shri Dasari is independent of the management and possesses appropriate skills, experience and knowledge, inter alia, in the field of sales and marketing, business and senior management, leadership and governance, finance and accounts, legal and regulatory framework. Brief profile of Shri Dasari as stipulated under Regulation 36(3) of the Listing Regulations is given as an annexure to this Notice.

In the opinion of the Board, Shri Dasari fulfils the conditions for appointment as an Independent Director as specified in the Act and the Listing Regulations.

Shri Dasari shall be paid remuneration by way of fee for attending meetings of the Board or Committees thereof or for any other purpose whatsoever as may be decided by the Board, reimbursement of expenses for participating in the Board and other meetings and profit related commission within the limits stipulated under Section 197 of the Act. Copy of draft letter of appointment of Shri Dasari setting out the terms and conditions of appointment is available for inspection by the Members through electronic mode, on the basis of request being sent on queries_documents@pidilite.com.

Except Shri Dasari, none of the other Directors, Key Managerial Personnel of the Company and their relatives are, in any way, concerned or interested (financially or otherwise) in this resolution.

This statement may also be regarded as an appropriate disclosure under the Act and the Listing Regulations.

The Board recommends the Special Resolution, as set out in Item No. 6 of the Notice, for approval by the Members.

Item No. 7

The Board, on the recommendation of Audit Committee, has approved the appointment and remuneration of an amount not exceeding 1,73,500/- (Rupees One Lakh Seventy Three Thousand Five Hundred Only), plus applicable taxes, for the financial year ending 31[St] March 2022 payable to the Cost Auditor M/s. V J Talati & Co., Cost Accountants to conduct the audit of the cost records of the Company for the aforesaid financial year. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor, as recommended by the Audit Committee and approved by the Board, has to be ratified by the Members of the Company.

The Board recommends the Ordinary Resolution, as set out in Item No. 7 of the Notice, for approval by the Members. None of the Directors, Key Managerial Personnel of the Company and their relatives are in any way concerned or interested (financially or otherwise) in this resolution.

BY ORDER OF THE BOARD OF DIRECTORS

Place : Mumbai PUNEET BANSAL Date : 12[th] May 2021 COMPANY SECRETARY Registered Office: Regent Chambers, 7[th] floor, Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai 400 021. Tel : 91 22 2835 7000 Fax : 91 22 2821 6007 E-mail : investor.relations@pidilite.co.in Website : www.pidilite.com CIN : L24100MH1969PLC014336

10

Additional information on Directors seeking election at the Annual General Meeting

[under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]:

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----- Start of picture text -----

Resolution/Item No 3 4 5 6
Name of Director Shri A N Parekh Shri Debabrata Gupta Shri Rajeev Vasudeva Shri Vinod Dasari
Age 49 years 58 years 61 years 54 years
Date of first 1 [st] July 2005 1 [st] March 2020 10 [th] September 2020 1 [st] September 2015
appointment
on the Board
Qualification B. S. Chem. Engg. Alumni of IIT Chartered Accountant, Graduate Engineer from
(USA) Kharagpur LLB and MBA University of Louisville, USA,
from University of Masters Degree in Business
Michigan, Ann Arbo. Administration from J.L.
Kellogg School of Management,
USA and a Masters Degree
in Engineering Management
from McCormick School of
Engineering, USA
Experience For details, please For details, please For details, For details, please refer to the
(including refer to the Corporate refer to the Corporate please refer to Explanatory statement to the
expertise in specific Governance Report Governance Report the Explanatory AGM Notice.
functional area)/ statement to the
Brief Resume AGM Notice.
Terms and Whole-time Director Whole-time Director Independent Independent Director
Conditions of liable to retire by designated as Director for term of 5 for second term up to
appointment/ rotation Director-Operations consecutive years up 31 [st] August 2025
re-appointment liable to retire by to 9 [th] September 2025
rotation
Remuneration last For details, please refer to the Corporate Governance Report
drawn
(FY 2020-21)
Remuneration As approved by the As approved by the As per Remuneration As per Remuneration
proposed to be paid members at the members at the Policy Policy
Annual General Annual General
meeting held on meeting held on
10 [th] September 2020 10 [th] September 2020
Other Companies 1. Nina Percept Pvt. None 1. Centum Learning 1. Eicher Motors Limited
in which he Ltd. (Deemed Public Limited 2. Lynks Logistics Limited
is a Director Company)
excluding Section 2. Pidilite Adhesives
8 companies and Pvt Ltd
Private Companies (Deemed Public
Company)
Chairperson/ For details, please refer to the Corporate Governance Report
Membership of
the Statutory
Committee(s) of
Board of Directors
of the Company
----- End of picture text -----

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----- Start of picture text -----

Resolution/Item No 3 4 5 6
Name of Director Shri A N Parekh Shri Debabrata Gupta Shri Rajeev Vasudeva Shri Vinod Dasari
Chairperson/ 1. Nina Percept Pvt None None None
Membership of Ltd
the Committee(s) Member of
of Other Boards Committees:
excluding Section • Audit Committee
8 companies and
Private Companies • Nomination &
Remuneration
Committee
2. Pidilite Adhesives
Pvt Ltd
Member of Committee:
• Corporate Social
Responsibility
Committee
Number of For details, please refer to the Corporate Governance Report.
Meetings of the
Board attended
during the year
Shareholding in the 30,76,918 NIL 670 NIL
Company as on 31 [st] Equity Shares Equity Shares
March 2021
Relationship with Related to None None None
other Directors, Shri N K Parekh,
Manager or Director of the
Key Managerial Company
Personnel, if any
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12

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annual report 202021

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It is easy enough to be pleasant, when life flows along like a song;

But the man worth while is the one who will smile when everything goes dead wrong

Ella Wheeler Wilcox

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We are all trying to cope with challenging circumstances for some time now. Many of us and our loved ones have been physically and mentally impacted. Despair and anxiety are normal when faced with such adversity.

Over generations, philosophers and poets have pondered over such situations and given wise advice on how to face such circumstances with patience, fortitude and courage. Messages given by some of the well-respected poets through their poems are captured in this Report.

These messages are intended to make us beter prepared to face these difficult circumstances. With determination we can overcome these challenges and build a beter future for all of us.

M. B. Parekh

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Invictus

Out of the night that covers me, Black as the pit from pole to pole, I thank whatever gods may be For my unconquerable soul.

In the fell clutch of circumstance I have not winced nor cried aloud. Under the bludgeonings of chance My head is bloody, but unbowed.

It maters not how strait the gate, How charged with punishments the scroll, I am the master of my fate, I am the captain of my soul.

William Ernest Henley

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I am master of my fate, I am captain of my soul

एक �नमर्ल स्रोत से तृ�ा बुझाना कब मना है? है अ�धेरी रात पर दीपक जलाना कब मना है?

�कसी उजड़े हुए को �फर बसाना कब मना है? है अ�धेरी रात पर दीपक जलाना कब मना है?

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ह�रवंश राय ब�न

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Kab mana hai: Who could stop you

Who could stop you from quenching thirst in a crystal-clear brook? Who could stop you from lighting a lamp in night’s darkest nook?

All is perhaps razed to ground, who stops you from building anew? Who could stop you from lighting a lamp in night’s darkest nook?

Achal: Unmoved

खड़ा �हमालय बता रहा है डरो न आंधी पानी म�। खड़े रहो तुम अ�वचल होकर सब संकट तूफानी म�।

अचल रहा जो अपने पथ पर लाख मुसीबत आने म�‚ �मली सफलता जग म� उस को जीने म� मर जाने म�।

सोहनलाल �द्वेदी

Standing tall, the Himalayas tell you not to fear floods and gales. Firm you stay, ever unmoved by the fury of barrages and hails.

Steadily he who is walking on his way, in midst of million woes, In life, in death, o doubtless, towards triumph truly he goes.

Sohanlal Dvivedi

Harivansh Rai Bachchan

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गाणं जग�ाचं

मरण येणार �णून कोणी जगायचं थांबतं का? जीव जडून प्रेम कोणी करायचं थांबतं का?

कशासाठी भयाने ग्रासून जायचं? फुलाय�ा प्र�ेक �णी नासून जायचं?

सुकून जाणार �णून फूल फुलायचं थांबतं का? मरण येणार �णून कोणी जगायचं थांबतं का? जीव जडून प्रेम कोणी करायचं थांबतं का?

मंगेश पाडगावकर

A song of living

Because death will come some day Should we stop living now? Should we stop loving with all our heart Oh pray, do tell me how?

Why surround ourselves with fears And dampen every smile with tears?

Because it will shrivel some day Should the flower stop blooming now? Because death will come some day Should we stop living now?

Should we stop loving with all our heart Oh pray, do tell me how?

Mangesh Padgaonkar

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Gana Jaganyaacha: A song of living

company information

board of directors

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table of contents
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09 10 16 20 Company Marketing Key Performance Management Information Initiatives Indicators Discussion & Analysis 28 32 42 58 10 Years' Financial Directors' Social & Annexures to Performance Report Community Directors' Report Service Initiatives

71 78 84 146 Business Auditor's Standalone Corporate Responsibility Report Financial Governance Report Report Statements & Compliance Certificates

157 160 Information for Consolidated Shareholders Financial Statements

M B Parekh

Executive Chairman N K Parekh Vice Chairman Bharat Puri Managing Director

A B Parekh

Whole Time Director

A N Parekh

Whole Time Director

corporate office

Ramkrishna Mandir Road Off Mathuradas Vasanji Road Andheri (E), Mumbai 400 059

registered office

Regent Chambers 7[th] Floor, Jamnalal Bajaj Marg 208, Nariman Point Mumbai 400 021

registrar &

transfer agent

TSR Darashaw Consultants Private Limited C 101, 1[st] Floor, 247 Park,

• L.B.S. Marg, Vikhroli (West) Mumbai – 400 083

Debabrata Gupta Vinod Dasari Whole Time Director Director

B S Mehta Director

Piyush Pandey Director

Sanjeev Aga Director

Rajeev Vasudeva Director (w.e.f 10.09.2020)

Uday Khanna Director

Meera Shankar Director

company secretary Puneet Bansal

solicitors & advocates Wadia Ghandy & Co

chief financial officer

bankers

Indian Overseas Bank Corporation Bank ICICI Bank HDFC Bank Citibank N A Standard Chartered Bank PLC.

Pradip Kumar Menon

internal auditors

Mahajan & Aibara

auditors

Deloitte Haskins & Sells LLP

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9

marketing initiatives

New campaigns were rolled out for Dr. Fixit, Fevikwik and Fevicol that carried on the task of developing the categories and creating new segments. In these challenging times of pandemic, our digital marketing initiatives, in the form of videos and posts on social media, forged deeper emotional connect with both consumers and end-users. These digital and TV campaigns won many prestigious awards for Fevicol, Fevikwik and Roff across many categories.

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advertising & communication

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A new television campaign featuring Mr. Amitabh Bachchan was aired to communicate the importance of using Dr.Fixit URP on Roof while constructing a new home.

Another television campaign was aired in Karnataka and Kerala to communicate the advantages of Dr.Fixit Roofseal Topcoat with ‘nanofibre’ formulation, over ordinary paints.

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Fevicol launched a 360° campaign ‘Yakshagana’ in the markets of Karnataka and Hyderabad. The campaign, based on a local art form of North Karnataka, is a humorous take on how using local glue is not the same as using Fevicol.

11

digital communication & initiatives

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Fevikwik through its quirkyrhyming social media posts and an Instagram meme campaign created awareness around the theme ‘Phenko Nahin, Jodo’. It also conducted a unique online contest called ‘Fevikwik Stars’ celebrating people who tend to break things and then repair them. Families were asked to share their stories about repairing objects and nominate family members to be ‘Fevikwik Stars’.

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Fevicol continued its efforts of building brand love with younger consumers by engaging through topical and quirky digital content, throughout the year, on social media. Also, Fevicol used its digital content to educate masses on Covid appropriate behaviour & social distancing in a typical Fevicol way. These creatives were shared widely by people on social media and whatsapp.

Fevicyl ‘Art Shaala’ online

classrooms for art hobbyists and professionals, with differentiated content, were organised through its social media assets. With over 20 masterclasses for advanced hobbyists and 37 open workshops for new hobbyists, these workshops led to the increase of Instagram page followers by 65%.

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new initiatives

Fevicryl planned a series of topical digital campaigns like #ArtFromHome,

• MaskItWithStyle

• PourYourArtOut

RangBharoTyoharoMein for consumers and budding hobbyists. Each of these campaigns was supported by digital media, influencer marketing, and contests. With this series of topical initiatives, the brand garnered a 10% engagement rate on its social media handles.

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Fevicryl #MyHappyWall

campaign was launched in Cochin and Tamil Nadu to motivate the consumers to paint their walls using the Fevicryl Colours and bring cheer to their homes. This Integrated Marketing Campaign was promoted through print, social media, website, trade contest, on-ground activation, and influencer marketing. In addition, two unique digital assets were created – DIY e-Book – a step-bystep guide providing hobbyists with DIY tutorials on wall art and Wall Talk – a 3-minute talk show inviting Hobbyists to share their wall art.

13

awards

The year 2020-21 was an exceptional year for Pidilite, as many of its brands won multiple awards across various categories.

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Fevikwik ‘Phenko Nahin, Jodo’ campaign won various awards at the most coveted marketing awards The EFFIE

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1. Two Gold at the EFFIE, including the Best Use of TV category

2. Two Silver at the EFFIE in Other Products and Regional category

3. One Bronze EFFIE in Disruptive Differentiators Award category

At the Kyoorius Awards 2020, Pidilite won a total of 23 awards.

Some of notable ones were:

1. Fevicol Sofa Campaign

• 4 Blue Elephants and 6 Baby Elephants

2. Roff Television Campaign

• 1 Blue Elephant and 3 Baby Elephants

Buzzing Content Award Fevicol won the best social media content in FMCG & retail category.

At exchange4media Indian Content Marketing Awards, #MyFevicolAd won the best content marketing social media and best crowdsourced award.

At Golden Globe Tigers Award, Fevicol won the Campaign of the Year for #MyFevicolAd and the award for Social Media Marketing category.

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15

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key performance indicators (standalone)

PROFIT & LOSS METRICES

Net Sales (in crores) EBITDA ( in crores) 6,187 | (1.6)% 1,550 | 4.3%

6,187 1,550

FY 2020-21 FY 2020-21

6,290 1,485

FY 2019-20 FY 2019-20

6,047 1,298

FY 2018-19 FY 2018-19 FY 2017-18 5,309 FY 2017-18 1,294 FY 2016-17 4,837 FY 2016-17 1,229

Profit After Tax (in crores) Earnings Per Share (EPS) ( ) (excluding exceptional items) (excluding exceptional items)

1,082 | (6.8)%

21.3 | (6.8)%

1,082 21.3 FY 2020-21 FY 2020-21 1,161 22.8 FY 2019-20 FY 2019-20 979 19.3 FY 2018-19 FY 2018-19 955 18.8 FY 2017-18 FY 2017-18 868 16.9 FY 2016-17 FY 2016-17

Book Value Per Share () Dividend Per Share (DPS) ( ) 109.4 | 24.5% 8.50 | 21.4%

66.3 70.2 82.4 87.9 109.4 FY 2020-21 FY 2019-20 FY 2018-19 FY 2017-18 FY 2016-17	4.75 6.00 6.50 7.00 8.50 FY 2020-21 FY 2019-20 FY 2018-19 FY 2017-18 FY 2016-17

Y-O-Y Growth/Degrowth

BALANCE SHEET METRICES

Net Current Assets (` in crores) 542 | (70.7)%

Reserves (` in crores)

5,510 | 24.8%

542 5,510 FY 2020-21 FY 2020-21 1,847 4,414 FY 2019-20 FY 2019-20 1,960 4,136 FY 2018-19 FY 2018-19 1,775 3,513 FY 2017-18 FY 2017-18 1,880 3,348 FY 2016-17 FY 2016-17

Return on Average Capital Employed (% )

Return on Average Net Worth

(% )

21.6 | (525 bps)

28.8 | (534 bps)

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21.6 28.8
FY 2020-21 FY 2020-21
26.8 34.2
FY 2019-20 FY 2019-20
25.3 34.7
FY 2018-19 FY 2018-19
27.4 37.4
FY 2017-18 FY 2017-18
28.7 41.1
FY 2016-17 FY 2016-17
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Distribution
Material Cost 45.6%
of Revenue
2020-21
Operating Cost 16.8%
Employee Cost 12.7%
Interest &
Foreign Exchange
Fluctuation Expense 0.3%
Depreciation 2.4%
Income Tax 6.0%
Retained Earning 16.2%
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17

key performance indicators (standalone)

Current Ratio

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----- Start of picture text -----

1.3
2,421
20-21
1,879
2.6
3,026
19-20
1,179
3.0
2,929
18-19
970
3.0
2,664
17-18
889
3.4
2,666
16-17
786
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Current Assets ( in crores) Current Liabilities ( in crores) Current Ratio

PBT & PBT as % to Net Sales

PBIT & Interest Cover

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----- Start of picture text -----

127.1 23.6
20-21 1,465 20-21 1,457
205.1 23.8
19-20 1,501 19-20 1,496
193.8 22.8
18-19 1,384 18-19 1,376
220.7 25.1
17-18 1,337 17-18 1,331
219.1 25.6
16-17 1,245 16-17 1,239
PBIT ( in crores) PBT* ( in crores)
Interest Cover (Times) PBT as % to Net Sales
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• PBT excludes exceptional items.

*PBIT excludes exceptional items.

Debt Equity Ratio

Value Addition to Business through Reserves

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----- Start of picture text -----

0.01 55 51
20-21 5,561 20-21 5,510
0 51
19-20 4,465 19-20 4,414
0 51
18-19 4,187 18-19 4,136
0 51
17-18 3,564 17-18 3,513
0 51
16-17 3,399 16-17 3,348
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Net Worth (in crores) ( Equity + Reserves) Total Debts ( in crores) Debt Equity Ratio

Share Capital ( in crores) Reserves ( in crores)

Growth in Market Capitalisation of Company and BSE sensex since 31[st ] March 2017

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----- Start of picture text -----

1.67 2.57
31-3-21
0.99 1.92
31-3-20
1.31 1.76
31-3-19
1.11 1.30
31-3-18
1.00 1.00
31-3-17
BSE Sensex (Times)
Base Value : 31 [st] March 2017 = 1
Market Capitalisation of Company (Times)
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19

new acquisition

management discussion and analysis

financial review

Consolidated Financials

Consolidated Net Sales reported flat growth (Excluding Pidilite Adhesives Pvt Ltd (PAPL) declined by 2.4%)

“EBITDA” (Earnings Before Interest, Taxes, Depreciation, Exceptional items and foreign exchange difference) before non-operating income, grew by

6.5%

(Excluding PAPL grew by 2.7%)

Profit Before Tax and Exceptional Items (PBT) grew flat (Excluding PAPL declined by 3.8%)

Profit After Tax (PAT) grew flat (Excluding PAPL declined by 3.6%)

On a constant currency basis, the overseas subsidiaries reported sales growth of

8.2%

EBITDA grew by

196.4%

due to higher sales and better gross margins

Domestic subsidiaries sales grew by

7.6%

(Excluding PAPL declined by 18.8%) EBITDA grew by

3.8%

Standalone Financials

Company’s annual performance was impacted by continued lockdowns due to the pandemic in the month of April 2020 and partially in May 2020. Therefore, annual net sales show a decline as compared to previous year.

For the year, sales volume and mix declined by 2.6% and EBITDA, excluding non-operating income improved by

4.3%

Profit Before Tax and exceptional items (PBT) declined by 2.6%

Profit After Tax (PAT) declined by 1.8%

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During the year the Company acquired 100% shares of Huntsman Advanced Materials Solutions Private Limited. This company has since been renamed as Pidilite Adhesives Private Limited (PAPL).

PAPL is in the business of selling Adhesives, Sealants and other products under well-known brands such as Araldite, Araldite Karpenter and Araseal in India. PAPL has a nation-wide distribution network and a strong presence in retail trade. In the calendar year 2019, business revenue was approximately ` 400 crores. In addition to the Indian sub-continent business, the acquisition includes a Trademark licence for Middle East, Africa and Asian countries.

Araldite will add to the very strong portfolio of Pidilite’s adhesive and sealant brands. This acquisition is likely to create a significant shareholder value through strong revenue and cost synergies.

PAPL reported sales of 168 crores and EBITDA of 60 crores from 4[th] November 2020 till 31[st] March 2021.

(Excluding PAPL declined by 101.5%) on account of lower sales and hence higher absorption of fixed cost.

21

Construction Chemicals (Projects), Organic Pigments, Pigment Preparations, etc. and caters to various industries like packaging, joineries, textiles, paints, printing inks, paper, leather, etc.

The Company operates under two major business segments i.e. Branded Consumer & Bazaar and Business to Business.

performance by industry segment (standalone)

Products, such as Adhesives, Sealants, Art & Craft Materials and Others, Construction and Paint Chemicals are covered under Branded Consumer & Bazaar segment. These products are widely used by carpenters, painters, plumbers, mechanics, households, students, offices etc.

In both the above business segments, there are a few medium to large companies with national presence and a large number of small companies which are active regionally. Multinational companies are also present in many of the product categories in which the Company operates.

Business to Business segment covers products, such as Industrial Adhesives, Industrial Resins,

business segment/ product category %

6.4% industrial resins, construction chemicals (projects) etc.

5.7% industrial adhesives

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7.1%
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----- Start of picture text -----

5.9%
art & craft
materials etc. pigment & preparations
19.9%
0.8%
construction &
others
paint chemicals
81.2%
54.2% consumer & bazaar products segment
adhesives & selants
18.0%
business to business
products segment
0.8%
Standalone results - % of Total
others
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----- Start of picture text -----

Standalone results - % of Total
Sales from FY 2020-21
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consumer & bazaar

business to business

others

Branded Consumer & Bazaar Business to Business segment The ‘Others’ segment largely segment contributed contributed comprises of manufacture and sale of Speciality Acetates, raw 81.2% 18.0% materials etc.

of the sales of the Company and declined by 5.5% with volume and mix declining by 7.0%

of the sales of the Company and declined by 0.3% with volume and mix declining by 0.2%

Adhesives & Sealants category Industrial Adhesives includes includes adhesives, sealants and adhesives used in packaging, tapes. This category contributed footwear, cigarette, automotive industry and joinery. This 54.2% category contributed

54.2%

of the sales of the Company and grew by 1.2%

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5.7%

of the sales of the Company and declined by 8.1%

Construction and Paint Chemicals Industrial Resins, Construction contributed Chemicals (Projects) etc. contributed 19.9% 6.4%

of the sales of the Company and grew by 1.7%

of the sales of the Company and declined by 3.1% Pigments and Preparations contributed

Art & Craft Materials etc. contributed 7.1%

5.9%

of the sales of the Company and of the sales of the Company and declined by 5.5% declined by 14.1%

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23

human resources

The year under review witnessed significant progress in people practices, policies and processes, enabling the Company on its journey of ‘Growing to Greatness’.

Current Year Outlook

India has been impacted substantially by the second wave of the Covid 19 pandemic. There remains an uncertainty around the duration of the pandemic and the resultant impact on consumer sentiment and demand.

Input Inflation may continue during the current year as well. The Company is taking necessary steps to mitigate the impact of inflation through appropriate pricing and cost control measures.

The uncertain demand scenario coupled with significant inflation in input costs will call for active management of the rapidly evolving situation while maintaining employee and business eco system safety and security. While the rollout of the vaccination

In the last year, as the world dealt with the onslaught of COVID-19, India too was impacted badly. Our efforts throughout the year have been to focus on Employee Health and well-being, as well as supporting the business. A Covid taskforce was set up comprising of managers from HR and other functions who have been monitoring the external situation on an ongoing basis and designing appropriate response to take care of safety and protection of our employees. Training our Workforce to adopt the right kind of behaviour that ensure personal safety and security was conducted, Safety kits were distributed, safety kit allowances for all field personal was provided and regular sanitization drives were conducted on our premises.

To uphold the spirit of our employees, Pidilite’s Happy and Healthy (HAH) movement went fully digital in light of most employees moving to work from home leveraging Workplace, our internal social networking

programme is encouraging, it is evident that this will take considerable time before business sentiment is positively impacted. The Company has put in place a number of measures that impact both the delivery as well as the development agenda so as to remain resilient during these times. Our strategy is continuously evolving to address these challenges as well as adapt to market conditions.

While major subsidiaries in India are taking initiatives to improve margins and achieve consistent sales growth in their respective businesses, the impact of the pandemic on economic growth does pose a short term risk to these plans.

The Company’s major international subsidiaries are in Bangladesh, Sri Lanka, USA, Brazil, Thailand, Egypt and Dubai. Various initiatives are being taken

tool and having online events. The entire HAH effort was expanded by the launch of HAH Cares, an initiative that focused on providing our employees access to Doctor-on-Call 24x7, 1 to 1 Counselling service for mental and emotional wellbeing, various fitness classes for maintaining health in lockdown. We also continued to encourage employee participation in our events resulting in participation levels of over 65% of our employees.

The Company was rated by Great Place to Work Institute as one among the top 30 manufacturing sector companies in our very first year of participation. Our Sustainable Engagement Survey also witnessed an improvement in our eNPS score with us being close to the top quartile benchmark scores. In our long term effort to deepen the understanding of our employees about Pilglobin (branding for our Culture program), we launched a series of initiatives

to increase sales and market share in each of the significant geographies. The business environment in these countries remains subdued as they all face the ongoing impact of the pandemic and consequent impact on business.

Outlook on Opportunities, Threats, Risks and Concerns

The Indian economy provides a large opportunity to the Company to market its differentiated products. The home improvement area offers significant opportunities for growth given the growth in affordable housing, new construction as well as renovation. Continued economic growth offers significant opportunities in both the home improvement as well as the industrial sector.

including the articulation of learnings from our formative years in a booklet and launch of a unique group learning program. We launched this campaign by a catchy internal communication campaign building up to our Founder’s Day, where we staged an online play titled “Humari Neev”, narrating a collection of our own stories from the past that embody the living of our values by our employees. On this occasion, employees who have consistently demonstrated living our values were awarded.

We bolstered our learning and development efforts by bringing in online Learning Management System and we are now covering all employees of the Company and its subsidiaries. Our signature programs ‘ASCENT’ for first time managers and ‘CAPSTONE’ for middle management were held, to continue with our commitment to learn as we work. The total number of employees as on 31[st] March 2021 is 6,376.

Thus, slower growth of the Indian economy and stress in sectors, such as construction, could impact the performance of the Company.

Overseas subsidiaries, by virtue of their relatively smaller size, remain vulnerable to the political and economic uncertainties of their respective countries. Business disruptions as a result of the COVID-19 pandemic may impact the performance of the Company and its subsidiaries.

25

miscellaneous

economic value added (EVA)

The Company’s Net Worth (Equity capital + Reserves)

has grown from

` 3,399 crores

as on 31[st] March 2017 to

` 5,561 crores

as on 31[st] March 2021, giving a Compounded Annual Growth Rate (CAGR) of 13.10%.

The market capitalisation of the Company on

31[st] March 2021 was

` 91,973 crores

and has grown at a CAGR of 30.48%

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computation of eva

EVA	=	Net Operating Proft Afer Tax (NOPAT) - Weighted average cost of capital employed.
NOPAT	=	Net proft afer tax + post tax interest cost at actual.
Weighted average cost of	=	(Cost of equity x average shareholder funds) + (cost of debt x average debt).
capital employed
Cost of equity	=	Risk-free return equivalent to yield on long term Government of India (GOI) securities (taken @
		6.00%) + market risk premium (assumed @ 7.50%) x beta variant for the Company (taken at 0.76),
		where the beta is a relative measure of risk associated with the Compnay’s shares as against the
		stock market as a whole.
Cost of debt	=	Efective interest applicable to Pidilite based on an appropriate mix of short, medium and long term
		debt, net of taxes.

since the IPO in 1993.

other matters

The following matters are elaborated in

the Directors’ Report

� Risks and concerns

� Internal control systems and their adequacy

cautionary statement

Statements in this Management Discussion and

Analysis Report describing the Company’s objectives,

projections, estimates and expectations may be

‘forward looking statements’ within the meaning

of applicable laws and regulations. Actual results might differ.

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Item 2016-17 2017-18 2018-19 2019-20 2020-21
1. Risk Free Return on Long Term GOI Securities 6.5% 7.2% 7.3% 7.5% 6.0%
2. Cost of Equity 9.2% 11.4% 13.1% 12.0% 11.7%
3. Cost of Debt (Post Tax) 0.0% 0.0% 0.0% 0.0% 3.4%
4. Effective Weighted Average Cost of Capital 9.2% 11.4% 13.1% 12.0% 11.6%
Economic Value Added ( ` in crores)
5. Average Debt 1 0 0 0 55
6. Average Equity (Shareholder Funds) 3,025 3,482 3,875 4,326 5,013
7. Average Capital Employed (Debt + Equity) 3,026 3,482 3,875 4,326 5,068
8. Profit After Tax (as per P&L Statement) 868 #$ 955 $ 979 $ 1,161#$ 1,082#$
9. Interest (as per P&L Statement, net of Income Tax) 4 4 5 10 13
10. Net Operating Profit After Tax (NOPAT) 872 959 984 1,171 1,095
11. Weighted Average Cost of Capital (4x7) 278 397 509 521 588
12. Economic Value Added (10-11) 594 563 475 650 506
13. EVA as a % of Average Capital Employed (12 ÷ 7) 19.6% 16.2% 12.3% 15.0% 10.0%
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Profit After Tax excludes exceptional items.

$ Profit is after tax but before Other Comprehensive Income.

27

( ` in crores)

10 years’ financial performance

( ` in crores)

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I GAAP IND AS
Highlights 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 CAGR %
Operating Results
Sales and Other Income 3,017 3,615 4,169 4,724 5,134 5,409 5,627 6,285 *** 6,484 6,290 8.5%
Manufacturing & Other Expenses 2,483 2,939 3,448 3,918 3,942 4,070 4,197 4,796 4,847 4,667 7.3%
Operating Profit 534 676 721 806 1,192 1,339 1,430 1,490 1,637 1,623 13.1%
Interest (Net) 21 8 10 10 6 6 6 7 13 17 (2.4)%
Depreciation 48 53 69 108 88 90 91 100 126 147 13.3%
Profit from Ordinary Activities 465 615 642 688 1,098 1,243 1,333 1,383 1,498 1,459 13.5%
Exceptional Item 13 (6) 6 18 27 94 - - 59 -~ -
Foreign Exchange Difference - 8 1 5 2 1 4 2 6 2 2 (14.2)%
Expense/(Income)
Profit-Before Tax 444 620 631 668 1,070 1,145 1,331 1,376 1,437 1,457 14.1%
Current Tax 105 156 160 156 299 363 403 438 369 375 15.2%
Deferred Tax 4 3 2 11 24 8 19 11 (33) - ~ (33.1)%
Profit-After Tax for the year 335 461 469 501 747 774 909 927 1,102 1,081 13.9%
Add: Prior Year's Tax Provision written back - - - - - - 46 53 - - -
Profit-After Tax 335 461 469 501 747 $ 774 $ 955 $ 979 $ 1,102 $ 1,081 $ 13.9%
Dividend on Equity Shares 112 * 156 * 162 * 179 * 404 * 31 293 364 827 - -
Retained Earning 223 305 307 322 343 743 662 615 275 1,081 19.2%
Financial Position
Capital-Equity 51 51 51 51 51 51 51 51 51 51 0.0%
Reserve (Less Revaluation Reserve & 1,327 1,682 1,988 2,298 2,599 3,348 3,513 4,136 4,414 5,510 17.1%
Misc. Expenditure)
Net Worth 1,378 1,733 2,039 2,349 2,650 3,399 3,564 4,187 4,465 5,561 16.8%
Borrowings 264 60 8 6 1 - - - - 55 (16.0)%
Deferred Tax Liability (Net) 45 48 51 55 75 84 103 113 76 76 5.9%
Funds Employed 1,687 1,841 2,098 2,410 2,726 3,483 3,667 4,300 4,541 5,692 14.5%
Fixed Assets *
Gross Block 1,343 1,469 1,637 2,005 1,775 1,856 1,975 2,110 2,538 2,862 8.8%
Depreciation 476 527 594 716 707 790 871 930 1,041 1,158 10.4%
Net Block 867 942 1,043 1,288 1,068 1,066 1,104 1,180 1,497 1,704 7.8%
Investments in
- Subsidiaries 240 # 261 # 323 # 349 # 431 # 426 # 612# 673# 797# 3,148# 33.1%
- Others 93 286 251 352 *** 672 1,367 1,174 1,517 1,026 334 15.3%
Net Other Assets 487 352 481 421 *** 555 624 777 930 1,220 506 0.4%
Total Assets 1,687 1,841 2,098 2,410 2,726 3,483 3,667 4,300 4,541 5,692 14.5%
----- End of picture text -----**

The Company transitioned into Ind AS from 1[st] April 2015

~ Less than ` 1 crore

• Includes Tax on Dividend

• *** Previous years’ figures regrouped

• ** Including Capital Work-In-Progress and excluding Revalued Assets **** Paid dividend (including tax) as per IND AS and Depreciation thereon

$ Profit is after tax but before Other Comprehensive Income # After deducting provision for diminution

	I GAAP	IND AS
Highlights 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Funds Flow
Sources
Internal Generation 400 < 511 < 546 638 886 967 1,066 1,091 1,259 1,235
Increase in Capital & Reserve on conversion of FCCB 15 50 - - - - - - - -
Increase in Equity Share Capital - - - - -~ -~ -~ -~ -~ -~
Increase in Loans - - 8 - - - - - - 55
Decrease in Investment-Others 73 - 35 - - - 283 - 102 736
Decrease in Working Capital - 141 - 23 *** 329 - - - - 406
Total 488 702 589 661 *** 1,215 967 1,349 1,091 1,361 2,432
Applications
Repayment of Loans 23 204 60 2 5 1 - - - -
Capital Expenditure (Net) > 141 128 169 353 134 88 125 159 393 322
Investments in - Subsidiaries 19 26 62 26 82 90 151 61 146 2.110
- Others - 188 - 101 *** 590 695 - 255 - -
Buyback of Equity Shares - - - - - - 500 - - -
Dividend 112 156 162 179 404 * 31 293 364 827 *** -
Increase in Working Capital 193 - 136 - - 62 280 252 (5) -
Total 488 702 589 661 *** 1,215 967 1,349 1,091 1,361 2,432
Ratios
Return on Average Net Worth % (RONW) (PAT divided by Average Net Worth) ## 27.6 29.3 25.2 23.7 31.0 28.7 27.4 25.3 26.8 21.6 @
Return on Average Capital Employed % (ROCE) (PBIT divided by Average Funds Employed**)## 31.2 36.2 33.7 31.6 44.0 41.1 37.4 34.7 34.2 28.8
Long-term Debt/Cash Flow 0.6 0.1 - - - - - - - -
Gross Gearing % (Debt as a percentage of Debt plus Equity) 16.1 3.4 0.4 0.2 - - - - - 1.0
Current Ratio 1.8 1.6 1.8 1.7 2.5 3.4 3.0 3.0 2.6 1.3
Assets Turnover (times) (Sales divided by Total Assets) 1.8 1.9 2.0 1.9 1.8 1.5 1.5 1.4 1.4 1.1
Debtors Turnover (Sales divided by Debtors) 9.7 10.2 10.0 9.6 9.5 9.1 8.4 8.3 8.0 6.9
Inventory Turnover (Cost of Goods Sold divided by Inventories) 4.2 4.3 4.5 4.7 4.4 4.3 4.3 4.5 4.0 3.3
Operating Proft Margin (%) ## 19.2 20.5 18.7 18.4 25.3 27.7 26.9 24.6 26.0 26.2
Net Proft Margin (%) ## 16.3 18.5 16.5 15.7 23.3 25.6 25.1 22.8 23.8 23.6

The Company transitioned into Ind AS from 1[st] April 2015

• *** Previous years’ figures regrouped

• Includes Cost of Brands, Patents Trademarks and Businesses Acquired

• ** Excluding Deferred Tax Liability (Net)

• Includes Tax on Dividend

@ As compared to FY 2019-20, FY 2020-21 RONW is lower by 19.6% mainly due to 15.9% growth in average net worth against 6.8% decline in PAT

• < Includes security premium received on FCCB conversion

• PAT, PBT and PBIT are excluding exceptional items

• ~ Less than ` 1 crore **** Paid dividend (including tax) as per IND AS

29

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ேசார்வு ெகாள்ளாேத மனேம – உன் ஆர்வெமல்லாம் ஒாுநாள் பூரணமாகும்!

காரிாுள் சூழ்ந்த நீளிரவின் பின் காைல மலர்தல் கண்டைன அன்ேறா? தாரணி உயிர்க்கும் தாமைர சிலிர்க்கும் அளிகுலம் களிக்கும் அாுணனும் உதிப்பான்! (ேசார்வு ெகாள்ளாேத)

அகத்திாுள் நீங்கவும் அாுெளாளி ஓங்கவும் அன்பு தைழக்கவும் துன்பங்கள் தீர்க்கவும் அம்பிைக பாலன் வள்ளி மணாளன் அன்புடன் வாுவான் இன்னாுள் புரிவான். (ேசார்வு ெகாள்ளாேத)

கல்கி

Don’t be disheartened, oh mind! Your ardour will one day find its fulfilment.

Haven’t you seen the dawn break afer the long, black-shrouded night?

The earth springs to life, the lotus quivers as it blooms, the bees rejoice, the sun rises.

Muruga, the son of Ambikai, will shower his grace to dispel the darkness within, radiate blessings, nourish love and dismiss suffering.

Kalki

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Agathirul Neengavum: Dispel the darkness within

31

directors’ report

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Financial Performance

Comments on Financial Performance are included in Management Discussion and Analysis section.

Dividend

Your Directors recommend a dividend of 8.50 per equity share of 1/- each (previous year interim dividend considered as final dividend of 7/- per equity share of 1/- each), out of the current year’s profit, on 50.82 crores equity capital amounting to 431.93 crores (previous year 355.61 crores on equity capital of 50.81 crores). The dividend payout amount has grown at a CAGR of 15.40% during the last 5 years.

To

The Members

Your Directors take pleasure in presenting the Fifty-Second Annual Report together with Audited Financial Statements for the year ended 31[st] March 2021.

Financial Results (Standalone)

|(in crores )<br>2020-21<br>2019-20|(in crores )
2020-21
2019-20|(`in crores )
2020-21
2019-20|
|---|---|---|
|Sales|6,186.67|6,290.43|
|Operating Profit|1,623.30|1,637.28|
|Finance Costs|(16.99)|(13.40)|
|Depreciation, Amortisation and Impairment Expense|(147.10)|(125.79)|
|Net Foreign Exchange Loss|(2.13)|(1.86)|
|Profit Before Exceptional Items and Tax|1,457.08|1,496.23|
|Exceptional Items|(0.45)|(59.28)|
|Profit Before Tax|1,456.63|1,436.95|
|Current Year’s Tax|(375.05)|(368.65)|
|Profit After Current Year’s Tax|1,081.58|1,068.30|
|Deferred Tax|(0.12)|33.32|
|Profit After Tax|1,081.46|1,101.62|
|Profit Brought Forward|3,042.74|2,779.09|
|Other Comprehensive Income Included in Retained
Earnings (Net of tax)|(0.71)|(11.20)|
|Profit Available for Appropriation|4,123.49|3,869.50|
|Appropriations|||
|Dividend Paid|-|(330.18) #|
|Interim Dividend Paid|-|(355.61)|
|Tax on Dividend|-|(140.97)|
|Total|-|(826.76)|
|Closing Balance of Retained Earnings|4,123.49|3,042.74|

Pertaining to dividend for FY 2018-19

The dividend payout is in accordance with the Dividend Distribution Policy which is available on the website of the Company www.pidilite.com.

pbt, pat & growth (yoy)

equity dividend payout & % of standalone net profit (excluding exceptional items)

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(2.6)
1,457
20-21
1,082
(6.8)
8.7
1,496
19-20
1,161
18.5
3.4
1,376
18-19
979
2.5
7.4
1,331
17-18
955
10.0
13.0
1,239
16-17
868
12.2
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Excludes exceptional item

PBT ( in crores) PBT (Growth %) PAT ( in crores) PAT (Growth %)

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----- Start of picture text -----

39.9
8.50 2.5 20-21 432
36.9
7.00 2.7 19-20 429
40.6
6.50 2.5 18-19 398
38.1
6.00 2.6 17-18 364
33.8
4.75 3.0 16-17 293
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• Proposed dividend for 20-21

Dividend per Share ( ` )

Dividend Cover (Times) Payout

Dividend Payout (including tax on dividend till 19-20) (net of foreign tax credit) ( ` in crores)

Dividend % to Net Profit

33

Transfer to Reserves

The Company does not propose to transfer amounts to the general reserve.

Term Finance

The Company has no outstanding term loans (previous year NIL).

Capital Expenditure

The total capital expenditure during the year was 336.69 crores (previous year 369.03 crores) primarily spent on fixed assets for various manufacturing units, offices, laboratories, warehouses and on information technology.

Deposits

The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 during the financial year 2020-21 (previous year NIL).

Subsidiaries

Investment in Subsidiaries

During the year, investment of 2,333.82 crores (previous year 146.18 crores) was made in subsidiaries. Of this, 2,323.04 crores (including contingent consideration) was invested in domestic subsidiaries and 10.78 crores in overseas subsidiaries.

The investments in domestic subsidiaries were in Madhumala Ventures Pvt Ltd ( 10.51 crores), Nina Percept Pvt Ltd ( 4.82 crores), Pidilite Litokol Pvt Ltd ( 14.28 crores), Pidilite Grupo Puma Manufacturing Ltd ( 11.71 crores), Pidilite C-Techos Walling Ltd ( 0.60 crores) and in the newly acquired subsidiaries Tenax Pidilite India Pvt Ltd (formerly known as Tenax India Stone Products Pvt Ltd) ( 84.66 crores) and Pidilite Adhesives Pvt Ltd (formerly known as Huntsman Advanced Materials Solutions Pvt. Ltd.) ( ` 2,196.46 crores).

The investments in overseas subsidiaries were in Pidilite Middle East Ltd ( 10.33 Crores) and Pidilite Chemical PLC ( 0.45 crores).

During the year

• a. The Company acquired 100% share capital of Huntsman Advanced Materials Solutions Pvt. Ltd. for cash consideration of ` 2,196.46 crores. The acquisiton process was completed on 3[rd] November 2020. The name of the said subsidiary has been changed to Pidilite Adhesives Pvt. Ltd. with effect from 13[th] January 2021.

• b. The Company acquired the balance 30% stake in its subsidiary namely Cipy Poly Urethanes Pvt. Ltd. (CIPY), by purchasing 28,249 equity shares from certain other shareholders of CIPY, for a cash consideration of ` 60.49 crores (excluding certain contingent payment). The acquisition process was completed on 22[nd] April 2021. Consequent to this, CIPY became a wholly owned subsidiary of the Company.

• c. The Company has completed the acquisition of the business of wholly owned entity M/s. Nitin Enterprise, (a partnership firm having two partners, both of which are wholly owned subsidiaries of the Company).

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Performance of Major Domestic and Overseas Subsidiaries

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( ` in crores)
Name of Subsidiary Sales Sales % Growth EBITDA EBITDA % Growth
2020-21 2019-20 2020-21 2019-20
Nina Percept Pvt Ltd 176.63 267.76 (34.0%) (26.93) 11.50 (333.9%)
ICA Pidilite Pvt Ltd 178.21 185.83 (4.1%) 25.19 24.13 4.5%
CIPY Poly Urethanes Pvt Ltd 89.68 121.38 (26.1%) 1.63 15.38 (89.4%)
Pidilite Adhesives Pvt Ltd 168.32 - - 60.32 - -
Pidilite Speciality Chemicals Bangladesh Pvt Ltd 111.10 124.50 (10.8%) 17.09 19.19 (11.0%)
Pidilite Lanka (Pvt) Ltd 45.43 41.34 9.9% 6.95 2.90 139.7%
Pidilite USA Inc 140.70 119.14 18.1% 18.53 (0.45) 4,262.8%
Pulvitec do Brasil Industria e Comercio de Colas e 103.84 70.14 48.0% 23.29 1.58 1,378.7%
Adesivos Ltda
Pidilite Industries Egypt SAE includes PIL 36.73 37.93 (3.2%) (1.00) (0.08) (1,133.9%)
Trading (Egypt) Company
Pidilite Bamco Ltd includes Bamco Supply and
65.41 63.37 3.2% 9.18 5.38 70.8%
Services Ltd (Thailand)
Pidilite MEA Chemicals LLC (UAE) 109.81 114.69 (4.3%) (3.12) (4.33) 28.0%
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Overseas subsidiaries figures are at constant currency.

• Figures are for the period from 4[th] November 2020 to 31[st] March 2021

Regulations, 2015 (hereinafter referred to as ‘Listing Regulations’) and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2020-21, together with the Auditor’s Report, forms part of this Annual Report. A statement containing the salient features of the Company’s subsidiaries, associate and joint venture company in the prescribed Form AOC- 1, are set out in Note No. 59 to the Consolidated Financial Statements.

Performance of domestic subsidiaries was impacted due to nationwide lock-down in the country. Performance improved during second half of the year with good sales achievement by ICA Pidilite and Pidilite Adhesives.

Performance of subsidiaries in Bangladesh, Middle East and Egypt was impacted due to lockdowns.

Pidilite Lanka continues to perform well despite challenging business environment and posted a significant increase in EBITDA margin owing to lower material costs and local manufacturing.

The Consolidated Financial Statements have been prepared on the basis of audited financial statements of the Company, its subsidiaries, associate Companies and joint venture, as approved by their respective Board of Directors except Pulvitec Do Brazil Industria e Comercio de Colas e Adesivos Ltda which has been approved by the local administrator and Plus Call Technical Services LLC, Dubai for which the financial statements has been approved by the management. The requisite applications have been filed with Ministry of Corporate Affairs for striking off the names of Pidilite C-Techos Pvt. Ltd. and Pidilite Grupo Puma Pvt. Ltd., in absence of any business, since their incorporation.

Pidilite USA sales and profit grew well due to higher demand of hobby & craft products during the pandemic and increased focus on e-commerce.

Pidilite Brazil reported good sales and profit growth due to operational improvements and higher economic growth due to fiscal stimulus.

The subsidiaries in Thailand reported marginal sales growth driven by project business. EBITDA improved due to softer input costs and controlled spends.

Consolidated Financial Statements

In accordance with the provisions of Companies Act, 2013 (hereinafter referred to as ‘the Act’), Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)

The accounts of the subsidiaries are also uploaded on the website of the Company, www.pidilite.com.

35

Directors and Key Managerial Personnel

The Board of Directors, on the recommendation of Nomination and Remuneration Committee, has recommended to the Members the re-appointment of Shri Vinod Dasari as an Independent Director of the Company for a second consecutive term, commencing from the conclusion of 52[nd] AGM upto 31[st] August, 2025.

Shri Rajeev Vasudeva was appointed as an Additional Director (Independent) of the Company by the Board on the recommendation of Nomination and Remuneration Committee with effect from 10[th] September, 2020. Members’ approval is sought for his appointment as an Independent Director of the Company for a period of 5 consecutive years i.e upto 9[th] September 2025.

In accordance with the Act and the Articles of Association of the Company, Shri A N Parekh and Shri Debabrata Gupta, Directors of the Company, retire by rotation and being eligible, offers themselves for re-appointment.

Policy on Directors’ Remuneration

The policy on Directors’ remuneration is available on the website of the Company, www.pidilite.com. The remuneration paid to the Directors is as per the terms laid out in the said policy.

Directors’ Responsibility Statement

Your Directors confirm that:

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

• they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31[st] March 2021 and of the profit of the Company for that period;

• they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• they have prepared the annual accounts on a going concern basis;

• they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

• they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Annual Evaluation by the Board of its own performance, its Committees and individual Directors

The Board has put in place a mechanism for evaluation of its own performance and performance of its Committees and individual Directors. The evaluation of the Board, Committees, Directors and Chairman of the Board was conducted based on the evaluation parameters, such as Board composition and structure, effectiveness of the Board, participation at meetings, domain knowledge, awareness and observance of governance, etc. For further details, please refer to the Report on Corporate Governance, which forms a part of this Annual Report.

Familiarisation Programme

The Company has put in place an induction and familiarisation programme for all its Directors including the Independent Directors.

The familiarisation programme for Independent Directors in terms of provisions of Regulation 46(2)(i) of the Listing Regulations is uploaded on the website of the Company.

Number of Meetings of Board of Directors

Seven meetings of the Board of Directors of the Company were held during the financial year 2020-21. For further details, please refer to the Report on Corporate Governance, which forms a part of this Annual Report.

Statement of Declaration on Independence given by Independent Directors

All the Independent Directors of the Company have given declarations that:

• a. they meet the criteria of independence as laid down under the Act and the Listing Regulations; and

• b. they have registered their names in the Independent Directors’ Databank.

Corporate Governance

The Company is committed to good corporate governance practices. The Report on Corporate Governance, as stipulated under Listing Regulations, forms an integral part of this Annual Report. The requisite certificate from M/s M. M. Sheth & Co., Practising Company Secretaries, is attached to the Report on Corporate Governance, which forms a part of this Annual Report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year under review, as stipulated under the Listing Regulations, is presented in a section forming part of this Annual Report. For the sake of brevity the items covered in this Report are not repeated in the Management Discussion and Analysis Report.

Committees of the Board

The following are the statutory Committees constituted by the Board and they function according to their respective roles and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• • Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

Details of composition, terms of reference and number of meetings held for respective Committees are given in the Report on Corporate Governance, which forms a part of this Annual Report. Further, during the year under review, all recommendations made by the Audit Committee have been accepted by the Board.

Corporate Social Responsibility (CSR) Report and Policy

The CSR Report as per Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and amendments thereto, is attached as Annexure 1 to this Report. The details of CSR Initiatives forms part of Social & Community Service Initiatives section of this Annual Report. CSR Policy can be accessed on website of the Company www.pidilite.com.

Vigil Mechanism / Whistle Blower Policy

The Company has established a Vigil Mechanism and Whistle Blower Policy for its Directors and

employees.The said policy has been communicated to the Directors and employees of the Company and is also posted on the website of the Company. For further details, please refer to the Report on Corporate Governance, which forms a part of this Annual Report.

Policy relating to Prevention of Sexual Harassment

The Company has formulated a Prevention of Sexual Harassment Policy and has formed Internal Complaints Committees, as per statutory requirements. For further details, please refer to the Report on Corporate Governance, which forms a part of this Annual Report.

Statutory Auditors

In accordance with the provisions of the Act, M/s Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No 117366W/ W-100018) have been appointed as the Statutory Auditors of the Company, for a period of five years i.e. upto the conclusion of 54[th] AGM to be held for the adoption of accounts for the year ending 31[st] March 2023. Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

There is no qualification or adverse remark in Auditor’s Report. There is no incident of fraud requiring reporting by the Auditors under Section 143(12) of the Act.

Cost Auditor

The Company has maintained cost records as specified by Central Government u/s 148(1) of the Act. M/s. V J Talati & Co., Cost Accountants, were appointed as the Cost Auditor for the financial year 2020-21 to conduct the audit of the cost records of the Company and they have been reappointed as the Cost Auditor for the financial year 2021-22. In terms of the provisions of Section 148(3) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to the Cost Auditor has to be ratified by the Members of the Company. Accordingly, at the ensuing AGM, the Board seeks ratification of the remuneration payable to the Cost Auditor for the financial year 2021-22.

Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration

37

of Managerial Personnel) Rules, 2014, the Company has appointed M/s M. M. Sheth & Co., Practising Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2020-21. The Report of the Secretarial Auditor is attached as Annexure 2 to this Report. There is no qualification or adverse remark in their Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars under Section 134 of the Act, read with the Companies (Accounts) Rules, 2014 are attached as Annexure 3 to this Report.

Risk Management

In compliance with Regulation 21 of the Listing Regulations, a Risk Management Committee has been constituted by the Board. The Risk Management Committee, also known as Risk Management Oversight Committee, is entrusted with roles and powers which includes (a) Review and approval of risk management plan (b) Review progress on the risk management plan (c) Propose methodology on risk classification and measurement.

The Company has laid out a risk management plan for identification and mitigation of risks. The Company has also constituted a Management Risk Committee which is chaired by the Managing Director and has Senior Leadership of the Company as its members. The Management Risk Committee identifies the key risks for the Company, develops and implements the risk mitigation plan, reviews and monitors the risks and corresponding mitigation plans on a regular basis and prioritises the risks, if required, depending upon the effect on the business/ reputation.

The other details in this regard are provided in the Report on Corporate Governance, which forms a part of this Annual Report.

Contracts and Arrangements with Related Parties

All contracts/arrangements entered into by the Company during the financial year under review with related parties (as defined in the Act and Listing Regulations) were in the ordinary course of business and on an arm’s length basis. During the year, the Company did not enter into any contract/ arrangement/transaction with related parties which

could be considered as material in accordance with the Policy of the Company on Materiality of Related Party Transactions (RPT Policy) or which is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

The RPT Policy, as approved by the Board, is available on the Company’s website: www.pidilite.com.

Disclosure of related party transactions with the promoter(s)/promoter(s) group which individually hold 10% or more shareholding of the Company, as per the Indian Accounting Standards, are set out in Note No. 44 of the Standalone Financial Statements of the Company.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees or investments covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements.

Employees Stock Option Scheme

The Employees Stock Option Scheme (Scheme) is in line with SEBI (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations). The certificate of Auditors regarding implementation of the Scheme is available for inspection of Members in electronic mode.

The applicable disclosure, as stipulated under the SBEB Regulations, as on 31[st] March 2021 with regard to Scheme, is provided in Annexure 4 to this Report.

Extract of Annual Return

Extract of Annual Return of the Company is available on the website of the Company viz. www.pidilite.com.

Business Responsibility Report

A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front, forms an integral part of this Report.

Internal Control Systems and their Adequacy

The Company has adequate internal financial control procedures commensurate with its size and nature of business.

The Company has appointed Internal Auditors who periodically audit the adequacy and effectiveness of the internal controls laid down by the management and suggest improvements.

The Audit Committee of the Board of Directors approves the annual internal audit plan and periodically reviews the progress of audits as per approved audit plans along with critical internal audit findings presented by internal auditors, status of implementation of audit recommendations, if any, and adequacy of internal controls.

Significant/Material Orders Passed by the Regulators

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

Particulars of Employees and Related Disclosures

Disclosure pertaining to remuneration as per Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 5 to this Report.

Details of employee remuneration as required under provisions of Section 197 of the Act, and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any modifications, thereof) shall be made available to any shareholder, on request.

General

The Company has neither issued equity shares with differential rights nor any sweat equity shares.

There have been no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of this Report.

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

Appreciation

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation to the shareholders, dealers, distributors, consumers, banks and other financial institutions for their continued support.

FOR AND ON BEHALF OF THE BOARD

Mumbai M B Parekh Date : 12[th] May 2021 Executive Chairman

39

==> picture [508 x 665] intentionally omitted <==

�ે ગમે જગત�ુ� દ�વ જગદ�શને, તે તણો ખરખરો ફોક કરવો, આપણો �ચત�યો અથ� કઇં નવ સર�, ઊગર� એક ઉ�ેગ ધરવો.

હું ક�ં, હું ક�ં, એ જ અ�ાનતા, શકટનો ભાર �મ �ાન તાણે, �ૃ��ટમંડાણ છે સવ� એણી પેર�, �ગી �ગે�રા કોક �ણે.

નીપ�ે નરથી તો કોઈ નવ રહ� દુઃખી, શ�ુ માર�ને સહુ �મ� રાખે, રાય ને રંક કોઈ ��ટ� આવે નહ�, ભવન પર ભવન પર છ� દાખે.

ઋ�ુ લતા પ� ફળ ફૂલ આપે યથા, માનવી �ૂખ� મન �યથ� શોચે, �ેહના ભા�યમ� �ે સમે �ે લ�ું, તેહને તે સમે તે જ પહ�ચે.

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Lament not what He wished for thou, Lord of Universe, Preceptor of the Worlds. Things would not happen the way we wish, Quiet, be spared the anguish and hurts.

“I the doer, I the mover”, says silly man, like a dog walking under a wagon! Only the Yogi and the Sage know the truth: The worlds divers are founded finally in the One.

If Man has his say, no one would be pained, All would kill the foes and keep friends. No King nor Pauper would you find, All would stay in palaces grand.

Ivies do bloom, but only at due time. They then sprout flowers, fruits, foliage. Man, the fool, may rave and rage, But what is meant for whom, where and when, He surely gets that, there and then.

Narasinh Maheta

Jagatguru: Lord of Universe

41

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social & community service initiatives

Social & community service initiatives are undertaken directly by the Company and through various organisations such as

agriculture & horticulture

The Company has been supporting the partner organisations for agriculture activities and horticulture crops through collaboration with subjectmatter experts and relevant national institutions. During the year, the Company has assisted in the formation of 132 new Farmer Clubs (covering additional 2,057 farmers) in Bhavnagar and Amreli District (for Cotton, Groundnut, Onion and other relevant crops). With these additions, now there are 580 Farmer Clubs, covering over 15,000 farmers.

Data of 15,000 farmers (4,500 farmers added during the year) have been geo-tagged with area mapping on a digital portal. This helps in enhanced analysis for adoption of best practices, such as soil management, intercropping, drip irrigation, etc. Geo-tagging has facilitated provision of specific initiatives for farmers concerning improvement of yield and reduction in the cost of cultivation. About 69% of the farmers actively used these recommendations which resulted in a 10% decrease in the cost of cultivation for cotton and groundnut crops. The knowledge series of booklets on various crops and agricultural practices continues to benefit our Farmer Clubs.

The major breakthrough has been shifting of farmers from chemical fertilizer to bio-based fertilizer. While 6,100 farmers have significantly decreased usage of

chemical fertilizer by 35%, another 950 farmers have begun organic farming by widely using Jivamrut and Bijamrut.

We have continued the fruit and vegetable initiative and have developed 36 wadis (one-acre orchard) along with shade nets for replication of vegetable and fruit crops.

We have initiated three new centres for expansion of agriculture initiative at Maydhar and Sihor (Bhavnagar district) and Arnej (Gir Somnath District).

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Horticulture wadi (orchard) at farmers place

• Trivenikalyan Foundation (TKF)

• Gram Nirman Samaj (GNS)

• Shree Gramdaxinamurti - Manar

• Hanumant Hospital (managed by Shree Hanumant Seva

• Medicare Trust)

• Shree Mahuva Education Trust

• The Balvant Parekh Centre for General Semantics and

• Other Human Sciences

• Daxinamurti Vidhyarthi Mandir-Bhavnagar

• Shri N N Mehta Memorial Education Trust

• Lokbharti Gram Vidyapeeth Trust

• Shri Mahuva Gaurakshak Sabha

• Shri Balvant Parekh Science City

• (Science City) and

• Gram Seva Kendra Khadasli

As of now, most of these initiatives are centered in the villages of Gujarat. However, seeing the encouraging impact of these initiatives, the Company plans to conduct similar initiatives around its factories.

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De-topping of cotton crops

43

farmer producer organisation

The Company continues to support Farmer Producer Organisation (FPO) for various activities.

The FPO has continued collective procurement of various inputs, which is helping farmers fetch higher prices than the local market.

The total turnover of the FPO was ` 3.70 crore for the year 2020-21. The major part of margins has been transferred to over 3,000 farmers.

The FPO has, in collaboration with Government of Gujarat, through its Custom Hiring Center (CHC) in Mota Khutavda village, continued to support marginal farmers by providing agricultural equipments at nominal rental rates for use in their fields whenever needed.

For the next one year, FPO has an ambitious plan for input procurement and various value addition exercise of locally grown crops.

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Cultivation of dragon fruits

centre for agriculture-horticulture development at gram daxinamurti, manar

Construction of this Centre was completed during the year providing various modern facilities, such as Farmer’s Training Centre, Laboratory, Pilot Plant for post-harvest processing etc.

The Centre has developed and demonstrated agro-techniques for new and high value medicinal and aromatic crops to farmers. New introductions

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Procurement meeting with farmers by FPO

include citronella & lemon grass, used as a powerful insect repellent & disinfectant; palmarosa & vetiver, used in perfumery & cosmetics; senna, a controlling laxative for constipation; shataveri, an influential apoptogenic herb, used in the treatment of antibacterial and anti-fungal infection & as galactagogue; kalmegh, an influential herb used for the treatment of various diseases; aloe vera, used for digestive health & skincare; madhunashni, a powerful anti-diabetic plant; French basil & tulsi, an immunomodulator; and spices like coriander, fennel (saunf), ajwain, dill and fenugreek. Thousands of farmers in collaboration with Government departments from 35 adjoining villages have received training at our newly constructed farmer’s training centre.

An integrated portable low cost Gobar Urja Recovery Unit (GURU) was established at the Centre in order to enable farmers to learn and adopt this technology. This unit is integrated with vermicomposting and vermiwash. The biogas unit helps to reduce the emission of methane thereby maintain the ecological balance.

The Centre has effectively demonstrated protected cultivation with micro-irrigation system for plant multiplication vis-a-vis prevention of pests and diseases. Another major step forward is the development of valuable fruit fly trap - a non-chemical approach to control mango fruit fly which is a major pest affecting mango productivity. It is being

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Meeting of the Farmer Producer Organisation

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R & D, QC Laboratory and Pilot Plant for post-harvest processing and value addition

An aerial view of Centre for Agriculture and Horticulture Development (Manar)

Farmer training centre (Manar)

will benefit the farmers of the region for affordable availability of planting material.

live demonstration with the help of resource scientists from various parts of the country.

developed through our R&D team and is available to farmers at their doorstep through women selfhelp groups (SHG) as an income generation activity.

A water resource conservation initiative at the Centre covered more than 75 acres with hundred percent drip irrigation system. The Farmer’s Training Centre is capable of training more than 500 farmers at a time and supports many initiatives of Gujarat Government as well as of Central Government. It also carries out skill development and

A state-of-the-art Research & Development Centre, Quality Control Lab as well as Pilot Plant for post-harvest processing and value addition have been provided at the Centre. Soil and water testing facilities are provided to the farmers along with recommendation for improving soil health and increasing productivity.

