PIDILITE IDUSTRIES

 INTRODUCTION

Fevicol was invented in 1959.The first automated manufacturing plant was set up in Kondivita
Village, Bombay, hardly four years after the company was established. This setup presently
houses the Corporate Headquarters.

Pidilite brand was established in 1990.Pidilite Industries Private Limited was established,
denoting the very first step to brand recognition. Pidilite made its debut on the Bombay Stock
Exchange in 1993.

Pidilite is a consumer-focused company that emphasizes both innovation and quality. For
generations, we have introduced products for small to large applications at home and in industry,
establishing close connections with individuals from all walks of life.

The brand portfolio is as diverse as it is pace with the fast, ranging from adhesives, sealants,
water - resistant solutions, and construction chemicals to art and crafts, industrial resins,
polymers, and more. Today, the brands have been trusted by both household and industrial
names, and they are the adhesives market leader.

The products are accessible across demographics and geographies thanks to a robust and
growing network.

They also embrace the community responsibility through social initiatives in rural development,
education, and healthcare.

Pidilite Industries Limited is an Indian adhesive manufacturing company headquartered in

Andheri (East), Mumbai.

Its other brands are FeviKwik, Dr.Fixit, Roff, Cyclo, Ranipal, Hobby Ideas, M-seal and Acron. It
also markets and manufactures WD-40 in India.

The company has manufacturing facilities across India including Mahad (Maharashtra), Vapi
(Gujarat), Baddi and Kala Amb (both in HimachalPradesh).

In 1973, Pidilite became the first business in India to begin producing violet pigment.
The company's consumer products segment was established in 1984, and in 1989 it entered the
market for fevicryl acrylic paints that change fabric and multi-surface painting.

The company's plants in Mumbai and Vapi received ISO 9001 accreditation in 1995. In the same
year, the Mahad facility also acquired an ISO 9002 accreditation. According to the FE
Brandwagon Year Book 1997, Fevicol, the company's flagship brand, is among the Top 15
Indian brands.

Pidilite Industries Limited is a Public incorporated on July 28, 1969. It is a non-government

company that is registered with the Registrar of Companies in Mumbai. It has a paid-up capital
of Rs. 508,298,944 and an authorised share capital of Rs. 990,000,000. It is involved in the
production of basic chemicals.

Everything great begins with a small step, and Pidilite is no exception. The company began with
a single factory producing only one product, Fevicol. This white synthetic resin adhesive was
created primarily to ease the lives of carpenters and woodworkers. Until then, the only glue
available was clumsy and cumbersome animal fat.

The Corporate Identification Number (CIN) of Pidilite Industries Limited is

L24100MH1969PLC014336, and its registration number is 14336.
Investor.relations@pidilite.co.in is its email address, and its registered address is REGENT
CHAMBERS 7TH FLOOR208 NARIMAN POINT MUMBAI MH 400021 IN.

Pidilite USA Inc. purchased the businesses and assets of Sargent Art Inc., a manufacturer of art
materials that had been selling world-class art materials in the United States for over 50 years.

Pidilite purchased Tristar Colman, which is now known as Colstar and is a market leader in
brushes, canvases, and colours.

Pidilite opened an R&D centre in Singapore to attract international talent and expand its product
innovation strategies.

Pidilite Industries was named the 'Most Promising Company of the Year' at the 11th Indian
Business Leader Awards hosted by CNBC-TV18 (IBLA). The award is a tribute and testament to
the hard work of Pidilitians all over the world.
Pidilite purchased the top optical whitener brand, "Ranipal," in 1999, and the top epoxy
compound brand, "M-Seal," the following year, in 2000, after two years. In the same year, the
Fevicol campaign won the Silver ABBY for Campaign of the Century in India. In 2001, the
company launched the Dr.Fixit line of construction chemicals, and in 2002, it acquired Steel
grip, India's best-selling PVC insulation tape brand. Pidilite acquired Construction Chemicals'
"Roff" brand once more in 2004.

For its global operations, which include the purchase of foreign firms and joint ventures, the
company established a wholly-owned subsidiary in Singapore in 2005 under the name "Pidilite
International Pte Ltd." In the same year, 2005, Pidilite also purchased Jupiter Chemicals in Dubai
and Chemson Asia Pte Ltd.

