(vi) The expected rate of return on plan assets is determined after considering several applicable factors such as the composition of the plan assets, investment/ strategy, market scenario, etc. In order to protect the capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.
(vii) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.
(viii) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.
Gratuity fund asset is managed by Life Insurance Corporation of India, there is no material risk that the Company would be unable to meet its gratuity liability. Also as the fund is set up as a trust, the monies as a part of the trust will not flow back into the Company until the last employee of the trust is paid.
Note on other risks:
1 Investment Risk - The funds are invested by LIC / Kotak and they provide returns basis the prevalent bond yields, LIC on an annual basis requests for contributions to the fund, while the contribution requested may not be on the same interest rate as the bond yields provided, basis the past experience it is low risk.
2 Interest Risk - LIC does not provide market value of assets, rather maintains a running statement with interest rates declared annually - The fall in interest rate is not therefore offset by increase in value of Bonds, hence may pose a risk.
3 Longevity Risk - Since the gratuity payment happens at the retirement age of 60, longevity impact is very low at this age, hence the risk is low.
4 Salary Risk - The liability is calculated taking into account the salary increase, basis past experience of the Company's actual salary increases with the assumptions used, they are in line, hence this risk is low.
47| Employee Stock Option Scheme
a) Details of Employee Share Options
ESOP 2016 covering grant of 45,00,000 options (including 2,50,000 Options to be granted to Eligible Employees/ Directors of the subsidiary Companies) was approved by the shareholders through Postal Ballot on 2nd April 2016. Each option comprises one underlying equity share. The exercise price shall be 1/- per option or such other higher price as may be fixed by the Board or Committee. Options to be granted under the Plan shall vest not earlier than one year but not later than a maximum of six years from the date of grant of such options. In the case of Eligible Employee who has not completed 3 years of employment as on date of the grant of Options then the Options which are due for vesting before completion of 3 years as above, shall vest as on the completion of 3 years of employment in the Company by the Employee concerned or as may be approved by the Nomination and Remuneration Committee. Vested Options will have to be exercised within 3 years from the date of respective vesting.
48| Financial Instruments
(A) Capital Management
The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximising the return to stakeholders through the optimum utilisation of the equity balance. The capital structure of the Company consists of only equity of the Company. The Company is not subject to any externally imposed capital requirements. Refer Note 57 for information on ratios.
(C) Financial risk management objectives
The Company's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk, credit risk and liquidity risk. The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising foreign exchange forward contracts. Compliance with policies and exposure limits is a part of Internal Financial Controls. The Company does not enter into or trade in financial instruments, including derivative financial instruments, for speculative purposes. The Corporate Treasury function reports quarterly to the Company's risk management committee, an independent body that monitors risks and policies implemented to mitigate risk exposures.
(D) Market risk
The Company's activities expose it primarily to the financial risk of changes in foreign currency exchange rates (see note E below).
The Company enters into foreign exchange forward contracts to manage its exposure to foreign currency risk of net imports.
Interest risk: The Company is mainly exposed to the interest rate risk due to its investment in mutual funds. The interest rate risk arises due to uncertainties about the future market interest rate on these investments. The Company has laid policies and guidelines including tenure of investment made to minimise impact of interest rate risk.
Price risk: The Company is mainly exposed to the price risk due to its investment in mutual funds, bonds and alternate investment funds. The changes in the prices will not have material impact on financial statements
(ii) Foreign exchange forward contracts
It is the policy of the Company to enter into foreign exchange forward contracts to cover foreign currency payments (net of receipts). The Company enters into contracts with terms upto 90 days. The Company's philosophy does not permit any speculative calls on the currency. It is driven by conservatism which guides that we follow conventional wisdom by use of Forward contracts in respect of Trade transactions.
Regulatory Requirements: The Company does alter its hedge strategy in relation to the prevailing regulatory framework and guidelines that may be issued by RBI, FEDAI or ISDA or other regulatory bodies from time to time.
Mode of taking Cover: Based on the outstanding details of import payable and export receivable (in weekly baskets) the net trade import exposure is arrived at (i.e. Imports - Exports = Net trade exposures). The net trade import exposure arrived at is netted off with the outstanding forward cover as on date and with the surplus foreign currency balance available in EEFC A/Cs.
Forward cover is obtained from bank for each of the aggregated exposures and the Trade deal is booked. The forward cover deals are all backed by actual trade underlines and settlement of these contracts on maturity are by actual delivery of the hedged currency for settling the underline hedged trade transaction.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company's exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in Cash and Cash Equivalents.
