To

The Members

Your Directors take pleasure in presenting the Fifty-Third AnnualReport together with Audited Financial Statements for the year ended 31^stMarch 2022.

Financial Results (Standalone)

Financial Performance

Comments on Financial Performance are included in Management Discussionand Analysis section.

Dividend

Your Directors recommend a dividend of ' 10.00 per equity share of '1/- each (previous year ' 8.50 per equity share of ' 1/- each) amounting to ' 508.29crores (previous year ' 431.93 crores) out of the current year?s profit on ' 50.83crores equity capital (previous year ' 50.82 crores). The dividend payout amount has grownat a CAGR of 13.65% during the last 5 years.

# Pertaining to dividend for FY 2020-21

The dividend payout is in accordance with the Dividend DistributionPolicy which is available on the website of the Company

www.pidilite.com.

Transfer to Reserves

The Company does not propose to transfer amounts to the generalreserve.

Term Finance

The Company has no outstanding term loans (previous year NIL).

Capital Expenditure

The total capital expenditure during the year was ' 370.45 crores(previous year ' 336.69 crores) primarily spent on fixed assets for various manufacturingunits offices laboratories warehouses and on information technology.

Deposits

The Company has not accepted any deposits covered under Chapter V ofthe Companies Act 2013 during the financial year 2021-22 (previous year NIL).

Subsidiaries

Investment in Subsidiaries

During the year total investment of ' 104.94 crores (previous year '2323.04 crores) was made in domestic subsidiaries.

The investments in domestic subsidiaries were in Madhumala Ventures PvtLtd amounting to (' 54.96 crores) Pidilite C-Techos Walling Ltd (' 1.21 crores) and CipyPolyurethanes Private Limited (? 48.77 crores).

During the year

a. Scheme of Amalgamation of Pidilite Adhesives Private Limited (PAPL)with the Company was approved by the Hon?ble National Company Law Tribunal MumbaiBench on 7^th March 2022. The scheme is effective from 1^st April2022 which is the appointed date. The Company has completed the statutory requirementsincluding filing of Form INC28 with the Ministry of Corporate Affairs and hence PAPLstands dissolved.

b. Scheme of Amalgamation of Cipy Polyurethanes Private Limited (CIPY)with the Company was approved by the Hon?ble National Company Law Tribunal MumbaiBench on 23^rd March 2022. The scheme is effective from 1^st April2022 which is the appointed date. The Company has completed the statutory requirementsincluding filing of Form INC28 with the Ministry of Corporate Affairs and hence CIPYstands dissolved.

c. The Company through its subsidiary Madhumala Ventures Pvt. Ltd. madeinvestments in early-stage companies which would augment our capabilities.

d. The names of following two subsidiaries have been struck off by theRegistrar of Companies u/s 248 of the Companies Act during the F Y 2021-22 in absence ofany business since their incorporation:

(i) Pidilite C-Techos Pvt. Ltd. and (ii) Pidilite Grupo Puma Pvt.Ltd.

e. ICA Pidilite Pvt Ltd subsidiary of the Company made Buy back ofshares from all shareholder?s resulting into reduction in investments of the Companyby ' 11.28 crores.

Performance of Major Domestic and Overseas Subsidiaries

Overseas subsidiaries figures are at constant currency.

'Sales and EBITDA for Pidilite Adhesives Pvt. Ltd. for FY 2020-21 arefrom 4^th November 2020 to 31^st March 2021 and therefore notcomparable with FY 2021-22.

Domestic Subsidiaries in Consumer and Bazaar segment registered goodsales growth and healthy margins. The Subsidiaries sales growth in Business to Businesssegment showed signs of revival but EBITDA remained under pressure due to higher inputcosts.

Pidilite Bangladesh reported strong volume-led growth across categorieswith healthy EBITDA margin on back of improved gross margin due to pricing actions andcost control measures.