An inter-cropping initiative has been expanded to cover more crops like coconut with turmeric, pomegranate with aloe vera, etc. A joint collaborative project on aromatic citronella crop with the Government covering approximately 100 acres has been completed successfully. This

45

seaweed consortium - indian centre for climate and societal impact research (iccsir)

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Cattle treatment in villages

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Seaweed development tank

The Company has extended its support to ICCSIR, a non-profit organisation incorporated as per the provisions of Section 8 of the Companies Act, 2013. Under the umbrella of ICCSIR, a consortium has been formed by Excel Industries Ltd., the Company and Mamata group, with a unified interest to build a technology for the production, processing and value addition of selected seaweeds, as seaweeds have the potential to reverse the greenhouse effect and restore atmosphere.

The focus of the consortium is to tap the potential of blue economy i.e. sustainable use of ocean resources. A model is being developed to train fishermen and SHG women in Mundra (Kutch district), for livelihood generation through seaweed cultivation and value addition at the coastal belt.

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Cattle feed production unit

reasonable cost. This fodder was produced with raw materials available in nearby villages. It is proposed to scale up the production based on the results of this pilot experiment.

animal husbandry

Initiative of identifying and replicating best practices among farmers was continued and significant increase in yield of milk was noticed, with farmers who adapted such improved practices.

Under the continuing project of “sexed semen”, cumulatively 175 cattle have been given sexed semen and the conception of female calf is observed in most of the cases. In addition, normal “Artificial Insemination” service has continued with the objective of improving the breed of animals through qualified workers.

In order to deal with restriction in travel during pandemic period, “on-call” animal health advisory service was provided to 850 farmers involving approximately 8,000 cattles. A pilot cattle feed unit was started at Kalsar to produce nutritious fodder at

47

training centre for shg women

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initiatives for women

The Company helped to form, nurture and develop 130 new self help groups (SHGs) - Mahila Mandals in Bhavnagar, Talaja and Amreli Districts. More than 1,500 additional women became members of these SHGs. With this, the total number of SHGs has reached 570 with 6,400 members. Three additional village organisations were created during the year to support the SHGs.

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Training centre for SHG women

A new Training and Quality Assessment Centre became functional at Kalsar during the year. This Centre focusses on developing Technical, Financial and Managerial skills of women to enable them to start and operate a business. 60 such Training sessions were conducted during the year.

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Sanitizer unit run by SHG

During the year, SHGs sponsored by us at Biladi village started making sanitizers and variety of aloe-vera products. Other new SHG units initiated by us started making khakhra, pickles, cotton mask at Khadasali, Manar and Bagdana villages.

A new Logistics Warehouse has been made operational in Mahuva to support and take care of the needs of SHG businesses. Procurement, logistics and marketing support was provided to various SHG businesses making different products.

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New SHG units being constructed

The Company has also collaborated in Public-Private Partnership with the Government of Gujarat, Rurban Mission for development of Infrastructure for SHGs to undertake livelihood generation activities in Kikariya and Mota Khutavda villages.

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Felicitation of SHG women on Women’s day

An exhibition was organised for all SHGs located in Gujarat and in other States to showcase their products on the occasion of Women’s Day on 8[th] March 2021. The SHG supported by us, Bapa Sita Ram Water Shed unit located at Biladi Village of Mahuva Taluka (Bhavnagar), won the Award as the “Best SHG” of Gujarat State. This SHG manufactures Sanitizers and aloe-vera products.

49

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water resource management

The Company has continued its support for five watershed centres in Bhavnagar and Amreli districts to accomplish the task of creation of watershed structures and also continued its support for water management activities (check dams, ponds, etc.) with the Department of Narmada, Water Resources, Water Supply and Kalpsar Department of Government of Gujarat, in the PPP model. In 2020-21, 59 check dams, 22 ponds deepening and 220 farm ponds were completed.

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Check dam

Cumulatively, 147 check dams, 76 pond deepening and 589 farm ponds have been completed till date with the assistance of the Company.

The Company has also initiated the development of 66 water structures (51 check dam and 15 ponds) for the coming year and additional water structures are under discussion with the Government for next year.

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Development of farm pond at farmers land

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Tree plantation drive

==> picture [152 x 168] intentionally omitted <==

tree plantation initiative

sanitation

The Company has collaborated with State Forest Department and initiated a massive plantation drive with the help of local community. A total of 1.59 lakh trees were planted in the year 2020-21 through mobilization of Farmer Clubs, Schools and SHGs.

The Company provided support for building 2,360 new toilets (taking total to over 15,700 till date) in Mahuva Taluka. It has continued to work closely with the Government and provides support to households to achieve the vision of open defecation-free status for the villages of Mahuva Taluka, Gujarat.

‘Samman Patr’ for tree plantation drive

During the year, 1,200 hectares of additional farmland were converted to micro irrigation and more than 110 additional wells, spanning over 40 villages, were recharged, for improving the quality of groundwater.

Cumulatively, it has translated into 4,000 hectares of micro irrigation on farmland and 1,117 well recharges in 100 villages.

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51

education

skill initiatives

==> picture [483 x 434] intentionally omitted <==

Beautification of school

in number of students getting scholarship/prizes is an indication of improvement in the standard of education in the area.

The Company has supported rejuvenation and maintenance of 129 Government Schools in order to improve the infrastructure and provide pleasant learning environment to children.

The Company has continued its support to Shri Balvant Parekh Science City (a modern science museum) in Bhavnagar. The centre enables children to get familiar with various scientific subjects through interesting demonstration units. The centre also prepares students for various scholarship programmes and National Olympiad Competitions have also been undertaken. During the year, 90,915 students benefitted through 14 online sessions conducted on various subjects.

Due to the Covid-19 pandemic, the normal working of WaGaLe (Wanchan-Ganan-Lekhan) was impacted. However, the initiative was partially continued with 700+ children.

The Company has continued its support to Shri N N Mehta Memorial Education Trust which provided scholarships amounting to ` 42.57 lakh to 302 deserving students for higher education. The increase

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ITI training sessions

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The Company has continued its collaboration with Directorate of Employment and Training (under Labour and Employment Department), Government of Gujarat for the seventh year, to strengthen the skill eco-system in the State. During the year, a total of 14,500 trainees from around 194 ITIs benefitted through online classes for carpentry, plumbing, electrical and construction technician courses. Moreover, the Company supported 4 ITIs for plumbing and carpentry courses in Rajasthan.

The Company has been industry partner in 9 ITIs, under PPP (Public-Private Partnership) scheme of Government of Gujarat, where efforts are focussed on strengthening training delivery, both in scale and quality.

Masks provided to Covid warriors

The Company has continued its support as an industry partner in Gujarat for World Skill Competition, 2021 in carpentry, joinery, plumbing & heating trades.

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The Company has continued its collaboration with Kaushalya Vardhan Kendras (KVKs) for providing skill training mainly in 10 sectors covering 78 courses. During the year, more than 3,000 trainees availed online skill training.

1 lakh masks, which were produced in these ITIs and KVKs, were distributed to COVID warriors and other needy people.

53

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health initiative

The Company has continued its support to Hanumant Hospital, which was the first hospital in Bhavnagar District that started treatment of Covid-19 at Taluka level. More than 10,000 patients were screened for Covid symptoms and 986 critical Covid patients have been treated.

The Hospital ensured that all necessary equipment such as ventilators, oxygen concentrators, BiPAP monitors, etc. were made available in adequate numbers for corona patients.

Vaccination centre run by Hanumant Hospital

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Sanjeevini Scheme certificate provided to Covid survivor

The Company supported free vaccination for approximately 4,000 beneficiaries at Hanumant Hospital as well as other locations in Mahuva.

The Company supported the Government Medical College (Bhavnagar) to bridge the gap in availability of certain medical equipment required to treat corona patients.

During the year, Hanumant Hospital treated over 43,698 outpatients, 8,952 indoor patients, performed over 3,167 surgeries and successfully handled 4,038 emergency cases. Four educational training programmes were conducted for medical fraternity.

Eight speciality medical camps were conducted (in-house as well as in surrounding villages) under the Doctor connect programme.

Hanumant Hospital is enrolled under Ayushman Bharat scheme of Government. Under this, the Hospital provided cashless treatment to 745 beneficiaries this year.

Hanumant Hospital is the only hospital in Bhavnagar District enrolled under Mukhyamantri Amrutum (MA) Yojana. A total of 4,384 patients have received cashless dialysis service under this scheme.

b k parekh parkinson’s disease & movement disorder society (bkppdmds)

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Rehabilitation of people with Parkinson’s

Hanumant Hospital conducted 193 free cataract surgeries with Intraocular lenses (IOL) in collaboration with Vision Foundation, Mumbai.

The Hospital is running many schemes which helped 7,552 beneficiaries by providing treatment through IPD & OPD during the year. Hospital is having Arogya fund scheme to help the economically weaker class of patients for treatment through donors of the scheme. This year 1,741 patients were provided help amounting to ` 8.62 lakh.

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Arial view of Hanumant Hospital

B. K. Parekh Parkinson’s Disease and Movement Disorder Society works for rehabilitation of persons with Parkinson’s disease to improve quality of their life. The Society operates 9 Centres in Gujarat State and 2 Centres in Pune. Due to Covid pandemic conditions during the year, these Centres have used online platforms for conducting various activities relating to physiotherapy, speech therapy, occupational therapy, psychological guidance, diet and nutrition guidance, yoga, etc. Also, webinars by expert doctors on various subjects were conducted with specialised programmes for caregivers.

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55

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khadi initiative

The Company continued its association with the Mahuva Khadi Bhandar. As a part of collaboration with Khadi and Village Industries Board, 5 more Khadi Bhandars of Mahuva, Samanvay, Savarkundla, Vanda and Surendranagar were provided funds for 100 solar charkhas and 25 solar looms during the year (cumulatively, 126 solar charkhas and 30 power looms till date). This will be used by spinners and weavers and provide self-employment opportunities.

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Women working on the Solar Charkha

swachhta initiative

The Company has continued its collaboration with Swachh Bharat Mission (Urban), Government of Gujarat and Mahuva Nagarpalika for Cleanliness drive.

During the year 2020-21, the focus of the pilot initiative was twofold i.e. streamlining processes of Mahuva Nagarpalika related to regular cleaning of roads, allocation of dustbins, training of Safai Karamcharis, provision of fogging machines, repair and renovation of community toilets. The Company also worked on other challenges i.e. segregation of mixed waste, value addition of biodegradable and non-biodegradable waste and also recycling of the plastic waste.

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Waste segregation unit at Nagarpalika

balvant parekh centre for general semantics and other human sciences, baroda

Although most of the academic and outreach programmes of the Centre were impacted due to the Covid pandemic, still during the year three issue of its international academic journal i.e. Anekaant: A Journal of Polysemic Thought, The Spring 2019-20 Special Issue titled "General Semantics and Indian Philosophical Thought: A Comparative Approach," the Autumn 2020-21 Special Issue titled "General Semantics and Media Ecology," and a General Issue, comprising essays on Indian and World literary and cultural studies were published. The journal continues to garner positive responses from readers.

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To address the challenge of segregation at source, the Company has operationalised a unit that segregates 5 tonnes of solid mixed waste per day into biodegradable and non-biodegradable waste.

The biodegradable waste is then converted into compost with the help of bio-fertilisers. We have made more than 1,500 kgs of compost out of waste and this compost is being distributed to the farmers.

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57

Annexure 1 to the Directors’ Report

ANNUAL REPORT ON CSR ACTIVITIES FOR FINANCIAL YEAR ENDED 31[ST] MARCH 2021

1. Brief outline on CSR Policy of the Company

(a) Focus areas:

The Company supports various bodies in carrying out activities in the areas of rural development, education, health care, general semantics etc.

(b) CSR Objectives:

To attain its CSR objectives in a professional manner and integrated manner, the main objectives are:

• (1) To promote, carry out, support activities relating to: Education and Training including in Science and Technology, Humanities etc; Healthcare; Welfare of Children, Women, Senior Citizens, and Differently Abled Persons; Employment enhancing Vocational skills; Sanitation; Water management; Agriculture; Horticulture; promotion of Culture: Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts & Handicrafts; Employment Generation; Environment Sustainability; Science & Technology; Rural Development; Animal Welfare; welfare and development measures towards reducing inequalities faced by Socially and Economically Backward groups; and such activities may include establishing, supporting and / or granting aid to institutions engaged in any of the activities referred to above.

• (2) To conduct and support studies & research; publish and support literature, publications & promotion material; conduct and support discussions, lectures, workshops & seminars in any of the areas covered above.

• (3) To promote, carry out, support any activities covered in Schedule VII to the Companies Act, 2013, as amended from time to time.

2. Composition of CSR Committee:

S. no.	Name of Director	Designation/Nature of Directorship	Number of meetings of CSR Commitee held during the year	Number of meetings of CSR Commitee atended during the year
1	Shri N. K. Parekh	Vice Chairman - Non-Executive Director	2	2
2	Shri Sanjeev Aga	Independent Director	2	2
3	Shri A. B. Parekh	Whole Time Director	2	2
4	Smt. Meera Shankar	Independent Director	2	2
5	Shri Debabrata Gupta	Whole Time Director	2	2

1. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the Board are disclosed on the website of the company.

htps://www.pidilite.com/investors/corporate-governance/

1. Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable (attach the report).

Not Applicable

1. Details of the amount available for set off in pursuance of sub-rule (3) of Rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any: Nil

2. Average net profit of the Company as per Section 135(5): ` 1,293.76 Crores

3. (a) Two percent of average net profit of the Company as per Section 135(5): ` 25.88 Crores

4. (b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: Nil

5. (c) Amount required to be set off for the financial year, if any: Nil

6. (d) Total CSR obligation for the financial year (7a+7b+7c). ` 25.88 Crores

7. (a) CSR amount spent or unspent for the financial year:

|Total Amount Spent for the
Financial Year 2020-21 (in )|Amount Unspent (in)|Amount Unspent (in)|Amount Unspent (in)|Amount Unspent (in)|Amount Unspent (in`)|
|---|---|---|---|---|---|
||Total Amount transferred to
Unspent CSR Account as per
Section 135(6)||Amount transferred to any fund specifed under Schedule VII
as per second proviso to Section 135(5)|||
||Amount|Date of
transfer|Name of the
Fund|Amount|Date of transfer|
|27.70 Crores|-|-|-|-|-|

• (b) Details of CSR amount spent against ongoing projects for the financial year 2020-21:

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----- Start of picture text -----

Sr. Name of the Item Local Location Project Amount Amount Amount Mode Mode of Implementation through
No. Project # from area of the project duration allocated spent transferred of implementing Agency
the (Yes/ State District (in for the in the to unspent impleme- Name CSR
list of No) years) project current CSR ntation
activities ( in Cr) financial Account Direct Registration No.<br>in the year for the (Yes/<br>Schedule ( in Cr) project No)
VII to the as per
Act Section
135 (6)
( ` in Cr)
----- End of picture text -----*

|Sr.
No.|Name of the
Project #|Item
from
the
list of
activities
in the
Schedule
VII to the
Act|Local
area
(Yes/
No)|Location
of the project|Location
of the project|Project
duration
(in
years)*|Amount
allocated
for the
project
(in Cr)|Amount<br>spent<br>in the<br>current<br>fnancial<br>year<br>(in Cr)|Amount
transferred
to unspent
CSR
Account
for the
project
as per
Section
135 (6)
(`in Cr)|Mode
of
impleme-
ntation
Direct
(Yes/
No)|Mode of Implementation through
implementingAgency|Mode of Implementation through
implementingAgency|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|||||State|District||||||Name|CSR
Registration No.|
|1|Agriculture
&
Horticulture|iv, x|No|Gujarat|Bhavnagar|3|9.72|9.72|-|No|Gram Nirman
Samaj Gram
Vikas Yojna|CSR00001111|
||||||||||||Triveni Kalyan
Foundation|CSR00000487|
||||||||||||Gram
Daxinamurti|CSR00000995|
||||||||||||Lokbharti|CSR00001252|
||||||||||||Indian Centre
for Climate
and Societal
Impacts
Research|CSR00000447|
|2|Water
collection and
conservation|iv, x|No|Gujarat|Bhavnagar|3|1.80|1.80|-|No|Gram
Daxinamurti|CSR00000995|
||||||||||||Gram Nirman
Samaj Gram
Vikas Yojna|CSR00001111|
||||||||||||Lokbharti|CSR00001252|
|3|Healthcare|i, x|No|Gujarat|Bhavnagar|3|3.07|3.07|-|No|Hanumant
Seva Medicare
Trust|CSR00000914|
||||||||||||B. K. Parekh
Parkinson’s
Disease &
Movement
Disorder
Society|CSR00000507|
|4|Education|ii, x|No|Gujarat|Bhavnagar|3|7.86|7.86|-|No|Gram
Daxinamurti|CSR00000995|
||||||||||||Gram Nirman
Samaj Gram
Vikas Yojna|CSR00001111|
||||||||||||Lokbharti|CSR00001252|
||||||||||||Mahuva
Education
Trust|CSR00001131|
||||||||||||Triveni Kalyan
Education
Trust|CSR00000916|
||||||||||||Balwant
Parekh Centre
For General
Semantics|CSR00001326|
||||||||||||Monghiben
Balvihar Trust|CSR00001940|
||||||||||||||

59

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----- Start of picture text -----

Sr. Name of the Item Local Location Project Amount Amount Amount Mode Mode of Implementation through
No. Project # from area of the project duration allocated spent transferred of implementing Agency
the (Yes/ (in for the in the to unspent impleme-
list of No) State District years) project current CSR ntation Name CSR
activities ( in Cr) financial Account Direct Registration No.<br>in the year for the (Yes/<br>Schedule ( in Cr) project No)
VII to the as per
Act Section
135 (6)
( ` in Cr)
8 Animal iv, x No Gujarat Bhavnagar 3 0.16 0.16 - No Gram Nirman CSR00001111
Husbandry Samaj Gram
Vikas Yojna
Shree Mahuva CSR00001471
Gaurakshak
Sabha
9 Cleanliness iv, x No Gujarat Bhavnagar 3 0.03 0.03 - No Gram Nirman CSR00001111
Initiative Samaj Gram
Vikas Yojna
10 Khadi and v, x No Gujarat Bhavnagar 3 0.41 0.41 - No Gram Nirman CSR00001111
Handloom Samaj Gram
Vikas Yojna
11 Science Centre ii, x No Gujarat Bhavnagar 3 0.25 0.25 - No Monghiben CSR00001940
Balvihar Trust
12 Sanitation i, x No Gujarat Bhavnagar 3 0.04 0.04 - No Gram Nirman CSR00001111
Samaj Gram
Vikas Yojna
Total 24.95 24.95 -
----- End of picture text -----*

Notes:

a. # The details of the CSR Projects are given on the website of the Company at htps://www.pidilite.com/investors/corporate-governance/

b. * Extendable at the option of the Board.

c. The Company takes cognizance of sub-rule (3) of Rule 8 of the Companies CSR Policy Rules, 2014 and shall initiate steps to conduct impact assessment of CSR Projects through an independent agency from the financial year 2021-22, for the applicable projects.

(c) Details of CSR amount spent against other than ongoing projects for the financial year 2020-21:

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----- Start of picture text -----

Sr. Name of the Item from Local Location of the project Amount spent Mode of Mode of Implementation through implementing
No. Project the list of area in the current impleme- Agency
activities (Yes/ financial year ntation
in the No) State District ( ` in Cr) Direct Name CSR Registration
Schedule (Yes/No) No.
VII to the
Act
----- End of picture text -----*

Sr. No.	Name of the Project	Item from the list of activities in the Schedule VII to the Act	Local area (Yes/ No)	Location of the project	Location of the project	Amount spent in the current fnancial year (`in Cr)	Mode of impleme- ntation Direct (Yes/No)	Mode of Implementation through implementing Agency	Mode of Implementation through implementing Agency
				State	District			Name	CSR Registration No. *
1	Disaster Management#	xii	No	Gujarat, Maharashtra, Assam	Bhavnagar, Raigad, Guwahati	0.94	No	Gram Nirman Samaj Gram Vikas Yojna	CSR00001111
								Ncovid Centre, Mahad	-
								Shushrusha Citizens Co-op Hospital Ltd	-
								Allwin Life Care	-
								Shree Gohilwad Dasha Shrimali Vanik Mandal	-
								Midmark India Pvt. Ltd.	-
								Assam Aaroygya Nidhi (Test)	-
								District Disaster Mitigation Fund	-
								District Disaster Response Fund	-
								Nisarg Cyclone Family, Mahad	-
								Hastimal Manikchand	-
2	Water collection and conservation	iv, x	No	Gujarat	Bhavnagar	0.08	No	Sociation for Action on Health, Education and Environment (SAHEE)	-
								Pure Technologies	-

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----- Start of picture text -----

Sr. Name of the Item from Local Location of the project Amount spent Mode of Mode of Implementation through implementing
No. Project the list of area in the current impleme- Agency
activities (Yes/ financial year ntation
in the No) State District ( in Cr) Direct Name CSR Registration<br>Schedule (Yes/No) No. *<br>VII to the<br>Act<br>3 Healthcare i, x No Gujarat, Vapi, 0.68 No Deenanath Mangeshkar CSR00001393<br>Maharashtra Pune Hospital<br>PNR Society CSR00001320<br>Cancer Patients Aid CSR00000926<br>Association<br>Rotary Charitable Trust -<br>Helping Hand Charitable -<br>Trust<br>Lions Club of Vapi Udyog -<br>Nagar Charitable Trust<br>Shri Janseva Mandal -<br>4 Education ii, x No Gujarat, Bhavnagar. 0.71 No CII University -<br>Maharashtra Raigad<br>Dakshinamurti Vidyarthi -<br>Bhavan<br>Hirwal Education Trust -<br>Government Higher -<br>Secondary School, Vapi<br>Manav Chhaydo Trust -<br>Vapi<br>Shri Mahyavanshi -<br>Sikshan Pracharak Sangh<br>Vapi Nagar Panchayat -<br>Education Trust<br>5 Waste iv, x No Gujarat Bhavnagar 0.28 No Trashcon Labs Pvt Ltd -<br>Management<br>& Recycling of<br>Plastics<br>6 Skill ii, x No Gujarat Bhavnagar 0.06 No Shilpa Sharma Consulting -<br>Development<br>Total 2.75<br># Includes spends towards Covid-19 and Cyclone - Relief and Rehabilitation activities.<br>* CSR Registration will be obtained within the prescribed timeline, wherever applicable as per CSR Amendment Rules. The requirement does not apply to CSR<br>projects or programs approved prior to 1 [st] April 2021.<br>(d) Amount spent in Administrative Overhead: NIL<br>(e) Amount spent on Impact Assessment, if applicable: Not Applicable<br>(f) Total amount spent for the Financial Year (8b+8c+8d+8e): 27.70 Crores
(g) Excess amount for set off, if any: NIL
Sl. No Particular Amount (in ` )
(i) Two percent of average net profit of the Company as per Section 135(5) 25.88 Crores
(ii) Total amount spent for the Financial Year 27.70 Crores
(iii) Excess amount spent for the financial year [(ii)-(i)] 1.82 Crores
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, NIL
if any
(v) Amount available for set off in succeeding financial years [(iii)-(iv)] 1.82 Crores
----- End of picture text -----

1. (a) Details of Unspent CSR amount for the preceding three financial years: Not Applicable

2. (b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):

Not Applicable. As Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 came into force w.e.f. 22[nd] January 2021, details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s) shall be provided w.e.f. Financial Year 2021-22 onwards.

61

Annexure 2 to the Directors’ Report

1. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year (Asset-wise details).

2. (a) Date of creation or acquisition of the capital asset(s).: NA

3. (b) Amount of CSR spent for creation or acquisition of capital asset. NA

4. (c) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc NA

5. (d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset). NA

6. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per Section 135(5): Not Applicable

Sanjeev Aga (Chairman of CSR Committee)

Place: Mumbai Bharat Puri Date: 12[th] May 2021 (Managing Director)

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31[ST] MARCH 2021

• (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (Not applicable to the Company during the Audit Period);

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

• (d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

To,

The Members,

Pidilite Industries Limited, Regent Chambers, 7[th] Floor, 208, Nariman Point, Mumbai-400 021.

• (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit Period);

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Pidilite Industries Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

• (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

• (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the Audit Period);

I have conducted online verification of records, as facilitated by the Company, due to Covid-19 pandemic and subsequent lockdown situation for the purpose of issuing this Report. Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit and considering practical difficulties caused by lockdown imposed by state government due to Covid-19 pandemic, I hereby report that in my opinion, the Company has during the audit period covering the financial year ended on 31[st] March 2021 (Audit Period) complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

• (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not applicable to the Company during the Audit Period); and

• (i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

• (vi) I further report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in pursuance thereof, on test check basis, the Company has complied with the following laws applicable specifically to the Company:

• (a) The Environment (Protection) Act, 1986

• (b) Hazardous Waste (Management & Handling) Rule, 1989

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31[st] March 2021 according to the provisions of:

• (c) The Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989

(i) The Companies Act, 2013 (‘the Act’) and the rules made thereunder;

• I have also examined compliance with the applicable clauses of the following:

• (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

• (i) Secretarial Standards (i.e SS-1 relating to Board Meetings & SS-2 relating to General Meetings) issued by the Institute of Company Secretaries of India.

• (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

• (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Overseas Direct Investment;

• (ii) The Listing Agreements entered into by the Company with the Stock Exchanges.

During the period under review, the Company has

• (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that

• (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

• (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

63

Annexure 3 to the Directors’ Report

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance except when Board meetings were called by giving less than seven days notice in accordance with the provisions of Section 173 of the Act and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions at board meetings and Committee meetings were carried out unanimously as recorded in the minutes of meetings of the Board of Directors or Committees of the Board, as the case may be.

I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period the Company has following specific events/actions having a major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.

• Special Resolution passed by the Members at the 51[st] AGM held on 10[th] September 2020 for re-appointment of Shri N. K. Parekh as Non-Executive Director as required under regulation 17(1A) of LODR Regulations, 2015

• Special Resolution passed by the Members at the 51[st] AGM held on 10[th] September 2020 for re-appointment of Shri Sanjeev Aga as an Independent Director for a second term upto 31[st] March 2025.

• The Company has acquired 100% stake in Huntsman Advanced Materials Solutions Private Limited (name changed to Pidilite Adhesives Private Limited) by entering into definitive agreements with certain group of entities of Huntsman Corporation (USA).

• The Company has completed acquisition of the business of wholly owned entity, M/s. Nitin Enterprise, a partnership firm having two partners which are wholly owned subsidiaries of the Company.

• The Company’s shareholding in its subsidiary i.e. M/s. Cipy Poly Urethanes Pvt. Ltd. (Cipy), has increased from 70% to 100%, making Cipy now, a wholly owned subsidiary of the Company.

For M. M. SHETH & CO. (Company Secretaries)

M. M. SHETH

(Prop.)

FCS No. 1455, CP No. 729 PR No. 1000/2020 Place: Mumbai Date: 12[th] May 2021 UDIN: F001455C000285992

This report is to be read with our letter of even date which is annexed as Annexure-A and forms an integral part of this report.

Annexure-A

The Members,

Pidilite Industries Limited, Regent Chambers, 7[th] Floor, 208, Nariman Point, Mumbai-400 021.

Our report of even date is to be read along with this letter.

• 1) Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

• 2) We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

• 3) We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

• 4) Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events, etc.

• 5) The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

• 6) The Secretarial audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For M. M. SHETH & CO. (Company Secretaries)

M. M. SHETH

(Prop.)

FCS No. 1455, CP No. 729 PR No. 1000/2020 Place: Mumbai Date: 12[th] May 2021

UDIN: F001455C000285992

Statement containing particulars pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014.

Your Company undertook various measures for conservation of energy and use of alternate sources of energy which resulted in total savings of 17.18 crores during the year. Savings accrued during the last 3 years (2018-21) is 56.08 crores.

A) CONSERVATION OF ENERGY/ALTERNATE SOURCE OF ENERGY

1. Steps taken or impact on conservation of energy:

The manufacturing units of the Company have continued their efforts to reduce energy consumption. Various steps taken by your Company are given below:

New measures:

1. Cooling tower fan automation on temperature set point.

2. Replacement of existing AC with energy efficient AC.

3. Improved Pumping efficiency by providing high efficiency pumps and changes in electrical supply mode.

4. Heat recovery from exothermic reaction for generation of hot water.

5. Automation in Lighting control.

6. Usage of high efficiency mixing technology.

Earlier proven conservation projects replicated in 2020-21:

1. Condensate recovery for boiler feed.

2. Thyrister based heater control.

3. Installation of LED lights.

4. Installation of Variable frequency drives.

5. Steps taken by the Company for utilizing alternate sources of energy:

Various initiatives and steps taken by your Company are given below:

• a. Green Fuel:

• Your company continues to evaluate and operate the usage of green fuel ( bio mass) which replace fossil fuels for operation of our boilers. During the year, by use of green fuels, your Company has saved ` 13.6 crores and reduced 22,617 Tons of Eq. Co2 emission compared to use of conventional fuels.

• b. Wind Energy:

• Power generated from wind farm projects at Gujarat and Maharashtra continue to be utilized in the manufacturing units and corporate office in Mumbai. Power generated from windmills is 51 Lakh KWH while the consumption was limited to 21.8 Lakh KWH which has resulted in saving of ` 1.84 crores in the year.

Solar Energy:

• c.

• During the year, your Company added new solar plants in 3 different units in addition to the existing 10 solar power installations. These 13 installations resulted in savings of ` 1.37 crores for the year.

• The Capital Investment on Energy Conservation Equipment’s:

Capital investment in energy conservation equipment was ` 0.2 crores during the year.

B) TECHNOLOGY ABSORPTION

1. Efforts made towards technology absorption:

• a. R&D continuously focus on upcoming technology trends and upgrade our technologies by advancing development work on various types of products in adhesives, sealants, synthetic resins, pigments, pigment dispersions, intermediates, thickeners, dispersants, coatings, waterproofing products and construction chemicals.

• b. R&D partners with various technology experts and research institutes regularly, for developing new technologies.

• c. R&D reinforced the strategic initiative and action plan on safe and sustainable products and product systems.

65

Annexure 4 to the Directors’ Report

2. Benefits derived like product improvement, cost reduction, product development or import substitution:

R&D innovations have contributed in improved sales, product performance efficiencies, process efficiencies, capacity debottlenecking, addressing market needs for new applications, product cost reduction and improved environmental compliance.

1. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year):

The details of technology imported, the year of import, whether the technology been fully absorbed, if not fully absorbed, areas where absorption has not taken place, and the reasons thereof:

The technology for manufacture of Hot melt, received by the Company during the year 2018-19, is expected to be fully absorbed during the financial year 2021-22.

Disclosure regarding Employee Stock Option of the Company for the year ended 31[st] March 2021

• A. Relevant disclosures in terms of the ‘Guidance note on accounting for employee share-based payments’ issued by ICAI or any other relevant accounting standards as prescribed from time to time. Members may refer to the audited financial statement prepared as per Indian Accounting Standard (Ind-AS) for the year 2020-21.

• B. Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations shall be disclosed in accordance with ‘Accounting Standard 20 - Earnings Per Share’ issued by ICAI or any other relevant accounting standards as prescribed from time to time. Diluted EPS for the year ended 31[st] March 2021 is 21.27 calculated in accordance with Ind-AS 33 (Earnings per Share).

C. Details related to Employees’ Stock option of the Company for the year ended 31[st] March 2021:

(i)

4. Expenditure incurred on Research and Development:

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( ` in crores)
Year ended Year ended
31 [st] March 2021 31 [st] March 2020
i) Capital 1.05 1.85
ii) Recurring 71.86 69.37
TOTAL 72.91 71.22
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C] FOREIGN EXCHANGE EARNINGS AND OUTGO

The foreign exchange earned in terms of actual inflows during the year and the foreign exchange outgo during the year in terms of actual outflows:

C] FOREIGN EXCHANGE EARNINGS AND OUTGO The foreign exchange earned in terms of actual infows during the year and the foreign exchange outgo during the year in terms of actual outfows:	C] FOREIGN EXCHANGE EARNINGS AND OUTGO The foreign exchange earned in terms of actual infows during the year and the foreign exchange outgo during the year in terms of actual outfows:	C] FOREIGN EXCHANGE EARNINGS AND OUTGO The foreign exchange earned in terms of actual infows during the year and the foreign exchange outgo during the year in terms of actual outfows:
(`in crores)
	Year ended 31stMarch 2021	Year ended 31stMarch 2020
i) Foreign exchange earned	579	601
ii) Foreign exchange used	886	911

For and on behalf of the Board of Directors

M B Parekh

Place: Mumbai Date: 12[th] May 2021

Executive Chairman

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Sr. No. Particulars Employee Stock Option Scheme-2012 Employee Stock Option Plan-2016
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Sr. No.	Sr. No.	Particulars	Employee Stock Option Scheme-2012	Employee Stock Option Scheme-2012	Employee Stock Option Scheme-2012	Employee Stock Option Scheme-2012	Employee Stock Option Plan-2016
	(a)	Date of shareholders’ approval				24.07.2012	02.04.2016
	(b)	Total number of options approved under ESOS				3,00,000	45,00,000
	(c)	Vesting requirements	(a)	On completion of 12 months from the date of Grant		50% of the options	Options granted under the Plan shall vest not earlier than One year but not later than a maximum of Six years from the date of grant of such Options. In the case of Eligible Employee who has not completed 3 years of employment as on date of the grant of Options then the Options which are due for Vesting before completion of 3 years as above, shall vest as on the completion of 3 years of employment in the Company by the Employee concerned or as may be approved by the Compensation Commitee.
			(b)	On completion of 24 months from the date of Grant		Balance 50% of the options
			In the case of employees who have not completed 3 years of employment as on date of the grant then all options which are due for Vesting shall vest as per (a) and (b) above OR on the completion of 3 years of employment in the Company by the employee concerned whichever is later. The Compensation Commitee in its absolute discretion shall have the right to pre-pone the date of vesting. However the gap between the date of Grant and date of Vesting shall not be less than minimum period prescribed by the Securities and Exchange Board of India.
	(d)	Exercise price or pricing formula	As approved by the Shareholders in the Annual General Meeting held on 24thJuly 2012, the exercise price shall be1/- per option.<br>The exercise price of the options granted till<br>date is1/- per option.				As approved by the Shareholders through Postal Ballot which was declared on 2ndApril 2016, the exercise price shall be1/- per option.<br>The exercise price of the options granted till date<br>is1/- per option.
	(e)	Maximum term of options granted	All the options granted have been vested and have been exercised. No options have been granted in the year 2020-21.				Out of the options granted, the last date of vesting is 17thNovember 2026. The vested options need to be exercised within a maximum period of three years from the date of vesting of such options.
	(f)	Source of shares (primary, secondary or combination)	Primary				Primary
	(g)	Variation in terms of options	Not Applicable				Not Applicable

67

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Sr. No. Particulars Employee Stock Option Scheme-2012 Employee Stock Option Plan-2016
----- End of picture text -----

(ii)	Method used to account	Method used to account	Fair value method*	Fair value method*
	for ESOS
(iii)	(a)	Diference between the	N.A	N.A
		employee compensation
		cost computed as per
		intrinsic value method
		and the employee
		compensation cost as
		per the fair value of the
		options
	(b)	The impact of this	N.A	N.A
		diference on profts and
		on EPS of the Company
* NOTE : Under IND AS , Fair value method is used for accounting.

(iv)	Option movement during the year - Employee Stock Option Scheme-2012 (ESOS-2012) and Employee Stock Option Plan 2016	Option movement during the year - Employee Stock Option Scheme-2012 (ESOS-2012) and Employee Stock Option Plan 2016	Option movement during the year - Employee Stock Option Scheme-2012 (ESOS-2012) and Employee Stock Option Plan 2016
	(ESOP – 2016)
	Particulars	ESOS – 2012	ESOP – 2016
	Number of options outstanding at the beginning of the period	Nil	1,70,850
	Number of options granted during the year	Nil	2,78,990
	Number of options forfeited / lapsed during the year	Nil	700
	Number of options vested during the year	Nil	1,39,300
	Number of options exercised during the year	Nil	29,600
	Number of shares arising as a result of exercise of options	Nil	29,600
	Money realized by exercise of options (INR)	Nil	29,600
	Loan repaid by the Trust during the year from exercise price received	N.A.	N.A.
	Number of options outstanding as on 31stMarch 2021	Nil	4,19,540
	Number of options exercisable as on 31stMarch 2021	Nil	1,20,050

(v) Weighted-average exercise prices and weighted-average fair values of options

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(vi) Options granted during the year (excluding lapsed options):
a) Senior managerial personnel:
Sr. Number of options
Name of Employee Designation
No. granted in 2020-2021
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(vi) Sr. No.	Options granted during the year (excluding lapsed options): a) Senior managerial personnel: Name of Employee Designation	Options granted during the year (excluding lapsed options): a) Senior managerial personnel: Name of Employee Designation	Number of options granted in 2020-2021
1.	Shri Bharat Puri	Managing Director	2,35,000
2.	Shri Debabrata Sujit Gupta	Director – Operations	420
3.	Shri Pradip Kumar Menon	Chief Financial Ofcer	410
4.	Shri Puneet Bansal	Senior Vice President - Legal & Company Secretary	530
5.	Shri Rahul Kumar Sinha	Chief Human Resource Ofcer	760
6.	Shri Anubhav Saxena	President - R&D	910
7.	Shri Giridhar Ayanur Seetharam	Chief Business Ofcer (Fevicol Division)	780
8.	Shri Yogesh Anand	Chief Business Ofcer (International Operations)	820
9.	Shri Sanjay Bahadur	Chief Strategy and Business Development Ofcer (CC Businesses)	1,320
10.	Shri Himanshu Kapadia	Chief Business Ofcer (Large User Business and Services)	10,000
11.	Shri Pravin Digambar Chaudhari	Chief Business Ofcer (Pigments) and IP Manufacturing Operations	1,240
12.	Shri Shantanu Bhanja	Chief Business Ofcer (Consumer Products Business)	1,110
13.	Shri Nilesh Mazumdar	Chief Business Ofcer (CC – Retail and Rof Businesses)	910
14.	Shri Rajesh Balakrishnan	Chief Business Ofcer, IP	890
15.	Shri Salil Nagesh Dalal	Chief Business Ofcer (Emerging India)	760
b) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year 2020-21 -Nil c) identifed employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant-Nil (vii) A description of the method and signifcant assumptions used during the year to estimate the fair value of options, the weighted- average values of share price, the method used and the assumptions made to incorporate the efects of expected early exercise, how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and whether and how any other features of the option grant were incorporated into the measurement of fair value, such as a market condition. The fair value of the option has been determined using the Binomial Model. The assumptions used in this model for calculating fair value are as below: Please refer to “Notes to the Financial Statements – Note 46”.

|Particulars|Particulars|Weighted average exercise price
per option ()|Weighted average fair<br>value per option ()|
|---|---|---|---|
||Options granted on 27.07.2015 – ESOS 2012|1|521.11|
||Options granted on 29.01.2016 – ESOS 2012|1|532.20/525.01|
||Options granted on 29.07.2016 ESOS 2012|1|722.31|
||Options granted on 29.07.2016 ESOP 2016|1|730.61|
||Options granted on 09.11.2016– ESOS 2012|1|661.86|
||Options granted on 08.11.2017– ESOS 2016|1|734.15|
||Options granted on 11.04.2018 – ESOP 2016|1|976.94|
||Options granted on 30.10.2018 – ESOP 2016|1|931.19/924.50|
||Options granted on 23.01.2019 – ESOP 2016|1|1,112.48/1127.85|
||Options granted on 13.05.2019 – ESOP 2016|1|1,124.69|
||Options granted on 23.01.2020 – ESOP 2016|1|1,449.90/1,444.56/1,433.92|
||Options granted on 05.08.2020 – ESOP 2016|1|1,318.08/1,319.96|
||Options granted on 04.11.2020 – ESOP 2016|1|1,536.91|

69

Annexure 5 to the Directors’ Report

Information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

A. Ratio of remuneration paid to each Director to the median remuneration of the employees of the Company and percentage increase in remuneration for the financial year 2020-21 is as follows:

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Sr. Name of Director Designation Ratio of remuneration of % increase
No. Director to the Median
remuneration
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Sr. No.	Name of Director	Designation	Ratio of remuneration of Director to the Median remuneration	% increase
1	Shri M B Parekh	Executive Chairman	52.15	(24.64)%
2	Shri N K Parekh	Vice Chairman	5.59	21.93%
3	Shri Bharat Puri	Managing Director	227.50	(57.27)%
4	Shri A B Parekh	Whole time Director	22.22	(80.01)%
5	Shri A N Parekh	Whole time Director	93.01	(1.73)%
6	Shri B S Mehta	Director	4.71	18.20%
7	Shri Sanjeev Aga	Director	5.27	25.18%
8	Shri Uday Khanna	Director	4.71	19.70%
9	Smt Meera Shankar	Director	4.20	14.03%
10	Shri Vinod Kumar Dasari	Director	4.51	22.17%
11	Shri Piyush Pandey	Director	4.09	12.39%
12	Shri Debabrata Gupta	Whole time Director	34.96	*
13	Shri Rajeev Vasudeva	Director	0.46	**

B. Percentage increase in remuneration of Chief Financial Officer and Company Secretary for the financial year 2020-21 is as follows:

Sr. No.	Name	Designation	% increase
1	Shri Pradip Kumar Menon	Chief Financial Ofcer	#
2	Shri Puneet Bansal	Company Secretary	27.7%

Notes:

1. The aforesaid details are calculated on the basis of remuneration paid during the financial year 2020-21.

2. The remuneration to Non Executive Directors comprises of sitting fees and commission paid to them during the financial year 2020-21. 3. The median remuneration is ` 599,310/- for the financial year 2020-21.

3. *[ % increase in remuneration is not given as Shri Debabrata Gupta was appointed as the Whole Time Director of the Company ] w.e.f. 1[st] March 2020.

4. **[ % increase in remuneration is not given as Shri Rajeev Vasudeva was appointed as an Additional Director (Independent) ] of the Company w.e.f. 10[th] September 2020.

5. % increase in remuneration is not given as the payment for financial year 2019-20 was only for part of the year.

6. The remuneration to Directors is within the overall limits approved by the shareholders.

7. C. Percentage increase in the median remuneration of employee in the financial year 2020-21: 15.54%

D. Number of permanent employees on the rolls of the Company as on 31[st] March 2021: 6,376.

• E. Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Increase in remuneration is based on remuneration policy of the Company.

Average increase in salary of all employees in 2020-21 compared to 2019-20: 8.20%

F. Affirmation:

Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is affirmed that the remuneration paid to the Directors, Key Managerial Personnel and Senior Management is as per the Remuneration Policy of the Company.

Business Responsibility Report

Introduction

Inclusive and sustained growth has been a fundamental element of Pidilite’s strategy. In today’s changing business dynamics, the long-term sustainability of an organisation depends on its ability to meet evolving stakeholders’ expectations and create value. Stakeholders are more aware than ever and expect businesses to operate in a fair and equitable manner.

Over the years, the Company has made progressive advancement across all three dimensions of sustainability. On the economic front, through an appropriate product mix and a good understanding of customer requirements, the Company has been consistently growing its market presence, revenues and profitability. On the environment front, initiatives are focused towards resource optimisation, reduction of waste, energy and emissions across operations. Across the social dimension, the Company undertakes CSR initiatives, under various thematic areas such as education, healthcare, agriculture and horticulture, milk and animal health, women empowerment and rural development for local communities to name a few. In order to further enhance its sustainability performance, the Company endeavours to improve practices across its operations.

The Company has initiated efforts towards development of a sustainability roadmap. This will drive integration of sustainability considerations into core business systems and decision-making. The Company has published its second sustainability report in accordance with GRI Standards for Financial Year 2019-20.

This report conforms to the Business Responsibility Reporting (BRR) requirement of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR’) and the National Voluntary Guidelines (NVG) on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs, India.

A] GENERAL INFORMATION ABOUT THE COMPANY

1. Corporate Identity Number (CIN) of the Company: L24100MH1969PLC014336

2. Name of the Company: Pidilite Industries Limited

3. Registered address: Regent Chambers, 7[th] Floor, Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai 400 021, Maharashtra

4. Website: www.pidilite.com

5. E-mail Id: investor.relations@pidilite.co.in

6. Financial Year reported: 2020-21.

7. Sector(s) that the Company is engaged in (industrial activity code-wise): Manufacture of Adhesives and Glues including Rubber based Glues and Adhesives (20295)

8. List three key products/services that the Company manufactures/provides (as in balance sheet)

9. (i) Adhesives & Sealants

10. (ii) Construction Chemicals/ Paint Chemicals

11. (iii) Art & Craft Materials

For additional information on segment wise products/services, please refer to “Notes to the Financial Statements- Note 42.

1. Total number of locations where business activity is undertaken by the Company:

2. (a) Number of International Locations: 6 Branches and Representative offices (On Standalone basis)

(b)	Number of National Locations:	Number of National Locations:
	Manufacturing locations (States / Union Territories)	7
	Regional ofces	8

1. Markets served by the Company – The Company’s products have a pan India presence and the products are also marketed in several countries like UAE, USA, Nigeria, Bangladesh, Sri Lanka, Nepal, Singapore, China, Indonesia, Thailand, Egypt, Brazil, Bahrain, Qatar, Oman, Myanmar, Ethiopia, Kenya, France, Germany, Italy, Saudi Arabia, Tanzania, Hongkong, UK, Kuwait, Australia, Cameroon, Yemen, Japan, Philippines, etc.

71

B] FINANCIAL DETAILS OF THE COMPANY

		(`in crores)
1.	Paid up Capital :	50.82
2.	Total Turnover :	6,186.67
3.	Total proft afer taxes :	1,081.46

1. Total spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%):

CSR spending for the year is ` 27.70 crores, which is 2.56% of the average net profit for the last 3 financial years.

1. Few activities in which expenditure in 4 above has been incurred

The Company has been supporting Education, Healthcare, Agriculture and Horticulture, Animal Husbandry Initiative, Rural Development, Water Resources Management, Sanitation, Initiatives for Women, Farmer Producer Organisation, Skill Development, Swachhta Initiative, Khadi Initiative, etc.

For further details please refer to Social and Community Service Initiatives section of this Annual Report.

C] OTHER DETAILS

The Company has 35 subsidiaries, both direct and indirect, as on 31[st] March 2021. 15 of these subsidiaries are in India and 20 of them are located abroad.

The Business Responsibility (BR) policies of the subsidiaries are in line with the local requirements. Currently, the subsidiary companies and other entities (suppliers/ distributors, etc.) do not participate in BR initiatives of the Company.

D] BR INFORMATION

• (1) Details of the Director/Directors responsible for BR

• (a) Details of the Director/Directors responsible for implementation of the BR policy/policies:

Sr. No.	Particulars	Details
1	DIN Number	00035317
2	Name	Shri A B Parekh
3	Designation	Whole Time Director

• (b) Details of the BR head:

Sr. No.	Particulars	Details
1	DIN Number	01500784
2	Name	Shri Debabrata Gupta
3	Designation	Director – Operations
4	Telephone number	022- 2835 7313
5	e-mail id	debabrata.gupta@pidilite.com

(2) Principle-wise [as per National Voluntary Guidelines (NVGs)] BR Policy/policies:

These Principles are as follows:

Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability (P1).

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle (P2).

Principle 3: Businesses should promote the wellbeing of all employees (P3).

Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized (P4).

Principle 5: Businesses should respect and promote human rights (P5).

Principle 6: Businesses should respect, protect and make efforts to restore the environment (P6).

Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner (P7).

Principle 8: Businesses should support inclusive growth and equitable development (P8).

Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible manner (P9).

(a) Details of compliance (Reply in Y/N)

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Sr. P P P P P P P P P
Questions
No. 1 2 3 4 5 6 7 8 9
----- End of picture text -----

Sr. No.	Questions	P 1	P 2	P 3	P 3	P 4	P 5	P 6	P 7	P 8	P 9
1.	Do you have a policy/policies for …….	Y	Y	Y		Y	Y	Y	Y	Y	Y
2.	Has the policy being formulated in consultation with the relevant stakeholders?	Yes
3.	Does the policy conform to any national/international standards? If yes, specify? (50 words)	Yes Policies confrm to applicable Statutory Requirements as well as ISO 45001 and ISO 14001 Standards.
4.	Has the policy being approved by the Board? If yes, has it been signed by MD/ owner/ CEO/ appropriate Board Director?	Yes The policies have been signed by Director- Operations of the Company.
5.	Does the company have a specifed commitee of the Board/ Director/ Ofcial to oversee the implementation of the policy?	The implementation and adherence to the Code of Conduct for employees is overseen by the human resource department. The Corporate Social Responsibility Policy is administered by the CSR Commitee in line with requirements of the Companies Act, 2013. The Director- Operations is responsible for the implementation of Environment Health and Safety (EHS) policy/ies.
6.	Indicate the link for the policy to be viewed online?	Policies which are internal to the Company are available on the intranet of the Company. Other policies are available on the website of the Company:www.pidilite.com
7.	Has the policy been formally communicated to all relevant internal and external stakeholders?	Yes
8.	Does the company have in-house structure to implement the policy/ policies?	Yes
9.	Does the Company have a grievance redressal mechanism related to the policy/ policies to address stakeholders’ grievances related to the policy/ policies?	Yes
10.	Has the company carried out independent audit/ evaluation of the working of this policy by an internal or external agency?	External frms were engaged to review the systems, procedures and infrastructure related to safety and environment, and based on their recommendations adequate steps are being taken.

(3) Governance related to BR

Business Responsibility performance is reviewed, at-least annually, by the Board. The BR Report is part of Annual Report and is published annually. The Annual Report is available on the Company’s website www.pidilite.com.

73

(E] PRINCIPLE-WISE PERFORMANCE

Principle 1: Businesses should conduct and govern themselves with ethics, transparency and accountability:

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations both for internal and external stakeholders. The Company, in order to maintain these standards has adopted the ‘Code of Conduct’, which lays down the principles and standards that should govern the actions of the employees in the course of conduct of business of the Company. Any actual or potential violation of the Code, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. There is a Code for each of our subsidiaries in line with the local requirements prevailing in the country of operation.

The Company has a ‘Whistle Blower policy’ which covers serious concerns that could have impact on the operations and performance of the Company.

There were no complaints from shareholders pending at the beginning of the year. The Company received 8 complaints from shareholders during the year which were resolved expeditiously. There were no pending complaints at the end of the year.

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle:

The products developed and provided in market are safe for use and meet the standards as per applicable statutory requirements. The products exported internationally are in compliance with applicable regulations of the relevant countries.

Some of the products offered by us contribute to sustainability such as: -

• a. Waterproofing products which save structures from deterioration and improve the overall life of such structures.

• b. We provide products for walls and roofs which improve thermal insulation and save energy.

• c. We provide high quality adhesives for making furniture, footwear, etc. which prolong the life of such products.

• d. We provide repair and maintenance products which allows such articles to be repaired and reused rather than being thrown away.

In addition to the above, the Company has mechanisms in place to recycle the following wastes:

1. Waste generated out of packaging plastic is recycled through authorized recyclers.

2. Ash generated from boilers is recycled.

3. Most spent solvents are redistilled and recycled.

4. Hazardous waste is co-processed and used as a fuel in the cement industry, wherever permitted by regulations.

5. Through authorised recyclers of Multi Layered Plastic (MLP) packing material used for our products, we recycled back 100% of such MLP packing material.

Principle 3: Businesses should promote the well being of all employees:

The Company is focused towards building progressive and best-in-class people policies on work life balance, career progression, development and employee engagement. The Company’s “Happy and Healthy” (HAH) movement saw great participation with over 65% of the employees engaging in HAH activities.

As on 31[st] March 2021, the total number of permanent employees on the payroll of the Company was 6,376 and the total number of employees hired on temporary /contractual/casual basis was 1,649. The permanent women employees were 398 and permanent employees with disabilities were 16. There are no employee association that is recognized by the management. The details of complaints filed during the financial year are as under:

Sr. No.	Category	No. of complaints fled during the fnancial year	No. of complaints pending as on end of the fnancial year
1.	Child labour / forced labour / involuntary labour	Nil	Nil
2.	Sexual harassment	Nil	Nil
3.	Discriminatory employment	Nil	Nil

Safety and skill upgradation programmes are provided from time to time to the employees and over a period of time most of the employees are covered under such programmes. Employees are encouraged to participate in safety programmes and be acquainted with the safety measures.

Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized:

The Company has identified its internal and external stakeholders and endeavours to maintain healthy engagement with these stakeholders which allows active participation and collaboration wherever possible.

With an objective to be responsive towards stakeholders who are disadvantaged, vulnerable or marginalized, the Company continues to build on its unique initiative ‘WAGALE’ (Wanchan-Ganan-Lekhan) which has helped students with lesser learning abilities through online training sessions. The Company also facilitates scholarships to the deserving and qualified students, having limited financial means for pursuing higher education.

For further details please refer to Social and Community Service Initiatives report.

Principle 5: Businesses should respect and promote human rights:

The Code of Conduct is applicable to all the employees of the Company and its subsidiaries, joint ventures and associate entities.

It is the Company’s policy to ensure that there is no discrimination based on caste, gender, religion etc. The Company also takes care to ensure that no person below the age of 18 years is employed anywhere in the Company or in the units undertaking job work activities for the Company. It is also the Company’s policy that key vendors supplying goods/ services to the Company should not employ any child labour.

There have been no complaints received in the year under review, relating to any human rights issue.

Principle 6: Businesses should respect, protect and make efforts to restore the environment:

In Bhavnagar district, in cooperation with Gujarat Government, the Company has undertaken large scale watershed development work. This involves building of check dams, ponds, recharging of wells as well as desilting of existing water structures. This has resulted in recharging of ground water in several parts of the district. Additionally, regular tree plantation drives have been undertaken through farmer clubs, schools and other local organisations.

Majority of the boilers are being operated with green fuel (Biomass) in place of fossil fuels. The Company generates renewable energy through windmill and solar power units. Additional solar power units are being installed at various manufacturing unit locations.

Over 80% of our 51 units have been converted into zero discharge to external environment and over a period of time, the Company intends to convert many more units into zero discharge, as well as increase the usage of renewable sources of energy.

During the financial year 2020-21, the emissions/ waste generated by the Company were within the permissible limits prescribed by the State and Central Pollution Control Board. There were no pending show cause notices relating to environment issues as on 31[st] March 2021.

75

Principle 7: Business when engaged in influencing Public and Regulatory Policy, should do so in a responsible manner:

The Company has its representation in several business and industrial association and is a member of the following trade / chamber / association:

• Federation of Indian Chambers of Commerce and Industry

• Indian Chemical Council

• Confederation of Indian Industry

• Economic Research India Pvt. Ltd.

The Company, through its employees and representatives, actively participates in the deliberations at these trade/ chamber/ associations relating to environment, sustainability, trade and economic reforms etc. and making representations to the relevant regulatory bodies while framing of legislations/ guidelines/ policies.

Principle 8: Businesses should support inclusive growth and equitable development:

The Company has been actively supporting several initiatives including self-help groups of women aimed at improving their economic standing and supporting farmers in ways to improve yield of the farm lands.

These initiatives are implemented by the Company mainly through the implementing agencies as given in the Social and Community Service Initiatives section and Annexure 1 to the Directors’ Report.

Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible manner:

The Company provides all relevant information regarding a product for the user through product labelling, product literature, our website and our apps. We take great care to connect with our users and provide them information about how to use the products in a safe and effective manner.

Our sales force remains in regular touch with the customers and collects relevant feedback from them relating to their concerns, their expectations or complaints. Customer feedback or complaints received from all sources is adequately addressed in a time bound manner. As at the end of financial year, there were 11 consumer cases pending which majorly relate to perceived deficiency in waterproofing done by third party applicators.

Standalone Financial Statements

We take care to ensure that our businesses do not indulge in any unfair trade practices or anti-competitive practices.

77

Independent Auditor’s Report

TO THE MEMBERS OF PIDILITE INDUSTRIES LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Pidilite Industries Limited (“the Company”), which comprise the Balance Sheet as at 31[st] March 2021, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31[st] March 2021, and its profit total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter Principal audit procedures performed Impairment of Investment in To evaluate impairment certain subsidiaries (Refer Note of investment in these two 7 of the Standalone Financial subsidiaries, our procedures Statements) included:

The standalone financial a) Evaluated the design and statements of the Company implementation of the includes investment in two controls over identification subsidiaries, located at Brazil of impairment indicators and Middle East, aggregating and review of the 148.95 crores (as at 31[st] March impairment assessment of 2021) which is measured at cost investment in subsidiaries less impairment and is tested and tested the operating for impairment if there are any effectiveness of these indicators of impairment. controls.

Due to material accumulated b) Validating impairment models through testing losses being incurred by these of the mathematical subsidiaries, the Company’s accuracy and verifying the management has tested these application of the input investments for impairment in accordance with Ind AS assumptions. 36. For impairment testing, c) Assessed the management determines appropriateness of the recoverable amount, using forecast cash flows within discounted cash flow projections, the budgeted period based which represent management’s on the understanding of best estimate about future the business. developments and takes into account past experience.

d) Considered historical forecasting accuracy, by comparing previously forecasted cash flows to actual results achieved.

Key assumptions on which comparing previously management has based its forecasted cash flows to determination of recoverable actual results achieved. amount include estimated longterm growth rates, discount rate, e) Compared the assumptions estimated sales growth rate and made by the management estimated operating margins. of the Company with Management has obtained comparable benchmarks in fair value of investments from relation to key inputs such independent valuation experts as long-term growth rates for investments in the said two and discount rates with the subsidiaries. assistance of our fair value specialists.

We have identified this as a key audit matter as determination f) Performed sensitivity of recoverable amount involves analysis on the key significant judgements, as assumptions such as longregards to reasonableness term growth rates and of assumptions involved in discount rates, to ascertain estimating future cash flows the extent of change in of these subsidiaries and in those assumptions that determining the discount rate would be required for to be used. Changes in these the investment in these assumptions could impact subsidiaries to be impaired the results of the impairment further. assessment.

Information Other than the Financial Statements and Auditor’s Report Thereon

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

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

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

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

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Standalone Financial Statements

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained upto the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

79

Annexure “A” to the Independent Auditor’s Report

TO THE MEMBERS OF PIDILITE INDUSTRIES LIMITED FOR THE YEAR ENDED 31[ST] MARCH 2021

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

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

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

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

5. d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

6. e. On the basis of the written representations received from the directors as on 31[st] March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31[st] March 2021 from being appointed as a director in terms of Section 164(2) of the Act.

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

8. g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended, In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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

   • i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.

   • ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

   • iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

10. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants (Firm‘s Registration No.117366W/W-100018)

N. K. Jain

Partner

(Membership No. 045474) UDIN: 21045474AAAABI3158

Place: Mumbai Date: 12[th] May 2021

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)`

Meaning of Internal Financial Controls Over Financial Reporting

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

We have audited the internal financial controls over financial reporting of Pidilite Industries Limited (“the Company”) as of 31[st] March 2021 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

• (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

• (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

• (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31[st] March 2021, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm‘s Registration No.117366W/W-100018)

N. K. Jain Partner

(Membership No. 045474) UDIN: 21045474AAAABI3158

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Place: Mumbai Date: 12[th] May 2021

81

Annexure “B” to the Independent Auditor’s Report

TO THE MEMBERS OF PIDILITE INDUSTRIES LIMITED FOR THE YEAR ENDED 31[ST] MARCH 2021

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

• i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

• Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

• b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

• v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013.

• vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

• c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed/ transfer deed/ conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

• vii) According to the information and explanations given to us, in respect of statutory dues:

  • a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues applicable to it to the appropriate authorities.

• ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

• iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

• b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues in arrears as at 31[st] March 2021 for a period of more than six months from the date they became payable.

• iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31[st] March 2021 on account of disputes are given below:

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Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount
( in crores)
Income Tax Act, 1961 Income Tax Commissioner (Appeals) AY 2007-08, AY 2010-11 to AY 2014-15 0.11
Income Tax TDS Commissioner (Appeals) AY 2014-15 to 2019-20 37.00
Income Tax Act, 1961 - Total 37.11 []
Goods and Service Goods and Additional Commissioner 2017-18 0.05
tax Act, 2017 Service tax
Goods and Service tax Act, 2017 - Total 0.05
Finance Act, 1994 Service Tax The Customs, Excise & Service 2006-07 to 2011-12, 11.51
Tax Appellate Tribunal 2013-14 to 2016-17
(CESTAT)
Finance Act, 1994 – Total 11.51 [@]
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Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount
( in crores)
Sales Tax Act Sales Tax in Assessing officer 1998-99, 2005-06, 2.31
Various States 2008-09 to 2015-16
Sales Tax in Commissioner of Sales Tax 2008-09 0.25
Various States
Sales Tax in Additional Commissioner 2002-03, 2008-09 to 2017-18 17.79
Various States
Sales Tax in Deputy Commissioner of Sales 1994-95, 2005-06 to 2016-17 2.23
Various States Tax
Sales Tax in Joint Commissioner of 1998-99, 1999-00, 2002-03, 2004-05, 2008-09 74.84
Various States Sales Tax to 2017-18
Sales Tax in West Revision Board 2004-05 0.59
Bengal
Sales Tax in Sales Tax Tribunal 1999-00, 2000-01, 2002-03, 30.9
Various States 2004-05 to 2016-17
Sales Tax in High Court 2003-04, 2013-14, 2014-15 2.76
Various States
Sales Tax Act – Total 131.67 [^]
Net of 29.87 crores paid under protest ^ Net of 30.51 crores paid under protest
@ Net of 0.33 crores paid under protest
There are no dues of Customs Duty and Excise Duty which have not been deposited as on 31 [st] March 2021 on account of disputes
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• xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

• viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company has not taken any loans or borrowings from financial institutions and government and has not issued any debenture.

• xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

• ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.

• x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

• xvi) The Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934.

