Pidilite Industries Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2026

2.13 Provisions and Contingencies

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 resources 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.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may,
but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation
cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood
of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.

2.14 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.

All financial assets and financial liabilities are initially measured at fair value, except for trade receivables without a
significant financing component which are initially measured at transaction price. 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 (FVTPL) 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.

Investments in Subsidiaries and Associates are carried at cost less accumulated impairment losses, if any.

The company has adopted accounting policy choice to adjust any change in contingent consideration subsequent
to initial purchase price allocation against the cost of Investment. Where an indication of impairment exists, the
carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal
of investments in subsidiaries, associates and joint venture, the difference between net disposal proceeds and the
carrying amounts are recognised in the standalone statement of profit and loss.

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 period.

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. The difference between the carrying amount of the financial liability derecognised
and the consideration paid is recognised in the Statement of Profit and Loss.

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis or
to realise the asset and settle the liability simultaneously.

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.

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 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 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,Total Disability Pension Scheme and
Long Service Ex Gratia.

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 liability 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. The Company determines the liability for such accumulated leaves using the Projected
Accrued Benefit method with actuarial valuations being carried out at each Balance Sheet date.

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 up
to the reporting date.

The Company presents the above liability/(asset) as current and noncurrent in the Balance Sheet as per actuarial
valuation by the independent actuary; however, the entire liability towards gratuity is considered as current as the
Company will contribute this amount to the gratuity fund within the next twelve months.

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.

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.
Non-current assets and disposal groups held for sale are measured at the lower of carrying amount and fair value less
costs to sell.

3 j Significant 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 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 and Associates

Investment in subsidiaries and associates 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 for certain subsidiaries wherever needed.

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, as certified by independent valuer. 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.

3.1.3 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)

3.1.4 Income taxes

Significant judgements are involved in recognition of deferred tax assets: availability of future taxable profit against
which deductible temporary differences and tax losses carried forward can be utilised and uncertain tax treatments
(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.

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.

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.

3.2 Recent accounting pronouncements

Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time.

In May 2025, MCA notified amendments to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, applicable
w.e.f. 1^st April 2015. The Company has reviewed the amendment and based on its evaluation has determined that it
does not have any significant impact in its financial statements.

In August 2025, MCA notified the following amendments to:

1. Ind AS 1, Presentation of Financial Statements, applicable w.e.f. April 1, 2025 - The ammendment relates to
classification of liabilities as current or non-current and non-current liabilities with covenants. In the context of
classifying a liability as current, it removes the requirement of existence of a right to defer settlement for at least
12 months after the reporting date and instead requires that the said right should exist on the reporting date and
have substance. The amendment also introduces guidance on classification of liabilities with covenants. The
Company has no impact of these amendments in its classification criteria of current and non-current liabilities.

2. Ind AS 7, Statement of Cash Flows and Ind AS 107, Financial Instruments: Disclosures, applicable w.e.f. 1^st April
2026 - The amendment in Ind AS 7 requires to inform users of financial statements of the existence of supplier
finance arrangements and explain the nature of the arrangements, the carrying amount of liabilities and the range
of payment due dates. Ind AS 107 has been amended to add supplier finance arrangements as a factor that may
cause concentration of liquidity risk. The Company has reviewed the amendment and based on its evaluation has
determined that it does not have any impact in its financial statements.

3. Ind AS 12, International Tax Reform - Pillar Two Model Rules applicable immediately - The amendments provide
a temporary mandatory relief from deferred tax accounting for top-up tax and disclose that they have applied the
relief. The Company has reviewed the amendment and based on its evaluation has determined that it does not have
any impact in its financial statements.

3.3 Standards issued but not yet effective

Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. During the year, the MCA has issued
an amendment for removal of carve-out under Ind AS 1, Presentation of financial statements relating to classification
of liabilities subject to covenants breach which is applicable with effect from 1^st April 2026. The Company has reviewed
the new pronouncements and based on its evaluation has determined that it does not have any impact in its
financial statements.

Goodwill, Copyrights and Trademark

Goodwill, copyrights and trademark in the books of the Company pertain to Consumer & Bazaar and Business to
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 & Bazaar business and Business to 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 2026 and as on 31^st March 2025. 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 & Bazaar business and Business to 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 13.4% per annum (13.5% per annum as at 31^st March 2025).

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 (7% per annum as at 31^st March 2025) 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 aaareaate recoverable amount of the cash-aeneratina unit.

b. Terms/ Rights attached to equity shares

The Company has a single 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 7^th May 2026 declared a final dividend of 11.50 per equity share of 1 each amounting to
1,170.43 crores subject to approval of the shareholders at the ensuing Annual General Meeting.

During the year ended 31^st March 2026, the Company has paid final dividend of ? 20.00 per equity share of ? 1 each (pre-bonus) for the
financial year 2024-25 as approved by the Members of the Company at the Annual General Meeting held on 6^th August 2025.

Further the Company has paid special interim dividend of ? 10.00 per equity share of ? 1 each (pre-bonus) for the financial year 2025-26
as approved by the Board of Directors at its meeting held on 6^th August 2025.

c. Bonus shares issued during the current financial year

On 24^th September 2025, the Company allotted 50,88,57,016 bonus equity shares of 1/- each as fully paid up in the proportion of 1:1 [i.e.,
1 (One) new fully paid-up bonus equity share 01 1/- (Rupee One only) each for every 1 (One) existing fully paid-up equity share of

1/- (Rupee One only) each], to the eligible members of the Company whose name appeared in the Register of Members/Register of the
Beneficial Owners, as on 23^rd September 2025, (''Record Date'') in accordance with approval received from the Members by way of postal
ballot, result of which was declared on 11^th September 2026.The said bonus equity shares rank pari passu in all respects with the
existing equity shares of the Company. The paid up capital on account of bonus issue of 50,88,57,016/- has been apportioned from
securities premium.

21.1 Capital Reserve on Business Combination

Capital Reserve represents excess/short of net assets acquired in business combination. It is not available for the distribution to
shareholders as dividend.

21.2 Securities Premium

Security Premium 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, 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.

21.3 Capital Redemption Reserve

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.

21.4 Cash Subsidy Reserve

Cash Subsidy Reserve represents subsidies received from state government. It is not available for distribution as dividend to shareholders.

21.5 Share Options Outstanding Account

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.

21.6 General Reserve

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.

21.7 Retained Earnings

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.

Notes:

a) Loans to Pagel Concrete Technologies Pvt Ltd does not have any repayment schedule and is re-payable on demand. It is not bearing
any interest and is fully provided.

b) Loan to subsidiary NBFC Pargro Investments Pvt Ltd is interest bearing @ RBI Repo rate 200 bps per annum and is repayable as
per agreed schedule.

c) Loan to subsidiary Nina Percept Private Limited is interest bearing @ Government security yield 50 bps per annum and is repayable
as per agreed schedule.

d) Loan to Associate, bearing interest @ 9% per annum, and fully provided for, has been converted into Optionally Convertible
Redeemable Debentures, repayable/ convertible as per agreed terms.

e) For investments in subsidiaries, refer Note 7 and Note 44; and for guarantees given to subsidiaries, refer Note 44.

In line with Circular No 04/2015 issued by Ministry of Corporate Affairs dated 10/03/2015, loans given to employees as per the Company''s

policy are not considered for the purposes of disclosure under Section 186(4) of the Companies Act, 2013

Figures in brackets () represents previous year

42 Segment information

Operating Segment:

The Company operates in two 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 raw materials.

Operating Segment disclosures are consistent with the information provided to and reviewed by the Managing Director (Chief Operating
Decision Maker).

46| Employee Stock Option Scheme

a) Details of Employee Share Options

ESOP 2016 covering grant of 45,00,000 options (pre-bonus) [including 2,50,000 options (pre-bonus) 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.

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. Refer note 56 for information on ratios.

(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.

Interest risk: The Company is mainly exposed to the interest rate risk due to its investment in mutual funds. The interest rate risk arises
due to uncertainties about the future market interest rate on these investments. The Company has laid policies and guidelines including
tenure of investment made to minimise impact of interest rate risk.

Price risk: The Company is mainly exposed to the price risk due to its investment in mutual funds, bonds and alternate investment funds.
The changes in the prices will not have material impact on financial statements.

(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).
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 maturity of above outstanding Buy forward contracts is less than 6 months.

The line-items in the financial statements that include the above hedging instruments are “Other Financial Assets" of 3.39 crores
( NIL crores as at 31^st March 2025) and “Other Financial Liabilities" of NIL ( 0.78 crores as at 31^st March 2025) on a net basis
(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 4.20 crores
(Loss of 0.83 crores as at 31^st March 2025).

(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 (refer Note 9), 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.

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.

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.

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.

Nature of CSR activities:

(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; Milk and Animal Health; promotion of Farmer Producer Organisation;

Swachtha Initiative; promotion of Culture; Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts
& Handicrafts, Khadi and Handloom; Employment Generation and Government Scheme System; 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.

53 Other Information

a) During the current year, the Company invested an amount of 20.1 crores, in "Pidilite Ventures Private Limited" (PVPL), a wholly
owned subsidiary of the Company (31^st March 2025: 34.89 crores). PVPL has further invested in the following companies -

(i) invested an amount of 33.71 crores on 17^th October 2025 ( NIL in previous year) in "Imagimake Play Solutions Pvt Ltd" by
subscription to equity shares. The company is engaged in business of providing toys which cater to art & hobby, educational
toys, puzzles and 3D model sets.

(ii) invested an amount of 3.60 crores on 10^th February 2026 ( 8.0 crores in previous year) in "Buildnext Construction Solutions
Private Limited". The company is engaged in providing end to end home construction services.

(iii) invested an amount of ? 5 crores on 4^th December 2025 (? NIL crores in previous year) in the Printpanda India Pvt Ltd
(Magic Decor). The company is engaged in providing customized wallpapers.

(iv) invested an amount of NIL in current year ( 5.0 crores in previous year) in "Installco Wify Technology Private Limited".

The company is engaged in home improvement and maintenance services platform.

b) During the current year, the Company invested an amount of 17.10 crores on 13^th February 2026 ( 25.35 crores in previous year)
in "Bhimad Commercial Company Pvt Ltd" (Bhimad), a wholly owned subsidiary of the Company, by subscription to equity shares.
Bhimad has further invested in following companies -

(i) invested an amount of 17.10 crores on 18^th February 2026 ( 25.35 crores in previous year) in "Pargro Investments Private
Limited" (Pargro). Pargro is a Non Banking Finance Company (NBFC) which provides credit in the form of small value retail
loans to support its domain ecosystem and business growth.

