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Directors Report of Asian Paints Ltd.

Mar 31, 2023

The Board of Directors are pleased to present the 77th Integrated Annual Report of the Company along with the audited financial statements (standalone and consolidated) for the financial year ended 31st March, 2023.

FINANCIAL RESULTS AND STATE OF COMPANY AFFAIRS

The Company''s financial performance for the year ended 31st March, 2023 is summarised below:

Particulars

('' in Crores)

Standalone Consolidated

2022-23

2021-22 Growth (%)

2022-23

2021-22 Growth (%)

Revenue from sales and other operating income

30,078.40

25,188.51 19.4%

34,488.59

29,101.28 18.5%

Earning Before Interest, Taxes, Depreciation and Amortisation

6,338.49

5,039.68 25.8%

6,646.32

5,183.62 28.2%

Less : Finance Costs

93.06

70.25

144.45

95.41

Less : Depreciation and Amortisation Expense

755.83

721.56

858.02

816.36

Profit for the period before share of profit in associate

5,489.60

4,247.87 29.2%

5,643.85

4,271.85 32.1%

Share of profit of Associate

-

-

93.85

31.57

Profit before exceptional items & tax

5,489.60

4,247.87 29.2%

5,737.70

4,303.42

Exceptional Items**

-

53.73

48.87

115.70

Profit before Tax

5,489.60

4,194.14 30.9%

5,688.83

4,187.72 35.8%

Less : Tax Expense

1,389.42

1,059.43

1,493.50

1,102.91

Profit for the period

4,100.18

3,134.71 30.8%

4,195.33

3,084.81 36.0%

Attributable to:

Shareholders of the Company

4,100.18

3,134.71 30.8%

4,106.45

3,030.57 35.5%

Non-Controlling Interest

-

-

88.88

54.24

Other Comprehensive Income (net of tax)

67.35

(72.31)

13.04

(225.66)

Total Comprehensive Income

4,167.53

3,062.40 36.1%

4,208.37

2,859.15 47.2%

Attributable to:

Shareholders of the Company

4,167.53

3,062.40 36.1%

4,130.96

2,818.26 46.6%

Non-Controlling Interest

-

-

77.41

40.89

Opening balance in Retained Earnings"

8,953.07

7,556.03

9,167.34

7,874.02

Amount available for Appropriation"

13,045.78

10,694.02

13,266.48

10,908.45

Dividend

Interim - FY 2022-23

422.08

-

422.08

-

Interim - FY 2021-22

-

350.11

-

350.11

Final - FY 2021-22

1,486.78

-

1,486.78

-

Final - FY 2020-21

-

1,390.84

-

1,390.84

Gross obligation towards further acquisition in subsidiary

-

-

16.22

-

Transfer to other Reserve

-

-

0.48

0.16

Closing balance in Retained Earnings"

11,136.92

8,953.07

11,340.92

9,167.34

** For standalone financial results, exceptional items comprise of provision for expected credit loss made towards subsidy receivable in the previous year. For consolidated financial results, exceptional items include impairment provision towards goodwill in Causeway Paints Lanka (Pvt.) Limited, subsidiary company, and foreign exchange loss due to devaluation of Sri Lankan Rupee.

A Includes re-measurement of defined benefit plans.


COMPANY PERFORMANCE OVERVIEW

During the financial year 2022-23:

a. Revenue from operations on standalone basis increased to '' 30,078.40 crores as against

'' 25,188.51 crores in the previous year - a growth of 19.4%.

b. Cost of goods sold as a percentage to revenue from operations decreased to 60.9% as against 62% in the previous year.

c. Employee cost as a percentage to revenue from operations decreased to 5% ('' 1,513.89 crores) as against 5.2% ('' 1,310.14 crores) in the previous year.

d. Other expense as a percentage to revenue from operations increased to 14.7% ('' 4,416.49 crores) as against 14.6% ('' 3,681.62 crores) in the previous year.

e. Profit before exceptional items and tax for the current year is '' 5,489.60 crores as against

'' 4,247.87 crores in the previous year - a growth of 29.2%.

f. Profit after tax for the current year is

'' 4,100.18 crores as against '' 3,134.71 crores in the previous year - a growth of 30.8%.

g. On a consolidated basis, the Group achieved revenue of ? 34,488.59 crores as against

'' 29,101.28 crores - a growth of 18.5%.

h. Net profit after non-controlling interest for

the Group for the current year is ? 4,106.45 crores as against ? 3,030.57 crores in the previous year -a growth of 35.5%.

Exceptional items:

Economic crisis in Sri Lanka had led to currency devaluation resulting in recognition of an expense of ? 24.21 crores towards exchange loss arising on foreign currency obligations of Causeway Paints Lanka (Pvt.) Limited ("Causeway Paints") for the quarter ended 30th June, 2022. The above expense is disclosed as an exceptional item in the consolidated financial results for the financial year ended 31st March, 2023.

Further based on assessment of the fair value of investment made in Causeway Paints taking into account past business performance, prevailing business conditions and revised expectations of the future performance considering ongoing economic crisis in Sri Lanka, impairment loss of ? 24.66 crores on ''goodwill on consolidation'' has been recognised in consolidated financial results.

The performance of the Decorative, Home Decor and Industrial Business of the Company in India and international operations during the last financial year, important changes in these businesses, external environment and economic outlook are detailed out in the separate section of Management Discussion and Analysis Report forming part of this Integrated Annual Report.

During the year under review, there was no change in the nature of business of the Company.

Confirmations:

a. There was no revision of financial statements and Board''s Report of the Company for the preceding financial years, during the year under review.

b. There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2022-23 and the date of this Report.

FINANCIAL SALIENCY

The Company''s principal sources of liquidity are cash and cash equivalents, liquid investments and the cash flow that the Company generates from its operations. The Company continued to be debt-free and maintained sufficient cash to meet its strategic and operational requirements.

Cash and bank balances, current/non-current term deposits, investments in mutual funds and debentures/ bonds on a standalone basis as on 31st March, 2023, stood at '' 4,269.98 crores against '' 3,574.94 crores in the previous financial year. Cash and investments, on both standalone and consolidated basis, include deposits with banks and financial institutions with high credit ratings by international and domestic credit rating agencies.

As a result, liquidity risk towards such balances is limited. Ratings are monitored periodically.

The Company''s working capital management is robust and involves a well-organised process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.

CAPITAL EXPENDITURE

During the year under review, the Company on a standalone basis spent '' 1,057.27 crores against '' 402.91 crores in the previous financial year towards capital expenditure. This mainly comprises of regular capital expenditure at various plant locations & company offices/warehouses, manufacturing capacity expansion and construction of new head office building.

TRANSFER TO RESERVES

During the year under review, there was no amount transferred to any of the reserves by the Company.

DIVIDEND

The Board of Directors at their meeting held on 11th May, 2023, has recommended payment of '' 21.25 (2125%) per equity share of '' 1 each as final dividend for the financial year 2022-23. The record date for the purpose of payment of final dividend is Friday, 9th June, 2023. The final dividend, subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM") of the Company, will be paid on or after Friday, 30th June, 2023. During the year under review, interim dividend of '' 4.40 (440%) per equity share of '' 1 each was paid to the shareholders on 10th November, 2022.

The total dividend for the financial year 2022-23, including the proposed final dividend, amounts to '' 25.65 per equity share of ''1 each would involve a total outflow of '' 2,460.35 crores resulting in a dividend pay-out of 60% [as against ''19.15 per equity share of '' 1 each with the outflow of ''1,836.87 crores in financial year 2021-22 resulting in a dividend pay-out ratio of 58.6%] of the standalone profits of the Company.

As per the Income Tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. Accordingly, the Company makes the payment of the dividend from time to time after deduction of tax at source.

Details of dividend paid by the Company during the financial year 2022-23 is stated below:

Particulars

Gross amount of dividend* ('' in Crores)

Tax deducted at source ('' in Crores)

Net amount of dividend ('' in Crores)

Final Dividend 2021-22

1,486.78

169.85

1,316.93

Interim Dividend 2022-23

422.08

46.81

375.27

Total

1,908.86

216.66

1,692.20

* Includes excess funding made to the dividend account owing to rounding up of gross dividend.

The aforesaid interim and final dividend(s) are being paid by the Company from its profits for the respective financial years.

The dividend recommended is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A

of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") is available on the Company''s website at https://www.asianpaints.com/ DDPolicy.html.

During the year under review, the Company in its endeavour to enhance its disclosure and corporate governance practices reviewed and amended the Dividend Distribution Policy, inter alia, to include range of proposed dividend pay-out ratio in a financial year to be between 55% to 65% of its annual standalone profit after tax. The Board of Directors of the Company, considering the business & financial parameters and external factors mentioned in the Policy, shall endeavour to maintain the said dividend pay-out ratio.

ASIAN PAINTS GROUP

The Company has 24 subsidiary companies (19 international subsidiary companies), 1 associate company and 2 joint ventures companies as on 31st March, 2023.

International Business

Outside India, the Company has operations in 14 countries across four regions of the world - Asia (Bangladesh, Nepal, Sri Lanka and Indonesia), the Middle East (Oman, Bahrain, United Arab Emirates ("UAE") and Qatar), Africa (Egypt and Ethiopia) and South Pacific (Fiji, Solomon Islands, Samoa and Vanuatu). The Group continues to focus on increasing its market presence in emerging markets, especially in Asia and Africa.

Financial Performance

A list of bodies corporates which are subsidiaries/ associates/joint ventures of the Company is provided as part of the notes to Consolidated Financial Statements ("CFS"). The financial performance of the Company''s select subsidiary, associate and joint venture companies for the financial year 2022-23 is provided below:

i. Asian Paints International Private Limited

Asian Paints International Private Limited ("APIPL"), Singapore, is a wholly owned subsidiary company of the Company and is the holding company for all of its subsidiary companies carrying out operations overseas, except Asian Paints (Nepal) Private Limited, Nepal and Asian White Cement Holding Limited, Dubai International Financial Centre,

UAE (incorporated on 2nd May, 2023). The principal activities of APIPL are those of investment holding and management.

On a consolidated basis, revenue of APIPL was '' 2,549.36 crores (growth of 5.3% year-on-year) and net loss of '' 60.18 crores (against net loss of '' 177.83 crores in previous year).

ii. Asian Paints (Nepal) Private Limited

Asian Paints (Nepal) Private Limited ("AP Nepal"), Nepal, is a subsidiary company of the Company. Its principal business is manufacturing and selling of paints products in Nepal.

Revenue of AP Nepal was '' 546.65 crores (growth of 15.3% year-on-year) and net profit of '' 95.54 crores (growth of 4.8% year-on-year).

iii. Obgenix Software Private Limited

Obgenix Software Private Limited ("White Teak") is an associate company of the Company. White Teak is engaged in the business of decorative lighting products and fans.

Revenue of White Teak was '' 108.51 crores and net profit of '' 11.55 crores. The growth/de-growth has not been reported as stake in White Teak was acquired during the financial year 2022-23.

iv. Asian Paints PPG Private Limited

Asian Paints PPG Private Limited ("APPPG") is a joint venture company between the Company and PPG Industries Securities LLC. APPPG is engaged in the business of manufacturing, selling and distribution of protective coatings, powder coatings, road markings and floor coatings and providing related services.

Revenue of APPPG was '' 1,019.40 crores (growth of 28.4% year-on-year) and net profit of '' 62.72 crores (growth of 103.9% year-on-year).

v. PPG Asian Paints Private Limited

PPG Asian Paints Private Limited ("PPGAP") is a joint venture company between the Company and PPG Industries Securities LLC. PPGAP is engaged in the business of manufacturing and trading of paints and coatings for automotive, original equipment manufacturer, packaging, refinish, marine and other industries.

On a consolidated basis, revenue of PPGAP was '' 1,830.08 crores (growth of 26.8% year-on-year) and net profit of '' 176.38 crores (growth of 179.3% year-on-year).

A separate statement containing the salient features of financial statements of subsidiaries, associates, joint ventures of the Company in the prescribed Form AOC-1 forms a part of CFS, in compliance with Section 129(3) and other applicable provisions, if any, of the Companies Act, 2013 ("the Act") read with the Rules issued thereunder.

The Company does not have a material subsidiary as per the Listing Regulations.

The Company''s Policy for determining material subsidiaries is available on the Company''s website at https://www.asianpaints.com/PolicvforMaterial Subsidiaries.html.

Consolidated Financial Statements

In accordance with the provisions of the Act,

Regulation 33 of the Listing Regulations and applicable Indian Accounting Standards ("Ind AS"), the audited CFS of the Company for the financial year 2022-23, together with the Auditor''s Report forms part of this Integrated Annual Report.

