Page 189 - Annual Report 2019-20

NOTES FORMING PART OF THE CONSOLIDATED Notes forming part of the consolidated financial statements 187
FINANCIAL STATEMENTS

The financial statements of all entities used for the purpose of consolidation are drawn up to same
1 Corporate information
reporting date as that of the Parent, i.e., year ended on 31 March 2020.
st
Pidilite Industries Limited (the Company/ Parent), together with its subsidiaries are pioneers in consumer and The consolidated financial statements have been prepared on the following basis: PIDILITE ANNUAL REPORT 2019-20
industrial speciality chemicals in India. The equity shares of the Company are listed on BSE Ltd. (BSE) and
national Stock Exchange of India Ltd. (nSE). a) The financial statements of the Parent and its subsidiaries have been consolidated on a line-by-line
basis by adding together like items of assets, liabilities, income and expenses after eliminating
The address of its registered office is Regent Chambers, 7 Floor, Jamnalal Bajaj Marg, 208, nariman Point, intra-group balances, intra-group transactions and resulting unrealised profits or losses in accordance
th
Mumbai 400 021. The address of principal place of business is Ramkrishna Mandir Road, Off Mathuradas Vasanji with Ind AS 110 “Consolidated Financial Statements”. Further, the carrying amount of the Parent’s
Road, Andheri (E), Mumbai 400 059. investments in each subsidiary and the Parent’s portion of equity of each subsidiary are eliminated
on consolidation.
2 significant Accounting policies b) The consolidated financial statements include the share of profit/ loss of an Associate Company and
Joint Venture which have been accounted for using equity method as per Ind AS 28 “Investment
2.1 Basis of accounting and preparation of financial statements in Associates and Joint Ventures”. The investment is initially recognised at cost, and the carrying
The consolidated financial statements of the Group have been prepared in accordance with the Indian amount is increased or decreased to recognise the investor’s share of the profit or loss (the loss being
Accounting Standards (“Ind AS”) prescribed under Section 133 of the Companies Act, 2013(‘Act’) read restricted to the cost of investment) of the investee after the acquisition date.
with Companies (Indian Accounting Standards) Rules, 2015 as amended. c) Profit or loss and each component of Other Comprehensive Income (the ‘OCI’) are attributed to
The financial statements have been prepared under the historical cost convention except for the the equity holders of the Group and to the non-controlling interests, even if this results in the non-
following items – controlling interests having a deficit balance.
a. Certain Financial Assets/ Liabilities (including derivative instruments) – at Fair value d) The excess of cost to the Group of its investments in the subsidiary companies, Joint Venture and
Associate Company over its share of equity of the subsidiary companies, at the dates on which the
b. Employee Stock Options - at Fair value investments in the subsidiary companies were made, is recognised as ‘Goodwill’ being an asset in the
The financial statements are presented in Indian Rupees (InR) and all values are rounded to the nearest consolidated financial statements and is tested for impairment on annual basis. On the other hand,
crores, except otherwise indicated. where the share of equity in the subsidiaries, Joint Venture and Associate Company as on the date of
2.2 Basis of consolidation investment is in excess of cost of investments of the Group, it is recognised as ‘Capital Reserve’ and
shown under the head ‘Reserves & Surplus’, in the consolidated financial statements.
The consolidated financial statements comprise the financial statements of Pidilite Industries Limited (the e) Minority Interest in the net assets of the consolidated subsidiaries consist of the amount of equity
“Parent”) and its subsidiaries (together referred to as “Group”) and Group’s share of profit/ loss in its attributable to the minority shareholders at the date on which investments in the subsidiary companies
Associate and Joint Venture as at 31 March 2020. Control exists when the Group has: were made and further movements in their share in the equity, subsequent to the dates of investments.
st
• power over the investee; net profit/ loss for the year and each component of Other Comprehensive Income of the subsidiaries
attributable to minority interest is identified and adjusted against the profit after tax of the Group in
• exposure or rights, to variable returns from its involvement with the investee; and order to arrive at the income attributable to shareholders of the Company.
• ability to use its power over the investee to affect its returns. f) The difference between the cost of investments in the associate and the share of net assets at the
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there time of acquisition of shares in the associate is identified in the consolidated financial statements as
are changes to one or more of the three elements of control listed above. Goodwill or Capital Reserve as the case may be.
Generally, there is a presumption that a majority of voting rights result in control. When the Group has less g) Goodwill arising on consolidation is not amortised but tested for impairment.
than a majority of the voting rights of an investee, it has power over the investee when the voting rights 2.3 Business Combination
are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred
Group considers all relevant facts and circumstances in assessing whether or not the Group’s voting rights in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date
in an investee are sufficient to give it power, including: fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of
• the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the the acquiree and the equity interest issued by the Group in exchange of control of acquiree. Acquisition-
other vote holders; related costs are recognised in Consolidated Statement of Profit and Loss as incurred.
• potential voting rights held by the Group, other vote holders or other parties; Where the consideration transferred by the Group in a business combination includes assets or liabilities
resulting from a contingent consideration arrangement, the contingent consideration is measured
• rights arising from other contractual arrangements; and at its acquisition-date fair value and included as a part of the consideration transferred in a business
• any additional facts and circumstances that indicate that the Group has, or does not have, the current combination. Changes in the fair value of the contingent consideration that qualify as measurement
ability to direct the relevant activities at the time that decisions need to be made, including voting period adjustments are adjusted retrospectively, with corresponding changes against goodwill or
patterns at previous shareholders meetings. capital reserve, as the case maybe. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed one year from
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the acquisition date) about facts and circumstances that existed at the acquisition date. Contingent
the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or
PIDILITE ANNUAL REPORT 2019-20 If the Group losses control over a subsidiary, it derecognises the related assets (including goodwill), Consolidated Statement of Profit and Loss.
consideration that is classified as an asset or a liability is subsequently (after the measurement period)
disposed off during the year are included in the Consolidated Statement of Profit and Loss from the date
remeasured at subsequent reporting dates with the corresponding gain or loss being recognised in
the Company gains control until the date when the Group ceases to control the subsidiary.
In case of business combinations involving entities under common control, the above policy does
liabilities, non-controlling interest and other components of equity. Any investment retained is measured
not apply. Business combinations involving entities under common control are accounted for using
at fair value. Any resultant gain or loss is recognised in the Consolidated Statement of Profit and Loss.
the pooling of interests method. The net assets of the transferor entity or business are accounted at
their carrying amounts on the date of the acquisition subject to necessary adjustments required to
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
harmonise accounting policies. Retained earnings appearing in the financial statements of the transferor
transaction.

The consolidated financial statements are prepared using uniform accounting policies for like transactions
Identity of the reserves appearing in the financial statements of the transferor is preserved and appears
and other events in similar circumstances. When necessary, adjustments are made to the financial
in the financial statements of the transferee in the same form. Any excess or shortfall of the consideration
statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. is aggregated with the corresponding balance appearing in the financial statements of the transferee.
paid over the share capital of transferor entity or business is recognised as capital reserve under equity.
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