Statement of compliance:

With regard to the investments made during the year ended 31^st March 2026 as well as 31^st March 2025 the Company has complied
with the relevant regulatory provisions.

c) During the current year, the Company invested an amount of 5.00 crores in "Pidilite Grupo Puma Manufacturing Ltd" by
subscription to equity shares.

d) On 21^st November 2025, the Government of India notified four Labour Codes - the Code on Wages, 2019, the Industrial Relations
Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020, collectively
referred as the ''New Labour Codes'', consolidating 29 existing labour laws. The Ministry of Labour & Employment has published draft
Central Rules and FAQs, to facilitate assessment of the financial impact arising from these regulatory changes. The Company has
considered restructured compensation of its employees and assessed the impact of changes, consistent with the Labour Codes,
draft rules and FAQs. Accordingly, the Company has recognised under ''Employees benefits expense'' an amount 37.06 crores and

22.27 crores towards gratuity and compensated absences respectively for the year ended 31^st March 2026. Further the Company
has also recognised an amounts of 14.55 crores in ''Other Expenses'' towards gratuity liability on contract and outsourced
employees/workers for the year ended 31^st March 2026. The Company continues to monitor the finalisation of Central and State
Rules and clarifications from the Government on the New Labour Codes and would provide appropriate accounting effect on the
basis of such developments, as needed.

e) During the current year, the company has recognised profit on buyback of shares from "Pidilite USA Inc" amounting to 1.21 crores
for 18,00,000 equity shares (Investment value of 7.89 crores) recognised under Other Income.

f) During the previous year, the company has recognised profit on buyback of shares from "ICA Pidilite Private Limited" amounting
to 2.14 crores for 2,68,319 equity shares (Investment value of 9.4 crores) recognised under Other Income. The profit earned on
buyback of these equity shares is not taxable in the hands of the Company under section 10(34A) of the Income Tax Act, 1961.

g) During the previous year, the Company invested an amount of 13.86 crores in "Pidilite Middle East Ltd" and 0.67 crores in "Pidilite
Industries Egypt SAE" by subscription to equity shares.

h) During the year ended 31^st March 2024, the Company has divested its entire shareholding in its wholly owned subsidiary "Pulvitec
do Brasil Industria e Comercio de Colas e Adesivos Ltda" (hereinafter referred to as "Pulvitec"). During the previous year ended 31^st
March 2025, as part of indemnity obligations, Company received tax claims amounting 7.26 crores, which was partially offset
against supervening assets in form of tax credits available with Pulvitec of 2.21 crores resulting in net settlement of 5.05 crores,
which has been provisioned for. The remaining tax credits, after offsetting above referred tax claim, amounting 2.21 crores has
been recognised as other non-current financial assets (refer Note 12). The net amount of 2.84 crores charged to Statement of
Profit and Loss has been recognised under Exceptional Items in the Standalone financial statements (refer Note 38). Consequent to
the same, and after factoring foreign exchange rate fluctuations, the revised indemnity obligations of the Company stands at 13.88
crores, disclosed under Contingent Liabilities and Commitments [refer Note 39A(2c)].

i) The company carries liability towards acquisition amounting to 2.00 crores ( 6.00 crores in previous year) after writing back i.e
adjusted from investment 4.00 crores ( NIL in previous year), in respect of investment made in "Nina Percept Pvt Ltd" in Financial
Year 2023-24 (refer Note 25 & Note 26).

j) During the current year, the Company has impaired loans given to an associate of a subsidiary, "Aapkapainter Solutions Private
Limited" by amount 5.73 crores and 17.32 crores in previous year on assessment of expected Credit Loss upon significant
increase in credit risk of the financial asset, disclosed as Exceptional item in standalone financial statements (refer Note 38).

k) During the current year, the Company has recognised impairment loss amounting to 5.72 crores ( 6.43 crores in previous year)
in respect of certain items of plant and machinery lying in Capital Work In Progress located in Dahej SEZ and Sarigam-Vapi. These
machineries have been assessed as unusable and accordingly recognised as an impairment loss under Depreciation, Amortisation
and Impairment Expense in the Standalone financial Statements based on estimated realizable value.

Additionally in previous year items of plant and equipment (Property Plant and Equipment) located in Mahad and other locations
amounting to 1.60 crores has been assessed as unusable and idle, due to wear and tear and recognised as an impairment
loss under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated
realizable value.

l) During the year ended 31^st March 2026, the Company has paid final dividend of ? 20.00 per equity share of ? 1 each (pre-bonus) for
the financial year 2024-25 as approved by the Members of the Company at the Annual General Meeting held on 6^th August 2025.
Further the Company has paid special interim dividend of ? 10.00 per equity share of ? 1 each (pre-bonus) for the financial

year 2025-26 as approved by the Board of Directors at its meeting held on 6^th August 2025.

m) During the current year, company has impaired its investment in Pidilite C Techos Walling Ltd by 1.82 crores (refer Note 38).

54 Additional Regulatory Information Required By Schedule III to the Companies Act, 2013:

a) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013
or Section 560 of Companies Act, 1956 during the current and previous financial year.

b) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending
against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
Rules made thereunder.

c) The Company has not been declared willful defaulter by any bank or financial institution or other lender or government or any
government authority.

d) The Company has complied with the requirement with respect to number of layers as prescribed under Section 2(87) of the
Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

e) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961
(such as search or survey), that has not been recorded in the books of account.

f) The Company has not traded or invested in crypto currency or virtual currency.

g) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies
beyond the statutory period.

h) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (“Funding Parties"), with
the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries") or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

---

Mar 31, 2025

(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 / Kotak 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 the risk is low.

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.

47| Employee Stock Option Scheme

a) Details of Employee Share Options

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.

48| 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. Refer Note 57 for information on ratios.

(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.

Interest risk: The Company is mainly exposed to the interest rate risk due to its investment in mutual funds. The interest rate risk arises due to uncertainties about the future market interest rate on these investments. The Company has laid policies and guidelines including tenure of investment made to minimise impact of interest rate risk.

Price risk: The Company is mainly exposed to the price risk due to its investment in mutual funds, bonds and alternate investment funds. The changes in the prices will not have material impact on financial statements

(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). 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 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.

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.

The maturity of above outstanding Buy forward contracts is less than 6 months.

The line-items in the financial statements that include the above hedging instruments are “Other Financial Assets" of NIL crores ( 0.05 crores as at 31^st March 2024) and “Other Financial Liabilities" of 0.78 crores ( NIL crores as at 31^st March 2024) on a net basis (refer Note: 13 and 25 respectively).

The aggregate amount of Loss under foreign exchange forward contracts recognised in the Statement of Profit and Loss is 0.83 crores (Gain of 0.65 crores as at 31^st March 2024).

(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 (refer Note 9), 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.

(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.

(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; Milk and Animal Health; promotion of Farmer Producer Organisation;

Swachtha Initiative; promotion of Culture; Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts & Handicrafts, Khadi and Handloom; Employment Generation and Government Scheme System; 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.

54 Other Information

a) During the current year, on 5^th September 2024 and on 23^rd October 2024, the Company invested an amount of 5.00 crores and

? 29.89 crores respectively, in "Pidilite Ventures Private Limited" (PVPL) (formerly known as Madhumala Ventures Pvt Ltd), a wholly owned subsidiary of the Company (31^st March 2024: 50.02 crores). PVPL has further invested in the following companies -

(i) invested an amount of 5.00 crores on 27^th September 2024 ( Nil in previous year) in "Installco Wify Technology Private Limited". The company is engaged in home improvement and maintenance services platform.

(ii) invested an amount of 8.00 crores on 30^th October 2024 ( 6.00 crores in previous year) in "Buildnext Construction Solutions Private Limited". The company is engaged in providing end to end home construction services.

(iii) invested an amount of NIL in current year ( 5.00 crores in previous year) in "Finemake Technologies Private Limited" by

subscription to preference shares. The company is engaged in business of providing interior designing services.

(iv) invested an amount of NIL in current year ( 0.57 crores in previous year) in "Climacrew Private Limited" by subscription to

equity shares. The company is engaged in business of supply of seaweed and seaweed products.

(v) invested an amount of NIL in current year ( 1.50 crores in previous year) in "Constrobot Robotics Pvt Ltd" by subscription to

equity shares. The company is engaged in business of manufacturing special purpose machineries.

(vi) invested an amount of NIL in current year ( 20.00 crores in previous year) in "Imagimake Play Solutions Pvt Ltd." by subscription to equity shares. The company is engaged in business of providing toys which cater to art & hobby, educational toys, puzzles and 3D model sets.

(vii) invested an amount of NIL in current year ( 18.45 crores in previous year) in "Pepperfry Private Limited" (formerly known as M/s. Trendsutra Platform Services) by subscription to Non cumulative Compulsory Convertible Preference Shares. Pepperfry is an online furniture chain in India.

b) During the current year, on 13^th August 2024 and on 9^th September 2024, the Company invested an amount of

? 9.90 crores and 15.45 crores respectively in "Bhimad Commercial Company Pvt Ltd" (Bhimad), a wholly owned subsidiary of the Company, by subscription to equity shares. Bhimad has further invested in following companies -

(i) invested an amount of 25.35 crores in current year in "Pargro Investments Private Limited" (Pargro). Pargro is a Non Banking Finance Company (NBFC) which provides credit in the form of small value retail loans to support its domain ecosystem and business growth.

Statement of compliance:

With regard to the investments made during the year ended 31^st March 2025 as well as 31^st March 2024 the Company has complied with the relevant regulatory provisions.

c) During the current year, the Company invested an amount of 13.86 crores in "Pidilite Middle East Ltd" ( 6.79 crores in Previous

year) and 0.67 crores ( NIL in Previous year) in "Pidilite Industries Egypt SAE" by subscription to equity shares.

d) During the current year, the company has recognised profit on buyback of shares from "ICA Pidilite Private Limited" amounting to

? 2.14 crores for 2,68,319 equity shares (Investment value of 9.40 crores) recognised under Other Income. The profit earned on

buyback of these equity shares is not taxable in the hands of the Company under section 10(34A) of the Income Tax Act, 1961.

e) During the previous year, the Company invested an amount of 12.45 crores in "Pidilite Grupo Puma Manufacturing Ltd" by subscription to equity shares.

f) During the previous year, the company has recognised profit on buyback of shares from "Pidilite USA Inc" amounting to 27.15 crores for 1,20,00,000 shares recognised under Exceptional Items in the Standalone financial Statements

(refer Note 39).

g) During the previous year, the Company has divested its entire shareholding in its wholly owned subsidiary "Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda" (hereinafter referred to as "Pulvitec").The Company incurred transaction cost amounting to 2.36 crores and recognised total loss on sale of shares amounting to 20.00 crores recognised under Exceptional Items in the Standalone financial Statements (refer Note 39). The company has given indemnity of 20.91 crores against losses resulting from succession claims and other claims (including third party).

During the current year, as part of indemnity obligations, Company received tax claims amounting 7.26 crores, which was partially offset against supervening assets in form of tax credits available with Pulvitec of 2.21 crores resulting in net settlement of 5.05 crores, which has been provisioned for. The remaining tax credits, after offsetting above referred tax claim, amounting 2.21 crores has been recognised as other non-current financial assets (refer Note 12). The net amount of 2.84 crores charged to Statement of Profit and Loss has been recognised under Exceptional Items in the Standalone financial statements (refer Note 39). Consequent to the same, and after factoring foreign exchange rate fluctuations, the revised indemnity obligations of the Company stands reduced from 20.91 crores to 11.33 crores, disclosed under Contingent Liabilities and Commitments [refer Note 40A(2c)].

h) During the previous year, the Company invested an amount of 107.68 crores in "Nina Percept Pvt Ltd" by subscription to Equity shares. A liability towards acquisition (refer Note 24 & Note 25) had been recognised in the financial statements amounting to ? 6.00 crores.

i) During the current year, the Company has impaired loans given to an associate of a subsidiary, "Aapkapainter Solutions Private Limited" by amount 17.32 crores on assessment of expected Credit Loss upon significant increase in credit risk of the financial asset, disclosed as Exceptional item in standalone financial statements (Refer Note 39).

j) During the current year, the Company has recognised impairment loss amounting to 6.43 crores in respect of certain items of plant and machinery lying in Capital Work In Progress located in Dahej SEZ and Sarigam-Vapi. These machineries have been assessed

as unusable and accordingly recognised as an impairment loss under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated realizable value.

Additionally items of plant and equipment (Property Plant and Equipment) located in Mahad and other locations amounting to 1.60 crores has been assessed as unusable and idle, due to wear and tear and recognised as an impairment loss under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated realizable value.

k) During the previous year, the Company had sold plant and machinery located at Mahad and accordingly had reclassified identified assets as "Assets held for sale" at fair market value of 3.41 crores. The Company had recognised an impairment loss amounting to 20.36 crores under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated realizable value.

l) During the previous year, the Company entered into master agreement with M/s Basic Adhesives for purchase of certain intangible assets at an agreed consideration of USD 3,000,000. The transaction had been accounted as asset acquisition in line with Ind AS 38 (Intangible Asset). The Company incurred transaction cost of 0.27 crores for the above asset acquisition which was capitalised along with Basic Adhesive Trademark, IPR and technical knowhow. Total value of 24.91 crores was recognised under Intangible assets in the standalone financial statements.

m) During the current year, the Company had paid Dividend of 16.00 per equity share of 1 each for the financial year 2023-24.