In accordance with Section 136 of the Act, the audited financial statements, including the CFS and related information of the Company and the separate financial statements of each of the subsidiary company, are available on the Company''s website at https://www.asianpaints.com/AnnualReports.html.

Any member desirous of inspecting or obtaining copies of the audited financial statements, including the CFS may write to the Company Secretary at [email protected].

CAPACITY EXPANSION, NEW PROJECTS AND STRATEGIC ALLIANCES

Continuing the journey of home decor Acquisition of stake in Obgenix Software Private Limited

In April, 2022, the Company has acquired 49% of the equity share capital of Obgenix Software Private Limited (popularly known by the brand name "White Teak"). Accordingly, White Teak is an associate company of the Company.

White Teak is engaged in the business of decorative lighting products and fans. Its tech-enabled web platform www.whiteteak.com. is one of the strongest platforms offering customers an extensive range of decorative lighting products and fans, further supplemented by its excellent store network across many key urban cities in India.

As per the definitive agreements entered into with the shareholders of White Teak, the Company has agreed to acquire the balance 51% stake in White Teak in a phased manner.

Acquisition of majority stake in Weatherseal Fenestration Private Limited

In June, 2022, the Company acquired 51% of the equity share capital of Weatherseal Fenestration Private Limited ("Weatherseal") by subscribing to further issue of equity share capital of Weatherseal. Accordingly, Weatherseal is subsidiary company of the Company.

Weatherseal is engaged in the business of uPVC windows and doors space and has established reputable presence in the retail and project customer segment, primarily in South of India. It has a strong tech-enabled platform that has facilitated to provide a seamless customer experience in a scalable way.

As per the definitive agreements entered into with the promoters of Weatherseal, the Company has agreed to further acquire 23.9% stake in Weatherseal in a phased manner.

Investment in emulsion of the future

During the year under review, the Board of Directors of the Company approved the setting up of a manufacturing facility for Vinyl Acetate Ethylene Emulsion ("VAE") and Vinyl Acetate Monomer ("VAM") in India for a proposed investment of approximately '' 2,100 crores over a period of 3 years. The proposed manufacturing operations would be carried out through the wholly owned subsidiary company, namely Asian Paints (Polymers) Private Limited ("APPPL"), incorporated for the said purpose on 11th January, 2023.

The Company currently imports VAE and VAM for its internal consumption. VAE is a key raw material for the Company. VAM is a key input for manufacturing VAE.

VAE is considered to be the emulsion of the future and the key constituent for manufacturing environment friendly paints. VAE offers better paint properties and can significantly improve paint performance in customer facing attributes.

The installed capacity of the said manufacturing facility to be set up by APPPL would be 1,00,000 tons per annum for VAM and 1,50,000 tons per annum for VAE.

In house manufacturing of VAE & VAM by APPPL would provide substantial sustainable cost efficiencies and will substitute the Company''s dependence on imports.

The setting up of facility for manufacturing of VAE & VAM would be based on licensed technology tie ups.

Asian Paints proposes to set up White Cement manufacturing facility

During the year under review, the Company entered into definitive agreements for setting up of a joint venture company in Fujairah, UAE, with RS Holdings Limited, Fujairah, UAE, Associated Soap Stone Distributing Company Private Limited, India, and others to carry out the business of manufacturing and exporting white cement and white cement clinkers.

The overall investment would be approximately '' 550 crores, to be funded over a period of 2 years through a combination of equity funding and external debt financing.

White cement is the key raw material for some of the powder products and undercoats like putty which is a levelling powder product for various substrates.

At present, the Company purchases white cement for manufacturing powder products and undercoats in India. The setting up of the manufacturing facility for white cement would ensure new opportunities for the Company and a sustainable cost advantage along with an assured long-term supply of good quality raw materials.

On 2nd May, 2023, a joint venture company by the name of Asian White Cement Holding Limited ("AWCHL") has been incorporated in Dubai International Financial Centre, UAE, as the holding company for the purpose of setting up an operating company in Fujairah, UAE.

The Company would be holding 70% of the equity share capital of AWCHL, post infusion of funds. AWCHL is a subsidiary company of the Company.

The operating company, proposed to be incorporated, would be setting up a facility for manufacturing white cement with an initial capacity of 2,65,000 tons per annum. In addition, clinker grinding units would be set up in India.

Partnership for Nanotechnology

In October, 2022, the Company has entered into definitive agreements with Aapex Power and Industries Private Limited, Dr. Swapan Ghosh & others ("existing shareholders") and Harind Chemicals and Pharmaceuticals Private Limited ("Harind"), agreeing to acquire 51% stake in Harind, subject to certain conditions.

Harind is a specialty chemicals company built with nanotechnology at its core, primarily in the area of surface coating and care. Harind is, inter alia, engaged in the business of nanotechnology-based research, manufacturing and sale of a range of additives and specialised coatings. Nanotechnology has the potential of being the next frontier in the world of coatings and the Company would be able to manufacture commercially viable high-performance coatings and additives with this technology.

As per the definitive agreements, the Company has in addition to the proposed acquisition of 51% stake in Harind, has agreed to further acquire 39% stake in a phased manner over the period of 5 years, subject to certain conditions.

Setting up new water-based paint manufacturing facility

During the year under review, the Company has initiated the process for setting up a new water-based paint manufacturing facility with a capacity of 4 lakh kilolitres per annum at an approximate investment of '' 2,000 crores in the state of Madhya Pradesh subject to grant of requisite incentives by the Government of Madhya Pradesh and such other approvals and clearances, as may be required. The manufacturing at the facility is expected to be commissioned in 3 years, after acquisition of land.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Board of Directors

i. Re-appointment of Managing Director & CEO

The shareholders of the Company at their 76th AGM held on 29th June, 2022, based on the

(i) recommendations of the Board of Directors, Nomination and Remuneration Committee and Audit Committee; and (ii) considering the expertise of Mr. Amit Syngle (DIN: 07232566) in the Company''s business and his exceptional leadership and strong performance, had approved his re-appointment as the Managing Director & CEO of the Company for a second term of 5 years commencing from 1st April, 2023 to 31st March, 2028 and remuneration payable thereof.

The requisite declarations and eligibility confirmations under the provisions of the Act and Securities and Exchange Board of India ("SEBI") Regulations were received from Mr. Amit Syngle on account of his re-appointment effective from 1st April, 2023.

ii. Retirement by rotation and subsequent re-appointment

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company,

Mr. Ashwin Dani (DIN: 00009126) and Ms. Amrita Vakil (DIN: 00170725), Non-Executive Directors of the Company, are liable to retire by rotation at the ensuing AGM and being eligible have offered themselves for re-appointment.

Based on performance evaluation and recommendation of Nomination and Remuneration Committee, the Board of Directors recommends their re-appointment as Non-Executive Directors of the Company, liable to retire by rotation.

The Managing Director & CEO and Independent Directors of the Company are not liable to retire by rotation.

Mr. Ashwin Dani, Non-Executive Director of the Company, having attained the prescribed age limit of 75 years, for continuation of his directorship a Special Resolution is proposed in accordance with Regulation 17(1A) of the Listing Regulations for approval by the shareholders of the Company at the ensuing AGM.

In the opinion of the Nomination and Remuneration Committee and Board of Directors of the Company, considering seniority of Mr. Ashwin Dani and role played by him towards the growth of this Company and to reap the benefits of his rich and varied experience, the re-appointment of Mr. Ashwin Dani as a Non-Executive Director of the Company, liable to retire by rotation and continuation of his directorship beyond 75 years of age would be in the interest of the Company and its shareholders.

None of the Directors of the Company have resigned during the year under review.

Key Managerial Personnel

Mr. Amit Syngle, Managing Director & CEO and

Mr. R J Jeyamurugan, CFO & Company Secretary are the

Key Managerial Personnel of the Company.

During the year under review, there were no changes to the Key Managerial Personnel of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), the Directors of the Company state that:

a. in the preparation of the annual accounts for the financial year ended 31st March, 2023, the applicable Accounting Standards have been followed and there are no material departures from the same.

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so

as to give a true and fair view of the state of affairs of the Company as at 31st March, 2023 and of the profits of the Company for the financial year ended 31st March, 2023.

c. proper and sufficient care has been taken for the maintenance of adequate accounting records

in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. the annual accounts have been prepared on a ''Going Concern'' basis.

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively.

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

The aforesaid statement has also been reviewed and confirmed by the Audit Committee of the Board of Directors of the Company.

Declaration from Directors

The Company has, inter alia, received the following declarations from all the Independent Directors confirming that:

a. they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedule and Rules issued thereunder and the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

b. they have complied with the Code for Independent Directors prescribed under Schedule IV to the Act.

c. they have registered themselves with the Independent Director''s Database maintained by the Indian Institute of Corporate Affairs.

The Board of Directors of the Company have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same.

None of the Directors of the Company are disqualified from being appointed as Directors as specified under Section 164(1) and 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) or are debarred or disqualified by SEBI, Ministry of Corporate Affairs ("MCA") or any other such statutory authority.

All members of the Board and senior management have affirmed compliance with the Code of Conduct for Board and senior management for the financial year 2022-23.

The Company had sought following certificate from independent and reputed Company Secretaries in practice confirming that:

a. none of the Directors on the Board of the Company have been debarred or disqualified from being appointed and/or continuing as Directors by the SEBI/MCA or any other such statutory authority.

b. independence of the Directors of the Company in terms of the provisions of the Act, read with the Schedule and Rules issued thereunder and the Listing Regulations.

NUMBER OF MEETINGS OF THE BOARD

During the year under review, 8 meetings of the Board of Directors were held. The details of the meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2022-23 are given in the Corporate Governance Report forming part of this Integrated Annual Report.

The maximum interval between any two meetings did not exceed 120 days, as prescribed under the Act and the Listing Regulations.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The details of the training and familiarisation programme are provided in the Corporate Governance Report and is also available on the website of the Company at https://www. asianpaints.com/FamiliarisationProgramme.html.

COMMITTEES

As on 31st March, 2023, the Board has 6 Committees: Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee, Stakeholders Relationship Committee and Investment Committee.

During the year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board.

A detailed note on the composition of the Board and its Committees, meetings held during the year and its terms of reference is provided in the Corporate Governance Report forming part of this Integrated Annual Report. The composition and terms of reference of all the Committees of the Board of Directors of the Company is in line with the provisions of the Act and the Listing Regulations.

AUDITORS AND AUDITOR''S REPORT Statutory Auditors

Deloitte Haskins & Sells LLP, Chartered Accountants (Firm''s Registration No. 117366W/W-100018), were re-appointed as Statutory Auditors of the Company at the 75th AGM held on 29th June, 2021, to hold office till the conclusion of the 80th AGM.

Deloitte Haskins & Sells LLP has confirmed that they are not disqualified from continuing as Statutory Auditors of the Company. The profile of the Statutory Auditors is available on the website of the Company at https://www.asianpaints.com/StatutoryAuditors.html.

The Statutory Auditors have issued an unmodified opinion on the financial statements for the financial year 2022-23 and the Auditor''s Report forms part of this Integrated Annual Report.

During the year under review, the Board of Directors of the Company, based on the recommendation of the Audit Committee and in consultation with the Statutory

Auditors of the Company, approved the Policy on engagement of Statutory Auditors of the Company.

This Policy provides a documented approach for engagement of Statutory Auditors including the following: (i) law governing appointment and removal of Statutory Auditors and regulatory reporting;

(ii) rotation of audit partners every 5 years during the 10 years tenure of the Statutory Auditors; (iii) eligibility and qualifications of audit partner/firm; and (iv) restrictions on employment of audit partners.

The said Policy on engagement of Statutory Auditors is available on the website of the Company at https://www. asianpaints.com/AuditorsEngagementPolicy.html.

Internal Auditors

The Company has in place a robust Internal Audit function, which is led by Mr. Alok Agrawal, Chief Internal Auditor, and ably supported by a team of chartered accountants, certified internal auditors, chartered financial analysts, MBAs and ISO certified audit professionals. The Internal Audit function also partners with professional firms in the area of fraud investigation, market intelligence, digital forensics, IT audits and with other firms having expertise in certain specific areas.

The audit conducted by the Internal Audit team is based on an internal audit plan, which is reviewed each year by the Audit Committee. These audits are based on risk and control based methodology and, inter alia, involve the review of internal controls and governance processes, adherence to management policies and review of statutory compliances.

The Chief Internal Auditor of the Company reports functionally to the Audit Committee and administratively to the Managing Director & CEO. He participates in the meetings of the Audit Committee and Risk Management Committee. The Audit Committee met the Internal Auditor without the presence of the other members of the management during the year under review.

The Chief Internal Auditor shares his findings on financial, safety, information security, compliance and reporting risks on an annual basis with the Audit Committee along with the exceptions report and mitigation plan.

