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 requirescontinuous investments for its day to day operations.
The Board is necessitated tohive off its other step down subsidiaries , Pricol Wiping Systems Czech s.r.o and PricolWiping Systems Mexico S.A. de C.V. along with the Investment in Pricol WipingSystems India as a strategic / bundled offer, reckoning commonality ofcustomer base and in order to minimize the financial impact of the disposal.
Thedecision was taken to arrest further flow of funds into markets which are notconducive for sustaining the business at the current levels and also which does notseem to revive in the near future .
Consequently, these investments have beenclassified as Non-current Investments held for sale in accordance with Ind AS 105 -Non Current Assets held for sale and Discontinued Operations.
A provision ofRs 231.97 crore , including an estimated devolvement on account of guarantee, hasbeen made in Standalone Financial Statements based on a preliminary assessmentof estimated realisable value of the Investments less cost to sell and an Impairmentof Goodwill on Consolidation of Rs 51.70 crore has been provided in theConsolidated Financial Statements. Any additional provision to be made or excessprovision to be reversed will be appropriately dealt with in the year in which thetransaction reaches finality.