• xi) In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

For DELOITTE HASKINS & SELLS LLP

• Chartered Accountants

• (Firm’s Registration No. 117366W/W-100018)

N. K. Jain

Partner

• xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.

(Membership No. 045474) UDIN: 21045474AAAABI3158

Place: Mumbai Date: 12[th] May 2021

• xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

83

Statement of Balance Sheet

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as at 31 [st] March 2021 ( in crores)
Particulars Note No. As at 31 [st] March 2021 As at 31 [st] March 2020
ASSETS
1 Non-Current Assets
(a) Property, Plant and Equipment 4 1,023.38 861.24
(b) Right of Use Assets 5 118.67 109.15
(c) Capital Work-In-Progress 4 281.50 247.64
(d) Goodwill 6 86.34 86.11
(e) Other Intangible Assets 6 194.17 192.99
(f) Financial Assets
(i) Investments 7 3,312.26 1,108.34
(ii) Loans 10 4.82 4.04
(iii) Other Financial Assets 12 15.15 13.12
(g) Income Tax Assets (net) 16 86.98 105.80
(h) Other Non-Current Assets 17 79.37 64.57
Total Non-Current Assets 5,202.64 2,793.00
2 Current Assets
(a) Inventories 15 975.94 730.49
(b) Financial Assets
(i) Investments 8 169.35 715.18
(ii) Trade Receivables 9 999.09 806.63
(iii) Cash and Cash Equivalents 14A 109.81 564.17
(iv) Bank balances other than (iii) above 14B 2.56 4.67
(v) Loans 11 16.25 25.38
(vi) Other Financial Assets 13 7.34 8.23
(c) Other Current Assets 18 140.43 171.31
Total Current Assets 2,420.77 3,026.06
TOTAL ASSETS 7,623.41 5,819.06
EQUITY AND LIABILITIES
EQUITY
(a) Equity Share Capital 19 50.82 50.81
(b) Other Equity 20 5,510.40 4,414.01
Total Equity 5,561.22 4,464.82
LIABILITIES
1 Non-Current Liabilities
(a) Financial Liabilities
(i) Lease Liabilities 48.79 51.30
(ii) Other Financial Liabilities 23 13.63 7.26
(b) Provisions 25 45.02 40.89
(c) Deferred Tax Liabilities (net) 27 75.86 75.97
Total Non-Current Liabilities 183.30 175.42
2 Current Liabilities
(a) Financial Liabilities
(i) Borrowings 21 55.00 -
(ii) Trade Payables 22
- Total Outstanding Dues of Micro Enterprises 67.04 9.30
and Small Enterprises
- Total Outstanding Dues of Creditors other than 726.78 485.51
Micro Enterprises and Small Enterprises
(iii) Lease Liabilities 18.54 22.04
(iv) Other Financial Liabilities 24 900.44 552.42
(b) Other Current Liabilities 28 72.66 90.03
(c) Provisions 26 16.48 11.78
(d) Current Tax Liabilities (net) 29 21.95 7.74
Total Current Liabilities 1,878.89 1,178.82
TOTAL LIABILITIES 2,062.19 1,354.24
TOTAL EQUITY AND LIABILITIES 7,623.41 5,819.06
See accompanying notes to the financial statements 1 to 57
In terms of our report attached
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FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

For DELOITTE HASKINS & SELLS LLP Chartered Accountants

N. K. JAIN BHARAT PURI M B PAREKH Partner Managing Director Executive Chairman DIN: 02173566 DIN: 00180955

PRADIP KUMAR MENON PUNEET BANSAL Chief Financial Officer Company Secretary

Place: Mumbai Date: 12[th] May 2021

Statement of Profit and Loss

for the year ended 31[st] March 2021

EXPENSES
Cost of Materials Consumed Purchases of Stock-in-Trade Changes in inventories of Finished Goods, Work-in-Progress and Stock-in-Trade Employee Benefts Expense Finance Costs Depreciation, Amortisation and Impairment Expense Other Expenses	32 2,469.53 453.99 33 (89.77) 34 787.75 35 16.99 36 147.10 37 1,047.15	2,520.70 387.71 27.98 736.89 13.40 125.79 1,175.75
Total Expenses	4,832.74	4,988.22
Proft before Exceptional Items and Tax Exceptional Items	1,457.08 38 0.45	1,496.23 59.28
Proft before Tax Tax Expense Current Tax Deferred Tax	1,456.63 48 375.05 48 0.12	1,436.95 368.65 (33.32)
Net Tax Expense	375.17	335.33
Proft for the year	1,081.46	1,101.62
Other Comprehensive Income Items that will not be reclassifed to proft or loss Remeasurement of Defned Beneft Plan Income tax relating to items that will not be reclassifed to proft or loss	45 (0.95) 48 0.24	(14.88) 3.68
Total Other Comprehensive Loss	(0.71)	(11.20)
Total Comprehensive Income for the year	1,080.75	1,090.42
Earnings Per Equity Share: Basic ( ) Diluted ( ) See accompanying notes to the fnancial statements	43 21.28 21.27 1 to 57	21.69 21.68

Place: Mumbai Date: 12[th] May 2021

85

Statement of Changes in Equity

for the year ended 31[st] March 2021

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( in crores)
a. Equity Share Capital
Amount
Balance as at 1 [st] April 2019 50.80
Changes in equity share capital during the year
Issue of equity shares under Employee Stock Option Plan 2016 (refer Note 46) 0.01
Balance as at 31 [st] March 2020 50.81
Changes in equity share capital during the year
Issue of equity shares under Employee Stock Option Plan 2016 (refer Note 46) 0.01
Balance as at 31 [st] March 2021 50.82
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b. Other Equity
Reserves and Surplus TOTAL
Capital Securities Capital Cash Share General Retained
Reserve on Premium Redemption Subsidy Options Reserve Earnings
Business Reserve Reserve Outstanding
Combination Account
Balance as at 1 [st] April 2019 0.34 10.01 0.50 0.95 9.65 1,335.38 2,779.09 4,135.92
Profit for the year - - - - - - 1,101.62 1,101.62
Other Comprehensive Income for the year, - - - - - - (11.20) (11.20)
net of income tax
Payment of dividends - - - - - - (826.76) (826.76)
(including tax thereon)
Recognition of share-based payments - 13.20 - - 1.24 - - 14.44
(refer Note 46)
Transferred to Securities Premium on - 13.20 - - (13.20) - - -
Options exercised during the year
Amortised during the year - - - - 14.84 - - 14.84
Lapsed during the year - - - - (0.40) - - (0.40)
Balance as at 31 [st] March 2020 0.34 23.21 0.50 0.95 10.89 1,335.38 3,042.74 4,414.01
Profit for the year - - - - - - 1,081.46 1,081.46
Other Comprehensive Income for the year, - - - - - - (0.71) (0.71)
net of income tax
Recognition of share-based payments - 2.83 - - 14.53 - - 17.36
(refer Note 46)
Transferred to Securities Premium on - 2.83 - - (2.83) - - -
Options exercised during the year
Amortised and exercised during the year - - - - 17.40 - - 17.40
Lapsed during the year - - - - (0.04) - - (0.04)
Due to Business combination (refer Note 56) (1.72) - - - - - - (1.72)
Balance as at 31 [st] March 2021 (1.38) 26.04 0.50 0.95 25.42 1,335.38 4,123.49 5,510.40
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In terms of our report attached

For DELOITTE HASKINS & SELLS LLP FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

N. K. JAIN BHARAT PURI M B PAREKH Partner Managing Director Executive Chairman DIN: 02173566 DIN: 00180955 PRADIP KUMAR MENON PUNEET BANSAL Chief Financial Officer Company Secretary Place: Mumbai Place: Mumbai Date: 12[th] May 2021 Date: 12[th] May 2021

Statement of Cash Flows

for the year ended 31[st] March 2021

( in crores)

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For the year ended For the year ended
31 [st] March 2021 31 [st] March 2020
A Cash Flows From Operating Activities
Profit before tax for the year 1,456.63 1,436.95
Adjustments for:
Finance costs recognised in Statement of Profit and Loss 16.99 13.40
Interest income recognised in Statement of Profit and Loss (12.78) (5.93)
Dividend income recognised in Statement of Profit and Loss (2.78) (13.38)
Loss/ (Profit) on disposal of Property, Plant and Equipment 5.85 (2.67)
Net gain arising on financial assets designated at FVTPL (39.99) (110.39)
Allowance for Doubtful Debts 3.73 -
Allowance for Doubtful Debts Written Back - (5.80)
Exceptional Item - Impairment in value of Assets and Investments 0.45 59.28
Depreciation, Amortisation and Impairment Expense 147.10 125.79
Unrealised foreign exchange gain (net) (1.88) (0.15)
Provision for Employee Benefits 7.89 (11.36)
Expense recognised in respect of Equity-Settled Share-Based Payments 17.28 14.31
Operating profits before Working Capital changes 1,598.49 1,500.05
Movements in Working Capital:
(Increase)/ Decrease in Operating Assets
Trade Receivables (200.06) (17.94)
Inventories (240.47) 3.81
Non-Current Loans (0.78) (1.10)
Current Loans (7.87) (10.00)
Other Non-Current Financial Assets 0.02 5.39
Other Current Financial Assets 0.89 1.02
Other Non-Current Non Financial Assets (27.80) 2.83
Other Current Non Financial Assets 13.39 (25.70)
Increase/ (Decrease) in Operating Liabilities
Trade Payables 296.34 37.89
Other Current Financial Liabilities 121.42 113.99
Other Non-Current Financial Liabilities 6.37 (38.75)
Other Current Non Financial Liabilities (17.40) 32.60
Cash generated from Operations 1,542.54 1,604.09
Taxes paid (net of refunds) (342.02) (375.92)
Net Cash generated from Operating Activities [A] 1,200.52 1,228.17
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87

Notes forming part of the financial statements

Statement of Cash Flows

for the year ended 31[st] March 2021

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( in crores)
For the year ended For the year ended
31 [st] March 2021 31 [st] March 2020
B Cash Flows from Investing Activities
Payments for purchase of Property, Plant and Equipment, (323.97) (398.86)
Other Intangible Assets & Capital Work-In-Progress
Proceeds from disposal of Property, Plant and Equipment & 1.76 5.03
Other Intangible Assets
Net Cash outflow on acquisition/ Investment in Subsidiaries (2,109.95) (127.44)
Payments to purchase Investments (2,898.47) (1,305.53)
Proceeds on sale of Investments 3,634.27 1,907.30
Payment towards Share Application Money - (18.74)
Decrease/ (Increase) in Bank Deposits 1.42 53.67
(Increase)/ Decrease in Other Bank Balances 0.69 (1.40)
Interest received 12.78 5.93
Dividend received 2.78 13.38
Net cash (used in)/ generated from Investing Activities [B] (1,678.69) 133.34
C Cash Flows from Financing Activities
Net increase in Current Borrowings 55.00 -
Proceeds from issue of Equity shares of the Company 0.01 0.01
Payment of Lease Liabilities (24.08) (25.05)
Dividends paid on Equity Shares (including tax thereon) (0.69) (825.36)
Interest paid (11.53) (7.32)
Net cash generated from/ (used in) Financing Activities [C] 18.71 (857.72)
Net increase/ (decrease) in Cash and Cash Equivalents [A+B+C] (459.46) 503.78
Cash and Cash Equivalents at the beginning of the year 564.17 60.24
Bank unrealised gain 0.18 0.33
Cash and Cash Equivalents at the beginning of the year 564.35 60.57
Cash and Cash Equivalents at the end of the year (refer Note 14A) 109.81 564.17
Bank unrealised gain (0.05) 0.18
Acquisition under Business Combination (refer Note 56) (4.87) -
Cash and Cash Equivalents at the end of the year 104.89 564.35
Net (decrease)/ increase in Cash and Cash Equivalents (459.46) 503.78
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1 Corporate information

Pidilite Industries Limited, together with its subsidiaries are pioneers in consumer and industrial speciality chemicals in India. The equity shares of the Company are listed on BSE Ltd (BSE) and National Stock Exchange of India Ltd (NSE).

The address of its registered office is Regent Chambers, 7[th] Floor, Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai 400 021. The address of principal place of business is Ramkrishna Mandir Road, Off Mathuradas Vasanji Road, Andheri (E), Mumbai 400 059.

2 Significant Accounting Policies

2.1 Basis of accounting and preparation of financial statements

The standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (“Ind AS”) prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

The financial statements have been prepared under the historical cost convention except for the following items – a. Certain Financial Assets/ Liabilities (including derivative instruments) – at Fair value

b. Employee Stock Options - at Fair value

The financial statements are presented in Indian Rupees ( ) and all values are rounded to the nearest crores, except otherwise indicated.

2.2 Business Combination

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity interest issued by the Company in exchange of control of acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisitiondate fair value and included as a part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding changes against goodwill or capital reserve, as the case maybe. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Contingent consideration that is classified as an asset or a liability is subsequently (after the measurement period) remeasured at subsequent reporting dates with the corresponding gain or loss being recognised in Statement of Profit and Loss.

In case of business combinations involving entities under common control, the above policy does not apply. Business combinations involving entities under common control are accounted for using the pooling of interests method. The net assets of the transferor entity or business are accounted at their carrying amounts on the date of the acquisition subject to necessary adjustments required to harmonise accounting policies. Retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee. Identity of the reserves appearing in the financial statements of the transferor is preserved and appears in the financial statements of the transferee in the same form. Any excess or shortfall of consideration paid over share capital and reserves of transferor entity is recognised as capital reserve under equity.

2.3 Goodwill

Notes:

The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Indian Accounting Standard (IND AS 7) - Statement of Cash Flow.

In terms of our report attached

For DELOITTE HASKINS & SELLS LLP FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Chartered Accountants

N. K. JAIN Partner

BHARAT PURI M B PAREKH Managing Director Executive Chairman DIN: 02173566 DIN: 00180955 PRADIP KUMAR MENON PUNEET BANSAL Chief Financial Officer Company Secretary

Place: Mumbai Date: 12[th] May 2021

Place: Mumbai Date: 12[th] May 2021

Goodwill is measured as the excess of the sum of the consideration transferred over the net of acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Company’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination. A cashgenerating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each assets in the unit. Any impairment loss for goodwill is recognised directly in Statement of Profit and Loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

89

Notes forming part of the financial statements

Notes forming part of the financial statements

2.4 Revenue Recognition

The Company recognises revenue from sale of goods, based on the terms of contract and as per the business practise; the Company determines transaction price considering the amount it expects to be entitled in exchange of transferring promised goods to the customer. Revenue is recognised when it is realized or is realizable and has been earned after the deduction of variable components such as discounts, rebates, incentives, promotional couponing and schemes. The company estimates the amount of variable components based on historical, current and forecast information available and either expected value method or most likely method, as appropriate and records a corresponding liability in other payables; the actual amounts may be different from such estimates. These differences, which have historically not been significant, are recognised as a change in management estimate in a subsequent period.

2.4.1 Sale of Goods

Revenue is recognised when control of the products being sold has been transferred to a customer and when there are no longer any unfulfilled obligations to the customer. This is generally on delivery to the customer but depending on individual customer terms, this can be at the time of dispatch, delivery or upon formal customer acceptance. This is considered the appropriate point where the performance obligations in our contracts are satisfied and the Company no longer has control over the inventory.

Advance received from customer before transfer of control of goods to the customer is recognised as contract liability.

2.4.2 Dividend, Interest income and Royalty

Dividend income from investments is recognised when the Company’s right to receive dividend is established. Interest income from a financial asset is recognised on a time basis, by reference to the principal outstanding using the effective interest method provided it is probable that the economic benefits associated with the interest will flow to the Company and the amount of interest can be measured reliably. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of that financial asset.

Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement or underlying arrangement in case of sales provided that it is probable that the economic benefits associated with the royalty shall flow to the Company and the amount of royalty can be measured reliably.

Claims/ Insurance Claim etc. are accounted for when no significant uncertainties are attached to their eventual receipt.

The Company’s policy for recognition of revenue (rental income) from operating leases is described in note 2.5.2.

2.5 Leasing

The company at the inception of a contract, assesses whether the contract is a lease or not lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration.

2.5.1 Company as Lessee

The Company’s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cashflows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discount educing the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

2.5.2 Company as Lessor

Rental income from leases is recognised on a straight- line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company’s expected inflationary cost increase, such increases are recognised in the year in which such benefits accrue.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect constant periodic rate of return of the Company’s net investment outstanding in respect of the leases.

2.6 Foreign Currencies

The functional currency of the Company is the Indian Rupee.

At the end of each reporting period, monetary items (including financial assets and liabilities) denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Gains or losses arising from these translations are recognised in the Statement of Profit and Loss.

In respect of the foreign offices/ branches, which are integral foreign operations, all revenues and expenses during the month are reported at monthly average rates. Outstanding balances in respect of monetary assets and liabilities are restated at the year end exchange rates. Outstanding balances in respect of non-monetary assets and liabilities are stated at the rates prevailing on the date of the transaction. Net gain/ loss on foreign currency translation are recognised in the Statement of Profit and Loss.

2.7 Share-based payment transactions of the Company

Equity-settled share-based payments to employees providing similar services are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straightline basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity.

2.8 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

2.8.1 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 applicable tax rates that have been enacted or substantively enacted by the end of the reporting period and the provisions of the Income Tax Act, 1961 and other tax laws, as applicable.

2.8.2 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.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

91

Notes forming part of the financial statements

Notes forming part of the financial statements

2.8.3 Current and Deferred Tax for the year

Current and deferred tax are recognised in 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.

2.9 Property, Plant and Equipment

2.9.1 Property, Plant and Equipment acquired separately

Freehold land is stated at cost and not depreciated. Buildings, plant and machinery, vehicles, furniture and office equipments are stated at cost less accumulated depreciation and accumulated impairment losses.

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant and Equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.

2.9.2 Capital Work-in-Progress

Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company’s accounting policy. Such properties are classified and capitalised to the appropriate categories of Property, Plant and Equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

2.9.3 Depreciation

Depreciation is recognised so as to write off the cost of assets (other than Freehold Land and Capital Work-inProgress) less their residual values over their useful lives, using the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

For certain items of Property, Plant and Equipment, the Company depreciates over estimated useful life which are different from the useful lives prescribed under Schedule II to the Companies Act, 2013 which is based upon technical assessment made by technical expert and management estimate. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

2.10.3 Internally generated Intangible Assets – Research and Development Expenditure

Expenditure on research activities is recognised in Statement of Profit and Loss in the period in which it is incurred.

An internally generated intangible asset arising from development is recognised if and only if it meets the recognition criteria of intangible assets. The amount initially recognised is the sum total of expenditure incurred from the date when the intangible asset first meets the recognition criteria. Where no intangible asset can be recognised, development expenditure is recognised in Statement of Profit and Loss in the period in which it is incurred.

Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.

2.10.4 Useful lives of Intangible Assets

Estimated useful lives of the Intangible Assets are as follows:

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Type of Asset Useful Life
Computer Software 6 years
Technical Knowhow 10 years
Non-Compete Fees 7 - 10 years
Copyrights Indefinite Life
Trademark Indefinite Life
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2.11 Impairment of Tangible and Intangible Assets other than Goodwill

At the end of each reporting period, 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). When 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. When 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 group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

The estimated useful lives are as mentioned below:

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Type of Asset Useful Life
Buildings 30 - 60 years
Plant and Machinery 6 - 25 years
Vehicles 8 - 10 years
Furniture and Fixtures 10 years
Office Equipment 3 - 6 years
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2.10 Intangible Assets

2.10.1 Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

2.10.2 Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

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. Intangible assets with indefinite useful lives are tested for impairment annually at the cash-generating unit level. The assessment of indefinite useful life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Recoverable amount is the higher of fair value less costs of disposal and value in use. If the recoverable amount of the 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 in Statement of Profit and Loss.

2.12 Inventories

Inventories are valued at lower of cost and net realisable value. Cost of inventories is determined on weighted average. Cost for this purpose includes cost of direct materials, direct labour, excise duty and appropriate share of overheads. Net realisable value represents the estimated selling price in the ordinary course of business less all estimated costs of completion and estimated costs necessary to make the sale.

Obsolete, defective, unserviceable and slow/ non-moving stocks are duly provided for and valued at net realisable value.

2.13 Provisions (other than Employee Benefits)

A provision is recognised when as a result of past event, the Company has a present legal or constructive obligation which can be reliably estimated and it is probable that an outflow of economic benefit will be required to settle the obligation.

Provisions (excluding retirement benefits) are determined based on the best estimate required to settle the obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

93

Notes forming part of the financial statements

Notes forming part of the financial statements

2.14 Financial Instruments

2.14.1 Initial Recognition and Measurement

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. At initial recognition, financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at Fair Value Through Profit or Loss are recognised in the Statement of Profit and Loss.

2.14.2 Subsequent measurement of Financial Assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Debt instruments that meet conditions based on purpose of holding assets and contractual terms of instrument are subsequently measured at amortised cost using effective interest method.

All other financial assets are measured at fair value.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as Fair Value Through Profit or Loss. Interest income is recognised in profit or loss and is included in the “Other income” line item.

2.14.3 Impairment of Financial Assets

The Company recognises loss allowance using expected credit loss model for financial assets which are not measured at Fair Value Through Profit or Loss. Expected credit losses are weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss 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 Company expects to receive, discounted at original effective rate of interest.

For Trade receivables, the Company measures loss allowance at an amount equal to lifetime expected credit losses. The Company computes expected credit loss allowance based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

2.14.4 Financial Liabilities and equity instruments

2.14.4.1 Classification of debt or equity

Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and equity instrument.

2.14.4.2 Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

2.14.4.3 Financial Liabilities

All financial liabilities (other than derivative financial instruments) are measured at amortised cost using effective interest method at the end of reporting periods.

2.14.5 Derecognition of Financial Assets and Liabilities

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or when the Company transfers the contractual rights to receive the cash flows of the financial asset in which substantially all the risks and rewards of ownership of the financial asset are transferred, or in which the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and does not retain control of the financial asset.

The Company derecognises a financial liability (or a part of financial liability) when the contractual obligation is discharged, cancelled or expired.

2.14.6 Derivative Financial Instruments

The Company holds derivative financial instruments such as foreign exchange forward contracts to manage its exposure to foreign currency exchange rate risks. Also, the Company has an option to purchase and the seller has an option to sell balance stake in equity share capital of certain partly owned subsidiary(ies).

Derivatives are initially recognised at fair value at the date the contracts are entered into. Subsequent to initial recognition, these contracts are measured at fair value at the end of each reporting period and changes are recognised in Statement of Profit and Loss.

2.15 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit/ loss and tax for the period is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments. Cash Flows from operating, investing and financing activities of the Company are segregated.

Cash and Cash Equivalents for the purpose of Cash Flow Statement comprise of cash at bank, cash in hand and short- term deposits with an original maturity of three months or less, as reduced by bank overdrafts.

2.16 Segment Reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/ loss amounts are evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of cost plus margins. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under “unallocated revenue/ expenses/ assets/ liabilities” respectively.

2.17 Employee Benefits

Employee benefits include Provident Fund, Superannuation Fund, Employee State Insurance Scheme, Gratuity Fund, Compensated Absences, Anniversary Awards, Premature Death Pension Scheme and Total Disability Pension Scheme.

2.17.1 Defined Contribution Plans

The Company’s contribution to Provident Fund, Superannuation Fund, National Pension Scheme and Employee State Insurance Scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

2.17.2 Defined Benefit Plans

For Defined Benefit Plans in the form of Gratuity Fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding net interest) is reflected immediately in the Balance Sheet with a charge or credit recognised in Other Comprehensive Income in the period in which they occur. Remeasurement recognised in Other Comprehensive Income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised immediately for both vested and the non-vested portion. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited taking into account the present value of available refunds and reductions in future contributions to the schemes.

2.17.3 Short-Term and Other Long-Term Employee Benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees upto the reporting date.

2.18 Earnings per share

The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares. Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

95

Notes forming part of the financial statements

Notes forming part of the financial statements

2.19 Assets held for sale

Sale of business is classified as held for sale, if their carrying amount is intended to be recovered principally through sale rather than through continuing use. The condition for classification as held for sale is met when disposal business is available for immediate sale and the same is highly probable of being completed within one year from the date of classification as held for sale.

2.20 Discontinued operations

A discontinued operation is a component of the Company’s business that represents a separate line of business that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon the earlier of disposal or when the operation meets the criteria to be classified as held for sale.

2.21 Non-current assets and disposal groups held for sale

Assets of disposal groups that is available for immediate sale and where the sale is highly probable of being completed within one year from the date of classification are considered and classified as assets held for sale. Noncurrent assets and disposal groups held for sale are measured at the lower of carrying amount and fair value less costs to sell.

3 Critical Accounting Judgements and key sources of Estimation Uncertainty

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies, reported amounts of assets, liabilities, income and expenses, and accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing 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.

3.1.4 Income taxes

Significant judgements are involved in estimating budgeted profits for the calculation of advance tax and deferred tax, and determining provision for income taxes and uncertain tax positions (disclosed in Note 48).

3.1.5 Property, Plant and Equipment and Other Intangible Assets

The useful lives and residual values of Company’s assets are determined by the management at the time the asset is acquired. These estimates are reviewed annually by the management. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

3.1.6 Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances.

The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.

3.1 Key accounting judgements, assumptions and estimates

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting 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:

3.1.1 Impairment of investments in subsidiaries

Investment in subsidiaries is measured at cost and tested for impairment annually. For impairment testing, management determines recoverable amount, using cash flow projections which take into account past experience and represent management’s best estimate about future developments. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Management obtains fair value of investments from independent valuation experts.

3.1.2 Impairment of Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets (i.e. trademarks and copyrights) are tested for impairment on an annual basis. Recoverable amount of cash-generating units is determined based on higher of value-in-use and fair value less cost to sell. The impairment test is performed at the level of the cash-generating unit or groups of cashgenerating units which are benefitting from the synergies of the acquisition and which represents the lowest level at which the intangibles are monitored for internal management purposes.

Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent management’s best estimate about future developments.

3.1.3 Employee related provisions

The costs of long term and short term employee benefits are estimated using assumptions by the management. These assumptions include rate of increase in compensation levels, discount rates, expected rate of return on assets and attrition rates. (disclosed in Note 45)

97

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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4 Property, Plant and Equipment and Capital Work-In-Progress
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Freehold Land 89.94 84.40
Buildings 320.61 260.20
Plant and Machinery 547.75 453.15
Vehicles 4.93 5.06
Furniture and Fixtures 25.03 26.42
Office Equipment 35.12 32.01
1,023.38 861.24
Capital Work-In-Progress 281.50 247.64
TOTAL 1,304.88 1,108.88
Net of Impairment NIL ( 55.19 crores as at 31 [st] March 2020) (refer Note 38)
Freehold Buildings Plant and Vehicles Furniture Office TOTAL
Land Machinery and Equipment
Fixtures
Gross Carrying Amount
Balance as at 1 [st] April 2019 53.30 261.88 1,013.84 18.68 74.59 110.96 1,533.25
Additions 31.10 88.40 152.46 0.66 5.21 12.82 290.65
Disposals/ Adjustments - (2.74) (13.96) (0.20) (0.09) (0.06) (17.05)
Balance as at 31 [st] March 2020 84.40 347.54 1,152.34 19.14 79.71 123.72 1,806.85
Additions 6.97 70.88 175.20 1.13 3.11 14.58 271.87
Acquisition under Business - 2.81 11.60 - 0.08 0.02 14.51
Combination (refer Note 56)
Disposals/ Adjustments (1.43) (0.04) (25.64) (4.26) (0.54) (8.51) (40.42)
Balance as at 31 [st] March 2021 89.94 421.19 1,313.50 16.02 82.36 129.81 2,052.81
Accumulated Depreciation and Impairment
Balance as at 1 [st] April 2019 - (79.28) (642.43) (13.06) (49.15) (81.71) (865.63)
Eliminated on disposal of assets - 1.63 12.33 0.08 0.04 0.02 14.10
Depreciation expense - (9.69) (69.09) (1.10) (4.18) (10.02) (94.08)
Balance as at 31 [st] March 2020 - (87.34) (699.19) (14.08) (53.29) (91.71) (945.61)
Acquisition under Business
- (0.66) (2.27) - (0.04) (0.01) (2.98)
Combination (refer Note 56)
Eliminated on disposal of assets - - 20.20 4.08 0.45 8.08 32.81
Depreciation expense - (12.58) (84.49) (1.08) (4.45) (11.05) (113.65)
Balance as at 31 [st] March 2021 - (100.58) (765.75) (11.08) (57.33) (94.69) (1,029.43)
Net Carrying Amount
Balance as at 1 [st] April 2019 53.30 182.60 371.40 5.62 25.44 29.25 667.62
Additions 31.10 88.40 152.46 0.66 5.21 12.82 290.65
Disposals/ Adjustments - (2.74) (13.96) (0.20) (0.09) (0.06) (17.05)
Depreciation expense - (9.69) (69.09) (1.10) (4.18) (10.02) (94.08)
Depreciation Eliminated on - 1.63 12.33 0.08 0.04 0.02 14.10
disposal of assets
Balance as at 31 [st] March 2020 84.40 260.20 453.15 5.06 26.42 32.01 861.24
Additions 6.97 70.88 175.20 1.13 3.11 14.58 271.87
Acquisition under Business
- 2.15 9.33 - 0.04 0.01 11.53
Combination (refer Note 56)
Disposals/ Adjustments (1.43) (0.04) (25.64) (4.26) (0.54) (8.51) (40.42)
Depreciation expense - (12.58) (84.49) (1.08) (4.45) (11.05) (113.65)
Depreciation Eliminated on - - 20.20 4.08 0.45 8.08 32.81
disposal of assets
Balance as at 31 [st] March 2021 89.94 320.61 547.75 4.93 25.03 35.12 1,023.38
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Notes:

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( in crores)
a) Assets given under lease included in Note 4 above are as under:
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Freehold Land 17.00 13.79
Buildings 22.84 22.29
TOTAL 39.84 36.08
Freehold Buildings TOTAL
Land
Gross Carrying Amount
Balance as at 1 [st] April 2019 13.79 28.20 41.99
Additions - 3.12 3.12
Balance as at 31 [st] March 2020 13.79 31.32 45.11
Additions 3.21 1.71 4.92
Balance as at 31 [st] March 2021 17.00 33.03 50.03
Accumulated Depreciation and Impairment
Balance as at 1 [st] April 2019 - (6.93) (6.93)
Depreciation expense - (2.10) (2.10)
Balance as at 31 [st] March 2020 - (9.03) (9.03)
Depreciation expense - (1.16) (1.16)
Balance as at 31 [st] March 2021 - (10.19) (10.19)
Net Carrying Amount
Balance as at 1 [st] April 2019 13.79 21.27 35.06
Additions - 3.12 3.12
Depreciation expense - (2.10) (2.10)
Balance as at 31 [st] March 2020 13.79 22.29 36.08
Additions 3.21 1.71 4.92
Depreciation expense - (1.16) (1.16)
Balance as at 31 [st] March 2021 17.00 22.84 39.84
b) Buildings includes shares of co-operative societies of 0.01 crores ( 0.01 crores as at 31 [st] March 2020)
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99

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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5 Right of Use Assets
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Leasehold Land 61.80 39.65
Leasehold Buildings 56.87 69.50
TOTAL 118.67 109.15
Leasehold Leasehold TOTAL
Land Buildings
Gross Carrying Amount
Recognised on adoption of Ind AS 116 as at 1 [st] April 2019 (refer Note 51) 41.03 69.85 110.88
Additions - 22.46 22.46
Balance as at 31 [st] March 2020 41.03 92.31 133.34
Additions 23.01 20.03 43.04
Acquisition under Business Combination (refer Note 56) 0.45 - 0.45
Deletions/ Adjustments - (7.42) (7.42)
Balance as at 31 [st] March 2021 64.49 104.92 169.41
Accumulated Depreciation
Recognised on adoption of Ind AS 116 as at 1 [st] April 2019 (refer Note 51) - - -
Depreciation expense (1.38) (22.81) (24.19)
Balance as at 31 [st] March 2020 (1.38) (22.81) (24.19)
Depreciation expense (1.31) (25.24) (26.55)
Balance as at 31 [st] March 2021 (2.69) (48.05) (50.74)
Net Carrying Amount
Recognised on adoption of Ind AS 116 as at 1 [st] April 2019 (refer Note 51) 41.03 69.85 110.88
Additions - 22.46 22.46
Depreciation expense (1.38) (22.81) (24.19)
Balance as at 31 [st] March 2020 39.65 69.50 109.15
Additions 23.01 20.03 43.04
Acquisition under Business Combination (refer Note 56) 0.45 - 0.45
Deletions/ Adjustments - (7.42) (7.42)
Depreciation expense (1.31) (25.24) (26.55)
Balance as at 31 [st] March 2021 61.80 56.87 118.67
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( in crores)

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6 Goodwill and Other Intangible Assets
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Goodwill 86.34 86.11
Total Goodwill (A) 86.34 86.11
Other Intangible Assets
Trademark 157.67 157.67
Computer Software 16.98 12.84
Copyrights 4.48 4.48
Technical Knowhow Fees 14.87 17.63
Non Compete Fees 0.17 0.37
Total Other Intangible Assets (B) 194.17 192.99
Total Intangible Assets (A)+(B) 280.51 279.10
Goodwill Trademark Computer Copyrights Technical Non TOTAL
Software Knowhow Compete
Fees Fees
Gross Carrying Amount
Balance as at 1 [st] April 2019 86.11 157.91 53.10 4.72 41.12 4.56 347.52
Additions - - 4.19 - - - 4.19
Disposals/ Adjustments - (0.24) - (0.24) (0.76) (0.02) (1.26)
Balance as at 31 [st] March 2020 86.11 157.67 57.29 4.48 40.36 4.54 350.45
Additions - - 8.08 - - - 8.08
Acquisition under Business 0.23 - - - - - 0.23
Combination (refer Note 56)
Balance as at 31 [st] March 2021 86.34 157.67 65.37 4.48 40.36 4.54 358.75
Accumulated Amortisation and Impairment
Balance as at 1 [st] April 2019 - - (40.20) - (20.57) (3.71) (64.48)
Amortisation expense - - (4.20) - (2.84) (0.48) (7.52)
Eliminated on disposal of assets - - (0.05) - 0.68 0.02 0.65
Balance as at 31 [st] March 2020 - - (44.45) - (22.73) (4.17) (71.35)
Amortisation expense - - (3.93) - (2.76) (0.20) (6.90)
Balance as at 31 [st] March 2021 - - (48.38) - (25.49) (4.37) (78.25)
Net Carrying Amount
Balance as at 1 [st] April 2019 86.11 157.91 12.90 4.72 20.55 0.85 283.04
Additions - - 4.19 - - - 4.19
Disposals/ Adjustments - (0.24) - (0.24) (0.76) (0.02) (1.26)
Amortisation expense - - (4.20) - (2.84) (0.48) (7.52)
Amortisation Eliminated on - - (0.05) - 0.68 0.02 0.65
disposal of assets
Balance as at 31 [st] March 2020 86.11 157.67 12.84 4.48 17.63 0.37 279.10
Additions - - 8.08 - - - 8.08
Acquisition under Business 0.23 - - - - - 0.23
Combination (refer Note 56)
Amortisation expense - - (3.93) - (2.76) (0.20) (6.90)
Balance as at 31 [st] March 2021 86.34 157.67 16.99 4.48 14.87 0.17 280.51
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The company has estimated the useful life for its copyrights and trademark as indefinite on the basis of renewal of legal rights and the management’s intention to keep it perpetually.

101

Notes forming part of the financial statements

Notes forming part of the financial statements

Goodwill, Copyrights and Trademark

Goodwill, copyrights and trademark in the books of the Company pertain to Consumer and Bazaar business of the Company.

At the end of each reporting period, the Company reviews carrying amount of goodwill, copyrights and trademark to determine whether there is any indication that goodwill, copyrights and trademark has suffered any impairment loss. Accordingly, recoverable amount of goodwill, copyrights and trademark is arrived basis projected cashflows from Consumer and Bazaar business.

Recoverable amount of goodwill, copyrights and trademark exceeds the carrying amount of goodwill, copyrights and trademark in the books as on 31[st] March 2021. Further there are no external indications of impairment of goodwill, copyrights and trademark. As a result, no impairment loss on goodwill, copyrights and trademark is required to be recognised.

Projected cashflows from Consumer and Bazaar business

The recoverable amount of this cash-generating unit is determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by the management for next year, estimates prepared for the next 4 years thereafter and a discount rate of 11.7% per annum (12.0% per annum as at 31[st] March 2020).

Cash flow projections during the budget period are based on the same expected gross margins and raw materials price inflation throughout the budget period. The cash flows beyond that five-year period have been extrapolated using a steady 7% per annum (8% per annum as at 31[st] March 2020) growth rate. The management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

The key assumptions used in the value in use calculations for Consumer and Bazaar cash-generating unit are as follows:

Budgeted sales growth	Sales growth is assumed at10.8%(CAGR) (17.5% as at 31stMarch 2020) in line with current year projections. The values assigned to the assumption refect past experience and current market scenario considering COVID-19 impact and are consistent with the managements’ plans for focusing operations in these markets. The management believes that the planned sales growth per year for the next fve years is reasonably achievable.
Raw materials price infation	Forecast for Material cost growth CAGR higher by0.2%(0.2% as at 31stMarch 2020) vs. sales growth, considering impact of commodity cost infation.
Other budgeted costs	Commercial spends (schemes and A&SP) have been continued at current year’s % to sales. Other fxed costs are in line with the current year’s growth.

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7 Investments - Non-Current
As at 31 [st] March 2021 As at 31 [st ] March 2020
Qty in crores Qty in crores
Non-Current Investments
A] Investment in Equity Instruments
i) Quoted:
Investment in Associates (fully paid up) (at cost)
Equity Shares of 1 each of Vinyl Chemicals (India) Ltd 74,51,540 1.18 74,51,540 1.18
TOTAL Quoted (i) 1.18 1.18
ii) Unquoted:
(a) Investment in Subsidiaries (fully paid up) (at cost unless
otherwise stated)
Equity Shares of USD 1 each of Pidilite International Pte Ltd 2,59,83,766 133.84 2,35,92,766 115.81
Equity Shares of AED 1 each of Pidilite Middle East Ltd 9,61,63,000 150.03 9,11,63,000 139.70
[Impairment in value of investments 65.92 crores
( 65.92 crores as at 31 [st] March 2020)]
Equity Shares of BRL 1 each of Pulvitec do Brasil Industria e 7,43,02,867 175.04 7,43,02,867 175.04
Comercio de Colas e Adesivos Ltda
[Impairment in value of investments 110.20 crores
( 110.20 crores as at 31 [st] March 2020)]
Equity Shares of USD 1 each of Pidilite USA Inc 1,47,80,000 64.77 1,47,80,000 64.77
Equity Shares of EGP 100 each of Pidilite Industries Egypt SAE 7,396 0.54 7,396 0.54
Equity Shares of BIRR 100 each of Pidilite Chemical PLC 1,77,159 4.54 1,38,525 3.70
[refer Note 38] [Impairment in value of investments 4.54 crores
( 3.70 crores as at 31 [st] March 2020)]
Equity Shares of 10 each of Fevicol Company Ltd 2,69,260 2.24 2,69,260 2.24
Equity Shares of 10 each of Pagel Concrete Technologies Pvt Ltd 80,000 0.84 80,000 0.84
[Impairment in value of investments 0.84 crores ( 0.84 crores as at
31 [st] March 2020)]
Equity Shares of 10 each of Bhimad Commercial Company Pvt Ltd 10,000 0.02 10,000 0.02
Equity Shares of 10 each of Madhumala Ventures Pvt Ltd 1,75,045 137.00 1,62,395 126.49
(formerly known as Madhumala Traders Pvt Ltd)
[refer Note 53 (d)]
Equity Shares of 10 each of Building Envelope Systems India Ltd 50,10,000 8.88 50,10,000 8.88
Equity Shares of 10 each of Nina Percept Pvt Ltd 8,79,999 70.99 8,43,999 66.17
Equity Shares of 10 each of ICA Pidilite Pvt Ltd 28,33,964 125.96 28,33,964 125.96
Equity Shares of 10 each of Cipy Polyurethanes Pvt Ltd 65,816 139.01 65,816 139.01
[refer Note 53 (c)]
Equity contribution towards 100% Membership Interest in Pidilite 1 7.41 1 7.41
Ventures LLC
Equity Shares of 10 each of Pidilite Litokol Pvt Ltd 11,25,000 14.88 6,00,000 0.60
[refer Note 53 (e)]
Equity Shares of 10 each of Pidilite Grupo Puma Manufacturing Ltd 4,55,000 11.71 5,000 0.01
[refer Note 53 (f)]
Equity Shares of 10 each of Pidilite C Techos Walling Ltd 6,06,000 0.61 - -
[refer Note 53 (g)]
Equity Shares of 100 each of Tenax Pidilite India Pvt Ltd 42,000 84.66 - -
(formerly known as Tenax India Stone Products Pvt Ltd)
[refer Note 53 (a)]
Equity Shares of 10 each of Pidilite Adhesives Pvt Ltd 2,74,85,797 2,196.46 - -
(formerly known as Huntsman Advanced Materials Solutions Private
Limited) [refer Note 53 (b)]
Less : Impairment in value of Investments (181.49) (180.66)
TOTAL (a) 3,147.94 796.53
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103

Notes forming part of the financial statements

Notes forming part of the financial statements

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As at 31 [st ] March 2021 As at 31 [st ] March 2020
Qty in crores Qty in crores
(b) Investment in other entity (fully paid up) (at FVTPL)
Equity Shares of 10 each of Pal Peugeot Ltd 1,21,300 0.12 1,21,300 0.12
Less : Impairment in value of Investment (0.12) (0.12)
TOTAL (b) - -
TOTAL Unquoted [(a)+(b)] (ii) 3,147.94 796.53
Total Investment in Equity Instruments [(i)+(ii)] [A] 3,149.12 797.71
B] Investment in Preference Shares (at FVTPL) (Quoted)
Non-Cumulative Perpetual Preference shares of Kotak Mahindra 3,00,00,000 15.20 3,00,00,000 15.20
Bank Ltd
Total [B] 15.20 15.20
C] Investment in Debentures, Bonds & Market Instruments (at FVTPL)
(Quoted)
Units of Bharat Bond ETFs 2,50,000 27.85 2,50,000 25.55
Total [C] 27.85 25.55
D] Investment in Alternative Investment Fund (at FVTPL) (Unquoted)
Units of Fireside Ventures Investment Fund II 50,000 3.49 50,000 4.13
Total [D] 3.49 4.13
E] Investment in Mutual Funds (at FVTPL) (Unquoted)
Units of Kotak FMP Series 251 - 1265 days Direct Plan Growth 2,00,00,000 25.09 2,00,00,000 23.12
Units of SBI Debt Fund Series C49 1178 days - Direct Plan Growth 2,00,00,000 24.02 2,00,00,000 22.06
Units of HDFC FMP 1182D Jan 2019 (1) - Direct Growth 2,00,00,000 24.57 2,00,00,000 22.57
Units of HDFC FMP 1126D Mar 2019 (1) - Direct Growth 2,00,00,000 24.17 2,00,00,000 22.21
Units of IDFC FTP Series 149 (1424 days) - Direct Growth 1,50,00,000 18.75 1,50,00,000 17.26
Units of Aditya Birla Sun Life FTP-Series PJ (1135 days) - Direct Growth - - 1,00,00,000 11.81
Units of Aditya Birla Sun Life FTP-Series PK (1132 days) - Direct Growth - - 2,00,00,000 23.55
Units of DSP BlackRock FMP S223-39M - Direct Growth - - 1,50,00,000 17.76
Units of DSP BlackRock FMP S224-39M - Direct Growth - - 1,50,00,000 17.67
Units of HDFC FMP 1143D March 2018 (1) - Direct Growth - S39 - - 1,00,00,000 11.81
Units of IDFC FTP Series 140 Direct Plan - Growth (1145 days) - - 1,50,00,000 17.73
Units of Kotak FMP Series 219 - Direct Growth - - 1,50,00,000 17.77
Units of ICICI FMP Series 83 1105 D Plan F - Direct Growth - - 50,00,000 5.91
Units of Reliance FMP XXXVII Series 12 - Direct Growth - - 1,00,00,000 11.83
Units of SBI FMP Series C33 1216 days - Direct Growth - - 2,00,00,000 22.69
Total [E] 116.60 265.75
TOTAL [A+B+C+D+E] 3,312.26 1,108.34
Aggregate carrying value of quoted investments 44.23 41.93
Aggregate market value of quoted investments 86.44 71.90
Aggregate carrying value of unquoted investments 3,268.03 1,066.41
Aggregate amount of Impairment in value of investments 181.61 180.78
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8 Investments - Current
As at 31 [st ] March 2021 As at 31 [st ] March 2020
Qty in crores Qty in crores
Current Investments
A] Investment in Debentures, Bonds & Market Instruments (at FVTPL)
(Quoted)
Tax-free bonds of Housing and Urban Development Corporation Ltd - - 2,00,000 21.27
Tax-free bonds of National Housing Bank - - 10,000 5.59
Tax-free bonds of Indian Railway Finance Corporation 12 Feb 22 - - 70,000 7.57
Tax-free bonds of Indian Railway Finance Corporation 11 Jan 26 - - 1,000 10.40
TOTAL [A] - 44.83
B] Investment in Mutual Funds (at FVTPL) (Unquoted)
Units of Aditya Birla Sun Life FTP-Series PJ (1135 days) - Direct Growth 1,00,00,000 12.57 - -
Units of Aditya Birla Sun Life FTP-Series PK (1132 days) - Direct Growth 2,00,00,000 25.06 - -
Units of DSP BlackRock FMP S223-39M - Direct Growth 1,50,00,000 18.95 - -
Units of DSP BlackRock FMP S224-39M - Direct Growth 1,50,00,000 18.81 - -
Units of SBI FMP Series C33 (1216 days) - Direct Growth 2,00,00,000 24.73 - -
Units of Reliance FMP XXXVII Series 12 - Direct Growth 1,00,00,000 12.64 - -
Units of HDFC FMP 1143D March 2018 (1) - Direct Growth - S39 1,00,00,000 12.56 - -
Units of IDFC FTP Series 140 Direct Plan - Growth (1145 days) 1,50,00,000 18.88 - -
Units of Kotak FMP Series 219 - Direct Growth 1,50,00,000 18.86 - -
Units of ICICI FMP Series 83 1105 D Plan F - Direct Growth 50,00,000 6.29 - -
Units of HDFC Overnight Fund - Direct Growth - - 6,79,896 201.88
Units of SBI Overnight Fund - Direct Plan Growth - - 6,46,655 210.40
Units of Aditya Birla Sun Life Overnight Fund - Direct Growth - - 9,22,816 99.70
Units of ICICI Overnight Fund - Direct Growth - - 1,46,98,077 158.37
TOTAL [B] 169.35 670.35
TOTAL [A]+[B] 169.35 715.18
Aggregate carrying value of quoted investments - 44.83
Aggregate market value of quoted investments - 44.83
Aggregate carrying value of unquoted investments 169.35 670.35
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105

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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9 Trade Receivables
As at As at
31 [st ] March 31 [st ] March
2021 2020
Secured, Considered good 114.31 104.97
Unsecured, Considered good 884.78 701.66
Unsecured, Considered doubtful 34.75 31.02
Unsecured which have Significant Increase in Credit Risk - -
Unsecured, Credit Impaired - -
1,033.84 837.65
Less: Allowance for expected credit loss (34.75) (31.02)
TOTAL 999.09 806.63
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The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the receivable days and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows:

Ageing	Ageing	Ageing	Expected Credit Loss	Expected Credit Loss
			As at 31stMarch 2021	As at 31stMarch 2020
Within the credit period (in days)
01-90			0.8%	1.0%
91-180			76.3%	73.2%
181-360			64.4%	60.3%
>360			84.3%	81.1%
Movement in expected credit loss allowance
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Balance at the beginning of the year			31.02	36.82
Movement in expected credit loss allowance on trade receivables calculated at lifetime expected credit losses			3.73	(5.80)
Balance at the end of the year			34.75	31.02

A formal credit policy has been framed and credit facilities are given to dealers within the framework of the credit policy. As per credit risk management mechanism, a policy for doubtful debt has been formulated and risk exposure related to receivables are identified based on criteria mentioned in the policy and provided for credit loss allowance.

Trade receivables includes receivables from Companies/firms where directors are directors/ members/ partners (refer Note 44).

10	Loans - Non-Current	Loans - Non-Current	Loans - Non-Current	Loans - Non-Current	Loans - Non-Current
				As at 31stMarch 2021	As at 31stMarch 2020
Unsecured, Considered good
Loans and Advances to Employees & Others*				4.82	4.04
TOTAL				4.82	4.04
*Loans given for business purpose.

( in crores)

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11 Loans - Current
As at As at
31 [st ] March 31 [st ] March
2021 2020
Loans and Advances to Related Parties (refer Note 44)
Unsecured, Considered good 1.91 9.31
Considered doubtful Considered doubtful 0.33 0.33
2.24 9.64
Less: Allowance for doubtful balances (0.33) (0.33)
1.91 9.31
Loans and Advances to Employees & Others 14.34 16.07
TOTAL 16.25 25.38
Loans given for business purpose.
12 Other Financial Assets - Non-Current
As at As at
31 [st ] March 31 [st ] March
2021 2020
Security Deposit 13.13 13.12
Fixed Deposits with Banks with original maturity of more than 12 months 2.02 -
Other Receivables
Unsecured, Considered good - -
Considered doubtful 1.74 1.74
1.74 1.74
Less: Allowance for doubtful balances (1.74) (1.74)
- -
TOTAL 15.15 13.12
13 Other Financial Assets - Current
As at As at
31 [st ] March 31 [st ] March
2021 2020
Security Deposit
Unsecured, Considered good 6.52 5.82
Considered doubtful 0.44 0.55
6.96 6.37
Less: Allowance for doubtful balances (0.44) (0.55)
6.52 5.82
Derivative assets towards Foreign Exchange Forward Contracts 0.09 1.70
Derivative Asset towards call option to buy subsidiary shares - 0.24
Other Receivables 0.73 0.47
TOTAL 7.34 8.23
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*Includes Windmill income

107

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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14A Cash and Cash Equivalents
As at As at
31 [st ] March 31 [st ] March
2021 2020
Cash and Cash Equivalents
Cash on Hand 0.13 0.08
Cheques on Hand 55.50 0.85
Balance with banks
In Current Account 35.96 52.12
In EEFC Account 18.22 11.12
In Fixed Deposit Accounts with original maturity of 3 months or less - 500.00
TOTAL 109.81 564.17
Cash and cash Equivalents (as per Statement of Cash Flows) 109.81 564.17
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14B Bank Balances other than Cash and Cash Equivalents above

				As at 31stMarch 2021	As at 31stMarch 2020
Other Bank Balance
In Fixed Deposit Accounts with original maturity of more than 3 months but upto 12 months (refer Note a)				-	1.42
Earmarked Account
Dividend Payment Bank Account				2.56	3.25
TOTAL				2.56	4.67
a. Includes Fixed Deposit under lien				-	0.99
15	Inventories (at lower of cost and net realisable value)
				As at 31stMarch 2021	As at 31stMarch 2020
Raw Material and Packing Material				469.05	315.89
Work-in-Progress				88.76	71.51
Finished Goods				314.75	269.00
Stock-in-Trade (acquired for trading)				94.74	67.91
Stores and Spares				8.64	6.18
TOTAL				975.94	730.49
Goods-in-Transit included above
Raw Material and Packing Material				47.18	32.94
Work-in-Progress				3.50	1.58
Finished Goods				39.80	22.06
Stock-in-Trade (acquired for trading)				14.75	9.18
TOTAL				105.23	65.76

a. The cost of inventories recognised as an expense during the year in respect of continuing operations was 2,833.75 crores ( 2,936.39 crores for the year ended 31[st] March 2020)

b. The cost of inventories recognised as an expense includes 0.43 crores in respect of write-downs of inventory to net realisable value ( 0.37 crores for the year ended 31[st] March 2020)

c. The mode of valuation of inventories has been stated in Note 2.12

( in crores)

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16 Income Tax Asset (net) - Non-Current
As at As at
31 [st ] March 31 [st ] March
2021 2020
Advance Payment of Taxes (net of provisions 1,847.28 crores) 86.98 105.80
(net of provisions 1,881.72 crores as at 31 [st] March 2020)
TOTAL 86.98 105.80
17 Other Non-Current Assets
As at As at
31 [st ] March 31 [st ] March
2021 2020
Unsecured, Considered good
Capital Advances 51.27 45.39
Prepaid Expenses 0.18 0.24
Balance with Government Authorities 27.92 18.94
TOTAL 79.37 64.57
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* Includes amounts paid under protest against Sales Tax claims disputed by the Company (shown under contingent liabilities), Excise Duty rebates, GST receivable, etc.	* Includes amounts paid under protest against Sales Tax claims disputed by the Company (shown under contingent liabilities), Excise Duty rebates, GST receivable, etc.	* Includes amounts paid under protest against Sales Tax claims disputed by the Company (shown under contingent liabilities), Excise Duty rebates, GST receivable, etc.	* Includes amounts paid under protest against Sales Tax claims disputed by the Company (shown under contingent liabilities), Excise Duty rebates, GST receivable, etc.	* Includes amounts paid under protest against Sales Tax claims disputed by the Company (shown under contingent liabilities), Excise Duty rebates, GST receivable, etc.
18	Other Current Assets
			As at 31stMarch 2021	As at 31stMarch 2020
Export Benefts receivable
Unsecured, Considered good			8.59	11.05
Considered doubtful			-	-
			8.59	11.05
Less: Allowance for doubtful balances			-	-
			8.59	11.05
Balances with Government Authorities*
Unsecured, Considered good			90.29	96.51
Considered doubtful			0.09	0.08
			90.38	96.59
Less: Allowance for doubtful balances			(0.09)	(0.08)
			90.29	96.51
Advances to vendors
Unsecured, Considered good			33.06	37.13
Considered doubtful			0.01	0.01
			33.07	37.14
Less: Allowance for doubtful balances			(0.01)	(0.01)
			33.06	37.13
Prepaid Expenses			7.93	8.02
Others**			0.56	18.99
Less : Impairment in Share Application Money - Pidilite Chemical PLC (refer Note 38)			-	(0.39)
			0.56	18.60
TOTAL			140.43	171.31
* Includes input tax credit, VAT/ GST receivable, etc. ** Mainly consists of Share Application Money

109

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Notes forming part of the financial statements

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( in crores)
19 Equity Share Capital
As at As at
31 [st ] March 31 [st ] March
2021 2020
Authorised Capital:
70,00,00,000 Equity Shares of 1 each 70.00 70.00
(70,00,00,000 Equity Shares of 1 each as at 31 [st ] March 2020)
TOTAL 70.00 70.00
Issued, Subscribed and Paid up Capital:
50,81,53,380 Equity Shares of 1 each, fully paid up 50.82 50.81
(50,81,23,780 Equity Shares of 1 each as at 31 [st ] March 2020)
TOTAL 50.82 50.81
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a. Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period
Number of in crores
Shares
Balance as at 1 [st] April 2019 50,79,78,280 50.80
Shares issued during the year on exercise of options under Employee Stock Option Plan - 2016 1,45,500 0.01
Balance as at 31 [st] March 2020 50,81,23,780 50.81
Shares issued during the year on exercise of options under Employee Stock Option Plan - 2016 29,600 0.01
Balance as at 31 [st] March 2021 50,81,53,380 50.82
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d. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period
of five years, immediately preceding the reporting date:
As at As at
31 [st ] March 31 [st] March
2021 2020
Number of Number of
Shares Shares
Equity Shares
Buy-back of Shares 50,00,000 50,00,000
e. Equity Shares reserved for issuance under Employee Stock Option Scheme/ Plan:
As at As at
31 [st ] March 31 [st] March
2021 2020
Number of Number of
Shares Shares
Equity Shares of 1 each under Employee Stock Option Scheme - 2012 34,200 34,200
Equity Shares of 1 each under Employee Stock Option Plan - 2016 38,35,210 41,13,500
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b. Terms/ Rights attached to equity shares

The Company has only one class of equity shares having a par value of 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion of their shareholding.

The Board of Directors at its meeting held on 12[th] May 2021 declared a final dividend of 8.50 per equity share of 1 each, subject to approval of the shareholders at the ensuing Annual General Meeting.

During the year ended 31[st] March 2020, the Company had paid Final Dividend of 6.50 per equity share of 1 each for the financial year 2018-19 and Interim Dividend of 7.00 per equity share of 1 each for the financial year 2019-20.

c.	Details of shareholders holding more than 5% shares in the Company:	Details of shareholders holding more than 5% shares in the Company:
			As at 31stMarch 2021		As at 31stMarch 2020
			Number of Shares held	% of Holding	Number of Shares held	% of Holding
Shri Madhukar Balvantray Parekh			5,20,51,286	10.24	5,20,51,286	10.24
Shri Narendrakumar Kalyanji Parekh			5,42,73,688	10.68	5,42,73,688	10.68
Shri Ajay Balvantray Parekh			4,74,33,489	9.34	4,74,33,489	9.34
Shri Sushilkumar Kalyanji Parekh			4,13,97,646	8.15	4,13,97,646	8.15
Devkalyan Sales Pvt Ltd			2,62,24,280	5.16	2,62,24,280	5.16

111

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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20 Other Equity
As at As at
31 [st ] March 31 [st] March
2021 2020
Capital Reserve on Business Combination (1.38) 0.34
Securities Premium 26.04 23.21
Capital Redemption Reserve 0.50 0.50
Cash Subsidy Reserve 0.95 0.95
Share Options Outstanding Account 25.42 10.89
General Reserve 1,335.38 1,335.38
Retained Earnings 4,123.49 3,042.74
TOTAL 5,510.40 4,414.01
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20.1 Capital Reserve on Business Combination
As at As at
31 [st ] March 31 [st] March
2021 2020
Balance at the beginning of the year 0.34 0.34
Add/ (Less) : Additions/ (Deductions) during the year (refer Note 56) (1.72) -
Closing Balance (1.38) 0.34
Capital Reserve represents excess/short of net assets acquired in business combination. It is not available for the distribution to
shareholders as dividend.
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20.2	Securities Premium
					As at			As at
				31stMarch			31stMarch
					2021			2020
	Balance at the beginning of the year				23.21			10.01
		Add : Premium on Shares issued against ESOP			2.83			13.20
	Closing Balance				26.04			23.21
	Security Premium Account is created when shares are issued at premium. The Company may issue fully paid-up bonus shares to its
	members out of the Securities Premium Account, and Company can use this reserve for buy-back of shares. This reserve is utilised in
	accordance with the provisions of the Companies Act, 2013.

	accordance with the provisions of the Companies Act, 2013.
20.3	Capital Redemption Reserve
		As at 31stMarch 2021	As at 31stMarch 2020
	Balance at the beginning and end of the year	0.50	0.50
	The Company has recognised Capital Redemption Reserve on buy-back of equity shares from its General Reserve. The amount in
	Capital Redemption Reserve is equal to the nominal amount of equity shares bought back. The reserve can be utilised in accordance
	with the provisions of the Companies Act, 2013.

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( in crores)
20.4 Cash Subsidy Reserve
As at As at
31 [st ] March 31 [st] March
2021 2020
Balance at the beginning and end of the year 0.95 0.95
Cash Subsidy Reserve represents subsidies received from state government. It is not available for distribution as dividend to shareholders.
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20.5	Share Options Outstanding Account	Share Options Outstanding Account
				As at		As at
				31stMarch		31stMarch
				2021		2020
	Employees Stock Options Outstanding Balance at the beginning the year			16.95		29.38
		Add : Options granted during the year		42.59		1.72
		Less : Transferred to Securities Premium on Options exercised during the year		(2.83)		(13.20)
		Less : Lapsed during the year		(0.06)		(0.95)
	Closing Balance (A)			56.65		16.95
	Deferred Employees Stock Options Cost Balance at the beginning the year			(6.06)		(19.73)
		Less : Options granted during the year		(42.59)		(1.72)
		Add : Amortised and exercised during the year		17.40		14.84
		Add : Lapsed during the year		0.02		0.55
	Closing Balance (B)			(31.23)		(6.06)
	Closing Balance (A+B)			25.42		10.89
	The	above reserve relates to share options granted by the Company to its employees under its employee share option plan. Further				information
	about share-based payments to employees is set out in Note 46.

20.6 General Reserve

				As at		As at
				31stMarch	31stMarch
				2021		2020
	Balance at the beginning and end of the year			1,335.38		1,335.38
	General Reserve is created by a transfer from one component of equity to another and is not an item of Other		Comprehensive Income.
	The same can be utilised by the Company in accordance with the provisions of the Companies Act, 2013.

20.7 Retained Earnings

				As at 31stMarch 2021	As at 31stMarch 2020
	Balance at the beginning of the year			3,042.74	2,779.09
		Add : Proft for the year		1,081.46	1,101.62
		Less : Payment of Final Dividend		-	(330.18)
		Payment of Interim Dividend		-	(355.61)
		Tax on Dividend paid		-	(140.97)
		Other Comprehensive Income for the year, net of income tax		(0.71)	(11.20)
	Closing Balance			4,123.49	3,042.74
	This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit			obligations. This Reserve can
	be utilised in accordance with the provisions of the Companies Act, 2013.