During the year under review, the Audit Committee revised the Internal Audit Charter, inter alia, to further enhance the governance mechanism, and elaborated the scope of work of the internal audit function, specify the reporting structure of Chief Internal Auditor, elaborate the authority and responsibilities of the Chief Internal Auditor.

The Audit Committee also approved the abridged version of the Internal Audit Charter and the same is available on the website of the Company at https://www.asianpaints.com/AbridgedIACharter.html.

Secretarial Auditors

The Board of Directors of the Company, on the recommendation made by the Audit Committee, have appointed Dr. K. R. Chandratre, Practicing Company Secretary (Certificate of Practice No. 5144), as the Secretarial Auditors to conduct an audit of the secretarial records for the financial year 2023-24, based on consent received from Dr. K. R. Chandratre.

The Secretarial Audit Report for the financial year 2022-23 under the Act read with Rules made thereunder and Regulation 24A of the Listing Regulations, is set out in Annexure (A-1) to this Report.

The Secretarial Compliance Report received from Dr. K. R. Chandratre, for the financial year 2022-23, in relation to compliance of all applicable SEBI Regulations/ Circulars/Guidelines issued thereunder, Secretarial Standards, pursuant to requirement of Regulation 24A of the Listing Regulations, is set out in Annexure (A-2) to this Report. The Secretarial Compliance Report has been voluntarily enclosed as good disclosure practice.

As required by Schedule V of the Listing Regulations, the Auditor''s Certificate on Corporate Governance received from Dr. K. R. Chandratre is annexed to the Report forming part of this Integrated Annual Report.

The Secretarial Audit Report and Secretarial Compliance Report for the financial year 2022-23, does not contain any qualification, reservation or adverse remark.

Cost Auditors

The Company has maintained cost records for certain products as specified by the Central Government under Section 148(1) of the Act. RA & Co., Cost Accountants (Firm''s Registration No. 000242), are in the process of carrying out the cost audit for applicable products during the financial year 2022-23.

The Board of Directors of the Company, on the recommendation made by the Audit Committee, have appointed RA & Co., as the Cost Auditors of the Company to conduct the audit of cost records of applicable products for the financial year 2023-24. RA & Co., being eligible, have consented to act as the Cost Auditors of the Company for the financial year 2023-24.

The remuneration proposed to be paid to the Cost Auditors, subject to ratification by the members of the Company at the ensuing 77th AGM, would not exceed '' 9,00,000, excluding taxes and out-of-pocket expenses, if any.

The Cost Audit Report for the financial year 2021-22 does not contain any qualification, reservation or adverse remark.

Reporting of Frauds by Auditors

None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act.

RELATED PARTY TRANSACTIONS Related party transactions at Asian Paints

The Company has been entering into transactions with related parties, including entities directly and/or indirectly controlled by members of the Promoter(s) & Promoter(s) Group, for its business purposes for more than three decades. These transactions primarily include transactions relating to purchase of raw materials, packing materials, intermediaries and such other transactions permissible and provided for under the provisions of the Act, the Listing Regulations and the Income Tax laws.

The related parties with which the Company contracts:

a. primarily supply their products to the Company.

b. bring in advanced and innovative technology for the benefit of the Company.

c. customise their products to suit the Company''s specific requirements.

d. help in enhancing the Company''s purchase cycles and assure just in time supply with resultant benefits - notably on working capital.

All of the aforementioned benefits gives the Company a competitive and cost advantage in the market, without compromising on the quality/service levels and based on sound commercial judgement.

The Company follows robust internal processes before entering into transactions with related parties and the considerations which govern the transactions with related parties are the same as those applicable for other vendors of the Company. All the transactions are undertaken for the benefit of the Company and in compliance with the applicable laws.

In order to ensure transparency and arm''s length pricing for such supplies by related parties, the Company seeks multiple quotes from related parties and unrelated parties of equal standing and appoints a related party only if such party offers competitive terms, including pricing, as compared to unrelated parties. Along with pricing, manufacturing capabilities to effectively serve Company''s requirements and quality parameters are primary factors taken into consideration.

As a part of the Company''s annual planning process, before the beginning of a financial year, details of all transactions proposed to be executed with related parties, including estimated amount of transactions to be executed, manner of determination of pricing and commercial terms, etc. are presented to the Audit Committee for its consideration and approval. The details of said transactions are also placed before the Board of Directors for their information. The Board members interested in a transaction do not participate in the discussion of the item wherein that item is being considered.

Further approval is sought during the year for any new transaction/modification to the previously approved limits/terms of contracts with the related parties.

This is followed by a quarterly review of the related party transactions by the Audit Committee.

Policy

The SEBI vide amendments to the Listing Regulations had introduced substantial changes in the related party transaction framework, inter alia, by enhancing the purview of the definition of related party and overall scope of transactions with related parties.

During the year under review, the Board of Directors based on recommendations of the Audit Committee approved revisions to the Policy on dealing with and materiality of Related Party Transactions and framework for transaction with related parties of the Company to define the ordinary course of business, review of material related party transactions and revise the thresholds for entering into transactions with related parties and terms thereto.

The Company''s Policy on dealing with and materiality of related party transactions is available on the website of the Company at https://www.asianpaints.com/RPTPolicy.html.

Review

All transactions with related parties were reviewed and approved by the Audit Committee and were in accordance with the Policy on dealing with and materiality of related party transactions.

There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.

All contracts/arrangements/transactions entered into by the Company during the year under review with related parties were in the ordinary course of business and on arm''s length basis in terms of provisions of the Act. Further, there are no contracts or arrangements entered into under Section 188(1) of the Act, hence no justification have been separately provided in that regard.

Statutory Disclosures

The details of the related party transactions as per Ind AS - 24 on Related Party Disclosures are set out in Note 38 to the standalone financial statements of the Company.

The Company in terms of Regulation 23 of the Listing Regulations submits within the stipulated time from the date of publication of its standalone and consolidated financial results for the half year, disclosures of related party transactions, in the format specified by the stock exchanges. The said disclosures are available on the website of the Company at https://www.asianpaints.com/StatutoryFilings.html.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, is set out in Annexure (B) to this Report.

INTERNAL CONTROLS

The Company has in place a well-established and robust internal control systems which are commensurate with the nature of its business, size & scale and complexity of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of the Company''s operations, safe keeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of the Company''s operations.

The Audit Committee also periodically reviews the adequacy and effectiveness of internal control systems and provides guidance for further strengthening them.

During the year under review, no material observation has been made by the Internal Auditor or Statutory Auditors of the Company in relation to the efficiency and effectiveness of such controls.

revised definition of senior management consequent to its amendment under the Listing Regulations. As per the revised definition, all the functional heads of the Company would now also be classified as senior management.

The salient features of the Nomination and Remuneration Policy of the Company alongwith highlights of changes made during the year are outlined in the Corporate Governance Report forming part of this Integrated Annual Report. The Policy is also available on the website of the Company at https://www.asianpaints.com/ NRCPolicy.html.

REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

The remuneration paid to the Directors, Key Managerial Personnel and senior management is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the Listing Regulations. Further details on the same are given in the Corporate Governance Report forming part of this Integrated Annual Report.

Mr. Amit Syngle, Managing Director & CEO of the Company has not received any remuneration or commission from any of the subsidiary companies. Further, the Company doesn''t have any holding company, hence, there does not arise a circumstance of any remuneration or commission from holding company.

The information required under Section 197 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors and employees of the Company is set out in Annexure (C) to this Report.

BOARD EVALUATION

The Nomination and Remuneration Policy of the Company empowers the Nomination and Remuneration Committee to formulate a process for effective evaluation of the performance of individual Directors, Committees of the Board and the Board as a whole.

The criteria for the evaluation and the outcomes thereto are set out in the Corporate Governance Report forming part of this Integrated Annual Report.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has designed and implemented the comprehensive Internal Financial Controls System over financial reporting to ensure that all transactions are authorised, recorded and reported correctly in a timely manner. The Company''s Internal Financial Controls over financial reporting provides reasonable assurance over the integrity and reliability of financial statements of the Company.

The Company has detailed work instructions, Standard Operating Procedures, policies, process and manuals which lays down roles, responsibility and actions required. Functional heads are responsible to ensure compliance with all laws and regulations and also with the policies and procedures laid down by the management.

The Company''s Enterprise Resource Planning ("ERP") system of SAP S/4HANA is well leveraged and implemented towards day-to-day transaction accounting and financial reporting. The Company''s ERP along with allied information technology solutions provide a strong technology architecture for financial reporting controls. The Company''s investment in advanced automation system to enable automated accounting and financial closing procedures in various area has resulted in better accuracy and faster financial reporting with lesser manual interventions. The financial statement preparation has been automated to ensure end-to-end system driven reporting across the Group reducing scope of manual errors.

The Company''s Shared Services Center has taken ahead the digitalisation journey and delivered the aggressive targets for on-time payment processing with near zero errors. The efforts towards digital processing, touchless processing, use of virtual assistant, on the fly intelligence tool, use of optical character reader technology, mobile applications for employee reimbursements, car hiring, hotel and travel booking has created strong delight to stakeholders with related efficiencies in the process.

The Company is continuously experimenting and investing in new technologies to enable smoother and error proof processes.

The Company actively tracks all changes in Accounting Standards, the Act and other related regulations and makes changes to the underlying systems, processes and financial controls to ensure adherence to the same. With increased business complexities, the detailed accounting and financial treatment are decided for dealing with newer products, services, assets, commitments, contracts and arrangements. All resultant changes to the policy and

impact on financials are disclosed, after due validation with the Statutory Auditors, to the Audit Committee.

The Company has refreshed the Risk Assessment and Control Matrix for all processes involved in financial reporting and periodically tested them for design and operating effectiveness. Results of these tests are reported to the Audit Committee.

The Company gets its standalone financial results audited every quarter by its Statutory Auditors.

The policies to ensure uniform accounting treatment are prescribed to the subsidiary companies as well. International subsidiaries provide information required for consolidation of accounts in the format prescribed by the Company. The accounts of the subsidiary and joint venture companies are audited and certified by their respective Statutory Auditors for consolidation.

VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities. The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations.

The Company has engaged an agency for managing the ''Ethics Hotline'' which can be used to, inter alia, report any instances of financial irregularities, breach of code of conduct, abuse of authority, disclosure of financial/ unpublished price sensitive information other than for legitimate purposes, unethical/unfair actions concerning Company vendors/suppliers, malafide manipulation of Company records, discrimination to the Code of Conduct in an anonymous manner.

The Policy also provides adequate protection to those who report unethical practices and irregularities.

All incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy.

The Whistle Blower Policy aims to:

a. allow and encourage stakeholders to bring to the management''s notice concerns about unethical behaviour.

b. ensure timely and consistent organisational response.

c. build and strengthen a culture of transparency and trust.

d. provide protection against victimisation.

No person was denied access to the Audit Committee.

During the year under review, the Whistle Blower Policy was amended to formally extend the whistle blower mechanism to all the stakeholders of the Company to enable them to file protected disclosures in the manner ascribed in the Policy.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of the Company at https://www.asianpaints. com/WBPolicy.html.

COMPLIANCE MANAGEMENT

The Company has in place a comprehensive and robust legal compliance management online tool, which is devised to ensure compliance with all applicable laws which impact the Company''s business. Automated alerts are sent to compliance owners to ensure compliances within stipulated timelines. The compliance owners certify the compliance status which is reviewed by compliance approvers and a consolidated dashboard is presented to the respective functional heads and Compliance Officer. A certificate of compliance of all applicable laws and regulations along with corrective and preventive action, if any, is placed before the Audit Committee and Board of Directors on a quarterly basis.

Additionally, the Company is in the process of implementing a centralised automated tool for regular monitoring, response and maintaining repository of notices received from statutory authorities.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall: (i) formulate the criteria for Board membership, including the appropriate mix of Executive and Non-Executive Directors; (ii) approve and recommend compensation packages and policies for Directors and Senior Management Personnel;

(iii) lay down the process for effective manner of performance evaluation of the Board, its Committees and the Directors; and (iv) play the role of Compensation Committee in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and administer the Asian Paints Employee Stock Option Plan 2021.

During the year under review, the Nomination and Remuneration Policy was amended to include the

ASIAN PAINTS EMPLOYEE STOCK OPTION PLAN 2021 ("2021 PLAN")

The shareholders of the Company at their 75th AGM held on 29th June, 2021 have authorised the Board to offer, issue and provide stock options to the eligible employees of the Company and its subsidiaries under the 2021 Plan.

The 2021 Plan was introduced to incentivise, retain and attract key talent through this performance-based stock option grant program and consequently enhance shareholder value. The 2021 Plan aims to create a sense of ownership among the eligible employees and to align their medium and long-term compensation with the Company''s performance.

