To
The Members
Your Directors take pleasure in presenting the Fifty Fifth Annual
Report together with Audited Financial Statements for the year ended 31st
March, 2024.
Financial Results (Standalone)
|
|
(Rs in crores ) |
|
2023-24 |
2022-23 |
| Sales |
11,117.82 |
10,545.12 |
| Operating Profit |
2,716.70 |
1,939.10 |
| Finance Costs |
(29.46) |
(28.53) |
| Depreciation, Amortisation and Impairment
Expense |
(289.11) |
(221.97) |
| Net Foreign Exchange Loss |
(1.47) |
(20.88) |
| Profit Before Exceptional Items and Tax |
2,396.66 |
1,667.72 |
| Exceptional Items |
7.15 |
- |
| Profit Before Tax |
2,403.81 |
1,667.72 |
| Current Year?s Tax |
(604.74) |
(423.05) |
| Deferred Tax |
0.40 |
12.51 |
| Profit After Tax |
1,799.47 |
1,257.18 |
| Profit Brought Forward |
5,628.19 |
4,877.86 |
| Other Comprehensive Income Included in
Retained |
|
|
|
(20.04) |
1.45 |
| Earnings (Net of tax) |
|
|
| Profit Available for Appropriation |
7,407.62 |
6,136.49 |
Appropriations |
|
|
| Dividend Paid |
(559.30) * |
(508.30) # |
| Closing balance of Retained Earnings |
6,848.32 |
5,628.19 |
* Pertaining to dividend for FY 2022-23 # Pertaining to dividend for FY
2021-22
The dividend payout is in accordance with the Dividend Distribution
Policy, which is available on the website of the Company
https://www.pidilite.com/investor-relations/corporate-governance
Transfer to Reserves
The Company does not propose to transfer amounts to the general
reserve.
Term Finance
The Company has no outstanding term loans (previous year NIL).
Capital Expenditure
The total capital expenditure during the year was Rs 499.21 crores
(previous year Rs 456.94 crores) primarily spent on fixed assets for various manufacturing
units, offices, laboratories, warehouses and on information technology.
Deposits
The Company has not accepted any deposits covered under Chapter V of
the Companies Act, 2013 during the financial year 2023-24 (previous year NIL).
Subsidiaries
Investment in Subsidiaries
During the year, total investment of Rs 177.35 crores (previous year Rs
78.59 crores) was made in subsidiaries. Of this, Rs 170.14 crores was invested in domestic
subsidiaries and Rs 7.21 crores in overseas subsidiaries. The investments in domestic
subsidiaries were in M/s. Nina Percept Pvt. Ltd. amounting to Rs 107.67 crores, Pidilite
Ventures Pvt. Ltd. Rs 50.02 crores and Pidilite Grupo Puma Manufacturing Ltd. Rs 12.45
crores. The investments in overseas subsidiaries were in Pidilite Middle East Ltd Rs 6.80
crores and Pidilite Industries Egypt SAE Rs 0.41 Crores.
During the year a. The Company acquired the balance 25.42% stake in
its subsidiary namely Nina Percept Pvt. Ltd. (NPPL), by purchasing 3,00,000 equity shares
from an existing shareholder of NPPL, for a cash consideration of Rs 37.75 crores
(including certain contingent payment). Effective 29th June, 2023, consequent
to this, NPPL became a wholly owned subsidiary of the Company. b. M/s. Pidilite Middle
East Ltd. (PMEL), a wholly owned subsidiary of the Company, increased its holding in its
step-down subsidiary M/s. Pidilite MEA Chemicals LLC (PIL MEA LLC) from 49% to 100%, on
purchase of balance 51% stake from an existing shareholder of PIL MEA LLC, consequent to
this, PIL MEA LLC became a wholly owned subsidiary of PMEL effective 19th June,
2023. c. M/s. Pidilite MEA Chemicals LLC, a wholly owned subsidiary of the Company and
M/s. Corporacion Empresarial Grupo Puma SL, Spain incorporated a joint venture Company in
UAE in the name of "PidilitePuma MEA Chemicals LLC" on 2nd October,
2023 to carry on the business of manufacture of construction chemicals. d. The Company on
8th November, 2023 has, approved subject to RBI and regulatory approvals,
acquisition of M/s. Pargro Investments Pvt. Ltd., an existing NBFC company belonging to
Company?s Promoter Group through M/s. Bhimad Commercial Company Pvt. Ltd., a wholly
owned subsidiary of the Company for a cash consideration not exceeding Rs 10 crores. The
new business shall provide credit to its domain ecosystem to support their business
growth. e. M/s. Pidilite USA Inc, a wholly owned subsidiary of the Company, has done a
buyback of 1,20,00,000 shares of the Company amounting to Rs 79.75 crores. f. The Company
has transferred its 100% Equity shares in M/s. Pulvitec do Brasil Industria e Commercio de
Colas e Adesivos Limitada, Brazil, a wholly owned subsidiary of the Company to M/s.