113

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Notes forming part of the financial statements

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( in crores)
21 Borrowings - Current
As at As at
31 [st ] March 31 [st] March
2021 2020
Unsecured - at amortised cost
Working Capital Demand Loan 55.00 -
TOTAL 55.00 -
Unsecured working capital demand loan carries interest rate of 4.50% p.a.
22 Trade Payables
As at As at
31 [st ] March 31 [st] March
2021 2020
Trade Payables
Total outstanding dues of micro enterprises and small enterprises (refer Note 50) 67.04 9.30
Total outstanding dues of creditors other than micro enterprises and small enterprises 726.78 485.51
TOTAL 793.82 494.81
23 Other Financial Liabilities - Non-Current
As at As at
31 [st ] March 31 [st] March
2021 2020
Employee related liabilities 0.30 0.47
Others 13.33 6.79
TOTAL 13.63 7.26
Includes retention payable on capital goods
24 Other Financial Liabilities- Current
As at As at
31 [st ] March 31 [st] March
2021 2020
Unclaimed Dividend 2.56 3.25
Payables on purchase of assets 1.89 6.35
Trade/ Security Deposit received 133.82 123.86
Liabilities for expenses 458.83 349.78
Liability for purchase of investment in subsidiary (refer Note 53 (a)/(b)/(c) and 56) 266.46 -
Employee related liabilities 16.03 18.43
Derivative liabilities towards Foreign Exchange Forward Contracts 0.64 0.42
Derivative liability towards put option to buy subsidiary shares (refer Note 53 (c)) - 34.83
Others 20.21 15.50
TOTAL 900.44 552.42
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• Includes retention payable on capital goods

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( in crores)
25 Provisions - Non-Current
As at As at
31 [st ] March 31 [st] March
2021 2020
Provision for Employee Benefits
Compensated Absences 41.58 38.20
Anniversary Awards 1.25 0.82
Premature Death Pension Scheme 1.82 1.55
Total Disability Pension Scheme 0.37 0.32
TOTAL 45.02 40.89
26 Provisions - Current
As at As at
31 [st ] March 31 [st] March
2021 2020
Provision for Employee Benefits
Gratuity (net) (refer Note 45) 3.11 1.83
Compensated Absences 13.09 9.73
Anniversary Awards 0.21 0.16
Premature Death Pension Scheme 0.01 0.01
Total Disability Pension Scheme 0.06 0.05
TOTAL 16.48 11.78
27 Deferred Tax Liabilities (net)
As at As at
31 [st ] March 31 [st] March
2021 2020
Tax effect of items constituting Deferred Tax Assets (refer Note 48) (27.21) (38.60)
Tax effect of items constituting Deferred Tax Liabilities (refer Note 48) 103.07 114.57
TOTAL 75.86 75.97
28 Other Current Liabilities
As at As at
31 [st ] March 31 [st] March
2021 2020
Statutory remittances 58.27 63.57
Advance from customers 12.44 24.64
Other Liabilities 1.95 1.82
TOTAL 72.66 90.03
29 Current Tax Liabilities (net)
As at As at
31 [st ] March 31 [st] March
2021 2020
Provision for Tax (net of Advance Tax 1,039.01 crores) 21.95 7.74
(net of Advance Tax 678.22 crores as at 31 [st] March 2020)
TOTAL 21.95 7.74 Pidilite Annual Report 2020-21
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115

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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30 Revenue from Operations
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Revenue From Operations
Sale of Products 6,186.67 6,290.43
TOTAL (A) 6,186.67 6,290.43
Other Operating Revenue
Scrap Sales 11.14 11.37
Export Incentives 9.29 19.07
GST/ Excise Refund 3.47 3.40
Others 5.76 8.32
TOTAL (B) 29.66 42.16
TOTAL (A+B) 6,216.33 6,332.59
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• The Company disaggregated revenues from contracts with customers by customer type and by geography. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by industry, market and other economic factors. For geographywise and customerwise breakup of revenue, refer Note 42.

Further, the Company derives its revenue from the transfer of goods at a point in time for its major service lines. This is consistent with the revenue information that is disclosed for each reportable segment under Ind AS 108 ‘Operating Segment’.

Reconciliation of revenue recognised with the contracted price is as follows:

	For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Contracted Price	6,779.32	6,893.41
Reduction towards variable consideration components*	(592.65)	(602.98)
Revenue Recognised	6,186.67	6,290.43

*The reduction towards variable consideration includes discounts, rebates, incentives, promotional couponing and schemes.

( in crores)

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31 Other Income
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Interest on:
Bank Deposit (at amortised cost) 3.99 2.48
Overdue Trade Receivables 0.40 0.05
Tax Free Bonds (at FVTPL) 8.29 3.26
Others 0.10 0.14
Dividend on:
Investments in Mutual Funds and Others (at FVTPL) 1.13 11.59
Long-term Investments in Associate (at cost) 1.65 1.79
Other Non-Operating Income:
Windmill Income 1.35 3.21
Profit on Sale/Transfer of Assets - 2.67
Allowance for Doubtful Debts written back - 5.80
Royalty & Technical Knowhow Income 4.15 4.17
Insurance claim received 7.47 0.46
Liabilities no longer required written back 0.28 0.81
Rental Income from Leases 2.18 1.38
Net gain arising on financial assets designated as at FVTPL 39.54 109.52
Miscellaneous Income 2.96 4.53
TOTAL 73.49 151.86
32 Cost of Materials Consumed
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Inventory at the beginning of the year 315.89 292.03
Add : Purchases 2,617.77 2,544.56
Acquisition under Business Combination (refer Note 56) 4.92 -
2,938.58 2,836.59
Less : Inventory at the end of the year (469.05) (315.89)
TOTAL 2,469.53 2,520.70
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117

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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33 Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Inventories at the end of the year
Stock-in-Trade 94.74 67.91
Work-in-Progress 88.76 71.51
Finished Goods 314.75 269.00
Total (A) 498.25 408.42
Acquisition under Business Combination (refer Note 56)
Work-in-Progress 0.06 -
Total (B) 0.06 -
Inventories at the beginning of the year
Stock-in-Trade 67.91 70.70
Work-in-Progress 71.51 78.20
Finished Goods 269.00 287.50
Total (C) 408.42 436.40
TOTAL (C+B-A) (89.77) 27.98
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34 Employee Benefits Expense
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Salaries and Wages 714.40 667.83
Contribution to Provident and Other Funds (refer Note 45) 41.26 36.85
Share based payments to employees (net of recovery from subsidiaries) (refer Note 46) 17.28 14.31
Staff Welfare Expenses 14.81 17.90
TOTAL 787.75 736.89
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35	Finance Costs	Finance Costs	Finance Costs
		For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
	Interest expense on:
	Borrowings	4.41	-
	Lease Liability (refer Note 51)	5.46	6.08
	Dealer Deposits & others	7.12	7.32
	TOTAL	16.99	13.40
36	Depreciation, Amortisation and Impairment Expense
		For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
	Depreciation on Property, Plant and Equipment (refer Note 4)	113.65	94.08
	Depreciation on Right of Use of Assets (refer Note 5 and Note 51)	26.55	24.19
	Amortisation of Other Intangible Assets (refer Note 6)	6.90	7.52
	TOTAL	147.10	125.79

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( in crores)
37 Other Expenses
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Consumption of Stores and Spares 31.53 35.45
Clearing and Forwarding Charges 303.18 272.30
Power and Fuel 50.70 57.94
Contract Labour 85.20 81.21
Water Charges 12.93 3.84
Rent (refer Note 51) 13.34 11.96
Rates and Taxes 3.32 2.71
Insurance 9.30 7.42
License fees 0.85 0.77
Repairs:
Buildings 9.91 8.90
Machinery 16.44 18.10
Others 3.93 7.89
30.28 34.89
Directors' Fees 0.61 0.27
Advertisement and Publicity 140.78 251.33
Legal, Professional and Consultancy fees 40.30 47.46
Communication Expenses 5.71 6.71
Printing and Stationery 2.49 4.87
Travelling and Conveyance Expenses 51.81 105.25
Bad Debts 0.27 3.49
Allowance for Doubtful Debts 3.73 -
Processing and Packing Charges 76.79 72.69
Sales Commission 4.37 3.95
Payments to Auditor (refer Note a) 1.29 1.35
Donations 5.00 0.11
Corporate Social Responsibility Expenses (refer Note 52) 27.70 26.30
Loss on disposal of Property, Plant and Equipment 5.85 -
Net Loss on Foreign Currency Transactions and Translation (refer Note 40) 2.13 1.86
Miscellaneous Expenses 137.69 141.62
TOTAL 1,047.15 1,175.75
a. Details of Payments to Auditor (net of GST)
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
a) Auditors 1.04 1.04
b) Tax Matters 0.21 0.19
c) Other Services 0.03 0.10
d) Reimbursement of Expenses 0.01 0.02
TOTAL 1.29 1.35
38 Exceptional Items
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Impairment in value of Asset Held for Sale [refer Note 53(h)] - 55.19
Impairment in value of Investment in a subsidiary [refer Note 7 (A)(ii) (a) and Note 18] 0.45 4.09
TOTAL 0.45 59.28
Pidilite Annual Report 2020-21
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119

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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39 Contingent Liabilities and Commitments
As at As at
31 [st ] March 31 [st] March
2021 2020
A) Contingent liabilities not provided for:
1. Claims against the Company not acknowledged as debts comprise:
a) Income Tax demand against the Company not provided for and relating to issues of deduction and 58.72 58.50
allowances in respect of which the Company is in appeal
b) Excise Duty and Service Tax claims disputed by the Company relating to issues of classifications 21.08 22.13
c) Sales Tax (VAT, CST, Entry Tax, LBT and GST) claims disputed by the Company relating to issues 156.85 165.92
of declaration forms and classifications
d) Other Matters (relating to disputed Electricity Duty, Gram Panchayat Tax, 3.14 3.14
Open Access Charges, etc.)
2. a) Guarantees given by Banks on behalf of Government and others 43.56 47.86
b) Guarantees given by Company on behalf of the Subsidiaries to Banks
Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda 15.44 25.64
Pidilite Bamco Ltd 3.16 3.24
Pidilite MEA Chemicals LLC (Previously known as Jupiter Chemicals LLC) 40.04 41.07
Pidilite Lanka Private Limited 32.32 33.15
Bamco Supply & Services Ltd 1.07 1.09
Guarantees given are for business purpose.
Note: The Company, being the holding/ultimate holding company, will extend financial support to its subsidiaries as and when required.
B) Commitments:
a) Estimated amount of contracts, net of advances, remaining to be executed for the acquisition of 177.93 204.00
Property, Plant and Equipment, investments and not provided for
b) For other commitments, refer Note 47(E)(ii) for financial instruments, Note 51 for leases and Note
54 (a) for committed investment in subsidiaries.
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The net amount of exchange differences debited to Statement of Profit and Loss is 2.13 crores ( 1.86 crores for the year ended 40 31[st] March 2020).

41 Disclosure as per Regulation 34(3) read with Schedule 5 of Listing Regulations with the Stock Exchanges

• a) Loans and Advances in the nature of loans given to subsidiaries, associates, firms/ companies in which directors are interested:

Name of the Company Pagel Concrete Technologies Pvt Ltd	Relationship	As at 31stMarch 2021	As at 31stMarch 2021	As at 31stMarch 2020	As at 31stMarch 2020
		Amount Outstanding	Maximum Balance Outstanding during the year	Amount Outstanding	Maximum Balance Outstanding during the year
	Subsidiary	0.33	0.33	0.33	0.33
Notes:

Notes:

• a) Loans and Advances shown above, fall under the category of ‘Loans & Advances’ in the nature of loans where there is no repayment schedule and re-payable on demand.

b) Loans and Advances referred above are not bearing any interest and are fully provided.

Segment information

42

Business Segment: The Company operates in two business segments namely Consumer & Bazaar (C&B) and Business to Business (B2B). Consumer & Bazaar segment covers sale of products mainly to end consumers which are retail users such as carpenters, painters, plumbers, mechanics, households, students, offices, etc. Sale consists of mainly adhesives, sealants, art and craft materials and construction and paint chemicals. B2B covers sale of products to end customers which are mainly large business users. This includes Industrial Products (IP) such as adhesives, synthetic resins, organic pigments, pigment preparations, construction chemicals (projects), surfactants, etc. and caters to various industries like packaging, textiles, paints, joineries, printing inks, paper, leather, etc. Others includes sale of speciality acetates, raw materials etc.

Operating Segment disclosures are consistent with the information provided to and reviewed by the Managing Director (Chief Operating Decision Maker).

( in crores)

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Business Segments Year 2020-21 Year 2019-20
Consumer Business Others Total Consumer Business Others Total
& Bazaar to & Bazaar to
Business Business
Revenue
Segment Revenue 4,998.16 1,282.73 38.53 6,319.42 4,999.82 1,377.87 76.45 6,454.14
Less : Inter Segment Revenue (4.10) (98.99) - (103.09) (7.05) (113.58) (0.92) (121.55)
(at cost plus fixed margin)
Net Revenue 4,994.06 1,183.74 38.53 6,216.33 4,992.77 1,264.29 75.53 6,332.59
Revenue based on geography
India 5,547.18 5,638.05
Outside India 669.15 694.54
Segment Result 1,658.63 167.58 (1.84) 1,824.37 1,533.86 254.96 (4.55) 1,784.27
Unallocable Expenses (410.81) (411.12)
Unallocable Income 44.95 117.17
Operating Income 1,458.51 1,490.32
Finance Cost (16.99) (13.40)
Interest/ Dividend Income 15.56 19.31
Profit before Exceptional Items and Tax 1,457.08 1,496.23
Exceptional Items (0.45) (59.28)
Profit Before Tax 1,456.63 1,436.95
Tax Expense (375.17) (335.33)
Profit for the year 1,081.46 1,101.62
Other Comprehensive Income (0.71) (11.20)
Total Comprehensive Income 1,080.75 1,090.42
The above includes:
Depreciation, Amortisation and 64.92 30.03 0.97 95.92 49.52 23.62 3.87 77.01
Impairment (allocable)
Depreciation, Amortisation and 51.18 48.78
Impairment (unallocable)
Capital Expenditure (including Capital 181.49 68.81 - 250.30 215.24 100.25 6.14 321.63
Work-in-Progress) (allocable)
Capital Expenditure (unallocable) 86.39 47.40
There is no transaction with single external customer which amounts to 10% or more of the Company’s revenue
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Segment Assets & Liabilities		31stMarch 2021	31stMarch 2021			31stMarch 2020	31stMarch 2020
	Consumer & Bazaar	Business to Business	Others	Total	Consumer & Bazaar	Business to Business	Others	Total
Segment Assets	2,724.66	979.15	20.53	3,724.34	2,256.02	786.05	76.36	3,118.43
Unallocable Assets Total Assets Assets based ongeography: India Outside India Segment Liabilities Unallocable Liabilities Total Liabilities Other Information Capital Employed	1,208.22	395.70	1.74	3,899.07 7,623.41 7,442.85 180.56 1,605.66 456.53 2,062.19 5,561.22	905.78	289.00	4.77	2,700.63 5,819.06 5,656.43 162.63 1,199.55 154.69 1,354.24 4,464.82	Pidilite Annual Report 2020-21

All the Non-Current Assets of the Company are located in India

121

Notes forming part of the financial statements

Notes forming part of the financial statements

44 Related Party Disclosures

Earnings Per Share (EPS)

43

The following reflects the Profit and Share data used in the Basic and Diluted EPS computations:

	For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Basic:
Proft for the year ( in crores)	1,081.46	1,101.62
Weighted average number of equity shares in calculating basic EPS	50,81,35,294	50,79,93,224
Par value per share ( )	1.00	1.00
Earning per share (Basic) ( )	21.28	21.69
Diluted:
Proft for the year ( in crores)	1,081.46	1,101.62
Weighted average number of equity shares in calculating basic EPS	50,81,35,294	50,79,93,224
Add: Efect of Employee Stock Options	4,19,540	1,70,850
Weighted average number of equity shares in calculating diluted EPS	50,85,54,834	50,81,64,074
Par value per share ( )	1.00	1.00
Earning per share (Diluted) ( )	21.27	21.68

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Related Party Disclosures as required by Ind-AS 24 ‘Related Party Disclosures’ are given below:
(i) Relationships:
a. Nitin Enterprises (refer Note 56) Subsidiary
b. Fevicol Company Ltd Subsidiary
c. Bhimad Commercial Company Pvt Ltd Subsidiary
d. Madhumala Ventures Pvt Ltd Subsidiary
(Formerly known as Madhumala Traders Pvt Ltd)
e. Pagel Concrete Technologies Pvt Ltd Subsidiary
f. Building Envelope Systems India Ltd Subsidiary
g. Nina Percept Private Limited Subsidiary
h. Hybrid Coatings Subsidiary
i. Pidilite International Pte Ltd Subsidiary
j. Pidilite Middle East Ltd Subsidiary
k. Pidilite USA Inc Subsidiary
l. PIL Trading (Egypt) Company Subsidiary
m. PT Pidilite Indonesia Subsidiary
n. Pidilite Speciality Chemicals Bangladesh Pvt Ltd Subsidiary
o. Pidilite Innovation Centre Pte Ltd Subsidiary
p. Pidilite Industries Egypt - SAE Subsidiary
q. Pidilite Bamco Ltd Subsidiary
r. Bamco Supply and Services Ltd Subsidiary
s. Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda Subsidiary
t. Pidilite MEA Chemicals LLC Subsidiary
u. Pidilite Industries Trading (Shanghai) Co. Ltd Subsidiary
v. Pidilite Chemical PLC Subsidiary
w. Pidilite Lanka (Pvt) Ltd Subsidiary
x. ICA Pidilite Pvt Ltd Subsidiary
y. Nebula East Africa Pvt Ltd Subsidiary
z. Nina Lanka Construction Technologies (Pvt) Ltd Subsidiary
aa. Cipy Polyurethanes Pvt Ltd Subsidiary
ab. Pidilite Ventures LLC Subsidiary
ac. Pidilite East Africa Limited Subsidiary
ad. Pidilite Grupo Puma Pvt Ltd (w.e.f. 16 [th] September 2019) Subsidiary
ae. Pidilite C-Techos Pvt Ltd (w.e.f. 18 [th] September 2019) Subsidiary
af. Pidilite Litokol Pvt Ltd (w.e.f. 7 [th] October 2019) Subsidiary
ag. Pidilite Grupo Puma Manufacturing Ltd (w.e.f. 13 [th] January 2020) Subsidiary
ah. Nina Percept (Bangladesh) Pvt Ltd (w.e.f. 29 [th] January 2020) Subsidiary
ai. Pidilite C-Techos Walling Ltd (w.e.f. 5 [th] March 2020) Subsidiary
aj. Tenax Pidilite India Pvt Ltd (Formerly known as Tenax India Stone Subsidiary
Products Pvt Ltd) (w.e.f. 29 [th] May 2020) [Refer Note 53 (a)]
ak. Pidilite Adhesives Pvt Ltd (Formerly known as Huntsman Advanced Subsidiary
Materials Solutions Pvt Ltd) (w.e.f. 4 [th] November 2020)
[Refer Note 53 (b)]
al. Vinyl Chemicals (India) Ltd Associate
am. Aapkapainter Solutions Private Limited (w.e.f. 3 [rd] November 2020) Associate
[Refer Note 53(d)(i)]
an. Plus Call Technical Services LLC Substantial Interest in Voting Power (Joint Venture)
ao. Parekh Marketing Ltd Significant Influence of KMP
ap. Pargro Investment Pvt Ltd Significant Influence of KMP
aq. Kalva Marketing and Services Ltd Significant Influence of KMP
(ii) Key Management Personnel (KMP):
a. Shri M B Parekh Executive Chairman
b. Shri Bharat Puri Managing Director
c. Shri A B Parekh Whole Time Director
d. Shri A N Parekh Whole Time Director
e. Shri Sabyasachi Patnaik (upto 29 [th] February 2020) Whole Time Director
f. Shri Debabrata Gupta (w.e.f. 1 [st] March 2020) Whole Time Director
(iii) Close member of Key Management Personnel:
a. Smt Mala M Parekh Wife of Executive Chairman
Pidilite Annual Report 2020-21
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123

Notes forming part of the financial statements

Notes forming part of the financial statements

44 (iv) Transactions with Related Parties for the year ended 31[st] March 2021 are as follows:

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( in crores)
Nature of Transaction For the year ended 31 [st] March 2021 For the year ended 31 [st] March 2020
Subsidiary Associate KMP/ Total Subsidiary Associate KMP/ Total
Significant Significant
Influence of Influence of
KMP/Close KMP/Close
member of member of
KMP KMP
a. Sales and Related Income
Parekh Marketing Ltd - - 50.82 50.82 - - 73.97 73.97
Pidilite MEA Chemicals LLC 47.08 - - 47.08 55.35 - - 55.35
Nina Percept Private Limited 7.32 - - 7.32 13.36 - - 13.36
Pidilite Speciality Chemicals 30.23 - - 30.23 26.44 - - 26.44
Bangladesh Pvt Ltd
Pidilite Lanka (Pvt) Ltd 10.07 - - 10.07 9.81 - - 9.81
Pidilite Industries Egypt - SAE 3.85 - - 3.85 8.40 - - 8.40
Pidilite USA Inc 6.07 - - 6.07 5.02 - - 5.02
ICA Pidilite Pvt Ltd 0.34 - - 0.34 0.23 - - 0.23
Cipy Polyurathanes Pvt Ltd - - - - 0.05 - - 0.05
PIL Trading (Egypt) Company 1.07 - - 1.07 0.66 - - 0.66
Pidilite Bamco Ltd 0.24 - - 0.24 0.24 - - 0.24
Pidilite Innovation Centre Pte Ltd 0.15 - - 0.15 0.72 - - 0.72
Pulvitec Do Brasil Industria E Comercio 0.01 - - 0.01 - - - -
De Colas E Adesivos Ltda
Pidilite Adhesive Pvt Ltd 0.07 - - 0.07 - - - -
(w.e.f. 4 [th] November 2020)
Pidilite East Africa Ltd 0.87 - - 0.87 - - - -
Sub-Total (a) 107.37 - 50.82 158.19 120.28 - 73.97 194.25
b. Royalty and Technical Knowhow Received
Pidilite Speciality Chemicals 2.01 - - 2.01 2.21 - - 2.21
Bangladesh Pvt Ltd
Pidilite MEA Chemicals LLC 0.96 - - 0.96 0.88 - - 0.88
Pidilite Industries Egypt - SAE 0.80 - - 0.80 0.75 - - 0.75
Pidilite Bamco Ltd 0.14 - - 0.14 0.17 - - 0.17
Bamco Supply and Services Ltd 0.10 - - 0.10 0.11 - - 0.11
Nebula East Africa Pvt Ltd 0.04 - - 0.04 0.05 - - 0.05
Pidilite East Africa Ltd 0.02 - - 0.02 - - - -
Pidilite Lanka (Pvt) Ltd 0.15 - - 0.15 - - - -
Sub-Total (b) 4.22 - - 4.22 4.17 - - 4.17
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( in crores)
Nature of Transaction For the year ended 31 [st] March 2021 For the year ended 31 [st] March 2020
Subsidiary Associate KMP/ Total Subsidiary Associate KMP/ Total
Significant Significant
Influence of Influence of
KMP/Close KMP/Close
member of member of
KMP KMP
c. Income from Services Rendered
Nina Percept Private Limited 2.34 - - 2.34 3.17 - - 3.17
ICA Pidilite Pvt Ltd 0.16 - - 0.16 0.14 - - 0.14
Pidilite Lanka (Pvt) Ltd 0.24 - - 0.24 0.25 - - 0.25
Pidilite MEA Chemicals LLC 0.22 - - 0.22 0.23 - - 0.23
Pidilite Speciality Chemicals 0.17 - - 0.17 0.32 - - 0.32
Bangladesh Pvt Ltd
Pidilite Bamco Ltd 0.15 - - 0.15 0.14 - - 0.14
Pidilite Industries Egypt - SAE 0.06 - - 0.06 0.07 - - 0.07
Hybrid Coatings 0.06 - - 0.06 0.06 - - 0.06
Building Envelope Systems India Ltd 0.06 - - 0.06 0.06 - - 0.06
Pidilite Innovation Centre Pte Ltd 0.01 - - 0.01 0.02 - - 0.02
Pidilite East Africa Ltd. 0.07 - - 0.07 0.14 - - 0.14
Pulvitec Do Brasil Industria E Comercio 0.08 - - 0.08 - - - -
De Colas E Adesivos Ltda
Cipy Polyurathanes Pvt Ltd 0.31 - - 0.31 - - - -
Pidilite Adhesive Pvt Ltd 0.05 - - 0.05 - - - -
(w.e.f. 4 [th] November 2020)
Pidilite C-Techos Walling Ltd 0.01 - - 0.01 - - - -
Pidilite Grupo Puma Mfg Ltd 0.10 - - 0.10 - - - -
Pidilite Litokol Pvt Ltd 0.02 - - 0.02 - - - -
Tenax Pidilite India Pvt Ltd 0.11 - - 0.11 - - - -
(w.e.f. 29 [th] May 2020)
Bamco Supply and Services Ltd 0.00 - - 0.00 0.00 - - 0.00
Sub-Total (c) 4.22 - - 4.22 4.60 - - 4.60
Amount is 42,905 ( 41,485 for the year ended 31 [st] March 2020)
d. Dividend Received
Vinyl Chemicals (India) Ltd - 1.65 - 1.65 - 1.79 - 1.79
Sub-Total (d) - 1.65 - 1.65 - 1.79 - 1.79
e. Purchase of Goods
Vinyl Chemicals (India) Ltd - 350.19 - 350.19 - 320.83 - 320.83
Nitin Enterprises 41.75 - - 41.75 39.51 - - 39.51
ICA Pidilite Pvt Ltd 57.31 - - 57.31 47.23 - - 47.23
Cipy Polyurathanes Pvt Ltd 3.05 - - 3.05 3.22 - - 3.22
Hybrid Coatings 1.79 - - 1.79 2.72 - - 2.72
Building Envelope Systems India Ltd 3.26 - - 3.26 2.02 - - 2.02
Tenax Pidilite India Pvt Ltd 6.86 - - 6.86 - - - -
(w.e.f. 29 [th] May 2020)
Pidilite Adhesive Pvt Ltd 0.43 - - 0.43 - - - -
(w.e.f. 4 [th] November 2020)
Sub-Total (e) 114.45 350.19 - 464.64 94.70 320.83 - 415.53
f. Royalty Paid
Pidilite Innovation Centre Pte Ltd - - - - 2.54 - - 2.54
Sub-Total (f) - - - - 2.54 - - 2.54
g. Expense for services received
Pidilite USA Inc 13.60 - - 13.60 14.28 - - 14.28
Pidilite Innovation Centre Pte Ltd 8.16 - - 8.16 3.92 - - 3.92
PT Pidilite Indonesia 0.71 - - 0.71 0.71 - - 0.71
Pidilite Industries Trading (Shanghai) 1.06 - - 1.06 0.72 - - 0.72
Co. Ltd
Pidilite Chemical PLC 0.02 - - 0.02 0.14 - - 0.14
Sub-Total (g) 23.55 - - 23.55 19.77 - - 19.77
125
Pidilite Annual Report 2020-21
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Notes forming part of the financial statements

Notes forming part of the financial statements

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( in crores)
Nature of Transaction For the year ended 31 [st] March 2021 For the year ended 31 [st] March 2020
Subsidiary Associate KMP/ Total Subsidiary Associate KMP/ Total
Significant Significant
Influence of Influence of
KMP/Close KMP/Close
member of member of
KMP KMP
h. Investment in Share Capital
Nina Percept Private Limited 4.82 - - 4.82 - - - -
Pidilite Middle East Ltd 10.33 - - 10.33 - - - -
Pidilite International Pte Ltd - - - - 18.03 - - 18.03
Madhumala Ventures Pvt Ltd 10.50 - - 10.50 126.49 - - 126.49
Pidilite Litokol Pvt Ltd 4.08 - - 4.08 0.60 - - 0.60
Pidilite Industries Egypt - SAE - - - - 0.32 - - 0.32
Pidilite Grupo Puma Mfg Ltd 11.70 - - 11.70 0.01 - - 0.01
Pidilite Chemical PLC 0.45 - - 0.45 0.74 - - 0.74
Pidilite C-Techos Walling Ltd 0.61 - - 0.61 - - - -
Sub-Total (h) 42.49 - - 42.49 146.19 - - 146.19
i. Sale of Fixed Asset
Parekh Marketing Ltd - - - - - - 0.32 0.32
Sub-Total (i) - - - - - - 0.32 0.32
j. Rent Paid/ (Received)
Smt. Mala Parekh - - 0.58 0.58 - - 0.71 0.71
Parekh Marketing Ltd - - 0.07 0.07 - - 0.08 0.08
ICA Pidilite Pvt Ltd 0.05 - - 0.05 0.03 - - 0.03
Pargro Investment Pvt Ltd - - (0.06) (0.06) - - (0.08) (0.08)
Sub-Total (j) 0.05 - 0.59 0.64 0.03 - 0.71 0.74
k. Reimbursement of expenses made
Pidilite MEA Chemicals LLC 5.81 - - 5.81 6.11 - - 6.11
Parekh Marketing Ltd - - 0.03 0.03 - - 0.03 0.03
Pidilite Speciality Chemicals 0.32 - - 0.32 0.16 - - 0.16
Bangladesh Pvt Ltd
PIL Trading (Egypt) Company 0.15 - - 0.15 0.09 - - 0.09
Pidilite Innovation Centre Pte Ltd 0.11 - - 0.11 0.10 - - 0.10
ICA Pidilite Pvt Ltd 0.06 - - 0.06 0.38 - - 0.38
Pidilite Lanka (Pvt) Ltd 0.18 - - 0.18 0.21 - - 0.21
Nitin Enterprises 0.02 - - 0.02 - - - -
Pidilite Industries Egypt - SAE 0.11 - - 0.11 - - - -
Sub-Total (k) 6.76 - 0.03 6.79 7.05 - 0.03 7.08
l. Reimbursement of expenses received
Pidilite MEA Chemicals LLC 0.34 - - 0.34 0.34 - - 0.34
ICA Pidilite Pvt Ltd 0.58 - - 0.58 0.11 - - 0.11
Pidilite Bamco Ltd 0.04 - - 0.04 0.04 - - 0.04
Pidilite Litokol Pvt Ltd 0.20 - - 0.20 0.04 - - 0.04
Pidilite Grupo Puma Mfg Ltd 1.08 - - 1.08 0.03 - - 0.03
Pidilite C-Techos Walling Ltd 0.06 - - 0.06 0.04 - - 0.04
Cipy Polyurethanes Pvt Ltd 2.04 - - 2.04 1.07 - - 1.07
Pidilite Adhesive Pvt Ltd 0.64 - - 0.64 - - - -
(w.e.f. 4 [th] November 2020)
Tenax Pidilite India Pvt Ltd 1.08 - - 1.08 - - - -
(w.e.f. 29 [th] May 2020)
Nina Percept Private Limited 0.73 - - 0.73 - - - -
Sub-Total (l) 6.79 - - 6.79 1.67 - - 1.67
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( in crores)

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Nature of Transaction For the year ended 31 [st] March 2021 For the year ended 31 [st] March 2020
Subsidiary Associate KMP/ Total Subsidiary Associate KMP/ Total
Significant Significant
Influence of Influence of
KMP/Close KMP/Close
member of member of
KMP KMP
m. Compensation of Key Management Personnel of the Company:
Remuneration/ Commission to Directors:
i (Short Term Employee benefits)
- Shri M B Parekh - - 3.13 3.13 - - 4.15 4.15
- Shri Bharat Puri - - 14.24 14.24 - - 13.96 13.96
- Shri A B Parekh - - 1.33 1.33 - - 1.80 1.80
- Shri A N Parekh - - 5.63 5.63 - - 5.84 5.84
- Shri Sabyasachi Patnaik - - - - - - 2.01 2.01
(Upto 29 [th] February 2020)
- Shri Debabrata Gupta - - 2.27 2.27 - - 0.29 0.29
(w.e.f. 1 [st] March 2020)
Sub-Total - - 26.60 26.60 - - 28.05 28.05
ii Share-based payments
- Shri Bharat Puri - - - - - - 16.65 16.65
- Shri Sabyasachi Patnaik - - - - - - 0.40 0.40
(Upto 29 [th] February 2020)
Sub-Total - - - - - - 17.05 17.05
n. Dividend Paid - - - - - - 158.25 158.25
o. Outstanding Balances:
i Trade Receivables (net)
Parekh Marketing Ltd - - 19.53 19.53 - - 12.39 12.39
Pidilite MEA Chemicals LLC 18.44 - - 18.44 22.63 - - 22.63
Nina Percept Private Limited 10.40 - - 10.40 24.76 - - 24.76
Pidilite Industries Egypt - SAE 3.17 - - 3.17 10.60 - - 10.60
Pidilite Speciality Chemicals 11.63 - - 11.63 2.85 - - 2.85
Bangladesh Pvt Ltd
Pidilite USA Inc 1.89 - - 1.89 1.93 - - 1.93
Pidilite Lanka (Pvt) Ltd 5.50 - - 5.50 3.23 - - 3.23
Pidilite Bamco Ltd 0.08 - - 0.08 - - - -
Pidilite Innovation Centre Pte Ltd 0.15 - - 0.15 0.32 - - 0.32
PIL Trading (Egypt) Company 0.19 - - 0.19 0.44 - - 0.44
Bamco Supply and Services Ltd 0.02 - - 0.02 - - - -
Pidilite East Africa Ltd 0.94 - - 0.94 - - - -
Pidilite Litokol Pvt Ltd 0.23 - - 0.23 - - - -
Pidilite Grupo Puma Mfg Ltd 1.25 - - 1.25 - - - -
Pidilite C-Techos Walling Ltd 0.06 - - 0.06 - - - -
Cipy Polyurethanes Pvt Ltd 3.92 - - 3.92 - - - -
ICA Pidilite Pvt Ltd 0.05 - - 0.05 - - - -
Hybrid Coatings 0.03 - - 0.03 - - - -
Building Envelope Systems India Ltd 0.03 - - 0.03 - - - -
Pidilite Adhesive Pvt Ltd 0.76 - - 0.76 - - - -
(w.e.f. 4 [th] November 2020)
Tenax Pidilite India Pvt Ltd 1.33 - - 1.33 - - - -
(w.e.f. 29 [th] May 2020)
Pulvitec Do Brasil Industria E 0.08 - - 0.08 - - - -
Comercio De Colas E Adesivos Ltda
Nebula East Africa Pvt Ltd. 0.04 - - 0.04 - - - -
Pargro Investment Pvt Ltd - - 0.01 0.01 - - - -
Sub-Total 60.19 - 19.54 79.73 66.76 - 12.39 79.15
Pidilite Annual Report 2020-21
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127

Notes forming part of the financial statements

Notes forming part of the financial statements

( in crores)

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Nature of Transaction For the year ended 31 [st] March 2021 For the year ended 31 [st] March 2020
Subsidiary Associate KMP/ Total Subsidiary Associate KMP/ Total
Significant Significant
Influence of Influence of
KMP/Close KMP/Close
member of member of
KMP KMP
ii Loans and advances
Pidilite Speciality Chemicals 0.26 - - 0.26 4.23 - - 4.23
Bangladesh Pvt Ltd
Pidilite MEA Chemicals LLC 1.35 - - 1.35 2.68 - - 2.68
Pidilite Industries Egypt - SAE - - - - 0.45 - - 0.45
Pidilite Lanka (Pvt) Ltd - - - - 0.54 - - 0.54
Pagel Concrete Technologies Pvt Ltd 0.33 - - 0.33 0.33 - - 0.33
ICA Pidilite Pvt Ltd 0.21 - - 0.21 0.56 - - 0.56
Pidilite Bamco Ltd - - - - 0.08 - - 0.08
Pidilite Innovation Centre Pte Ltd - - - - 0.01 - - 0.01
Nebula East Africa Pvt Ltd. - - - - 0.05 - - 0.05
Bamco Supply and Services Ltd - - - - 0.03 - - 0.03
Pidilite East Africa Ltd - - - - 0.14 - - 0.14
Pidilite Litokol Pvt Ltd - - - - 0.04 - - 0.04
Pidilite Grupo Puma Mfg Ltd 0.08 - - 0.08 0.03 - - 0.03
Pidilite C-Techos Walling Ltd - - - - 0.04 - - 0.04
Cipy Polyurethanes Pvt Ltd - - - - 0.43 - - 0.43
Pidilite Chemical PLC 0.01 - - 0.01 - - - -
Sub-Total 2.24 - - 2.24 9.64 - - 9.64
iii Trade Payables (net)
Vinyl Chemicals (India) Ltd - 93.75 - 93.75 - 23.07 - 23.07
ICA Pidilite Pvt Ltd 8.09 - - 8.09 3.57 - - 3.57
Nitin Enterprises - - - - 0.16 - - 0.16
Pidilite Industries Trading 0.83 - - 0.83 0.72 - - 0.72
(Shanghai) Co Ltd
Pidilite MEA Chemicals LLC 0.05 - - 0.05 0.04 - - 0.04
Pidilite USA Inc 0.58 - - 0.58 1.85 - - 1.85
Cipy Polyurethanes Pvt Ltd 0.54 - - 0.54 - - - -
Hybrid Coatings 0.74 - - 0.74 0.02 - - 0.02
Building Envelope Systems India Ltd 0.55 - - 0.55 0.49 - - 0.49
PIL Trading (Egypt) Company 0.19 - - 0.19 0.23 - - 0.23
PT Pidilite Indonesia 0.03 - - 0.03 0.07 - - 0.07
Pidilite Chemicals PLC - - - - 0.02 - - 0.02
Parekh Marketing Ltd - - - - - - 0.01 0.01
Pidilite Innovation Centre Pte Ltd 0.84 - - 0.84 - - - -
Pidilite Adhesive Pvt Ltd 0.50 - - 0.50 - - - -
(w.e.f. 4 [th] November 2020)
Tenax Pidilite India Pvt Ltd 4.51 - - 4.51 - - - -
(w.e.f. 29 [th] May 2020)
Pidilite Lanka (Pvt) Ltd 0.04 - - 0.04 - - - -
Nina Percept Private Limited 0.77 - - 0.77 - - - -
Pidilite East Africa Ltd 0.02 - - 0.02 - - - -
Pidilite Litokol Pvt Ltd 0.13 - - 0.13 - - - -
Sub-Total 18.41 93.75 - 112.16 7.17 23.07 0.01 30.25
p. Corporate guarantee given to bank on behalf of
Pulvitec do Brasil Industria e Comercio 15.44 - - 15.44 25.64 - - 25.64
de Colas e Adesivos Ltda
Pidilite Bamco Ltd 3.16 - - 3.16 3.24 - - 3.24
Pidilite MEA Chemicals LLC 40.04 - - 40.04 41.07 - - 41.07
Pidilite Lanka Private Limited 32.32 - - 32.32 33.15 - - 33.15
Bamco Supply & Services Ltd 1.07 - - 1.07 1.09 - - 1.09
Sub-Total (p) 92.03 - - 92.03 104.19 - - 104.19
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45 Employee Benefits

The Company has classified various employee benefits as under:

• (A) Defined Contribution Plans (a) Provident Fund (b) Superannuation Fund (c) State Defined Contribution Plans - Employers' Contribution to Employees' State Insurance - Employers' Contribution to Employees' Pension Scheme 1995 - Labour Welfare Fund

• (d) National Pension Scheme

The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund Commissioner, the Superannuation Fund is administered by the LIC of India and National Pension Fund is administered by Pension Fund Regulatory and Development Authority (PFRDA), as applicable, for all eligible employees. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. These funds are recognised by the Income Tax Authorities.

The Company has recognised the following amounts in the Statement of Profit and Loss:

( in crores)

				For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
	(i)	Contribution to Provident Fund		19.47	17.56
	(ii)	Contribution to Employees’ Superannuation Fund		0.86	0.87
	(iii)	Contribution to Employees’ State Insurance Scheme		0.20	0.20
	(iv)	Contribution to Employees’ Pension Scheme 1995		9.04	8.65
	(v)	Contribution to National Pension Scheme		3.61	2.80
TOTAL				33.18	30.08
(B)	Defned Beneft Plans
Gratuity
(C)	Other Long-Term Benefts
	(a)	Compensated Absences
	(b)	Anniversary Awards
	(c)	Premature Death Pension Scheme
	(d)	Total Disability Pension Scheme

129

Notes forming part of the financial statements

Notes forming part of the financial statements

Valuations in respect of above have been carried out by independent actuary, as at the balance sheet date, based on the following assumptions:

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Valuations as at
31 [st] March 2021 31 [st] March 2020
(i) Discount Rate (per annum) 6.86% 6.65%
(ii) Rate of increase in Compensation levels (per annum) 1 [st] yr - 8.50%, 1 [st] yr - 4%,
thereafter 6.50% thereafter 6.50%
(iii) Expected Rate of Return on Assets 6.86% 6.65%
(iv) Attrition Rate upto 5 yrs - 13%, upto 5 yrs - 13%,
5 - 10 yrs - 5%, 5 - 10 yrs - 5%,
Above 10 yrs - 5% Above 10 yrs - 5%
(v) Retirement Age 60 years 60 years
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• (vi) The expected rate of return on plan assets is determined after considering several applicable factors such as the composition of the plan assets, investment/ strategy, market scenario, etc. In order to protect the capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.

• (vii) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

• (viii) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

Gratuity fund asset is managed by Life Insurance Corporation of India, there is no material risk that the Company would be unable to meet its gratuity liability. Also as the fund is set up as a trust, the monies as a part of the trust will not flow back into the Company until the last employee of the trust is paid.

Note on other risks:

• 1 Investment Risk – The funds are invested by LIC and they provide returns basis the prevalent bond yields, LIC on an annual basis requests for contributions to the fund, while the contribution requested may not be on the same interest rate as the bond yields provided, basis the past experience it is low risk.

• 2 Interest Risk – LIC does not provide market value of assets, rather maintains a running statement with interest rates declared annually – The fall in interest rate is not therefore offset by increase in value of Bonds, hence may pose a risk.

• 3 Longevity Risk – Since the gratuity payment happens at the retirement age of 60, longevity impact is very low at this age, hence this is a non-risk.

• 4 Salary Risk – The liability is calculated taking into account the salary increase, basis past experience of the Company’s actual salary increases with the assumptions used, they are in line, hence this risk is low risk.

salary increases with the assumptions used, they are in line, hence this risk is low risk.	salary increases with the assumptions used, they are in line, hence this risk is low risk.	salary increases with the assumptions used, they are in line, hence this risk is low risk.
			( in crores)
			31stMarch 2021	31stMarch 2020
			Gratuity Funded	Gratuity Funded
(i)	Changes in Present value of Obligation
1	Present value of defned beneft obligation at the beginning of the year		87.57	74.28
2	Previous period adjustments		5.69	-
3	Current Service Cost		8.43	6.98
4	Interest Cost		5.35	4.97
5	Actuarial (Gains)/Loss arising from changes in
	- demographic assumption		-	(0.04)
	- fnancial assumption		0.63	1.28
	- experience adjustment		(0.67)	13.42
6	Benefts Paid		(5.88)	(13.32)
7	Acquisition under Business Combination (refer Note 56)		0.04	-
8	Present value of defned beneft obligation at the end of the year		101.16	87.57
(ii)	Changes in Fair value of Plan Assets
1	Fair value of plan assets at the beginning of the year		85.74	69.89
2	Expected Return on Plan Assets		5.70	5.17
3	Actuarial Gain/(Loss)		(0.99)	(0.21)
4	Employer's Contributions		13.41	16.40
5	Benefts Paid		(5.88)	(5.51)
6	Acquisition under Business Combination (refer Note 56)		0.07	-
7	Fair value of plan assets at the end of the year		98.05	85.74

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( in crores)
31 [st ] March 2021 31 [st ] March 2020
Gratuity Funded Gratuity Funded
(iii) Net Benefit (Asset)/ Liability
1 Defined benefit obligation 101.16 87.57
2 Fair value of plan assets 98.05 85.74
3 Net Benefit (Asset)/ Liability (refer Note 26) 3.11 1.83
(iv) Expenses recognised in the Statement of Profit and Loss
1 Current Service Cost 8.43 6.98
2 Interest cost on benefit obligation (net) (0.35) (0.21)
3 Total Expenses recognised in the Statement of Profit and Loss 8.08 6.77
(v) Remeasurement Effects Recognised in Other Comprehensive Income for the year
1 Actuarial (Gains)/ Loss arising from changes in
- demographic assumption - (0.04)
- financial assumption 0.63 1.28
- experience adjustment (0.67) 13.42
2 Return on plan asset 0.99 0.21
3 Recognised in Other Comprehensive Income 0.95 14.88
(vi) Actual return on plan assets 4.71 4.96
(vii) Sensitivity Analysis
Defined Benefit Obligation
Discount Rate
a Discount Rate - 100 basis points 108.00 93.28
b Discount Rate + 100 basis points 95.15 82.55
Salary Increase Rate
a Rate - 100 basis points 95.06 82.47
b Rate + 100 basis points 107.97 93.27
Note on Sensitivity Analysis
1 Sensitivity analysis for each significant actuarial assumptions of the Company which are discount rate and salary assumptions
as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called
out in the table above.
2 The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the
base liability calculation except for the parameters to be stressed.
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1	Sensitivity analysis for each signifcant actuarial assumptions of the Company which are discount rate and salary assumptions as of the end of the reporting period, showing how the defned beneft obligation would have been afected by changes is called out in the table above.
2 3	The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed. There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same to that in the previous year.
(viii)	Expected Future Cashfows Year 1 17.74 13.89
(ix)	Year 2 10.24 8.35 Year 3 9.10 8.81 Year 4 8.43 7.91 Year 5 8.41 7.05 Year 6 to 10 41.67 35.71 Average Expected Future Working Life (yrs) 11.15 11.09	Pidilite Annual Report 2020-21

131

Notes forming part of the financial statements

Notes forming part of the financial statements

46 Employee Stock Option Scheme

a) Details of Employee Share Options

In the Annual General Meeting of the Company held on 24[th] July 2012, the shareholders approved the issue of 50,76,486 equity shares under the Scheme titled “Employee Stock Option Scheme 2012” (ESOS 2012). The Board approved Employees Stock Option Scheme covering 3,00,000 Stock options, in terms of the regulations of the Securities and Exchange Board of India.

The ESOS 2012 allows the issue of options to Eligible employees of the Company. Each option comprises one underlying equity share. The exercise price of each option shall be 1/- per equity share. The options vest in the manner as specified in ESOS 2012. Options may be exercised within 5 years from the date of vesting.

ESOP 2016 covering grant of 45,00,000 options (including 2,50,000 Options to be granted to Eligible Employees/ Directors of the subsidiary Companies) was approved by the shareholders through Postal Ballot on 2[nd] April 2016. Each option comprises one underlying equity share. The exercise price shall be 1/- per option or such other higher price as may be fixed by the Board or Committee. Options to be granted under the Plan shall vest not earlier than one year but not later than a maximum of six years from the date of grant of such options. In the case of Eligible Employee who has not completed 3 years of employment as on date of the grant of Options then the Options which are due for vesting before completion of 3 years as above, shall vest as on the completion of 3 years of employment in the Company by the Employee concerned or as may be approved by the Nomination and Remuneration Committee. Vested Options will have to be exercised within 3 years from the date of respective vesting.

The following share based payment arrangements were in existence during the current & prior years:

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Option Series Number Grant date Vesting date Exercise price Fair value at
( ) grant date ( )
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Option Series h	Number	Grant date	Vesting date	Exercise price ( )	Fair value at grant date ( )
1 Granted on 8tNovember 2017-ESOP 2016	28,750	08.11.2017	08.11.2018	1.00	734.15
	28,750	08.11.2017	08.11.2019	1.00	734.15
2 Granted on 11thApril 2018-ESOP 2016	4,150	11.04.2018	11.04.2019	1.00	976.94
	4,150	11.04.2018	11.04.2020	1.00	976.94
3 Granted on 30thOctober 2018-ESOP 2016	1,33,200	30.10.2018	30.10.2019	1.00	931.19
	1,33,200	30.10.2018	30.10.2020	1.00	931.19
	1,500	30.10.2018	30.10.2019	1.00	924.50
	1,500	30.10.2018	30.10.2020	1.00	924.50
	2,000	30.10.2018	30.10.2021	1.00	924.50
4 Granted on 23rdJanuary 2019-ESOP 2016	3,000	23.01.2019	23.01.2022	1.00	1,112.48
	3,000	23.01.2019	23.01.2023	1.00	1,112.48
	4,000	23.01.2019	23.01.2024	1.00	1,112.48
	1,500	23.01.2019	29.01.2021	1.00	1,127.85
	1,500	23.01.2019	29.01.2022	1.00	1,127.85
	1,500	23.01.2019	01.02.2021	1.00	1,127.85
	1,500	23.01.2019	01.02.2022	1.00	1,127.85
5 Granted on 13thMay 2019-ESOP 2016	2,500	13.05.2019	13.05.2020	1.00	1,124.69
6 Granted on 29thJanuary 2020-ESOP 2016	4,000	29.01.2020	31.01.2021	1.00	1,449.90
	500	29.01.2020	31.01.2021	1.00	1,444.56
	500	29.01.2020	31.01.2021	1.00	1,444.56
	2,500	29.01.2020	18.11.2022	1.00	1,433.92
	2,500	29.01.2020	18.11.2023	1.00	1,433.92
7 Granted on 5thAugust 2020-ESOP 2016	5,000	05.08.2020	05.08.2022	1.00	1,318.08
	5,000	05.08.2020	05.08.2023	1.00	1,318.08
	1,400	05.08.2020	05.08.2021	1.00	1,319.96
	1,050	05.08.2020	05.08.2022	1.00	1,319.96
	1,050	05.08.2020	05.08.2023	1.00	1,319.96
8 Granted on 4thNovember 2020-ESOP 2016	15,245	04.11.2020	04.11.2021	1.00	1536.91
	15,245	04.11.2020	04.11.2022	1.00	1,536.91
	1,17,500	04.11.2020	04.11.2021	1.00	1,536.91
	1,17,500	04.11.2020	04.11.2022	1.00	1,536.91

b) Fair value of share options granted

The fair value of the stock options has been estimated using Black-Scholes model which takes into account as of grant date the exercise price and expected life of the option, the current market price of underlying stock and its expected volatility, expected dividends on stock and the risk free interest rate for the expected term of the option.

Inputs into the model	Granted on 8th November 2017-ESOP 2016	Granted on 11thApril 2018-ESOP 2016	Granted on 30thOctober 2018-ESOP 2016	Granted o	n 23rdJanuary 2019-ESOP 2016	n 23rdJanuary 2019-ESOP 2016
Share price (on the date previous to grant date) 758.55		1,000.15	961.55	1,152.80	1,152.80	1,152.80
Exercise price 1.00		1.00	1.00	1.00	1.00	1.00
Date of vesting (1)	08.11.2018	11.04.2019	30.10.2019	23.01.2022	29.01.2021	01.02.2021
Dividend yield (%) 0.85		0.62	2.54	0.84	0.84	0.84
Option life (no. of years) 2.50		2.50	2.50	6.00	5.02	5.02
Risk free interest rate (%) 6.69		7.09	8.01	7.56	7.49	7.49
Expected volatility (%) 22.12		21.65	23.20	24.34	23.87	23.86
Date of vesting (2)	08.11.2019	11.04.2020	30.10.2020	23.01.2023	29.01.2022	01.02.2022
Dividend yield (%) 0.91		0.66	3.62	0.84	0.84	0.84
Option life (no. of years) 3.50		3.50	3.50	7.00	6.02	6.03
Risk free interest rate (%) 6.64		7.28	8.02	7.58	7.56	7.56
Expected volatility (%) 24.01		23.59	23.24	24.37	24.32	24.30
Date of vesting (3)	-	-	30.10.2021	23.01.2024	-	-
Dividend yield (%) -		-	4.82	0.84	-	-
Option life (no. of years) -		-	4.50	8.00	-	-
Risk free interest rate (%) -		-	8.15	7.65	-	-
Expected volatility (%) -		-	24.34	24.40	-	-

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Inputs into the model Granted on Granted on 29 [th] January Granted on 05 [th] August Granted on
13 [th] May 2020-ESOP 2016 2020-ESOP 2016 04 [th] November
2019-ESOP 2020-ESOP
2016 2016
Share price (on the date 1,154.45 1,461.60 1,461.60 1,461.60 1,342.80 1,342.80 1,565.60
previous to grant date)
Exercise price 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Date of vesting (1) 13.05.2020 31.01.2021 18.11.2022 31.01.2021 05.08.2022 05.08.2021 04.11.2021
Dividend yield (%) 0.84 0.74 0.74 0.74 0.72 0.72 0.72
Option life (no. of years) 2.50 4.01 5.80 4.01 5.00 4.00 4.01
Risk free interest rate (%) 7.03 6.15 6.39 6.15 5.13 4.89 4.89
Expected volatility (%) 23.06 23.69 24.49 23.69 25.39 22.94 23.17
Date of vesting (2) - - 18.11.2023 31.01.2022 05.08.2023 05.08.2022 04.11.2022
Dividend yield (%) - - 0.74 0.74 0.72 0.72 0.72
Option life (no. of years) - - 6.80 5.01 6.00 5.00 5.01
Risk free interest rate (%) - - 6.43 6.39 5.62 5.13 5.13
Expected volatility (%) - - 24.56 23.76 25.95 25.39 25.73
Date of vesting (3) - - - - - 05.08.2023 -
Dividend yield (%) - - - - - 0.72 -
Option life (no. of years) - - - - - 6.00 -
Risk free interest rate (%) - - - - - 5.62 -
Expected volatility (%) - - - - - 25.95 -
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133

Notes forming part of the financial statements

Notes forming part of the financial statements

c) Movements in Share Options during the year

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During the year ended During the year ended
31 [st] March 2021 31 [st] March 2020
Options Weighted Options Weighted
(No.s) average (No.s) average
exercise exercise
price per price per
option option
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	During the year ended 31stMarch 2021	During the year ended 31stMarch 2021	During the year ended 31stMarch 2020	During the year ended 31stMarch 2020
	Options (No.s)	Weighted average exercise price per option	Options (No.s)	Weighted average exercise price per option
Option outstanding at the beginning of the year
- ESOP 2016	1,70,850	1	3,15,750	1
Granted during the year
- ESOP 2016*	2,78,990	1	12,500	1
Vested during the year - ESOP 2016**	1,39,300	1	1,55,850	1
Exercised during the year - ESOP 2016***	29,600	1	1,45,500	1
Lapsed during the year****
- ESOP 2016 (granted on 8thNovember 2017)	-	1	2,400	1
- ESOP 2016 (granted on 30thOctober 2018)	700	1	9,500	1
Options outstanding at the end of the year
- ESOP 2016	4,19,540	1	1,70,850	1
Options available for grant
- ESOS 2012	34,200	1	34,200	1
- ESOP 2016	38,35,210	1	41,13,500	1
The weighted average share price at the date of exercise for stock options exercised during the year		1,820.83		1,331.62
Range of exercise price for options outstanding at the end of the year		1		1
* Includes NIL options(Previous year 1,000) granted to Eligible Employees of the Subsidiary Companies Includes 400 options (Previous year 1,100) vested by Eligible Employees of the Subsidiary Companies Includes 1,100 options (Previous year 400) exercised by Eligible Employees of the Subsidiary Companies *** Lapsed due to termination of employment with the Company

• Includes NIL options(Previous year 1,000) granted to Eligible Employees of the Subsidiary Companies

• ** Includes 400 options (Previous year 1,100) vested by Eligible Employees of the Subsidiary Companies

• *** Includes 1,100 options (Previous year 400) exercised by Eligible Employees of the Subsidiary Companies

• **** Lapsed due to termination of employment with the Company

47 Financial Instruments

(A) Capital Management

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximising the return to stakeholders through the optimum utilisation of the equity balance. The capital structure of the Company consists of only equity of the Company. The Company is not subject to any externally imposed capital requirements.

(B) Categories of financial instruments

( in crores)

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As at As at
31 [st] March 31 [st] March
2021 2020
Financial Assets
Measured at fair value through profit or loss (FVTPL)
Investments in Mutual funds, Preference Shares, Debentures and Bonds 332.49 1,025.81
Derivative assets towards Foreign Exchange Forward Contracts 0.09 1.70
Derivative Asset towards call option to buy subsidiary shares - 0.24
Measured at amortised cost
Trade Receivables 999.09 806.63
Cash and Cash Equivalents 109.81 564.17
Other Bank balances 2.56 4.67
Loans 21.07 29.42
Other Financial Assets 22.40 19.41
Total Financial Assets 1,487.51 2,452.05
Financial Liabilities
Measured at fair value through profit or loss (FVTPL)
Derivative liabilities towards Foreign Exchange Forward Contracts 0.64 0.42
Derivative liability towards put option to buy subsidiary shares - 34.83
Measured at amortised cost
Borrowings 55.00 -
Trade Payables 793.82 494.81
Lease Liabilities 67.33 73.34
Other Financial Liabilities 913.43 524.42
Total Financial Liabilities 1,830.22 1,127.82
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(C) Financial risk management objectives

The Company’s Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk, credit risk and liquidity risk. The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising foreign exchange forward contracts. Compliance with policies and exposure limits is a part of Internal Financial Controls. The Company does not enter into or trade in financial instruments, including derivative financial instruments, for speculative purposes. The Corporate Treasury function reports quarterly to the Company’s risk management committee, an independent body that monitors risks and policies implemented to mitigate risk exposures.

(D) Market risk

The Company’s activities expose it primarily to the financial risk of changes in foreign currency exchange rates (see note E below). The Company enters into foreign exchange forward contracts to manage its exposure to foreign currency risk of net imports.

135

Notes forming part of the financial statements

Notes forming part of the financial statements

(E) Foreign currency risk management

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

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Foreign Currency Exposure Foreign Currency Exposure
(in FC) ( in crores)
31 [st] March 31 [st] March 31 [st] March 31 [st] March
2021 2020 2021 2020
Amounts recoverable/ (advance) in foreign currency on account of the following:
EUR 10,81,550.68 7,99,474.10 9.31 6.65
USD 1,81,31,339.20 1,18,56,074.29 133.32 89.42
AUD - 38,745.00 - 0.18
GBP (9,350.00) - (0.09) -
Amounts (payable)/ advance in foreign currency on account of the following:
AED 2,09,539.00 2,36,491.04 0.42 0.49
AUD 1,820.00 1,820.00 0.01 0.01
BDT - 50,000.00 - 0.00
CHF (51,054.78) (5,212.31) (0.40) (0.04)
EUR (9,74,428.65) (2,86,454.95) (8.39) (2.38)
GBP (9,79,835.82) (1,65,553.39) (9.89) (1.54)
JPY (1,00,47,800.00) (75,78,800.00) (0.67) (0.53)
SGD (1,54,359.69) - (0.84) -
USD (2,65,45,200.80) (1,42,44,907.61) (195.19) (107.34)
ZAR 64,255.58 64,255.58 0.03 0.03
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• BDT exposure is NIL as at 31[st] March 2021 ( 44,400 as at 31[st] March 2020).

(i) Foreign currency sensitivity analysis

The Company is mainly exposed to the USD, EUR and JPY. The following table demonstrates the sensitivity to a 2% increase or decrease in the USD, EUR and JPY against INR with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 2% represents management assessment of reasonably possible changes in foreign exchange rates.

changes in foreign exchange rates.	changes in foreign exchange rates.	changes in foreign exchange rates.
			( in crores)
			USD impact
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Impact on proft or loss for the year (a)			(1.24)	(0.36)
			EUR impact
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Impact on proft or loss for the year (b)			0.02	(0.09)
			JPY impact
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Impact on proft or loss for the year (c)			(0.01)	(0.01)
(a) This is mainly atributable to the exposure of outstanding USD receivables and payables at			the end of the reporting period.

• (b) This is mainly attributable to the exposure of outstanding EUR receivables and payables at the end of the reporting period.

• (c) This is mainly attributable to the exposure of outstanding JPY payables at the end of the reporting period.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

(ii) Foreign exchange forward contracts

It is the policy of the Company to enter into foreign exchange forward contracts to cover foreign currency payments (net of receipts) in USD and EUR. The Company enters into contracts with terms upto 90 days. The Company’s philosophy does not permit any speculative calls on the currency. It is driven by conservatism which guides that we follow conventional wisdom by use of Forward contracts in respect of Trade transactions.

Regulatory Requirements: The Company does alter its hedge strategy in relation to the prevailing regulatory framework and guidelines that may be issued by RBI, FEDAI or ISDA or other regulatory bodies from time to time.

Mode of taking Cover: Based on the outstanding details of import payable and export receivable (in weekly baskets) the net trade import exposure is arrived at (i.e. Imports – Exports = Net trade exposures). The net trade import exposure arrived at is netted off with the outstanding forward cover as on date and with the surplus foreign currency balance available in EEFC A/Cs. Forward cover is obtained from bank for each of the aggregated exposures and the Trade deal is booked. The forward cover deals are all backed by actual trade underlines and settlement of these contracts on maturity are by actual delivery of the hedged currency for settling the underline hedged trade transaction.

The following table details the foreign exchange forward contracts outstanding at the end of the reporting period:

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Outstanding contracts Average exchange rates ( ) Foreign Currency
31 [st] March 31 [st] March 31 [st] March 31 [st] March
2021 2020 2021 2020
USD - Buy 74.48 72.30 1,41,21,844.00 55,78,888.40
EUR - Buy - 80.43 - 72,00,000.00
( in crores)
Outstanding contracts Nominal Amounts Fair value assets/ (liabilities)
31 [st] March 31 [st] March 31 [st] March 31 [st] March
2021 2020 2021 2020
USD - Buy 104.33 40.61 (0.55) 1.70
EUR - Buy - 60.22 - (0.42)
TOTAL (0.55) 1.28
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The line-items in the financial statements that include the above hedging instruments are “Other Financial Assets” of 0.09 crores ( 1.70 crores as at 31[st] March 2020) and “Other Financial Liabilities” of 0.64 crores ( 0.42 crores as at 31[st] March 2020) (refer Note: 13 and 24 respectively).

The aggregate amount of loss under foreign exchange forward contracts recognised in the Statement of Profit and Loss is 2.49 crores (profit of 2.42 crores as at 31[st] March 2020).

(F) Credit risk management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables.

The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating. The Company’s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.

Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.

(G) Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in Cash and Cash Equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

(i) Liquidity risk tables

The following tables detail the Company’s remaining contractual maturity for its non-derivative and derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company will be liable to pay.