The vesting criteria is primarily based on achievement of annual performance parameters by the eligible employees, number of years of service and such other criteria as may be prescribed by the Nomination and Remuneration Committee from time to time. The exercise price for stock options granted to eligible employees shall be at 50% of the ''Reference Share Price'' of the Company (as defined under the 2021 Plan).

The certificate from the Secretarial Auditor on the implementation of the 2021 Plan in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) ("SEBI SBEB Regulations"), has been uploaded on the website of the Company at https://www.asianpaints.com/AnnualReports.html.

The 2021 Plan is being implemented in accordance with the provisions of the Act and SEBI SBEB Regulations.

The details of the stock options granted under the 2021 Plan and the disclosures in compliance with SEBI SBEB Regulations are set out in Annexure (D) and are available on the website of the Company at https://www.asianpaints.com/AnnualReports.html.

CORPORATE SOCIAL RESPONSIBILITY ("CSR")

During the financial year 2022-23, the Company has spent '' 77.42 crores towards CSR expenditure, including set-off of excess CSR spends of '' 0.27 crores made by the Company in previous financial years, in terms of the CSR annual action plan approved by the CSR Committee and the Board of Directors, from time to time. The CSR initiatives of the Company were under the thrust area of health & hygiene, enhancing vocational skills, water conservation and disaster management.

The CSR annual action plan of the Company for the financial year 2022-23 and 2023-24 is available on the website of the Company at https://www.asianpaints.com/ about-us.html.

The CSR Committee confirms that the implementation and monitoring of the CSR Policy was done in compliance with the CSR objectives and Policy of the Company.

The Company''s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2023, in accordance with the Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") is set out in Annexure (E) to this Report.

Synopsis of the report of the independent agency for the CSR projects to which impact assessment is applicable in terms of the provisions of Section 135 of the Act and CSR Rules, has been provided as part of the said annual report on CSR.

RISK MANAGEMENT

The Company recognises that risk is an integral and inevitable part of business and is fully committed to manage the risks in a proactive and efficient manner.

The Company has a disciplined process for continuously assessing risks, in the internal and external environment along with minimising the impact of risks. The Company incorporates the risk mitigation steps in its strategy and operating plans.

The objective of Risk Management process in the Company is to enable value creation in an uncertain environment, promote good governance, address stakeholder expectations proactively and improve organisational resilience and sustainable growth.

The Company has in place a Risk Management Policy which articulates the approach to address the uncertainties in its endeavour to achieve its stated and implicit objectives. The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of reviewing the risk management process in the Company and to ensure that key strategic and business risks are identified and addressed by the management.

During the year, the Company has also reviewed the Risk Management Framework which lists out the principles and approach to the Risk Management process. The Company regularly identifies uncertainties and after

assessing them, devises short-term and long-term actions to mitigate any risk which could materially impact the Company''s long-term plans. Mitigation plans to significant risks are well integrated with business plans and are reviewed on a regular basis by the senior leadership.

The Company periodically reviews and improves the adequacy and effectiveness of its risk management systems considering rapidly changing business environment and evolving complexities. The Company, through the Risk Management process, aims to contain the risk within the risk appetite. There are no risks which in the opinion of the Board threaten the existence of the Company. Further, some of the risks which may pose challenges are set out in the "Managing our risks" section forming part of this Integrated Annual Report.

The Risk Management Policy of the Company is available on the website of the Company at https://www.asianpaints.com/RMPolicy.html.

INTEGRATED ANNUAL REPORT

This is the third year of publication of the Integrated Annual Report for the Company in line with the framework published by the Value Reporting Foundation.

The Global Responsibility Indicators reported in the Integrated Annual Report have been subject to Reasonable/Limited Assurance. The Assurance Report issued by Price Waterhouse Chartered Accountants LLP has been annexed to this Integrated Annual Report. The Board acknowledges its responsibility for the integrity of the Integrated Annual Report and the information contained therein.

The Integrated Annual Report comprises both financial and non-financial information to enable the members to take well informed decisions and have a better understanding of the Company''s long-term perspective and value creation for all the stakeholders. The Integrated Annual Report, this year, includes a disclosure on the Environment, Social and Governance ("ESG") commitments of the Company in addition to the disclosures on value creation based on 6 capitals, viz., financial capital, manufactured capital, intellectual capital, human capital, social & relationship capital, natural capital.

The key initiatives taken by the Company with respect to stakeholder engagement, ESG, Health and Safety of employees has been provided separately under various capital sections of this Integrated Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report as stipulated under the Listing Regulations is presented in a separate section forming part of this Integrated Annual Report.

Corporate Governance Report and Business Responsibility and Sustainability Report

In compliance with Regulation 34 of the Listing Regulations, a separate report on the Corporate Governance and the Business Responsibility and Sustainability Report, forms part of this Integrated Annual Report.

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2023 in Form MGT-7 in accordance with Section 92(3) read with Section 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.asianpaints.com/AnnualReports.html.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Prevention of Sexual Harassment Act"), the Company has formulated a Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at workplace and an Internal Complaints Committee has also been set up to redress any such complaints received.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates. Further, the Policy also gives shelter to contract workers, probationers, temporary employees, trainees, apprentices of the Company and any person visiting the Company at its office.

The Company periodically conducts sessions for employees across the organisation to build awareness about the Policy and the provisions of Prevention of Sexual Harassment Act.

Complaints of sexual harassment received during the financial year 2022-23 by the Company were investigated in accordance with the procedures prescribed and adequate steps were taken to resolve them. Further details with respect to the complaints of sexual harassment is provided in the Corporate Governance Report forming part of this Integrated Annual Report.

The Policy Formulated by the Company For prevention of sexual harassment is available on the website of the Company at https://www.asianpaints.com/POSHPolicy.html.

REGISTRAR AND SHARE TRANSFER AGENT

TSR Consultants Private Limited is the Registrar and Share Transfer Agent of the Company.

SHARE CAPITAL

During the financial year 2022-23, there was no change in the authorised, issued, subscribed and paid-up share capital of the Company.

Confirmations:

a. During the year under review, the Company has not:

(i) issued any shares, warrants, debentures, bonds, or any other convertible or non-convertible securities.

(ii) issued equity shares with differential rights as to dividend, voting or otherwise.

(iii) issued any sweat equity shares to its Directors or employees.

(iv) made any change in voting rights.

(v) reduced its share capital or bought back shares.

(vi) changed the capital structure resulting from restructuring.

(vii) failed to implement any corporate action.

b. The Company''s securities were not suspended for trading during the year.

c. The disclosure pertaining to explanation for any deviation or variation in connection with certain terms of a public issue, rights issue, preferential issue, etc. is not applicable to the Company.

UNCLAIMED DIVIDEND

In terms of applicable provisions of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), during the year under review, unclaimed dividend amounting to '' 1.48 crores was transferred by the Company to the Investor Education and Protection Fund ("IEPF"), established by the Government of India.

Further, 2,57,798 shares were transferred to the demat account of the IEPF Authority during the year,

in accordance with the IEPF Rules, as the dividend(s) has not been claimed by the shareholders for 7 (seven) consecutive years or more.

The details of unclaimed dividend lying in the unclaimed dividend accounts of the Company and details of resultant benefits arising out of shares already transferred to IEPF as on 31st March, 2023 is provided in General Shareholder Information section forming part of this Integrated Annual Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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.

The Competition Commission of India ("Commission") had passed a prima facie Order dated 14th January, 2020 directing the Director General ("DG") to cause an investigation against the Company, under the provisions of the Section 26(1) of the Competition Act, 2002 ("the Competition Act"). Based on this Order, the DG initiated the investigation against the Company and on 17th December, 2021 had submitted its consolidated Investigation Report to the Commission.

The Hon''ble Commission vide its Order dated 8th September, 2022 has noted that the Company has not contravened any charging sections i.e., Section 4 and Section 3(4) read with Section 3(1) of the Competition Act. The said Order of the Hon''ble Commission has been appealed in National Company Law Appellate Tribunal by the complainants.

LOANS AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers)

Rules, 2014, as on 31st March, 2023, are set out in Note 36(B) to the standalone financial statements of the Company.

DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors, General Meetings and on voluntary basis the Standard on Report of the Board of Directors.

This Report of the Board of Directors is in compliance with the provisions of the Secretarial Standards - 4 on Report of the Board of Directors.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Act read with the Companies (Accounts) Rules, 2014, is set out in the Annexure (F) to this Report.

AWARDS AND ACCOLADES

The details of some of the significant accolades earned by the Company during the financial year 2022-23 has been provided as part of this Integrated Annual Report.

OTHER DISCLOSURES

a. No credit rating has been obtained by the

Company with respect to its securities. Further, the details of the credit rating obtained by the Company with respect to its long-term and shortterm borrowings have been provided separately in the General Shareholder Information section of this Integrated Annual Report

b. No application has been made under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) ("the IBC, 2016"), hence, the requirement to disclose the details of application made or any proceeding pending under the IBC, 2016 during the year along with their status as at the end of the financial year is not applicable

c. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable

APPRECIATION

The Board of Directors place on record sincere gratitude and appreciation for all the employees of the Company. Our consistent growth has been possible by their hard work, solidarity, co-operation and dedication during the year.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of Directors

Deepak Satwalekar

Chairman

(DIN:00009627)

Place: Mumbai Date: 11th May, 2023


Mar 31, 2022

The Board of Directors are pleased to present the 76th Integrated Annual Report of the Company along with the audited financial statements (standalone and consolidated) for the financial year 2021-22.

FINANCIAL RESULTS

The Company''s financial performance for the year ended 31st March, 2022 is summarised below:

C in crores)

Standalone

Consolidated

2021-22

2020-21''

Growth (%)

2021-22

2020-21#

Growth (%)

Revenue from Operations

25,188.51

18,516.86

36.0%

29,101.28

21,712.79

34.0%

Earning Before Interest, Taxes, Depreciation and Amortisation

5,039.68

4,858.80

3.7%

5,183.62

5,158.65

0.5%

Less : Finance Costs

70.25

71.66

95.41

91.63

Less : Depreciation and Amortisation Expense

721.56

697.47

816.36

791.27

Profit for the period before share of profit in associate

4,247.87

4,089.67

3.9%

4,271.85

4,275.75

(0.1%)

Share of profit of Associate

-

-

31.57

28.60

Profit before exceptional items & tax

4,247.87

4,089.67

3.9%

4,303.42

4,304.35

(0.0%)

Exceptional Items1

53.73

-

115.70

-

Profit before Tax

4,194.14

4,089.67

2.6%

4,187.72

4,304.35

(2.7%)

Less : Tax Expense

1,059.43

1,037.87

1,102.91

1,097.60

Profit for the period

3,134.71

3,051.80

2.7%

3,084.81

3,206.75

(3.8%)

Attributable to:

Shareholders of the Company

3,134.71

3,051.80

2.7%

3,030.57

3,139.29

(3.5%)

Non-Controlling Interest

-

-

54.24

67.46

Other Comprehensive Income (net of tax)

(72.31)

50.53

(225.66)

(5.68)

Total Comprehensive Income

3,062.40

3,102.33

(1.3%)

2,859.15

3,201.07

(10.7%)

Attributable to:

Shareholders of the Company

3,062.40

3,102.33

(1.3%)

2,818.26

3,143.42

(10.3%)

Non-Controlling Interest

-

-

40.89

57.65

Opening balance in Retained EarningsA

7,556.03

4,973.44

7,874.02

5,204.64

Amount available for AppropriationA

10,694.02

8,021.26

10,908.45

8,339.68

Dividend

Interim - FY 2021-22

350.11

-

350.11

-

Interim - FY 2020-21

-

321.35

-

321.35

Final - FY 2020-21

1,390.84

-

1,390.84

-

Final - FY 2019-20

-

143.88

-

143.88

Closing balance in Retained EarningsA

8,953.07

7,556.03

9,167.34

7,874.02

COMPANY PERFORMANCE OVERVIEW

During the financial year 2021-22:

• Revenue From operations on standalone basis increased to '' 25,188.51 crores as against '' 18,516.86 crores in the previous year - a growth of 36%.

• Cost of goods sold as a percentage to revenue from operations increased to 62% as against 54.5% in the previous year.

• Employee cost as a percentage to revenue from operations decreased to 5.2% ('' 1,310.14 crores) as against 6.1% ('' 1,128.66 crores) in the previous year.

• Other expense as a percentage to revenue from operations decreased to 14.6% ('' 3,681.62 crores) as against 15.2% ('' 2,812.89 crores) in the previous year.

• Profit before exceptional items and tax For the current year is '' 4,247.87 crores as against '' 4,089.67 crores in the previous year - a growth of 3.9%.