A Singapore-based manufacturer of waterproof coatings and emulsion paints, expanding its

current and fast expanding line of construction chemicals and paints. The company established
two subsidiaries in the same year of 2005: "Pidilite Do Brasil Desenvolvimento De Negocios
Ltd" in Sao Paulo, Brazil, and "Pidilite Middle East Limited" as an offshore corporation in
Dubai's Jebel Ali Free Zone.

Tristar Fine Art, a global leader in brushes for sketching and painting, and Bamco Thailand, a
construction chemical company, were both acquired by Pidilite in 2006. Additionally, Pidilite
has acquired Sargent Art Inc.'s operations and assets through a subsidiary called Pidilite USA
Inc. Delaware. The business had opened a research and development facility in Singapore under
the name "Pidilite Innovation Centre Pte Ltd." With effect from April 1st, 2007, Vinyl
Chemicals (India) Ltd.'s Mahad VAM production facility was demerged as Pidilite. The
company introduced Fevicol 1K PUR and Fevicol Kwikgrab in 2007–2008 to handle particular
applications in the building construction sector.

Pidilite and its wholly owned subsidiaries have acquired property and branded sealant and
adhesives businesses from Hardcastle & Waud Manufacturing Co. Ltd and affiliates. The
company acquired Bhimad Commercial Co. and Madhumala Traders in February 2008 with an
investment of Rs 170,000 each. Fevicol was voted #1 in Home Care in June 2008. Pidilite
Industries' board of directors decided to meet on June 10, 2013 to seek out a strategic partner for
the synthetic elastomer project. On 22nd September 2014, Pidilite Industries announced that its
Board of Directors has approved a lump-sum cash acquisition of Blue Coat Private Limited's
adhesives business in view of his Rs 26.357 crore.

On 12 December 2014, Pidilite Industries, together with Pidilite International Pte Ltd., of which
it is a wholly-owned subsidiary, entered into Ethiopia on 10 December 2014 to manufacture
adhesives, mastics, paints, varnishes or similar coatings; Established a limited liability subsidiary
under the name of Pidilite Chemical PLC for the production of printing and painting inks, etc.
The Board of Directors of Pidilite Industries was approved at that meeting. Investment in shares
of Nina Waterproofing Systems Private Limited on March 30, 2015. Our proposed ownership of
Nina will be his 70% and Nina will become our subsidiary. Pidilite Industries' initial investment
in Nina is approximately Rs 23.33 lakh. The Board has also approved an additional investment
of up to INR 100 crore in Nina. On April 16, 2015, Pidilite Industries announced his subsidiary,
Nina Waterproofing Systems Private Ltd. (NWSP) Waterproofing business of Nina Concrete
Systems Private Ltd. (NCS) Volume sales basis. PIL holds his 70% of NWSP's paid-up capital.

The impregnation business was established in 1965 under the brand name NINA. NINA is
recognized as one of the leading waterproof solution providers in India. NINA has a major
presence across the construction sector, including residential, commercial, industrial, and
institutional and infrastructure segments. On November 25, 2015, Pidilite Industries, together
with his wholly-owned subsidiary, Fevicol Company Limited, established a company called
Wood coat Private Limited on November 20, 2015 to manufacture all types of wood coatings,
including wood stains. Announced to handle On November 30, 2015, Pidilite Industries
announced that its subsidiary in Sri Lanka, Pidilite Lanka (Private) Limited, has acquired the
Chemifix trademark and other related brands from CIC Holdings PLC. Entry into PVAC
adhesives business Acquired commercial and technical know-how related to PVAC adhesives
business. CIC Holdings PLC is Sri Lanka's leading conglomerate, operating in a number of
segments including: chemicals, fertilizers, pharmaceuticals,Agri chemical, food products etc.