55 Additional Regulatory Information Required By Schedule III to the Companies Act, 2013:

a) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the current and previous financial year.

b) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

c) The Company has not been declared willful defaulter by any bank or financial institution or other lender or government or any government authority.

d) The Company has complied with the requirement with respect to number of layers as prescribed under Section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

e) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.

f) The Company has not traded or invested in crypto currency or virtual currency.

g) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

h) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (“Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

I58 Approval of financial statement

The standalone financial statements are approved for issue by the Audit Committee and by the Board of Directors at their respective meetings held on 8^th May 2025.

---

Mar 31, 2024

The Company has estimated the useful life for its copyrights and trademark pertaining to consumer & bazaar CGU 1,314.39 crores ( 1,314.39 crores as at 31^st March 2023) as indefinite on the basis of renewal of legal rights and the management''s intention to keep it perpetually.

Goodwill, Copyrights and Trademark

Goodwill, copyrights and trademark in the books of the Company pertain to Consumer and Bazaar & Business to 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 & Business to 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 2024 and as on 31^st March 2023. 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 and Business to 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 13.5% per annum (12.7% per annum as at 31^st March 2023).

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 (7% per annum as at 31^st March 2023) 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 and Business to Business cashgenerating unit are as follows:
Budgeted sales growth	Sales growth is assumed at 12.4% (CAGR) (12.8% as at 31st March 2023) for Consumer and Bazaar business and at 12.1% (CAGr) (10.9% as at 31st March 2023) for Business to Business which is in line with current year projections. The values assigned to the assumption reflect past experience and current market scenario 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 31st March 2023) vs. sales growth, considering impact of commodity cost inflation.
Other budgeted costs	Commercial spends (schemes and A&SP) are kept consistent to sales growth. Other fixed costs are in line with the current year''s growth.

b. Terms/ Rights attached to equity shares

The Company has a single 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 7^th May 2024 declared a final dividend of 16.00 per equity share of 1 each amounting to 813.77 crores subject to approval of the shareholders at the ensuing Annual General Meeting.

During the year ended 31^st March 2024, the Company has paid final dividend of 11.00 per equity share of 1 each for the financial year 2022-23 declared on 8^th May 2023.

|22.1 Capital Reserve on Business Combination

Capital Reserve represents excess/short of net assets acquired in business combination. It is not available for the distribution to shareholders as dividend.

|22.2 Securities Premium

Security Premium 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, 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.

|22.3 Capital Redemption Reserve

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.

|21.4 Cash Subsidy Reserve

Cash Subsidy Reserve represents subsidies received from state government. It is not available for distribution as dividend to shareholders. |21.5 Share Options Outstanding Account

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 47.

|21.6 General Reserve

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.

|21.7 Retained Earnings

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.

( in crores)
4o| Contingent Liabilities and Commitments
		As at 31st March 2024	As at 31st March 2023
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 allowances in respect of which the Company is in appeal	147.89	89.97
b)	Excise Duty and Service Tax claims disputed by the Company relating to issues of classifications	22.41	23.10
c)	Sales Tax (VAT, CST, Entry Tax, LBT and GST) claims disputed by the Company relating to issues of declaration forms and classifications	129.24	162.12
d)	Other Matters (relating to Open Access Charges, Electricity charges, etc.)	4.42	1.50
2. a)	Guarantees issued by Banks in favour of Government and others*	55.25	38.79
b)	Guarantees given by Company on behalf of the Subsidiaries to Banks*
	Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda	-	17.26
	Pidilite Bamco Ltd	3.59	3.53
	Pidilite MEA Chemicals LLC (Previously known as Jupiter Chemicals LLC)	45.41	44.74
	Pidilite Lanka Private Limited	36.65	36.12
	Bamco Supply and Services Ltd	1.21	1.19
	Pidilite East Africa Limited	12.51	12.33
	Nina Percept Limited	90.00	90.00
* Guarantees given are for business purpose.
c)	Indemnity given towards disposal of subsidiary (Refer note 54)	20.91	-
Note:	The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financials statements
B) Commitments:
a)	Estimated amount of contracts, net of advances, remaining to be executed for the acquisition of Property, Plant and Equipment, investments and not provided for	157.24	209.92
b)	For other commitments, refer Note 48(E)(ii) for financial instruments and Note 52 for leases.
c)	The Company, being the holding/ultimate holding company, will extend financial support to its subsidiaries as and when required.

4l| Details of provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

Provision for warranties represents management''s best estimate of the liability for warranties based on past experience of claims.

The provisions for tax related matters comprises of numerous separate cases that arise in the ordinary course of business. These provisions have not been discounted as it is not practicable for the Company to estimate the timing of the provision utilisation and cash outflows, if any, pending resolution.

43 Segment information

Operating Segment:

The Company operates in two 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 raw materials.

(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 money 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 / Kotak 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.

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.

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.

47| 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.

48| 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.

(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.

Interest risk: The Company is mainly exposed to the interest rate risk due to its investment in mutual funds. The interest rate risk arises due to uncertainties about the future market interest rate on these investments. The Company has laid policies and guidelines including tenure of investment made to minimise impact of interest rate risk.

Price risk: The Company is mainly exposed to the price risk due to its investment in mutual funds, bonds and alternate investment funds. The changes in the prices will not have material impact on financial statements

(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.

(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.

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.

The maturity of above outstanding USD buy forward contracts is less than 6 months.

The line-items in the financial statements that include the above hedging instruments are “Other Financial Assets" of 0.05 crores ( NIL crores as at 31^st March 2023) and “Other Financial Liabilities" of NIL crores ( 0.60 crores as at 31^st March 2023) (refer Note: 13 and 25 respectively).

The aggregate amount of gain under foreign exchange forward contracts recognised in the Statement of Profit and Loss is 0.65 crores (loss of 0.44 crores as at 31^st March 2023).

(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 (refer Note 9), 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.

(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; Milk and Animal Health; promotion of Farmer Producer Organisation;

Swachtha Initiative; promotion of Culture; Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts & Handicrafts, Khadi and Handloom; Employment Generation and Government Scheme System; 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.

54 Other Information

a) During the current year, the Company invested an amount of 50.02 crores on 13^th July 2023 in Pidilite Ventures Private Limited (PVPL) (formerly known as Madhumala Ventures Pvt Ltd), a wholly owned subsidiary of the Company. PVPL has further invested in the following companies.

(i) invested an amount of Nil in the current year ( 3.65 crores in previous year) in the Abeyaantrix Technology Private Limited. The company operates a software-enabled platform for construction contractors to manage documents, and record financial transactions, known by the name of Onsite.

(ii) invested an amount of 6.00 crores on 27^th August 2023 ( 23.89 crores in previous year) in the Buildnext Construction Solutions Private Limited. The company is engaged in providing end to end home construction services.

(iii) invested an amount of 5.00 crores on 18^th January 2024 ( 9.00 crores in previous year) in the Finemake Technologies Private Limited by subscription to preference shares. The company is engaged in business of providing interior designing services.

(iv) invested an amount of 0.57 crores on 10^th November 2023 & 28^th December 2023 ( 0.49 crores in previous year) in the Climacrew Private Limited by subscription to equity shares. The company is engaged in business of supply of seaweed and seaweed products.

(v) invested an amount of 20.00 crores on 6^th October 2023 ( Nil in previous year) in the Imagimake Play Solutions Pvt Ltd by subscription to equity shares. The company is engaged in business of providing toys which cater to art & hobby, educational toys, puzzles and 3D model sets.

(vi) invested an amount of 18.45 crores on 14^th July 2023 ( Nil in previous year) in the Pepperfry Private Limited (formerly known as M/s. Trendsutra Platform Services) by subscription to Non cumulative Compulsory Convertible Preference Shares. Pepperfry is an online furniture chain in India.

Statement of compliance:

With regard to the investments made during the year ended 31^st March 2024 as well as 31^st March 2023 the Company has complied with the relevant regulatory provisions.

b) During previous year, the Company has invested an amount of 8.18 crores in "Pidilite International Pte Ltd” and ? 12.22 crores in "Pidilite Litokol Pvt Ltd" by subscription to equity shares.

c) During the current year, the Company invested an amount of 12.45 crores in "Pidilite Grupo Puma Manufacturing Ltd” (Previous year - 13.04 crores) and 6.79 crores in "Pidilite Middle East Ltd" ( 17.03 crores in the Previous year) by subscription to equity shares.

d) During the current year, the Company has invested an amount of 107.68 crores in "Nina Percept Pvt Ltd" by subscription to Equity shares. A liability towards acquisition (refer Note 24 & Note 25) had been recognised in the financial statement in current year amounting to 7.00 crores.

e) During the current year, the company has recognised profit on buyback of shares from "Pidilite USA Inc” amounting to 27.15 crores for 1,20,00,000 shares recognised under Exceptional Items in the Standalone financial Statements (Refer note 39).

f) During current year, the Company has divested its entire shareholding in its wholly owned subsidiary "Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda".The Company incurred transaction cost amounting to 2.36 crores and recognised total loss on sale of shares amounting to 20.00 crores recognised under Exceptional Items in the Standalone financial Statements (Refer note 38). The company has given indemnity of 20.91 crores against losses resulting from succession claims and other claims (including third party).

g) During current year, the Company decided to sell plant and machinery located at Mahad and accordingly has reclassified identified assets as "Assets held for sale" at fair market value of 3.41 crores. The Company has recognised an impairment loss amounting to 20.36 crores under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated realizable value.

h) During current year, the Company entered into master agreement with M/s Basic Adhesives for purchase of certain intangible assets at an agreed consideration of USD 3,000,000. The transaction has been accounted as asset acquisition in line with Ind AS 38 (Intangible Asset). The Company incurred transaction cost of 0.27 crores for the above asset acquisition which was capitalised along with Basic Adhesive Trademark, IPR and technical knowhow. Total value of 24.91 crores is recognised under Intangible assets in the standalone financial statements.

i) During the current year, the Company had paid Dividend of 11.00 per equity share of 1 each for the financial year 2022-23.

55 Additional Regulatory Information Required By Schedule Ill To The Companies Act, 2013:

a) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the current and previous financial year.

b) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

c) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

d) The Company has complied with the requirement with respect to number of layers as prescribed under Section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

e) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.

f) The Company has not traded or invested in crypto currency or virtual currency.

g) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

h) The Company has not received any funds from any person(s) or entity(ies), including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

I58 Approval of financial statement

The standalone financial statements are approved for issue by the Audit Committee and by the Board of Directors at their respective meetings held on 7^th May 2024.

---

Mar 31, 2023

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.

Goodwill, Copyrights and Trademark

Goodwill, copyrights and trademark in the books of the Company pertain to Consumer and Bazaar & Business to 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 & Business to 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 2023. 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 (including Araldite) and Business to 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 12.7% per annum (12.0% per annum as at 31^st March 2022).

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 (7% per annum as at 31^st March 2022) 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 cashgenerating unit.

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 8^th May 2023 declared a final dividend of 11.00 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 2023, the Company had paid final dividend of 10.00 per equity share of 1 each for the financial year 2021-22.