• Profit after tax for the current year is '' 3,134.71 crores as against '' 3,051.80 crores in the previous

year - a growth of 2.7%.

• On a consolidated basis, the Group achieved revenue of '' 29,101.28 crores as against '' 21,712.79 crores - a growth of 34%.

• Net profit after non-controlling interest for the Group for the current year is '' 3,030.57 crores as against '' 3,139.29 crores in the previous year - a degrowth of 3.5%.

Exceptional items:

• An amount of ? 53.73 crores is recognised as an exceptional item based on re-assessment of expected timing of receipt of cash flow towards subsidy receivable from the State Governments under ''expected credit loss'' method. Further, subsidy income under ''other operating revenue'' for financial year 2021-22 is lower by ? 31.10 crores. The Company is confident about the ultimate realisation of the dues from the State Governments. This has resulted in lower profits in the standalone and consolidated statement of Profit and Loss.

• The current economic crisis in Sri Lanka has led to currency devaluation. Consequently, this has resulted in recognition of the following exceptional items:

O Expense of ? 48.50 crores towards exchange loss recognised on foreign currency obligations of Causeway Paints Lanka (Pvt.) Limited ("Causeway Paints"); and

O Impairment provision of ? 13.47 crores on ''goodwill on consolidation'' recognised on acquisition of Causeway Paints.

• Consequent to the currency devaluation, foreign currency translation loss of ?139.87 crores has been recognised on consolidation of financial results of Causeway Paints in ''other comprehensive income'' of the consolidated financial results of the Company.

TRANSFER TO RESERVES

During the year under review, there was no amount transferred to any of the reserves by the Company.

DIVIDEND

The Board of Directors at their meeting held on 10th May, 2022, has recommended payment of '' 15.50 (Rupees fifteen and paise fifty only) (1550%) per equity share of '' 1 (Rupee one only) each as final dividend for the financial year 2021-22. The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM") of the Company.

During the year under review, the Board of Directors of the Company at their meeting held on 21st October, 2021, declared an interim dividend of '' 3.65 (Rupees three and paise sixty-five only) (365%) per equity share of '' 1 (Rupee one only) each. The interim dividend was paid to the shareholders on 10th November, 2021.

The total dividend for the financial year 2021-22, including the proposed final dividend, amounts to '' 19.15 (Rupees nineteen and paise fifteen only) per equity share of '' 1 (Rupee one only) each would involve a total outflow of '' 1,836.87 crores (Rupees one thousand eight hundred thirty-six crores and eighty-seven lakhs only) resulting in a dividend payout of 58.6% of the standalone profits of the Company.

In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.

The dividend recommended is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is available on the Company''s website at https://www.asianpaints.com/DDPolicy.html.

SUBSIDIARIES AND JOINT VENTURES

The Company has 22 subsidiaries and 2 joint-venture companies as on 31st March, 2022.

Financial Performance

A list of bodies corporates which are subsidiaries/ associates/joint ventures of the Company is provided as part of the notes to Consolidated Financial Statements ("CFS").

A separate statement containing the salient features of financial statements of subsidiaries, associates, joint ventures of the Company in the prescribed Form AOC-1 forms a part of CFS, in compliance with Section 129(3) and other applicable provisions, if any, of the Companies Act, 2013 ("the Act") read with the Rules issued thereunder.

The Company does not have a material subsidiary.

The Company''s Policy for determining material subsidiaries is available on the Company''s website at https://www. asianpaints.com/PolicvforMaterialSubsidiaries.html.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Act,

Regulation 33 of the Listing Regulations and applicable Accounting Standards, the audited CFS of the Company for the financial year 2021-22, together with the Auditors'' Report forms part of this Annual Report.

In accordance with Section 136 of the Act, the audited financial statements, including the CFS and related information of the Company and the separate financial statements of each of the subsidiary companies, are available on the Company''s website at https://www. asianpaints.com/AnnualReports.html. Any Member desirous of inspecting or obtaining copies of the said CFS may write to the Company Secretary at investor.relations@ asianpaints.com.

Amalgamation of Reno Chemicals Pharmaceuticals and Cosmetics Private Limited with the Company

During the year under review, the Mumbai Bench of the Hon''ble National Company Law Tribunal vide its Order dated 2nd September, 2021, approved the Scheme of Amalgamation of Reno Chemicals Pharmaceuticals and Cosmetics Private Limited, Company''s wholly owned subsidiary, with the Company ("the Scheme").

Pursuant to necessary filings with the Registrar of Companies, Maharashtra at Mumbai, the Scheme became effective from 17th September, 2021, with the appointed date of 1st April, 2019.

Formation of a subsidiary in Qatar

Asian Paints International Private Limited, Singapore, wholly owned subsidiary of the Company, formed a company with limited liability namely AP International Doha Trading W.L.L, Qatar, on 29th July, 2021.

Continuing the journey of Home Decor

As part of its strategic vision of becoming the most inspirational home decor brand empowering the consumer to create her dream home, the Company has identified lighting products and uPVC windows and doors space as key opportunity areas to transition from ''share of surface'' to ''share of space''.

i. In April, 2022, the Company has acquired 49% of the equity share capital of Obgenix Software Private Limited (popularly known by the brand name "White Teak").

White Teak is engaged in the business of decorative lighting products and fans. Its tech-enabled web platform www.whiteteak.com, is one of the strongest platforms offering customers an extensive range of decorative lighting products and fans, further supplemented by its excellent store network across many key urban cities in India. It has been at the forefront of creating cutting-edge designs and ideas

in this space and bringing international standard design and quality to customers.

The Company has also agreed to acquire the balance 51% stake in White Teak in a phased manner.

ii. In April, 2022, the Company has entered into definite agreements with Weatherseal Fenestration Private Limited ("Weatherseal Fenestration") and its existing promoters, agreeing to acquire 51% stake by subscription to equity share capital of Weatherseal Fenestration, subject to certain conditions.

Weatherseal Fenestration is engaged in the business of uPVC windows and doors space and has establishec reputable presence in the retail and project customer segment, primarily in South of India. It has a strong tech-enabled platform that has facilitated to provide a seamless customer experience in a scalable way.

As per the definitive agreements, the Company has agreed to further acquire 23.9% stake in Weatherseal Fenestration in a phased manner.

ASIAN PAINTS EMPLOYEE STOCK OPTION PLAN 2021 ("2021 PLAN")

The shareholders of the Company at their 75th AGM held or 29th June, 2021, have authorised the Board to offer, issue and provide stock options to the eligible employees of the Company and its subsidiaries under the 2021 Plan.

The 2021 Plan was introduced to incentivise, retain and attract key talent through this performance-based stock option grant program, and consequently enhance shareholder value. The 2021 Plan aims to create a sense of ownership among the eligible employees and to align their medium and long-term compensation with the Company''s performance.

The maximum number of stock options to be granted to eligible employees under the 2021 Plan shall not exceed 25,00,000 equity shares (as may be adjusted for any changes in capital structure of the Company), issued by the Company under primary market route and/or acquisition of equity shares from the secondary market route, at a price decided by the Board, or by the Nomination and Remuneration Committee.

The vesting criteria is primarily based on achievement of annual performance parameters by the eligible employees, number of years of service and such other criteria as may be prescribed by the Nomination and Remuneration Committee from time to time. The exercise price for stock options granted to eligible employees shall be at 50% of the "Reference Share Price" of the Company (as defined under the 2021 Plan).

The certificate from the Secretarial Auditor on the implementation of the 2021 Plan in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force)

("SEBI SBEB Regulations"), has been uploaded on the website of the Company at

https://www.asianpaints.com/AnnualReports.html.

The 2021 Plan is being implemented in accordance with the provisions of the Act and SEBI SBEB Regulations.

The details of the stock options granted under the 2021 Plan and the disclosures in compliance with SEBI SBEB Regulations and Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are set out in Annexure (A) and are available on the website of the Company at https://www.asianpaints.com/AnnualReports.html.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Board of Directors

Sad Demise of Mr. Abhay Vakil, erstwhile Non-Executive Director of the Company

Mr. Abhay Vakil, erstwhile Non-Executive Director of the Company, left for heavenly abode on 2nd November, 2021.

Late Mr. Abhay Vakil was associated with the Company since 1974. He was the Whole-time Director of the Company from 1983 to 1998 and he held the position of Managing Director from 1998 to 2009. He was appointed as a Non-Executive Director of the Company in 2009.

During his tenure as the Managing Director of the Company, late Mr. Vakil was overseeing the Company''s decorative business and was in charge of the supply chain/ sales and marketing functions of the decorative business. His sad demise is an irreparable loss to the Company.

The Board of Directors of the Company express their deep condolences and pay tribute to late Mr. Abhay Vakil. The Board places on record profound appreciation for his valuable contribution for channelising the growth of the Company.

Change in Directorate

i. Retirement of Independent Directors

Dr. S. Sivaram (DIN: 00009900) and Mr. M. K. Sharma (DIN: 00327684) retired as an Independent Director(s) of the Company with effect from closure of business hours on 30th September, 2021 and 31st March, 2022, respectively, upon completion of their tenure as Independent Directors in terms of Section 149(11) of the Act.

Dr. S. Sivaram joined the Board as an Independent Director in the year 2001 and since then the Company has immensely benefited from his guidance in the areas of technology, governance, risk management, etc. The Board places on record appreciation for his thoroughness, dedication and commitment.

Mr. M. K. Sharma joined the Board as an Independent Director in the year 2012. The Board places on record appreciation for the outstanding contribution of

Mr. M. K. Sharma during his tenure as an Independent Director of the Company. As the Chairman of the Audit Committee and Member of the Nomination and Remuneration Committee, Mr. Sharma''s contribution has been immensely valuable and has further strengthened the Company''s governance standards.

ii. Re-appointment of Independent Director

The shareholders of the Company at their 75th AGM held on 29th June, 2021, based on the (i) outcome of performance evaluation; (ii) recommendations of the Board and Nomination and Remuneration Committee; and (iii) experience and significant contributions made by Mr. R. Seshasayee (DIN: 00047985), have, inter alia, approved his re-appointment as an Independent Director for the second term of 5 (five) consecutive years with effect from 23rd January, 2022 to 22nd January, 2027.

In accordance with Regulation 17(1A) of the Listing Regulations, consent of the shareholders was accorded by way of Special Resolution for continuation of directorship of Mr. R. Seshasayee beyond the age of 75 (seventy-five) years, as he would attain the said prescribed age limit on 31st May, 2023, during the midst of his second term.

iii. Appointment of Non-Executive Directors

The Board of Directors at their meetings held on 21st October, 2021 and 1st March, 2022 based on recommendations of the Nomination and Remuneration Committee, inter alia, approved the following changes to the Board of Directors of the Company, subject to approval of shareholders of the Company:

(a) Appointment of Mr. Milind Sarwate (DIN: 00109854) as an Additional and Independent Director of the Company for a period of 5 (five) consecutive years from 21st October, 2021 upto 20th October, 2026.

Mr. Milind Sarwate is a Chartered Accountant (1983), Cost Accountant (1983), Company Secretary (1984) and a CII-Fulbright Fellow (Carnegie Mellon University, USA, 1996).

He is the Founder & CEO of Increate Value Advisors LLP. He provides advice & mentorship in business & social value creation, governance, and capability-building, leveraging his 38-year experience including long stints as CFO and CHRO of Marico Limited and Godrej Group.

He invests in promising businesses and social enterprises.

Mr. Sarwate serves on the Boards of listed and unlisted companies and has Chaired Audit Committees in these companies since 2005.

(b) Appointment of Ms. Nehal Vakil (DIN: 00165627) as a Non-Executive Promoter Director with effect from 1st March, 2022, to fill the casual vacancy created on the Board on account of the sad demise of Mr. Abhay Vakil.

Ms. Nehal Vakil holds Bachelor of Arts degree with specialisation in Finance from Eli Broad College of Business, Michigan State University -East Lansing, Michigan, USA.

She commenced her career with the Company in the year 1999 and was, inter alia, responsible for monitoring budgets, revenue, and variance trends in the corporate center.

She is presently the Director in charge of the operations of Vikatmev Containers Limited ("Vikatmev"), a leading container manufacturer in Mumbai. At Vikatmev, she heads a team that strategises and devises new approaches to boost customer numbers, growth and revenue.

Ms. Nehal Vakil also manages the other family businesses and investments along with the wealth advisors. She also serves as a Director on the Board of few other public and private limited companies.

Ms. Nehal Vakil is the daughter of late Mr. Abhay Vakil and is a Member of the Promoter(s)/ Promoter(s) Group of the Company. She is also the cousin of Ms. Amrita Vakil, Non-Executive Director of the Company.

In the opinion of the Board, Mr. Milind Sarwate and Ms. Nehal Vakil bring on board the required experience, integrity, expertise and relevant proficiency which will add tremendous value to the Board of Directors in exercising their role effectively.