Soprema Ltda., Brazil, a part of Soprema Group, France for a consideration of
approximately
Rs 47 crores post adjustment of net debt and hold back, on 28th
March, 2024. Pulvitec has ceased to be a wholly owned subsidiary of the Company. g. The
Company through its subsidiary M/s. Pidilite Ventures Pvt. Ltd. made certain investments
in early-stage companies. h. M/s. Constrobots Robotics Pvt. Ltd. has become an Associate
company w.e.f. 27th May, 2023.
Domestic and International Subsidiaries Performance
(Rs in crores)
Domestic Subsidiaries Sales Sales % Growth EBITDA EBITDA % Growth
2023-24 2022-23 2023-24 2022-23
Consumer & Bazaar 472.11 391.11 20.70% 64.69 62.22 4.00% Business
to Business 346.57 315.87 9.70% 25.93 6.25 314.70%
Domestic subsidiaries figures includes companies which were
non-operating in previous year.
Domestic subsidiaries (Consumer & Bazaar) reported industry leading
growth with healthy EBITDA Margins. The subsidiaries in Business to Business segment
achieved double digit sales growth with improvement in EBITDA Margins.
(Rs in crores)
International Subsidiaries |
Sales |
Sales |
% Growth |
EBITDA |
EBITDA |
% Growth |
|
2023-24 |
2022-23 |
|
2023-24 |
2022-23 |
|
| Asia |
317.88 |
311.88 |
1.9% |
60.61 |
51.39 |
17.9% |
| Middle East & Africa |
282.34 |
245.34 |
15.1% |
28.53 |
9.18 |
210.8% |
Overseas subsidiaries figures are at constant currency.
Despite the global economic uncertainty, inflation and political
instability in some countries, International subsidiaries (excluding Pidilite USA and
Pulvitec Brazil) revenues for the year grew by 7.8% over FY 2023 with EBITDA Margins
improving from 10.8% to 14.8%. In March 2024, the Company divested its business in Brazil
and with this, now the company has fully exited the businesses in Americas.
Consolidated Financial Statements
In accordance with the provisions of Companies Act, 2013 (hereinafter
referred to as ‘the Act?), Regulation 33 of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter
referred to as ‘Listing Regulations?) and applicable Accounting Standards, the
Audited Consolidated Financial Statements of the Company for the financial year 2023-24,
together with the Auditor?s Report, form part of this Annual Report. A statement
containing the salient features of the Company?s subsidiaries and associate companies
in the prescribed Form AOC- 1, are set out after Note No. 61 to the Consolidated Financial
Statements.
The Consolidated Financial Statements have been prepared on the basis
of audited financial statements of the Company, its subsidiaries, associate companies and
joint venture, as approved by their respective Board of Directors except M/s. Pulvitec Do
Brazil Industria e Comercio de Colas e Adesivos Ltda (upto 28th March, 2024)
which has been approved by the local administrator. The accounts of the subsidiaries are
also uploaded on the website of the Company, https://www.pidilite.com/
investor-relations/financials.
Directors and Key Managerial Personnel
Shri N. K. Parekh, a promoter Director, has stepped down as the
Non-Executive Director of the Company from the close of business hours of 31st
March, 2024. Shri N. K. Parekh has been an outstanding leader associated with the Company
for over 55 years and has contributed immensely to the growth of the Company. The Board
places on record the deep appreciation and gratitude for the valuable contributions made
by Shri N. K. Parekh.
Shri B S Mehta and Shri Uday Khanna, Independent Directors have retired
from the Company on 31st March, 2024 and 2nd April, 2024
respectively, on completion of their second term on the Board of the Company. The Board
places on record the deep appreciation and gratitude for the valuable contributions made
by Shri B S Mehta and Shri Uday Khanna during their tenure on the Board.