Pidilite Lanka continued with its sales growth momentum in a verychallenging economic environment. However the profitability was significantly impacteddue to socioeconomic and political crisis and steep currency devaluation.

Pidilite USA posted sales and EBITDA decline primarily due tomoderation of demand in hobby and craft products in the post pandemic period as well asmaterial cost increases.

Pidilite Brazil recorded lower sales mainly on account of overalleconomic slowdown and higher growth in the prior year due to fiscal stimulus. Operatingprofits remain low due to significant input cost inflation and competitive pricingpressure.

Our subsidiary in the Middle East reported healthy sales performance onaccount of good demand from re-export market.

Consolidated Financial Statements

In accordance with the provisions of Companies Act 2013 (hereinafterreferred to as ‘the Act?) Regulation 33 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as ‘Listing Regulations?) and applicable Accounting Standards theAudited Consolidated Financial Statements of the Company for the financial year 2021 -22together with the Auditor?s Report form part of this Annual Report. A statementcontaining the salient features of the Company?s subsidiaries associate and jointventure company in the prescribed Form AOC- 1 are set out in Note No. 59 to theConsolidated Financial Statements.

The Consolidated Financial Statements have been prepared on the basisof audited financial statements of the Company its subsidiaries associate company andjoint venture as approved by their respective Board of Directors except Pulvitec DoBrazil Industria e Comercio de Colas e Adesivos Ltda which has been approved by the localadministrator and Plus Call Technical Services LLC Dubai for which the financialstatements has been approved by the management.

The accounts of the subsidiaries are also uploaded on the website ofthe Company www.pidilite.com.

Directors and Key Managerial Personnel

Smt. Meher Pudumjee was appointed as an Additional Director of theCompany by the Board on the recommendation of Nomination and Remuneration Committee witheffect from 18^th May 2022. Members? approval is sought for herappointment as an Independent Director of the Company for a period of five years witheffect from 18^th May 2022.

Shri Sudhanshu Vats was appointed as an Additional Director designatedas Deputy Managing Director by the Board on the recommendation of Nomination andRemuneration Committee with effect from 18^th May

2022. Members? approval is sought for his appointment as WholeTime Director designated as Deputy Managing Director of the Company for a period of fiveyears with effect from 18^th May 2022.

Shri A B Parekh Whole Time Director has been appointed by the Board asExecutive - Vice Chairman with effect from 11^th August 2021.

Shri Puneet Bansal resigned with effect from 16^th September2021 as the Company Secretary and Compliance Officer (Key Managerial Personnel) of theCompany. Shri Pradip Menon Chief Financial Officer (Key Managerial Personnel) of theCompany resigned with effect from 21^st December 2021.

In terms of Section 203 of the Act and applicable provision of ListingRegulations the Board of Directors have appointed Smt. Manisha Shetty as the CompanySecretary and Compliance Officer (Key Managerial Personnel) of the Company with effectfrom 11^th March 2022 and Shri Sandeep Batra as Chief Financial Officer (KeyManagerial Personnel) of the Company with effect from 1^st June 2022.

In accordance with the Act and the Articles of Association of theCompany Shri A B Parekh and Shri N K Parekh Directors of the Company retire by rotationand being eligible offers themselves for re-appointment.

Amendment of Article 22 of Articles of Association of the Company

The Board of Directors have approved amendment of Article 22 ofArticles of Association of the Company to increase the limit on maximum number ofDirectors from existing 15 Directors to 18 Directors. As per the amended Article 22 thenumber of Directors of the Company shall not be less than 3 (three) and not more than 18(eighteen). Members? approval is sought to amend the existing Article 22 and toincrease the maximum number of Directors.

Policy on Directors? remuneration

The policy on Directors? remuneration is available on the websiteof the Company www.pidilite.com. The remuneration paid to the Directors is as per theterms laid out in the said policy.