In accordance with Regulation 17(1C) of the Listing Regulations with effect from 1st January, 2022, approval of the shareholders for appointment of a person on the Board of Directors should be taken at the next general meeting or within a time period of 3 (three) months from the date of appointment, whichever is earlier. Further, in accordance with Regulation 25(2A) of the Listing Regulations, effective 1st January, 2022, consent of the shareholders by way of Special Resolution shall be required for appointment of an Independent Director on the Board of Directors of the Company.

The approval of the shareholders of the Company was required within 3 (three) months for appointment of Ms. Nehal Vakil as a Non-Executive Director of the Company.

Mr. Milind Sarwate was appointed as an Additional and Independent Director prior to the Notification of the provisions of Regulation 17(1C) and 25(2A) of the Listing Regulations.

The approval of the shareholders of the Company was sought by postal ballot notice dated 1st March, 2022 for the aforementioned appointments on the Board, in good governance for Mr. Milind Sarwate.

The shareholders by way of postal ballot, have approved their appointments with requisite majority. The results of postal ballot were declared on 20th April, 2022.

iv. Re-appointment of Managing Director & CEO

The Board of Directors at their meeting held on 10th May, 2022, subject to approval of the shareholders, approved the re-appointment of Mr. Amit Syngle (DIN: 07232566) as the Managing Director & CEO of the Company for a further period of 5 (five) years commencing from 1st April, 2023 to 31st March, 2028.

Appropriate resolution for re-appointment of Mr. Amit Syngle as the Managing Director & CEO of the Company is being placed for the approval of the shareholders of the Company at the ensuing AGM. The Board of Directors, Nomination and Remuneration Committee and Audit Committee of the Company recommends his re-appointment as the Managing Director & CEO of the Company.

v. Retirement by rotation and subsequent re-appointment

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. Malav Dani (DIN: 01184336) and Mr. Manish Choksi (DIN:00026496), Non-Executive Directors of the Company, are liable to retire by rotation at the ensuing AGM and being eligible have offered themselves for re-appointment.

The Managing Director & CEO and Independent Directors of the Company are not liable to retire by rotation.

Key Managerial Personnel

Mr. Amit Syngle, Managing Director & CEO, and

Mr. R J Jeyamurugan, CFO & Company Secretary, are the

Key Managerial Personnel of the Company.

During the year under review, there were no changes to the Key Managerial Personnel of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) thereofnfor the time being in force), the Directors of the Company state that:

i. in the preparation of the annual accounts for the financial year ended 31st March, 2022, the applicable Accounting Standards have been followed and there are no material departures from the same;

ii. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so

as to give a true and fair view of the state of affairs of the Company as at 31st March, 2022 and of the profits of the Company for the financial year ended 31st March, 2022;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records

in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a ''going concern'' basis;

v. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

vi. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

Declaration from Directors

The Company has, inter alia, received the following declarations from all the Independent Directors confirming that:

• they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedule and Rules issued thereunder, and the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company;

• they have complied with the Code for Independent Directors prescribed under Schedule IV to the Act; and

• they have registered themselves with the Independent Director''s Database maintained by the Indian Institute of Corporate Affairs.

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.

NUMBER OF MEETINGS OF THE BOARD

During the year under review, 10 (ten) meetings of the Board of Directors were held. The details of the meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2021-22 are given in the Corporate Governance Report which forms part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act and the Listing Regulations.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall: (i) formulate the criteria for board membership, including the appropriate mix of Executive & Non-Executive Directors; (ii) approve and recommend compensation packages and policies for Directors and Senior Management; and (iii) lay down the effective manner of performance evaluation of the Board, its Committees and the Directors.

The salient features of the Nomination and Remuneration Policy of the Company along with highlights of changes made during the year are outlined in the Corporate Governance Report which forms part of this Report. The Policy is also available on the website of the Company at https://www.asianpaints.com/NRCPolicy.html.

REMUNERATION OF DIRECTORS,KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the Listing Regulations. Further details on the same are given in the Corporate Governance Report which forms part of this Annual Report.

The information required under Section 197 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of directors and employees of the Company is set out in Annexure (B) to this Report and is also available on the website of the Company at

https://www.asianpaints.com/AnnualReports.html. BOARD EVALUATION

The Nomination and Remuneration Policy of the Company empowers the Nomination and Remuneration Committee to formulate a process for effective evaluation of the performance of individual directors, Committees of the Board and the Board as a whole.

The Board formally assesses its own performance based on parameters which, inter alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.

The parameters for the performance evaluation of the Directors include contribution made at the Board meeting, attendance, instances of sharing best and next practices, domain knowledge, vision, strategy, engagement with senior management, etc.

The Chairperson(s) of the respective Committees based on feedback received from the Committee members on the outcome of performance evaluation of the Committee, share a report to the Board.

The Independent Directors at their separate meeting review the performance of: Non-Independent Directors and the Board as a whole, Chairman of the Company after taking into account the views of Executive Director and Non-Executive Directors, the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The Chairman of the Nomination and Remuneration Committee, leads the performance evaluation exercise.

The outcome of the performance evaluation of Committees of the Board and the Board is presented to the Nomination and Remuneration Committee and the Board of Directors of the Company and key outcomes, actionable areas are discussed and acted upon. The details of the evaluation process and the outcomes are set out in the Corporate Governance Report which forms a part of this Annual Report.

The outcome of evaluation of individual directors is shared on one-on-one basis with the Director being evaluated.

The Board of Directors have decided to engage an external expert to carry out the evaluation of performance of the Board, Committees and individual directors, once in every 3 (three) financial years. The Company had engaged Egon Zehnder, external consultants, to conduct performance evaluation for the financial year 2020-21 of the Board, Committees of the Board and individual directors.

FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

All Independent Directors are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The details of the training and familiarisation program are provided in the Corporate Governance Report and is also available on the website of the Company at https://www.asianpaints. com/FamiliarisationProgramme.html.

REGISTRAR AND TRANSFER AGENT

The name of the Company''s Registrar and Transfer Agent, TSR Darashaw Consultants Private Limited, has been changed to TSR Consultants Private Limited with effect from 13th April, 2022.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report.

AUDITORS AND AUDITORS'' REPORT Statutory Auditor

Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), were appointed as Statutory Auditors of the Company at the 75th AGM held on 29th June, 2021, to hold office till the conclusion of the 80th AGM.

Deloitte Haskins & Sells LLP has confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors have issued an unmodified opinion on the Financial Statements for the financial year 2021-22 and the Auditor''s Report forms part of this Annual Report.

Cost Auditor

The Company has maintained cost records for certain products as specified by the Central Government under Section 148(1) of the Act. RA & Co., Cost Accountants (Firm Registration No. 000242), have carried out the cost audit for applicable products during the financial year 2021-22.

The Board of Directors of the Company, on the recommendation made by the Audit Committee, have appointed RA & Co., as the Cost Auditors of the Company to conduct the audit of cost records of products for the financial year 2022-23. RA & Co., being eligible, have consented to act as the Cost Auditors of the Company for the financial year 2022-23.

The remuneration proposed to be paid to the Cost Auditors, subject to ratification by the members of the Company at the ensuing 76th AGM, would not exceed '' 9 lakhs (Rupees nine lakhs only) excluding taxes and out-of-pocket expenses, if any.

The Cost Audit Report for the financial year 2020-21 does not contain any qualification, reservation, or adverse remark.

Secretarial Auditor

The Board of Directors of the Company, on the recommendation made by the Audit Committee, have appointed Dr. K. R. Chandratre, Practicing Company Secretary (Certificate of Practice No. 5144), as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2022-23, based on consent received from Dr. K. R. Chandratre.

The Secretarial Audit Report for the financial year 2021-22 under the Act read with Rules made thereunder and Regulation 24A of the Listing Regulations, is set out in Annexure (C-1) to this Report.

The Secretarial Compliance Report received from Dr. K. R. Chandratre, for the financial year 2021-22, in relation to compliance of all applicable Securities and Exchange Board of India ("SEBI") Regulations/Circulars/ Guidelines issued thereunder, pursuant to requirement of Regulation 24A of the Listing Regulations, is set out in Annexure (C-2) to this Report. The Secretarial Compliance Report has been voluntarily disclosed as good disclosure practice.

As required by Schedule V of the Listing Regulations, the Auditors Certificate on Corporate Governance received from Dr. K. R. Chandratre is annexed to the Corporate Governance Report forming part of this Annual Report.

The Secretarial Audit Report and Secretarial Compliance Report for the financial year 2021-22, does not contain any qualification, reservation, or adverse remark.

RISK MANAGEMENT

Risk management is integral to the Company''s strategy and for the achievement of the long-term goals. Our success as an organisation depends on our ability to identify and leverage the opportunities while managing the risks.

With the continuation of the COVID-19 pandemic, the challenges of uncertain lockdowns, unlock phases, health hazards and supply chain disruptions across the globe continued to impact the business.

These challenges have brought a mix of opportunities and uncertainties impacting the Company''s objectives. Risk management, which aims at managing the impact of these uncertainties, is an integral part of the Company''s strategy setting and decision making process. The Company regularly identifies uncertainties and after assessing them, devises short-term and long-term actions to mitigate any risk which could materially impact your Company''s longterm goals. This process of identifying and assessing the risks is a two-way process with inputs being taken from employees across the organisation.

The Company engages regularly with various stakeholders to foresee changing/emerging expectations and proactively tries to integrate the same with the overall plans and priorities of the Company.

The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of reviewing the risk management process in the Company and ensuring that the risks are brought within acceptable limits.

Our approach to risk management is designed to provide reasonable assurance that our assets are safeguarded, the risks facing the business are being assessed and mitigated and all information that may be required to be disclosed is reported to Company''s Senior Management including, where appropriate, the Managing Director & CEO, the Chief Financial Officer, the Audit Committee, the Risk Management Committee, and the Board.

Mitigation plans to significant risks are well integrated with functional and business plans and are reviewed on a regular basis by the senior leadership.

The Company endeavours to continually sharpen its risk management systems and processes in line with a rapidly changing business environment. There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Annual Report.

The Board of Directors of the Company on the recommendation of the Risk Management Committee has developed Risk Management Policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company and which articulates the Company''s approach to address the uncertainties in its endeavour to achieve its stated and implicit objectives.


COMMITTEES

As on 31st March, 2022, the Board has 7 (seven) Committees: Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee, Stakeholders Relationship Committee, Investment Committee and Shareholders Committee.

The Board of Directors of the Company have dissolved the Shareholders Committee and the terms of reference of the said Committee have been merged with the Stakeholders Relationship Committee. The said changes were effective from 1st April, 2022.

During the year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board.

A detailed note on the composition of the Board and its ; Committees, including its terms of reference is provided in the Corporate Governance Report. The composition and ; terms of reference of all the Committees of the Board of Directors of the Company is in line with the provisions of the Act and the Listing Regulations.

\ CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the financial year 2021-22, the Company has spent '' 71.01 crores (Rupees seventy-one crores and one lakh 6 only) towards CSR expenditure. The CSR initiatives of the Company were under the thrust area of health & hygiene, enhancing vocational skills, water conservation and disaster management. The CSR Policy of the Company is available on the website of the Company at https://www.asianpaints.com/CSRPolicy.html.

The Company''s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2022, in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") is set out in Annexure (D) to this Report.

Synopsis of the report of the independent agency for the CSR projects to which impact assessment is applicable in terms of the provisions of Section 135 of the Act and CSR Rules, has been annexed to the said annual report on CSR.

CORPORATE GOVERNANCE REPORTAND BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance and the Business Responsibility and Sustainability Report, forms part of this Annual Report.

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2022 in Form MGT-7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.asianpaints.com/AnnualReports.html.

RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved by the Audit Committee and were in accordance with the Policy on dealing with and materiality of related party transactions and the related party framework, formulated and adopted by the Company.

The SEBI vide amendments to the Listing Regulations had introduced substantial changes in the related party transaction framework, inter alia, by enhancing the purview of the definition of related party, and overall scope of transactions with related parties effective 1st April, 2022 or unless otherwise specified in the amendment.

The Board of Directors on recommendations of the Audit Committee approved the revised ''Policy on dealing with and materiality of related party transactions'' and related party framework of the Company to align it with the amendments notified by SEBI.

All contracts/arrangements/transactions entered into by the Company during the year under review with related parties were in the ordinary course of business and on arm''s length basis in terms of provisions of the Act.

Further, there are no contracts or arrangements entered into under Section 188(1) of the Act, hence no justification have been separately provided in that regard.

The Company''s Policy on dealing with and materiality of related party transactions is available on the website of the Company at https://www.asianpaints.com/RPTPolicy.html.