Shri A. B. Parekh, Executive Vice Chairman has stepped down as the
Whole-time Director of the Company effective from 1st April, 2024 but continues
as a Director on the Board of the Company designated as Non-Executive Vice Chairman. Shri
Sudhanshu Vats, Deputy Managing Director has been designated as the Managing Director
Designate with effect from 1st April, 2024. Members approval is sought at the
ensuing Annual General Meeting for revision in his remuneration.
Shri Kavinder Singh has been appointed as a Joint Managing Director
Designate of the Company by the Board on the recommendation of Nomination and Remuneration
Committee for a period of 5 years with effect from 20th May, 2024, subject to
the approval of the Members at the ensuing Annual General Meeting. Shri Murali Sivaraman
has been appointed as an Independent Director for a period of 5 years, by the Board on the
recommendation of Nomination and Remuneration Committee, with effect from 23rd
January, 2024 and Member?s approved his appointment by passing special resolution
through Postal Ballot process on 13th March, 2024. Shri Rajeev Gupta has been
appointed as an Additional Director (Independent) of the Company, by the Board on the
recommendation of Nomination and Remuneration Committee for a period of five years with
effect from 7th May, 2024, subject to the approval of the Members at the
ensuing Annual General Meeting. Shri J. S. Deepak has been appointed as an Additional
Director (Independent) of the Company, by the Board on the recommendation of Nomination
and Remuneration Committee for a period of five years with effect from 1st
July, 2024, subject to the approval of the Members at the ensuing Annual General Meeting.
In the opinion of the Board, Shri Murali Sivaraman, Shri Rajeev Gupta
and Shri J. S. Deepak possess requisite expertise, experience and integrity including
proficiency.
In accordance with the Act and the Articles of Association of the
Company, Shri A. B. Parekh and Shri Joseph Varghese, Directors of the Company, retire by
rotation and being eligible, offer themselves for re-appointment.
None of the Directors of the Company are disqualified for being
appointed as Directors as specified under Section 164(2) of the Act read with Rule 14(1)
of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Policy on Directors? remuneration
The policy on Directors? remuneration is available on the website
of the Company, https://www.pidilite. com/investor-relations/corporate-governance. The
remuneration paid to the Directors is as per the terms laid out in the said policy.
Directors? Responsibility Statement
Your Directors confirm that:
• in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation relating to material
departures; • they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year ended 31st March, 2024 and of the profit of the Company for that
period;
• they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities; • they have prepared the annual accounts on a going concern
basis; • they have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and are operating
effectively; and • they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
Annual Evaluation by the Board of its own performance, its Committees
and individual Directors
The Board has put in place a mechanism for evaluation of its own
performance and performance of its Committees and individual Directors. The evaluation of
the Board, Committees, Directors and Chairman of the Board was conducted based on the
evaluation parameters, such as Board composition and structure, effectiveness of the
Board, participation at meetings, domain knowledge, awareness and observance of
governance, etc. For further details, please refer to the Report on Corporate Governance,
which forms a part of this Annual Report.
Familiarisation Programme
The Company has put in place an induction and familiarisation programme
for all its Directors including the Independent Directors.
The familiarisation programme for Independent Directors in terms of
provisions of Regulation 46(2)(i) of the Listing Regulations is uploaded on the website of
the Company.
Number of Meetings of Board of Directors
Eight meetings of the Board of Directors of the Company were held
during the financial year 2023-24. For further details, please refer to the Report on
Corporate Governance, which forms a part of this Annual Report.
Statement of Declaration on Independence given by Independent Directors
All the Independent Directors of the Company have given declarations
that: a. they meet the criteria of independence as laid down under the Act and the Listing
Regulations; b. they have complied with the Code of Independent Directors prescribed under
Schedule IV of the Act; and c. they have registered themselves with the Independent
Directors? Database maintained by the Indian Institute of Corporate Affairs.
Corporate Governance
The Company is committed to good corporate governance practices. The
Report on Corporate Governance, as stipulated under Listing Regulations, forms an integral
part of this Annual Report. The requisite certificate from M/s. Parikh & Associates,
Practising Company Secretaries, is attached to the Report on Corporate Governance.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year under
review, as stipulated under the Listing Regulations, is presented in a section forming
part of this Annual Report. For the sake of brevity the items covered in this Report are
not repeated in the Management Discussion and Analysis Report.