( in crores)
39 |	Contingent Liabilities and Commitments
							As at 31st March 2023	As at 31st March 2022 (refer Note 56)
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 allowances in respect of which the Company is in appeal					89.97	89.97
	b)	Excise Duty and Service Tax claims disputed by the Company relating to issues of classifications					23.10	24.19
	c)	Sales Tax (VAT, CST, Entry Tax, LBT and GST) claims disputed by the Company relating to issues of declaration forms and classifications					162.12	174.98
	d)	Other Matters (relating to disputed Electricity Duty, Gram Panchayat Tax, Open Access Charges, etc.)					1.50	2.66
2.	a)	Guarantees given by Banks on behalf of the Company*					38.79	44.25
	b)	Corporate Guarantees given by the Company on behalf of the Subsidiaries to Banks*
		Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda					17.26	15.90
		Pidilite Bamco Ltd					3.53	3.26
		Pidilite MEA Chemicals LLC (Previously known as Jupiter Chemicals LLC)					44.74	41.23
		Pidilite Lanka Private Limited					36.12	33.28
		Bamco Supply and Services Ltd					1.19	1.10
		Pidilite East Africa Limited					12.33	7.57
		Nina Percept Private Limited					90.00	-
* Guarantees given are for business purpose.
B)	Commitments:
	a)	Estimated amount of contracts, net of advances, remaining to be executed for the acquisition of Property, Plant and Equipment, investments and not provided for					209.92	122.46
	b)	For other commitments, refer Note 47(E)(ii) for financial instruments and Note 51 for leases.
	c)	The Company, being the holding/ultimate holding company, will extend financial support to its subsidiaries as and when required.
H	Details of provisions
	Provision for warranties represents management''s best estimate of the liability for warranties based on						past experience of claims
	Particulars		Opening Balance	Additions under Business Combination (refer Note 56)	Additions	Utilisation	Reversal (withdrawn as no longer required)	Closing Balance
	n,-.		0.86	-	0.03	(0.40)	-	0.49
	riuvisiuii iui vvaiicniiy CApti lies		(-)	(0.35)	(0.53)	((0.02))	(-)	(0.86)
Figures in brackets () represents previous year

42 Segment information

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 raw materials.

(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 money 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 / Kotak 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.

|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.

(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.

(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 line-items in the financial statements that include the above hedging instruments are "Other Financial Assets" of NIL crores ( 0.44 crores as at 31^st March 2022) and "Other Financial Liabilities" of 0.60 crores ( 0.60 crores as at 31^st March 2022)

(refer Note: 13 and 25 respectively).

The aggregate amount of loss under foreign exchange forward contracts recognised in the Statement of Profit and Loss is 0.44 crores (gain of 0.14 crores as at 31^st March 2022).

(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 (refer Note 9), 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 and 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.

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.

¦ 52 Corporate Social Responsibility Expenses

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.

* The unspent amount of ? Nil crores ( 1.85 crores in the previous year) will be transferred to unspent CSR account within 30 days from the end of the financial year, in accordance with the Companies Act, 2013 read with the CSR Amendment Rules. The unspent CSR amount of previous year ( 1.85 crores) is incurred for CSR activities in current year.

Nature of CSR activities

(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; Milk and Animal Health; promotion of Farmer Producer Organisation; Swachtha Initiative; promotion of Culture; Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts & Handicrafts, Khadi and Handloom; Employment Generation and Government Scheme System; 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.

53 Other Information

a) Pidilite Ventures Private Limited (formerly known as Madhumala Ventures Pvt Ltd), a wholly owned subsidiary of the Company:

(i) invested an amount of 3.65 crores in current year in the Abeyaantrix Technology Private Limited. The company operates a software-enabled platform for construction contractors to manage documents, and record financial transactions, known by the name of Onsite.

(ii) invested an amount of 23.89 crores in current year in the Buildnext Construction Solutions Private Limited. The company is engaged in providing end to end home construction services.

(iii) invested an amount of 15.37 crores in previous year in the Aapkapainter Solutions Pvt Ltd (Aapkapainter). The company is engaged in providing painting and waterproofing solutions to retail consumer.

(iv) invested an amount of 1.50 crores in previous year in the Pepperfry Private Limited (formerly known as M/s. Trendsutra Platform Services) by subscription to Non Cumulative Compulsory Convertible Debentures/ Compulsory Convertible Non-Cumulative Preference Shares. Pepperfry is an online furniture chain in India.

(v) invested an amount of 18.45 crores in previous year in the Homevista Decor & Furnishings Pvt Ltd (HomeLane) by subscription to Equity and 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.

(vi) invested an amount of 1.56 crores in previous year in the Constrobot Robotics Pvt Ltd by subscription to Equity Shares. The company is engaged in the business of research and development, designing, manufacturing, trading and dealing in robotic equipments etc.

(vii) invested an amount of 3.75 crores in previous year in the Kaarwan Eduventures Private Limited by subscription to Cumulative Compulsory Convertible Preference Shares. The company is engaged in the business of Architecture, Interior and General Designing etc.

(viii) invested an amount of 9.00 crores in current year ( 2.00 crores in previous year) in the Finemake Technologies Private Limited by subscription to Preference Shares. The company is engaged in business of providing interior designing services.

(ix) invested an amount of 0.49 crores in current year ( 10,000 in previous year) in the Climacrew Private Limited by subscription to Equity Shares. The company is engaged in business of supply of seaweed and seaweed products.

b) During current year, the Company has invested an amount of 8.18 crores in "Pidilite International Pte Ltd" and

1703 crores in Pidilite Middle East Ltd by subscription to Equity Shares.

c) During current year, the Company has invested an amount of 12.22 crores in "Pidilite Litokol Pvt Ltd" and 13.04 crores in Pidilite Grupo Puma Manufacturing Ltd by subscription to Equity Shares.

d) During previous year, ICA Pidilite Private Limited, subsidiary of the Company made buy back of shares from all shareholder. The company has recognised profit on buyback on shares from subsidiary amounting to 1.11 crores (refer Note 32)

e) During previous year, the Company has invested an amount of 1.21 crores in "Pidilite C-Techos Walling Limited" (PCWL) by subscription to Equity Shares.

f) During previous year, on completion of winding up procedures, Pidilite Grupo Puma Private Limited (w.e.f. 27^th October, 2021) and Pidilite C-Techos Private Limited (w.e.f. 1^st February 2022) were struck off by Registrar of Companies.

g) During the current year, the Company had paid Dividend of 10.00 per equity share of 1 each for the financial year 2021-22.

b) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

c) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

d) The Company has complied with the requirement with respect to number of layers as prescribed under Section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

e) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.

f) The Company has not traded or invested in crypto currency or virtual currency during the year.

g) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

h) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Isy 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 8^th May 2023.

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Mar 31, 2022

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 2022. 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 12.0% per annum (11.7% per annum as at 31^st March 2021).

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 (7% per annum as at 31^st March 2021) 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 12.3% (CAGR) (10.8% as at 31st March 2021) 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 31st March 2021) 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.

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 18^th May 2022 declared a final dividend of ^ 10.00 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 2022, the Company had paid Final Dividend of 8.50 per equity share of 1 each for the financial year 2020-21.

E2 Segment information

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 mainly includes sale of raw materials.

(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 money 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 / Kotak 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.

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.

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.

4b| 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.

(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.

(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 line-items in the financial statements that include the above hedging instruments are “Other Financial Assets” of ^ 0.44 crores ( 0.09 crores as at 31^st March 2021) and “Other Financial Liabilities" of 0.60 crores (Rs 0.64 crores as at 31^st March 2021) (refer Note: 13 and 24 respectively).

The aggregate amount of profit under foreign exchange forward contracts recognised in the Statement of Profit and Loss is ? 0.14 crores (loss of 2.49 crores as at 31^St March 2021).

(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.

Nature of CSR activities

(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; Milk and Animal Health; promotion of Farmer Producer Organisation; Swachtha Initiative; promotion of Culture; Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts & Handicrafts, Khadi and Handloom; Employment Generation and Government Scheme System; 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.

53 Other Information

a) During previous year, the Company had 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) had been recognised in this financial statement amounting to 15.94 crores which was paid in current year based on preconditions mentioned in the agreement.

b) During previous year, the Company had 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 well-known brands such as Araldite, Araldite Karpenter and Araseal. Huntsman group had 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 inline with 2019. Accordingly, a liability towards acquisition (refer Note 24) had been recognised in the financial statement in previous year amounting to 208.31 crores which was paid in current year.

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 had 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 34.60 crores was accounted in the books with corresponding derivative liability (Net) in financial year 2017-18. During previous year, seller has exercised the option to sell the balance 30% stake on

6^th January 2021. A liability towards acquisition (refer Note 24) had been recognised in this financial statement amounting to 4.25 crores which will be paid once the preconditions mentioned in the agreement are met. During current year additional investment of 48 crores was recorded on transfer of balance shares.

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 15.37 crores in current year ( 3.00 crores in previous year) in the Aapkapainter Solutions Private Limited (Aapkapainter). The company is engaged in providing painting and waterproofing solutions to retail consumer.

(ii) invested an amount of 19.15 crores in previous year in the Home Interior Designs E.Commerce Private Limited (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 1.50 crores in current year ( 71.48 crores in previous year) in the Pepperfry Private Limited (formerly known as M/s. Trendsutra Platform Services Private Limited) by subscription to Non Cumulative Compulsory Convertible Debentures/Compulsory Convertible Non-Cumulative Preference Shares. Pepperfry is an online furniture chain in India.

(iv) invested an amount of 18.45 crores in current year ( 49.00 crores in previous year) in the Homevista Decor & Furnishings Pvt Ltd (HomeLane) by subscription to Equity and 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.

(v) invested an amount of 1.57 crores in current year in the Constrobot Robotics Pvt Ltd by subscription to Equity Shares. The company is engaged in the business of research and development, designing, manufacturing, trading and dealing in robotic equipments etc.

(vi) invested an amount of 3.75 crores in current year in the Kaarwan Eduventures Private Limited by subscription to Cumulative Compulsory Convertible Preference Shares. The company is engaged in the business of Architecture, Interior and General Designing etc.

(vii) invested an amount of 2.00 crores in current year in the Finemake Technologies Private Limited by subscription to Preference Shares. The company is engaged in business of providing interior designing services.

(viii) invested an amount of 10,000 in current year in the Climacrew Private Limited by subscription to Equity Shares. The company is engaged in the business of supply of seaweed and seaweed products.

e) During the year, the Company has invested an amount of 1.21 crores in "Pidilite C-Techos Walling Limited" (PCWL) by subscription to Equity Shares.

f) During the year, ICA Pidilite Private Limited, subsidiary of the Company made buy back of shares from all shareholder. The company has recognised profit on buyback on shares from subsidiary amounting to 1.11 crores (refer Note 31).

g) During the current year, the Company had paid Dividend of 8.50 per equity share of 1 each for the financial year 2020-21.

h) The Company has taken into account external and internal information for assessing possible impact of COVID-19 on various element of its financial statements, including recoverability of its assets.

i) During the year, on completion of winding up procedures, Pidilite Grupo Puma Private Limited (w.e.f. 27^th October 2021) and Pidilite C-Techos Private Limited (w.e.f. 1^st February 2022) were struck off by Registrar of Companies.

j) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

k) Previous year figures have been regrouped/reclassified to make them comparable with those of current year, wherever applicable.

54 Events after reporting period

a) During the year, the Company has filed two merger applications with National Company Law Tribunal (NCLT) with respect to merger of its wholly owned subsidiaries namely Pidilite Adhesives Pvt Ltd (PAPL) and Cipy Polyurethanes Pvt Ltd (CIPY). Consequent to the filing of NCLT orders approving the mergers with Registrar of Companies, mergers have become effective from Appointed date 1^st April 2022. As a result of merger being an event happening after balance sheet date, no effect of merger given in the financial statements.

b) Proposed dividend of 10.00 per Equity Share of 1 each recommended by the Board of Directors at its meeting held on 18^th May 2022. The proposed dividend is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

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 had 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 8.50 crores to the seller and balance liability towards acquisition has been paid in current year amounting to 8.80 crores.

The gross contractual amounts and the fair value of trade and other receivables acquired was 0.91 crores. None of the trade and other receivables were 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 for the year ended 31^st March 2021. 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 18^th May 2022.

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Mar 31, 2021

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.

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 X 1 each for the financial year 2018-19 and Interim Dividend of 7.00 per equity share of X 1 each for the financial year 2019-20.

¦l.^l Segment information

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.

(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.

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.

(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.

(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 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.

(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

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.

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 well-known 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 Designs 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 Decor & 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.

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)

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.

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.

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.

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.

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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Mar 31, 2019

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, 7th 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 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.

2.1 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:

2.1.1 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.

2.1.2 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 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.

2.1.3 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 44)

2.1.4 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 47).

2.1.5 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.

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 31st March 2019. 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 13.1% per annum (12.5% per annum as at 31st March 2018).