There are no materially significant related party transactions that may have potential conflict with interest of the Company at large. There were no transactions of the Company with any person or entity belonging to the Promoter(s)/Promoter(s) Group which individually holds 10% or more shareholding in the Company.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 41 to the standalone financial statements of the Company.

The Company in terms of Regulation 23 of the Listing Regulations submits within the stipulated time from the date of publication of its standalone and consolidated financial results for the half year, disclosures of related party transactions on a consolidated basis, in the format specified in the relevant accounting standards to the stock exchanges. The said disclosures are available on the website of the Company at https://www.asianpaints.com/StatutorvFilinqs.html.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in Annexure (E) to this Report.

LOANS AND INVESTMENTS

Details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2022, are set out in Note 47(C) to the standalone financial statements of the Company.

The Risk Management Policy of the Company is available j on the website of the Company at

https://www.asianpaints.com/RMPolicy.html.

VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and in line with the best governance practices. The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations.

The Company has engaged an agency for managing the ''Ethics Hotline'' which can be used to, inter alia, report any instances of financial irregularities, breach of code of conduct, abuse of authority, disclosure of financial/ unpublished price sensitive information other than for legitimate purposes, unethical/unfair actions concerning Company vendors/suppliers, malafide manipulation of Company records, discrimination to the Code of Conduct in an anonymous manner.

The Policy also provides adequate protection to the Directors, employees and business associates who report unethical practices and irregularities.

Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy.

The Whistle-Blower Policy aims to:

• allow and encourage stakeholders to bring to the management''s notice concerns about unethical behavior;

• ensure timely and consistent organisational response;

• build and strengthen a culture of transparency and trust; and

• provide protection against victimisation.

No person was denied access to the Audit Committee.

The Whistle Blower Policy has been appropriately communicated within the Company across all levels and is available on the website of the Company at https://www.asianpaints.com/WBPolicy.html.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Prevention of Sexual Harassment Act"), the Company has formulated a Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at workplace and an Internal Complaints Committee has also been set up to redress any such complaints received.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

The Company periodically conducts sessions for employees across the organisation to build awareness about the Policy and the provisions of Prevention of Sexual Harassment Act.

Complaints of sexual harassment received during the financial year 2021-22 by the Company were investigated in accordance with the procedures prescribed and adequate steps were taken to resolve them.

The policy formulated by the Company for prevention of sexual harassment is available on the website of the Comany at https://www.asianpaints.com/POSHPolicy.html.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has adequate Internal Financial Controls System over financial reporting which ensures that all transactions are authorised, recorded, and reported correctly in a timely manner. The Company''s Internal Financial Controls over financial reporting provides reasonable assurance over the integrity of financial statements of the Company.

The Company has laid down Standard Operating Procedures, Policies and Authority/Commercial Manual to guide the operations of the business. Functional heads are responsible to ensure compliance with all laws and regulations and also with the policies and procedures laid down by the management.

The Corporate Accounts team has undertaken advanced digitalisation and automation initiatives in the current year. System based reports and automated accounting for various areas in financial statements have contributed to better accuracy and faster financial reporting. Further, the financial statement preparation has been automated to ensure end to end system driven reporting across Group reducing scope of manual errors. Such initiatives would be continued in the coming year as well.

The Shared Services Center continued the journey of digitalisation and touchless processing of vendor payments taking it to next level. Virtual Assistant for Processing Invoices, on the fly intelligence tool, has been deployed for better compliances to laws & regulation.

A mobile application has been developed for employee reimbursement with Optical Character Recognition enabled technology easing the process of raising claims as well as automating necessary controls for seamless processing. Car hiring process has been digitalised automating the entire process from booking a request to invoice processing along with tracking of distances travelled and time involved.

The Company tracks all amendments to Accounting Standards, the Act and makes changes to the underlying systems, processes and financial controls to ensure adherence to the same. During the current year, the Company assessed impact of changes in Schedule III under the Act and Accounting Standards on its financial

reporting and accordingly made necessary changes in its policies, processes and disclosures. All resultant changes to the policy and impact on financials are disclosed after due validation with the statutory auditors and the Audit Committee.

During the year, the Company has prepared Risk Assessment and Control Matrix for all processes involved in financial reporting and was tested for design and operating effectiveness.

The Company gets its standalone financial statements audited every quarter by its Statutory Auditors. The policies to ensure uniform accounting treatment are prescribed to the subsidiary companies as well. International subsidiaries provide information required for consolidation of accounts in the format prescribed by the Company. The accounts of the subsidiary and joint venture companies are audited and certified by their respective Statutory Auditors for consolidation.

OTHER DISCLOSURES

i. Unclaimed Dividend

In terms of applicable provisions of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), during the year under review, unpaid or unclaimed dividend amounting to '' 1.34 crores (Rupees one crores and thirty-four lakhs only) was transferred by the Company to the Investor Education and Protection Fund ("IEPF"), established by the Government of India.

Further, 1,69,237 (One lakh sixty-nine thousand two hundred and thirty-seven) shares were transferred to the demat account of the IEPF Authority during the year, in accordance with the IEPF Rules, as the dividend(s) has not been paid or claimed by the shareholders for 7 (seven) consecutive years or more;

ii. None of the Directors of the Company have resigned during the year under review;

iii. The Company has not failed to implement any corporate action during the year under review;

iv. The disclosure pertaining to explanation for any deviation or variation in connection with certain terms of a public issue, rights issue, preferential issue, etc. is not applicable to the Company;

v. The Company''s securities were not suspended during the year under review;

vi. There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2021-22 and the date of this Report.

An overview of the paint industry, important changes in the paint industry during the last financial year, external environment, and economic outlook have been provided in detail in the separate section of Management Discussion and Analysis forming part of this Annual Report;

vii. During the year under review, there was no change in the nature of business of the Company;

viii. Key initiatives with respect to stakeholder relationship, customer relationship, environment, sustainability, health and safety have been provided in detail in the respective sections of this Annual Report;

ix. During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014;

x. 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;

xi. 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;

The Competition Commission of India ("Commission") had passed a prima facie Order dated 14th January, 2020, directing the Director General ("DG") to cause an investigation against the Company, under the provisions of Section 26(1) of the Competition Act, 2002. Based on this Order, the DG initiated an investigation against the Company and on 17th December, 2021, submitted a consolidated Investigation Report to the Commission. The report in no way affects the going concern status of the Company. The Commission has now scheduled the matter for hearing.

xii. The Managing Director & CEO of the Company has not received any remuneration or commission from any of the subsidiary companies. Further the Company doesn''t have any holding company;

xiii None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act;

xiv. The information on conservation of energy,

technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Act

read with the Companies (Accounts) Rules, 2014, is set out in the Annexure (F) to this Report;

xv. Company has not issued equity shares with differential rights as to dividend, voting or otherwise;

xvi. The Company has not issued any sweat equity shares to its directors or employees;

xvii. There was no revision of financial statements and Board''s Report of the Company during the year under review;

xviii. No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable; and

xix. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

APPRECIATION

The Board of Directors place on record sincere gratitude and appreciation for all the employees of the Company.

Our consistent growth was made possible by their hard work, solidarity, cooperation, and dedication during the year.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of Directors

Deepak Satwalekar

Chairman (DIN: 00009627)

Place: Mumbai Date: 10th May, 2022

1

For standalone results, exceptional items comprise of provision for expected credit loss taken towards subsidy receivable. Additionally, exceptional items for consolidated results also include impairment provision towards goodwill in Causeway Paints Lanka (Pvt.) Limited, subsidiary company, and foreign exchange loss due to devaluation of Sri Lankan Rupees.

# Figures for FY 2020-21 have been restated to give impact of amalgamation of Reno Chemicals Pharmaceuticals and Cosmetics Private Limited with the Company, effective from 17th September, 2021, with the appointed date of 1st April, 2019. The accounting impact is not material.

A Includes re-measurement of defined benefit plans.


Mar 31, 2021

Dear Members,

The Board of Directors are pleased to present the 75th Integrated Annual Report of the Company along with the audited financial statements (standalone and consolidated) for the financial year 2020-21.

FINANCIAL RESULTS

(Rs. in crores)



















































































































































































































































































































Standalone Consolidated
2020-21 2019-20 Growth (%) 2020-21 2019-20 Growth (%)
Revenue from Operations 18516.86 17194.09 7.70% 21712.79 20211.25 7.40%
Earning Before Interest Taxes
Depreciation and Amortisation
4859.51 4214.58 15.30% 5158.65 4466.08 15.50%
Less : Finance Costs 71.66 78.38 91.63 102.33
Less : Depreciation and Amortisation
Expense
697.47 689.97 791.27 780.5
Profit for the period before share of
profit in associate
4090.38 3446.23 18.70% 4275.75 3583.25 19.30%
Share of profit of Associate - - 28.6 50.74
Profit before exceptional items & tax 4090.38 3446.23 4304.35 3633.99
Exceptional Items** - 33.2 - -
Profit before Tax 4090.38 3413.03 19.80% 4304.35 3633.99 18.40%
Less : Tax Expense 1037.87 759.08 1097.6 854.85
Profit for the period from continuing
operations
3052.51 2653.95 15.00% 3206.75 2779.14 15.40%
Profit before tax from discontinued
operations
- - - -5.73
Tax expense of discontinued operations - - - -0.78
Profit for the period from discontinued
operations
- - - -4.95
Profit for the period 3052.51 2653.95 15.00% 3206.75 2774.19 15.60%
Attributable to:
Shareholders of the company 3052.51 2653.95 15.00% 3139.29 2705.17 16.00%
Non-Controlling Interest - - 67.46 69.02
Other Comprehensive Income (net of tax) 50.53 50.4 -5.68 58.31
Total Comprehensive Income 3103.04 2704.35 14.70% 3201.07 2832.5 13.00%
Attributable to:
Shareholders of the company 3103.04 2704.35 14.70% 3143.42 2755.61 14.10%
Non-Controlling Interest - - 57.65 76.89
Opening balance in Retained Earnings 4974.64 4424.53 5204.64 4604.6
Amount available for Appropriation 8023.17 7068.66 8339.68 7299.35
Dividend
Interim - FY 2020-21 321.35 - 321.35 -
Interim - FY 2019-20 - 1007.16 - 1007.16
Final - FY 2019-20 143.88 - 143.88 -
Final - FY 2018-19 - 733.79 - 733.79
Tax on Dividend - 353.07 - 353.07
Transfer to General Reserve - - - -
Transfer to other Reserve - - 0.43 0.69
Closing balance in Retained Earnings 7557.94 4974.64 7874.02 5204.64

**Comprise of impairment provision towards investment made in Sleek International Private Limited & Maxbhumi Developers Limited, wholly owned subsidiary companies of the Company of Rs. 29.7 crores and Rs. 3.5 crores respectively.

COMPANY PERFORMANCE OVERVIEW

During the financial year 2020-21:

* During the financial year 2020-21, revenue from operations on standalone basis increased to Rs. 18,516.86 crores as against Rs. 17,194.09 crores in the previous year - a growth of 7.7%.

* Cost of goods sold as a percentage to revenue from operations decreased to 54.5% as against 55.3% in the previous year.

* Employee cost as a percentage to revenue from operations increased to 6.1% (Rs. 1,128.66 crores) as against 5.7% (Rs. 985.43 crores) in the previous year.

* Other expense as a percentage to revenue from operations decreased to 15.2% (Rs. 2,812.48 crores) as against 16.5 % (Rs. 2,845.44 crores) in the previous year.

* The Company has contributed approximately a sum of Rs. 10 crores towards COVID-19 pandemic related relief activities.

* The Profit after Tax for the current year is Rs. 3,052.51 crores as against Rs. 2,653.95 crores in the previous year - a growth of 15.0%.

* On a consolidated basis, the group achieved revenue of Rs. 21,712.29 crores as against Rs. 20,211.25 crores - a growth of 7.4%. Net profit after non-controlling interest for the group for the current year is Rs. 3,139.29 crores as against Rs. 2,705.17 crores in the previous year - a growth of 16.0%.

TRANSFER TO RESERVES

During the year under review, there was no amount transferred to any of the reserves by the Company.

DIVIDEND

The Board of Directors at their meeting held on 12th May, 2021, has recommended payment of Rs. 14.50 (Rupees fourteen and paise fifty only) (1450%) per equity share of the face value of Rs. 1 (Rupee one only) each as final dividend for the financial year ended 31st March, 2021. The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company.

During the year under review, the Board of Directors of the Company at their meeting held on 22nd October, 2020, declared an Interim dividend of Rs. 3.35 (Rupees three and paise thirty five only) (335%) per equity share of the face value of Rs. 1 (Rupee one only) each. The interim dividend was paid to the shareholders on 12th November, 2020.