137

Notes forming part of the financial statements

Notes forming part of the financial statements

The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

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( in crores)
Less than 1 1-5 years More than 5 years Total Carrying Amount
year
As at 31 [st] March 2021
Interest bearing
- Borrowings 55.00 - - 55.00 55.00
Non-interest bearing
- Trade Payables 668.30 - - 668.30 668.30
- Other Financial Liabilities 706.14 8.98 - 715.12 715.12
1,374.44 8.98 - 1,383.42 1,383.42
- Lease Liabilities (undiscounted) 23.80 49.30 11.86 84.96 67.33
Fixed interest rate instruments
- Trade/ Security Deposit received 133.82 - - 133.82 133.82
Derivative liabilities towards foreign 0.64 - - 0.64 0.64
exchange forward contracts
Financial guarantee contracts 92.03 - - 92.03 -
As at 31 [st] March 2020
Non-interest bearing
- Trade Payables 494.81 - - 494.81 494.81
- Other Financial Liabilities 393.31 7.26 - 400.57 400.57
888.12 7.26 - 895.38 895.38
- Lease Liabilities (undiscounted) 27.86 53.38 7.54 88.78 73.34
Fixed interest rate instruments
Trade/ Security Deposit received 123.86 - - 123.86 123.86
Derivative liabilities towards foreign 0.42 - - 0.42 0.42
exchange forward contracts
Derivative liability towards put option to 34.83 - - 34.83 34.83
buy subsidiary shares
Financial guarantee contracts 104.19 - - 104.19 -
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• (H) Fair value measurements This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

• (i) Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period.

The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Financial Assets/ Financial Liabilities	Financial Assets/ Financial Liabilities	Fair value	Fair value	Fair value hierarchy	Valuation technique(s) and key input(s)
		As at 31stMarch 2021	As at 31stMarch 2020
1 Investment in Mutual/Alternate Investment Funds, Preference Shares, Debentures and Bonds		Various listed funds - aggregate fair value of 332.49 crores	Various listed funds - aggregate fair value of 1, 025.81 crores	Level 1	Quoted bid prices in active market
2 Derivative assets and liabilities towards foreign currency forward contracts		Assets - 0.09 crores and Liabilities - 0.64 crores	Assets - 1.70 crores and Liabilities - 0.42 crores	Level 2	Mark to market values acquired from banks, with whom the Com- pany contracts.
3 Derivative asset and liability towards call and put option to buy subsidiary shares		Assets - NIL and Liabilities - NIL	Assets - 0.24 crores and Liabilities - 34.83 crores	Level 2	Fair values of options using black scholes valuation model based on Independent Valuer's report

(ii) Financial instruments measured at amortised cost The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

( in crores)

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48 Taxes
1 Deferred Tax
As at As at
31 [st] March 31 [st] March
2021 2020
Deferred Tax Assets (27.21) (38.60)
Deferred Tax Liabilities 103.07 114.57
TOTAL 75.86 75.97
a 2020- 2021
Deferred Tax (Assets)/ Liabilities in relation to:
Opening Recognised in Recognised Closing
Balance Profit or loss in Other balance
Comprehensive
Income
Property, Plant and Equipment 18.08 8.71 - 26.79
Intangible Assets 73.07 (3.55) - 69.52
FVTPL Financial Assets 4.23 2.52 - 6.75
Allowance for doubtful debts (7.81) (0.94) - (8.75)
Provision for Employee Benefits (12.33) (1.65) (0.24) (14.22)
Share issue and buy-back costs 1.48 (3.26) - (1.78)
Others (0.75) (1.71) - (2.45)
TOTAL 75.97 0.12 (0.24) 75.86
b 2019- 2020
Deferred Tax (Assets)/ Liabilities in relation to:
Property, Plant and Equipment 51.95 (33.87) - 18.08
Intangible Assets 72.08 0.99 - 73.07
FVTPL Financial Assets 17.07 (12.84) - 4.23
Provisions for VRS 0.12 (0.12) - -
Allowance for doubtful debts (12.86) 5.05 - (7.81)
Provision for Employee Benefits (14.99) 6.34 (3.68) (12.33)
Share issue and buy-back costs (0.40) 1.88 - 1.48
Others - (0.75) - (0.75)
TOTAL 112.97 (33.32) (3.68) 75.97
2 Income Taxes relating to continuing operations
a Income Tax recognised in the Statement of Profit and Loss
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Current Tax
In respect of the current year 375.05 368.65
TOTAL 375.05 368.65
Deferred Tax
In respect of the current year 0.12 (33.32)
TOTAL 0.12 (33.32)
Income Tax expense recognised in the Statement of Profit and Loss relating to continuing 375.17 335.33
operations
Pidilite Annual Report 2020-21
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139

Notes forming part of the financial statements

Notes forming part of the financial statements

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( in crores)
b The Income Tax expense for the year can be reconciled to the accounting profit as follows:
For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Profit Before Tax 1,456.63 1,436.95
Income Tax Rate (%) 25.17 25.17
Income Tax expense 366.60 361.65
Effect of income that is exempt from taxation (2.06) (4.19)
Effect of expenses that are not deductible in determining taxable profit 9.50 21.93
Effect of concessions (research and development and backward area deductions) - (3.46)
Effect of lower rate of tax - (48.22)
Others 1.13 7.62
Income tax expense recognised in the Statement of Profit and Loss 375.17 335.33
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• The Tax rate used for the above reconciliation is the corporate tax rate of 25.168% (25.168% for the year ended 31[st] March 2020) payable by corporate entities in India on taxable profits under Indian Tax Law.

c Income Tax recognised in Other Comprehensive Income	c Income Tax recognised in Other Comprehensive Income	c Income Tax recognised in Other Comprehensive Income	c Income Tax recognised in Other Comprehensive Income	c Income Tax recognised in Other Comprehensive Income
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Tax arising on income and expenses recognised in Other Comprehensive Income:
Re-measurement of Defned Beneft Obligation			0.24	3.68
Income Tax recognised in Other Comprehensive Income			0.24	3.68

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( in crores)
49 Research & Development Expenditure
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Capital expenditure included in Property, Plant and Equipment 1.05 1.85
Revenue expenditure charged to Statement of Profit and Loss 71.86 69.37
TOTAL 72.91 71.22
50 Disclosures required under Section 22 of Micro, Small and Medium Enterprises Development Act, 2006
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
(i) Principal amount remaining unpaid to any SME supplier as at the end of the accounting 67.04 9.30
year
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year - -
(iii) The amount of interest paid along with the amounts of the payment made to the supplier - -
beyond the appointed day
(iv) The amount of interest due and payable for the year - -
(v) The amount of interest accrued and remaining unpaid at the end of the - -
accounting year
(vi) The amount of further interest due and payable even in the succeeding year, until such date - -
when the interest dues as above are actually paid
TOTAL 67.04 9.30
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The above information regarding dues to Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information collected with the Company. This has been relied upon by the auditors.

141

Notes forming part of the financial statements

Notes forming part of the financial statements

51 Lease

In previous year on transition, the adoption of the new standard resulted in recognition of ‘Right of Use’ asset of 110.88 crore and a corresponding lease liability of 69.85 crores and transfer from asset amounting to 41.03 crores. The effect of this adoption is insignificant on the profit before tax, profit for the period and earnings per share. Ind AS 116 will result in an increase in cash inflows from operating activities and an increase in cash outflows from financing activities on account of lease payments.

Refer note 47G(i) for contractual maturities of lease liabilities.

( in crores)

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Reconciliation of operating lease commitments as at 31 [st] March 2019 with the lease liabilities recognised in the Balance Sheet
as at 1 [st] April 2019:
Operating lease commitments disclosed as at 31 [st] March 2019 34.28
Discounted using incremental borrowing rate of at 1 [st] April 2019 46.51
Add : finance lease liabilities recognised as at 31 [st] March 2019 -
(Less) : short-term leases not recognised as a liability (10.94)
(Less) : low-value leases not recognised as a liability -
Lease liability recognised as at 1 [st] April 2019 69.85
Of which are:
Current lease liabilities 16.49
Non-current lease liabilities 53.36
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Impact	Impact	of	adoption	of	Ind	AS	116	on	the	Statement	of	Proft	and	Loss:
																31st	For the year ended March 2021	For the year ended 31stMarch 2020

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For the For the
year ended year ended
31 [st] March 2021 31 [st] March 2020
Interest on lease liabilities (refer Note 35) 5.46 6.08
Depreciation of Right of use assets (refer Note 36) 26.55 24.19
Deferred tax (credit) (0.86) (0.97)
Impact on the Statement of Profit and Loss 31.15 29.30
Expenses related to short term lease incurred during the year (refer Note 37) 13.34 11.96
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52 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

• (a) Gross amount required to be spent by the Company during the year is 25.88 crores ( 24.81 crores for the year ended 31[st ] March 2020)

• (b) Amount spent during the year on:

		In cash	Yet to be paid in cash	TOTAL
(i) Construction/acquisition of any asset		-	-	-
		(-)	(-)	(-)
(ii) On purposes other than (i) above		27.70	-	27.70
		(26.30)	(-)	(26.30)

Figures in brackets() represent previous year

53 Other Information

• a) During the year, the Company has acquired 70% stake in equity shares of Tenax Pidilite India Pvt Ltd (“Tenax”) (formerly know as Tenax India Stone Products Pvt Ltd) from Tenax SPA Italy (Tenax Italy) thereby making Tenax a subsidiary of the Company on 28[th] May 2020. Accordingly, a liability towards acquisition (refer Note 24) has been recognised in this financial statement amounting to 15.94 crores which will be paid once the preconditions mentioned in the agreement are met. Tenax Italy is the leading manufacturer of adhesives, coating, surface treatment chemicals and abrasives for the marble, granite and stone industry. Tenax is engaged in the sales and distribution of Tenax Italy products for the retail market in India.

• b) During the year, the Company has acquired 100% stake in Pidilite Adhesive Private Limited (PAPL) (formerly known as Huntsman Advanced Materials Solutions Private Limited) from Huntsman Group and thereby making subsidiary of the company on 3[rd] November 2020. Huntsman Group is a leading global producer of differentiated organic chemical products. PAPL manufactures and sells adhesives, sealants and other products under wellknown brands such as Araldite, Araldite Karpenter and Araseal. Huntsman group has been paid approximately 90% of the cash consideration at closing and balance approximately 10% under an earnout within 18 months if the business achieves sales revenue in-line with 2019. Accordingly, a liability towards acquisition (refer Note 24) has been recognised in this financial statement amounting to 208.31 crores.

• c) During the financial year 2017-18, 70% shareholding in CIPY Polyurethanes Pvt Ltd (CIPY) was acquired by entering into a share purchase agreement. Pursuant to share purchase agreement, the Company had an option to purchase and the seller has an option to sell balance 30% of equity share capital of CIPY on or after expiry of 3 years from acquisition date. Accordingly, an investment of 34.6 crores was accounted in the books with corresponding derivative liability (Net) in financial year 2017-18. During current year, seller has exercised the option to sell the balance 30% stake on 6[th] January 2021. Additional investment of 48 crores to be recorded on transfer of balance shares. (refer Note 54)

• d) Madhumala Ventures Pvt Ltd (Formerly known as Madhumala Traders Pvt Ltd) (Madhumala), a wholly owned subsidiary of the Company:

• (i) invested an amount of 3.00 crores in current year ( 2.00 crores in previous year) in the Aapkapainter Solutions Pvt Ltd (Aapkapainter). The company is engaged in providing painting and waterproofing solutions to retail consumer.

• (ii) Invested an amount of 19.15 crores in current year in the Homevista Interior Désigns E.Commerce Pvt Ltd (Livspace) by subscription to Compulsory Convertible Non-Cumulative Preference Shares. Livspace is leading home design and renovation platform of India and Southeast Asia.

• (iii) invested an amount of 71.48 crores in previous year in the Trendsutra Platform Services Pvt Ltd (Pepperfry) by subscription to Compulsory Convertible Non-Cumulative preference Shares. Pepperfry is an online furniture chain in India.

• (iv) invested an amount of 49.00 crores in previous year in the Homevista Décor & Furnishings Pvt Ltd (HomeLane) by subscription to Compulsory Convertible Cumulative preference Shares. HomeLane is a fast growing home interiors company backed by strong tech-stack and presence in 7 cities with 16 experience centers in India.

• e) During the previous year, the Company has incorporated a subsidiary in the name of ‘Pidilite Litokol Private Limited’ (PLPL). This subsidiary is incorporated to carry on the business of chemicals epoxy grouts, chemical based products, etc. In terms of Shareholder’s agreement, the Company shall hold 60% of the paid-up share capital and balance capital held by Litokol SPA, Italy.

• f) During the previous year, the Company has incorporated a subsidiary in the name of ‘Pidilite Grupo Puma Manufacturing Limited’ (PGPML) to carry on the business of manufacturing, processing, trading or dealing in technical mortars, building materials, high quality C2 tile adhesives, other materials used in construction etc. The Company shall hold 50% of the paid-up share capital and balance capital held by Corporacion Empresarial Grupo Puma S.L. (Grupo Puma).

• g) During the previous year, the Company has incorporated a Subsidiary Company in the name of “Pidilite C-Techos Walling Limited” (PCWL) to carry on the business of construction of building works or any other structural or architectural work of any kind using C-Techos wall technology, manufacturing of ACC panels and other ancillary products. The Company shall hold 60% of the paid-up share capital and balance capital held by Chetana Exponential Technologies Pvt Ltd.

• h) During previous year, the Company decided to sell plant and machinery pertaining to Synthetic Elastomer project located at Dahej having a carrying value of 60.52 crores as on 1[st] April 2019 (included in capital work in progress). Accordingly, reclassified these assets as “Assets held for sale” at fair market value of 38.28 crores and an impairment loss amounting to 22.24 crores was provided in September 2019.

The Company has undertaken its best efforts to find buyers for these assets. In absence of buyer, as at 31[st] March 2020, these assets were fair valued at estimated realizable scrap value in accordance with Ind AS 113 “Fair Value Measurement”, being asset categorized as Level 3, whereby fair value is determined based on the inputs to the valuation technique.

Out of these assets, Company had identified certain plant & machinery amounting to 5.33 crores for its internal use and remaining plant & machinery amounting to 32.95 crores had been further impaired. Hence, an impairment loss aggregating to 55.19 crores is disclosed as an exceptional item in the financial statements in previous year.

143

Notes forming part of the financial statements

Notes forming part of the financial statements

• i) During the previous year, the Company had paid Interim Dividend of 7.00 per equity share of 1 each for the financial year 2019-20.

• j) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13[th] November 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

54 Events after reporting period

• a) On 22[nd] April, 2021, the Company’s shareholding in its subsidiary namely M/s. Cipy Polyurethanes Pvt Ltd (CIPY), has increased from 70% to 100%, pursuant to the acquisition of the balance 28,249 equity shares from certain other shareholders, in accordance with the provisions of the shareholders agreement dated 5[th] January 2018. Consequent to this, CIPY is now a wholly owned subsidiary of the Company. The consideration of 60.49 crores (excluding certain contingent payment) has been paid in cash.

• b) Proposed dividend of 8.50 per Equity Share of 1 each recommended by the Board of Directors at its meeting held on 12[th] May 2021. The proposed dividend is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

• 55 In March 2020, the World Health Organisation declared COVID 19 to be a pandemic. As a result, the operations of the Company were impacted in FY’21 with series of lockdowns announced by the government. Further disruptions in operations also happened in between during the year with unexpected closure of sites due to detection of Covid patients. The situation gradually normalised from Q3’ FY’21 onward. However the Second wave of Covid again disrupted operations in certain part of the country in April 2021.

The Company has evaluated the impact of Covid 19 on the operations of the Company, order booking and revenue, cash flow, assets and liabilities and factored in the impact of it upto the date of approval of these financial statements on the carrying value of its assets and liabilities.

Even though, it is very difficult to predict the duration of the disruption and severity of its impact, on the basis of evaluation of overall economic environment, outstanding order book, liquidity position, debt status, recoverability of receivables, the Company expects to recover the carrying amount of these assets and currently does not anticipate any further impairment of it. In assessing the recoverability, the Company has considered internal and external information upto the date of approval of these financial statements and has concluded that there are no material impact on the operations and the financial position of the Company.

Given the uncertainties, the impact of COVID-19 maybe different from that estimated as at the date of approval of these financial statements, and the Company will continue to closely monitor the developments.

56 Business Combination

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1 Partnership Firm merged
Proportion of Consideration
Date of
Financial Year Name of Firm Name of Firm voting equity transferred
acquisition
interests ( in crores)
acquired (%)
During 2020-21 Nitin Enterprises Production of sealants 31 [st] March 2021 100% 17.30
( in crores)
2 Consideration transferred
Cash 8.50
Consideration Payable 8.80
TOTAL (A) 17.30
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The Board of Directors at its meeting held on 29[th] January 2020 had approved a restructuring proposal whereby the Company shall, for operational convenience and synergies, acquire the business of wholly owned entity, Nitin Enterprises (a partnership firm having two partners which are wholly owned subsidiaries of the Company) on a slump sale basis for a cash consideration. The Company has completed the acquisition of the business of wholly owned entity, Nitin Enterprises on 31[st] March 2021. During previous year, the Company had made an advance payment of 8.5 crores to the seller and balance liability towards acquisition (refer Note 24) has been recognised in this financial statement amounting to 8.8 crores.

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( in crores)
3 Identifiable assets acquired and liabilities assumed and capital reserve arising on date of acquisition
Property, Plant and Equipment 11.53
Capital Work-in-Progress 0.13
Intangible Assets
Goodwill 0.23
Right of Use Assets 0.45
Other Financial Assets - Non-Current 2.05
Other Non-Current Assets 4.17
Inventories 4.98
Trade Receivables 0.91
Cash and Cash Equivalents 4.87
Other Current Assets 0.58
Total Assets Acquired (B) 29.90
Provisions - Non-Current 0.02
Trade Payables 8.14
Other Financial Liabilities - Current 6.13
Other Current Liabilities 0.03
Total Liabilities taken over (C) 14.32
Net Assets Acquired (D) = (B) - (C) 15.58
Capital Reserve (E) = (A) - (D) 1.72
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The gross contractual amounts and the fair value of trade and other receivables acquired is 0.91 crores. None of the trade and other receivables are credit impaired and it is expected that the full contractual amounts will be recoverable.

Total Capital Reserve on acquisition was 1.72 crores. The Capital Reserve on acquisition can be attributable to skilled employees, expected synergies from acquisition and other intangible assets that can not be identified separately.

Nitin Enterprises contributed NIL towards revenue from operations and Company’s results. If the acquisition had occurred on 1[st] April 2020, revenue from operations would have been higher by 40.77 crores and profit would have been lower by 2.00 crores. In determining these amounts, it is assumed that the fair value adjustments, that arose on date of acquisition would have been same if the acquisition had occurred on 1[st] April 2020.

57 Approval of financial statement

The financial statements are approved for issue by the Audit Committee and by the Board of Directors at their respective meetings held on 12[th] May 2021.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

PUNEET BANSAL

BHARAT PURI

M B PAREKH Executive Chairman DIN: 00180955 Place: Mumbai Date: 12[th] May 2021

Company Secretary

Managing Director DIN: 02173566

PRADIP KUMAR MENON Chief Financial Officer

145

Corporate Governance Report

In compliance with Regulation 34(3) and Schedule V of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) the Company submits the following report:

1. Company’s Philosophy on Code of Governance

The Company is committed to complying with the best practices in Corporate Governance and aspires to reach higher standards while emphasising on the principles of integrity, transparency, customer orientation thereby creating a sustainable culture and long term value for all its stakeholders.

The Company has complied in all material respects with applicable mandatory requirements of the Listing Regulations. 2. Board Procedures

The Board / Statutory Committee meetings are pre-scheduled and a tentative annual calendar of the Board and Statutory Committee meetings is circulated to the Directors well in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. However, in case of a special and urgent business need, the Board’s approval is taken by passing resolutions by circulation, as permitted by law, which are noted and confirmed in the subsequent Board Meeting.

3. Board of Directors

During the financial year 2020-21, seven Board Meetings were held on 9[th] April 2020, 17[th] June 2020, 6[th] August 2020, 10[th] September 2020, 28[th] October 2020, 4[th] November 2020 and 28[th] January 2021.

The Directors of the Company, in their fiduciary position, are empowered to oversee the management functions with a view to ensuring its effectiveness and enhancement of shareholder value. The Board also reviews and approves management’s strategic plan & business objectives and monitors the Company’s strategic direction.

The composition of the Board is in conformity with Regulation 17 of the Listing Regulations as well as the Companies Act, 2013 read with the Rules issued thereunder. The Independent Directors constitute more than 50% of the Board’s strength. The details of composition of the Board, category, attendance of Directors at the Board Meetings and previous Annual General Meeting (51[st] AGM), number of other Directorships and Committee positions as on 31[st] March 2021 are given below:

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Sr. Name DIN Category No. of Attendance No. of No. of Committee
No. Board at 51 [st] AGM Directorships positions held in
Meetings held in other other companies ()
attended companies() Member Chairman-
@ -ships ships
1. Shri M B Parekh 00180955 ED (P) 7 Yes 10 1 -
(Executive Chairman)
2. Shri N K Parekh 00111518 NED (P) 7 Yes 10 1 -
(Vice Chairman)
3. Shri Bharat Puri 02173566 ED 7 Yes 5 1 -
(Managing Director)
4. Shri A B Parekh 00035317 ED (P) 7 Yes 14 - -
(Whole Time Director)
5. Shri A N Parekh 00111366 ED (P) 7 Yes 7 1 -
(Whole Time Director)
6. Shri Debabrata Gupta 01500784 ED 7 Yes - - -
(Whole Time Director)
7. Shri B S Mehta 00035019 NED (I) 5 Yes 2 1 -
8. Shri Sanjeev Aga 00022065 NED (I) 7 Yes 6 2 1
9. Shri Uday Khanna 00079129 NED (I) 7 Yes 5 1 3
10. Smt Meera Shankar 06374957 NED (I) 6 Yes 3 1 -
11. Shri Vinod Kumar Dasari 00345657 NED (I) 6 Yes 5 - -
12. Shri Piyush Pandey 00114673 NED (I) 6 Yes 5 1 -
13. Shri Rajeev Vasudeva 02066480 NED (I) 3 - 3 - -
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Notes:

• @ All the Board meetings were conducted through Video Conferencing.

• Appointed as an Additional Director (Non-Executive Independent) w.e.f. 10[th] September 2020.

• ** Including directorships held in private limited companies, Section 8 companies (as per Companies Act, 2013), Alternate directorships and directorships in entities incorporated outside India.

• *** Position in Audit Committee and Stakeholders Relationship Committee only (excluding private limited company, foreign company and section 8 company) as provided in Regulation 26(1) of Listing Regulations.

• ED– Executive Director, ED (P) – Executive Director, Promoter, NED (P) – Non-Executive Director, Promoter, NED (I) – Non-Executive Director, Independent.

The Company provides teleconference/Video Conference facilities to Directors to participate in the meetings.

Names of listed entity wherein Directors are holding position of Director & the category of Directorship as on 31[st] March 2021:

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Name of Director Name of the other Listed company Category of Directorship
Shri M B Parekh Vinyl Chemicals (India) Limited Managing Director and Chairperson
Excel Industries Limited Non-Executive - Independent Director
Shri N K Parekh Vinyl Chemicals (India) Limited Non-Executive - Non Independent Director
Shri Bharat Puri Tata Consumer Products Limited Non-Executive - Independent Director
(formerly known as Tata Global Beverages Ltd)
Shri A B Parekh Vinyl Chemicals (India) Limited Non-Executive - Non Independent Director
Shri A N Parekh - -
Shri B S Mehta Atul Limited Non-Executive - Independent Director
Shri Sanjeev Aga UFO Moviez India Limited Non-Executive - Independent Director-Chairperson
Mahindra Holidays & Resorts India Limited Non-Executive - Independent Director
Larsen & Toubro Infotech Limited Non-Executive - Independent Director
Larsen & Toubro Limited Non-Executive - Independent Director
Shri Uday Khanna Castrol India Limited Non-Executive - Independent Director
Pfizer Limited Non-Executive - Independent Director
Kotak Mahindra Bank Limited Non-Executive - Independent Director
Smt Meera Shankar ITC Limited Non-Executive - Independent Director
Adani Transmission Limited Non-Executive - Independent Director
JK Tyre & Industries Limited Non-Executive - Independent Director
Shri Vinod Kumar Dasari Eicher Motors Ltd Executive Director
Shri Piyush Pandey Zee Entertainment Enterprises Limited Non-Executive - Independent Director
- -
Shri Debabrata Gupta
- -
Shri Rajeev Vasudeva
(w.e.f. 10 [th] September 2020)
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Shri M B Parekh and Shri A B Parekh are related to each other. Shri A N Parekh and Shri N K Parekh are related to each other. The Chairman is not related to the Managing Director, as per the definition of ‘relative’ defined under the Companies Act, 2013. The Chairman of the Company is a Promoter Director and has been serving as a Director of the Company since 1972. He has guided the Company through decades of diversification and growth. He is primarily responsible for ensuring that the Board provides effective governance to the Company.

The Managing Director of the Company is responsible for executing all corporate strategy and planning in consultation with the Board and other matters of the management.

The number of shares held by Non-Executive Directors as on 31[st] March 2021:

Shri B S Mehta – 24,716, Shri Sanjeev Aga – 798, Shri Uday Khanna – 5,000, Smt Meera Shankar – Nil; Shri Vinod Kumar Dasari – Nil, Shri Piyush Pandey – Nil, Shri Rajeev Vasudeva – 670 and Shri N K Parekh (Promoter) – 5,42,73,688.

The familiarization programme for Independent Directors in terms of provisions of Listing Regulations is uploaded on the website of the Company: www.pidilite.com. The Independent Directors were updated with the strategic and operational details of the respective divisions of the Company.

147

Skills/ expertise/ competencies identified by the Board of Directors (as on 31[st] March 2021)

The core skills/expertise/competencies available with the Board and taken into consideration while nominating any candidate to serve on the Board are:

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----- Start of picture text -----

Name of Directors Sales and Business Leadership & Legal & Finance, Relevant
Marketing & Senior Governance Regulatory Accounts Technologies
Management Matters & Risk
Management
Executive Directors
Shri M B Parekh √ √ √ √ √ √
Shri Bharat Puri √ √ √ √ √ √
Shri A B Parekh √ √ √ √ √ √
Shri A N Parekh √ √ √ √ √ √
Shri Debabrata Gupta √ √ √ √
Non-Executive Non-Independent Director
Shri N K Parekh √ √ √ √ √ √
Independent Director
Shri B S Mehta √ √ √ √
Shri Sanjeev Aga √ √ √ √ √
Shri Uday Khanna √ √ √ √ √
Smt Meera Shankar √ √ √
Shri Vinod Dasari √ √ √ √ √
Shri Piyush Pandey √ √ √ √ √
Shri Rajeev Vasudeva √ √ √ √
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Independent Directors’ Meeting

In accordance with the provisions of Schedule IV (Code for Independent Directors) of the Companies Act, 2013 and Regulation 25(3) of Listing Regulations, meeting of the Independent Directors of the Company was held on 8[th] March 2021.

Declarations

The Company has received declarations from the Independent Directors that they meet the criteria of independence laid down under the Companies Act, 2013 and the Listing Regulations. The Board of Directors, based on the declaration(s) received from the Independent Directors, have verified the veracity of such disclosures and confirm that the Independent Directors fulfill the conditions of independence specified in the Listing Regulations and the Companies Act, 2013 and are independent of the management of the Company. The Company has issued formal appointment letters to all the Independent Directors in accordance with the Companies Act, 2013 read with the Rules issued thereunder. The draft of the letter of appointment/ re-appointment, containing the terms and conditions, issued to the Independent Directors, is posted on the Company’s website. Based on intimations/disclosures received from the Directors periodically, the Directors of the Company hold positions of, memberships/Chairmanships of the committees which are not more than the prescribed limits.

4. Audit Committee

The composition of the Audit Committee, its powers and terms of reference are in alignment with provisions of Section 177 of the Companies Act, 2013 read with the Rules issued thereunder and Regulation 18 of the Listing Regulations. The members of the Audit Committee are financially literate and have experience in financial management. All the recommendations made by the Audit Committee during the year under review were accepted by the Board.

Details of composition of the Audit Committee and attendance of the members at the meetings are given below:

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Sr. No. Name Designation Category No. of Meetings attended
1 Shri B S Mehta Chairman NED (I) 3
2 Shri M B Parekh Member ED (P) 4
3 Shri Uday Khanna Member NED (I) 4
4 Shri Sanjeev Aga Member NED (I) 4
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Shri Bharat Puri, Managing Director is a permanent invitee, ex-officio.

The Company Secretary is the Secretary of the Audit Committee. The Chief Financial Officer, Vice President – Domestic Accounts, Chief - Internal Audit, Statutory Auditors and Internal Auditors are invited to attend the meetings. The Cost Auditor is invited as and when required. The remuneration of Chief Internal Auditor is reviewed by the management.

The Chairman of the Audit Committee was present at the 51[st] Annual General Meeting held on 10[th] September 2020.

5. Nomination and Remuneration Committee (NRC)

NRC also functions as Compensation Committee as per SEBI (Share Based Employee Benefits) Regulations, 2014.

The terms of reference of NRC consists of making recommendation to the Board for all remuneration payable to Directors and Senior Management and making policy relating thereto, review of performance-based remuneration with reference to corporate goals and objectives, frame policy and review the process of succession planning at key levels in the Company and other related matters.

During the financial year 2020-21, seven meetings of the NRC were held on 17[th] June 2020, 5[th] August 2020, 10[th] September 2020, 4[th] November 2020, 29[th] December 2020, 27[th] January 2021 and 11[th] March 2021.

Details of composition of the NRC and attendance of the members at the meetings are given below:

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----- Start of picture text -----

Sr. No. Name Designation Category No. of meetings attended
1 Shri B S Mehta Chairman NED (I) 5
2 Shri N K Parekh Member NED (P) 7
3 Shri Sanjeev Aga Member NED (I) 7
4 Shri Vinod Dasari Member NED (I) 5
5 Shri Rajeev Vasudeva Member NED (I) 1
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*Shri Rajeev Vasudeva was appointed as member of NRC at the Board Meeting held on 28[th] January 2021 and as such he attended only one NRC which was convened on 11[th] March 2021.

Shri Rahul Kumar Sinha, Chief Human Resource Officer, acts as the Secretary of the NRC.

The Committee’s constitution and terms of reference are in compliance with the provisions of Section 178 of the Companies Act, 2013, Regulation 19 and Part D of Schedule II of Listing Regulations and SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time.

The Committee has formulated Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Personnel and is available on the Company’s website viz. www.pidilite.com. The Remuneration Policy is directed towards time commitment and responsibilities of the Directors and senior management, desirability of performance-based remuneration and salaries paid by comparable companies.

The criteria for performance evaluation of Directors, Board etc. cover the areas relevant to the functioning of Independent Directors such as preparation, participation, conduct and effectiveness. The Board evaluation for financial year 2020-21 was completed and summary of findings and recommendations were discussed by the Directors.

During the financial year 2020-21, four meetings of the Audit Committee were held on 16[th] June 2020, 5[th] August 2020, 3[rd] November 2020 and 27[th] January 2021 (in respect of all the aforesaid meetings certain business items were transacted and then meeting were adjourned to the next consecutive day for discussion on financial results and other related matters).

149

A. Remuneration of Executive Directors

Details of Executive Directors’ remuneration for the financial year 2020-21 are given below:

( in crores)

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----- Start of picture text -----

Sr. Name Salary * Commission Variable Pay Perquisites Total Tenure
No. Payable (Provision) and other (No. of years)
allowances
1 Shri M B Parekh 1.85 0 0 1.04 2.89 5 years from
(Executive Chairman) 01.08.2018
2 Shri Bharat Puri 5.74 3.66 1.93 2.08 13.41 5 years from
(Managing Director) 10.04.2020
3 Shri A B Parekh 0.79 0 0 0.42 1.21 5 years from
(Whole Time Director) 01.08.2018
4 Shri A N Parekh 0.69 4.40 0 0.45 5.54 5 years from
(Whole Time Director) 01.07.2020
5 Shri Debabrata Gupta 1.08 0 0.27 0.81 2.16 3 years from
(Whole Time Director) 01.03.2020
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• Includes House Rent Allowance

The above figures are exclusive of Company’s contribution to Provident Fund, Superannuation, Gratuity and encashment of leave at the end of tenure as per the rules of the Company.

Details of Stock options:

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----- Start of picture text -----

Sr. Name of the Director Vesting date No. of options# Exercise period
No.
1 Shri Bharat Puri 30.10.2020 1,10,000 Within 3 years from
the date of vesting
04.11.2021 1,17,500
04.11.2022 1,17,500
2 Shri Debabrata Gupta 04.11.2021 210 Within 3 years from
the date of vesting
04.11.2022 210
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• The stock options are issued at the face value.

• Vested but not exercised.

B. Service Contracts, notice period, severance fees

Notice period for the Executive Directors is as applicable to the senior employees of the Company except for Shri Bharat Puri where the notice period is of 365 days (as per agreement). No severance fee is payable to the Executive Directors on termination of employment.

• C. Details of sitting fees and commission to Non-Executive Directors

The details of sitting fees paid for attending the Board/ Committee meetings and commission due to the Non-Executive Directors for the year ended 31[st] March 2021 are as under:

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----- Start of picture text -----

Sr. Name Sitting fees ( ) Commission Payable ( ) Total ( )
No.
1 Shri B S Mehta 8,25,000 25,00,000 33,25,000
2 Shri Sanjeev Aga 11,57,000 25,00,000 36,57,000
3 Shri Uday Khanna 8,25,000 25,00,000 33,25,000
4 Smt.Meera Shankar 5,20,000 25,00,000 30,20,000
5 Shri Vinod Kumar Dasari 7,00,000 25,00,000 32,00,000
6 Shri N K Parekh 13,53,000 25,00,000 38,53,000
7 Shri Piyush Pandey 4,50,000 25,00,000 29,50,000
8 Shri Rajeev Vasudeva 2,75,000 13,83,562 16,58,562
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• Appointed as Additional Director (Non-Executive Independent) w.e.f. 10[th] September 2020

The Non-Executive Directors did not have pecuniary relationships or transactions vis-à-vis the Company. The Company regularly obtains services from Ogilvy and Mather Pvt. Ltd., in which Shri Piyush Pandey, Independent Director of the Company, is a Whole-time Director. The Company has not granted any Stock option to any of its Non-Executive Directors.

In terms of Special Resolution passed by the Members at Annual General Meeting held on 30[th] August 2018, the aggregate commission paid to the Non-Executive Directors does not exceed 1% per annum of the net profit of the Company computed in accordance with Section 198 of the Companies Act, 2013. The commission is determined by the Board of Directors considering the time spent in attending Board meetings, Committee meetings and advice given to the Company as experienced/expert persons, whenever approached.

6. Stakeholders Relationship Committee

The composition of the Stakeholders Relationship Committee is in compliance with the provisions of Section 178 of the Companies Act, 2013 read with the Rules issued thereunder and Regulation 20 of the Listing Regulations. During the financial year 2020-21, 13 meetings of the Share Transfer Committee were held and one meeting of Stakeholders Relationship Committee was held on 15[th] January 2021 which was attended by all the members of the Committee.

Details of composition of the Stakeholders Relationship Committee are given below:

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----- Start of picture text -----

Sr. Name Designation Category
No.
1 Shri Sanjeev Aga Chairman NED (I)
2 Shri N K Parekh Member NED (P)
3 Shri A B Parekh Member ED (P)
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The Committee is empowered to look into redressal of shareholders’/investors’ grievance such as complaints relating to transfer/transmission of shares, non-receipt of declared dividends, non-receipt of Annual Reports, effective exercise of voting rights by shareholders, service standards for Registrar and Share Transfer Agent, reducing quantum of unclaimed dividend, etc.

The status of investor grievances and share transfers is reported to the Board on periodic basis.

Shri Puneet Bansal, Company Secretary and Smt. Manisha Shetty, Additional Company Secretary, are the Compliance Officers for complying with the requirements of the Securities Laws and Listing Regulations.

Barring certain cases pending in Courts/Consumer Forums, mainly relating to disputes over the title to shares, in which the Company has been made a party, the Company and TSR Darashaw Consultants Pvt Ltd, have attended to all the shareholders’/investors’ grievances/correspondences generally within a period of 15 days from the date of receipt.

The total number of letters received from the shareholders were 920 of which only 8 were in the nature of complaints. All the complaints were resolved to the satisfaction of shareholders. No request for transfer of shares was pending as on 31[st] March 2021.

As per SEBI (Prohibition of Insider Trading) Regulations, 2015, (‘PIT Regulations’) the Company has adopted a Code of Conduct for Prevention of Insider Trading (‘Code’). All the Directors, employees and other persons specified therein are governed by this Code.

The Company appointed Shri A N Parekh, Whole Time Director, Shri Puneet Bansal, Company Secretary and Smt. Manisha Shetty, Additional Company Secretary as the Compliance Officers under PIT Regulations.

7. Risk Management Committee

The composition of Risk Management Committee is in compliance with the provisions of the Companies Act, 2013 and Regulation 21 of Listing Regulations. During the year, two meetings of the Committee were held on 16[th] June 2020 and 3[rd] November 2020.The constitution of the Risk Management Committee along with the details of the meetings attended during the financial year 2020-21 is detailed below:

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----- Start of picture text -----

Sr. Name Designation Category No. of meetings
No. attended
1 Shri B S Mehta Chairman NED (I) 1
2 Shri Uday Khanna Member NED (I) 2
3 Shri A N Parekh Member ED (P) 2
4 Shri Debabrata Gupta Member ED 2
5 Shri A D Ubhaykar Member 2
6 Shri Sanjay Bahadur Member 2
7 Shri Pankaj Bhargava Member 2
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151

The Company also has a Management Risk Committee, also known as the Risk Identification and Mitigation Committee (RIMC). 4 meetings of the RIMC were held during the financial year 2020-21. The terms of reference of the Committee is mentioned in the Directors Report forming part of this Annual Report. The Chief Financial Officer or Chief - Internal Audit acts as Secretary to the Committee.

8. Corporate Social Responsibility (CSR) Committee

The composition of the CSR Committee is in alignment with provisions of Section 135 of the Companies Act, 2013.

The Committee met two times during the financial year 2020-21 i.e. on 17[th] June 2020 and 28[th] January 2021.

The constitution of the CSR Committee along with the details of the meetings attended during the financial year 2020-21 is detailed below:

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----- Start of picture text -----

Sr. Name Designation Category No. of meetings
No. attended
1 Shri N K Parekh Member NED (P) 2
2 Shri Sanjeev Aga Member NED (I) 2
3 Shri A B Parekh Member ED (P) 2
4 Smt. Meera Shankar Member NED (I) 2
5 Shri Debabrata Gupta Member ED 2
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Members elect Chairperson of the Committee at each meeting. The Company Secretary acts as Secretary to the Committee. The CSR Committee is empowered, pursuant to its terms of reference, inter alia, to:

• a) Formulate and recommend to the Board a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company.

• b) Recommend the amount of expenditure to be incurred.

• c) Monitor the implementation of Corporate Social Responsibility Policy.

• d) Recommend to the Board for apporval of Annual Action Plan for CSR Implementation

The details of the CSR initiatives of the Company form part of the Social & Community Service Initiatives Report and Annexure to the Directors’ Report. The Constitution of CSR Committee, the CSR Policy and details of CSR Projects are available on the website of the Company:www.pidilite.com

9. General Body Meetings

Details of location, date and time of the Annual General Meetings held during the last three years are given below:

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Financial Venue Date & Time Details of special resolution passed at the AGM
Year
2019-20 Video Conferencing (“VC”)/Other 10 [th] September 2020 • Re-appointment of Shri N K Parekh as Non-Executive
Audio Visual Means (“OAVM”) at 3.00 p.m. Director, who retired by rotation
• Re-appointment of Shri Sanjeev Aga as an
Independent Director for a second term of 5
consecutive years
2018-19 Kamalnayan Bajaj Hall, Bajaj 6 [th] August 2019 • Re-appointment of Shri N K Parekh as a
Bhavan, Jamnalal Bajaj Marg, at 3.00 p.m. Non-Executive Director, who retired by rotation.
Nariman Point, Mumbai-400 021. • Re-appointment of Shri B S Mehta as an Independent
Director for a second term of 5 consecutive years
• Re-appointment of Shri Uday Khanna as an
Independent Director for a second term of
5 consecutive years
• Re-appointment of Smt. Meera Shankar as an
Independent Director for a second term of
5 consecutive years
2017-18 Kamalnayan Bajaj Hall, Bajaj 30 [th] August 2018 at • Re-appointment of Shri M B Parekh as the
Bhavan, Jamnalal Bajaj Marg, 11.00 a.m. Whole Time Director designated as
Nariman Point, Mumbai-400 021. Executive Chairman for a period of 5 years
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The above mentioned Special Resolutions were passed with requisite majority.

Postal Ballot

No postal ballot was conducted during the financial year 2020-21. There is no immediate proposal for passing any resolution through postal ballot.

10. Means of Communication

a. Publication of financial results:

The extract of standalone and consolidated results are normally published in The Economic Times and Maharashtra Times and are displayed on the website of the Company: www.pidilite.com

b. Websites and News Releases:

In compliance with Regulation 46 of the Listing Regulations, a separate dedicated section under ‘Investors’ on the Company’s website gives information on various announcements made by the Company, status of unclaimed dividend, Annual Report, Quarterly/Half yearly/ Nine-months and Annual financial results along with the applicable policies of the Company. The Company’s official news releases and presentations made to the institutional investors and analysts are also available on the Company’s website (www.pidilite.com). Quarterly Compliance Reports and other relevant information of interest to the Investors are also placed under the Investors Section on the Company’s website.

• c. Analysts presentations:

The presentations on performance of the Company are placed on the Company’s website for the benefit of the institutional investors, analysts and other shareholders immediately after the financial results are communicated to the Stock Exchanges. The Company also conducts calls/meetings with investors immediately after declaration of financial results to brief them on the performance of the Company and a transcript of such calls/meeting are uploaded on the Company’s website and Stock Exchanges.

d. Stock Exchange:

The Company makes timely disclosures of necessary information to BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) in terms of the Listing Regulations and other applicable rules and regulations issued by the SEBI.

e. Reminders to Investors:

• Reminders are, inter alia, sent to shareholders for registering their email ids, claiming returned undelivered share certificates and unclaimed dividend and transfer of shares thereto.

• f. The Annual Report with Audited Financial Statements of the Company and its subsidiaries are available in downloadable formats on the website of the Company www.pidilite.com. The Annual Report and Audited Financial Statements of the Company are also available on the websites of the Stock Exchanges.

11. General Information for Shareholders

Detailed information in this regard is provided in the “Information for Shareholders” section, appearing in the Annual Report.

12. Disclosures

During the financial year 2020-21:

• There were no materially significant related party transactions which have potential conflict with the interest of the Company at large. The details of related party transactions are set out in the Notes to Financial Statements forming part of this Annual Report.

• The Company has complied with all requirements of the Listing Regulations and guidelines of SEBI. Consequently, no penalties were imposed or strictures passed against the Company by SEBI, Stock Exchanges or any other statutory authority on any matter relating to capital markets during the last 3 years.

• The Company has complied with all the requirements of corporate governance as specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the Listing Regulations.

• The Company has a Vigil Mechanism and Whistle Blower Policy for Directors and Employees to report violations of applicable laws and regulations and the Code of Conduct. During the year under review, no employee was denied access to the Audit Committee Chairman.

• The Company has no material subsidiary. Policy for determining ‘material’ subsidiary is uploaded on the website of the Company: www.pidilite.com

• Company’s Policy on Related Party Transactions is uploaded on the website of the Company: www.pidilite.com

The Company has not made preferential allotment or qualified institutional placement.

• There were no instances, wherein the Board had not accepted recommendations made by any committee of the Board.

• Total fees of 1.50 crores for financial year 2020-21, for all services, was paid by the Company and its subsidiaries, on a consolidated basis to the Statutory Auditors of the Company M/s. Deloitte Haskins & Sells LLP and all entities in the network firm/network entity of which the Statutory Auditors is a part.

153

Corporate Governance Compliance Certificate

13. Equity shares in Unclaimed Suspense Account

The details of Equity shares in Unclaimed Suspense Account under Regulation 39 and Schedule VI of Listing Regulations are as follows:

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Description No. of Records No. of Equity Shares
of 1/- each
No. of shareholders and outstanding shares at the beginning of the year 43 38786
No. of shareholder’s request received for transfer of shares during the year 0 0
No. of shareholders to whom shares transferred during the year 0 0
No. of shareholders and shares transferred to IEPF A/C 43 38786
No. of shareholders and outstanding shares at the end of the year 0 0
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The voting rights on the above shares shall remain frozen till the rightful owner of such shares claims the shares.

14. Compliance of discretionary requirements under Regulation 27 of Listing Regulations

• a. The Chairman of the Company, Shri M B Parekh, is the Executive Chairman.

• b. As the financial results are published in the newspapers and also posted on Company’s website, the same are not being sent to the shareholders.

• c. The Company’s financial statements for the financial year ended 31[st] March 2021 do not contain any modified audit opinion.

• d. Shri Bharat Puri is the Managing Director and Chief Executive Officer of the Company. He is not related to any Director, Key Managerial Personnel or their relatives of the Company.

• e. The Internal Auditor makes quarterly presentation to the Audit Committee on their Reports.

To

The Members of M/s. Pidilite Industries Limited

We have examined relevant records of M/s Pidilite Industries Ltd. (the Company) for the purpose of certifying compliance of the conditions of Corporate Governance for the financial year ended on 31[st] March 2021 as per the provisions of Regulations 17 to 27, clauses (b) to (i) of Regulation 46(2) and para C, D and E of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of certification.

The compliance of the conditions of Corporate Governance is the responsibility of the Management of the Company. Our examination was limited to the review of procedure and implementation thereof, as adopted by the Company for ensuring compliance with conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

We have conducted online verification of records, as facilitated by the Company, due to Covid-19 and subsequent lockdown situation for the purpose of issuing this Certificate.

On the basis of our examination of the records produced, explanations and information furnished and considering the practical difficulties caused by lockdown imposed by the State Government due to Covid-19 pandemic, we certify that the Company has complied with the conditions of Corporate Governance for the financial year ended on 31[st] March 2021 as stipulated in the Listing Regulations.

This certificate is neither an assurance as to the future viability of the Company nor the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

15. Information relating to Directors

Information relating to Directors seeking appointment/reappointment as required under Regulation 36(3) of Listing Regulations is given in the Notice of the ensuing 52[nd ] Annual General Meeting.

16. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)

Place: Mumbai	For M M SHETH & CO.
Date: 12thMay 2021	(Company Secretaries)

Act, 2013 during the financial year 2020-21

• a. Number of complaints filed during the financial year: Nil

• b. Number of complaints disposed of during the financial year: 1

• c. Number of complaints pending as on end of the financial year: Nil

17. Certificate from Company Secretary in Practice:

A certificate from Shri M M Sheth of M/s. M M Sheth & Co., Company Secretaries in Practice is attached with this report stating that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by SEBI/Ministry of Corporate Affairs or any such statutory authority.

M M SHETH (Prop)

FCS No. 1455, CP No. 729 PR No. 1000/2020 UDIN: F001455C000286036

18. Governance of Subsidiary Companies:

The summary of the minutes of the Board Meetings of the subsidiary companies along with the details of significant transactions and arrangements entered into by the subsidiary companies are shared with the Board of Directors on a quarterly basis. The financial statements of the subsidiary companies are presented to the Audit Committee. The Company does not have a material subsidiary as on the date of this Report. The information in respect of the loans and advances in the nature of loans to subsidiaries pursuant to Regulation 34 read with Schedule V of the Listing Regulations is provided in Notes to the standalone financial statements.

19. Declaration by Shri Bharat Puri, Managing Director under Schedule V (D) of Listing Regulations

‘Pursuant to Schedule V (D) of Listing Regulations, I hereby declare that all the Board Members and Senior Management personnel of the Company have affirmed compliance with the Code of Conduct of Board of Directors and Senior Management for the year ended 31[st] March 2021.’

155

Certificate of Non-Disqualification of Directors

Information for Shareholders

[pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]

To

The Members of

M/s. Pidilite Industries Limited,

Regent Chambers, 7[th] Floor, 208, Nariman Point, Mumbai – 400021.

I have examined the relevant registers, records, forms, returns and disclosures received from the Directors

of Pidilite Industries Limited having CIN: L24100MH1969PLC014336 and having registered office at Regent Chambers, 7[th] Floor, 208, Nariman Point, Mumbai – 400021, Maharashtra, India (hereinafter referred to as ‘the Company’), produced before me by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

I have conducted online verification of records, as facilitated by the Company, due to Covid-19 pandemic and subsequent lockdown situation for the purpose of issuing this Certificate.

In my opinion and to the best of my information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company & its officers, I hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31[st] March 2021 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other Statutory Authority.

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Sr. No. Name of Director DIN Original Date of
Appointment in Company
1 Narendrakumar Kalyanji Parekh 00111518 28/07/1969
2 Madhukar Balvantray Parekh 00180955 31/08/1972
3 Ajay Balvantray Parekh 00035317 26/06/1985
4 Bansidhar Sunderlal Mehta 00035019 25/07/2000
5 Apurva Narendrakumar Parekh 00111366 01/07/2005
6 Bharat Tilakraj Puri 02173566 28/05/2008
7 Uday Chander Khanna 00079129 03/04/2014
8 Meera Shankar 06374957 30/07/2014
9 Sanjeev Aga 00022065 29/07/2011
10 Vinod Kumar Dasari 00345657 01/09/2015
11 Piyush Indernarayan Pandey 00114673 11/04/2018
12 Debabrata Sujit Gupta 01500784 01/03/2020
13 Rajeev Vasudeva 02066480 10/09/2020
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Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. My responsibility is to express an opinion on these based on my verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For M M SHETH & CO. (Company Secretaries)

Place: Mumbai Date: 12[th] May 2021

M M SHETH (Prop)

FCS No. 1455, CP No. 729 PR No. 1000/2020 UDIN: F001455C000286014

Annual General Meeting

Day, Date and Time:

Wednesday, 11[th] August 2021 at 3.00 p.m.

Venue:

The Company is conducting AGM through Video Conferencing/Other Audio Visual Means as permitted under the various circulars issued by Ministry of Corporate Affairs.

Financial Year: 1[st] April 2020 to 31[st] March 2021

Date of Book Closure:

Thursday, 29[th] July 2021 to Wednesday, 11[th] August 2021 (both days inclusive).

Dividend Payment:

Credit/dispatch of dividend warrants will commence from 13[th] August 2021 subject to the approval of payment of dividend by the shareholders at the Annual General Meeting.

Listing of Shares on Stock Exchanges:

The equity shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).The Annual Listing fee for the financial year 2020-21 has been paid to BSE and NSE.

Stock Codes

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Name and address of the Stock Exchange Stock Code
BSE Limited 500331
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai - 400 001.
National Stock Exchange of India Limited PIDILITIND
Exchange Plaza, C-1, Block G, Bandra Kurla
Complex, Bandra (E), Mumbai - 400 051.
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Market Price Data

Share prices during the financial year 2020-21 at NSE for one equity share of 1/- each were as under:

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Month Share Price ( )
High Low
April 2020 1,584.00 1,196.40
May 2020 1,521.50 1,330.00
June 2020 1,532.95 1,366.25
July 2020 1,453.30 1,340.00
August 2020 1,504.30 1,306.95
September 2020 1,517.00 1,390.00
October 2020 1,600.00 1,434.00
November 2020 1,620.00 1,500.60
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----- Start of picture text -----

Month Share Price ( )
High Low
December 2020 1,778.00 1,534.30
January 2021 1,842.00 1,663.80
February 2021 1,808.90 1,665.00
March 2021 1,838.30 1,681.00
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Share prices during the financial year 2020-21 at BSE for one equity share of 1/- each were as under:

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Month Share Price ( )
High Low
April 2020 1,583.00 1,197.10
May 2020 1,520.00 1,331.10
June 2020 1,532.25 1,366.95
July 2020 1,454.20 1,340.00
August 2020 1,501.00 1,307.05
September 2020 1,516.45 1,390.60
October 2020 1,599.80 1,435.00
November 2020 1,620.00 1,501.60
December 2020 1,778.85 1,535.00
January 2021 1,849.90 1,662.95
February 2021 1,819.00 1,665.00
March 2021 1,837.80 1,680.80
Stock Performance
Base is considered to be 100 as on 1 [st] April 2020 .
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The performance of the Company’s shares in comparison to BSE sensex is given in the chart below:

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180
170
160
150
140
130
120
110
100
90
80
Pidilite (BSE) BSE Sensex
Percent
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21
Pidilite Annual Report 2020-21
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157

Registrar & Share Transfer Agent

TSR Darashaw Consultants Private Limited (formerly known as TSR Darashaw Limited) Unit: Pidilite Industries Limited C 101, 1[st] Floor, 247 Park, L. B. S. Marg, Vikhroli (West), Mumbai - 400083 Tel : 022 - 66568484 Fax : 022 - 66568494 E-mail: csg-unit@tcplindia.co.in Website: https://www.tcplindia.co.in

Share Transfer System

The Company has delegated the authority to approve shares received for transfer in physical form to TSR Darashaw Consultants Private Limited, Registrar & Share Transfer Agent and Share Transfer Committee comprising of the Directors viz, Sarva Shri N K Parekh, A B Parekh and A N Parekh.

Presently the share transfers documents are processed and the share certificates duly transferred are returned generally within a period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects.

Distribution of Shareholding as on 31[st] March 2021

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----- Start of picture text -----

No. of Equity No. of No. of
% %
Shares held Shareholders Shares
Upto 5000 2,83,387 99.13 2,70,20,654 5.32
5001 - 10000 1,485 0.52 1,10,30,107 2.17
10001- 20000 414 0.14 58,96,991 1.16
20001- 30000 122 0.04 30,05,649 0.59
30001- 40000 78 0.03 27,46,579 0.54
40001- 50000 49 0.02 21,75,924 0.43
50001- 100000 117 0.04 84,87,050 1.67
100001 and above 226 0.08 44,77,90,426 88.12
Total 2,85,878 100.00 50,81,53,380 100.00
No. of 835 0.29 13,30,204 0.26
Shareholders
& shares in
physical mode
No. of beneficial 2,85,043 99.71 50,68,23,176 99.74
owners & shares
in electronic
mode
Total 2,85,878 100.00 50,81,53,380 100.00
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Dematerialisation of shares and liquidity

As on 31[st] March 2021, 99.74% of total equity shares of the Company were held in dematerialised form with National Securities Depository Limited and Central Depository

Services (India) Limited. The Company’s equity shares are required to be compulsorily traded in the dematerialised form. The shares are available for dematerialisation under ISIN - INE318A01026.

Requests for dematerialisation of shares are processed and generally confirmed within 15 days of receipt.

Transfer of unclaimed dividend & shares to the Investor Education and Protection Fund

Pursuant to applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (Rules), all unpaid or unclaimed dividends and shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more have been transferred by the Company to the Investor Education and Protection Fund (IEPF) Authority. The said requirement does not apply to shares in respect of which there is a specific Order of Court, Tribunal or Statutory Authority, restraining transfer of the shares.

During the year under review, the Company had sent individual notices through email and also advertised in the newspapers seeking action from the shareholders who have not claimed their dividends for seven consecutive years or more. Accordingly, the Company has transferred to IEPF following unpaid or unclaimed dividends and corresponding shares as under:

Particulars	Amount of dividend ( )	No. of shares
Final Dividend for the Financial Year 2012-13	15,58,638	51,818

The Company has uploaded the above mentioned details on its website: www.pidilite.com and also on the website of the IEPF Authority (www.iepf.gov.in).

The voting rights on the shares transferred to IEPF Authority shall remain frozen till the rightful owner claims the shares from the IEPF Authority.

Shareholders/claimants whose shares, unclaimed dividend, have been transferred to the IEPF Demat Account or the Fund, as the case may be, need to apply to the IEPF Authority by making an application in Form IEPF-5 (available on http:// www.iepf.gov.in). Company has appointed Shri Puneet Bansal as Nodal Officer and Smt Manisha Shetty, as Deputy Nodal Officer.

Plant Locations

Major Plant locations-Mahad, Taloja, Karad (Maharashtra); Vapi, Surat, Dahej, Panoli (Gujarat); Daman (Union Territory of India); Kala Amb, Baddi, Nalagarh (Himachal Pradesh); Secunderabad (Telangana); Guwahati (Assam); Vizag (Andhra Pradesh).

Credit Ratings

The Company has not issued any debt instruments and does not have any fixed deposit programme or any scheme or proposal involving mobilization of funds in India or abroad during the financial year ended 31[st] March 2021. The ratings

given by CRISIL for short-term borrowings and long-term borrowings of the Company are A1+ and AAA respectively. There was no revision in the said ratings during the year under review.

Commodity price risk / Foreign Exchange Risk and Hedging Activities

Certain key raw materials and packing materials used by the Company are derivatives of commodities such as crude oil, paper, aluminium etc. Any material price fluctuation in such commodities can impact the margins of the Company till the impact is appropriately factored in the pricing of Company’s products. The Company does not undertake commodity hedging activities.

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with the policies of the Company.

Exposure to commodity and commodity risks faced by the Company throughout the year is Nil

Shareholding Pattern as on 31[st] March 2021

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UTI, Mutual Funds, Banks,
Insurance Companies
& Alternate Investment
Funds 7.49 %
FII’s & FPI’s
11.88 %
Bodies
Corporate & Indian
Public 10.47 %
Promoters
70.16 %
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Address for Correspondence

Registered Office:

Regent Chambers, 7[th] Floor, Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai - 400 021 Tel No: 022-2282 2708 CIN: L24100MH1969PLC014336

Corporate Office:

Ramkrishna Mandir Road, Off. Mathuradas Vasanji Road, Andheri (E), Mumbai - 400 059 Tel No : 022-28357000/7949 Fax No : 022-28216007 E-mail : investor.relations@pidilite.co.in Website : www.pidilite.com

Corporate Secretarial/Investors’ Assistance Department

The Company’s Secretarial Department headed by Shri Puneet Bansal, Company Secretary, is situated at the Corporate Office mentioned above. Shareholders/ Investors may contact Shri. Puneet Bansal or Smt. Manisha Shetty at the Corporate Office in Mumbai for any assistance they may need.

Outstanding GDRs/ADRs/Warrants

The Company has no outstanding GDRs/ADRs/Warrants as on 31[st] March 2021.

Employee Stock Options

The information with regard to the Employee Stock Options are set out under Annexure to Directors’ Report.

159

Independent Auditor’s Report

TO THE MEMBERS OF PIDILITE INDUSTRIES LIMITED

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of Pidilite Industries Limited (”the Parent”) and its subsidiaries, (the Parent and its subsidiaries together referred to as “the Group”) which includes the Group’s share of profit in its associates and share of loss in its joint venture, which comprise the Consolidated Balance Sheet as at 31[st] March 2021, and the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements/ financial information of the subsidiaries and associates referred to in the Other Matters section below, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (‘Ind AS’), and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31[st] March 2021, and their consolidated profit, their consolidated total comprehensive income, their consolidated cash flows and their consolidated changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing specified under section 143 (10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group, its associates and joint venture in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the sub-paragraph (a) of the Other Matters section below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period.

These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter Principal audit procedures performed: Acquisition accounting for Our procedures included but were Pidilite Adhesives Private not limited to: Limited (Formerly known as Huntsman Advanced Materials Solutions Private Limited)

The Parent company • Evaluated the design and tested completed the acquisition the operating effectiveness of of Pidilite Adhesives Private internal controls implemented Limited for 2,196.46 crores by the Parent Company over on 3[rd] November 2020 as the purchase price allocation set out in Note 52B of the process. Consolidated Financial • We tested the completeness Statements. of the identified assets Accounting for the and liabilities acquired by acquisition has involved comparison to the external judgment in order to: valuer report through discussions with the Parent • determine the fair Company.

• determine the fair Company. value of consideration transferred; • We assessed the Company’s determinations of fair values for

• • identify and measure assets and liabilities acquired the fair value of the and the methods identifiable assets used to value the underlying acquired and liabilities assets by: assumed;

• Reading the valuation report

• • allocate the purchase prepared by the appointed consideration between external valuation specialists. identifiable assets and liabilities and goodwill; - Evaluating the competence and independence of the

• This is a material appointed external valuation acquisitions for the Parent specialists. Company and given the level of estimation and - Involving our internal judgement required, we valuation specialists in considered it to be a key assessing the appropriateness audit matter. The most of the methods used to significant judgements determine the fair values of relate to the identification the brands and distribution and valuation of intangible relationships and including assets acquired. The assumptions such as the identified intangible discount rates applied. assets are the brands and • Evaluating appropriateness

• distribution relationships. of adequate disclosures in

• This includes complex accordance with the applicable

• valuation considerations accounting standards.

• and requires the use of specialists.

Information Other than the Financial Statements and Auditor’s Report Thereon

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

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

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, compare with the financial statements of the subsidiaries and associates audited by the other auditors, to the extent it relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. Other information so far as it relates to the subsidiaries and associates, is traced from their financial statements audited by the other auditors.

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

Management’s Responsibility for the Consolidated Financial Statements

The Parent’s Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group including its Associates and joint venture in accordance with the Ind AS and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group and of its associates and joint venture are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and its associates and its joint venture and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and

fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Parent Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associates and joint venture are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate their respective entities or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group and of its associates and joint venture are also responsible for overseeing the financial reporting process of the Group and of its associates and joint venture.

Auditor’s Responsibility for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

161

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associates and joint venture to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained upto the date of our auditor’s report. However, future events or conditions may cause the Group and its associates and joint venture to cease to continue as a going concern.

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

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group and its associates and joint venture to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities or business activities included in the consolidated financial statements of which we are the independent auditors. For the other entities or business activities included in the consolidated financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

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

We communicate with those charged with governance of the Parent and such other entities included in the consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Other Matters

(a) We did not audit the financial statements/ financial information of 33 subsidiaries, whose financial statements/ financial information reflect total assets of 2,074.54 crores as at 31[st] March 2021, total revenues of 1,149.72 crores and net cash inflows amounting to 123.24 crores for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of net profit of 3.98 crores for the year ended 31[st] March 2021, as considered in the consolidated financial statements, in respect of 2 associates, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and associates, and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and associates is based solely on the reports of the other auditors.