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 8% per annum (9% per annum as at 31st March 2018) 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 14.5% (CAGR) (13.8% as at 31st March 2018), in line with current year projections. The values assigned to the assumption reflect past experience 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 1% (0.6% as at 31st March 2018) 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.

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:

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 43).

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 14th May 2019 declared a final dividend of f 6.50 per equity share of f 1 each, subject to approval of the shareholders at the ensuing Annual General Meeting.

During the year ended 31st March 2019, the Company had paid Final Dividend of Rs. 6.00 per equity share of X 1 each for the financial year 2017-18.

During the year ended 31st March 2018, the Company had paid Final Dividend of Rs. 4.75 per equity share of Rs. 1 each for the financial year 2016-17.

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 Reserve 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.

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.

* The Company desegregated revenues from contracts with customers by customer type and by geography. The Company bel ieves 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 geography wise and customer wise breakup of revenue, refer Note 41.

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.

3. 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:

4 Segment information

Business Segment: The Company has Consumer & Bazaar Products and Industrial Products as its reportable business segments based on customer type. Consumer & Bazaar products consists of mainly Adhesives, Sealants, Art Materials and Construction Chemicals. Industrial Products consists of Organic Pigment, Industrial Resins and Industrial Adhesives. Others largely comprises manufacture and sale of Speciality Acetates. Operating Segment disclosures are consistent with the information provided to and reviewed by the Managing Director (Chief Operating Decision Maker).

5 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

(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

(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 and the Company has funding ratio of about 94% (i.e. asset over liability ratio of 94%) in the current year, and hence, 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.

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.

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.

6 Employee Stock Option Scheme

a) Details of Employee Share Options

In the Annual General Meeting of the Company held on 24th 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 Rs. 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 2nd April 2016. Each Option comprises one underlying equity share. The exercise price shall be Rs. 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.

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.

* Includes 2,200 (1,900 for the year ended 31st March 2018) Options granted to the Eligible Employees of the subsidiary Companies.

** Includes 1,950 Options (Nil for the year ended 31st March 2018) vested and exercised by Eligible Employees of the Subsidiary Companies.

*** Lapsed due to termination of employment with the Company.

7 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

(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.

(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:

(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.

(a) This is mainly attributable 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 in to 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 line-items in the financial statements that include the above hedging instruments are “Other Financial Assets” of f 0.96 crores ( 0.09 crores as at 31st March 2018) and “Other Financial Liabilities” of 0.03 crores ( 0.08 crores as at 31st March 2018).

(refer Note 12 and 27 respectively)

At 31st March 2019, the aggregate amount of loss under foreign exchange forward contracts recognised in the Statement of Profit and Loss is 0.93 crores (gain of 0.01 crores as at 31st March 2018).

(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. 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. The contractual maturity is based on the earliest date on which the Company will be liable to pay.

(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).

(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.

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.

* Interest component consists of 45,519 which will be paid subsequently 5o| Operating Lease

(a) Operating Lease payment recognised in Statement of Profit and Loss amounting to 34.28 crores ( 30.83 crores for the year ended 31st March 2018)

(b) General description of the leasing arrangement:

i) Future lease rentals are determined on the basis of agreed terms.

ii) At the expiry of the lease term, the Company has an option either to vacate the asset or extend the term by giving notice in writing.

The Company has entered into operating lease arrangements for certain facilities, which are cancellable in nature and maybe renewed for a further period on mutual agreement of the parties.

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 23.12 crores ( 19.34 crores for the year ended 31st March 2018)

8 Other Information

a) During previous year, the Company had completed buyback of 50,00,000 equity shares of Rs. 1/- each (representing 0.975% of total pre buy-back paid up equity capital of the Company) from the shareholders of the Company on a proportionate basis through the tender offer route at a price of 1,000 per equity share for an aggregate amount of 500 crores. Accordingly, the Company had extinguished 49,99,056 fully paid up equity shares of X 1/- each (in dematerialized form) and 944 fully paid up equity shares of X 1/- each (in physical form) as a result of the conclusion of buyback of 50,00,000 equity shares and final share capital of the Company (post extinguishment) was 50,78,10,330 shares X 1/- each. The Company funded the buyback from its Securities Premium and General Reserve. In accordance with section 69 of the Companies Act, 2013, the Company created “Capital Redemption Reserve” of 0.50 crores equal to the nominal value of the shares bought back as an appropriation from General Reserve.

b) During the year, Percept Waterproofing Services Limited (Percept) (80% Subsidiary of the Company) was merged with Nina Waterproofing Systems Pvt Ltd (Nina) (70% Subsidiary of the Company), pursuant to the Hon’ble National Company Law Tribunal, Mumbai Bench, order dated 11th January 2019, w.e.f. the Appointed date i.e. 1st April 2017 and consequently, Percept stands dissolved without winding up. Further, post the said merger, w.e.f. 27th March 2019, Nina is known as AEKAM Construction Specialities Private Limited (AEKAM) and w.e.f. 15th April 2019, AEKAM is known as Nina Percept Private Limited. Accordingly, the company’s investment in Percept are merged with Nina Percept Private Limited and the Company holds 71.53% stake in the merged entity.

c) During previous year, the Company acquired 70% stake in equity shares of CIPY Polyurethanes Pvt Ltd (“CIPY”), thereby making CIPY a subsidiary of the Company. CIPY is engaged in the business of manufacture and sale of floor coatings.

The business acquisition was conducted by entering into a share purchase agreement for cash consideration of 96.40 crores. During current year, an additional amount of 8.16 crores is paid as working capital adjustments. 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 i.e on or after 8th February 2021. Accordingly, derivative asset and derivative liability of 7.61 crores (refer Note 11) and 42.2 crores (refer Note 23) respectively has been recognised in this financial statement based on a valuation report obtained from an independent valuer.

9 Events after reporting period

There was no significant event after the end of the reporting period which require any adjustment or disclosure in the financial statement other than the proposed dividend of 6.5 per Equity Share of 1 each recommended by the Board of Directors at its meeting held on 14th May 2019. The proposed dividend is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

10 Approval of the financial statements

The financial statements are approved for issue by the Audit Committee and by the Board of Directors at their meeting held on 14th May 2019.

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Mar 31, 2018

1. Corporate information

Since inception, Pidilite Industries Limited, together with its subsidiaries has been a pioneer 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 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.

2.1 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:

2.1.1 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.

2.1.2 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 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.

2.1.3 Business combinations and Intangible Assets

Business combinations are accounted for using Ind AS 103, “Business Combinations”. Ind AS 103 requires the identifiable intangible assets 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 intangible assets. These valuations are conducted by independent valuation experts.

2.1.4 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)

2.1.5 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).

2.1.6 Property, Plant and Equipment

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.

The Company has determined the indefinite useful life for its Copyrights and Trademark on the basis of renewal of legal rights regularly and the management’s intention to keep them perpetually.

Goodwill, Copyrights and Trademark

Goodwill, copyrights and trademark in the books of the Company pertains 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 2018. 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 covering a five year period, and a discount rate of 12.5% per annum (12.5% per annum as at 31^st March 2017).

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 9% per annum (9% per annum as at 31^st March 2017) 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.

3 Segment information

Business Segment: The Company has Consumer & Bazaar Products and Industrial Products as its reportable segments. Consumer & Bazaar products consists of mainly Adhesives, Sealants, Art Materials and Construction Chemicals. Industrial Products consists of Organic Pigment, Industrial Resins and Industrial Adhesives. Others largely comprises manufacture and sale of Speciality Acetates. Operating Segment disclosures are consistent with the information provided to and reviewed by the Managing Director (Chief Operating Decision Maker).

4 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.

5 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.

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.

6 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

(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.

(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:

(i) Foreign currency sensitivity analysis

The Company is mainly exposed to the USD and EUR. The following table demonstrates the sensitivity to a 2% increase or decrease in the USD and EUR 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.

(a) This is mainly attributable to the exposure outstanding on USD receivables and payables at the end of the reporting period.

(b) This is mainly attributable to the exposure to outstanding EUR receivables and 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 in to 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 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 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 line-items in the financial statements that include the above hedging instruments are “Other Financial Assets” and “Other Financial Liabilities”.

At 31^st March 2018, the aggregate amount of gain under foreign exchange forward contracts recognised in the Statement of Profit and Loss is 0.85 crores (loss of 0.60 crores as at 31^st March 2017).

(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. 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. The contractual maturity is based on the earliest date on which the Company will be liable to pay.

(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).

(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.

7 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 19.34 crores ( 15.69 crores for the year ended 31^st March 2017)

(b) Amount spent during the year on:

8 Other Information

During the year:

a) The Company has acquired 70% stake in equity shares of Cipy Poly Urethanes Pvt Ltd (“CIPY”), thereby making CIPY a subsidiary of the Company on 8^th February 2018. CIPY is engaged in the business of manufacture and sale of floor coatings. The business acquisition was conducted by entering into a share purchase agreement for cash consideration of 96.25 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 i.e on or after 8^th February 2021. Accordingly, derivative asset and derivative liability of 0.55 crores (refer Note 11) and 35.15 crores (refer Note 23) respectively has been recognised in this financial statement based on a valuation report obtained from an independent valuer.

b) The Company has on 23^rd March 2018 completed buy-back of 50,00,000 equity shares of 1/- each (representing 0.975% of total pre buy-back paid up equity capital of the Company) from the shareholders of the Company on a proportionate basis through the tender offer route at a price of 1,000 per equity share for an aggregate amount of 500 crores. Accordingly, the Company has extinguished 49,99,056 fully paid up equity shares of 1/- each (in dematerialized form) and 944 fully paid up equity shares of 1/- each (in physical form) as a result of the conclusion of buy-back of 50,00,000 equity shares and final share capital of the company (post extinguishment) is 50,78,10,330 shares 1/- each. The Company has funded the buy-back from its Securities Premium and General Reserve. In accordance with section 69 of the Companies Act, 2013, the Company has created “Capital Redemption Reserve” of Rs. 0.50 crores equal to the nominal value of the shares bought back as an appropriation from General Reserve.

9 Events after reporting period

There was no significant event after the end of the reporting period which require any adjustment or disclosure in the financial statement other than the proposed dividend of 6.44 per Equity Share of 1 each recommended by the Board of Directors at its meeting held on 24^th May 2018. The proposed dividend amounting to 366.72 crores includes dividend distribution tax of 62.03 crores and is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

10 Approval of the financial statements

The financial statements are approved for issue by the Audit Committee at its meeting held on 23^rd May 2018 and by the Board of Directors at its meeting held on 24^th May 2018.

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Mar 31, 2017

The Company has determined the indefinite useful life for its Copyrights & Trademarks on the basis of renewal of legal rights regularly and the management’s intention to keep it perpetually.

Allocation of goodwill to cash-generating units

Goodwill in the books of the Company pertains mainly to Consumer and Bazaar business of the Company.

At the end of each reporting period, the Company reviews carrying amount of goodwill to determine whether there is any indication that goodwill has suffered any impairment loss.

Accordingly, recoverable amount of goodwill is arrived basis projected cash flows from Consumer and Bazaar business.

Recoverable amount of goodwill exceeds the carrying amount of goodwill in the books as on 31^st March 2017. Further there are no external indications of impairment of goodwill.

As a result, no impairment loss on goodwill is required to be recognized.

Projected cash flows 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 covering a five year period, and a discount rate of 12.5% per annum (as at 31^st March 2016: 12.5% per annum; as at 1^st April 2015: 12.5% per annum).

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 9% per annum (as at 31^st March 2016: 9% per annum; as at 1^st April 2015: 9% per annum) 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.

b. Terms/ Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.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 18^th May 2017 declared a final dividend of Rs.4.75 per equity share of Rs. 1 each, subject to approval of the shareholders at the ensuing Annual General Meeting

During the year ended 31^st March 2015, the Company paid the Final Dividend of Rs.2.90 per equity share of Rs.1 each for the financial year 2014-15.