Directors? Responsibility Statement

Your Directors confirm that:

• in the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures;

• they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended 31^st March 2022 and of the profit of the Company for thatperiod;

• they have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

• they have prepared the annual accounts on a going concern basis;

• they have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and are operatingeffectively; and

• they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

Annual Evaluation by the Board of its own performance its Committeesand individual Directors

The Board has put in place a mechanism for evaluation of its ownperformance and performance of its Committees and individual Directors. The evaluation ofthe Board

Committees Directors and Chairman of the Board was conducted based onthe evaluation parameters such as Board composition and structure effectiveness of theBoard participation at meetings domain knowledge awareness and observance ofgovernance etc. For further details please refer to the Report on Corporate Governancewhich forms a part of this Annual Report.

Familiarisation Programme

The Company has put in place an induction and familiarization programmefor all its Directors including the Independent Directors.

The familiarization programme for Independent Directors in terms ofprovisions of Regulation 46(2)(i) of the Listing Regulations is uploaded on the website ofthe Company. Number of Meetings of Board of Directors

Seven meetings of the Board of Directors of the Company were heldduring the financial year 2021 - 22. For further details please refer to the Report onCorporate 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 declarationsthat:

a. they meet the criteria of independence as laid down under the Actand the Listing Regulations and

b. they have registered their names in the Independent Directors?Databank.

Corporate Governance

The Company is committed to good corporate governance practices. TheReport on Corporate Governance as stipulated under Listing Regulations forms an integralpart of this Annual Report. The requisite certificate from M/s M. M. Sheth & Co.Practising Company Secretaries is attached to the Report on Corporate Governance whichforms a part of this Annual Report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year underreview as stipulated under the Listing Regulations is presented in a section formingpart of this Annual Report. For the sake of brevity the items covered in this Report arenot repeated in the Management Discussion and Analysis Report.

Committees of the Board

The following are the statutory Committees constituted by the Board andthey 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 heldfor respective Committees are given in the Report on Corporate Governance which forms apart of this Annual Report. Further during the year under review all recommendationsmade by the Audit Committee have been accepted by the Board.

Corporate Social Responsibility (CSR) Report and Policy

The CSR Report as per Section 135 of the Act read with Companies(Corporate Social Responsibility Policy) Rules 2014 and amendments thereto is attachedas 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 onwebsite of the Company www.pidilite.com.

Vigil Mechanism / Whistle Blower Policy

The Company has established a Vigil Mechanism and Whistle Blower Policyfor its Directors and employees. The said policy has been communicated to the Directorsand employees of the Company and is also posted on the website of the Company. For furtherdetails please refer to the Report on Corporate Governance which forms a part of thisAnnual Report.

Policy relating to Prevention of Sexual Harassment

The Company has formulated a Prevention of Sexual Harassment Policy andhas formed Internal Complaints Committee as per statutory requirements. For furtherdetails please refer to the Report on Corporate Governance which forms a part of thisAnnual Report.

Statutory Auditors

In accordance with the provisions of the Act

M/s Deloitte Haskins & Sells LLP Chartered Accountants (FirmRegistration No 117366W/W-100018) have been appointed as the Statutory Auditors of theCompany for a period of five years i.e. upto the conclusion of 54^th AGM to beheld for the adoption of accounts for the year ending 31^st March 2023. Auditorshave 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) ofthe Act.

Cost Auditor

The Company has maintained cost records as specified by CentralGovernment u/s 148(1) of the Act. M/s. V J Talati & Co. Cost Accountants wereappointed as the Cost Auditor for the financial year 2021-22 to conduct the audit of thecost records of the Company and they have been reappointed as the Cost Auditor for thefinancial year 2022-23. In terms of the provisions of Section 148(3) of the Act read withthe Companies (Audit and Auditors) Rules 2014 as amended the remuneration payable tothe Cost Auditor has to be ratified by the Members of the Company. Accordingly at theensuing AGM the Board seeks ratification of the remuneration payable to the Cost Auditorfor the financial year 2022-23.