(c) We did not audit the financial information of 2 subsidiaries, whose financial information reflect total assets of NIL as at 31[st] March 2021, total revenues of NIL and net cash inflows/ (outflows) amounting to NIL for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share of net loss of NIL for the year ended 31[st] March, 2021, as considered in the consolidated financial statements, in respect of a joint venture, whose financial information have not been audited by us. These financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and a joint venture, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial information are not material to the Group.

Our opinion on the consolidated financial statements above and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial information certified by the Management.

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

Report on Other Legal and Regulatory Requirements

As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the separate financial statements/ financial information of the subsidiaries and associates referred to in the Other Matters section above we report, to the extent applicable that:

• i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group and its associates.

• a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

• ii) the Group and its associates did not have any material foreseeable losses on long-term contracts including derivative contracts.

• b) In our opinion, proper books of account as required iii) There has been no delay in transferring amounts, by law relating to preparation of the aforesaid required to be transferred, to the Investor Education consolidated financial statements have been kept so and Protection Fund by the Parent, its subsidiary far as it appears from our examination of those books companies and associate companies incorporated and the reports of the other auditors. in India.

• c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants (Firm’s Registration No. 117366W/W-100018)

N. K. Jain Partner

(Membership No. 045474)

UDIN: 21045474AAAABH4498

• d) In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133 of the Act.

Place: Mumbai Date: 12[th] May 2021

• e) On the basis of the written representations received from the directors of the Parent as on 31[st] March 2021 taken on record by the Board of Directors of the Company and the reports of the statutory auditors of its subsidiary companies and associate companies incorporated in India, none of the directors of the Group companies and its associate companies incorporated in India is disqualified as on 31[st] March 2021 from being appointed as a director in terms of Section 164 (2) of the Act.

• f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A” which is based on the auditors’ reports of the Parent, subsidiary companies and associate companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting of those companies.

• g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended, In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Parent to its directors during the year is in accordance with the provisions of section 197 of the Act.

163

Annexure “A” to the Independent Auditor’s Report

TO THE MEMBERS OF PIDILITE INDUSTRIES LIMITED FOR THE YEAR ENDED 31[ST] MARCH 2021

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended 31[st] March 2021, we have audited the internal financial controls over financial reporting of Pidilite Industries Limited (hereinafter referred to as “Parent” and its subsidiary companies, its associate companies, which are companies incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of the Parent, its subsidiary companies and its associate companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies and its associate companies, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial

controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiary companies and associate companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies and its associate companies, which are companies incorporated in India where such reporting under section 143(3) of the Companies Act, 2013 is applicable.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

• (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

• (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

• (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur

and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies and its associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31[st] March 2021, based on the criteria for internal financial control over financial reporting established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 12 subsidiary companies and 2 associate companies, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India.

Our opinion is not modified in respect of the above matters.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants (Firm‘s Registration No.117366W/W-100018)

N. K. Jain

Partner

(Membership No. 045474) UDIN: 21045474AAAABH4498

Place: Mumbai Date: 12[th] May 2021

165

Consolidated Statement of Balance Sheet

as at 31[st] March 2021

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( in crores)
Particulars Note No. As at 31 [st] March 2021 As at 31 [st] March 2020
ASSETS
1 Non-Current Assets
(a) Property, Plant and Equipment 4 1,285.03 1,141.95
(b) Right of Use Assets 5 157.81 147.00
(c) Capital Work-In-Progress 4 293.87 259.33
(d) Goodwill 6 1,283.95 184.03
(e) Other Intangible Assets 6 1,691.13 333.73
(f) Investments accounted for using equity method 7 32.47 25.30
(g) Financial Assets
(i) Investments 8 307.04 441.16
(ii) Loans 11 4.85 4.09
(iii) Other Financial Assets 13 51.06 42.85
(h) Income Tax Assets (net) 18 97.12 109.53
(i) Deferred Tax Assets (net) 53 16.59 13.00
(j) Other Non-Current Assets 20 94.13 72.78
Total Non-Current Assets 5,315.05 2,774.75
2 Current Assets
(a) Inventories 17 1,234.15 929.47
(b) Financial Assets
(i) Investments 9 176.46 719.73
(ii) Trade Receivables 10 1,321.02 1,088.50
(iii) Cash and Cash Equivalents 15 442.65 692.23
(iv) Bank balances other than (iii) above 16 8.81 11.02
(v) Loans 12 16.89 17.38
(vi) Other Financial Assets 14 85.26 103.18
(c) Current Tax Assets (net) 19 3.13 1.93
(d) Other Current Assets 21 227.00 197.51
Total Current Assets 3,515.37 3,760.95
TOTAL ASSETS 8,830.42 6,535.70
EQUITY AND LIABILITIES
EQUITY
(a) Equity Share Capital 22 50.82 50.81
(b) Other Equity 23 5,542.14 4,404.80
Equity attributable to owners of the Company 5,592.96 4,455.61
Non-Controlling Interests 42(b) 240.04 215.65
Total Equity 5,833.00 4,671.26
LIABILITIES
1 Non-Current Liabilities
(a) Financial Liabilities
(i) Borrowings 24 12.39 25.13
(ii) Lease Liabilities 80.68 83.08
(iii) Other Financial Liabilities 27 13.63 7.26
(b) Provisions 29 57.98 51.95
(c) Deferred Tax Liabilities (net) 53 398.03 82.29
Total Non-Current Liabilities 562.71 249.71
2 Current Liabilities
(a) Financial Liabilities
(i) Borrowings 25 201.51 143.99
(ii) Trade Payables 26
- Total Outstanding Dues of Micro Enterprises 86.03 23.13
and Small Enterprises
- Total Outstanding Dues of Creditors other than 920.71 597.88
Micro Enterprises and Small Enterprises
(iii) Lease Liabilities 27.71 28.39
(iv) Other Financial Liabilities 28 1,034.04 668.74
(b) Other Current Liabilities 31 114.73 122.34
(c) Provisions 30 24.96 21.59
(d) Current Tax Liabilities (net) 32 25.02 8.67
Total Current Liabilities 2,434.71 1,614.73
TOTAL LIABILITIES 2,997.42 1,864.44
TOTAL EQUITY AND LIABILITIES 8,830.42 6,535.70
See accompanying notes to the consolidated financial statements 1 to 59
In terms of our report attached
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For DELOITTE HASKINS & SELLS LLP FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

N. K. JAIN BHARAT PURI M B PAREKH Partner Managing Director Executive Chairman DIN: 02173566 DIN: 00180955

PRADIP KUMAR MENON PUNEET BANSAL Chief Financial Officer Company Secretary Place: Mumbai Place: Mumbai Date: 12[th] May 2021 Date: 12[th] May 2021

Consolidated Statement of Profit and Loss

for the year ended 31[st] March 2021

Consolidated Statement of Proft and Loss	Consolidated Statement of Proft and Loss	Consolidated Statement of Proft and Loss	Consolidated Statement of Proft and Loss
( in crores) for the year ended 31stMarch 2021
Particulars	Note No.	For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
INCOME
Revenue from Operations Other Income	33 7,292.71 34 79.40		7,294.47 149.43
Total Income	7,372.11		7,443.90
EXPENSES
Cost of Materials Consumed Purchases of Stock-in-Trade Changes in inventories of Finished Goods, Work-in-Progress and Stock-in-Trade Employee Benefts Expense Finance Costs Depreciation, Amortisation and Impairment Expense Other Expenses	35 3,017.82 477.17 36 (118.32) 37 980.86 38 37.23 39 200.66 40 1,254.56		2,997.71 383.57 21.22 927.22 33.60 169.92 1,388.73
Total Expenses	5,849.98		5,921.97
Proft before Share of proft/ (loss) of Associate and Joint venture, Exceptional Items and Tax Share of Proft in Associate(net of tax)	1,522.13 42(a) 3.98		1,521.93 3.03
Total Share of proft of Associate and Joint Venture	3.98		3.03
Proft before Exceptional Items and Tax	1,526.11		1,524.96
Exceptional Items	41 3.62		55.19
Proft before Tax Tax Expense Current Tax Deferred Tax	1,522.49 53 399.88 53 (3.52)		1,469.77 383.99 (36.27)
Net Tax Expense	396.36		347.72
Proft for the year	1,126.13		1,122.05
Atributable to: Shareholders of the Company Non-Controlling Interest	1,131.21 42(b) (5.08)		1,116.42 5.63
Other Comprehensive Income
Items that will not be reclassifed to proft or loss Remeasurement of Defned Beneft Plan Income tax relating to items that will not be reclassifed to proft or loss	(0.99) 0.28		(14.63) 3.58
Items that will be reclassifed to proft or loss Exchange diference on translation of foreign operation	(10.15)		(14.59)
Total Other Comprehensive Income/ (Loss)	(10.86)		3.54
Atributable to: Shareholders of the Company Non-Controlling Interest	(11.22) 42(b) 0.36		3.42 0.12
Total Comprehensive Income for the year	1,115.27		1,125.59
Atributable to: Shareholders of the Company Non-Controlling Interest Earnings Per Equity Share: Basic ( ) Diluted ( ) See accompanyingnotes to the consolidated fnancial statements	1,119.99 (4.72) 46 22.26 22.24 1 to 59		1,119.84 5.75 21.98 21.97
In terms of our report atached For DELOITTE HASKINS & SELLS LLP FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants N. K. JAIN BHARAT PURI M B PAREKH Partner Managing Director DIN: 02173566 Executive Chairman DIN: 00180955 PRADIP KUMAR MENON PUNEET BANSAL Chief Financial Officer Company Secretary Place: Mumbai Date: 12thMay 2021 Place: Mumbai Date: 12thMay 2021

167

( in crores)

Consolidated Statement of Changes in Equity

for the year ended 31[st] March 2021

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( in crores) ( in crores)
a. Equity Share Capital b. Other Equity
Amount Reserves and Surplus Equity at- Non- Total
tributable Control- Equity
Balance as at 1 [st] April 2019 50.80 Capital Securities Capital Cash Legal State Share Foreign General Retained to owners ling
Reserve Premium Redem- Subsidy Reserve Invest- Options Currency Reserve Earnings of the interest
ption Reserve ment Out- Trans-
Changes in equity share capital during the year Company
Reserve Reserve standing lation
Account Reserve
Issue of equity shares under Employee Stock Option Plan - 2016 (refer Note 49) 0.01
Profit for the year - - - - - - - - - 1,131.21 1,131.21 (5.08) 1,126.13
Balance as at 31 [st] March 2020 50.81
Addition during the - - - - 0.01 - - (10.51) - - (10.50) 0.36 (10.14)
Changes in equity share capital during the year
year
Issue of equity shares under Employee Stock Option Plan - 2016 (refer Note 49) 0.01 Other Comprehensive - - - - - - - - - (0.71) (0.71) - (0.71)
Income for the year,
Balance as at 31 [st] March 2021 50.82
net of income tax
Payment of dividends - - - - - - - - - (0.02) (0.02) - (0.02)
b. Other Equity (including tax thereon)
Reserves and Surplus Equity at- Non- Total Non-controlling - - - - - - - - - - - 34.29 34.29
tributable Control- Equity interest on acquisition
Capital Securities Capital Cash Legal State Share Foreign General Retained to owners ling of subsidiary/ Issue
Reserve Premium Redem- Subsidy Reserve Invest- Options Currency Reserve Earnings of the interest of share capital in
ption Reserve ment Out- Trans- subsidiaries
Company
Reserve Reserve standing lation
Account Reserve Change in Group - - - - - - - - - - - (5.18) (5.18)
Interest
Balance as at 0.34 10.01 0.50 0.95 0.24 0.15 9.65 14.36 1,335.38 2,725.71 4,097.29 207.15 4,304.44
1 [st] April 2019 Recognition of - 2.83 - - - - 14.53 - - - 17.36 - 17.36
share-based payments
Profit for the year - - - - - - - - - 1,116.42 1,116.42 5.63 1,122.05
(refer Note 49)
Addition during the - - - - 0.01 - - 14.47 - - 14.48 0.11 14.59
year Transferred to - 2.83 - - - - (2.83) - - - - - -
Securities Premium
Other Comprehensive - - - - - - - - - (11.06) (11.06) 0.01 (11.05) on Options exercised
Income for the year, during the year
net of income tax
Amortised and - - - - - - 17.40 - - - 17.40 - 17.40
Payment of dividends - - - - - - - - - (826.77) (826.77) - (826.77)
Exercised during the
(including tax thereon)
year
Payment of dividends - - - - - - - - - - - (0.39) (0.39)
to Non-Controlling Lapsed during the - - - - - - (0.04) - - - (0.04) - (0.04)
interest year
Non-controlling - - - - - - - - - - - 3.14 3.14 Balance as at 0.34 26.04 0.50 0.95 0.26 0.15 25.42 18.32 1,335.38 4,134.78 5,542.14 240.04 5,782.18
interest on acquisition 31 [st] March 2021
of subsidiary/ Issue
of share capital in subsidiaries In terms of our report attached
For DELOITTE HASKINS & SELLS LLP FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Recognition of - 13.20 - - - - 1.24 - - - 14.44 - 14.44 Chartered Accountants
share-based payments
(refer Note 49) N. K. JAIN BHARAT PURI M B PAREKH
Partner Managing Director Executive Chairman
Transferred to - 13.20 - - - - (13.20) - - - - - - DIN: 02173566 DIN: 00180955
Securities Premium
PRADIP KUMAR MENON PUNEET BANSAL
on Options exercised Chief Financial Officer Company Secretary
during the year
Place: Mumbai Place: Mumbai
Amortised and - - - - - - 14.84 - - - 14.84 - 14.84 Date: 12 [th] May 2021 Date: 12 [th] May 2021
Exercised during
the year
Lapsed during the - - - - - - (0.40) - - - (0.40) - (0.40)
year
Balance as at 0.34 23.21 0.50 0.95 0.25 0.15 10.89 28.83 1,335.38 3,004.30 4,404.80 215.65 4,620.45
31 [st] March 2020
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169

Consolidated Statement of Cash Flows

for the year ended 31[st] March 2021

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( in crores)
For the year ended For the year ended
31 [st] March 2021 31 [st] March 2020
A Cash Flows from Operating Activities
Profit before tax 1,522.49 1,469.77
Adjustments for:
Share of profit from Associate (3.98) (3.03)
Finance costs recognised in Consolidated Statement of Profit and Loss 37.23 33.60
Interest income recognised in Consolidated Statement of Profit and Loss (16.84) (12.46)
Dividend income recognised in Consolidated Statement of Profit and Loss (1.13) (11.59)
Dividend from Associate 1.79 2.16
Exceptional Item - Impairment in value of Assets and Investments 3.62 55.19
Loss/ (Profit) on disposal of Property, Plant and Equipment 5.73 (2.67)
Net gain arising on financial assets designated at FVTPL (40.26) (109.79)
Allowance for Doubtful Debts 11.01 8.45
Depreciation, Amortisation and Impairment Expense 200.66 169.92
Unrealised Foreign Exchange (Gain)/ Loss (Net) (9.01) 6.90
Provision for Employee Benefits 8.09 (10.12)
Provision/ Write back of Warranties and Others (0.35) 5.31
Expense recognised in respect of Equity-Settled Share-Based Payments 17.24 14.44
Operating Profits before Working Capital changes 1,736.29 1,616.08
Movements in Working Capital:
(Increase)/Decrease in Operating Assets
Trade Receivables (175.88) (37.58)
Inventories (278.70) 0.02
Non-Current Loans (0.76) (1.03)
Current Loans 0.49 (5.26)
Non-Current Financial Assets (0.19) (1.34)
Other Current Financial Assets 17.94 (32.57)
Other Non-Current Non Financial Assets (4.20) 2.65
Other Current Non Financial Assets (29.20) (34.15)
Increase/ (Decrease) in Operating Liabilities
Trade Payables 354.61 41.70
Other Current Financial Liabilities 147.68 166.92
Other Non-Current Financial Liabilities 6.37 (75.61)
Other Current Non Financial Liabilities (11.41) 32.79
Cash generated from Operations 1,763.04 1,672.62
Taxes paid (net of refunds) (370.91) (393.07)
Net cash generated from Operating Activities [A] 1,392.13 1,279.55
B Cash Flows from Investing Activities
Payments for purchase of Property, Plant and Equipment, (353.76) (467.13)
Other Intangible Assets & Capital Work-In-Progress
Proceeds from disposal of Property, Plant and Equipment & 1.76 23.20
Other Intangible Assets
Payments to purchase Investments (2,931.95) (1,438.73)
Proceeds on sale of Investments 3,638.81 1,910.03
Payments for business acquisitions (refer Note 52B) (2,056.86) -
(Increase)/ Decrease in Bank Deposits (4.75) 53.03
Decrease/ (Increase) in Other Bank Balances 0.89 (1.51)
Interest received 16.84 12.46
Dividend received 1.13 11.59
Net cash (used in)/ generated from Investing Activities [B] (1,687.89) 102.94
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Consolidated Statement of Cash Flows

for the year ended 31[st] March 2021

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( in crores)
For the year ended For the year ended
31 [st] March 2021 31 [st] March 2020
C Cash Flows from Financing Activities
Proceeds from issue of Equity Instruments of the Company 0.01 0.01
Payment of Lease Liabilities (33.93) (34.02)
Net increase in Current Borrowings 27.93 10.77
Net (Decrease)/ Increase in Non-Current Borrowings (11.13) 22.03
(Payment)/ Proceeds from Share Capital issued to Minority (net) (29.11) 2.75
Dividend paid on Equity Shares (including tax thereon) (0.69) (825.36)
Interest paid (29.32) (25.39)
Net cash used in Financing Activities [C] (76.24) (849.21)
Net (decrease)/ increase in Cash and Cash Equivalents [A+B+C] (372.00) 533.28
Cash and Cash Equivalents at the beginning of the year (refer Note 15) 606.37 72.94
Bank unrealised gain 0.18 0.33
Cash and Cash Equivalents at the beginning of the year 606.55 73.27
Cash and Cash Equivalents at the end of the year (refer Note 15) 327.20 606.37
Bank unrealised (Loss)/ Gain (0.05) 0.18
Acquisition under Business Combination (refer Note 52B) (92.60) -
Cash and Cash Equivalents at the end of the year 234.55 606.55
Net (Decrease)/ Increase in Cash and Cash Equivalents (372.00) 533.28
Notes:
a) The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Indian Accounting Standard
(IND AS 7) - Statement of Cash Flows.
b) Reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities:
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				( in crores)	( in crores)
Particulars		As at 31stMarch	Cash Flows	Non-Cash Changes	As at 31stMarch 2021
		2020		Current/ Non-Current Classifcation
Borrowings - Non-Current		25.13	(12.74)	-	12.39
		(8.51)	(16.62)	(-)	(25.13)
Borrowings - Current		58.14	27.93	-	86.07
		(47.37)	(10.77)	(-)	(58.14)
Other Financial Liabilities
- Current portion of Non-Current Borrowings		7.10	1.61	-	8.71
		(1.69)	(5.41)	(-)	(7.10)

In terms of our report attached For DELOITTE HASKINS & SELLS LLP FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

N. K. JAIN BHARAT PURI M B PAREKH Partner Managing Director Executive Chairman DIN: 02173566 DIN: 00180955 PRADIP KUMAR MENON PUNEET BANSAL Chief Financial Officer Company Secretary

Place: Mumbai Date: 12[th] May 2021

Place: Mumbai Date: 12[th] May 2021

171

Notes forming part of the consolidated financial statements

Notes Forming Part of The Consolidated Financial Statements

1 Corporate information

Pidilite Industries Limited (the Company/ Parent), together with its subsidiaries are pioneers in consumer and industrial speciality chemicals in India. The equity shares of the Company are listed on BSE Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE).

The address of its registered office is Regent Chambers, 7[th] Floor, Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai 400 021. The address of principal place of business is Ramkrishna Mandir Road, Off Mathuradas Vasanji Road, Andheri (E), Mumbai 400 059.

2 Significant Accounting Policies

2.1 Basis of accounting and preparation of financial statements

The consolidated financial statements of the Group have been prepared in accordance with the Indian Accounting Standards (“Ind AS”) prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Companies (Indian Accounting Standards) Rules, 2015 as amended.

The financial statements have been prepared under the historical cost convention except for the following items –

• a. Certain Financial Assets/ Liabilities (including derivative instruments) – at Fair value

b. Employee Stock Options - at Fair value

The financial statements are presented in Indian Rupees ( ) and all values are rounded to the nearest crores, except otherwise indicated.

2.2 Basis of consolidation

The consolidated financial statements comprise the financial statements of Pidilite Industries Limited (the “Parent”) and its subsidiaries (together referred to as “Group”) and Group’s share of profit/ loss in its Associates and Joint Venture as at 31[st] March 2021. Control exists when the Group has:

• power over the investee;

• exposure or rights, to variable returns from its involvement with the investee; and

• ability to use its power over the investee to affect its returns.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Generally, there is a presumption that a majority of voting rights result in control. When the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group’s voting rights in an investee are sufficient to give it power, including:

• the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• potential voting rights held by the Group, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders meetings.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed off during the year are included in the Consolidated Statement of Profit and Loss from the date the Group gains control until the date when the Group ceases to control the subsidiary.

If the Group losses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity. Any investment retained is measured at fair value. Any resultant gain or loss is recognised in the Consolidated Statement of Profit and Loss.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies.

The financial statements of all entities used for the purpose of consolidation are drawn upto same reporting date as that of the Parent, i.e., year ended on 31[st] March 2021.

• The consolidated financial statements have been prepared on the following basis:

• a) The financial statements of the Parent and its subsidiaries have been consolidated on a line-by-line basis by adding together like items of assets, liabilities, income and expenses after eliminating intra-group balances, intra-group transactions and resulting unrealised profits or losses in accordance with Ind AS 110 “Consolidated Financial Statements”. Further, the carrying amount of the Parent’s investments in each subsidiary and the Parent’s portion of equity of each subsidiary are eliminated on consolidation.

• b) The consolidated financial statements include the share of profit/ loss of an Associate Companies and Joint Venture which have been accounted for using equity method as per Ind AS 28 “Investment in Associates and Joint Ventures”. The investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss (the loss being restricted to the cost of investment) of the investee after the acquisition date.

• c) Profit or loss and each component of Other Comprehensive Income (the ‘OCI’) are attributed to the equity holders of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

• d) The excess of cost to the Group of its investments in the subsidiary companies, Joint Venture and Associate Company over its share of equity of the subsidiary companies, at the dates on which the investments in the subsidiary companies were made, is recognised as ‘Goodwill’ being an asset in the consolidated financial statements and is tested for impairment on annual basis. On the other hand, where the share of equity in the subsidiaries, Joint Venture and Associate Company as on the date of investment is in excess of cost of investments of the Group, it is recognised as ‘Capital Reserve’ and shown under the head ‘Reserves & Surplus’, in the consolidated financial statements.

• e) Minority Interest in the net assets of the consolidated subsidiaries consist of the amount of equity attributable to the minority shareholders at the date on which investments in the subsidiary companies were made and further movements in their share in the equity, subsequent to the dates of investments. Net profit/ loss for the year and each component of Other Comprehensive Income of the subsidiaries attributable to minority interest is identified and adjusted against the profit after tax of the Group in order to arrive at the income attributable to shareholders of the Company.

• f) The difference between the cost of investments in the associate and the share of net assets at the time of acquisition of shares in the associate is identified in the consolidated financial statements as Goodwill or Capital Reserve as the case may be.

• g) Goodwill arising on consolidation is not amortised but tested for impairment.

2.3 Business Combination

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in exchange of control of acquiree. Acquisition-related costs are recognised in Consolidated Statement of Profit and Loss as incurred.

Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as a part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding changes against goodwill or capital reserve, as the case maybe. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Contingent consideration that is classified as an asset or a liability is subsequently (after the measurement period) remeasured at subsequent reporting dates with the corresponding gain or loss being recognised in Consolidated Statement of Profit and Loss.

In case of business combinations involving entities under common control, the above policy does not apply. Business combinations involving entities under common control are accounted for using the pooling of interests method. The net assets of the transferor entity or business are accounted at their carrying amounts on the date of the acquisition subject to necessary adjustments required to harmonise accounting policies. Retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee. Identity of the reserves appearing in the financial statements of the transferor is preserved and appears in the financial statements of the transferee in the same form. Any excess or shortfall of the consideration paid over the share capital of transferor entity or business is recognised as capital reserve under equity.

173

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

2.4 Goodwill

Goodwill is measured as the excess of the consideration transferred over the net of acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each assets in the unit. Any impairment loss for goodwill is recognised directly in Consolidated Statement of Profit and Loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

The Group’s policy for goodwill arising on business combination or acquisition of an associate and a Joint Venture is described at Note 2.5.

2.5 Investments in Associates and Joint Ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A Joint Venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

An investment in an associate or a Joint Venture is accounted for using the equity method from the date on which the investee becomes an associate or a Joint Venture.

Under the equity method, an investment in an associate or a Joint Venture is initially recognised in the Consolidated Balance Sheet at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and Other Comprehensive Income of the associate or Joint Venture. Distributions received from an associate or a Joint Venture reduce the carrying amount of the investment. When the Group’s share of losses of an associate or a Joint Venture exceeds the Group’s interest in that associate or Joint Venture (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate or Joint Venture); the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or Joint Venture.

On acquisition of the investment in an associate or a Joint Venture, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised directly in equity as capital reserve.

After application of the equity method of accounting, the Group determines whether there is any objective evidence of the impairment as a result of one or more events that occurred after the initial recognition of the net investment in an associate or Joint Venture and that event (or events) has an impact on the estimated future cash flows from the net investment that can be reliably estimated. If there exists such an objective evidence of impairment, then it is necessary to recognise impairment loss with respect to the Group’s investment in an associate or Joint Venture.

When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with Ind AS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with Ind AS 36 to the extent that the recoverable amount of the investment subsequently increases.

When a group entity transacts with an associate or a Joint Venture of the Group, profits and losses resulting from the transactions with the associate or Joint Venture are recognised in the Group’s consolidated financial statements only to the extent of interests in the associate or Joint Venture that are not related to the Group.

2.6 Revenue Recognition

The Group recognises revenue from sale of goods and services, based on the terms of contract and as per the business practise; the Group determines transaction price considering the amount it expects to be entitled in exchange of transferring promised goods or services to the customer. Revenue is recognised when it is realized or is realizable and has been earned after the deduction of variable components such as discounts, rebates, incentives, promotional couponing and schemes. The Group estimates the amount of variable components based on historical, current and forecast information available and either expected value method or most likely method, as appropriate and records a corresponding liability in other payables; the actual amounts may be different from such estimates. These differences, which have historically not been significant, are recognised as a change in management estimate in a subsequent period.

2.6.1.a Sale of goods

Revenue is recognised when control of the products being sold has been transferred to a customer and when there are no longer any unfulfilled obligations to the customer. This is generally on delivery to the customer but depending on individual customer terms, this can be at the time of dispatch, delivery or upon formal customer acceptance. This is considered the appropriate point where the performance obligations in our contracts are satisfied and the Group no longer has control over the inventory.

Advance received from customer before transfer of control of goods to the customer is recognised as contract liability.

2.6.1.b Sale of Services

Revenue from sale of services includes fixed price contracts and time and material contracts and is recognised as sale, as and when the related services are performed and certified by the client. Services performed and not certified by the client, are recognised as sales and are recorded as uncertified revenue and unbilled revenue. Incomplete services are recorded at cost as work-in-progress.

The Group accounts for provision of warranty in accordance with Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets”.

2.6.2 Dividend, Interest income and Royalty

Dividend income from investments is recognised when the Group’s right to receive dividend is established.

Interest income from a financial asset is recognised on a time basis, by reference to the principal outstanding using the effective interest method provided it is probable that the economic benefits associated with the interest will flow to the Group and the amount of interest can be measured reliably. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of that financial asset.

Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement or underlying arrangement in case of sales provided that it is probable that the economic benefits associated with the royalty shall flow to the Group and the amount of royalty can be measured reliably.

Claims/ Insurance Claim etc. are accounted for when no significant uncertainties are attached to their eventual receipt.

The Group’s policy for recognition of revenue (rental income) from leases is described in Note 2.7.1.

2.7 Leasing

The Group, at the inception of a contract, assesses whether the contract is a lease or not lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration.

2.7.1 Group as Lessor

Rental income from leases is recognised on a straight- line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Group’s expected inflationary cost increase, such increases are recognised in the year in which such benefits accrue.

Amounts due under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases.

Finance lease income is allocated over accounting periods so as to reflect constant periodic rate of return of the Group’s net investment outstanding in respect of the leases.

2.7.2 Group as Lessee

The Group’s lease asset classes primarily consist of leases for land and buildings. The Group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: (i) the contract involves the use of an identified asset (ii) the Group has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short - term leases) and low value leases. For these short-term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

175

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e.the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cashflows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Group changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

2.8

Foreign Currencies

The functional currency of the Parent and its Indian Subsidiaries is the Indian Rupee, whereas the functional currency of Foreign Subsidiaries is the currency of their countries of domicile. In preparing the financial statements of each individual Group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items (including financial assets and liabilities) denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Gains or losses arising from these translations are recognised in the Consolidated Statement of Profit and Loss. For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into Indian Rupees using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period.

2.9 Share-based payment transactions of the Group

Equity-settled share-based payments to employees providing similar services are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straightline basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity.

2.10 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. .

2.10.1 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 Consolidated 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 Group’s current tax is calculated using applicable tax rates that have been enacted or substantively enacted by the end of the reporting period and the provisions of the Income Tax Act, 1961 and other tax laws, as applicable.

2.10.3 Current and Deferred Tax for the year

Current and deferred tax are recognised in the Consolidated 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 Property, Plant and Equipment

2.11.1 Property, Plant and Equipment acquired separately

Freehold Land is stated at cost and not depreciated.

Buildings, plant and machinery, vehicles, furniture and office equipments are stated at cost less accumulated depreciation and accumulated impairment losses.

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant and Equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Consolidated Statement of Profit and Loss.

2.11.2 Capital Work-In-Progress

Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Such properties are classified and capitalised to the appropriate categories of Property, Plant and Equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

2.11.3 Depreciation

Depreciation is recognised so as to write off the cost of assets (other than Freehold Land and Capital Work-InProgress) less their residual values over their useful lives, using the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

For certain items of Property, Plant and Equipment, the Group depreciates over estimated useful life which are different from the useful lives prescribed under Schedule II to the Companies Act, 2013 which is based upon technical assessment made by technical expert and management estimate. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Estimated useful lives of the assets are as follows:

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Type of Asset Useful Life
Buildings 20-60 years
Leasehold Improvements 5-20 years
Plant and Machinery 1-30 years
Vehicles 1-10 years
Furniture and Fixtures 3-15 years
Office Equipment 1-20 years
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2.10.2 Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated 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.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

2.12 Intangible Assets

2.12.1 Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets with indefinite useful lives are carried at cost less accumulated impairment losses.

2.12.2 Intangible assets acquired in a business combination

Intangible assets other than goodwill acquired in a business combination are initially recognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, such intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

177

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

2.12.3 Internally generated Intangible Assets – Research and Development Expenditure

Expenditure on research activities is recognised in Consolidated Statement of Profit and Loss in the period in which it is incurred.

An internally generated intangible asset arising from development is recognised if and only if it meets the recognition criteria of intangible assets. The amount initially recognised is the sum total of expenditure incurred from the date when the intangible asset first meets the recognition criteria. Where no intangible asset can be recognised, development expenditure is recognised in Consolidated Statement of Profit and Loss in the period in which it is incurred.

Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets acquired separately.

2.12.4 Useful lives of Intangible Assets

Estimated useful lives of the Intangible Assets are as follows:

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Type of Asset Useful Life
Computer Software 5-10 years
Technical Knowhow 10-15 years
Non-Compete Fees 10-15 years
Distributor Relationship 15 years
Copyrights Indefinite Life
Trademark 10 years-Indefinite Life
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2.13 Impairment of Tangible and Intangible Assets other than Goodwill

At the end of each reporting period, the Group 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). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When 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 group 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. Intangible assets with indefinite useful lives are tested for impairment annually at the cash-generating unit level. The assessment of indefinite useful life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Recoverable amount is the higher of fair value less costs of disposal and value in use.

If the recoverable amount of the 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 in Consolidated Statement of Profit and Loss.

2.14 Inventories

Inventories are valued at lower of cost and net realisable value.

Cost of inventories is determined on weighted average. Cost for this purpose includes cost of direct materials, direct labour and appropriate share of overheads. Net realisable value represents the estimated selling price in the ordinary course of business less all estimated costs of completion and estimated costs necessary to make the sale.

Obsolete, defective, unserviceable and slow/ non-moving stocks are duly provided for and valued at net realisable value.

2.15 Provisions (other than Employee Benefits)

A provision is recognised when as a result of past event, the Group has a present legal or constructive obligation that can be reliably estimated, and, it is probable that an outflow of economic benefit will be required to settle the obligation.

Provisions (excluding retirement benefits) are determined based on the best estimate required to settle the obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

2.16 Financial Instruments

2.16.1 Initial Recognition and Measurement

Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the instruments.

At initial recognition, financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at Fair Value Through Profit and Loss) are added to or deducted from the value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at Fair Value Through Profit and Loss are recognised in Consolidated Statement of Profit and Loss.

2.16.2 Subsequent measurement of Financial Assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Debt instruments that meet conditions based on purpose of holding assets and contractual terms of instrument are subsequently measured at amortised cost using effective interest method. All other financial assets are measured at fair value. Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at Fair Value Through Profit and Loss. Interest income is recognised in Consolidated Statement of Profit and Loss and is included in the “Other income” line item.

2.16.3 Impairment of Financial Assets

The Group recognises loss allowance using expected credit loss model financial assets which are not measured at Fair Value Through Profit and Loss. Expected credit losses are weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at original effective rate of interest.

For Trade receivables, the Group measures loss allowance at an amount equal to lifetime expected credit losses. The Group computes expected credit loss allowance based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

2.16.4 Financial Liabilities and Equity Instruments

2.16.4.1 Classification of debt or equity

Debt or equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and equity instrument.

2.16.4.2 Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds, net of direct issue costs.

2.16.4.3 Financial Liabilities

All financial liabilities (other than derivative financial instruments) are measured at amortised cost using effective interest method.

2.16.5 Derecognition of Financial Assets and Liabilities

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or when the Group transfers the contractual rights to receive the cash flows of the financial asset in which substantially all the risks and rewards of ownership of the financial asset are transferred, or in which the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and does not retain control of the financial asset.

The Group derecognises a financial liability (or a part of financial liability) when the contractual obligation is discharged, cancelled or expires.

2.16.6 Derivative Financial Instruments

The Group holds derivative financial instruments such as foreign exchange forward contracts to hedge its exposure to foreign currency exchange rate risks.

Derivatives are initially recognised at fair value at the date the contracts are entered into. Subsequent to initial recognition, these contracts are measured at their fair value and changes at the end of each reporting period. The resulting gain or loss is recognised in Consolidated Statement of Profit and Loss immediately.

2.17 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / loss before tax for the period is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments. Cash flows from operating, investing and financing activities of the Group are segregated.

Cash and Cash Equivalents for the purpose of cash flow statement comprise of cash at bank, cash in hand and short-term deposits with an original maturity of three months or less, as reduced by bank overdrafts.

179

Notes forming part of the consolidated fnancial statements

Notes forming part of the consolidated financial statements

2.18 Segment Reporting

The Group identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding allocation of resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Group. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of cost plus margins. Revenue, expenses, assets and liabilities which relate to the Group as a whole and are not allocable to segments on reasonable basis have been included under “unallocated revenue/ expenses/ assets/ liabilities respectively”.

2.19 Employee Benefits

Employee benefits include Provident Fund, Superannuation Fund, Employee State Insurance Scheme, Gratuity Fund, Compensated Absences, Anniversary Awards, Premature Death Pension Scheme and Total Disability Pension Scheme.

2.19.1 Defined Contribution Plans

The Group’s contribution to Provident Fund, Superannuation Fund, National Pension Scheme and Employee State Insurance Scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

2.19.2 Defined Benefit Plans

For defined benefit plans in the form of Gratuity Fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding net interest) is reflected in the Consolidated Balance Sheet with a charge or credit recognised in Other Comprehensive Income in the period in which they occur. Remeasurement recognised in Other Comprehensive Income is reflected in retained earnings and is not reclassified to profit or loss. Past service cost is recognised immediately for both vested and the non-vested portion. The retirement benefit obligation recognised in the Consolidated Balance Sheet represents the present value of the defined benefit obligation, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited taking into account the present value of available refunds and reductions in future contributions to the schemes.

2.19.3 Short-Term and Other Long-Term Employee Benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees upto the reporting date.

2.20 Earnings per share

The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares. Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.

2.21 Assets held for sale

Sale of business is classified as held for sale, if their carrying amount is intended to be recovered principally through sale rather than through continuing use. The condition for classification as held for sale is met when disposal business is available for immediate sale and the same is highly probable of being completed within one year from the date of classification as held for sale.

2.22 Discontinued operations

A discontinued operation is a component of the Group’s business that represents a separate line of business that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon the earlier of disposal or when the operation meets the criteria to be classified as held for sale.

2.23 Non-current assets and disposal groups held for sale

Assets of disposal groups that is available for immediate sale and where the sale is highly probable of being completed within one year from the date of classification are considered and classified as assets held for sale. Noncurrent assets and disposal groups held for sale are measured at the lower of carrying amount and fair value less costs to sell.

3. Critical Accounting Judgements and key sources of Estimation Uncertainty

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies, reported amounts of assets, liabilities, income and expenses, and accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing 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.

3.1

Critical Judgments

3.1.1 Classification of Plus Call Technical Services LLC as a Joint Venture

Plus Call Technical Services LLC is a limited liability company whose legal form confers separation between the parties to the joint arrangement and the LLC itself. Furthermore, there is no contractual arrangement or any other facts and circumstances that indicate that the parties to the joint arrangement have rights to the assets and obligations for the liabilities of the joint arrangement. Accordingly, Plus Call Technical Services LLC is classified as Joint Venture of the Group.

3.1.2 Classification of entities as Subsidiaries wherein Group has ownership interest and voting rights of 50% or less

Pidilite MEA Chemicals LLC, Bamco Supply and Services Ltd, ICA Pidilite Pvt Ltd, Pidilite Grupo Puma Pvt Ltd, Pidilite Grupo Puma Manufacturing Ltd are subsidiaries of the Group even though the Group has ownership interest and voting rights of 50% or less in the subsidiaries respectively. However, based on the relevant facts and circumstances, control and management of these entities lie with the Group. The Group has the power to direct the relevant activities of these entities and therefore controls these entities.

3.2 Key accounting, judgements, assumptions and estimates

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting 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:

3.2.1 Impairment of Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets (i.e. trademark and copyrights) are tested for impairment on an annual basis. Recoverable amount of cash- generating units is determined based on higher of value-in-use and fair value less cost to sell. The impairment test is performed at the level of the cash-generating unit or groups of cash-generating units which are benefitting from the synergies of the acquisition and which represents the lowest level at which the intangibles are monitored for internal management purposes.

Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent management’s best estimate about future developments.

3.2.2 Business Combinations and Intangible Assets

Business combinations are accounted for using Ind AS 103, ‘Business Combinations’. Ind AS 103 requires the identifiable intangible assets and contingent consideration to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets. These valuations are conducted by independent valuation experts.

181

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

3.2.3 Employee related provisions

The costs of long-term and short-term employee benefits are estimated using assumptions by the management. These assumptions include rate of increase in compensation levels, discount rates, expected rate of return on assets and attrition rates (disclosed in Note 51).

3.2.4 Income taxes

Significant judgements are involved in estimating budgeted profits for the calculation of advance tax and deferred tax, and determining provision for income taxes and uncertain tax positions (disclosed in Note 53).

3.2.5 Property, Plant and Equipment and Other Intangible Assets

The useful lives and residual values of Group’s assets are determined by the management at the time the asset is acquired. These estimates are reviewed annually by the management. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

3.2.6 Leases

The Group evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116 ‘Leases’. Identification of a lease requires significant judgment. The Group uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by-lease basis and there by assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Group considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances.

The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.

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( in crores)
4 Property, Plant and Equipment and Capital Work-In-Progress
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Freehold Land 130.00 123.33
Buildings 432.64 381.68
Plant and Machinery 637.07 552.22
Vehicles 7.03 7.17
Furniture and Fixtures 32.97 34.54
Office Equipment 45.32 43.01
1,285.03 1,141.95
Capital Work-In-Progress 293.87 259.33
TOTAL 1,578.90 1,401.28
Net of Impairment NIL ( 55.19 crores as at 31 [st] March 2020) (refer Note 41)
Freehold Buildings Plant and Vehicles Furniture Office TOTAL
Land Machinery and Fixtures Equipment
Gross Carrying Amount
Balance as at 1 [st] April 2019 85.28 391.39 1,187.28 24.86 89.01 120.04 1,897.86
Additions 36.73 103.95 170.62 1.14 9.57 21.91 343.92
Disposals/ Adjustments - (3.39) (16.15) (0.41) (0.19) 0.64 (19.50)
Foreign Currency Translation 1.32 6.86 4.01 0.29 1.05 0.43 13.96
Balance as at 31 [st] March 2020 123.33 498.81 1,345.76 25.88 99.44 143.02 2,236.24
Additions 8.41 72.30 187.55 2.06 4.98 16.24 291.54
Acquisition under Business - - 5.60 - 0.02 - 5.62
Combinations (refer Note 52B)
Disposals/ Adjustments (1.43) (0.05) (25.69) (4.65) (0.60) (8.77) (41.19)
Foreign Currency Translation (0.31) (3.20) (4.42) (0.05) (0.53) (0.46) (8.97)
Balance as at 31 [st] March 2021 130.00 567.86 1,508.80 23.24 103.31 150.03 2,483.24
Accumulated Depreciation and Impairment
Balance as at 1 [st] April 2019 - (101.84) (720.27) (17.03) (57.30) (88.10) (984.54)
Eliminated on disposal of assets - 1.63 13.21 0.28 (1.09) (0.13) 13.90
Depreciation expense - (15.03) (84.11) (1.75) (5.84) (11.73) (118.46)
-
Foreign Currency Translation (1.89) (2.37) (0.21) (0.67) (0.05) (5.19)
Balance as at 31 [st] March 2020 - (117.13) (793.54) (18.71) (64.90) (100.01) (1,094.29)
Eliminated on disposal of assets - 0.04 20.38 4.46 0.46 8.33 33.67
- - - -
Acquisition under Business (1.52) (0.01) (1.53)
Combinations (refer Note 52B)
Depreciation expense - (18.69) (100.04) (1.98) (6.23) (13.20) (140.14)
Foreign Currency Translation - 0.56 2.99 0.02 0.34 0.17 4.08
Balance as at 31 [st] March 2021 - (135.22) (871.73) (16.21) (70.34) (104.71) (1,198.21)
Net Carrying Amount
Balance as at 1 [st] April 2019 85.28 289.55 467.01 7.83 31.71 31.94 913.32
Additions 36.73 103.95 170.62 1.14 9.57 21.91 343.92
Disposals/ Adjustments - (3.39) (16.15) (0.41) (0.19) 0.64 (19.50)
Depreciation expense - (15.03) (84.11) (1.75) (5.84) (11.73) (118.46)
Depreciation Eliminated on disposal - 1.63 13.21 0.28 (1.09) (0.13) 13.90
of assets
Foreign Currency Translation 1.32 4.97 1.64 0.08 0.38 0.38 8.77
Balance as at 31 [st] March 2020 123.33 381.68 552.22 7.17 34.54 43.01 1,141.95
Additions 8.41 72.30 187.55 2.06 4.98 16.24 291.54
Disposals/ Adjustments (1.43) (0.05) (25.69) (4.65) (0.60) (8.77) (41.19)
Acquisition under Business - - 4.08 - 0.01 - 4.09
Combinations (refer Note 52B)
Depreciation expense - (18.69) (100.04) (1.98) (6.23) (13.20) (140.14)
Depreciation Eliminated on disposal - 0.04 20.38 4.46 0.46 8.33 33.67
of assets
Foreign Currency Translation (0.31) (2.64) (1.43) (0.03) (0.19) (0.29) (4.89)
Balance as at 31 [st] March 2021 130.00 432.64 637.07 7.03 32.97 45.32 1,285.03 183
Pidilite Annual Report 2020-21
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Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

Notes:

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( in crores)
a) Assets given under lease included in Note 4 above are as under:
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Freehold Land 17.00 13.79
Buildings 22.84 22.29
TOTAL 39.84 36.08
Freehold Buildings Total
Land
Gross Carrying Amount
Balance as at 1 [st] April 2019 13.79 28.20 41.99
Additions - 3.12 3.12
Balance as at 31 [st] March 2020 13.79 31.32 45.11
Additions 3.21 1.71 4.92
Balance as at 31 [st] March 2021 17.00 33.03 50.03
Accumulated Depreciation and Impairment
Balance as at 1 [st] April 2019 - (6.93) (6.93)
Depreciation expense - (2.10) (2.10)
Balance as at 31 [st] March 2020 - (9.03) (9.03)
Depreciation expense - (1.16) (1.16)
Balance as at 31 [st] March 2021 - (10.19) (10.19)
Net Carrying Amount
Balance as at 1 [st] April 2019 13.79 21.27 35.06
Additions - 3.12 3.12
Depreciation expense - (2.10) (2.10)
Balance as at 31 [st] March 2020 13.79 22.29 36.08
Additions 3.21 1.71 4.92
Depreciation expense - (1.16) (1.16)
Balance as at 31 [st] March 2021 17.00 22.84 39.84
b) Buildings include shares of co-operative societies of 0.01 crores ( 0.01 crores as at 31 [st] March 2020)
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( in crores)

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5 Right of Use Assets
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Leasehold Land 88.39 67.34
Leasehold Buildings 69.14 79.25
Plant and Machinery 0.28 0.41
TOTAL 157.81 147.00
Leasehold Leasehold Plant and TOTAL
Land Buildings Machinery
Gross Carrying Amount
Recognised on adoption of Ind AS 116 as at 1 [st] April 2019 (refer Note 54) 66.25 82.36 0.55 149.16
Additions 3.53 24.79 - 28.32
Foreign Currency Translation 1.34 (0.50) - 0.84
Balance as at 31 [st] March 2020 71.12 106.65 0.55 178.32
Additions 26.08 26.29 - 52.37
Acquisition under Business Combination (refer Note 52B) - 5.02 - 5.02
Disposals/ Adjustments (0.09) (7.75) - (7.84)
Foreign Currency Translation (1.62) (0.59) 0.01 (2.20)
Balance as at 31 [st] March 2021 95.49 129.62 0.56 225.67
Accumulated Depreciation and Impairment
Recognised on adoption of Ind AS 116 as at 1 [st] April 2019 (refer Note 54) - - - -
Depreciation expense (3.66) (27.63) (0.14) (31.43)
Foreign Currency Translation (0.12) 0.23 - 0.11
Balance as at 31 [st] March 2020 (3.78) (27.40) (0.14) (31.32)
Disposals/ Adjustments - 0.21 - 0.21
Acquisition under Business Combination (refer Note 52B) - (2.03) - (2.03)
Depreciation expense (3.46) (31.51) (0.14) (35.11)
Foreign Currency Translation 0.14 0.25 - 0.39
Balance as at 31 [st] March 2021 (7.10) (60.48) (0.28) (67.86)
Net Carrying Amount
Recognised on adoption of Ind AS 116 as at 1 [st] April 2019 (refer Note 54) 66.25 82.36 0.55 149.16
Additions 3.53 24.79 - 28.32
Depreciation expense (3.66) (27.63) (0.14) (31.43)
Foreign Currency Translation 1.22 (0.27) - 0.95
Balance as at 31 [st] March 2020 67.34 79.25 0.41 147.00
Additions 26.08 26.29 - 52.37
Acquisition under Business Combination (refer Note 52B) - 2.99 - 2.99
Disposals/ Adjustments (0.09) (7.54) - (7.63)
Depreciation expense (3.46) (31.51) (0.14) (35.11)
Foreign Currency Translation (1.48) (0.34) 0.01 (1.81)
Balance as at 31 [st] March 2021 88.39 69.14 0.28 157.81
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185

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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6 Goodwill and Other Intangible Assets
As at As at
31 [st] March 31 [st] March
2021 2020
Carrying Amounts
Goodwill on Consolidation 1,182.63 81.78
Goodwill (acquired separately) 101.32 102.25
Total Goodwill (A) 1,283.95 184.03
Other Intangible Assets
Trademark 1,395.83 240.59
Computer Software 20.03 15.24
Copyrights 4.48 4.48
Technical Knowhow Fees 32.79 38.34
Commercial Knowhow Fees 36.38 34.03
Non Compete Fees 0.80 1.05
Distribution Network 200.82 -
Total Other Intangible Assets (B) 1,691.13 333.73
Total Intangible Assets (A+B) 2,975.08 517.76
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( in crores)

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Goodwill Trade- Computer Copy- Technical Commercial Non Distributor TOTAL
mark Software rights Knowhow Knowhow Compete Relation-
Fees Fees Fees ships
Gross Carrying Amount
Balance as at 1 [st] April 2019 184.99 250.87 57.68 4.72 75.28 59.97 5.41 - 638.92
Additions - - 4.39 - - - - - 4.39
Disposals/ Adjustments - (0.24) 0.23 (0.24) (0.76) - (0.02) - (1.03)
Foreign Currency Translation (0.96) 0.91 (0.10) - 0.06 - 0.03 - (0.06)
Balance as at 31 [st] March 2020 184.03 251.54 62.20 4.48 74.58 59.97 5.42 - 642.22
Additions - 0.45 9.44 - - - - - 9.89
Acquisition under Business 1,100.10 1,158.72 - - 0.82 - - 215.00 2,474.64
Combination (refer Note 52B)
Disposals/ Adjustments - (0.45) - - - - - - (0.45)
Foreign Currency Translation (0.19) (1.13) (0.09) - (0.23) - - - (1.64)
Balance as at 31 [st] March 2021 1,283.94 1,409.13 71.55 4.48 75.17 59.97 5.42 215.00 3,124.66
Accumulated Amortisation
and Impairment
Balance as at 1 [st] April 2019 - (8.21) (41.97) - (30.64) (19.95) (3.86) - (104.63)
Eliminated on disposal - - (0.12) - 0.68 - 0.02 - 0.58
of assets
Amortisation expense - (2.45) (4.87) - (6.31) (5.99) (0.53) - (20.15)
Foreign Currency Translation - (0.29) - - 0.03 - - - (0.26)
Balance as at 31 [st] March 2020 - (10.95) (46.96) - (36.24) (25.94) (4.37) - (124.46)
Acquisition under Business - - - - (0.02) - - - (0.02)
Combination (refer Note 52B)
Amortisation expense - (2.44) (4.61) - (3.93) - (0.25) (14.18) (25.41)
Foreign Currency Translation - 0.10 0.05 - (2.19) 2.35 - - 0.31
Balance as at 31 [st] March 2021 - (13.29) (51.52) - (42.38) (23.59) (4.62) (14.18) (149.58)
Net Carrying Amount
Balance as at 1 [st] April 2019 184.99 242.66 15.71 4.72 44.64 40.02 1.55 - 534.29
Additions - - 4.39 - - - - - 4.39
Disposals/ Adjustments - (0.24) 0.23 (0.24) (0.76) - (0.02) - (1.03)
Amortisation expense - (2.45) (4.87) - (6.31) (5.99) (0.53) - (20.15)
Amortisation Eliminated on - - (0.12) - 0.68 - 0.02 - 0.58
disposal of assets
Foreign Currency Translation (0.96) 0.62 (0.10) - 0.09 - 0.03 - (0.32)
Balance as at 31 [st] March 2020 184.03 240.59 15.24 4.48 38.34 34.03 1.05 - 517.76
Additions - 0.45 9.44 - - - - - 9.89
Acquisition under Business 1,100.10 1,158.72 - - 0.80 - - 215.00 2,474.62
Combination (refer Note 52B)
Disposals/ Adjustments - (0.45) - - - - - - (0.45)
Amortisation expense - (2.44) (4.61) - (3.93) - (0.25) (14.18) (25.41)
Foreign Currency Translation (0.19) (1.03) (0.04) - (2.42) 2.35 - - (1.33)
Balance as at 31 [st] March 2021 1,283.94 1,395.84 20.03 4.48 32.79 36.38 0.80 200.82 2,975.08
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The Group has estimated the useful life for some of its Copyrights & Trademark as indefinite on the basis of renewal of legal rights and the management’s intention to keep it perpetually.

187

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

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( in crores)
As at As at
31 [st] March 2021 31 [st] March 2020
Goodwill on Consolidation
Cipy Polyurethanes Pvt Ltd (CIPY) 57.62 57.62
Pidilite Bamco Ltd (Bamco) 22.94 22.27
Bhimad Commercial Co Pvt Ltd (Bhimad) 0.01 0.01
Madhumala Traders Pvt Ltd (Madhumala) 0.01 0.01
Pidilite Industries Egypt SAE (PIE) 1.95 1.87
Tenax Pidilite India Pvt Ltd 59.21 -
(Formerly known as Tenax India Stone Products Pvt Ltd) (refer Note 52B)
Pidilite Adhesives Pvt Ltd (Formerly known as Huntsman Advanced Materials Solutions 1,040.89 -
Pvt Ltd) (refer Note 52B)
Total (A) 1,182.63 81.78
Goodwill acquired separately
Pidilite Industries Limited 86.11 86.11
Nitin Enterprises (Nitin) 0.23 0.23
Building Envelope Systems India Ltd (BESI) 0.55 0.55
Nina Percept Private Limited (Nina Percept) 5.13 5.13
ICA Pidilite Private Limited (ICA) 2.08 2.08
Pulvitec do Brasil Industria e Commercio de Colas e Adesivos Ltda (Pulvitec) 6.71 7.63
Pidilite USA Inc (PUSA) 0.51 0.52
Total (B) 101.32 102.25
Total Goodwill (A+B) 1,283.95 184.03
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*Goodwill acquired in business combination is allocated, at acquisition date, to the cash-generating units that are expected to benefit from that business combination.

Goodwill, Copyrights and Trademark

Goodwill, copyrights and trademark in the books of the Group pertains mainly to Consumer and Bazaar business (majorly consists of Consumer and Bazaar business of Parent). At the end of each reporting period, the Group reviews carrying amount of goodwill, copyrights and trademark to determine whether there is any indication that goodwill, copyrights and trademark has suffered any impairment loss. Accordingly, recoverable amount of goodwill, copyrights and trademark is arrived basis projected cashflows from Consumer and Bazaar business. Recoverable amount of goodwill, copyrights and trademark exceeds the carrying amount of goodwill, copyrights and trademark in the books as on 31[st] March 2021. Further there are no external indications of impairment of goodwill, copyrights and trademark. As a result, no impairment loss on goodwill, copyrights and trademark is required to be recognised.

Projected cashflows from Consumer and Bazaar business (relates to Parent which represents significant portion of goodwill)

The recoverable amount of this cash-generating unit is determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by the management for next year, estimates prepared for the next 4 years thereafter and a discount rate of 11.7% per annum (12.0% per annum as at 31[st] March 2020).

Cash flow projections during the budget period are based on the same expected gross margins and raw materials price inflation throughout the budget period. The cash flows beyond that five-year period have been extrapolated using a steady 7% per annum (8% per annum as at 31[st] March 2020) growth rate. The management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

The key assumptions used in the value in use calculations for Consumer and Bazaar cash-generating unit are as follows:

Budgeted sales growth Sales growth is assumed at 10.8% (CAGR) (17.5% as at 31[st] March 2020) in line with current year projections. The values assigned to the assumption reflect past experience and current market scenario considering COVID-19 impact and are consistent with the managements’ plans for focusing operations in these markets. The management believes that the planned sales growth per year for the next five years is reasonably achievable. Raw materials price inflation Forecast for Material cost growth CAGR higher by 0.2% (0.2% as at 31[st] March 2020) vs. sales growth, considering impact of commodity cost inflation. Other budgeted costs Commercial spends (schemes and A&SP) have been continued at current year’s % to sales. Other fixed costs are in line with the current year’s growth.

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7 Investments accounted for using equity method
As at 31 [st] March 2021 As at 31 [st] March 2020
Qty in crores Qty in crores
Carrying amount determined using the Equity method of accounting
A] Investment in Associates (fully paid up)
i] Investment in Equity Instruments (Quoted)
Equity Shares of 1 each of Vinyl Chemicals (India) Ltd 74,51,540 1.18 74,51,540 1.18
Add: Share in accumulated Profits/Reserves 26.93 24.12
28.11 25.30
ii] Investments in Preference Shares (Unquoted) [refer Note 56 (a) (i)]
Compulsory Convertible Cumulative Preference Shares of Aapkapainter 4,062 5.00 -
Solutions Pvt Ltd
Add: Share in accumulated Profits/Reserves (0.64) -
4.36 -
Total [A] 32.47 25.30
B] Investment in Joint Venture (fully paid up) (Unquoted)
Equity Shares of AED 1000 each of Plus Call Technical Services LLC 57 0.21 57 0.21
Add: Share in accumulated Profits/Reserves 1.56 1.56
1.77 1.77
Less : Impairment in value of Investments (1.77) (1.77)
Total [B] - -
TOTAL [(A)+(B)] 32.47 25.30
Aggregate carrying value of quoted investments 28.11 25.30
Aggregate market value of quoted investments 86.44 31.15
Aggregate carrying value of unquoted investments 4.36 -
Aggregate amount of Impairment in value of investments 1.77 1.77
8 Investments - Non-Current
As at 31 [st] March 2021 As at 31 [st] March 2020
Qty in crores Qty in crores
A] Investment in Equity Instruments (fully paid up) (at FVTPL) (Unquoted)
Equity Shares of 10 each of Pal Peugeot Ltd 1,21,300 0.12 1,21,300 0.12
Less: Impairment in value of Investment (0.12) (0.12)
Total [A] - -
B] Investments in Preference Shares (at FVTPL) (Quoted)
Non-Cumulative Perpetual Preference shares of Kotak Mahindra Bank Ltd 3,00,00,000 15.20 3,00,00,000 15.20
Total [B] 15.20 15.20
C] Investment in Debentures, Bonds & Market Instruments (at FVTPL) (Quoted)
Units of Bharat Bond ETFs 2,50,000 27.85 2,50,000 25.55
Total [C] 27.85 25.55
D] Investment in Alternative Investment Fund (at FVTPL) (Unquoted)
Units of Fireside Ventures Investment Fund II 50,000 3.49 50,000 4.13
Total [D] 3.49 4.13
E] Investment in Promissory Note (at FVTPL) (Unquoted)
Convertible Promissory Note of Clare Inc 1 3.68 1 3.77
Total [E] 3.68 3.77
F] Investments in Preference Shares (at FVTPL) (Unquoted) [refer Note 56 (a)]
Compulsory Convertible Cumulative Preference Shares of Homevista Décor 17,52,734 49.00 17,52,734 49.00
& Furnishings Pvt Ltd
Compulsory Convertible Cumulative Preference Shares of Homevista 9,32,488 19.15 - -
Interior Désigns E.Commerce Pvt Ltd
Compulsory Convertible Cumulative Preference Shares of Trendsutra 1,47,80,200 71.48 1,47,80,200 71.48
PlatformServices Pvt Ltd
Compulsory Convertible Cumulative Preference Shares of Aapkapainter - - 1,625 2.00
Solutions Pvt Ltd
Total [F] 139.63 122.48
Pidilite Annual Report 2020-21
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189

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

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As at 31 [st] March 2021 As at 31 [st] March 2020
Qty in crores Qty in crores
G] Investment in Promissory Note (at amortised cost) (Unquoted)
Convertible Promissory Note of Optmed Inc 1 5.51 1 5.65
Less : Impairment in value of Investments (4.96) (1.41)
Total [G] 0.55 4.24
H] Investment in Mutual Funds (at FVTPL) (Unquoted)
Units of Kotak FMP Series 251 - 1265 days Direct Plan Growth 2,00,00,000 25.09 2,00,00,000 23.12
Units of SBI Debt Fund Series C49 1178 days - Direct Plan Growth 2,00,00,000 24.02 2,00,00,000 22.06
Units of HDFC FMP 1182D Jan 2019 (1) - Direct Growth 2,00,00,000 24.57 2,00,00,000 22.57
Units of HDFC FMP 1126D Mar 2019 (1) - Direct Growth 2,00,00,000 24.17 2,00,00,000 22.21
Units of IDFC FTP Series 149 (1424 days) - Direct Plan Growth 1,50,00,000 18.75 1,50,00,000 17.26
Units of IDFC Money Manager Fund 9,191 0.04 9,191 0.04
Units of Aditya Birla Sun Life FTP-Series PJ (1135 days) - Direct Growth - - 1,00,00,000 11.81
Units of Aditya Birla Sun Life FTP-Series PK (1132 days) - Direct Growth - - 2,00,00,000 23.55
Units of DSP BlackRock FMP S223-39M - Direct Growth - - 1,50,00,000 17.76
Units of DSP BlackRock FMP S224-39M - Direct Growth - - 1,50,00,000 17.67
Units of HDFC FMP 1143D March 2018 (1) - Direct Growth - S39 - - 1,00,00,000 11.81
Units of IDFC FTP Series 140 Direct Plan - Growth (1145 days) - - 1,50,00,000 17.73
Units of Kotak FMP Series 219 - Direct Growth - - 1,50,00,000 17.77
Units of ICICI FMP Series 83 1105 D Plan F - Direct Growth - - 50,00,000 5.91
Units of Reliance FMP XXXVII Series 12 - Direct Growth - - 1,00,00,000 11.83
Units of SBI FMP Series C33 1216 days - Direct Growth - - 2,00,00,000 22.69
Total [H] 116.64 265.79
Total [A+B+C+D+E+F+G+H] 307.04 441.16
Aggregate carrying value of quoted investments 43.05 40.75
Aggregate market value of quoted investments 43.05 40.75
Aggregate carrying value of unquoted investments 263.99 400.41
Aggregate amount of Impairment in value of investments 5.08 1.53
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**The Group invested in convertible promissory note of Optimed Inc., the conversion of which is subject to various covenants and an option to convert at the sole discretion of the Group upon certain future event. Management has considered and valued this investment as a ‘debt instrument’ and believes that the valuation of the option can be done only after the occurrence of the specific future event. During the year, Group has recognised impairment amounting to 3.62 crores ( Nil for the year ended 31[st] March 2020) (refer Note 41).

