Board of Pricol approves divestment of its step down subsidiaries

At meeting held on 15 June 2019

The Board of Pricol at its meeting held on 15 June 2019 has taken a considered decision to hive off its investment in its wholly owned subsidiary, Pricol Espana S.L. , Spain, primarily to hive off the step down subsidiary unit at Brazil which requires continuous investments for its day to day operations.

The Board is necessitated to hive off its other step down subsidiaries , Pricol Wiping Systems Czech s.r.o and Pricol Wiping Systems Mexico S.A. de C.V. along with the Investment in Pricol Wiping Systems India as a strategic / bundled offer, reckoning commonality of customer base and in order to minimize the financial impact of the disposal.

The decision was taken to arrest further flow of funds into markets which are not conducive for sustaining the business at the current levels and also which does not seem to revive in the near future .

Consequently, these investments have been classified as Non-current Investments held for sale in accordance with Ind AS 105 - "Non Current Assets held for sale and Discontinued Operations".

A provision of Rs 231.97 crore , including an estimated devolvement on account of guarantee, has been made in Standalone Financial Statements based on a preliminary assessment of estimated realisable value of the Investments less cost to sell and an Impairment of Goodwill on Consolidation of Rs 51.70 crore has been provided in the Consolidated Financial Statements. Any additional provision to be made or excess provision to be reversed will be appropriately dealt with in the year in which the transaction reaches finality.

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