The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
(i) Liquidity risk tables
The following tables detail the Company's remaining contractual maturity for its non-derivative and derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company will be liable to pay.
The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.
The maturity of above outstanding Buy forward contracts is less than 6 months.
The line-items in the financial statements that include the above hedging instruments are “Other Financial Assets" of NIL crores ( 0.05 crores as at 31st March 2024) and “Other Financial Liabilities" of 0.78 crores ( NIL crores as at 31st March 2024) on a net basis (refer Note: 13 and 25 respectively).
The aggregate amount of Loss under foreign exchange forward contracts recognised in the Statement of Profit and Loss is 0.83 crores (Gain of 0.65 crores as at 31st March 2024).
(F) Credit risk management
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables (refer Note 9), investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables.
The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating. The Company's exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.
Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.
(G) Liquidity risk management
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
(ii) Financial instruments measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
(1) To promote, carry out, support activities relating to: Education and Training including in Science and Technology, Humanities etc; Healthcare; Welfare of Children, Women, Senior Citizens, and Differently Abled Persons; Employment enhancing Vocational skills; Sanitation; Water management; Agriculture; Horticulture; Milk and Animal Health; promotion of Farmer Producer Organisation;
Swachtha Initiative; promotion of Culture; Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts & Handicrafts, Khadi and Handloom; Employment Generation and Government Scheme System; Environment Sustainability; Science & Technology; Rural Development; Animal Welfare; welfare and development measures towards reducing inequalities faced by Socially and Economically Backward groups; and such activities may include establishing, supporting and/ or granting aid to institutions engaged in any of the activities referred to above.
(2) To conduct and support studies & research; publish and support literature, publications & promotion material; conduct and support discussions, lectures, workshops & seminars in any of the areas covered above.
(3) To promote, carry out, support any activities covered in Schedule VII to the Companies Act, 2013, as amended from time to time.
54 Other Information
a) During the current year, on 5th September 2024 and on 23rd October 2024, the Company invested an amount of 5.00 crores and
? 29.89 crores respectively, in "Pidilite Ventures Private Limited" (PVPL) (formerly known as Madhumala Ventures Pvt Ltd), a wholly owned subsidiary of the Company (31st March 2024: 50.02 crores). PVPL has further invested in the following companies -
(i) invested an amount of 5.00 crores on 27th September 2024 ( Nil in previous year) in "Installco Wify Technology Private Limited". The company is engaged in home improvement and maintenance services platform.
(ii) invested an amount of 8.00 crores on 30th October 2024 ( 6.00 crores in previous year) in "Buildnext Construction Solutions Private Limited". The company is engaged in providing end to end home construction services.
(iii) invested an amount of NIL in current year ( 5.00 crores in previous year) in "Finemake Technologies Private Limited" by
subscription to preference shares. The company is engaged in business of providing interior designing services.
(iv) invested an amount of NIL in current year ( 0.57 crores in previous year) in "Climacrew Private Limited" by subscription to
equity shares. The company is engaged in business of supply of seaweed and seaweed products.
(v) invested an amount of NIL in current year ( 1.50 crores in previous year) in "Constrobot Robotics Pvt Ltd" by subscription to
equity shares. The company is engaged in business of manufacturing special purpose machineries.
(vi) invested an amount of NIL in current year ( 20.00 crores in previous year) in "Imagimake Play Solutions Pvt Ltd." by subscription to equity shares. The company is engaged in business of providing toys which cater to art & hobby, educational toys, puzzles and 3D model sets.
(vii) invested an amount of NIL in current year ( 18.45 crores in previous year) in "Pepperfry Private Limited" (formerly known as M/s. Trendsutra Platform Services) by subscription to Non cumulative Compulsory Convertible Preference Shares. Pepperfry is an online furniture chain in India.
b) During the current year, on 13th August 2024 and on 9th September 2024, the Company invested an amount of
? 9.90 crores and 15.45 crores respectively in "Bhimad Commercial Company Pvt Ltd" (Bhimad), a wholly owned subsidiary of the Company, by subscription to equity shares. Bhimad has further invested in following companies -
(i) invested an amount of 25.35 crores in current year in "Pargro Investments Private Limited" (Pargro). Pargro is a Non Banking Finance Company (NBFC) which provides credit in the form of small value retail loans to support its domain ecosystem and business growth.