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9 Investments - Current
As at 31 [st] March 2021 As at 31 [st] March 2020
Qty in crores Qty in crores
A] Investments in Debentures, Bonds & Market Instruments (at FVTPL)
(Quoted)
Tax-free bonds of Housing and Urban Development Corporation Ltd - - 2,00,000 21.27
Tax-free bonds of National Housing Bank - - 10,000 5.59
Tax-free bonds of Indian Railway Finance Corporation 12 Feb 22 - - 70,000 7.57
Tax-free bonds of Indian Railway Finance Corporation 11 Jan 26 - - 1,000 10.40
Total [A] - 44.83
B] Investment in Mutual Funds (at FVTPL) (Unquoted)
Units of Aditya Birla Sun Life FTP-Series PJ (1135 days) - Direct Growth 1,00,00,000 12.58 - -
Units of Aditya Birla Sun Life FTP-Series PK (1132 days) - Direct Growth 2,00,00,000 25.07 - -
Units of DSP BlackRock FMP S223-39M - Direct Growth 1,50,00,000 18.95 - -
Units of DSP BlackRock FMP S224-39M - Direct Growth 1,50,00,000 18.81 - -
Units of SBI FMP Series C33 (1216 days) - Direct Growth 2,00,00,000 24.73 - -
Units of Reliance FMP XXXVII Series 12 - Direct Growth 1,00,00,000 12.64 - -
Units of HDFC FMP 1143D March 2018 (1) - Direct Growth - S39 1,00,00,000 12.56 - -
Units of IDFC FTP Series 140 Direct Plan - Growth (1145 days) 1,50,00,000 18.88 - -
Units of Kotak FMP Series 219 - Direct Growth 1,50,00,000 18.86 - -
Units of ICICI FMP Series 83 1105 D Plan F - Direct Growth 50,00,000 6.28 - -
Units of ICICI Prudential Overnight Fund - Direct Growth 1,01,804 3.10 - -
Units of ICICI Prudential Equity Arbritage Fund - Growth 3,56,760 1.00 - -
Units of HDFC Liquid Fund - Growth 1,856 0.75 - -
Units of IDFC Arbritage Fund - Growth 3,74,231 1.00 - -
Units of L&T Ultra Short Term Fund - Growth 1,42,467 0.50 - -
Units of SBI Liquid Fund - Growth 2,331 0.75
Units of HDFC Overnight Fund - Direct Growth - - 6,79,896 201.88
Units of SBI Overnight Fund - Direct Plan Growth - - 6,46,655 210.40
Units of Aditya Birla Sun Life Overnight Fund - Direct Growth - - 9,22,816 99.70
Units of ICICI Overnight Fund - Direct Growth - - 1,51,16,609 162.92
Total [B] 176.46 674.90
C] Other Investments
Deposits (at amortised cost)
IL & FS Financial Services Limited 1.55 1.55
Infrastructure Leasing & Financial Services Limited 7.25 7.25
8.80 8.80
Less : Impairment in value of Investments (8.80) (8.80)
Total [C] - -
TOTAL [A+B+C] 176.46 719.73
Aggregate carrying value of quoted investments - 44.83
Aggregate market value of quoted investments - 44.83
Aggregate carrying value of unquoted investments 176.46 674.90
Aggregate amount of Impairment in value of investments 8.80 8.80
Pidilite Annual Report 2020-21
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191

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

10 Trade Receivables

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As at As at
31 [st] March 31 [st] March
2021 2020
Secured, Considered good 114.31 105.20
Unsecured, Considered good 1,206.71 983.30
Unsecured, Considered doubtful 88.53 77.52
Unsecured which have Significant Increase in Credit Risk - -
Unsecured, Credit Impaired - -
1,409.55 1,166.02
Less: Allowance for expected credit loss (88.53) (77.52)
TOTAL 1,321.02 1,088.50
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The Group has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the receivables days and the rates vary with the business of Parent and each Subsidiary.

Trade receivables includes receivables from Companies/firms where directors are directors/members/partners (refer Note 47).

Movement in expected credit loss allowance	Movement in expected credit loss allowance	Movement in expected credit loss allowance
	For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Balance at the beginning of the year	77.52	68.44
Movement in expected credit loss allowance on trade receivables calculated at lifetime expected credit losses	11.01	9.08
Balance at the end of the year	88.53	77.52

A formal credit policy has been framed and credit facilities are given to dealers within framework of credit policy. As per credit risk management mechanism, a policy for doubtful debt has been formulated and risk exposure related to receivable are identified based on criteria mentioned in policy and provided for credit loss allowance.

11	Loans - Non-Current	Loans - Non-Current
						As at		As at
					31stMarch		31stMarch
						2021		2020
	Unsecured, Considered good
		Loans and Advances to Employees & Others*				4.85		4.09
		Loans to Joint Venture*				4.82		4.97
						-		-
	Less: Impairment in value of loan					(4.82)		(4.97)
	TOTAL					4.85		4.09
	* Loans given for business purpose.

12 Loans - Current

			As at 31stMarch 2021	As at 31stMarch 2020
Unsecured, Considered good
Loans and Advances to Employees & Others*			16.89	17.38
TOTAL			16.89	17.38
*Loans given for business purpose.

( in crores)

13 Other Financial Assets - Non-Current

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As at As at
31 [st] March 31 [st] March
2021 2020
Security Deposit 17.69 19.52
Fixed Deposits with Banks with original maturity of more than 12 months 9.45 3.29
Retention Money Receivable 23.82 19.99
Other Receivables
Unsecured, Considered good 0.10 0.05
Considered doubtful 1.74 1.74
1.84 1.79
Less: Allowance for doubtful balances (1.74) (1.74)
0.10 0.05
TOTAL 51.06 42.85
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14 Other Financial Assets - Current

					As at	As at
					31stMarch	31stMarch
					2021	2020
	Security Deposit
		Unsecured, Considered good			9.13	8.51
		Considered doubtful			0.44	0.55
					9.57	9.06
	Less: Allowance for doubtful balances				(0.44)	(0.55)
					9.13	8.51
	Derivative assets towards foreign exchange forward contracts				0.18	1.81
	Retention MoneyReceivable
		Unsecured, Consideredgood			16.17	17.58
		Considered doubtful			5.25	1.51
					21.42	19.09
	Less: Allowance for doubtful balances				(5.25)	(1.51)
					16.17	17.58
	Uncertifed Revenue from Works Contract				56.05	70.60
	Other Receivables*				3.73	4.68
	TOTAL				85.26	103.18
	* Includes Windmill income and Insurance claim receivable

15 Cash and Cash Equivalents

		As at 31stMarch 2021	As at 31stMarch 2020
Cash and Cash Equivalents
Cash on Hand		2.25	0.39
Cheques on Hand		55.50	0.85
Balance with banks In Current Account In EEFC Account In Fixed Deposit Accounts with original maturity of 3 months or less TOTAL Cash and Cash Equivalents (as above) Cash Credits and Bank Overdrafs (refer Note 25) Cash and Cash equivalents (as per Statement of Cash Flows)		178.07 19.71 187.12 442.65 442.65 (115.45) 327.20	169.22 12.89 508.88 692.23 692.23 (85.86) 606.37	Pidilite Annual Report 2020-21

193

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

16 Bank Balances other than Cash and Cash Equivalents above

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As at As at
31 [st] March 31 [st] March
2021 2020
Balance with banks
In Escrow Account 0.04 0.14
Other Bank Balance
In Fixed Deposit Accounts with original maturity of more than 12 months (refer Note a) 2.84 -
In Fixed Deposit Accounts with original maturity of more than 3 months but upto 12 months 3.37 7.62
(refer Note a)
Earmarked Account
Dividend Payment Bank Account 2.56 3.26
TOTAL 8.81 11.02
a. Includes Fixed Deposit under lien - 0.99
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17 Inventories (at lower of cost and net realisable value)

				As at	As at
				31stMarch	31stMarch
				2021	2020
	Raw Material and Packing Material			598.38	420.44
	Work-in-Progress			94.98	78.75
	Finished Goods			375.70	312.62
	Stock-in-Trade (acquired for trading)			156.29	111.30
	Stores and Spares			8.80	6.36
	TOTAL			1,234.15	929.47
	Included above Goods-in-Transit
	Raw Material and Packing Material			52.55	41.79
	Work-in-Progress			3.50	1.87
	Finished Goods			49.42	41.15
	Stock-in-Trade (acquired for trading)			16.64	8.69
	TOTAL			122.11	93.50

a. The cost of inventories recognised as an expense during the year in respect of continuing operations was 3,376.67 crores ( 3,402.50 crores for the year ended 31[st] March 2020).

b. The cost of inventories recognised as an expense includes 0.43 crores in respect of write-downs of inventory to net realisable value ( 0.37 crores for the year ended 31[st] March 2020).

c. The mode of valuation of inventories has been stated in Note 2.14.

b. The cost of inventories recognised as an expense includes0.43crores in respect o value ( 0.37 crores for the year ended 31stMarch 2020).	b. The cost of inventories recognised as an expense includes0.43crores in respect o value ( 0.37 crores for the year ended 31stMarch 2020).	f write-downs of i	nventory to net	realisable
c. The mode of valuation of inventories has been stated in Note 2.14.
18	Income Tax Assets (net) - Non-Current
			As at 31stMarch 2021	As at 31stMarch 2020
Advance Payment of Taxes (net of provisions)			97.12	109.53
TOTAL			97.12	109.53

( in crores)

19 Current Tax Assets (net)

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As at As at
31 [st] March 31 [st] March
2021 2020
Advance Payment of Taxes (net of provisions) 3.13 1.93
TOTAL 3.13 1.93
20 Other Non-Current Assets
As at As at
31 [st] March 31 [st] March
2021 2020
Unsecured, Considered good
Capital Advances 64.65 47.50
Prepaid Expenses 0.16 0.27
Balance with Government Authorities 29.32 25.01
TOTAL 94.13 72.78
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• Includes amounts paid under protest against Sales Tax claims disputed by the Company (shown under contingent liabilities), Excise Duty rebates, GST receivable, etc.

21 Other Current Assets

		As at 31stMarch 2021	As at 31stMarch 2020
Export Benefts receivable
Unsecured, Considered good		8.79	11.14
Considered doubtful		-	-
		8.79	11.14
Less: Allowance for doubtful balances		-	-
		8.79	11.14
Balance with Government Authorities*
Unsecured, Considered good		141.35	126.88
Considered doubtful		0.09	0.08
		141.44	126.96
Less: Allowance for doubtful balances		(0.09)	(0.08)
		141.35	126.88
Advances to Vendors
Unsecured, Considered good		62.73	45.16
Considered doubtful		0.01	0.01
		62.74	45.17
Less: Allowance for doubtful balances		(0.01)	(0.01)
		62.73	45.16
Prepaid Expenses		14.13	14.33
TOTAL		227.00	197.51
* Includes input tax credit, VAT, Service Tax/ GST receivable,etc.

195

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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As at As at
31 [st] March 31 [st] March
2021 2020
22 Equity Share Capital
Authorised Capital:
70,00,00,000 Equity Shares of 1 each 70.00 70.00
(70,00,00,000 Equity Shares of 1 each as at 31 [st ] March 2020)
TOTAL 70.00 70.00
Issued, Subscribed and Paid-up Capital:
50,81,53,380 Equity Shares of 1 each, fully paid up 50.82 50.81
(50,81,23,780 Equity Shares of 1 each as at 31 [st] March 2020)
TOTAL 50.82 50.81
a. Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period
Number of in crores
Shares
Balance as at 1 [st] April 2019 50,79,78,280 50.80
Shares issued during the year on exercise of options under Employee Stock Option Plan - 2016 1,45,500 0.01
Balance as at 31 [st] March 2020 50,81,23,780 50.81
Shares issued during the year on exercise of options under Employee Stock Option Plan - 2016 29,600 0.01
Balance as at 31 [st] March 2021 50,81,53,380 50.82
b. Terms/ Rights attached to equity shares
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The Company has only one class of equity shares having a par value of 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion of their shareholding.

The Board of Directors at its meeting held on 12[th] May 2021 declared a final dividend of 8.50 per equity share of 1 each, subject to approval of the shareholders at the ensuing Annual General Meeting.

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c. Details of shareholders holding more than 5% shares in the Company:
As at As at
31 [st] March 2021 31 [st] March 2020
Number of % of Number of % of
Shares held Holding Shares held Holding
Shri Madhukar Balvantray Parekh 5,20,51,286 10.24 5,20,51,286 10.24
Shri Narendrakumar Kalyanji Parekh 5,42,73,688 10.68 5,42,73,688 10.68
Shri Ajay Balvantray Parekh 4,74,33,489 9.34 4,74,33,489 9.34
Shri Sushilkumar Kalyanji Parekh 4,13,97,646 8.15 4,13,97,646 8.15
Devkalyan Sales Pvt Ltd 2,62,24,280 5.16 2,62,24,280 5.16
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d.	Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of fve years, immediately preceding the reporting date:	Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of fve years, immediately preceding the reporting date:	Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of fve years, immediately preceding the reporting date:	Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of fve years, immediately preceding the reporting date:	Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of fve years, immediately preceding the reporting date:	Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of fve years, immediately preceding the reporting date:	Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of fve years, immediately preceding the reporting date:
						As at 31stMarch 2021	As at 31stMarch 2020
						Number of Shares	Number of Shares
Equity Shares
Buy-back of Shares						50,00,000	50,00,000
e.	Equity Shares reserved for issuance under Employee Stock Option Scheme/Plan:
						As at 31stMarch 2021	As at 31stMarch 2020
						Number of Shares	Number of Shares
Equity Shares of 1 each under Employee Stock Option Scheme-2012						34,200	34,200
Equity Shares of 1 each under Employee Stock Option Plan-2016						38,35,210	41,13,500

During the year ended 31[st] March 2020, the Company had paid Final Dividend of 6.50 per equity share of 1 each for the financial year 2018-19 and Interim Dividend of 7.00 per equity share of 1 each for the financial year 2019-20.

197

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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23 Other Equity
As at As at
31 [st] March 31 [st] March
2021 2020
Capital Reserve 0.34 0.34
Securities Premium 26.04 23.21
Capital Redemption Reserve 0.50 0.50
Cash Subsidy Reserve 0.95 0.95
Legal Reserve 0.26 0.25
State Investment Reserve 0.15 0.15
Share Options Outstanding Account 25.42 10.89
Foreign Currency Translation Reserve 18.32 28.83
General Reserve 1,335.38 1,335.38
Retained Earnings 4,134.78 3,004.30
TOTAL 5,542.14 4,404.80
23.1 Capital Reserve
As at As at
31 [st] March 31 [st] March
2021 2020
Balance at the beginning and end of the year 0.34 0.34
Capital Reserve represents excess of net assets acquired in past amalgamation. It is not available for the distribution to shareholders
as dividend.
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	Capital Reserve represents excess of net assets acquired in past amalgamation. It is not	Capital Reserve represents excess of net assets acquired in past amalgamation. It is not	available for the distribution to	available for the distribution to	shareholders	shareholders
	as dividend.
23.2	Securities Premium
				As at		As at
				31stMarch		31stMarch
				2021		2020
	Balance at the beginning of the year			23.21		10.01
		Add : Premium on Shares issued against ESOP		2.83		13.20
	Closing Balance			26.04		23.21
	Security Premium Account is created when shares are issued at premium. The Group may issue fully paid-up bonus shares to its
	members out of the Securities Premium Account, and Group can use this reserve for buy-back of shares.

	Closing Balance 26.04 23.21	Closing Balance 26.04 23.21	Closing Balance 26.04 23.21
23.3	Security Premium Account is created when shares are issued at premium. The Group may issue fully paid-up bonus shares to its members out of the Securities Premium Account, and Group can use this reserve for buy-back of shares. Capital Redemption Reserve
		As at 31stMarch 2021	As at 31stMarch 2020
	Balance at the beginning and end of the year	0.50	0.50
	The Group has recognised Capital Redemption Reserve on buy-back of equity shares from its General Reserve. The amount in
	Capital Redemption Reserve is equal to the nominal amount of equity shares bought back. The reserve can be utilised in accordance
	with the provisions of the Companies Act, 2013.

( in crores)

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23.4 Cash Subsidy Reserve
As at As at
31 [st] March 31 [st] March
2021 2020
Balance at the beginning and end of the year 0.95 0.95
Cash Subsidy Reserve represents subsidies received from state governments. It is not available for the distribution to shareholders as
dividend.
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23.5	Legal Reserve	Legal Reserve
				As at		As at
				31stMarch	31st	March
				2021		2020
	Balance at the beginning of the year			0.25		0.24
		Add : Additions during the year		0.01		0.01
	Closing Balance			0.26		0.25
	According to Thai Civil and Commercial Code, the Company is required to set aside to a statutory reserve an amount equal to at least fve percent of its net proft each time the Company pays out a dividend, until such reserve reaches ten percent of its registered share
	capital. The statutory reserve cannot be used for dividend payment. At present, the statutory reserve has fully been set aside.

	According to Thai Civil and Commercial Code, the Company is required to set aside to a statutory reserve an amount equal to at least fve percent of its net proft each time the Company pays out a dividend, until such reserve reaches ten percent of its registered share
	capital. The statutory reserve cannot be used for dividend payment. At present, the statutory reserve has fully been set aside.
23.6	State Investment Reserve
	As at As at
	31stMarch 31stMarch
	2021 2020
	Balance at the beginning and end of the year 0.15 0.15
	State Investment Reserve represents subsidies received by Hybrid Coatings from state government for capital investment. It is not
	available for the distribution to shareholders as dividend.

23.7 Share Options Outstanding Account

				As at 31stMarch 2021	As at 31stMarch 2020
	Employees Stock Options Outstanding
	Balance at the beginning of the year			16.95	29.38
		Add : Options granted during the year		42.59	1.72
		Less : Transferred to Securities Premium on Options exercised during the year		(2.83)	(13.20)
		Less : Lapsed during the year		(0.06)	(0.95)
	Closing Balance (A)			56.65	16.95
	Deferred Employees Stock Options Cost
	Balance at the beginning of the year			(6.06)	(19.73)
		Less: Options granted during the year		(42.59)	(1.72)
		Add: Amortised and exercised during the year		17.40	14.84
		Add: Lapsed during the year		0.02	0.55
	Closing Balance (B) Closing Balance (A+B)			(31.23) 25.42	(6.06) 10.89
	The above reserve relates to share options granted by the Company to its employees under its employee share option plan.
	Further information about share-based payments to employees is set out in Note 49.

199

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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23.8 Foreign Currency Translation Reserve
As at As at
31 [st] March 31 [st] March
2021 2020
Balance at the beginning of the year 28.83 14.36
Add/ (Less) : Exchange difference arising on translatory foreign operations (10.51) 14.47
Closing Balance 18.32 28.83
Foreign Currency Translation Reserve arises as a result of translating the financial statement items from the functional currency
into the Group’s presentational currency i.e. Indian Rupee.
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	into the Group’s presentational currency i.e. Indian Rupee.
23.9	General Reserve
			As at	As at
			31stMarch	31stMarch
			2021	2020
	Balance at the beginning and end of the year		1,335.38	1,335.38
	General Reserve is created by a transfer from one component of equity to another and is not an item of Other Comprehensive Income.
	The same can be utilised by the Company in accordance with the provisions of the Companies Act, 2013.

			As at	As at
			31stMarch	31stMarch
			2021	2020
23.10	Retained Earnings
	Balance at the beginning of the year		3,004.30	2,725.71
	Add : Proft for the year		1,131.21	1,116.42
	Less : Payment of Final Dividend		(0.02)	(330.19)
	Payment of Interim Dividend		-	(355.61)
	Tax on Dividend paid		-	(140.97)
	Other Comprehensive Income for the year, net of income tax		(0.71)	(11.06)
	Closing Balance		4,134.78	3,004.30
	The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the fnancial statements of the Company and also considering requirements of the Companies Act, 2013.			separate

	The amount that can be distributed by the Company as dividends to its equity shareholders is determined fnancial statements of the Company and also considering requirements of the Companies Act, 2013.	The amount that can be distributed by the Company as dividends to its equity shareholders is determined fnancial statements of the Company and also considering requirements of the Companies Act, 2013.	The amount that can be distributed by the Company as dividends to its equity shareholders is determined fnancial statements of the Company and also considering requirements of the Companies Act, 2013.	The amount that can be distributed by the Company as dividends to its equity shareholders is determined fnancial statements of the Company and also considering requirements of the Companies Act, 2013.	The amount that can be distributed by the Company as dividends to its equity shareholders is determined fnancial statements of the Company and also considering requirements of the Companies Act, 2013.	The amount that can be distributed by the Company as dividends to its equity shareholders is determined fnancial statements of the Company and also considering requirements of the Companies Act, 2013.	based on the	separate	separate
24	Borrowings - Non-Current
							As at			As at
							31stMarch		31stMarch
							2021			2020
	Secured - Term Loan from Bank (refer Note i)						7.85			18.60
	Unsecured - Term Loan from Bank (refer Note ii)						4.54			6.53
	TOTAL						12.39			25.13

i) Secured term loan for international subsidiaries at 5.25% p.a (9% - 11.97% as at 31[st] March 2020) is secured by hypothecation of plant and machineries, land and building.

• ii) Unsecured term loan from bank for an international subsidiary carries an interest rate of AWPLR - 0.50% p.a., 4.00% p.a (AWPLR - 0.50% p.a. as at 31[st] March 2020). The maturity date for international subsidiaries varies from July 2022 to October 2024 which is repayable in monthly/ quarterly installments.

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( in crores)
25 Borrowings - Current
As at As at
31 [st] March 31 [st] March
2021 2020
Secured - at amortised cost
1) Loans repayable on demand from banks
i) Working Capital Demand Loan 25.13 39.63
ii) Bank Overdraft 81.53 50.34
2) Amount due on Factoring 1.65 7.32
Unsecured - at amortised cost
Loans repayable on demand from banks
i) Working Capital Demand Loan 59.28 11.18
ii) Bank Overdraft 33.92 35.52
TOTAL 201.51 143.99
Secured
1) i) Secured working capital demand loan for domestic subsidiaries carries interest rate of 8.0% p.a. (8.5% p.a as at 31 [st] March 2020)
and for international subsidiaries at 5.48% to 9.92%, (11.50% - 12.43%, LIBOR + 2.7% p.a. as at 31 [st] March 2020). The group working
capital demand loan is secured by receivables, inventories, outstanding monies and other assets.
ii) Secured bank overdraft for domestic subsidiaries carries interest rate of 8.20% p.a. (8.9% p.a. as at 31 [st] March 2020) and for
international subsidiaries at T- Bill rate + 1.5% (AWPLR + 0.35% p.a. as at 31 [st] March 2020). It is secured by way of charge to
receivables and inventory.
2) Secured amount due on factoring for domestic subsidiaries carries interest rate (including factoring cost) of 13.00% p.a. (11.00% to
11.75% p.a. as at 31 [st] March 2020). It is secured by a charge against certain trade receivables.
Unsecured
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• 1) i) Unsecured working capital demand loan carries interest rate of 4.5% p.a. and for international subsidiaries at 3.3% (9.50% p.a. as at 31[st] March 2020).

1)	i) Unsecured working capital demand loan carries interest rate of 4.5% p.a. and for international subsidiaries at 3.3% (9.50% p.a. as at 31stMarch 2020).	i) Unsecured working capital demand loan carries interest rate of 4.5% p.a. and for international subsidiaries at 3.3% (9.50% p.a. as at 31stMarch 2020).	i) Unsecured working capital demand loan carries interest rate of 4.5% p.a. and for international subsidiaries at 3.3% (9.50% p.a. as at 31stMarch 2020).	i) Unsecured working capital demand loan carries interest rate of 4.5% p.a. and for international subsidiaries at 3.3% (9.50% p.a. as at 31stMarch 2020).
	ii) Unsecured bank overdraf for international subsidiaries carries interest rate of EIBOR + 1.5% p.a. and AWPLR + 0.35% p.a (EIBOR+ 1.55% p.a. as at 31stMarch 2020). ( in crores)
26	Trade Payables
			As at 31stMarch 2021	As at 31stMarch 2020
	Trade Payables
	Total outstanding dues of micro enterprises and small enterprises		86.03	23.13
	Total outstanding dues of creditors other than micro enterprises and small enterprises TOTAL		920.71 1,006.74	597.88 621.01
27	Other Financial Liabilities - Non-Current Retention money payable Employees related liabilities TOTAL		As at 31stMarch 2021 13.33 0.30 13.63	As at 31stMarch 2020 6.79 0.47 7.26	Pidilite Annual Report 2020-21

201

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

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( in crores)
28 Other Financial Liabilities - Current
As at As at
31 [st] March 31 [st] March
2021 2020
Unclaimed Dividend 2.56 3.25
BTA payable (refer Note 45 a) 3.22 3.12
Liability for purchase of investment [refer note 45 (b) and 52B)] 306.22 -
Payable on purchase of assets 2.40 7.39
Trade/ Security Deposit received 134.05 123.93
Liabilities for expenses 527.35 392.84
Gross obligation towards acquisition (refer Note 45 b) - 81.23
Derivative liabilities towards foreign exchange forward contracts 0.66 0.42
Current portion of non-current borrowings (refer Note 24) 8.71 7.10
Retention money payable 22.15 17.14
Employees related liabilities 26.72 32.32
TOTAL 1,034.04 668.74
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29	Provisions - Non-Current
				As at	As at
				31stMarch	31stMarch
				2021	2020
	Provision for Employee Benefts
		Gratuity (net) (refer Note 51)		5.23	4.21
		Compensated Absences		42.73	38.97
		Anniversary Awards		1.25	0.82
		Premature Death Pension Scheme		1.82	1.55
		Total Disability Pension Scheme		0.37	0.32
		Other Retirement Benefts		5.91	5.29
	Others (refer Note 55)			0.67	0.79
	TOTAL			57.98	51.95

30	Provisions - Current
	Provision for Employee Benefts		As at 31stMarch 2021	As at 31stMarch 2020
		Gratuity (net) (refer Note 51)	3.66	2.50
		Compensated Absences	15.26	12.26
		Anniversary Awards	0.21	0.16
		Premature Death Pension Scheme	0.01	0.01
		Total Disability Pension Scheme	0.06	0.05
		Other Retirement Benefts	2.74	1.85
	Provision for warranty expenses (refer Note 55) TOTAL		3.02 24.96	4.76 21.59

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( in crores)
31 Other Current Liabilities
As at As at
31 [st] March 31 [st] March
2021 2020
Statutory remittances 84.51 79.40
Advance from customers 28.29 41.10
Other liabilities 1.93 1.84
TOTAL 114.73 122.34
32 Current Tax Liabilities (net)
As at As at
31 [st] March 31 [st] March
2021 2020
Provision for Tax (net of Advance Tax) 25.02 8.67
TOTAL 25.02 8.67
33 Revenue from Operations
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Revenue from Operations
Sale of Products 7,073.23 6,985.44
Sale of Services 177.69 268.72
TOTAL (A) 7,250.92 7,254.16
Other Operating Revenue
Scrap Sales 12.49 12.18
Export Incentives 9.33 19.11
GST Refund 16.48 3.40
Others 3.49 5.62
TOTAL (B) 41.79 40.31
TOTAL (A+B) 7,292.71 7,294.47
The Group disaggregated revenues from contracts with customers by customer type and by geography. The Group believes that this
disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by industry, market and
other economic factors. For geographywise and customerwise breakup of revenue, refer Note 48.
Further, the Group derives its revenue from the transfer of goods at a point in time for its major service lines. This is consistent with the
revenue information that is disclosed for each reportable segment under Ind AS 108 ‘Operating Segment’.
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	*The Group disaggregated revenues from contracts with customers by customer type and by geography. The Group believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash fows are afected by industry, market and other economic factors. For geographywise and customerwise breakup of revenue, refer Note 48.	*The Group disaggregated revenues from contracts with customers by customer type and by geography. The Group believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash fows are afected by industry, market and other economic factors. For geographywise and customerwise breakup of revenue, refer Note 48.
	Further, the Group derives its revenue from the transfer of goods at a point in time for its major service lines. This is consistent with the revenue information that is disclosed for each reportable segment under Ind AS 108 ‘Operating Segment’.
	Reconciliation of revenue recognised with the contracted price is as follows:
	For the year ended 31stMarch 2021 Contracted Price 7,964.46	For the year ended 31stMarch 2020 7,941.25
	Reduction towards variable consideration components* (713.54) Revenue Recognised 7,250.92	(687.09) 7,254.16
	*The reduction towards variable consideration includes discounts, rebates, incentives, promotional couponing and schemes.

203

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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34 Other Income
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Interest on:
Bank Deposit (at amortised cost) 6.49 3.34
Overdue Trade Receivables 0.40 0.05
Tax Free Bonds (at FVTPL) 8.29 3.26
Others 1.66 5.81
Dividend on:
Investments in Mutual Funds and Others (at FVTPL) 1.13 11.59
Other Non-Operating Income:
Windmill Income 1.35 3.21
Insurance claim received 7.47 0.46
Liabilities no longer required written back 0.32 1.59
Rental Income from Leases 2.18 1.38
Net gain arising on financial assets designated as at FVTPL 40.26 109.79
Profit on Sale of Assets (net) - 2.67
Miscellaneous Income 9.85 6.28
TOTAL 79.40 149.43
35 Cost of Materials Consumed
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Inventory at the beginning of the year 420.44 404.72
Add : Purchases 3,195.01 3,013.43
Add : Acquisition under Business Combination (refer Note 52B) 2.56 -
3,618.01 3,418.15
Less : Inventory at the end of the year 600.19 420.44
TOTAL 3,017.82 2,997.71
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36 Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade

	For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Inventories at the end of the year
Stock-in-Trade	156.29	111.30
Work-in-Progress	94.98	78.75
Finished Goods	375.70	312.62
Total (A)	626.97	502.67
Acquisition under Business Combinations(refer Note 52B)
Stock-in-Trade	3.48	-
Finished Goods	2.50	-
Total (B)	5.98	-
Inventories at the beginning of the year
Stock-in-Trade	111.30	118.63
Work-in-Progress	78.75	84.02
Finished Goods	312.62	321.24
Total (C)	502.67	523.89
TOTAL (C+B-A)	(118.32)	21.22

( in crores)

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37 Employee Benefits Expense
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Salaries and Wages 884.38 833.74
Contribution to Provident and Other Funds (refer Note 51) 55.28 50.83
Share-based Payments to Employees (refer Note 49) 17.24 14.44
Staff Welfare Expenses 23.96 28.21
TOTAL 980.86 927.22
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38 Finance Costs

		For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
	Interest expense on:
	Borrowings	15.53	9.38
	Lease Liability (refer Note 54)	7.91	8.21
	Unwinding of Liabilities (refer Note 45)	6.29	8.26
	Dealer Deposits & others	7.50	7.75
	TOTAL	37.23	33.60

39 Depreciation, Amortisation and Impairment Expense

	For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Depreciation on Property, Plant and Equipment (refer Note 4)	140.14	118.46
Depreciation on Right of Use of Assets (refer Note 5 and Note 54)	35.11	31.31
Amortisation of Other Intangible Assets (refer Note 6)	25.41	20.15
TOTAL	200.66	169.92

205

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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40 Other Expenses
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Consumption of Stores and Spares 33.63 37.58
Clearing, Forwarding and Octroi Duty 331.31 297.45
Power and Fuel 55.51 63.07
Contract Labour 96.11 75.47
Water Charges 13.15 4.12
Rent (refer Note 54) 21.67 20.35
Rates and Taxes 4.76 4.80
Insurance 12.91 10.58
License Fees 1.07 1.12
Repairs:
Buildings 10.54 9.63
Machinery 18.88 21.27
Others 5.29 9.32
34.71 40.22
Directors' Fees 1.05 0.44
Advertisement and Publicity 159.76 284.64
Legal, Professional and Consultancy Fees 52.49 57.27
Communication Expenses 8.42 9.84
Printing and Stationery 4.30 7.25
Travelling and Conveyance Expenses 62.43 122.13
Bad Debts 7.08 3.88
Provision for Doubtful Debts 11.01 8.45
Processing and Packing Charges 81.89 76.80
Sales Commission 12.99 10.34
Payments to Auditor (refer Note a) 3.02 2.57
Donations 5.18 0.17
Corporate Social Responsibility Expenses 29.55 27.12
Loss on Fixed Assets Sold / Discarded (net) 5.73 -
Net Loss on Foreign Currency Transactions and Translation 2.37 4.13
Miscellaneous Expenses 202.46 218.94
TOTAL 1,254.56 1,388.73
a. Details of Payments to Auditors of Parent and Subsidiaries (net of taxes)
a) Auditor 2.20 2.01
b) Tax Matters 0.38 0.21
c) Other Services 0.42 0.33
d) Reimbursement of Expenses 0.02 0.02
TOTAL 3.02 2.57
41 Exceptional Items
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Impairment in value of Asset held for Sale [refer Note 56(g)] - 55.19
Provision for Diminution/ Impairment in value of Investment[refer Note 8G)] 3.62 -
TOTAL 3.62 55.19
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42 a) Associates and Joint Ventures
A. (i) Details of Associate
Name of Associate Principal Place of Proportion of ownership
activity incorporation interest/ voting rights held
and principal by the Group
place of As at As at
business 31 [st] March 31 [st] March
2021 2020
Vinyl Chemicals (India) Ltd Trading in India 40.64% 40.64%
chemicals
( in crores)
(ii) Financial information in respect of Associate
Particulars For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Group's share of profit 4.62 3.03
Group's share of Other Comprehensive Income - -
Group's share of Total Comprehensive Income 4.62 3.03
(iii) Reconciliation with carrying amount of investment
As at As at
31 [st] March 31 [st] March
2021 2020
Net assets excluding dividend adjustment 66.25 59.31
Share in accumulated Profits/Reserves (%) 40.64 40.64
Share in accumulated Profits/Reserves 26.93 24.12
Investment in Equity Share Capital 1.18 1.18
Total Investment 28.11 25.30
B. (i) Details of Associate
Name of Associate Principal Place of Proportion of ownership
activity incorporation interest/ voting rights held
and principal by the Group
place of As at As at
business 31 [st] March 31 [st] March
2021 2020
Aapkapainter Solutions Private Limited Painting and India 28.89% -
Waterproofing
Solutions
( in crores)
(ii) Financial information in respect of Associate
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Group's share of loss (0.64) -
Group's share of Other Comprehensive Income - -
Group’s share of Total Comprehensive Income (0.64) - Pidilite Annual Report 2020-21
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207

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

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( in crores)
(iii) Reconciliation with carrying amount of investment
As at As at
31 [st] March 31 [st] March
2021 2020
Net assets excluding dividend adjustment 3.38 -
Share in accumulated Profits/Reserves (%) 28.89 -
Share in accumulated Profits/Reserves (0.64) -
Investment in Equity Share Capital 5.00 -
Total Investment 4.36 -
C. (i) Details of Joint Venture
Name of Joint Venture Principal Place of Proportion of ownership
activity incorporation interest/ voting rights held
and principal by the Group
place of As at As at
business 31 [st] March 31 [st] March
2021 2020
Plus Call Technical Services LLC Flooring, United Arab 40.00% 40.00%
(refer Note 7B) tiling, painting, Emirates
concrete work
and related
contracting
activities
( in crores)
(ii) Financial information in respect of Joint Venture
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Group's share of profit/ (loss) - -
Group's share of Other Comprehensive Income - -
Group’s share of Total Comprehensive Income - -
42 b) Non-Controlling Interest
As at As at
31 [st] March 31 [st] March
2021 2020
Balance at the beginning of the year 215.65 207.15
Share of Profit/ (Loss) for the year (5.08) 5.63
Share of Other Comprehensive Income for the year 0.36 0.12
Non-Controlling Interests arising on the acquisition of:
Pidilite East Africa Ltd - 2.11
Pidilite Litokol Pvt Ltd - 0.40
Nina Lanka Construction Technologies (Private) Limited - 0.18
Nina Percept (Bangladesh) Pvt Ltd - 0.10
Tenax Pidilite India Pvt Ltd (Formerly known as Tenax India Stone Products Pvt Ltd) 10.91 -
(Refer Note 52B)
Additional Non-Controlling interests arising on increase in capital of:
Pidilite Lanka (Pvt) Ltd - 0.35
Pidilite East Africa Ltd 1.75 -
Pidilite Litokol Pvt Ltd 9.52 -
Pidilite Grupo Puma Manufacturing Ltd 11.71 -
Pidilite C-Techos Walling Ltd 0.40 -
Change in Group Interest:
Nina Percept Pvt Ltd (4.49) -
Pidilite Lanka (Pvt) Ltd (0.69) -
Dividend paid to Non-Controlling interests
Bamco Supply and Services Ltd - (0.39)
TOTAL 240.04 215.65
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Non-wholly owned subsidiaries of the Group that have material non-controlling interests :
Name of subsidiaries Place of Proportion of
incorporation ownership interests and
and principal voting rights held by
place of non-controlling interests
business
As at As at
31 [st] March 31 [st] March
2021 2020
Nina Percept Pvt Ltd India 25% 28%
ICA Pidilite Pvt Ltd India 50% 50%
Cipy Polyurethanes Pvt Ltd [refer Note 45 (b)] India 30% 30%
Building Envelope Systems India Pvt Ltd India 40% 40%
Bamco Supply and Services Ltd Thailand 49% 49%
Pidilite Lanka (Pvt) Ltd Srilanka 24% 24%
Pidilite East Africa Ltd Kenya 45% 45%
Pidilite Grupo Puma Manufacturing Ltd India 50% -
Pidilite Litokol Pvt Ltd India 40% 40%
Tenax Pidilite India Pvt Ltd (Formerly known as Tenax India Stone India 70% -
Products Pvt Ltd) (Refer Note 52B)
( in crores)
Name of subsidiaries Profit/ (Loss) allocated to Other Comprehensive Accumulated
non-controlling interests Income non-controlling interest
For the For the For the For the As at As at
year ended year ended year ended year ended 31 [st] March 31 [st] March
31 [st] March 31 [st] March 31st March 31 [st] March 2021 2020
2021 2020 2021 2020
Nina Percept Pvt Ltd (7.08) 0.86 0.10 0.03 30.56 42.03
ICA Pidilite Pvt Ltd 1.86 0.77 (0.03) 0.07 123.92 122.09
Cipy Polyurethanes Pvt Ltd 0.09 3.35 (0.05) (0.11) 28.03 27.99
[refer Note 45 (b)]
Building Envelope Systems India 0.03 0.84 - 0.01 9.54 9.51
Pvt Ltd
Bamco Supply and Services Ltd 0.07 0.37 0.06 (0.17) 3.72 3.59
Pidilite Lanka (Pvt) Ltd 0.37 (0.29) 0.22 0.05 7.50 7.60
Pidilite East Africa Ltd (0.75) - 0.06 - 1.06 -
Pidilite Grupo Puma Mfg Ltd (0.64) - - - 11.07 -
Pidilite Litokol Pvt Ltd (0.02) - - - 9.50 -
Tenax Pidilite India Pvt Ltd 1.03 - - - 11.94 -
(Formerly known as Tenax India
Stone Products Pvt Ltd)
(Refer Note 52B)
Individually immaterial subsidiaries (0.04) (0.27) - 0.24 3.20 2.84
with non-controlling interests
TOTAL (5.08) 5.63 0.36 0.12 240.04 215.65
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209

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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43 Contingent Liabilities and Commitments
As at As at
31 [st] March 31 [st] March
2021 2020
A) Contingent liabilities not provided for:
1. Claims against the Group not acknowledged as debts comprises of:
a) Income Tax demand against the Group not provided for and relating to issues of deduction and 60.05 59.96
allowances in respect of which the Group is in appeal
b) Excise Duty and Service Tax claims disputed by the Group relating to issues of classifications 49.69 51.12
c) Sales Tax (VAT, LBT, Entry Tax and GST) claims disputed by the Group relating to issues of 158.23 167.08
declaration forms and classifications
d) Other Matters (relating to disputed Electricity Duty, Gram Panchayat Tax, open access charges, etc.) 19.73 6.64
2. Guarantees given by Banks in favour of Government and others * 53.16 57.60
Guarantees given are for business purpose.
B) Commitments:
a) Estimated amount of contracts, net of advances, remaining to be executed on Property, Plant and 180.42 206.10
Equipment, investments and not provided for
b) For other commitments, refer Note 50 (E) (ii) Financial instruments, Note 45 and Note 54 Leases.
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44	Research & Development Expenditure	Research & Development Expenditure	Research & Development Expenditure	Research & Development Expenditure
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
	Capital expenditure included in Property, Plant and Equipment		3.69	2.52
	Revenue expenditure charged to Consolidated Statement of Proft and Loss		68.62	70.20
	TOTAL		72.31	72.72

• 45 (a) During the financial year 2015-16, pursuant to a Business Transfer Agreement (BTA) entered into by Nina Percept Pvt Ltd with Nina Concrete Systems Private Limited (NCSPL), the Group acquired the waterproofing Business (the “Business”), including all its assumed assets and assumed liabilities, of NCSPL, a private limited company based in India (the “Seller”), as a going concern and on a slump sale basis for a lump-sum consideration, with effect from 17[th] April 2015.

The terms and conditions of the BTA included a total purchase consideration of 82.02 crores, out of which 78.81 crores was settled by the Company to the Seller as of 31[st] March 2021. A balance amount of 3.22 crores including Holdback Amount is payable by the Company to the Seller after settlement of the unrealised Net Working Capital.

An amount of the identified Net Working Capital, i.e. Receivables, Inventories, Retention Monies receivables, etc which was not fully realised by 15[th] April 2020, was to be deducted by the Company from the Holdback amount and the balance was to be paid to the seller or recovered from the seller. The settlement of which was to be completed by 31[st] October 2020, post verification of books of account.

Due to pandemic, the verification of books by Independent Audit firm got delayed. The report is now submitted by the Independent auditors and is under discussion. The same will be finalised in the Financial Year 2021-22.

• (b) During the financial year 2017-18, 70% shareholding in Cipy Polyurathanes Pvt Ltd (CIPY) was acquired by entering into a share purchase agreement for cash consideration of 96.40 crores.

Pursuant to share purchase agreement, the Company has an option to purchase and the seller has an option to sell balance 30% of equity share capital of CIPY on or after expiry of 3 years from acquisition date. Accordingly, a gross liability towards acquisition (refer Note 28) in previous year has been recognised in this financial statement. (refer Note 57 a)

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( in crores)
46 Earnings Per Share (EPS)
The following reflects the Profit and Share data used in the Basic and Diluted EPS computations:
For the year For the year
ended ended
31 [st] March 31 [st] March
2021 2020
Basic:
Profit attributable to shareholders of the Company ( in crores) 1,131.21 1,116.42
Weighted average number of equity shares in calculating basic EPS 50,81,35,294 50,79,93,224
Par value per share ( ) 1.00 1.00
Earning per share (Basic) ( ) 22.26 21.98
Diluted:
Profit attributable to shareholders of the Company ( in crores) 1,131.21 1,116.42
Weighted average number of equity shares in calculating basic EPS 50,81,35,294 50,79,93,224
Add: Effect of Employee Stock Option Scheme/ Plan 4,19,540 1,70,850
Weighted average number of equity shares in calculating diluted EPS 50,85,54,834 50,81,64,074
Par value per share ( ) 1.00 1.00
Earning per share (Diluted) ( ) 22.24 21.97
47 Related Party Disclosures
Related Party Disclosures as required by Ind-AS 24, ‘Related Party Disclosures’ are given below:
(i) Relationships:
a. Vinyl Chemicals (India) Ltd Associate
Aapkapainter Solutions Private Limited
b. Associate
(from 3 [rd] November 2020)
c. Plus Call Technical Services LLC Joint Venture
d. Parekh Marketing Ltd Significant Influence of KMP
e. Pargro Investment Pvt Ltd Significant Influence of KMP
f. Kalva Marketing and Services Ltd Significant Influence of KMP
(ii) Key Management Personnel (KMP):
a. Shri M B Parekh Executive Chairman
b. Shri Bharat Puri Managing Director
c. Shri A B Parekh Whole Time Director
d. Shri A N Parekh Whole Time Director
e. Shri Sabyasachi Patnaik (upto 29 [th] February 2020) Whole Time Director
f. Shri Debabrata Gupta (from 1 [st] March 2020) Whole Time Director
(iii) Close member of Key Management Personnel:
a. Smt Mala M Parekh Wife of Executive Chairman Pidilite Annual Report 2020-21
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211

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

48 Segment information

47 (iv) Transactions with Related Parties for the year ended 31[st] March 2021 are as follows:

The Group operates in two business segments namely Consumer & Bazaar (C&B) and Business to Business (B2B). C&B segment covers sale of products mainly to end consumers which are retail users such as carpenters, painters, plumbers, mechanics, households, students, offices, etc. Sale consists of mainly adhesives, sealants, art and craft materials and construction and paint chemicals. B2B covers sale of products to end customers which are mainly large business users. This includes Industrial Products (IP) such as adhesives, synthetic resins, organic pigments, pigment preparations, construction chemicals (projects), surfactants, etc. and caters to various industries like packaging, textiles, paints, joineries, printing inks, paper, leather, etc. Others includes sale of speciality acetates, raw materials etc. Operating Segment disclosures are consistent with the information provided to and reviewed by the Managing Director (Chief Operating Decision Maker)..

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Nature of Transaction For the year ended 31 [st] March 2021 For the year ended 31 [st] March 2020 covers sale of products mainly to end consumers which are retail users such as carpenters, painters, plumbers, mechanics, households,
students, offices, etc. Sale consists of mainly adhesives, sealants, art and craft materials and construction and paint chemicals. B2B
Associate KMP/ Significant Total Associate KMP/ Significant Total covers sale of products to end customers which are mainly large business users. This includes Industrial Products (IP) such as
and Joint Influence of KMP/ and Joint Influence of KMP/ adhesives, synthetic resins, organic pigments, pigment preparations, construction chemicals (projects), surfactants, etc. and caters to
Venture Close member of Venture Close member of various industries like packaging, textiles, paints, joineries, printing inks, paper, leather, etc. Others includes sale of speciality acetates,
KMP KMP raw materials etc. Operating Segment disclosures are consistent with the information provided to and reviewed by the Managing
a. Sales and Related Income Director (Chief Operating Decision Maker).. ( in crores)
Parekh Marketing Ltd - 50.82 50.82 - 73.97 73.97 Business Segments Year 2020-21 Year 2019-20
Sub-Total (a) - 50.82 50.82 - 73.97 73.97 Consumer Business to Others Total Consumer Business to Others Total
b. Dividend Received & Bazaar Business & Bazaar Business
Revenue
Vinyl Chemicals (India) Ltd 1.65 - 1.65 1.79 - 1.79
Segment Revenue 5,808.88 1,575.40 38.53 7,422.81 5,573.85 1,796.81 76.45 7,447.11
Sub-Total (b) 1.65 - 1.65 1.79 - 1.79 Less : Inter Segment Revenue (16.73) (113.37) - (130.10) (24.19) (127.53) (0.92) (152.64)
c. Purchase of Goods (at cost plus fixed margin)
Net Revenue 5,792.15 1,462.03 38.53 7,292.71 5,549.66 1,669.28 75.53 7,294.47
Vinyl Chemicals (India) Ltd 350.19 - 350.19 320.83 - 320.83
Revenue based on geography
Sub-Total (c) 350.19 - 350.19 320.83 - 320.83 India 6,086.10 6,132.03
d. Sale of Fixed Asset Outside India 1,206.61 1,162.44
Parekh Marketing Ltd - - - - 0.32 0.32 Segment Result 1,773.63 118.13 (1.84) 1,889.92 1,549.64 268.54 (4.55) 1,813.63
Sub-Total (d) - - - - 0.32 0.32 Unallocable Expenses (389.67) (396.10)
Unallocable Income 41.14 113.95
e. Rent Paid/ (Received)
Operating Income 1,541.39 1,531.48
Smt Mala Parekh - 0.58 0.58 - 0.71 0.71
Finance Cost (37.23) (33.60)
Parekh Marketing Ltd - 0.07 0.07 - 0.08 0.08 Interest/ Dividend Income 17.97 24.05
Pargro Investment Pvt Ltd - (0.06) (0.06) - (0.08) (0.08) Share of Profit of Associates/Joint Ventures 3.98 3.03
Sub-Total (e) - 0.59 0.59 - 0.71 0.71 Profit before Exceptional Items and Tax 1,526.11 1,524.96
Exceptional items (3.62) (55.19)
f. Reimbursement of expenses made
Profit Before Tax 1,522.49 1,469.77
Parekh Marketing Ltd - 0.03 0.03 - 0.03 0.03 Tax Expense (396.36) (347.72)
Sub-Total (f) - 0.03 0.03 - 0.03 0.03 Profit for the year 1,126.13 1,122.05
g. Compensation of Key Management Personnel of the Company: Other Comprehensive Income (10.86) 3.54
Remuneration/ Commission to Directors: Total Comprehensive Income 1,115.27 1,125.59
Share of Non-Controlling Interest - (Loss)/Profit (4.72) 5.75
i Short Term Employee benefits Total Comprehensive Income attributable to 1,119.99 1,119.84
- Shri M B Parekh - 3.13 3.13 - 4.15 4.15 shareholders
- Shri Bharat Puri - 14.24 14.24 - 13.96 13.96 The above includes:
- Shri A B Parekh - 1.33 1.33 - 1.80 1.80 Depreciation, Amortisation and Impairment 108.73 39.78 0.97 149.48 84.02 33.26 3.86 121.14
(allocable)
- Shri A N Parekh - 5.63 5.63 - 5.84 5.84 Depreciation, Amortisation and Impairment 51.18 48.78
- Shri Sabyasachi Patnaik - - - - 2.01 2.01 (unallocable)
(Upto 29 [th] Feb 2020) Capital Expenditure (including Capital Work-In- 173.38 76.17 - 249.55 250.43 115.78 6.14 372.35
- Shri Debabrata Gupta - 2.27 2.27 - 0.29 0.29 Progress) (allocable)
(w.e.f. 1 [st] March 2020) Capital Expenditure (unallocable) 86.39 47.40
Capital Expenditure 335.94 419.75
Sub-Total - 26.60 26.60 - 28.05 28.05
India 325.63 388.08
ii Share-based payments Outside India 10.31 31.67
Shri Bharat Puri - - - - 16.65 16.65 There is no transactions with single external customer which amounts to 10% or more of the Group’s revenue
Shri Sabyasachi Patnaik - - - - 0.40 0.40 Segment Assets & Liabilities As at 31 [st] March 2021 As at 31 [st] March 2020
(Upto 29 [th] Feb 2020) Consumer Business to Others Total Consumer Business to Others Total
Sub-Total - - - - 17.05 17.05 & Bazaar Business & Bazaar Business
h. Dividend Paid - - - - 158.25 158.25 Segment Assets 6,353.49 1,565.54 20.53 7,939.56 3,069.02 1,382.59 76.36 4,527.97
Unallocable Assets 890.86 2,007.73
i. Outstanding Balances:
Total Assets 8,830.42 6,535.70
i Trade Receivables (net) Assets based on geography:
Parekh Marketing Ltd - 19.53 19.53 - 12.39 12.39 India 8,175.79 5,871.94
Pargro Investment Pvt Ltd - 0.01 0.01 - - - Outside India 654.63 663.76
Sub-Total - 19.54 19.54 - 12.39 12.39 Segment Liabilities 1,653.18 837.44 1.74 2,492.36 962.11 696.40 4.77 1,663.28
Unallocable Liabilities 505.06 201.16
ii Trade Payables (net)
Total Liabilities 2,997.42 1,864.44
Vinyl Chemicals (India) Ltd 93.75 - 93.75 23.07 - 23.07 Other Information
Parekh Marketing Ltd - - - - 0.01 0.01 Capital Employed 5,833.00 4671.26
Sub-Total 93.75 - 93.75 23.07 0.01 23.08 Consequent to acquisition of Pidilite Adhesives Pvt Ltd, which has been included as a part of consumer and bazaar segment, hence figures for the
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Consequent to acquisition of Pidilite Adhesives Pvt Ltd, which has been included as a part of consumer and bazaar segment, hence figures for the corresponding periods are not comparable.

213

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

Employee Stock Option Scheme

49

a) Details of Employee Share Options

In the Annual General Meeting of the Company held on 24[th] July 2012, the shareholders approved the issue of 50,76,486 equity shares under the Scheme titled “Employee Stock Option Scheme 2012” (ESOS 2012). The Board approved Employees Stock Option Scheme covering 3,00,000 Stock options, in terms of the regulations of the Securities and Exchange Board of India.

The ESOS 2012 allows the issue of options to Eligible employees of the Company. Each option comprises one underlying equity share. The exercise price of each option shall be 1/- per equity share. The options vest in the manner as specified in ESOS 2012. Options may be exercised within 5 years from the date of vesting.

ESOP 2016 covering grant of 45,00,000 options (including 2,50,000 Options to be granted to Eligible Employees/ Directors of the subsidiary Companies) was approved by the shareholders through Postal Ballot on 2[nd] April 2016. Each option comprises one underlying equity share. The exercise price shall be 1/- per option or such other higher price as may be fixed by the Board or Committee. Options to be granted under the Plan shall vest not earlier than one year but not later than a maximum of six years from the date of grant of such options. In the case of Eligible Employee who has not completed 3 years of employment as on date of the grant of Options then the Options which are due for vesting before completion of 3 years as above, shall vest as on the completion of 3 years of employment in the Company by the Employee concerned or as may be approved by the Nomination and Remuneration Committee. Vested Options will have to be exercised within 3 years from the date of respective vesting.

The following share based payment arrangements were in existence during the current & prior years:

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Option Series Number Grant date Vesting date Exercise Fair value at
price ( ) grant date ( )
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Option Series	Number	Grant date	Vesting date	Exercise price ( )	Fair value at grant date ( )
1 Granted on 8thNovember 2017-ESOP 2016	28,750	08.11.2017	08.11.2018	1.00	734.15
	28,750	08.11.2017	08.11.2019	1.00	734.15
2 Granted on 11thApril 2018-ESOP 2016	4,150	11.04.2018	11.04.2019	1.00	976.94
	4,150	11.04.2018	11.04.2020	1.00	976.94
3 Granted on 30thOctober 2018-ESOP 2016	1,33,200	30.10.2018	30.10.2019	1.00	931.19
	1,33,200	30.10.2018	30.10.2020	1.00	931.19
	1,500	30.10.2018	30.10.2019	1.00	924.50
	1,500	30.10.2018	30.10.2020	1.00	924.50
	2,000	30.10.2018	30.10.2021	1.00	924.50
4 Granted on 23rdJanuary 2019-ESOP 2016	3,000	23.01.2019	23.01.2022	1.00	1,112.48
	3,000	23.01.2019	23.01.2023	1.00	1,112.48
	4,000	23.01.2019	23.01.2024	1.00	1,112.48
	1,500	23.01.2019	29.01.2021	1.00	1,127.85
	1,500	23.01.2019	29.01.2022	1.00	1,127.85
	1,500	23.01.2019	01.02.2021	1.00	1,127.85
	1,500	23.01.2019	01.02.2022	1.00	1,127.85
5 Granted on 13thMay 2019-ESOP 2016	2,500	13.05.2019	13.05.2020	1.00	1,124.69
6 Granted on 29thJanuary 2020-ESOP 2016	4,000	29.01.2020	31.01.2021	1.00	1,449.90
	500	29.01.2020	31.01.2021	1.00	1,444.56
	500	29.01.2020	31.01.2021	1.00	1,444.56
	2,500	29.01.2020	18.11.2022	1.00	1,433.92
	2,500	29.01.2020	18.11.2023	1.00	1,433.92
7 Granted on 5thAugust 2020-ESOP 2016	5,000	05.08.2020	05.08.2022	1.00	1,318.08
	5,000	05.08.2020	05.08.2023	1.00	1,318.08
	1,400	05.08.2020	05.08.2021	1.00	1,319.96
	1,050	05.08.2020	05.08.2022	1.00	1,319.96
	1,050	05.08.2020	05.08.2023	1.00	1,319.96
8 Granted on 4thNovember 2020-ESOP 2016	15,245	04.11.2020	04.11.2021	1.00	1,536.91
	15,245	04.11.2020	04.11.2022	1.00	1,536.91
	1,17,500	04.11.2020	04.11.2021	1.00	1,536.91
	1,17,500	04.11.2020	04.11.2022	1.00	1,536.91

b) Fair value of share options granted

The fair value of the stock options has been estimated using Black-Scholes model which takes into account as of grant date the exercise price and expected life of the option, the current market price of underlying stock and its expected volatility, expected dividends on stock and the risk free interest rate for the expected term of the option.

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Inputs into the model Granted Granted on Granted on Granted on 23 [rd] January
on 8 [th] 11 [th] April 30 [th] October 2019-ESOP 2016
November 2018-ESOP 2018-ESOP
2017-ESOP 2016 2016
2016
Share price 758.55 1,000.15 961.55 1,152.80 1,152.80 1,152.80
(on the date previous to grant date)
Exercise price 1.00 1.00 1.00 1.00 1.00 1.00
Date of vesting (1) 08.11.2018 11.04.2019 30.10.2019 23.01.2022 29.01.2021 01.02.2021
Dividend yield (%) 0.85 0.62 2.54 0.84 0.84 0.84
Option life (no. of years) 2.50 2.50 2.50 6.00 5.02 5.02
Risk free interest rate (%) 6.69 7.09 8.01 7.56 7.49 7.49
Expected volatility (%) 22.12 21.65 23.20 24.34 23.87 23.86
Date of vesting (2) 08.11.2019 11.04.2020 30.10.2020 23.01.2023 29.01.2022 01.02.2022
Dividend yield (%) 0.91 0.66 3.62 0.84 0.84 0.84
Option life (no. of years) 3.50 3.50 3.50 7.00 6.02 6.03
Risk free interest rate (%) 6.64 7.28 8.02 7.58 7.56 7.56
Expected volatility (%) 24.01 23.59 23.24 24.37 24.32 24.30
Date of vesting (3) - - 30.10.2021 23.01.2024 - -
Dividend yield (%) - - 4.82 0.84 - -
Option life (no. of years) - - 4.50 8.00 - -
Risk free interest rate (%) - - 8.15 7.65 - -
Expected volatility (%) - - 24.34 24.40 - -
Inputs into the model Granted on Granted on 29 [th] January Granted on 05 [th] August Granted on
13 [th] May 2020-ESOP 2016 2020-ESOP 2016 04 [th] November
2019-ESOP 2020-ESOP
2016 2016
Share price (on the date 1,154.45 1,461.60 1,461.60 1,461.60 1,342.80 1,342.80 1,565.60
previous to grant date)
Exercise price 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Date of vesting (1) 13.05.2020 31.01.2021 18.11.2022 31.01.2021 05.08.2022 05.08.2021 04.11.2021
Dividend yield (%) 0.84 0.74 0.74 0.74 0.72 0.72 0.72
Option life (no. of years) 2.50 4.01 5.80 4.01 5.00 4.00 4.01
Risk free interest rate (%) 7.03 6.15 6.39 6.15 5.13 4.89 4.89
Expected volatility (%) 23.06 23.69 24.49 23.69 25.39 22.94 23.17
Date of vesting (2) - - 18.11.2023 31.01.2022 05.08.2023 05.08.2022 04.11.2022
Dividend yield (%) - - 0.74 0.74 0.72 0.72 0.72
Option life (no. of years) - - 6.80 5.01 6.00 5.00 5.01
Risk free interest rate (%) - - 6.43 6.39 5.62 5.13 5.13
Expected volatility (%) - - 24.56 23.76 25.95 25.39 25.73
Date of vesting (3) - - - - - 05.08.2023 -
Dividend yield (%) - - - - - 0.72 -
Option life (no. of years) - - - - - 6.00 -
Risk free interest rate (%) - - - - - 5.62 -
Expected volatility (%) - - - - - 25.95 -
Pidilite Annual Report 2020-21
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215

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

c) Movements in Share Options during the year

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During the year ended During the year ended
31 [st] March 2021 31 [st] March 2020
Options Weighted Options Weighted
(No.s) average (No.s) average
exercise price exercise price
per option per option
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	During the year ended 31stMarch 2021	During the year ended 31stMarch 2021	During the year ended 31stMarch 2020	During the year ended 31stMarch 2020
	Options (No.s)	Weighted average exercise price per option	Options (No.s)	Weighted average exercise price per option
Option outstanding at the beginning of the year
- ESOP 2016	1,70,850	1	3,15,750	1
Granted during the year
- ESOP 2016*	2,78,990	1	12,500	1
Vested during the year - ESOP 2016**	1,39,300	1	1,55,850	1
Exercised during the year - ESOP 2016***	29,600	1	1,45,500	1
Lapsed during the year****
- ESOP 2016 (granted on 8thNovember 2017)	-	1	2,400	1
- ESOP 2016 (granted on 30thOctober 2018)	700	1	9,500	1
Options outstanding at the end of the year
- ESOP 2016	4,19,540	1	1,70,850	1
Options available for grant
- ESOS 2012	34,200	1	34,200	1
- ESOP 2016	38,35,210	1	41,13,500	1
The weighted average share price at the date of exercise for stock options exercised during the year		1.820.83		1,331.62
Range of exercise price for options outstanding at the end of the year		1		1
* Includes NIL options (Previous year 1,000) granted to Eligible Employees of the Subsidiary Companies Includes 400 options (Previous year 1,100) vested by Eligible Employees of the Subsidiary Companies Includes 1,100 options (Previous year 400) exercised by Eligible Employees of the Subsidiary Companies *** Lapsed due to termination of employment with the Company

• Includes NIL options (Previous year 1,000) granted to Eligible Employees of the Subsidiary Companies

** Includes 400 options (Previous year 1,100) vested by Eligible Employees of the Subsidiary Companies

• *** Includes 1,100 options (Previous year 400) exercised by Eligible Employees of the Subsidiary Companies

• **** Lapsed due to termination of employment with the Company

50 Financial Instruments

(A) Capital Management

The Group manages its capital to ensure that the Group will be able to continue as going concern while maximising the return to stakeholders through the optimum utilisation of the equity balance. The capital structure of the Group consists of equity and borrowings of the Group.