On April 25, 2016, Pidilite Industries announced that its Board of Directors has approved the
signing of a definitive agreement with INDUSTRIA CHIMICA ADRIATICA SPA (ICA), a
leading manufacturer of wood coatings based in Italy. As part of the joint venture, Pidilite
Industries, together with its wholly-owned subsidiary Fevicol Company Limited, will own 50%
of the shares of Wood Coat Private Limited (a joint venture company), with the remaining 50%
of the shares held by ICA and its partner companies. And Italcoats, distributor of ICA wood
coatings in India. The joint venture will initially engage in high-tech wood finishing operations
in India and other selected countries. Wood Coat Private Limited is now a wholly owned
subsidiary of Pidilite Industries. The joint venture will acquire Italcoats' current wood coating
distribution business and become the exclusive distributor of his ICA wood coatings in India and
other selected countries. The joint venture will also acquire technology and know-how in
manufacturing select wood surface products from ICA and will be authorized to manufacture
ICA wood surfaces for marketing, distribution and sale in India and other selected countries. can
be Pidilite Industries' Board of Directors has approved an equity investment of up to Rs 6.375
crore by May 15, 2016 and a further equity investment of up to Rs 6.25 crore as per the joint
venture's business requirements. Dr. Cipy has a new brand identity. In 2018, CIPY Polyurethanes
Pvt. Ltd, a floor coating company, was acquired. The Company rebranded CIPY Polyurethanes
as Dr. Cipy in 2021, giving it a distinct Pidilite brand identity while retaining the core and
expertise of its founder, Dr Subash Cipy. The Company is committed to long-term development
by improving the local communities' quality of life and well-being through economic, social, and
environmental improvements. Over the years, the company has been involved in a variety of
social and community initiatives aimed at agriculture, animal husbandry, health, education,
woman empowerment, and water conservation, among other things. These initiatives are being
carried out directly by the Company and through various organisations in the states of Gujarat,
Maharashtra, Himachal Pradesh, and Rajasthan.

Over 1000 affordable, high-quality products have been developed through powerful, in-house
R&D for the product portfolio.

For the past 57 years, there has been a proven track record of innovation, consistent quality, and
customer intimacy. Capability to create personalised products and applications. Over 5000
employees are skilled and experienced. Product distribution: Around 70 countries worldwide.
Manufacturing facilities in India, Bangladesh, Thailand, Singapore, Dubai, Brazil, the United
States, and Egypt provide a global presence.

Extensive distribution network: 6,000 distributors and 600,000 dealers/retailers throughout India

Turnover in excess of USD 800 million.

  Promoters of the company and founder of the company.

NAME POSITION

SHRI. BALVANTRAY KALYANJI PAREKH FOUNDER CHAIRMAN

N K PAREKH VICE CHAIRMAN

BHARAT PURI MANAGING DIRECTOR

A N PAREKH WHOLE TIME DIRECTOR

M B P AREKH EXECUTIVE CHAIRMAN

A B P AREKH EXECUTIVE VICE CHAIRMAN

SUDHANSHU VATS DEPUTY MANAGING DIRECTOR

DEBABRATA GUPTA WHOLE TIME DIRECTOR

SANJEEV AGA DIRECTOR

MEERA SHANKAR DIRECTOR

PIYUSH PANDEY DIRECTOR

B S MEHTA DIRECTOR

UDAY KHANNA DIRECTOR

VINOD DASARI DIRECTOR

RAJEEV VASUDEVA DIRECTOR

MEHER PUDUMJEE DIRECTOR

 Shareholding pattern (SHP)
  Annual report.
 Profit and loss

consolidated Profit & Loss account ---------------- in Rs.