During the year ended 31^st March 2016, the Company had paid an Interim Dividend of Rs.3.65 per equity share of Rs.1 each and Final Dividend of f 0.50 per equity share of Rs.1 each for the financial year 2015-16.

e. The Company had issued on 6^th December 2007, 400 Foreign Currency Convertible Bonds (FCCB) of US$100,000 each, which were convertible into Equity shares at any time upto 1^st December 2012. The due date for redemption of FCCBs was 7^th December 2012. As on 7^th December 2012, the balance outstanding FCCBs aggregating 205 Bonds were redeemed by the Company.

42. Segment information

Business Segment: The Company has Consumer & Bazaar Products and Industrial Products as its reportable segments. Consumer & Bazaar products consists of mainly Adhesives, Sealants, Art Materials and Construction Chemicals. Industrial Products consists of Organic Pigment, Industrial Resins and Industrial Adhesives. The VAM plant was modified to make a range of Speciality Acetates. Others largely comprises manufacture and sale of Speciality Acetates. Operating Segment disclosures are consistent with the information provided to and reviewed by the Managing Director (Chief Operating Decision Maker).

(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 and Pidilite has funding ratio of 95% (i.e. asset over liability ratio of 95%), which is on the top 5% when compared to other companies, there is no material risk of the Company unable to meet the Gratuity payments. 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 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.

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.

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.

1 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 Rs. 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. Result of the Postal Ballot was declared on 2^nd April 2016. Each option comprises one underlying equity share. The exercise price shall be Rs.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.

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.

2 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 maximizing the return to stakeholders through the optimum utilization 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.

(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 analyze 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 utilizing forward foreign exchange 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 forward foreign exchange contracts to manage its exposure to foreign currency risk of net imports.

(i) Foreign currency sensitivity analysis

The Company is mainly exposed to the USD and EUR. The following table demonstrates the sensitivity to a 2% increase or decrease in the USD and Euro 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.

(i) This is mainly attributable to the exposure outstanding on USD receivables and payables at the end of the reporting period.

(ii) This is mainly attributable to the exposure to outstanding Euro receivables and 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) Forward foreign exchange contracts

It is the policy of the Company to enter into forward foreign exchange contracts to cover foreign currency payments (net of receipts) in USD and Euro. The Company enters in to 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 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 line-items in the financial statements that include the above hedging instruments are “Other Financial Assets” and “Other Financial Liabilities”.

At 31^st March 2017, the aggregate amount of loss under forward foreign exchange contracts recognized in the Statement of Profit and Loss is Rs.0.60 crores (Rs. 1.38 crores as at 31^st March 2016). Aggregate amount of loss in reserves is Rs.0.06 crores as at 1^st April 2015.

(F) Credit risk management

Credit risk refers to risk that a counter party 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 counter parties that have sufficiently high credit rating. The Company’s exposure and credit ratings of its counter parties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counter parties.

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 counter parties are banks and recognized 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. 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. The contractual maturity is based on the earliest date on which the Company will be liable to pay.

(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).

(ⁱⁱ) Financial instruments measured at amortized cost

The carrying amount of financial assets and financial liabilities measured at amortized 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.

3 Notes to the Reconciliations

a Pre-operative expenses

Under previous GAAP, pre operative expenses were capitalized in the cost of Property, Plant and Equipment. Under Ind AS, these expenses have been specifically excluded from the cost of Property, Plant and Equipment. On the date of transition to Ind AS, these expenses have been identified and excluded from the cost of Property, Plant and Equipment, resulting in reduction in value of opening block of Property, Plant and Equipment as at 1^st April 2015, by 2.34 crores. During the year 2015-16, depreciation relating to pre-operative expenses (capitalized under previous GAAP) have been reversed to the extent of 0.16 crores.

b. Leasehold land classified to prepaid

Under previous GAAP, leasehold land was included in the Property, Plant and Equipment. Under Ind AS, leases not classified as finance leases are regrouped under prepaid expenses, as at 31^st March 2016 21.04 crores and as at 1^st April 2015 21.25 crores. Depreciation to the extent of 0.21 crores pertaining to leasehold land has been reversed and the same is expensed under the head “Rent”. This has no impact on statement of profit and loss or on total equity.

c. Capital Work-In-Progress

Under previous GAAP, capital work in progress was measured at cost. On transition to Ind AS, the Company has elected to fair value Land, Building and Plant and Machinery, alongwith integrated patents, designs and drawings at Dahej (included in Capital Work in progress) as of the transition date. Resultant reduction in value of CWIP is 242.02 crores as at 1^st April 2015. During the year 2015-16, administrative expenses which were included in Capital Work-In-Progress in previous GAAP, and which cannot be capitalized under Ind AS were expensed amounting to 0.06 crores.

d. Goodwill

Under previous GAAP, goodwill was amortized based on its useful life. Under Ind AS, goodwill is not amortized and tested for impairment on transitioning to Ind AS, amortization expense pertaining to Goodwill has been reversed, resulting in an increase in carrying amount of Goodwill by 9.10 crores as at 31^st March 2016.

e. Other Intangibles

Under previous GAAP, other intangible assets were amortized based on their useful life. Under Ind AS, the company has estimated the useful lives of Trademarks and Copyrights to be indefinite. On transitioning to Ind AS, amortization expense pertaining to Trademarks and Copyrights have been reversed, resulting in an increase in carrying amount of Trademark and copyrights by 16.95 crores and 0.77 crores respectively as at 31^st March 2016.

f. Investments

Under previous GAAP, investments in mutual funds were measured at lower of cost or fair value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition. Changes in fair value of these investments are recognized in profit or loss. On transition to Ind AS, these financial assets have been measured at their fair values which is higher than cost as per previous GAAP, resulting in net increase in carrying amount as at 31^st March 2016 by Rs.54.33 crores and as at 1^st April 2015 by 26.06 crores. During the year 2015-16, increase in mark to market gain on account of fair valuation of investments of 28.27 crores.

g. Reversal of provision for diminution in value of investments

Under Ind AS, investments in mutual funds were measured at cost. Impairment, if any, was provided for, against cost of investments. Under Ind AS, these investments are measured at fair value. Amount provided for impairment during the financial year ended 31^st March 2016 amounting to 0.07 crores is reversed. There is no deferred tax impact on such reversal, but there is an increase in profit before tax and total profit for the year ended 31^st March 2016 by 0.07 crores.

h. Trade Receivable - Expected Credit Loss

Under previous GAAP, allowance for doubtful debts was made as per management policy based on ageing of debtors. Under Ind AS, the Company applies expected credit loss (ECL) model for recognizing impairment loss on these financial assets on the transition date. The resultant changes in provision for doubtful debts are recognized in profit or loss. On transition to Ind AS, allowance for doubtful debts is remeasured as per ECL model, which is higher than provision as per previous GAAP, resulting in net increase in carrying amount of allowance for doubtful debts as at 31^st March 2016 by Rs.8.15 crores and as at 1^st April 2015 by Rs.8.57 crores. During the year 2015-16, reduction in provision as per ECL is 0.42 crores.

i. Deferred premium on forward contracts

Under previous GAAP, deferred premium on forward contracts was recognized under Other Current Assets. Under Ind AS, forward contracts are recognized as financial assets / liabilities and measured at FVTPL on the date of transition. Changes in fair value of forward contracts are recognized in profit or loss. As a result, deferred premium amounting to 0.39 crores as at 31^st March 2016 and 0.29 crores as at 1^st April 2015 is derecognized as an asset. During the year 2015-16, exchange difference on forward contracts 1.52 crores is reversed. On transition to Ind AS, these forward foreign exchange contracts are recognized under Other Financial Assets/ Liabilities. These have been measured at their fair values as at 31^st March 2016 at 1.44 crores under Other Financial Liabilities (as at 1^st April 2015 at 0.01 crores under Other Financial Assets and 0.08 crores under Other Financial Liabilities). During the year 2015-16, mark to market loss on account of fair valuation of forward contracts is 1.38 crores.

j. Short term provisions - Reversal of equity dividend provided

Under previous GAAP, dividend on equity shares, which was recommended by the board of directors after the end of reporting period but before the financial statements were approved for issue, were recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised when declared by the members in a general meeting. The effect of this change is an increase in total equity as at 31^st March 2016 of 30.85 crores ( 178.94 crores as at 1^st April 2015), but does not affect profit before tax and total profit for the year ended 31^st March 2016.

k. Actuarial gains and losses

Under previous GAAP, actuarial gains and losses were recognized in profit and loss. Under Ind AS, the actuarial gains and losses forming part of remeasurement of the net defined benefit liability/ asset, are recognized in the Other Comprehensive Income under Ind AS instead of profit or loss. The actuarial gains for the year ended 31^st March 2016 were 0.31 crores, with tax 0.09 crores. This change does not effect total equity, but there is an increase in profit before tax of 0.31 crores and in total profit of 0.22 crores for the year ended 31^st March 2016.

l. Fair valuation of ESOP

Under previous GAAP, the cost of equity settled employee share based payments was recognized using the intrinsic value method. This did not result in recognizing any expense in profit or loss in respect of these share based payments because the fair value of the shares on the grant date equaled the exercise price. Under Ind AS, the cost of equity settled employee share based payments was recognized based on the fair value of the options as on grant date. As on transition date, there is a reduction in the provision for Employee Stock Options Outstanding to the extent of 0.16 crores as at 31^st March 2016 and 0.01 crores as at 1^st April 2015. The change does not affect total equity, but there is an increase in the profit before tax as well as total profit for the year ended 31^st March 2016 of 0.16 crores.

m. Deferred Tax impact

Deferred tax impacts for the above adjustments, are a net increase in Deferred Tax Liabilities as at 31^st March 2016 by Rs.9.31 crores and reduction in Deferred Tax Liability as at 1^st April 2015 by Rs.3.14 crores. During the year 2015-16, increase in provision for Deferred Tax Liability is 12.45 crores.

n. Cash discount

Cash discount has been reduced from revenue as per ind AS, amounting to 3.47 crores for the year ended 31^st March 2016. The same amount is reduced from Other Expenses. This does not affect profit or equity.

o. Bank overdraft included in Cash and cash equivalents

Under Ind AS, bank overdrafts which are repayable on demand and form an integral part of an entity’s cash management system are included in Cash and Cash Equivalents for the purpose of presentation of statement of cash flows. Whereas under previous GAAP there was no similar guidance and hence, bank overdrafts were considered similar to other borrowings and the movements therein were reflected in cash flows from Financing activities. The effect of this is that bank overdrafts of 1.12 crores as at 31^st March 2016 and 5.78 crores as at 1^st April 2015 have been considered as part of Cash and Cash equivalents. This also includes effect of Balance with Banks in Current Account (balances with restriction on repatriation) of 0.50 crores as at 31^st March 2016 and 0.61 crores as at 1^st April 2015, which were included in Cash & Cash Equivalents under previous GAAP. Consequently, the cash outflow from financing activities for the year ended 31^st March 2016 prepared as per Ind As is lower to the extent of this net movement of 4.66 crores.

p. Other Comprehensive Income

Under previous GAAP, there was no concept of Other Comprehensive Income. Under Ind AS, specified items of income, expense, gains or losses are required to be presented in Other Comprehensive Income.

q. Excise Duty

Under previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense is presented separately on the face of the statement of profit and loss. The change does not affect total equity as at 1^st April 2015 and 31^st March 2016, profit before tax or total profit for the year ended 31^st March 2016.

4 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.

5 Recent accounting pronouncements

^a) Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of Cash Flows’. The amendments are applicable to the Company from 1^st April 2017.

Amendment to Ind AS 7: The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

Amendment to Ind AS 102: The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

The Company is evaluating the requirements of the aforesaid amendments and the effect on the financial statements is being evaluated.