Committees of the Board
The following are the statutory Committees constituted by the Board and
they function according to their respective roles and defined scope:
• Audit Committee
• Nomination and Remuneration Committee
• Corporate Social Responsibility Committee
• Stakeholders Relationship Committee
• Risk Management Committee
Details of composition, terms of reference and number of meetings held
for respective Committees are given in the Report on Corporate Governance, which forms a
part of this Annual Report. Further, during the year under review, all recommendations
made by the Audit Committee have been accepted by the Board.
Corporate Social Responsibility (CSR) Report and CSR Policy
The CSR Report as per Section 135 of the Act read with Companies
(Corporate Social Responsibility Policy) Rules, 2014 and amendments thereto, is attached
as Annexure 1 to this Report. The details of CSR Initiatives forms part of Social &
Community Service Initiatives section of this Annual Report. CSR Policy can be accessed on
website of the Company https://www.pidilite.com/investor-relations/corporate-governance.
Vigil Mechanism / Whistle Blower Policy
The Company has established a Vigil Mechanism and Whistle Blower Policy
for its Directors and employees. The said policy has been communicated to the Directors
and employees of the Company and is also posted on the website of the Company
https://www.pidilite.com/investor-relations/corporate-governance. For further details,
please refer to the Report on Corporate Governance, which forms a part of this Annual
Report.
Policy relating to Prevention of Sexual Harassment
In accordance with the requirements of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act")
and Rules made thereunder, the Company has formulated a Prevention of Sexual Harassment
Policy, which mandates no tolerance against any conduct amounting to sexual harassment of
women at workplace. The Company has formed Internal Complaints Committee to redress and
resolve any complaints arising under the POSH Act. To build awareness in this area,
Company has been conducting induction/training programmes in the organisation on a
periodical basis. For further details, please refer to the Report on Corporate Governance,
which forms a part of this Annual Report.
Statutory Auditors
In accordance with the provisions of the Act, M/s. B S R & Co. LLP,
Chartered Accountants
(Firm Registration No 101248W/W-100022) have been appointed as the
Statutory Auditors of the Company, for a period of five years i.e. upto the conclusion of
59th AGM to be held for the adoption of accounts for the financial year ending
31st March, 2028. Auditors have confirmed that they are not disqualified from
continuing as Auditors of the Company. There is no qualification or adverse remark in
Auditors? Report. There is no incident of fraud requiring reporting by the Auditors
under Section 143(12) of the Act.
Cost Auditor
The Company has maintained cost records as specified by Central
Government u/s 148(1) of the Act. M/s. V J Talati & Co., Cost Accountants, were
appointed as the Cost Auditor for the financial year 2023-24 to conduct the audit of the
cost records of the Company and they have been reappointed as the Cost Auditor for the
financial year 2024-25. In terms of the provisions of Section 148(3) of the Act, read with
the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to
the Cost Auditor has to be ratified by the Members of the Company. Accordingly, at the
ensuing AGM, the Board seeks ratification of the remuneration payable to the Cost Auditor
for the financial year 2024-25.
Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed M/s. Parikh & Associates, Practising Company Secretaries to undertake the
Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit
Report for the financial year 2023-24 under the Companies Act, 2013 read with Rules made
thereunder and Regulation 24A of the Listing Regulations, is set out in Annexure 2 to this
report. There is no qualification or adverse remark in their Report.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars under Section 134 of the Act, read with the Companies
(Accounts) Rules, 2014 are attached as Annexure 3 to this Report.
Risk Management
In compliance with Regulation 21 of the Listing Regulations, a Risk
Management Committee has been constituted by the Board. The Risk Management Committee,
also known as Risk Management Oversight Committee, is entrusted with roles and powers as
specified in Part D of Schedule II of Listing Regulations. The Company has laid out a risk
management policy for identification and mitigation of risks. The Company has also
constituted a Management Risk Committee which is chaired by the Managing Director and has
Senior Leadership of the Company as its members. The Management Risk Committee identifies
the key risks for the Company, develops and implements the risk mitigation plan, reviews
and monitors the risks and corresponding mitigation plans on a regular basis and
prioritises the risks, if required, depending upon the effect on the business/reputation.
The other details in this regard are provided in the Report on
Corporate Governance, which forms a part of this Annual Report.