(B) Categories of Financial Instruments

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( in crores)
As at As at
31 [st] March 31 [st] March
2021 2020
Financial Assets
Measured at fair value through profit or loss (FVTPL)
Investments in Mutual funds, Preference Shares, Debentures and Bonds 479.27 1,152.88
Derivative assets towards foreign exchange forward contracts 0.18 1.81
Investments in Promissory Notes 3.68 3.77
Measured at amortised cost
Investments in Deposits & Promissory Notes 0.55 4.24
Trade Receivables 1,321.02 1,088.50
Cash and Cash Equivalents 442.65 692.23
Other Bank balances 8.81 11.02
Loans 21.74 21.47
Other Financial Assets 136.14 144.22
Total Financial Assets 2,414.04 3,120.14
Financial Liabilities
Measured at fair value through profit or loss (FVTPL)
Derivative liabilities towards foreign exchange forward contracts 0.66 0.42
Measured at amortised cost
Borrowings 222.61 176.22
Trade Payables 1,006.74 621.01
Lease Liabilities 108.39 111.47
Gross obligation towards acquisition - 81.23
Other Financial liabilities 1,038.30 587.25
Total Financial Liabilities 2,376.70 1,577.60
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(C) Financial risk management objectives

The Group’s Treasury functions provide services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk, credit risk and liquidity risk. The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising foreign exchange forward contracts. Compliance with policies and exposure limits is a part of Internal Financial Controls. The Group does not enter into or trade in financial instruments, including derivative financial instruments, for speculative purposes.

(D) Market risk

The Group’s activities expose it primarily to the financial risk of changes in foreign currency exchange rates (see Note E below). The Group enters into foreign exchange forward contracts to manage its exposure to foreign currency risk of net imports.

217

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

(E) Foreign currency risk management

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

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Foreign Currency Exposure Foreign Currency Exposure
(in FC) ( in crores)
31 [st] March 31 [st] March 31 [st] March 31 [st] March
2021 2020 2021 2020
Amounts recoverable / (advance) in foreign currency on account of the following:
EUR 24,72,137.16 7,99,474.10 21.28 6.65
USD 1,38,65843.08 1,81,84,244.20 139.57 137.14
AUD - 38,745.00 - 0.18
GBP (9,350.00) - (0.09) -
SGD 21,052.00 - 0.11 -
Amounts (payable)/ advance in foreign currency on account of the following:
AED 2,09,539.00 2,36,491.04 0.42 0.49
AUD 1,820.00 1,820.00 0.01 0.01
BDT - 50,000.00 - 0.00
CHF (51,054.78) (5,212.31) (0.40) (0.04)
EUR 8,28,706.20 17,44,843.41 7.13 14.51
GBP (9,69,635.82) (1,65,553.39) (9.79) (1.54)
JPY (1,00,47,800.00) (75,78,800.00) (0.67) (0.53)
SGD (1,54,359.69) 1,628.00 (0.84) 0.01
USD (2,21,04,483.46) (1,04,46,059.69) (162.51) (78.80)
THB 4,82,285.26 5,36,113.88 0.11 0.12
ZAR 64,255.58 64,255.58 0.03 0.03
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• BDT exposure is NIL as at 31[st] March 2021 ( 44,400 as at 31[st] March 2020).

(i) Foreign currency sensitivity analysis

The Group is mainly exposed to the USD, EUR and JPY. The following table demonstrates the sensitivity to a 2% increase or decrease in the USD, EUR and JPY against INR with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Group as at the reporting date. 2% represents management assessment of reasonably possible changes in foreign exchange rates.

in foreign exchange rates.	in foreign exchange rates.	in foreign exchange rates.
			( in crores)
			USD impact
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Impact on proft or loss for the year (a)			(1.21)	1.17
			( in crores)
			EUR impact
			For the year ended 31stMarch 2021	For the year ended 31stMarch 2020
Impact on proft or loss for the year (b)			0.57	0.42

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( in crores)
JPY impact
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Impact on profit or loss for the year (c) (0.01) (0.01)
(a) This is mainly attributable to the exposure of outstanding USD receivables and payables at the end of the reporting period.
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• (b) This is mainly attributable to the exposure of outstanding EUR receivables and payables at the end of the reporting period.

• (c) This is mainly attributable to the exposure of outstanding JPY payables at the end of the reporting period.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

(ii) Foreign exchange forward contracts

It is the policy of the Group to enter into foreign exchange forward contracts to cover foreign currency payments (net of receipts) in USD, EUR, GBP and AUD. The Group enters in to contracts with terms upto 90 days. The Group’s philosophy does not permit any speculative calls on the currency. It is driven by conservatism which guides that we follow conventional wisdom by use of Forward contracts in respect of Trade transactions.

Regulatory Requirements: The Group will alter its hedge strategy in relation to the prevailing regulatory framework and guidelines that may be issued by RBI, FEDAI or ISDA or other regulatory bodies from time to time.

Mode of taking Cover: Based on the outstanding details of import payable and exports receivable (in weekly baskets) the net trade import exposure is arrived at (i.e. Imports – Exports = Net trade exposures). The Net trade import exposure arrived at is netted off with the outstanding forward cover as on date and with the surplus foreign currency balance available in EEFC A/Cs. Forward cover is obtained from bank for each of the aggregated exposures and the Trade deal is booked. The forward cover deals are all backed by actual trade underlines and settlement of these contracts on maturity are by actual delivery of the hedged currency for settling the underline hedged trade transaction.

The following table details the foreign exchange forward contracts outstanding at the end of the reporting period:

Outstanding contracts			Average exchange rates ( )	Average exchange rates ( )	Foreign Currency (Amount)	Foreign Currency (Amount)
			31stMarch 2021	31stMarch 2020	31stMarch 2021	31stMarch 2020
USD - Buy			74.45	72.27	1,49,40,376.00	62,48,647.15
EUR - Buy			-	80.43	-	77,48,100.00
			Nominal Amounts		( in crores) Fair value assets/ (liabilities)
Outstanding contracts
			31stMarch 2021	31stMarch 2020	31stMarch 2021	31stMarch 2020
USD - Buy			110.34	45.58	(0.48)	1.77
EUR - Buy			-	64.82	-	(0.44)
TOTAL					(0.48)	1.33

The line-items in the balance sheet that include the above hedging instruments are “Other financial assets” of 0.18 crores ( 1.81 crores as at 31[st] March 2020) and “Other financial liabilities” 0.66 crores ( 0.42 crores as at 31[st] March 2020) (refer Note 14 and 28 respectively).

The aggregate amount of gain under foreign exchange forward contracts recognised in the Consolidated Statement of Profit and Loss is 2.30 crores (loss of 1.33 crores as at 31[st] March 2020).

(F) Credit risk management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables.

The Group has adopted a policy of only dealing with counterparties that have sufficiently high credit rating. The Group’s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.

Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.

219

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

(i) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis.

(G) Liquidity risk management

Liquidity risk is the risk that the Group will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

The Group has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Group also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

Th G h tblihd liidit ik t fk f i it ht t di t d l t	Th G h tblihd liidit ik t fk f i it ht t di t d l t	Th G h tblihd liidit ik t fk f i it ht t di t d l t	Th G h tblihd liidit ik t fk f i it ht t di t d l t	Th G h tblihd liidit ik t fk f i it ht t di t d l t	Th G h tblihd liidit ik t fk f i it ht t di t d l t
e roup as an esase quy rs managemen ramewor or managng s sor erm, meum erm an ong erm funding and liquidity management requirements. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of fnancial assets and liabilities. The Group manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Group also has adequate credit facilities agreed with banks to ensure that there is sufcient cash to meet all its normal operating commitments in a timely and cost-efective manner. (i) Liquidity risk tables The following tables detail the Group’s remaining contractual maturity for its derivative and non-derivative fnancial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash fows of fnancial liabilities based on the earliest date on which the group will be liable to pay. The tables include both interest and principal cash fows. To the extent that interest fows are foating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. ( in crores) Less than 1 year 1-5 years More than 5 years Total Carrying Amount As at 31stMarch 2021 Non-interest bearing - Trade Payables 1,006.74 - - 1,006.74 1,006.74 - Other Financial Liabilities 890.62 13.63 - 904.25 904.25 1,897.36 13.63 - 1,910.99 1,910.99 - Lease Liabilities (undiscounted) 34.95 65.20 48.47 148.62 108.39 Fixed interest rate instruments - Trade/ Security Deposit received 134.05 - - 134.05 134.05 Variable interest rate instruments - Borrowings 201.51 12.39 - 213.90 213.90 - Current Maturity of Term Loan 8.71 - - 8.71 8.71 Derivative liabilities towards foreign exchange forward contracts 0.66 - - 0.66 0.66 As at 31stMarch 2020 Non-interest bearing - Trade Payables 621.01 - - 621.01 621.01 - Other Financial Liabilities 456.06 7.26 - 463.32 463.32 1,077.07 7.26 - 1,084.33 1,084.33 - Lease Liabilities (undiscounted) 35.13 66.89 48.93 150.95 111.47 Fixed interest rate instruments - Trade/ Security Deposit received 123.93 - - 123.93 123.93 Variable interest rate instruments - Borrowings 143.99 25.13 - 169.12 169.12 - Current Maturity of Term Loan 7.10 - - 7.10 7.10 Derivative liabilities towards foreign exchange forward contracts 0.42 - - 0.42 0.42 Gross obligation towards acquisition - 81.23 - 81.23 81.23						Financial Assets/ Financial Liabilities			Fair value	Fair value hierarchy	Valuation Technique(s) and key input(s)
								As at 31stMarch 2021	As at 31stMarch 2020
						1 Investment in Mutual/Alternate Investment Funds, Preference Shares, Debentures and Bonds		Various listed funds - aggregate fair value of 343.13 crores	Various listed funds - aggregate fair value of 1,034.49 crores	Level 1	Quoted bid prices in active market
	Less than 1 year	1-5 years	More than 5 years	Total		2 Derivative assets & liabilities towards foreign currency forward contracts		Assets - 0.18 crores and liabilities - 0.66 crores	Assets - 1.81 crores and liabilities - 0.42 crores	Level 2	Mark to market values acquired from banks, with whom the Group contracts.
As at 31stMarch 2021
Non-interest bearing
- Trade Payables	1,006.74	-	-	1,006.74	1,006.74	3 Gross obligation towards acquisition		Liabilities - NIL	Liabilities - 81.23 crores	Level 2	Fair values of op- tions using black scholes valuation model based on Independent valuer's report
- Other Financial Liabilities	890.62	13.63	-	904.25	904.25
	1,897.36	13.63	-	1,910.99	1,910.99
- Lease Liabilities (undiscounted)	34.95	65.20	48.47	148.62	108.39
Fixed interest rate instruments
						4 Investment in Preference Shares		Aggregate fair value of 139.13 crores	Aggregate fair value of 122.48 crores	Level 3	Fair value is derived consid- ering recent financial rounds of investment
- Trade/ Security Deposit received	134.05	-	-	134.05	134.05
Variable interest rate instruments
- Borrowings	201.51	12.39	-	213.90	213.90
- Current Maturity of Term Loan	8.71	-	-	8.71	8.71
						5 Investment in Promissory Notes		Aggregate fair value of 3.68 crores	Aggregate fair value of 3.77 crores	Level 3	Fair value is derived consid- ering recent financial rounds of investment
Derivative liabilities towards foreign exchange forward contracts	0.66	-	-	0.66	0.66
As at 31stMarch 2020
Non-interest bearing
- Trade Payables	621.01	-	-	621.01	621.01
						(ii) Financial instruments measured at amortised cost The carrying amount of fnancial assets and fnancial liabilities measured at amortised cost in the fnancial statements are a reasonable approximation of their fair values since the Group does not anticipate that the carrying amounts would be signifcantly diferent from the values that would eventually be received or setled.
- Other Financial Liabilities	456.06	7.26	-	463.32	463.32
	1,077.07	7.26	-	1,084.33	1,084.33
- Lease Liabilities (undiscounted)	35.13	66.89	48.93	150.95	111.47
Fixed interest rate instruments
- Trade/ Security Deposit received	123.93	-	-	123.93	123.93
Variable interest rate instruments
- Borrowings	143.99	25.13	-	169.12	169.12
- Current Maturity of Term Loan	7.10	-	-	7.10	7.10
Derivative liabilities towards foreign exchange forward contracts	0.42	-	-	0.42	0.42
Gross obligation towards acquisition	-	81.23	-	81.23	81.23

(H) Fair value measurements

This note provides information about how the Group determines fair values of various financial assets and financial liabilities.

221

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

51

Employee Benefits

The Group has classified various employee benefits as under:

• (A) Defined Contribution Plans

• (a) Provident Fund

• (b) Superannuation Fund

• (c) State Defined Contribution Plans

  • Employers' Contribution to Employees' State Insurance

  • Employers' Contribution to Employees' Pension Scheme 1995

  • Labour Welfare Fund

Note on other risks:

• 1 Investment Risk - The funds are invested by LIC and they provide returns basis the prevalent bond yields, LIC on an annual basis requests for contributions to the fund, while the contribution requested may not be on the same interest rate as the bond yields provided, basis the past experience it is low risk.

• 2 Interest Risk – LIC does not provide market value of assets, rather maintains a running statement with interest rates declared annually – The fall in interest rate is not therefore offset by increase in value of Bonds, hence may pose a risk.

• 3 Longevity Risk – Since the gratuity payment happens at the retirement age of 58-60, longevity impact is very low at this age, hence this is a non-risk.

• 4 Salary Risk - The liability is calculated taking into account the salary increases, basis past experience of the Company’s actual salary increases with the assumptions used, they are in line, hence this risk is low risk.

• (d) National Pension Scheme

The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund Commissioner, the Superannuation Fund is administered by the LIC of India and National Pension Fund is administered by Pension Fund Regulatory and Development Authority (PFRDA), as applicable, for all eligible employees. Under the schemes, the Group is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. These funds are recognised by the Income Tax Authorities.

The Group has recognised the following amounts in the Consolidated Statement of Profit and Loss:

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( in crores)
For the year ended For the year ended
31 [st] March 2021 31 [st] March 2020
(i) Contribution to Provident Fund 21.94 19.17
(ii) Contribution to Employees' Superannuation Fund 0.86 0.87
(iii) Contribution to Employees' State Insurance Scheme & Labour Welfare Fund 0.29 0.27
(iv) Contribution to Employees' Pension Scheme 1995 9.49 10.06
(v) Contribution to National Pension Scheme 3.61 2.80
vi) Other Funds (International) 9.41 9.41
TOTAL 45.60 42.58
(B) Defined Benefit Plans
Gratuity
(C) Other Long-Term Benefits
(a) Compensated Absences
(b) Anniversary Awards
(c) Premature Death Pension Scheme
(d) Total Disability Pension Scheme
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Valuations in respect of above have been carried out by independent actuary, as at the balance sheet date, based on the following assumptions:

				Valuations as at	Valuations as at
				31stMarch 2021	31stMarch 2020
	(i)	Discount Rate (per annum)		6.06% - 7.23%	6.25% - 9.46%
	(ii)	Rate of increase in Compensation levels (per annum)		1st2 yrs - 4 - 10%, thereafer 4 - 10%	1st2 yrs - 4 - 8.7%, thereafter 5 - 10%
	(iii)	Expected Rate of Return on Assets		6.06% - 7.23%	6.25% - 9.46%
	(iv)	Atrition Rate		upto 5 yrs - 1% - 20%, 5-10 yrs - 1% to 20%, Above 10 yrs - 1% to 20%	upto 5 yrs - 2% - 25%, 5-10 yrs -2% to 25%, Above 10 yrs - 2% to 25%
(v)		Retirement Age		60 years	60 years

(vi) The expected rate of return on plan assets is determined after considering several applicable factors such as the composition of the plan assets, investment strategy, market scenario, etc. In order to protect the capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.

(vii) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

• (viii) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

( in crores)

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31 [st] March 2021 31 [st] March 2020
Gratuity Gratuity Gratuity Gratuity
Funded Unfunded Funded Unfunded
(i) Changes in Present value of Obligation
1 Present value of defined benefit obligation at the beginning of the 92.47 4.57 78.40 3.36
year
2 Previous period adjustments 5.69 - - -
3 Additions during the year - - - 0.26
4 Acquisition under Business Combination (refer Note 52B) - 0.61 - -
5 Current Service Cost 9.20 0.59 7.65 0.54
6 Interest Cost 5.66 0.27 5.27 0.23
7 Actuarial (Gains)/Loss arising from changes in:
- demographic assumption (0.06) (0.03) 0.16 -
- financial assumption 1.23 0.14 0.01 0.18
- experience adjustment (0.78) (0.58) 14.07 0.21
8 Benefits Paid (6.58) (0.46) (13.34) (0.21)
9 Foreign Currency Translation (0.11) (0.05) 0.25 -
10 Present value of defined benefit obligation at the end of the year 106.72 5.06 92.47 4.57
(ii) Changes in Fair value of Plan Assets
1 Fair value of plan assets at the beginning of the year 90.33 - 73.27 -
2 Expected Return on Plan Assets 6.08 - 5.43 -
3 Actuarial Loss (1.07) - (0.01) -
4 Employer's Contributions 14.27 - 16.94 -
5 Benefits Paid (6.64) - (5.53) -
6 Foreign Currency Translation (0.08) - 0.23 -
7 Fair value of plan assets at the end of the year 102.89 - 90.33 -
(iii) Net Benefit (Asset)/ Liability
1 Defined benefit obligation 106.72 5.06 92.47 4.57
2 Fair value of plan assets 102.89 - 90.33 -
3 Net Benefit (Asset)/ Liability 3.83 5.06 2.14 4.57
Pidilite Annual Report 2020-21
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223

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

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31 [st] March 2021 31 [st] March 2020
Gratuity Gratuity Gratuity Gratuity
Funded Unfunded Funded Unfunded
(iv) Expenses recognised in the Consolidated Statement of Profit and Loss
1 Current Service Cost 9.20 0.59 7.65 0.54
2 Past Service Cost - (0.01) - -
3 Interest cost on benefit obligation (net) (0.37) 0.27 (0.17) 0.23
4 Total Expenses recognised in the Consolidated Statement of Profit 8.83 0.85 7.48 0.77
and Loss
(v) Remeasurement Effects recognised in Other Comprehensive Income for the year
1 Actuarial (Gains)/Loss arising from changes in:
- demographic assumption (0.06) (0.03) 0.16 (0.04)
- financial assumption 1.23 0.14 0.01 0.18
- experience adjustment (0.78) (0.58) 14.07 0.21
2 Return on plan asset 1.07 - 0.04 -
3 Recognised in Other Comprehensive Income 1.46 (0.47) 14.28 0.35
(vi) Actual return on plan assets 4.78 - 5.26 -
(vii) Sensitivity Analysis
Defined Benefit Obligation
Discount Rate
a Discount Rate - 100 basis points 114.04 5.09 98.66 4.86
b Discount Rate + 100 basis points 100.34 4.34 87.06 4.30
Salary Increase Rate
a Rate - 100 basis points 100.25 4.34 86.98 4.30
b Rate + 100 basis points 114.04 5.07 98.64 4.85
Note on Sensitivity Analysis
1 Sensitivity analysis for each significant actuarial assumptions of the Group which are discount rate and salary assumptions as
of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out
in the table above.
2 The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the
base liability calculation except for the parameters to be stressed.
3 There is no change in the method from the previous period and the points /percentage by which the assumptions are stressed
are same to that in the previous year.
(viii) Expected Future Cashflows
Year 1 18.07 0.62 14.61 0.73
Year 2 10.67 0.70 8.52 0.57
Year 3 9.46 0.56 9.07 0.61
Year 4 8.77 0.55 8.11 0.49
Year 5 8.84 0.48 7.24 0.45
Year 6 to 10 44.11 2.21 37.76 1.79
(ix) Average Expected Future Working Life (yrs) 12.82 6.11 14.76 6.06
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52A Subsidiaries

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Details of the Group’s subsidiaries at the end of the reporting period are as follows:
Name of Subsidiary Place of Proportion of ownership
incorporation and interest and voting rights
operation held by the Group
As at As at
31 [st] March 2021 31 [st] March 2020
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Name of Subsidiary	Place of incorporation and operation	Proportion of ownership interest and voting rights held bythe Group	Proportion of ownership interest and voting rights held bythe Group
		As at 31stMarch 2021	As at 31stMarch 2020
a. Fevicol Company Ltd (Fevicol)	India	100.00%	100.00%
b. Bhimad Commercial Company Pvt Ltd (Bhimad)	India	100.00%	100.00%
c. Madhumala Ventures Pvt Ltd (Formerly known as Madhumala Traders Pvt Ltd) (Madhumala)	India	100.00%	100.00%
d. Pagel Concrete Technologies Pvt Ltd (PCTPL)	India	80.00%	80.00%
e. Nitin Enterprises (Nitin) (refer Note 56 (e))	India	100.00%	100.00%
f. Building Envelope Systems India Ltd (BESI)	India	60.00%	60.00%
g. Nina Percept Private Limited	India	74.58%	71.53%
h. Hybrid Coatings (Hybrid)	India	60.00%	60.00%
i. Pidilite International Pte Ltd (PIPL)	Singapore	100.00%	100.00%
j. Pidilite Middle East Ltd (PMEL)	United Arab Emirates	100.00%	100.00%
k. Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda(Pulvitec)	Brazil	100.00%	100.00%
l. Pidilite USA Inc (PUSA)	USA	100.00%	100.00%
m. Pidilite MEA Chemicals LLC (Jupiter)*	United Arab Emirates	49.00%	49.00%
n. PT Pidilite Indonesia (PTPI)	Indonesia	100.00%	100.00%
o. Pidilite Speciality Chemicals Bangladesh Pvt Ltd (PSCB)	Bangladesh	100.00%	100.00%
p. Pidilite Innovation Centre Pte Ltd (PICPL)	Singapore	100.00%	100.00%
q. Pidilite Industries Egypt SAE (PIE)	Egypt	100.00%	100.00%
r. Pidilite Bamco Ltd (Bamco)	Thailand	100.00%	100.00%
s. Pidilite Chemical PLC (PCPLC)	Ethiopia	100.00%	100.00%
t. PIL Trading (Egypt) Company (PTC)	Egypt	100.00%	100.00%
u. Pidilite Industries Trading (Shanghai) Co Ltd (Pidilite Shanghai)	China	100.00%	100.00%
v. Bamco Supply and Services Ltd (BSSL)*	Thailand	49.00%	49.00%
w. ICA Pidilite Pvt Ltd (ICA)*	India	50.00%	50.00%
x. Cipy Polyurethanes Pvt Ltd (refer Note 45 (b))	India	70.00%	70.00%
y. Pidilite Lanka (Pvt) Ltd (PLPL)	Sri Lanka	76.00%	76.00%
z. Nebula East Africa Pvt Ltd (Nebula)	Kenya	100.00%	100.00%
aa. Nina Lanka Construction Technologies (Pvt) Ltd (Nina Lanka)**	Sri Lanka	72.70%	72.70%
ab. Pidilite Ventures LLC	USA	100.00%	100.00%
ac. Pidilite East Africa Limited	Kenya	55.00%	55.00%
ad. Pidilite Grupo Puma Pvt Ltd (PGPPL)* (w.e.f. 16thSeptember 2019)	India	50.00%	50.00%
ae. Pidilite C-Techos Pvt Ltd (w.e.f. 18thSeptember, 2019)	India	60.00%	60.00%
af. Pidilite Litokol Pvt Ltd (w.e.f. 7thOctober 2019) [refer Note 56(c)]	India	60.00%	60.00%
ag. Pidilite Grupo Puma Manufacturing Ltd (PGPML)* (w.e.f. 13thJanuary2020) [refer Note 56(d)]	India	50.00%	50.00%
ah. Nina Percept (Bangladesh) Pvt Ltd*** (w.e.f. 29thJanuary 2020) [refer Note 56(b)]	Bangladesh	71.81%	71.81%
ai. Pidilite C-Techos Walling Ltd (w.e.f. 5thMarch 2020) [refer Note 56(f)]	India	60.00%	60.00%
aj. Tenax Pidilite India Pvt Ltd (Formerly known as Tenax India Stone Products Pvt Ltd) (w.e.f. 28thMay2020) (Refer note 52B)	India	70.00%	-
ak. Pidilite Adhesives Pvt Ltd (Formerly known as Huntsman Advanced Materials Solutions Pvt Ltd) (w.e.f. 4thNovember 2020) (Refer note 52B)	India	100.00%	-
Pidilite MEA Chemicals LLC, BSSL, PGPPL, PGPML and ICA are subsidiaries of the Group even though the Group has 49%, 49%, 50%, 50% and 50% ownership interest and voting rights in the subsidiaries respectively. However, based on the relevant facts and circumstances, control and management of these entities lie with the Group. The Group has the power to direct the relevant activities of these entities and therefore controls these entities. Nina Lanka Construction Technologies (Pvt) Ltd (Nina Lanka) is a 100% subsidiary of Nina Percept Private Limited and Pidilite Lanka (Pvt) Ltd ** Nina Percept (Bangladesh) Pvt Ltd (Nina Bangladesh) is a 100% subsidiary of Nina Percept Private Limited and Pidilite Speciality Chemicals Bangladesh Pvt Ltd (PSCB).

225

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

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( in crores)
52B Business Combination 2020-21 2020-21
Tenax Pidilite Pidilite Adhesives
1 Subsidiaries acquired India Pvt Ltd Pvt Ltd
Financial Year Name of subsidiary Principal activity Date of Proportion of Consideration
Provisions - Non-Current - 0.47
acquired acquisition voting equity transferred
interests ( in crores) Deferred Tax Liability (net) 0.06 315.59
acquired (%)
Lease Liability - 3.02
During 2020-21 Tenax Pidilite India Pvt Sales and distribution 28 [th] May 2020 70% 84.66
Ltd (formerly known of adhesives, coating, Trade Payables 0.19 24.69
as Tenax India Stone surface treatment
Other Current Liabilities 0.01 3.79
Products Pvt Ltd) chemicals and abrasives
for the marble, granite Provisions - Current - 0.20
and stone industry
Current Tax Liabilities (net) - 2.13
During 2020-21 Pidilite Adhesives Pvt manufactures and sells 3 [rd] November 100% 2,196.46
Ltd (Formerly known Adhesives, Sealants and 2020 Total Liabilities taken over (C) 0.26 349.89
as Huntsman Advanced other products under Net Assets Acquired (D) = (B)-(C) 25.45 1,155.57
Materials Solutions well-known brands such
Private Limited) as Araldite, Araldite Goodwill (E) = (A) - (D) 59.21 1,040.89
Karpenter and Araseal
( in crores) Note A Tenax Pidilite India Pvt Ltd
2 Consideration transferred
The business acquisition was conducted by entering into a share purchase agreement for cash consideration of
2020-21 2020-21 84.66 crores. This acquisition will help the Group’s presence in the fast growing adhesives, coatings and surface
Tenax Pidilite Pidilite Adhesives treatment chemical market for the marble and stone industry.
India Pvt Ltd Pvt Ltd
The gross contractual amounts and the fair value of trade and other receivables acquired is 6.6 crores. None of
Cash 68.72 1,988.15 the trade and other receivables are credit impaired and it is expected that the full contractual amounts will be
Contingent consideration (i) 15.94 208.31 recoverable.
Total (A) 84.66 2,196.46 The transaction cost of 1.5 crores has been expensed in the Consolidated Statement of Profit and Loss.
(i) a As per the agreements, in case of Tenax Pidilite India Pvt Ltd, contingent consideration of 15.94 crores would be payable based After acquisition, assets and liabilities are fair valued and certain intangible assets are identified and fair
upon achievement of working capital requirement and settlement of old receivable and inventory balances. The fair value of the
valued based on purchase price allocation report obtained from external valuer. Goodwill on acquisition was
total consideration is based on a valuation report obtained from an independent valuer.
59.21 crores. The Goodwill on acquisition can be attributable to Tenex Pidilite India Pvt Ltd skilled employees,
b As per the agreements, in case of Pidilite Adhesives Pvt Ltd, contingent consideration of 208.31 crores would be payable based expected synergies from acquisition and other intangible assets that can not be identified separately.
upon achievement of an earnout within 18 months if the business achieves sales revenue in-line with 2019. The fair value of the
total consideration is based on a valuation report obtained from an independent valuer. For the period 29 [th] May to 31 [st] March 2021, Tenax Pidilite India Pvt Ltd contributed revenue from operations
of 18.08 crores and 3.45 crores to the Group’s results. If the acquisition had occurred on 1 [st] April 2020,
3 Identifiable assets acquired and liabilities assumed and goodwill arising on date of acquisition consolidated revenue from operations would have been higher by 6.32 crores and consolidated profit would
2020-21 2020-21 have been higher by 0.29 crores. In determining these amounts, it is assumed that the fair value adjustments,
that arose on date of acquisition would have been same if the acquisition had occurred on 1 [st] April 2020.
Tenax Pidilite Pidilite Adhesives
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3 Identifable assets acquired and liabilities assumed and goodwill arising on date of acquisition	3 Identifable assets acquired and liabilities assumed and goodwill arising on date of acquisition	3 Identifable assets acquired and liabilities assumed and goodwill arising on date of acquisition	3 Identifable assets acquired and liabilities assumed and goodwill arising on date of acquisition	3 Identifable assets acquired and liabilities assumed and goodwill arising on date of acquisition
			2020-21	2020-21
			Tenax Pidilite India Pvt Ltd	Pidilite Adhesives Pvt Ltd
Property, Plant and Equipment			-	4.08
Right of use assets			-	2.99
Intangible Assets
Trade Mark			4.60	1,121.83
Technical Knowhow Fees			0.57	-
Intellectual Property			-	30.31
Distributor Relationships			-	215.00
Income Tax Asset (Net)			-	3.37
Other Financial Assets - Non-Current			1.86	-
Inventories			1.40	6.55
Trade Receivables			6.60	38.84
Cash and Cash Equivalents			7.20	82.32
Other bank balances			0.09	-
Other Financial Assets - Current			3.10	-
Current Tax Assets (net)			0.17	-
Other Current Assets			0.12	0.17
Total Assets Acquired (B)			25.71	1,505.46

Note B Pidilite Adhesives Pvt Ltd

The business acquisition was conducted by entering into a share purchase agreement for cash consideration of 2,196.46 crores. This acquisition will add to the already very strong portfolio held by the Group of adhesive and sealant brands and complement it’s retail portfolio.

The gross contractual amounts and the fair value of trade and other receivables acquired is 38.84 crores. None of the trade and other receivables are credit impaired and it is expected that the full contractual amounts will be recoverable.

The transaction cost of 8.7 crores has been expensed in the Consolidated Statement of Profit and Loss.

After acquisition, assets and liabilities are fair valued and certain intangible assets are identified and fair valued based on purchase price allocation report obtained from external valuer. Goodwill on acquisition was 1,040.89 crores. The Goodwill on acquisition can be attributable to Pidilite Adhesives Pvt Ltd skilled employees, expected synergies from acquisition and other intangible assets that can not be identified separately.

For the period 4[th] November to 31[st] March 2021, Pidilite Adhesives Private Limited contributed revenue from operations of 168.32 crores and 44.57 crores to the Group’s results. If the acquisition had occurred on 1[st] April 2020, consolidated revenue from operations would have been higher by 124.59 crores and consolidated profit would have been higher by 26.90 crores. In determining these amounts, it is assumed that the fair value adjustments, that arose on date of acquisition would have been same if the acquisition had occurred on 1[st] April 2020.

The financial statements for the year ended 31[st] March 2021 include the impact of above acquisitions and accordingly are not comparable with previous year to that extent.

227

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

( in crores)

53 Taxes

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1. Deferred Tax
As at As at
31 [st] March 31 [st] March
2021 2020
Deferred Tax Assets (net) (16.59) (13.00)
Deferred Tax Liabilities (net) 398.03 82.29
TOTAL 381.44 69.29
a 2020-21
Deferred tax (Assets)/ Liabilities in relation to:
Opening Acquisition Recognised Recognised Foreign Closing
Balance under Busi- in Profit or in Other Currency Balance
ness Combi- Loss Comprehensive Translation
nation (refer Income
Note 52B)
Property, Plant and Equipment 38.92 0.21 8.47 - (0.19) 47.41
Intangible Assets 84.65 4.40 (0.31) - (0.02) 88.72
DTL on Acquired Intangibles - 311.41 (1.50) - - 309.91
(refer Note 52B)
FVTPL financial assets 4.28 - 2.54 - - 6.82
Other Provisions (7.58) (0.06) (0.43) - 0.08 (7.99)
Allowance for Doubtful Debts (16.87) (0.07) (3.22) - (0.02) (20.18)
Provision for Employee Benefits (14.08) (0.21) (1.76) (0.28) - (16.33)
Share issue and buy-back costs 1.48 - (3.26) - - (1.78)
Tax Losses (21.51) - (4.05) - 0.42 (25.14)
TOTAL 69.29 315.68 (3.52) (0.28) 0.27 381.44
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b 2019-20	b 2019-20	b 2019-20	b 2019-20	b 2019-20	b 2019-20	b 2019-20
Deferred tax (Assets) / Liabilities in relation to:
	Opening Balance	Acquisition under Busi- ness Combi- nation (refer Note 52B)	Recognised in Proft or Loss	Recognised in Other Comprehensive Income	Foreign Currency Translation	Closing Balance
Property, Plant and Equipment	67.78	-	(29.26)	-	0.40	38.92
Intangible Assets	83.38	-	1.20	-	0.07	84.65
FVTPL fnancial assets	17.12	-	(12.84)	-	-	4.28
Other Provisions	(5.80)	-	(1.45)	-	(0.33)	(7.58)
Allowance for Doubtful Debts	(18.74)	-	2.06	-	(0.19)	(16.87)
Provision for Employee Benefts	(16.72)	-	6.23	(3.58)	(0.01)	(14.08)
Share issue and buy-back costs	(0.40)	-	1.88	-	-	1.48
Tax Losses	(17.20)	-	(4.09)	-	(0.22)	(21.51)
TOTAL	109.42	-	(36.27)	(3.58)	(0.28)	69.29

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( in crores)
2. Income Taxes relating to Continuing Operations
a
Income Tax recognised in Consolidated Statement of Profit and Loss
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Current Tax
In respect of the current year 399.88 384.00
In respect of prior years - (0.01)
TOTAL 399.88 383.99
Deferred Tax
In respect of the current year (3.52) (36.27)
Income tax expense recognised in the Consolidated Statement of Profit and Loss relating to 396.36 347.72
continuing operations
b The Income Tax expense for the year can be reconciled to the accounting profit as follows:
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Profit Before Tax 1,518.51 1,466.74
Income Tax Rate (%) 25.17 25.17
Income Tax expense 382.18 369.15
Effect of income that is exempt from taxation (6.40) (5.03)
Effect of expenses that are not deductible in determining taxable profit 12.35 22.55
Effect of concessions (research and development and backward area deductions) - (3.46)
Effect of lower rate of tax - (48.21)
Effect of previously unrecognised and unused tax losses and deductible temporary differences 0.03 -
now recognised as deferred tax assets
Effect of previously unrecognised and unused tax losses and deductible temporary differences 0.97 -
now recognised as deferred tax liabilities
Effect of the subsidiary companies being taxed at lower tax rate (minimum alternate tax) as the (0.20) (0.17)
profits under tax laws are lower than the book profits
Effect of subsidiary companies taxed at a different rate than the parent company 5.66 5.83
Others 1.77 7.07
TOTAL 396.36 347.73
Adjustments recognised in the current year in relation to the current tax of prior years - (0.01)
Income tax expense recognised in Consolidated Statement of Profit and Loss (relating to 396.36 347.72
continuing operations)
c Income Tax recognised in Other Comprehensive Income
For the For the
year ended year ended
31 [st] March 31 [st] March
2021 2020
Tax arising on income and expenses recognised in Other Comprehensive Income:
Re-measurement of Defined Benefit Obligation 0.28 3.58
Income Tax recognised in Other Comprehensive Income 0.28 3.58
Pidilite Annual Report 2020-21
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229

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

54 Lease

In previous year on transition, the adoption of the new standard resulted in recognition of ‘Right of Use’ asset of 152.46 crores and a corresponding lease liability of 109.73 crores and balance on account of transfer from asset. The effect of this adoption is insignificant on the profit before tax, profit for the period and earnings per share. Ind AS 116 will result in an increase in cash inflows from operating activities and an increase in cash outflows from financing activities on account of lease payments. Refer Note 50G(i) for contractual maturities of lease liabilities.

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(( in crores)
Reconciliation of operating lease commitments as at 31 [st] March 2019 with the lease liabilities recognised in the Balance Sheet as at
1 [st] April 2019:
Operating lease commitments disclosed as at 31 [st] March 2019 48.95
Discounted using incremental borrowing rate of at 1st April 2019 75.71
Add : finance lease liabilities recognised as at 31 [st] March 2019 3.33
(Less) : short-term leases not recognised as a liability (17.98)
(Less) : low-value leases not recognised as a liability -
(Less) : translation Difference (0.28)
Lease liability recognised as at 1 [st] April 2019 109.73
Of which are:
Current lease liabilities 21.83
Non-current lease liabilities 87.90
Impact of adoption of Ind AS 116 on the Consolidated Statement of Profit and Loss:
For the year For the year
ended ended
31 [st] March 31 [st] March
2021 2020
Interest on lease liabilities (refer Note 38) 7.91 8.21
Depreciation of Right of use assets (refer Note 39) 35.11 31.31
Deferred tax (credit) (1.01) (1.08)
Impact on the Consolidated Statement of Profit and Loss 42.01 38.44
Expenses related to short term lease incurred during the year (refer Note 40) 21.67 20.35
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55 Details of provisions

The Group has made provision for various contractual obligations and disputed liabilities based on its assessment of the amount it estimates to incur to meet such obligations, details of which are given below:

					( in crores)	( in crores)
Particulars		As at 1stApril 2020	Additions	Utilisation	Foreign Currency Translation	As at 31stMarch 2021
Provision for Employee related claims		0.12	0.05	(0.05)	(0.01)	0.11
		(0.30)	(-)	((0.15))	((0.03))	(0.12)
Provision for other contingencies (regulatory tax related claims)		0.67	-	-	(0.11)	0.56
		(0.67)	(0.14)	(-)	((0.14))	(0.67)
Provision for Warranty Expenses		4.76	1.16	(2.70)	(0.20)	3.02
		(1.27)	(4.10)	((0.07))	((0.54))	(4.76)
TOTAL		5.55	1.21	(2.75)	(0.32)	3.69
		(2.24)	(4.24)	((0.22))	((0.71))	(5.55)
Figures in brackets () represents previous year Of the above, the following amounts are expected to be incurred within a year:
Particulars					As at 31stMarch 2021	As at 31stMarch 2020
Provision for Warranty Expenses					3.02	4.76

56 Other Information

• a) Madhumala Ventures Pvt Ltd (Formerly known as Madhumala Traders Pvt Ltd) (Madhumala), a wholly owned subsidiary of the Company:

• (i) invested an amount of 3.00 crores in current year ( 2.00 crores in previous year) in the Aapkapainter Solutions Pvt Ltd (Aapkapainter). The company is engaged in providing painting and waterproofing solutions to retail consumer.

• (ii) invested an amount of 19.15 crores in current year in the Homevista Interior Désigns E.Commerce Pvt Ltd (Livspace) by subscription to Compulsory Convertible Non-Cumulative Preference Shares. Livspace is leading home design and renovation platform of India and Southeast Asia.

• (iii) invested an amount of 71.48 crores in previous year in the Trendsutra Platform Services Pvt Ltd (Pepperfry) by subscription to Compulsory Convertible Non-Cumulative Preference Shares. Pepperfry is an online furniture chain in India.

• (iv) invested an amount of 49.00 crores in previous year in the Homevista Décor & Furnishings Pvt Ltd (HomeLane) by subscription to Compulsory Convertible Cumulative Preference Shares. HomeLane is a fast growing home interiors company backed by strong tech-stack and presence in 7 cities with 16 experience centers in India.

• b) During the previous year, Nina Percept Private Limited (NPPL), subsidiary of the Company along with Pidilite Speciality Chemicals Pvt Ltd (PSCB), step-down subsidiary of the Company, has incorporated a subsidiary in Bangladesh namely ‘Nina Percept (Bangladesh) Pvt Ltd’ to carry on the business of roofing and waterproofing services. NPPL shall hold 99% of the paid up share capital of Nina Percept (Bangladesh) Pvt Ltd and the balance 1% shall be held by PSCB.

• c) During the previous year, the Company has incorporated a subsidiary in the name of ‘Pidilite Litokol Private Limited’ (PLPL). This subsidiary is incorporated to carry on the business of chemicals epoxy grouts, chemical based products, etc. In terms of Shareholder’s agreement, the Company shall hold 60% of the paid-up share capital and balance capital held by Litokol SPA, Italy.

• d) During the previous year, the Company has incorporated a subsidiary in the name of ‘Pidilite Grupo Puma Manufacturing Limited’ (PGPML) to carry on the business of manufacturing, processing, trading or dealing in technical mortars, building materials, high quality C2 tile adhesives, other materials used in construction etc. The Company shall hold 50% of the paid-up share capital and balance capital held by Corporacion Empresarial Grupo Puma S.L. (Grupo Puma).

• e) The Board of Directors at its meeting held on 29[th] January 2020 had approved a restructuring proposal whereby the Company shall, for operational convenience and synergies, acquire the business of wholly owned entity, Nitin Enterprises (a partnership firm having two partners which are wholly owned subsidiaries of the Company) on a slump sale basis for a cash consideration. The Company has completed the acquisition of the business of wholly owned entity, Nitin Enterprises on 31[st] March 2021.

• f) During the previous year, the Company has incorporated a Subsidiary Company in the name of “Pidilite C-Techos Walling Limited” (PCWL) to carry on the business of construction of building works or any other structural or architectural work of any kind using C-Techos wall technology, manufacturing of ACC panels and other ancillary products. The Company shall hold 60% of the paid-up share capital and balance capital held by Chetana Exponential Technologies Pvt Ltd.

• g) During previous year, the Company decided to sell plant and machinery pertaining to Synthetic Elastomer project located at Dahej having a carrying value of 60.52 crores as on 1[st] April 2019 (included in capital work in progress). Accordingly, reclassified these assets as “Assets held for sale” at fair market value of 38.28 crores and an impairment loss amounting to 22.24 crores was provided in September 2019.

The Company has undertaken its best efforts to find buyers for these assets. In absence of buyer, as at 31[st] March 2020, these assets were fair valued at estimated realizable scrap value in accordance with Ind AS 113 “Fair Value Measurement”, being asset categorized as Level 3, whereby fair value is determined based on the inputs to the valuation technique.

Out of these assets, Company has identified certain plant & machinery amounting to 5.33 crores for its internal use and remaining plant & machinery amounting to 32.95 crores have been further impaired. Hence, an impairment loss aggregating to 55.19 crores is disclosed as an exceptional item in the financial statements.

231

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

• h) In March 2020, the World Health Organisation declared COVID 19 to be a pandemic. As a result, the operations of the Group were impacted in FY’21 with series of lockdowns announced by the government. Further disruptions in operations also happened in between during the year with unexpected closure of sites due to detection of Covid patients. The situation gradually normalised from Q3’ FY’21 onward. However the Second wave of Covid again disrupted operations in certain part of the country in April 2021.

The Group has evaluated the impact of Covid 19 on the operations, order booking and revenue, cash flow, assets and liabilities and factored in the impact of it upto the date of approval of these financial statements on the carrying value of its assets and liabilities.

Even though, it is very difficult to predict the duration of the disruption and severity of its impact, on the basis of evaluation of overall economic environment, outstanding order book, liquidity position, debt status, recoverability of receivables, the Group expects to recover the carrying amount of these assets and currently does not anticipate any further impairment of it. In assessing the recoverability, the Group has considered internal and external information upto the date of approval of these financial statements and has concluded that there are no material impact on the operations and the financial position of the Group.

Given the uncertainties, the impact of COVID-19 maybe different from that estimated as at the date of approval of these financial statements, and the Group will continue to closely monitor the developments.

• i) During the previous year, the Company had paid Interim Dividend of 7.00 per equity share of 1 each for the financial year 2019-20.

• j) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13[th] November 2020, and has invited suggestions from stake holders which are under active consideration by the Ministry. The Company and its Indian subsidiaries will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

57 Events after reporting period

• a) On 22[nd] April 2021, the Company’s shareholding in its subsidiary namely M/s. Cipy Polyurethanes Pvt Ltd (CIPY), has increased from 70% to 100%, pursuant to the acquisition of the balance 28,249 equity shares from certain other shareholders, in accordance with the provisions of the shareholders agreement dated 5[th] January 2018. Consequent to this, CIPY is now a wholly owned subsidiary of the Company. The consideration of 60.49 crores (excluding certain contingent payment) has been paid in cash.

• b) Proposed dividend of 8.50 per Equity Share of 1 each recommended by the Board of Directors at its meeting held on 12[th] May 2021. The proposed dividend is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

58 Approval of financial statements

The consolidated financial statements are approved for issue by the Audit Committee and by the Board of Directors at their respective meetings held on 12[th] May 2021.

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59 [Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Statements to ]
Schedule III to the Companies Act, 2013
( in crores)
Name of the entity Net assets, i.e., Total Share of Profit Share in Other Share in Total
Assets - Liabilities and Loss Comprehensive Income Comprehensive Income
As % of Amount As % of Amount As % of Amount As % of Amount
consolidated consolidated consolidated consolidated
net assets Profit and Other total
Loss Comprehensive Comprehensive
Income Income
Pidilite Industries Limited 75.12 4,440.14 97.32 1,095.92 323.74 (35.16) 95.12 1,060.79
Indian Subsidiaries
Bhimad Commercial Co Pvt Ltd 0.00 0.23 0.02 0.22 - - 0.02 0.22
Building Envelope Systems India Ltd 0.05 2.99 (0.76) (8.54) - - (0.77) (8.54)
Fevicol Company Ltd 0.00 0.04 - - 0.09 (0.01) (0.00) (0.01)
Hybrid Coatings 0.12 7.18 (0.37) (4.12) - - (0.37) (4.12)
Madhumala Ventures Pvt Ltd 2.40 139.79 0.02 0.26 - - 0.02 0.26
Nina Percept Private Limited 1.82 106.04 0.78 8.81 3.59 (0.39) 0.75 8.42
Nitin Enterprises - - (3.86) (43.47) (0.28) 0.03 (3.90) (43.44)
Pagel Concrete Technologies Pvt Ltd 0.00 0.07 - - - - - -
Cipy Polyurethanes Pvt Ltd 2.03 118.58 (1.07) (12.04) 1.66 (0.18) (1.10) (12.22)
ICA Pidilite Pvt Ltd 1.59 92.65 (4.61) (51.90) 0.55 (0.06) (4.66) (51.96)
Pidilite C-Techos Walling Ltd 0.01 0.60 (0.00) (0.04) - - (0.00) (0.04)
Pidilite Grupo Puma Manufacturing Ltd 0.21 12.37 (0.05) (0.54) - - (0.05) (0.54)
Pidilite Litokol Pvt Ltd 0.26 14.92 (0.00) (0.01) - - (0.00) (0.01)
Pidilite C-Techos Pvt Ltd - - - - - - - -
Pidilite Grupo Puma Pvt Ltd - - - - - - - -
Pidilite Adhesives Pvt Ltd 2.98 173.70 3.53 39.79 0.09 (0.01) 3.57 39.78
Tenax Pidilite India Pvt Ltd 0.42 24.68 (0.47) (5.30) - - (0.48) (5.30)
Foreign Subsidiaries
Pidilite Bamco Ltd 1.01 58.78 0.32 3.61 (0.52) 0.06 0.33 3.67
Bamco Supply and Services Ltd 0.07 3.92 0.28 3.19 0.78 (0.09) 0.28 3.10
Pidilite MEA Chemicals LLC 0.68 39.90 3.38 38.11 (144.75) 15.72 4.83 53.83
Pidilite Chemical PLC 0.02 0.92 (0.05) (0.56) (5.25) 0.57 0.00 0.02
Pidilite Industries Egypt SAE 0.41 23.65 0.15 1.65 (6.81) 0.74 0.21 2.39
Pidilite Industries Trading (Shanghai) 0.01 0.45 (0.07) (0.79) - - (0.07) (0.79)
Co Ltd
Pidilite Innovation Centre Pte Ltd 0.11 6.40 (0.51) (5.78) 0.37 (0.04) (0.52) (5.83)
Pidilite International Pte Ltd 0.20 11.88 (0.04) (0.44) 83.05 (9.02) (0.85) (9.46)
Pidilite Lanka (Pvt) Ltd 0.46 26.83 1.04 11.75 (8.65) 0.94 1.14 12.69
Pidilite Middle East Ltd 0.00 0.29 (0.01) (0.11) (29.37) 3.19 0.28 3.08
Pidilite Speciality Chemicals 1.56 90.71 3.39 38.21 8.04 (0.87) 3.35 37.34
Bangladesh Pvt Ltd
Pidilite USA Inc 1.92 111.73 0.48 5.41 (12.98) 1.41 0.61 6.82
PIL Trading (Egypt) Company 0.04 2.23 0.14 1.60 (1.84) 0.20 0.16 1.79
PT Pidilite Indonesia 0.03 1.96 (0.06) (0.62) 2.49 (0.27) (0.08) (0.89)
Pulvitec do Brasil Industria e Commercio 0.57 32.97 1.09 12.28 (108.62) 11.80 2.16 24.08
de Colas e Adesivos Ltda
Nina Lanka Construction Technologies 0.00 0.24 0.01 0.09 (1.24) 0.14 0.02 0.23
(Pvt) Ltd
Nebula East Africa Pvt Ltd 0.01 0.67 0.01 0.09 0.18 (0.02) 0.01 0.07
Pidilite Ventures Ltd 0.14 8.31 0.02 0.28 0.09 (0.01) 0.02 0.27
Pidilite East Africa Limited 0.08 4.40 0.02 0.24 (1.10) 0.12 0.03 0.36
Nina Percept (Bangladesh) Pvt Ltd 0.00 0.26 (0.00) (0.02) - - (0.00) (0.02)
Non-Controlling Interest 4.12 240.04 (0.45) (5.08) (3.31) 0.36 (0.42) (4.72)
Aapkapainter Solutions Pvt Ltd 0.07 4.36 (0.06) (0.64) - - (0.06) (0.64)
(Associate)
Vinyl Chemicals (India) Ltd (Associate) 0.48 28.11 0.41 4.62 - - 0.41 4.62
Plus Call Technical Services LLC - - - - - - - -
(Joint Venture)
TOTAL 100.00 5,833.00 100.00 1,126.13 100.00 (10.86) 100.00 1,115.27
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233

Notes forming part of the consolidated financial statements

Notes forming part of the consolidated financial statements

Information on Subsidiary Companies

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) in Form AOC-1

(ursuant to rst provso t	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)	su-secton () o secton rea wt rue o ompanes (ccounts) ues, ) n orm - ( in crores)
Name of the entity	Date of acquisition/ incorporation of subsidiary	Reporting period (FY)	Reporting Currency	Exchange Rates as at year end	Share Capital (includes Share application Money)	Reserves & Surplus	Total Assets	Total Liabilities	Investments (except in case of subsidiaries)	Turnover	Profit/ (Loss) Before Taxation	Provision For Tax (including Deferred Tax)	Profit/ (Loss) After Taxation	Proposed Dividend	% of shareholding*
Pidilite International Pte Ltd	29.12.2004	31.03.2021	USD	73.52	198.96	1.17	200.33	0.20	-	-	(0.04)	-	(0.04)	-	100.00%
Pidilite Middle East Ltd	18.05.2005	31.03.2021	AED	19.92	191.58	(100.03)	91.61	0.05	-	-	(0.11)	-	(0.11)	-	100.00%
Pidilite MEA Chemicals (LLC)	28.06.2005	31.03.2021	AED	19.92	0.60	(159.44)	120.42	279.26	-	110.07	(10.37)	-	(10.37)	-	49.00%
Pidilite Speciality Chemicals Bangladesh Pvt Ltd	29.12.2005	31.03.2021	Taka	0.86	30.46	50.78	122.88	41.64	-	110.66	9.26	4.07	5.20	-	100.00%
Pidilite Bamco Ltd	27.02.2006	31.03.2021	Baht	2.34	8.19	27.63	43.75	7.93	-	54.92	7.64	1.31	6.33	-	100.00%
PT Pidilite Indonesia	01.03.2006	31.03.2021	IDR	0.01	5.79	(3.80)	2.20	0.21	-	-	0.08	0.01	0.08	-	100.00%
Pidilite USA Inc	12.05.2006	31.03.2021	USD	73.52	108.66	1.99	130.22	19.57	0.55	140.70	14.66	1.97	12.69	-	100.00%
Pidilite Innovation Center Pte Ltd	20.12.2006	31.03.2021	SGD	54.36	5.41	1.87	10.91	3.63	-	3.04	1.98	0.05	1.93	-	100.00%
Pidilite Industries Egypt - SAE	18.10.2007	31.03.2021	EGP	4.65	45.51	(17.92)	50.71	23.12	-	32.33	(0.84)	0.20	(1.04)	-	100.00%
Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda	10.05.2005	31.03.2021	BRL	12.76	94.85	(61.95)	64.83	31.93	-	102.70	18.30	6.12	12.18	-	100.00%
Bamco Supply and Services Limited	22.04.2008	31.03.2021	Baht	2.34	0.23	7.74	8.68	0.70	-	10.78	0.23	0.09	0.14	-	49.00%
PIL Trading (Egypt) LLC	27.07.2009	31.03.2021	EGP	4.65	2.53	(6.56)	5.22	9.25	-	6.90	(1.45)	-	(1.45)	-	100.00%
Pidilite Industries Trading (Shanghai) Co Ltd	22.11.2010	31.03.2021	RMB	11.17	1.07	0.21	1.32	0.04	-	1.03	0.28	-	0.28	-	100.00%
Pidilite Chemical PLC	10.12.2014	31.03.2021	Birr	1.76	3.15	(2.23)	3.28	2.36	-	-	(0.54)	-	(0.54)	-	100.00%
Pidlite Ventures LLC	08.08.2018	31.03.2021	USD	73.52	7.72	0.59	8.32	0.01	3.68	-	0.28		0.28	-	100.00%
Nebula East Africa Ltd	09.09.2015	31.03.2021	KES	0.67	0.33	0.30	1.49	0.85	-	1.89	0.11	0.05	0.05	-	100.00%
Pidilite Lanka (Pvt) Ltd	07.08.2015	31.03.2021	LKR	0.37	32.18	(1.31)	53.96	23.10	-	45.51	2.60	1.07	1.52	-	76.00%
Nina Lanka Construction Technologies (Pvt) Limited	20.02.2017	31.03.2021	LKR	0.37	0.58	(0.25)	0.73	0.40	-	0.38	(0.02)	-	(0.02)	-	72.70%
Pidilite East Africa Limited	12.02.2019	31.03.2021	KES	0.67	8.56	(2.10)	12.37	5.91	-	7.46	(2.30)	(0.63)	(1.67)	-	55.00%
Nina Percept (Bangladesh) Pvt Ltd	29.01.2020	31.03.2021	Taka	0.86	0.38	(0.02)	0.37	-	-	-	(0.02)	-	(0.02)	-	71.81%
Fevicol Company Limited	28.07.1979	31.03.2021	INR	-	0.27	1.96	2.23	-	0.04	-	-	-	-	-	100.00%
Madhumala Ventures Pvt. Ltd	01.06.1989	31.03.2021	INR	-	0.18	144.60	144.80	0.02	144.13	-	(0.74)	0.03	(0.76)	-	100.00%
Bhimad Commercial Company Pvt Ltd	01.06.1989	31.03.2021	INR	-	0.01	7.84	7.85	-	-	-	(0.80)	-	(0.80)	-	100.00%
Pagel Concrete Technologies Pvt Ltd	24.01.2007	31.03.2021	INR	-	0.10	(0.43)	-	0.33	-	-	-		-	-	80.00%
Building Envelope Systems India Ltd	07.09.2012	31.03.2021	INR	-	8.35	14.37	23.41	0.61	-	9.54	0.41	0.33	0.09	-	60.00%
Nina Percept Private Limited	30.03.2015	31.03.2021	INR	-	1.18	116.70	306.23	188.34	-	176.63	(36.53)	(8.67)	(27.86)	-	74.58%
ICA Pidilite Pvt Ltd	20.11.2015	31.03.2021	INR	-	7.31	240.52	302.24	54.42	-	178.01	5.05	1.33	3.72	-	50.00%
Cipy Polyurethanes Pvt Ltd	09.02.2018	31.03.2021	INR	-	0.94	93.13	131.31	37.23	-	89.31	0.52	0.22	0.30	-	70.00%
Pidilite C-Techos Pvt Ltd	18.09.2019	31.03.2021	INR	-	-	-	-	-	-	-	-	-	-	-	60.00%
Pidilite Grupo Puma Pvt Ltd	16.09.2019	31.03.2021	INR	-	0.91	21.18	25.23	3.14	-	-	(1.29)	-	(1.29)	-	100.00%
Pidilite C-Techos Walling Ltd	05.03.2020	31.03.2021	INR	-	1.01	(0.11)	0.96	0.07	-	-	(0.07)	-	(0.07)	-	60.00%
Pidilite Litokol Pvt Ltd	07.10.2019	31.03.2021	INR	-	1.88	22.82	25.08	0.38	-	-	(0.05)	-	(0.05)	-	60.00%
Pidilite Grupo Puma Manufacturing Ltd	13.01.2020	31.03.2021	INR	-	0.01	(0.04)	0.01	0.04	-	-	(0.04)	-	(0.04)	-	50.00%
Pidilite Adhesives Private Limited	03.11.2020	31.03.2021	INR	-	27.49	246.81	388.08	113.78	-	168.04	59.42	14.84	44.59	-	100.00%
Tenax Pidilite India Private Limited	28.05.2020	31.03.2021	INR	-	0.60	39.21	50.85	11.04	-	18.08	4.69	1.24	3.45	-	70.00%
* % of holding and voting power either directly or indirectly through subsidiary as at 31stMarch 2021. Name of Subsidiaries which are yet to commence operations: Pidilite C-Techos Pvt Ltd and Pidilite Grupo Puma Pvt Ltd Name of Subsidiaries which have been liquidated or sold during the year: Not Applicable

Information on Associates

(Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies)

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( in crores)
Name of Associate Vinyl Aapkapainter
Chemicals Solutions Private
(India) Ltd Limited
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Name of Associate	Name of Associate	Name of Associate	Name of Associate	Name of Associate	Vinyl Chemicals (India) Ltd	Aapkapainter Solutions Private Limited
1	Latest audited Balance Sheet Date				31stMarch 2021	31stMarch 2021
2	Share of Associate held by the Company at the year end
		Number			74,51,540	4,062
		Amount of Investment in Associate			1.18	5.00
		Extent of Holding %			40.64%	28.89%
3	Description of how there is signifcant infuence				Associate	Associate
4	Reason why Associate is not consolidated				refer Note 2.5	refer Note 2.5
5	Networth atributable to Shareholding as per latest audited Balance Sheet				27.67	3.43
6	Proft/ (Loss) for the year
	(i)	Considered in Consolidation			4.62	(0.64)
	(ii)	Not Considered in Consolidation			6.73	(1.56)

Information on Joint Venture

(Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Joint Venture)

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( in crores)
Name of Joint Venture Plus Call Technical Services LLC
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Name of Joint Venture	Name of Joint Venture	Name of Joint Venture	Name of Joint Venture	Name of Joint Venture	Name of Joint Venture	Plus Call Technical Services LLC	Plus Call Technical Services LLC
1	Latest unaudited Balance Sheet Date						31stMarch 2021
2	Share of Joint Venture held by the Company at the year end
		Number					57
		Amount of Investment in Joint Venture					0.21
		Extent of Holding %					40.00%
3	Description of how there is signifcant infuence						Not Applicable
4	Reason why Joint Venture is not consolidated						refer Note 2.5
5	Networth atributable to Shareholding as per latest unaudited Balance Sheet						-
6	Proft/ (Loss) for the year
	(i)	Considered in Consolidation					-
	(ii)	Not Considered in Consolidation					-

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

PUNEET BANSAL Company Secretary

BHARAT PURI M B PAREKH Managing Director Executive Chairman DIN: 02173566 DIN: 00180955 Place: Mumbai Date: 12[th] May 2021

PRADIP KUMAR MENON Chief Financial Officer

235

িবপেদ েমাের রক্ষা কেরা এ নেহ েমার �াথৰ্না, িবপেদ আিম না েযন কির ভয়। দুঃখতােপ ব্যিথত িচেত নাই বা িদেল সা�না, দুঃেখ েযন কিরেত পাির জয়।

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সহায় েমার না যিদ জুেট িনেজর বল না েযন ট�েট, সংসােরেত ঘ�েল ক্ষিত, লিভেল �ধু বঞ্চনা িনেজর মেন না েযন মািন ক্ষয়।

রবী�নাথ ঠাকুর

It is not my prayer that you save me from all perils I pray that I should not fear when faced with odds

Console me not when I am torn with misery Grant me instead the will to win against grief

Obhoy: Fearless

If no help comes forth, let my strength not crumble When losses abound and I am deprived of everything Let my heart not take this as defeat

Rabindranath Tagore

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Calligraphy – English & Marthi: Shreyas Balsare, Gujarati: Kailash Malviya, Tamil: Tharique Azeez
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www.pidilite.com
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Pidilite Industries Limited
REGISTERED OFFICE
Regent Chambers, 7 [th] Floor
Jamnalal Bajaj Marg
208 Nariman Point
Mumbai 400 021
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