6 Other Information

During the year:

a) The name of the subsidiary Woodcoat Pvt Ltd was changed to ICA Pidilite Pvt Ltd

b) Pidilite International Pte Ltd and Pidilite Middle East Ltd, wholly owned subsidiaries of the Company, have acquired shares of Nebula East Africa Pvt Ltd (NEAPL), a Company incorporated in Kenya. With this acquisition, the wholly owned subsidiaries of the Company jointly hold 100% of the paid up share capital.

c) Nina Waterproofing Systems Pvt Ltd, a subsidiary of the Company has incorporated a subsidiary in Srilanka in the name of Nina Lanka Construction Technologies (Pvt) Ltd

7 Events after reporting period

There was no significant event after the end of the reporting period which require any adjustment or disclosure in the financial statement other than the proposed dividend of Rs.4.75 per equity share of Rs.1 each recommended by Board of Directors at its meeting held on 18^th May 2017. The proposed dividend amounting to Rs.293.10 crores includes dividend distribution tax of Rs. 49.58 crores and is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognized as a liability.

8 Approval of financial statements

The financial statements are approved for issue by the Audit Committee at its meeting held on 17^th May 2017 and by the Board of Directors on 18^th May 2017.

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Mar 31, 2015

Corporate information

Since its inception in 1959, Pidilite Industries Limited has been a pioneer in consumer and industrial specialty chemicals in India. The equity shares of the Company are listed on BSE Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE).

2 Contingent Liabilities and Commitments

As at 31st As at 31st March 2015 March 2014

A) Contingent liabilities not provided for:

1 Claims against the Company not acknowledged as debts comprise of:

a) Income Tax demand against the Company not 133.26 43.57 provided for and relating to issues of deduction and allowances in respect of which the Company is in appeal

b) Excise Duty claims disputed by the Company relating to issues of classifications 25.34 5.57

c) Sales Tax claims disputed by the Company relating to issues of declaration forms and 662.68 238.63 classifications

d) Other Matters (relating to disputed electricity duty, Gram Panchayat Tax, 31.58 25.59 open access charges, etc.)

2 a) Guarantees given by Banks in favour of Government and others 201.43 221.74

b) Guarantees given by Company* Pidilite USA Inc. 375.66 360.30

Pulvitec do Brasil Industria e Comercio de Colase Adesivos Ltda 150.27 144.12

Pidilite Bamco Ltd 97.95 94.00

Jupiter Chemicals (LLC) 90.33 86.33

Pidilite Industries Egypt SAE - 48.04

Bamco Supply and Services Ltd 19.24 18.47

TOTAL 733.45 751.26

Guarantee given for business purpose

B) Commitments:

a) Estimated amount of contracts, net of advances, remaining to be executed on capital account 435.57 351.67 and not provided for

b) Other Commitments - Non Cancellable Operating Leases (Refer Note 48)

33 The net amount of exchange differences (credited)/ debited to Statement of Profit and Loss 24.61 51.26

3 Disclosure as per clause 32 of the listing agreements with the Stock Exchanges

a) Loans and Advances in the nature of loans given to subsidiaries, associates, firms/ companies in which directors are interested:

3 Segment information

Business Segment: The Company has identified business segments as its primary segment and geographical segments as its secondary segment. Business segments are primarily: Consumer & Bazaar Products, Industrial Products and Others. This segmentation is based around customers. Consumer & Bazaar Products consist of mainly Adhesives, Sealants, Art Materials and Construction Chemicals. Industrial Products consist of Organic Pigments, Industrial Resins and Industrial Adhesives. Others largely comprises of Speciality Acetates. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment, manpower efforts, etc. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Geographical segments of the Company are India and Other Countries. Segment revenues are allocated based on the location of the customer.

Related Party Disclosures as required by AS-18, "Related Party Disclosure" are given below:

(i) Relationships:

a. Parekh Marketing Ltd Significant Influence

b. Vinyl Chemicals (India) Ltd Substantial Interest in Voting Power (Associate)

c. Kalva Marketing and Services Ltd Significant Influence

d. Nitin Enterprises Subsidiary

e. Fevicol Company Ltd Subsidiary

f. Bhimad Commercial Company Pvt Ltd Subsidiary

g. Madhumala Traders Pvt Ltd Subsidiary

h. Pagel Concrete Technologies Pvt Ltd Subsidiary

i. Building Envelope Systems India Ltd Subsidiary

j. Percept Waterproofing Services Ltd Subsidiary

k. Hybrid Coatings Subsidiary

l. Nina Waterproofing Systems Private Limited Subsidiary

m. Pidilite International Pte Ltd Subsidiary

n. Pidilite Middle East Ltd Subsidiary

o. Pulvitec do Brasil Industria e Comercio de Colas Subsidiary

e Adesivos Ltda

p. Pidilite USA Inc Subsidiary

q. Jupiter Chemicals (LLC) Subsidiary

r. PT Pidilite Indonesia Subsidiary

s. Pidilite Speciality Chemicals Bangladesh Pvt Ltd Subsidiary

t. Pidilite Innovation Centre Pte Ltd Subsidiary

u. Pidilite Industries Egypt SAE Subsidiary

v. Pidilite Bamco Ltd Subsidiary

w. Bamco Supply and Services Ltd Subsidiary

x. PIL Trading (Egypt) Company Subsidiary

y. Pidilite Industries Trading (Shanghai) Co Ltd Subsidiary

z. Pidilite Chemical PLC Subsidiary

(ii) Key Management Personnel:

a. Shri M B Parekh Executive Chairman and Managing Director*

b. Shri N K Parekh Joint Managing Director**

c. Shri A B Parekh Whole Time Director

d. Shri A N Parekh Whole Time Director

e. Shri R Sreeram (upto 7th November, 2014) Whole Time Director

f. Shri J L Shah (w.e.f. 4th November, 2014 upto 19th May, 2015) Whole Time Director

* W.e.f. 10th April, 2015, Shri Bharat Puri is appointed as the Managing Director of the Company and Shri M B Parekh ceased to be the Managing Director of the Company but continues as a Whole Time Director and as the Executive Chairman of the Company.

** W.e.f. 1st April, 2015, Shri N K Parekh cease to be the Joint Managing Director of the Company. He has been appointed as Non-Executive Vice Chairman of the Company effective 1st April, 2015.

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

The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund Commissioner and the Superannuation Fund is administered by the LIC of India 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:

(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.

Employee Stock Option Scheme

a) In the Annual General Meeting of the Company held on 24th July, 2012, the shareholders approved the issue of 5,076,486 equity shares under the Scheme titled "Employee Stock Option Scheme - 2012" (ESOS 2012). At the meeting of the Board of Directors of the Company held on 28th May, 2013, the Board approved Employees Stock Option Scheme covering 300,000 Stock Options, in terms of the regulations of the Securities and Exchange Board of India.

The ESOS-2012 allows the issue of options to employees of the Company. Each option comprises one underlying equity share. The HR & Remuneration Committee of the Company at its meeting held on 29th October, 2013 has granted 49,000 Stock Options pursuant to ESOS-2012 to the eligible employees of the Company. The exercise price of each option shall be Rs. 1/- per equity share. The options are granted, vesting in two equal installments over a period of two years from the date of the grant in a manner as specified in the Scheme. Options may be exercised within 5 years from the date of vesting.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

Operating Lease

a) Operating lease payment recognised in Statement of Profit and Loss under the head 'Rent' in Other Expenses amounting to 247.47 million ( 205.91 million) (Refer Note 30)

b) General description of the leasing arrangement:

i) Leased Assets: Godowns, Company Flat, Office space, etc.

ii) Future lease rentals are determined on the basis of agreed terms.

iii) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

The Company has entered into operating lease arrangements for certain facilities. The lease is non-cancellable for a period of 11 months to 5 years and may be renewed for a further period based on mutual agreement of the parties.

4 As per the requirement of the provisions of Schedule II of the Companies Act, 2013 (the "Act"), the Management has decided to adopt the useful lives as suggested in Part C of Schedule II of the Act with effect from 1st April, 2014 for all its fixed assets. Further, assets individually costing X 5,000/- or less that were depreciated fully in the year of purchase are now depreciated based on the useful life considered by the Company for the respective category of assets. The details of previously applied and revised useful life are as follows:

Pursuant to the transition provisions prescribed in Schedule II of the Companies Act, 2013, the Company has fully depreciated the carrying value of assets net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of X 133.93 million (net of deferred tax of X 69.17 million) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

The depreciation expense in the Statement of Profit and Loss for the year is higher by X 199 million consequent to the change in the useful life of the assets.

5 In the opinion of the Management, all assets other than Fixed Assets and Non- Current investments have a realisable value in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet.

6 In respect of Corporate Social Responsibility activities, gross amount required to be spent by the Company during the year was X 113.25 million and the Company has paid / spent Rs. 114.39 million.

7 During the year, the Company has acquired, on a slump sale basis, the adhesive business of Bluecoat Private Limited. Also, with its wholly owned subsidiary Pidilite International Pte Ltd., the Company has incorporated a subsidiary named "Pidilite Chemical PLC" in Ethiopia for manufacture of adhesives, mastics, paints, varnishes or similar coatings, printing, writing and painting inks, etc.

The Company has also acquired a subsidiary named "Nina Waterproofing Systems Private Limited" having 70% holding in its Share Capital. The said subsidiary company is engaged in the business of supply and installation of waterproofing systems, including but not limited to waterproofing products or thermal insulation systems for construction projects, infrastructure projects.

8 Figures in brackets indicate previous year's figures.

9 Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification/ disclosure.

Notes:

1. The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard 3 (AS-3), "Cash Flow Statement".

2. Cash and Cash Equivalents comprise cash on hand, cheques on hand, Current Accounts and EEFC Accounts with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition) that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3. Balance with banks in Current Account includes the balances having restriction on repatriation amounting to Rs. 6.06 million (7 6.86 million).

4. In respect of Corporate Social Responsibility activities, the Company has paid / spent Rs. 114.39 million.

5. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification/ disclosure.

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Mar 31, 2014

1 Corporate information

Since its inception in 1959, Pidilite Industries Limited has been a pioneer in consumer and industrial specialty chemicals in India. The equity shares of the Company are listed on BSE Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE).

(Rs. in million)

2 Contingent Liabilities and Commitments

As at As at 31st March 31st March 2014 2013

A) Contingent liabilities not provided for:

1 Claims against the Company not acknowledged as debts comprise of:

a) Income Tax demand against the Company not provided for and relating to issues of deduction 43.57 36.94 and allowances in respect of which the Company is in appeal

b) Excise Duty claims disputed by the Company relating to issues of classifications 5.57 2.64

c) Sales Tax claims disputed by the Company relating to issues of declaration forms and 238.63 359.95 classifications

d) Other Matters (relating to disputed electricity duty, Gram Panchayat Tax, 25.59 5.26 open access charges, etc.)

2 a) Guarantees given by Banks in favour of Government and others 221.74 278.52

b) Guarantees given by Company 751.26 1,004.21

B) Commitments:

a) Estimated amount of contracts, net of advances, remaining to be executed on capital account 351.67 374.76 and not provided for

b) Other Commitments - Non Cancellable Operating Leases (Refer Note 49)

33 The net amount of exchange differences (credited) / debited to Statement of Profit and Loss 51.26 4.60

4 Pursuant to the notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs amending the Accounting Standard 11, the Company has exercised the option as per Para 46A inserted in the Standard for all long term monetary assets and liabilities. Consequently, an amount ofRs. 55.52 million (without considering future tax benefit of Rs. 18.01 million) was carried forward in the Foreign Exchange Monetary Item Translation Difference Account as on 31st March, 2012. This amount has been amortised over the period of the monetary liabilities i.e. up to 7th December, 2012. Further it has credited the gain off 8 million to the carrying cost of the fixed assets for above referred period.

5 Segment information

Business Segment: The Company has identified business segments as its primary segment and geographical segments as its secondary segment. Business segments are primarily: Consumer & Bazaar Products, Industrial Products and Others. This segmentation is based around customers. Consumer & Bazaar Products consist of mainly Adhesives, Sealants, Art Materials and Construction Chemicals. Industrial Products consists of Organic Pigments, Industrial Resins and Industrial Adhesives. Others consist of VAM manufacturing unit of Vinyl Chemicals (India) Ltd demerged into the Company wef 1st April, 2007. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment, manpower efforts, etc. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Geographical segments of the Company are India and Other Countries. Segment revenues are allocated based on the location of the customer.