Statement of compliance:
With regard to the investments made during the year ended 31st March 2025 as well as 31st March 2024 the Company has complied with the relevant regulatory provisions.
c) During the current year, the Company invested an amount of 13.86 crores in "Pidilite Middle East Ltd" ( 6.79 crores in Previous
year) and 0.67 crores ( NIL in Previous year) in "Pidilite Industries Egypt SAE" by subscription to equity shares.
d) During the current year, the company has recognised profit on buyback of shares from "ICA Pidilite Private Limited" amounting to
? 2.14 crores for 2,68,319 equity shares (Investment value of 9.40 crores) recognised under Other Income. The profit earned on
buyback of these equity shares is not taxable in the hands of the Company under section 10(34A) of the Income Tax Act, 1961.
e) During the previous year, the Company invested an amount of 12.45 crores in "Pidilite Grupo Puma Manufacturing Ltd" by subscription to equity shares.
f) During the previous year, the company has recognised profit on buyback of shares from "Pidilite USA Inc" amounting to 27.15 crores for 1,20,00,000 shares recognised under Exceptional Items in the Standalone financial Statements
(refer Note 39).
g) During the previous year, the Company has divested its entire shareholding in its wholly owned subsidiary "Pulvitec do Brasil Industria e Comercio de Colas e Adesivos Ltda" (hereinafter referred to as "Pulvitec").The Company incurred transaction cost amounting to 2.36 crores and recognised total loss on sale of shares amounting to 20.00 crores recognised under Exceptional Items in the Standalone financial Statements (refer Note 39). The company has given indemnity of 20.91 crores against losses resulting from succession claims and other claims (including third party).
During the current year, as part of indemnity obligations, Company received tax claims amounting 7.26 crores, which was partially offset against supervening assets in form of tax credits available with Pulvitec of 2.21 crores resulting in net settlement of 5.05 crores, which has been provisioned for. The remaining tax credits, after offsetting above referred tax claim, amounting 2.21 crores has been recognised as other non-current financial assets (refer Note 12). The net amount of 2.84 crores charged to Statement of Profit and Loss has been recognised under Exceptional Items in the Standalone financial statements (refer Note 39). Consequent to the same, and after factoring foreign exchange rate fluctuations, the revised indemnity obligations of the Company stands reduced from 20.91 crores to 11.33 crores, disclosed under Contingent Liabilities and Commitments [refer Note 40A(2c)].
h) During the previous year, the Company invested an amount of 107.68 crores in "Nina Percept Pvt Ltd" by subscription to Equity shares. A liability towards acquisition (refer Note 24 & Note 25) had been recognised in the financial statements amounting to ? 6.00 crores.
i) During the current year, the Company has impaired loans given to an associate of a subsidiary, "Aapkapainter Solutions Private Limited" by amount 17.32 crores on assessment of expected Credit Loss upon significant increase in credit risk of the financial asset, disclosed as Exceptional item in standalone financial statements (Refer Note 39).
j) During the current year, the Company has recognised impairment loss amounting to 6.43 crores in respect of certain items of plant and machinery lying in Capital Work In Progress located in Dahej SEZ and Sarigam-Vapi. These machineries have been assessed
as unusable and accordingly recognised as an impairment loss under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated realizable value.
Additionally items of plant and equipment (Property Plant and Equipment) located in Mahad and other locations amounting to 1.60 crores has been assessed as unusable and idle, due to wear and tear and recognised as an impairment loss under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated realizable value.
k) During the previous year, the Company had sold plant and machinery located at Mahad and accordingly had reclassified identified assets as "Assets held for sale" at fair market value of 3.41 crores. The Company had recognised an impairment loss amounting to 20.36 crores under Depreciation, Amortisation and Impairment Expense in the Standalone financial Statements based on estimated realizable value.
l) During the previous year, the Company entered into master agreement with M/s Basic Adhesives for purchase of certain intangible assets at an agreed consideration of USD 3,000,000. The transaction had been accounted as asset acquisition in line with Ind AS 38 (Intangible Asset). The Company incurred transaction cost of 0.27 crores for the above asset acquisition which was capitalised along with Basic Adhesive Trademark, IPR and technical knowhow. Total value of 24.91 crores was recognised under Intangible assets in the standalone financial statements.
m) During the current year, the Company had paid Dividend of 16.00 per equity share of 1 each for the financial year 2023-24.
55 Additional Regulatory Information Required By Schedule III to the Companies Act, 2013:
a) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the current and previous financial year.
b) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
c) The Company has not been declared willful defaulter by any bank or financial institution or other lender or government or any government authority.
d) The Company has complied with the requirement with respect to number of layers as prescribed under Section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
e) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.
f) The Company has not traded or invested in crypto currency or virtual currency.
g) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.
h) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (“Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
I58 Approval of financial statement
The standalone financial statements are approved for issue by the Audit Committee and by the Board of Directors at their respective meetings held on 8th May 2025.
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