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Notes to Accounts of Pidilite Industries Ltd.

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 31st 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 31st March 2016: 12.5% per annum; as at 1st 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 31st March 2016: 9% per annum; as at 1st 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 18th 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 31st 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 31st 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 6th December 2007, 400 Foreign Currency Convertible Bonds (FCCB) of US$100,000 each, which were convertible into Equity shares at any time upto 1st December 2012. The due date for redemption of FCCBs was 7th December 2012. As on 7th 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 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. Result of the Postal Ballot was declared 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.

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 31st 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 31st March 2016). Aggregate amount of loss in reserves is Rs.0.06 crores as at 1st 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 1st 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 31st March 2016 21.04 crores and as at 1st 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 1st 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 31st 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 31st 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 31st March 2016 by Rs.54.33 crores and as at 1st 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 31st 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 31st 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 31st March 2016 by Rs.8.15 crores and as at 1st 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 31st March 2016 and 0.29 crores as at 1st 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 31st March 2016 at 1.44 crores under Other Financial Liabilities (as at 1st 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 31st March 2016 of 30.85 crores ( 178.94 crores as at 1st April 2015), but does not affect profit before tax and total profit for the year ended 31st 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 31st 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 31st 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 31st March 2016 and 0.01 crores as at 1st 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 31st 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 31st March 2016 by Rs.9.31 crores and reduction in Deferred Tax Liability as at 1st 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 31st 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 31st March 2016 and 5.78 crores as at 1st 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 31st March 2016 and 0.61 crores as at 1st April 2015, which were included in Cash & Cash Equivalents under previous GAAP. Consequently, the cash outflow from financing activities for the year ended 31st 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 1st April 2015 and 31st March 2016, profit before tax or total profit for the year ended 31st 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 1st 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 18th 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 17th May 2017 and by the Board of Directors on 18th May 2017.


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.


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.


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.


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.


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.


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.

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