6 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

The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund Commissioner and the Superannuation Fund is administered by the LIC of India 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.

7 Employee Stock Option Scheme

a) In the Annual General Meeting of the Company held on 24th July, 2012, the shareholders approved the issue of 5,076,486 equity shares under the Scheme titled "Employee Stock Option Scheme-2012 " (ESOS 2012). At the meeting of the Board of Directors of the Company held on 28th May, 2013, the Board approved Employees Stock Option Scheme covering 300,000 stock options, in terms of the regulations of the Securities and Exchange Board of India.

The ESOS-2012 allows the issue of options to employees of the Company. Each option comprise one underlying equity share. The HR & Remuneration Committee of the Company at its meeting held on 29th October, 2013 has granted 49,000 Stock Options pursuant to ESOS-2012 to the eligible employees of the Company. The exercise price of each option shall be Rs. 1/- per equity share. The options granted vesting in two equal installments over a period of two years from the date of the grant in a manner as specified in the Scheme. Options may be exercised within 5 years from the date of vesting.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

8 Operating Lease

a) Operating lease payment recognised in Statement of Profit and Loss amounting to f 205.91 million (Rs. 186.30 million)

b) General description of the leasing arrangement:

i) Leased Assets: Godowns, Company Flat, Office Space, etc.

ii) Future lease rentals are determined on the basis of agreed terms.

iii) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

The Company has entered into operating lease arrangements for certain facilities. The lease is non-cancellable for a period of 11 months to 5 years and may be renewed for a further period based on mutual agreement of the parties.

9 In the opinion of the Management, all assets other than Fixed Assets and Non- Current investments have a realisable value in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet.

10 During the year, the Company has incorporated a Subsidiary Company named "Percept Waterproofing Services Limited" for the purpose of carrying on business of waterproofing application and consultancy services.

11 During the year the Company has declared Voluntary Retirement Scheme for its employees at Panvel, Kamothe & Ta loja units .

12 Figures in brackets indicate previous year''s figures.

13 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

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Mar 31, 2013

Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements are prepared under the historical cost convention, on the basis of a going concern and as per applicable Indian Accounting Standards. The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis (except as otherwise stated).

1 Pursuant to the notification dated 29th December 2011 issued by the Ministry of Corporate Affairs amending the Accounting Standard 11, the Company has exercised the option as per Para 46A inserted in the Standard for all long term monetary assets and liabilities. Consequently, an amount of Rs. 55.52 million (without considering future tax benefit of 18.01 million) is carried forward in the Foreign Exchange Monetary Item Translation Difference Account as on 31st March 2012. This amount has been amortized over the period of the monetary liabilities i.e. up to 7th December 2012. Further it has credited the gain of Rs. 8 million to the carrying cost of the fixed assets for above referred period.

1a) Segment information

Business Segment: The Company is operating into three business segments: Consumer & Bazaar Products, Industrial Products and Others. This segmentation is based around customers. Consumer & Bazaar Products consist of mainly Adhesives, Sealants, Art Mate- rials and Construction Chemicals. Industrial Products consists of Organic Pigments, Industrial Resins and Industrial Adhesives. Others consist of VAM manufacturing unit of Vinyl Chemicals (India) Ltd demerged into the Company wef 1st April 2007.

2 Earnings Per Share (EPS)

The following reflects the Profit and Share data used in the Basic and Diluted EPS computations:

3 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

The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund Commissioner and the Superannuation Fund is administered by the LIC of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. 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.

4 Operating Lease

a) Operating lease payment recognised in Statement of Profit & Loss amounting to Rs. 186.30 million ( Rs. 150.10 million)

b) General description of the leasing arrangement:

i) Leased Assets: Godowns, Company Flat, Office space, etc.

ii) Future lease rentals are determined on the basis of agreed terms.

iii) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

5 In the opinion of the Management, all assets other than Fixed Assets and Non-Current investments have a realisable value in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet Working Capital Loan from Banks (Cash Credit Accounts) are secured by way of first charge on the stock of Raw Materials, Finished Goods, Packing Material, Stock in Process, Bills Receivable and Book Debts and by way of second charge on the entire Plant and Machinery of the Company including Stores and Spares. Further, these loans are secured by way of an Equitable Mortgage on the Land and Building of the Company''s unit at Kondivita, Mumbai.

6 Figures in bracket indicate previous year''s figures.

7 Previous year''s figures have been regrouped / rearranged wherever necessary.

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Mar 31, 2012

(Rs. in million)

1 Contingent Liabilities

As at As at 31st March 31st March 2012 2011

Contingent liabilities not provided for:

Guarantees given by Banks in favour of Government and others 75.79 53.93

i. Guarantees given by Company 899.20 596.65

ii. Disputed liabilities in respect of Income Tax, Sales Tax, Central Excise and Customs (under appeal) 363.53 542.50

iv Claims against the Company not acknowledged as debts. 62.68 82.17

2 Pursuant to the notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs amending the Accounting Standard 11, the Company has exercised the option as per Para 46A inserted in the Standard for all long term monetary assets and liabilities. Consequently, an amount of X 55.52 million (without considering future tax benefit of X 18.01 million) is carried forward in the Foreign Exchange Monetary Item Translation Difference Account as on 31st March 2012. This amount is to be amortized over the period of the monetary liabilities i.e. up to 7th December 2012.

Further it has debited the loss of Rs. 74.04 million to the carrying cost of the depreciable asset for the period ending 31st March 2012.

3 Segment information

Business Segment:

The Company is operating into three business segments: Consumer & Bazaar Products, Industrial Products and Others. This segmentation is based around customers.

Consumer & Bazaar Products consist of mainly Adhesives, Sealants, Art Materials and Construction Chemicals.

Industrial Products consists of Organic Pigments, Industrial Resins and Industrial Adhesives.

Others consist of VAM manufacturing unit of Vinyl Chemicals (India) Ltd demerged into the Company wef 1st April 2007.

Operating Lease

a) Operating lease payment recognised in Statement of Profit & Loss Account amounting to Rs. 150.10 million (Rs. 135.93 million)

b) General description of the leasing arrangement:

) Leased Assets : Godowns, Company Flat, Office space, etc.

i) Future lease rentals are determined on the basis of agreed terms.

ii) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

4 Figures in bracket indicate previous year's figures.

5 Previous year's figures have been regrouped / rearranged wherever necessary.

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Mar 31, 2011

1. The Company did not have at any time during the year amount due to small and medium enterprises (SME) which is outstanding for more than 45 days. Further no interest is paid / payable to such SME creditors. The above information and that given in Schedule 8 "Current Liabilities and Provisions"regarding small and medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

(Rs in million)

As at As at

31st March 31st March

2011 2010

2. Contingent liabilities not provided for:

i. Guarantees given by Banks in favour of Government and others 53.93 48.98

ii. Guarantees given by Company 596.65 647.00

iii Disputed liabilities in respect of Income Tax, Sales Tax, Central 542.50 323.80 Excise and Customs (under appeal)

iv Claims against the company not acknowledged as debts. 82.17 81.44

3. The Company had, in March 2009, exercised the option permitted by the Central Government under Notification No G.S.R 225 ( E) to treat foreign exchange difference relating to assets as adjustments in the carrying value of such depreciable assets and amortise other differences of a specified nature over the term of the relative item. Accordingly for the period ended 31st March 2011, the Company has credited the gam of Rs 1.99 million to the carrying cost of the depreciable assets and credited Rs 8,05 million to Foreign Currency Monetary Item Translation Account. Out of the said Foreign Currency Monetary Item Translation Account Rs 1.07 million has been amortised in the current year ended 31- March 2011.

Notes:

SEGMENT INFORMATION Business Segment

The Company is operating into three business segments: Consumer & Bazaar Products, Industrial Products and Others. This segmentation is based around customers.

Consumer & Bazaar Products consist of mainly Adhesives, Sealants, Art Materials and Construction Chemicals.

Industrial Products consists of Organic Pigments, Industrial Resins and Industrial Adhesives.

Others consist of VAM manufacturing unit of Vinyl Chemicals (India) Ltd demerged into the Company wef 1st April 2007.

Geographical Segment

For the purpose of geographical segment the sales are divided into two segments: Sales within India and Sales to other countries.

ii Key Management Personnel:

Sarva Shri M B Parekh - Managing Director,

N K Parekh - Jr Managing Director,

A B Parekh and A N Parekh - Whole Time Directors,

Shri J L Shah - Whole Time Director.

iii Other Directors:

Sarva Shri B K Parekh and S K Parekh

4. Research & development Expenditure

2010-11 2009-10

Capital expenditure included in fixed assets 4.54 5.34

Revenue expenditure charged to Profit & Loss account 105.96 91.64

Total 110.50 96.98

[Refer Notes 1(v) of Schedule 12]

5. Figures in bracket indicate previous years figures.

6. Previous years figures have been regrouped / rearranged wherever necessary.

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Mar 31, 2010

(Rs in million)

As at As at 31st March 31st March 2010 2009

1. Contingent liabilities not provided for:

Guarantees given by Banks in favour of Government and others 48.98 56.02

i. Guarantees given by Company 647.00 565.30

ii. Disputed liabilities in respect of Income Tax, Sales Tax, 323.80 112.25 Central Excise and Customs (under appeal)

v Claims against the company not acknowledged as debts. 81.44 76.07

2. Related Party Disclosures

Related Party Disclosures as required by AS-18, “Related Party Disclosures”, are given below:

i Relationships:

a. Parekh Marketing Ltd. Significant Influence

b. Vinyl Chemicals (India) Ltd. Substantial Interest in Voting Power (Associate)

c. Kalva Marketing and Services Ltd. Significant Influence

d. Nitin Enterprises Controlling Interest

e. Fevicol Company Ltd. 100% Subsidiary

f. Bhimad Commercial Co Pvt. Ltd. 100% Subsidiary

g. Madhumala Traders Pvt. Ltd. 100% Subsidiary

h. Pagel Concrete Technologies Pvt. Ltd. 75% Subsidiary

Pidilite International Pte Ltd. 100% Subsidiary

j. Pidilite Middle East Ltd. 100% Subsidiary

k. Pulvitec do Brasil Industria e Comercio de Colas e

Adesivos Ltda 100% Subsidiary

Pidilite USA Inc. 100% Subsidiary

m. Jupiter Chemicals (LLC) 100% Subsidiary of wholly owned subsidiary

n. P.T. Pidilite Indonesia 100% Subsidiary of wholly owned subsidiary

o. Pidilite Speciality Chemicals Bangladesh Pvt. Ltd. 100% Subsidiary of wholly owned subsidiary

p. Pidilite Innovation Centre Pte Ltd. 100% Subsidiary of wholly owned subsidiary

q. Pidilite Industries Egypt - SAE 100% Subsidiary of wholly owned subsidiary

Pidilite Bamco Ltd. 100% Subsidiary of wholly owned subsidiary

s. Pidilite South East Asia Ltd. 100% Subsidiary of wholly owned subsidiary

t. Bamco Supply Services Ltd. 49% Subsidiary of wholly owned subsidiary and having significant influence

u. PIL Trading Egypt (LLC) 100% Subsidiary of wholly owned subsidiary

ii Key Management Personnel :

Sarva Shri M B Parekh - Managing Director, N K Parekh - Jt Managing Director, A B Parekh and A N Parekh - Wholetime Directors, Shri V S Vasan - Wholetime Director (for the period 1st April 2009 till 21st October 2009). Shri J L Shah - Wholetime Director (From 21 st October 2009)

iii Other Directors :

Sarva Shri B K Parekh, S K Parekh, R M Gandhi, N J Jhaveri, B S Mehta, R Kapoor , Y Mahajan, B Puri and D. Bhattacharya

3. 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

The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund Commissioner and the Superannuation Fund is administered by the Life Insurance Corporation of India. 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.

4. Figures in bracket indicate previous year’s figures.

5. Previous year’s figures have been regrouped / rearranged wherever necessary.