Page 160 - Annual Report 2019-20

notes forming part of the financial statements notes forming part of the financial statements
53 other Information
a) During the year, Madhumala Ventures Pvt Ltd (Formerly known as Madhumala Traders Pvt Ltd)
(Madhumala), a wholly owned subsidiary of the Company:
(i) invested an amount of 2.00 crores in the Aapkapainter Solutions Pvt Ltd (Aapkapainter).
Madhumala has agreed to make an investment of 5.00 crores in Aapkapainter, a company engaged
in providing painting and waterproofing solutions to retail consumer.
(ii) invested an amount of 71.47 crores in the Trendsutra Platform Services Pvt Ltd (Pepperfry) by
subscription to Compulsory Convertible non-Cumulative Preference Shares. Pepperfry is an online
furniture chain in India.
(iii) invested an amount of 49.00 crores in the homevista Décor & Furnishings Pvt Ltd (homeLane) by
subscription to Compulsory Convertible Cumulative Preference Shares. homeLane is a fast growing
home interiors company backed by strong tech-stack and presence in 7 cities with 16 experience
centers in India.
b) During previous year, Percept Waterproofing Services Limited (Percept) (80% Subsidiary of the
Company) was merged with nina Waterproofing Systems Pvt Ltd (nina) (70% Subsidiary of the
Company), pursuant to the hon’ble national Company Law Tribunal, Mumbai Bench, order dated
11 January 2019, w.e.f. the Appointed date i.e. 1 April 2017 and consequently, Percept stands dissolved
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without winding up. Further, post the said merger, w.e.f 27 March 2019, nina is known as AEKAM
Construction Specialties Private Limited (AEKAM) and w.e.f 15 April 2019, AEKAM is known as nina
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Percept Private Limited. Accordingly, the company’s investment in Percept are merged with nina Percept
Private Limited and the Company holds 71.53% stake in the merged entity.
c) During the year, nina Percept Private Limited (nPPL), subsidiary of the Company along with Pidilite
Speciality Chemicals Bangladesh Pvt Ltd (PSCB), step-down subsidiary of the Company, has
incorporated a subsidiary in Bangladesh namely ‘nina Percept (Bangladesh) Pvt Ltd’ to carry on the
business of roofing and waterproofing services. nPPL shall hold 99% of the paid up share capital of nina
Percept (Bangladesh) Pvt Ltd and the balance 1% shall be held by PSCB.
d) During the year, the Company has incorporated a subsidiary in the name of ‘Pidilite Litokol Private
Limited’ (PLPL). This subsidiary is incorporated to carry on the business of chemicals epoxy grouts,
chemical based products, etc. In terms of Shareholder’s agreement, the Company shall hold 60% of the
paid-up share capital and balance capital held by Litokol SPA, Italy.
e) During the year, The Company has incorporated a subsidiary in the name of ‘Pidilite Grupo Puma
Manufacturing Limited’ (PGPML) to carry on the business of manufacturing, processing, trading or
dealing in technical mortars, building materials, high quality C2 tile adhesives, other materials used in
construction etc. The Company shall hold 50% of the paid-up share capital and balance capital held by
Corporacion Empresarial Grupo Puma S.L. (Grupo Puma).
f) The Board of Directors at its meeting held on 29 January 2020 have approved a restructuring proposal
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whereby the Company shall, for operational convenience and synergies, acquire the business of wholly
owned entity, M/s nitin Enterprise (a partnership firm having two partners which are wholly owned
subsidiaries of the Company) on a slump sale basis for a cash consideration of an amount not exceeding
18.50 crores. The Company has applied and awaiting for necessary approvals.
g) During the year, the Company has incorporated a Subsidiary Company in the name of “Pidilite C-Techos
Walling Limited” (PCWL) to carry on the business of construction of building works or any other
structural or architectural work of any kind using C-Techos wall technology, manufacturing of ACC panels
and other ancillary products. The Company shall hold 60% of the paid-up share capital and balance
capital held by Chetana Exponential Technologies Pvt Ltd.
PIDILITE ANNUAL REPORT 2019-20
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h) During current year, the Company decided to sell plant and machinery pertaining to Synthetic Elastomer PIDILITE ANNUAL REPORT 2019-20
project located at Dahej having a carrying value of 60.52 crores as on 1 April 2019 (included in capital
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work in progress). Accordingly, reclassified these assets as “Assets held for sale” at fair market value of
38.28 crores and an impairment loss amounting to 22.24 crores was provided in September 2019.
The Company has undertaken its best efforts to find buyers for these assets. In absence of buyer, as at
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31 March 2020, these assets were fair valued at estimated realizable scrap value in accordance with Ind
AS 113 “Fair Value Measurement”, being asset categorized as Level 3, whereby fair value is determined
based on the inputs to the valuation technique.
Out of these assets, Company has identified certain plant & machinery amounting to 5.33 crores for its
internal use and remaining plant & machinery amounting to 32.95 crores have been further impaired.
hence, an impairment loss aggregating to 55.19 crores is disclosed as an exceptional item in the
financial statements.
i) During the year, the Company had paid Interim Dividend of 7.00 per equity share of 1 each for the
financial year 2019-20.
j) In March 2020, the World health Organisation declared COVID-19 to be a pandemic. The operation of
the Company were disrupted since mid of March 20. As on date, The Company has already restarted the
operations albeit in a phased manner after obtaining necessary permissions as required. The Company
has adopted measures to curb the spread of infection in order to protect the health of its employees
and ensure business continuity with minimal disruption including remote working, maintaining social
distancing, sanitization of work spaces etc.
The Company has evaluated the impact of COVID-19 on the operations of the Company, order booking
and revenue, cash flow, assets and liabilities and factored in the impact of it upto the date of approval of
these financial statements on the carrying value of its assets and liabilities.
Even though, it is very difficult to predict the duration of the disruption and severity of its impact, on the
basis of evaluation of overall economic environment, outstanding order book, liquidity position, debt
free status, recoverability of receivables, the Company expects to recover the carrying amount of these
assets and currently does not anticipate any further impairment of it. In assessing the recoverability,
the Company has considered internal and external information upto the date of approval of these Ind
AS financial statements and has concluded that there are no material impact on the operations and the
financial position of the Company.
Given the uncertainties, the impact of COVID-19 maybe different from that estimated as at the date of
approval of these standalone financial statements, and the Company will continue to closely monitor the
developments.
54 Events after reporting period
The Company has entered into a definitive agreement with Tenax SPA Italy (Tenax Italy) for acquiring 70% of
the share capital of Tenax India Stone Products Pvt Ltd (Tenax India) for cash consideration of approximately
80.00 crores (depending upon the actual cash and working capital at the time of closing), subject to
certain preconditions being met prior to closing of the transaction. Tenax Italy is the leading manufacturer
of adhesives, coating, surface treatment chemicals and abrasives for the marble, granite and stone industry.
Tenax India is a subsidiary of Tenax Italy engaged in the sales and distribution of Tenax Italy products for the
retail market in India.
55 Approval of the financial statements
The financial statements are approved for issue by the Audit Committee and by the Board of Directors at
their respective meetings held on 17 June 2020.
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