--- Cr--------

Particulars Mar 22 21-Mar

INCOME    

Revenue From Operations [Gross] 9,879.97 7,250.92

Less: Excise/Sevice Tax/Other Levies 0 0

Revenue From Operations [Net] 9,879.97 7,250.92

Other Operating Revenues 40.99 41.79

Total Operating Revenues 9,920.96 7,292.71

Other Income 36.3 79.4

Total Revenue 9,957.26 7,372.11

EXPENSES    

Cost Of Materials Consumed 5,040.74 3,017.82

Purchase Of Stock-In Trade 648.4 477.17

Changes In Inventories Of FG,WIP And Stock-In Trade -244.96 -118.32

Employee Benefit Expenses 1,112.36 980.86

Finance Costs 42.08 37.23

Depreciation And Amortisation Expenses 239.61 200.66

Other Expenses 1,517.13 1,254.56

Total Expenses 8,355.36 5,849.98

Profit/Loss Before Exceptional, ExtraOrdinary Items And Tax 1,601.90 1,522.13

Exceptional Items 0 -3.62

Profit/Loss Before Tax 1,601.90 1,518.51

Tax Expenses-Continued Operations    

Current Tax 407.94 399.88

Deferred Tax -0.92 -3.52

Total Tax Expenses 407.02 396.36

Profit/Loss After Tax And Before ExtraOrdinary Items 1,194.88 1,122.15

Profit/Loss From Continuing Operations 1,194.88 1,122.15

Profit/Loss For The Period 1,194.88 1,122.15

Minority Interest 0.8 5.08

Share Of Profit/Loss Of Associates 11.88 3.98

Consolidated Profit/Loss After MI And Associates 1,207.56 1,131.21

OTHER ADDITIONAL INFORMATION    

EARNINGS PER SHARE    

Basic EPS (Rs.) 24 22

Diluted EPS (Rs.) 24 22

DIVIDEND AND DIVIDEND PERCENTAGE    

Equity Share Dividend 431.93 0.02

Tax On Dividend 0 0
  Balance sheet.

Consolidated Balance Sheet ------------------- in Rs. Cr--------

Particulars Mar 22 21-Mar

EQUITIES AND LIABILITIES    

SHAREHOLDER'S FUNDS    

Equity Share Capital 50.83 50.82

Total Share Capital 50.83 50.82

Reserves and Surplus 6,319.83 5,516.72

Total Reserves and Surplus 6,319.83 5,516.72

Employees Stock Options 33.05 25.42

Total Shareholders Funds 6,403.71 5,592.96

Minority Interest 198.9 240.04

NON-CURRENT LIABILITIES    

Long Term Borrowings 1.72 12.39

Deferred Tax Liabilities [Net] 398.45 398.03

Other Long Term Liabilities 115.98 94.31

Long Term Provisions 71.83 57.98

Total Non-Current Liabilities 587.98 562.71

CURRENT LIABILITIES    
Short Term Borrowings 285.62 201.51

Trade Payables 1,049.29 1,006.74

Other Current Liabilities 947.43 1,201.50

Short Term Provisions 42.69 24.96

Total Current Liabilities 2,325.03 2,434.71

Total Capital And Liabilities 9,515.62 8,830.42

ASSETS    

NON-CURRENT ASSETS    

Tangible Assets 1,757.79 1,442.84

Intangible Assets 1,658.64 1,691.13

Capital Work-In-Progress 225.42 293.87

Fixed Assets 3,641.85 3,427.84

Non-Current Investments 285.09 339.51

Deferred Tax Assets [Net] 21.28 16.59

Long Term Loans And Advances 5.05 4.85

Other Non-Current Assets 259.91 242.31

Total Non-Current Assets 5,500.01 5,315.05

CURRENT ASSETS    

Current Investments 173.52 176.46

Inventories 1,695.09 1,234.15

Trade Receivables 1,430.54 1,321.02

  Cash flow

Consolidated Cash Flow ------------------ in Rs. Cr--------

-

Particular Mar 22 21-Mar

Net Profit Before Tax 1613.78 1522.49

Net Cash From Operating Activities 955.37 1392.13

Net Cash (used in)/from Investing Activities -558.14 -1687.89

Net Cash (used in)/from Financing Activities -467.96 -76.24

Net (decrease)/increase In Cash and Cash -70.73 -372

Equivalents
Opening Cash & Cash Equivalents 327.15 606.55

Closing Cash & Cash Equivalents 256.42 234.55

 Analysis of Capital WIP and Fixed Asset.

2.6 Revenue Recognition

The Group recognises revenue from sale of goods and services, based on the terms of contract
and as per the business practise; the Group determines transaction price considering the amount
it expects to be entitled in exchange of transferring promised goods or services to the customer.
Revenue is recognised when it is realized or is realizable and has been earned after the deduction
of variable components such as discounts, rebates, incentives, promotional couponing and
schemes. The Group estimates the amount of variable components based on historical, current
and forecast information available and either expected value method or most likely method, as
appropriate and records a corresponding liability in other payables; the actual amounts may be
different from such estimates. These differences, which have historically not been significant, are
recognized as a change in management estimate in a subsequent period.