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 hasappointed M/s M. M. Sheth & Co. Practising Company Secretaries to undertake theSecretarial Audit of the Company for the financial year 2021-22. The Report of theSecretarial Auditors attached as Annexure 2 to this Report. There is no qualification oradverse remark in their Report.

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings 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 RiskManagement Committee has been constituted by the Board. The Risk Management Committeealso known as Risk Management Oversight Committee is entrusted with roles and powers asspecified in Part D of Schedule II of Listing Regulations.

The Company has laid out a risk management policy for identificationand mitigation of risks. The Company has also constituted a Management Risk Committeewhich is chaired by the Managing Director and has Senior Leadership of the Company as itsmembers.

The Management Risk Committee identifies the key risks for the Companydevelops and implements the risk mitigation plan reviews and monitors the risks andcorresponding mitigation plans on a regular basis and prioritises the risks if requireddepending upon the effect on the business/reputation.

The other details in this regard are provided in the Report onCorporate Governance which forms a part of this Annual Report.

Contracts and Arrangements with Related Parties

All contracts/arrangements entered into by the Company during thefinancial year under review with related parties (as defined in the Act and ListingRegulations) 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 withrelated parties which could be considered as material in accordance with the Policy of theCompany on Materiality of Related Party Transactions (RPT Policy) or which is required tobe 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 theCompany?s website: www.pidilite.com.

Disclosure of related party transactions with thepromoter(s)/promoter(s) group which individually hold 10% or more shareholding of theCompany as per the Indian Accounting Standards are set out in Note No. 44 the StandaloneFinancial Statements of the Company.

Particulars of Loans Guarantees or Investments

Details of loans guarantees or investments covered under theprovisions 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 (ShareBased Employee Benefits) Regulations 2014 (SBEB Regulations). The certificate ofSecretarial Auditors regarding implementation of the Scheme is available for inspection ofMembers in electronic mode.

The applicable disclosure as stipulated under Securities and ExchangeBoard of India (Share Based Employee Benefits and Sweat Equity) Regulations 2021 as on31^st March 2022 with regard to Scheme is provided in Annexure 4 to thisReport.

Extract of Annual Return

Extract of Annual Return of the Company is available on the website ofthe Company viz. www.pidilite.com.

Business Responsibility Report

A Business Responsibility Report as per Regulation 34 of the ListingRegulations detailing the various initiatives taken by the Company on the environmentalsocial and governance front forms an integral part of this Report.

Internal Control Systems and their Adequacy

The Company has adequate internal financial control procedurescommensurate with its size and nature of business.

The Company has appointed Internal Auditors who periodically audit theadequacy and effectiveness of the internal controls laid down by the management andsuggest improvements.

The Audit Committee of the Board of Directors approves the annualinternal audit plan and periodically reviews the progress of audits as per approved auditplans along with critical internal audit findings presented by internal auditors statusof implementation of audit recommendations if any and adequacy of internal controls.

Significant/Material Orders Passed by the Regulators

There are no significant/material orders passed by the Regulators orCourts or Tribunals impacting the going concern status of the Company and its operationsin future.

Particulars of Employees and Related Disclosures

Disclosure pertaining to remuneration as per Section 197(12) of theAct read with Rule 5(1) of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014 isattached as Annexure 5 to this Report.

Details of employee remuneration as required under provisions ofSection 197 of the Act and Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 (including any modifications thereof) shall be madeavailable to any shareholder on request.

General

The Company has neither issued equity shares with differential rightsnor any sweat equity shares.

There have been no material changes and commitments affecting thefinancial position of the Company between the end of financial year and the date of thisReport.

The Company has complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on Meetings of the Board of Directors andGeneral Meetings.

Appreciation

Your Directors wish to place on record their appreciation of thecontribution made by the employees at all levels to the continued growth and prosperity ofyour Company. Your Directors also wish to place on record their appreciation to theshareholders dealers distributors consumers banks and other financial institutions fortheir continued support.