Contracts and Arrangements with Related Parties
All contracts/arrangements/transactions entered into by the Company
during the financial year under review with related parties (as defined in the Act and
Listing Regulations) were in the ordinary course of business and on an arm?s length
basis. During the year, the Company did not enter into any contract/
arrangement/transaction with related parties which could be considered as material in
accordance with the Policy of the Company on Materiality of Related Party Transactions
(RPT Policy) or which is required to be reported in Form No. AOC-2 in terms of Section
134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts)
Rules, 2014. The RPT Policy, as approved by the Board, is available on the Company?s
website: https://www.pidilite.com/investor-relations/corporate-governance.
Disclosure of related party transactions with the
promoter(s)/promoter(s) group which individually hold 10% or more shareholding of the
Company, as per the Indian Accounting Standards, are set out in Note No 45 of the
Standalone Financial Statements of the Company.
Particulars of Loans, Guarantees or Investments
Details of loans, guarantees or investments covered under the
provisions of Section 186 of the Act are given in the Notes to the Financial Statements.
Employees Stock Option Scheme
The Employees Stock Option Scheme (Scheme) is in line with SEBI (Share
Based Employee Benefits) Regulations, 2014. The certificate of Secretarial Auditors
regarding implementation of the Scheme is available for inspection of Members in
electronic mode. The applicable disclosure, as stipulated under Securities and Exchange
Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as on
31st March, 2024 with regard to Scheme, is provided in Annexure 4 to
this Report.
Annual Return
Annual Return of the Company for FY 2023-24 as on 31st
March, 2024 is available on the website of the
Company viz.
https://www.pidilite.com/investor-relations/latest-general-meeting.
Business Responsibility and Sustainability Report
A Business Responsibility and Sustainability Report as per Regulation
34 of the Listing Regulations, detailing the various initiatives taken by the Company on
the environmental, social and governance front along with Independent Practitioners?
Reasonable Assurance Report provided by M/s. B S R & Co. LLP, Statutory Auditors,
forms an integral part of this Report.
Internal Control Systems and their Adequacy
The Company has adequate internal financial control procedures
commensurate with its size and nature of business.
The Company has appointed Internal Auditors who periodically audit the
adequacy and effectiveness of the internal controls laid down by the management and
suggest improvements.
The Audit Committee of the Board of Directors approves the annual
internal audit plan and periodically reviews the progress of audits as per approved audit
plans along with critical internal audit findings presented by internal auditors, status
of implementation of audit recommendations and adequacy of internal controls.
Registrar and Share Transfer Agent
Pursuant to an Order dated 18th December, 2023, passed by
the Mumbai Bench of the National Company Law Tribunal, M/s. TSR Consultants Pvt. Ltd.,
Registrar and Share Transfer Agent of the Company has been amalgamated with M/s. Link
Intime India Pvt. Ltd. ("LIIPL") with effect from 22nd December,
2023. LIIPL is the Registrar and Share Transfer Agent of the Company.
Significant/Material Orders passed by the Regulators
There are no significant/material orders passed by the Regulators or
Courts or Tribunals impacting the going concern status of the Company and its operations
in future.
Particulars of Employees and Related Disclosures
Disclosure pertaining to remuneration as per Section 197(12) of the
Act, read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
attached as Annexure 5 to this Report.
Details of employee remuneration as required under provisions of
Section 197 of the Act and Rule 5(2) of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 (including any modifications, thereof) shall be made
available to any shareholder, on request.
General
The Company has neither issued equity shares with differential rights
nor any sweat equity shares. There have been no material changes and commitments affecting
the financial position of the Company between the end of financial year and the date of
this Report. The Company has complied with Secretarial Standards issued by the Institute
of Company Secretaries of India on Meetings of the Board of Directors and General
Meetings.
No proceedings are made or pending under the Insolvency and Bankruptcy
Code, 2016 and there is no instance of one-time settlement with any Bank or Financial
Institution.
There has been no change in the nature of business of the Company.
Appreciation
Your Directors wish to place on record their appreciation of the
contribution made by the employees at all levels to the continued growth and prosperity of
your Company. Your Directors also wish to place on record their appreciation to the
shareholders, dealers, distributors, consumers, banks and other financial institutions for
their continued support.
FOR AND ON BEHALF OF THE BOARD
4 2
| Mumbai |
M B Parekh |
|
|
|
|
| Date : 1st July 2024 |
Executive Chairman |
|