2.6.1. A Sale of goods

Revenue is recognised when control of the products being sold has been transferred to a
customer and when there are no longer any unfulfilled obligations to the customer. This is
generally on delivery to the customer but depending on individual customer terms, this can be at
the time of dispatch, delivery or upon formal customer acceptance. This is considered the
appropriate point where the performance obligations in our contracts are satisfied and the Group
no longer has control over the inventory. Advance received from customer before transfer of
control of goods to the customer is recognised as contract liability.

2.6.1. B Sale of Services

Revenue from sale of services includes fixed price contracts and time and material contracts and
is recognized as sale, as and when the related services are performed and certified by the client.
Services performed and not certified by the client, are recognized as sales and are recorded as
uncertified revenue and unbilled revenue. Incomplete services are recorded at cost as work-in-
progress. The Group accounts for provision of warranty in accordance with Ind AS 37
“Provisions, Contingent Liabilities and Contingent Assets”.

2.6.2 Dividend, Interest income and Royalty

Dividend income from investments is recognised when the Group’s right to receive dividend is
established. Interest income from a financial asset is recognised on a time basis, by reference to
the principal outstanding using the effective interest method provided it is probable that the
economic benefits associated with the interest will flow to the Group and the amount of interest
can be measured reliably. The effective interest rate is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to the gross carrying amount
of that financial asset. Royalty income is recognised on an accrual basis in accordance with the
substance of the relevant agreement or underlying arrangement in case of sales provided that it is
probable that the economic benefits associated with the royalty shall flow to the Group and the
amount of royalty can be measured reliably. Claims / Insurance Claim etc. are accounted for
when no significant uncertainties are attached to their eventual receipt. The Group’s policy for
recognition of revenue (rental income) from leases is described in Note 2.7.1.

2.7 Leasing

The Group, at the inception of a contract, assesses whether the contract is a lease or not lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a time in exchange for a consideration.

2.7.1 Group as Lessor

Rental income from leases is recognised on a straight- line basis over the term of the relevant
lease. Where the rentals are structured solely to increase in line with expected general inflation to
compensate for the Group’s expected inflationary cost increase, such increases are recognised in
the year in which such benefits accrue. Amounts due under finance leases are recognised as
receivables at the amount of the Group’s net investment in the leases. Finance lease income is
allocated over accounting periods so as to reflect constant periodic rate of return of the Group’s
net investment outstanding in respect of the leases.

2.7.2 Group as Lessee

The Group’s lease asset classes primarily consist of leases for land and buildings. The Group
assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the
use of an identified asset, the Group assesses whether: (i) the contract involves the use of an
identified asset,

(ii) The Group has substantially all of the economic benefits from use of the asset through the
period of the lease and

(iii) The Group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”)
and a corresponding lease liability for all lease arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short -term leases) and low value leases. For these
short-term and low value leases, the Group recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease. Certain lease arrangements includes
the options to extend or terminate the lease before the end of the lease term. ROU assets and
lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or prior to the commencement date of the
lease plus any initial direct costs less any lease incentives. They are subsequently measured at
cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated
from the commencement date on a straight-line basis over the shorter of the lease Term or useful
life of the underlying asset. Right-of-use assets are evaluated for recoverability whenever events
or changes in circumstances indicate that their carrying amounts may not be recoverable. For the
purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those from other assets. In such cases, the
recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset
belongs. The lease liability is initially measured at amortized cost at the present value of the
future lease payments. The lease payments are discounted using the interest rate implicit in the
lease or, if not readily determinable, using the incremental borrowing rates in the country of
domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the
related right of use asset if the Group changes its assessment if whether it will exercise an
extension or a termination option. Lease liability and ROU asset have been separately presented
in the Balance Sheet and lease payments have been classified as financing activity in the
consolidated statement of cash flows.

Foreign Currencies

The functional currency of the Parent and its Indian Subsidiaries is the Indian Rupee, whereas
the functional currency of Foreign Subsidiaries is the currency of their countries of domicile. In
preparing the financial statements of each individual Group entity, transactions in currencies
other than the entity’s functional currency (foreign currencies) are recognized at the rates of
exchange prevailing at the dates of the transactions. At the end of each reporting period,
monetary items (including financial assets and liabilities) denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair
value was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated. Gains or losses arising from these translations are
recognized in the Consolidated Statement of Profit and Loss. For the purposes of presenting
these consolidated financial statements, the assets and liabilities of the Group’s foreign
operations are translated into Indian Rupees using exchange rates prevailing at the end of each
reporting period. Income and expense items are translated at the average exchange rates for the
period.

2.9 Share-based payment transactions of the Group

Equity-settled share-based payments to employees providing similar services are measured at the
fair value of the equity Instruments at the grant date. The fair value determined at the grant date
of the equity-settled share-based payments is expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of equity instruments that will eventually vest, with a
corresponding increase in equity.

2.10 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. .

2.10.1 Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from
‘profit before tax’ as reported in the Consolidated Statement of Profit and Loss because of items
of income or expense that are taxable or deductible in other years and items that are never
taxable or deductible. The Group’s current tax is calculated using applicable tax rates that have
been enacted or substantively enacted by the end of the reporting period and the provisions of the
Income Tax Act, 1961 and other tax laws, as applicable.

2.10.2 Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and
liabilities in the consolidated financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax Liabilities are generally recognized for all taxable
temporary differences. Deferred tax assets are generally recognized for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. The carrying amount of deferred tax
assets is reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to
apply in the period in which the liability is settled or the asset realized, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting period. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the Group expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities.

2.10.3 Current and Deferred Tax for the year

Current and deferred tax are recognized in the Consolidated Statement of Profit and Loss, except
when they relate to items that are recognized in Other Comprehensive Income or directly in
equity, in which case, the current and deferred tax are also recognized in Other Comprehensive
Income or directly in equity respectively.

2.11 Property, Plant and Equipment

2.11.1 Property, Plant and Equipment acquired separately

Freehold Land is stated at cost and not depreciated. Buildings, plant and machinery, vehicles,
furniture & fixtures and office equipments are stated at cost less accumulated Depreciation and
accumulated impairment losses. An item of Property, Plant and Equipment is derecognized upon
disposal or when no future economic benefits are expected to arise from the continued use of the
asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant and
Equipment is determined as the difference between the sales proceeds and the carrying amount
of the asset and is recognized in Consolidated Statement of Profit and Loss.

2.11.2 Capital Work-In-Progress

Properties in the course of construction for production, supply or administrative purposes are
carried at cost, less any Recognized impairment loss. Cost includes professional fees and, for
qualifying assets, borrowing costs capitalized in accordance with the Group’s accounting policy.
Such properties are classified and capitalized to the appropriate categories of Property, Plant and
Equipment when completed and ready for intended use. Depreciation of these assets, on the same
basis as other property assets, commences when the assets are ready for their intended use.

2.11.3 Depreciation

Depreciation is recognized so as to write off the cost of assets (other than Freehold Land and
Capital Work-In-Progress) less their residual values over their useful lives, using the straight-line
method as per the useful life prescribed in Schedule II to the Companies Act, 2013.For certain
items of Property, Plant and Equipment, the Group depreciates over estimated useful life which
are different from the useful lives prescribed under Schedule II to the Companies Act, 2013
which is based upon technical assessment made by technical expert and management estimate.
The management believes that these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are likely to be used. The estimated useful
lives, residual values and depreciation method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on a prospective basis

2.12 Intangible Assets

2.12.1 Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortization and accumulated impairment losses. Amortization is recognized on a
straight-line basis over their estimated useful lives. The estimated useful life and amortization
method are reviewed at the end of each reporting period, with the effect of any changes in
estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives
are carried at cost less accumulated impairment losses.

2.12.2 Intangible assets acquired in a business combination

Intangible assets other than goodwill acquired in a business combination are initially recognised
at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial
recognition, such intangible assets acquired in a business combination are reported at cost less
accumulated amortization and accumulated impairment losses, on the same basis as intangible
assets that are acquired separately.

2.12.3 Internally generated Intangible Assets – Research and Development Expenditure

Expenditure on research activities is recognized in Consolidated Statement of Profit and Loss in

the period in which it is incurred. An internally generated intangible asset arising from
development is recognized if and only if it meets the recognition criteria of intangible assets. The
amount initially recognized is the sum total of expenditure incurred from the date when the
intangible asset first meets the recognition criteria. Where no intangible asset can be recognized,
development expenditure is recognized in Consolidated Statement of Profit and Loss in the
period in which it is incurred. Subsequent to initial recognition, internally generated intangible
assets are reported at cost less accumulated amortization and accumulated impairment losses, on
the same basis as intangible assets acquired separately

Impairment of Tangible and Intangible Assets other than Goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). When it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs. When a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to individual cash-generating
units, or otherwise they are allocated to the smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be identified. Intangible assets with indefinite
useful lives and intangible assets not yet available for use are tested for impairment at least
annually, and whenever there is an indication that the asset may be impaired. Intangible assets
with indefinite useful lives are tested for impairment annually at the cash-generating unit level.
The assessment of indefinite useful life is reviewed annually to determine whether the indefinite
life continues to be supportable. If not, the change in useful life from indefinite to finite is made
on a prospective basis. Recoverable amount is the higher of fair value less costs of disposal and
value in use. If the recoverable amount of the asset (or cash-generating unit) is estimated to be
less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss is recognized in Consolidated Statement
of Profit and Loss.

2.14 Inventories

Inventories are valued at lower of cost and net realizable value. Cost of inventories is determined
on weighted average. Cost for this purpose includes cost of direct materials, direct Labor and
appropriate share of overheads. Net realizable value represents the estimated selling price in the
ordinary course of business less all estimated costs of completion and estimated costs necessary
to make the sale. Obsolete, defective, unserviceable and slow / non-moving stocks are duly
provided for and valued at net realizable value.

2.15 Provisions (other than Employee Benefits)

A provision is recognized when as a result of past event, the Group has a present legal or
constructive obligation that can be reliably estimated, and, it is probable that an outflow of
economic benefit will be required to settle the obligation. Provisions (excluding retirement
benefits) are determined based on the best estimate required to settle the obligation at the balance
sheet date, taking into account the risks and uncertainties surrounding g the obligation. These are
reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

 Analysis of Profitability & Trend.

Ratio March- 2022 March- 2021 March -2020 March - 2019

1.Return on 1,194.88/6403.71 1,122.15/5592.96 1,119.02/4455.6 924.79/4148.09*1

Equity = *100 = 18.66 *100 = 20.06 1*100 = 25.12 00 = 22.29
NPAT/Net
Worth*100

2. Return on 1,601.90/7,169.3 1,518.51/6,379.1 1,466.74/4,907.9 1,338.02/4,603.08

Capital 1 *100 = 2*100 = 7 *100 = *100 =
Employed=PBT/ 22.3439
Capital
Employed*100

Capital Employed 9,494.3-2,325.03 8,813.83- 6,522.70- 5,903.79-1,300.71

= Total Assets – = 7,169.31 2,434.71 = 1,614.73 = = 4,603.08
Current liabilities 6,379.12 4,907.97

3. Return on 1,601.90/9,494.3 1,518.51/8,813.8 1,466.74/6,522.7 1,338.02/ 5,903.79

Assets = 4*100 = 16.87 3*100 = 17.23 0 *100 = 22.49 *100 =22.66
PBT/Total
Assets*100

4.Gross Profit 9,879.97/ 7,250.92/ 7,254.16/ 7,034.02/7,077.96

Ratio = Gross 9,920.96*100 = 7,292.71 *100 = 7,294.47 *100 = *100 =
Profit/ Net
99.59 99.43 99.45 99.38
sales*100

5.Net Profit Ratio 1643/9,920.96 1465/7,292.71 1501/7,294.47 1384/7,077.96

=PBIT/Sales*100 *100 = 16.56 *100 = 20.09 *100 = 20.58 *100 = 19.55

 Reference.
1. https://www.bseindia.com/bseplus/AnnualReport/

500331/73708500331.pdf
2. https://www.screener.in/company/PIDILITIND/consolidated/
3. https://ticker.finology.in/company/PIDILITIND?mode=C
4. https://www.moneycontrol.com/financials/pidiliteindustries/
5. https://www.pidilite.com/