The total dividend amount for the financial year 2020-21, including the proposed final dividend, amounts to Rs. 17.85 (Rupees seventeen and paise eighty five only) per equity share of the face value of Rs. 1 (Rupee one only) each [total dividend payout for the FY 2020-21 amounting to Rs. 1,712.17 crores (Rupees one thousand seven hundred twelve crores and seventeen lakhs only)] as against the total dividend of Rs. 12 (Rupees twelve only) per equity share of the face value of Rs. 1 (Rupee one only) each paid for the previous financial year 2019-20 [total dividend payout for the FY 2019-20 amounting to Rs. 1,151.04 crores (Rupees one thousand one hundred fifty one crores and four lakhs only)].

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.

The dividend recommended is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is available on the Company’s website: https://www.asianpaints.com/more/investors/policies-programs.html.

The dividend payout ratio of the Company since last three financial years is more than 50%.

UNCLAIMED DIVIDEND

Pursuant to the applicable provisions of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), during the year, unpaid or unclaimed dividend amounting to Rs. 1.34 crores was transferred by the Company to the Investor Education and Protection Fund ("IEPF"), established by the Government of India.

Further, 1,43,738 shares were transferred to the demat account of the IEPF Authority during the year, in accordance with IEPF Rules, as the dividend has not been paid or claimed by the shareholders for 7 (seven) consecutive years or more.

SUBSIDIARIES & ASSOCIATE COMPANIES

The Company has 23 subsidiaries and 2 joint-venture companies as on 31st March, 2021.

Financial Performance

A list of bodies corporates which are subsidiaries/associates/ joint ventures of the Company is provided as part of the notes to Consolidated Financial Statements.

A separate statement containing the salient features of financial statements of subsidiaries, associates, joint venture companies of the Company in the prescribed Form AOC-1 forms a part of Consolidated Financial Statements ("CFS") in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with Rules.

The Company does not have any material subsidiary.

Consolidated Financial Statements

In accordance with the provisions of the Act, Regulation 33 of the Listing Regulations and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2020-21, together with the Auditors’ Report form part of this Annual Report.

In accordance with Section 136 of the Act, the audited financial statements, including the CFS and related information of the Company and the financial statements of each of the subsidiary companies, are available on our website, www.asianpaints.com. Any Member desirous of making inspection or obtaining copies of the said financial statements may write to the Company Secretary at [email protected].

The Company’s Policy for determining material subsidiaries may be accessed on the website of the Company at https://www.asianpaints.com/more/investors/policies-programs.html.

Amalgamation of Reno Chemicals Pharmaceuticals & Cosmetics Private Limited with the Company

The Company Petition filed for amalgamation of Reno Chemicals Pharmaceuticals & Cosmetics Private Limited, Company’s wholly owned subsidiary with the Company was admitted on 26th April, 2021 by Hon’ble National Company Law Tribunal, Mumbai (NCLT).

The said Petition is listed for final hearing before the Hon''ble NCLT.

Merger of Asian Paints (Lanka) Limited with Causeway Paints Lanka (Private) Limited

With effect from 1st April, 2021, indirect subsidiary of the Company, Asian Paints (Lanka) Limited amalgamated with Causeway Paints Lanka (Private) Limited.

Winding-up of Asian Paints (Tonga) Limited

Asian Paints (Tonga) Limited has ceased its business operations w.e.f. 10th December, 2020 and liquidated all its assets & liabilities. The name of the Company was struck off from the Business Registries Office, Kingdom of Tonga on 29th January, 2021.

ASIAN PAINTS EMPLOYEES’ STOCK OPTION PLAN

The Board of Directors of the Company at their meetings held on 30th March, 2021 and 12th May, 2021, based on the recommendations of the Nomination and Remuneration Committee, approved formulation of Asian Paints Employees’ Stock Option Plan 2021 ("2021 Plan"), for grant of stock options to ‘Eligible Employees’ of the Company and its subsidiary companies. This 2021 Plan will be effective from the financial year 2020-21 onwards and is subject to approval of the shareholders at the ensuing AGM of the Company. The 2021 Plan has been introduced for eligible employees of the Company and/or its subsidiary companies with an objective to motivate and retain professionals by rewarding performance, and in order to further increase shareholder value.

The 2021 Plan is intended to cover Eligible Employees of the Company and its subsidiary companies, including the Managing Director & CEO of the Company. As such, Mr. Amit Syngle, Managing Director & CEO, shall also be eligible to participate in the 2021 Plan.

The appointment and remuneration of Mr. Amit Syngle as the Managing Director & CEO, was approved by the shareholders of the Company in the 74th AGM of the Company held on 5th August, 2020 ("Original Resolution").

It is proposed to amend the Original Resolution to include appropriate clauses enabling the grant of stock options to Mr. Amit Syngle, pursuant to the 2021 Plan.

The brief details of the 2021 Plan and other relevant details have been provided in explanatory statement annexed to the Notice of the ensuing 75th AGM of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board of Directors

Re-appointment and continuation of Mr. R. Seshasayee as an Independent Director of the Company, not liable to retire by rotation.

At the 71st AGM of the Company held on 27th June, 2017, the shareholders had approved the appointment of Mr. R Seshasayee (DIN: 00047985) as an Independent Director to hold office for a period of 5 (five) consecutive years up to 22nd January, 2022.

Based on the outcome of performance evaluation and recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company, at their meeting held on 12th May, 2021 have recommended the reappointment of Mr. R Seshasayee as an Independent Director for second term of 5 (five) consecutive years upto 22nd January, 2027 (not liable to retire by rotation), in accordance with Section 149, 152, Schedule IV and other applicable provisions, if any, of the Act and the Listing Regulations.

In terms of the provisions of the Regulation 17(1A) of the Listing Regulations, consent of the Shareholders by way of Special Resolution shall be required for continuation of directorship of Mr. R. Seshasayee, Independent Director of the Company, who would attain the prescribed age limit of 75 years during the period of the proposed second term.

In the opinion of the Nomination & Remuneration Committee and Board of Directors of the Company, considering the wealth of experience and expertise of Mr. R Seshasayee and the immense value he brings to the Board and the Company, the re-appointment of Mr. R Seshasayee for a second term of 5 (five) consecutive years from 23rd January, 2022 to 22nd January, 2027 (not liable to retire by rotation) and continuation of his directorship beyond 75 (seventy-five) years of age would be in the interest of the Company and its shareholders. Mr. R. Seshasayee is exempt from the requirement to undertake online proficiency self-assessment test conducted by Indian Institute of Corporate Affairs (IICA), Manesar.

Retirement by rotation and subsequent re-appointment

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. Abhay Vakil and Mr. Jigish Choksi, Non-Executive Directors of the Company, are liable to retire by rotation at the ensuing AGM and being eligible have offered themselves for re-appointment.

The Managing Director & CEO and Independent Directors of the Company are not liable to retire by rotation.

Declaration from Directors

The Company has received the following declarations from all the Independent Directors confirming that:

1. They meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedule and Rules issued thereunder, and the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company; and

2. They have registered themselves with the Independent Director’s Database maintained by the IICA. None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 164(2) of the Act and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Key Managerial Personnel

Mr. Amit Syngle, Managing Director & CEO and Mr. R. J. Jeyamurugan, CFO & Company Secretary, are the Key Managerial Personnel of the Company.

Mr. Amit Syngle was appointed as the Managing Director & CEO of the Company with effect from 1st April, 2020. During the year under review, there were no other changes to the Key Managerial Personnel of the Company.

NUMBER OF MEETINGS OF THE BOARD

During the year under review, 7 (seven) meetings of the Board of Directors were held. The details of the meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2020-21 are given in the Corporate Governance Report which forms part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall, formulate the criteria for Board membership, including the appropriate mix of Executive & Non-Executive Directors, Board Diversity and approve and recommend compensation packages and policies for Directors and Senior Management and lay down the effective manner of performance evaluation of the Board, its Committees and the Directors and such other matters as provided under Section 178 of the Act and Listing Regulations.

The salient features of the Nomination and Remuneration Policy of the Company are outlined in the Corporate Governance Report which forms part of this Annual Report. The Policy is also available on the website of the Company https://www.asianpaints.com/more/investors/policies-programs.html.

REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the Listing Regulations. Further details on the same are given in the Corporate Governance Report which forms part of this Annual Report.

The information required under Section 197 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of the Company is set out in the Annexure [A] to this report and is also available on the website of the Company at www.asianpaints.com.

BOARD EVALUATION

During the year under review, the Nomination and Remuneration Committee engaged M/s. Egon Zehnder, external consultants, to conduct evaluation of the Board, Committees of the Board and Directors. The evaluation was conducted based on the criteria and framework adopted by the Board. The evaluation parameters and the process have been explained in the Corporate Governance Report.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

All Independent Directors are familiarized with the operations and functioning of the Company. The details of the training and familiarization program are provided in the Corporate Governance Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, the Directors of the Company state that:

a. in the preparation of the annual accounts for the financial year ended 31st March, 2021, the applicable Accounting Standards have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2021 and of the profits of the Company for the financial year ended 31st March, 2021;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a ‘going concern’ basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

REGISTRAR AND TRANSFER AGENT

M/s. TSR Darashaw Consultants Private Limited (TSR) is the Registrar and Transfer Agent of the Company.

During the year under review, the registered office and place of operation of TSR has been shifted to Vikhroli, Mumbai.

Accordingly, the Company is required to seek shareholders’ approval under Section 94 and other applicable provisions of the Act read with the Companies (Management and Administration) Rules, 2014, for maintenance of the Registers and Indexes of Members of the Company under Section 150 of the Companies Act, 1956 or Section 88 of the Act, as applicable and copies of the returns prepared under Section 159 of the Companies Act, 1956 or Section 92 of the Act, as applicable, read with the Companies (Management and Administration) Rules, 2014 and in accordance with Article 144 of the Articles of Association of the Company, for the period(s) on or after 1st April, 2003, at TSR’s office located in Vikhroli, Mumbai.

Appropriate resolution seeking approval of the shareholders has been placed at the ensuing AGM of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report.

AUDITORS AND AUDITORS’ REPORT

Statutory Auditor

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), were appointed as Statutory Auditors of the Company at the 70th AGM held on 28th June, 2016, to hold office till the conclusion of the ensuing 75th AGM.

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants are eligible to be re-appointed for a further term of 5 (five) years, in terms of provisions of Sections 139 and 141 of the Act.

Accordingly, the Board of Directors of the Company at their meeting held on 12th May, 2021 on the recommendation of the Audit Committee and subject to the approval of the shareholders of the Company at the ensuing AGM, have approved the re-appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/ W-100018), as the Statutory Auditors, for a further period of 5 (five) years i.e. from the conclusion of the 75th AGM till the conclusion of 80th AGM of the Company.

The Company has received written consent and certificate of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Act and Rules issued thereunder, from M/s. Deloitte Haskins & Sells LLP. They have confirmed to hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as required under the Listing Regulations.

The Auditors have issued an unmodified opinion on the Financial Statements, both standalone and consolidated for the financial year ended 31st March, 2021. The said Auditors’ Report(s) for the financial year ended 31st March, 2021 on the financial statements of the Company forms part of this Annual Report.

Cost Auditor

The Company has maintained cost records for certain products as specified by the Central Government under sub-section (1) of Section 148 of the Act. M/s. RA & Co., Cost Accountants, (Firm Registration No. 000242) have carried out the cost audit for applicable products during the financial year 2020-21.

The Board of Directors of the Company, on the recommendations made by the Audit Committee, have appointed M/s. RA & Co., as the Cost Auditors of the Company to conduct the audit of cost records of certain products for the financial year 2021-22. M/s. RA & Co., being eligible, have consented to act as the Cost Auditors of the Company for the financial year 2021-22.

The remuneration proposed to be paid to the Cost Auditor, subject to ratification by the members of the Company at the ensuing 75th AGM, would not exceed Rs. 8 lakhs (Rupees eight lakhs only) excluding taxes and out of pocket expenses, if any.

Secretarial Auditor

The Board of Directors of the Company have appointed Dr. K. R. Chandratre, Practicing Company Secretary (Certificate of Practice No. 5144), as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2021-22. The Company has received consent from Dr. K. R. Chandratre to act as the auditor for conducting audit of the secretarial records for the financial year ending 31st March, 2022.

The Secretarial Audit Report for the financial year ended 31st March, 2021 under the Act, read with Rules made thereunder and Regulation 24A of the Listing Regulations, is set out in the Annexure [B-1] to this report.

The Secretarial Compliance Report for the financial year ended 31st March, 2021, in relation to compliance of all applicable SEBI Regulations/circulars/guidelines issued thereunder, pursuant to requirement of Regulation 24A of the Listing Regulations, is set out in Annexure [B-2] to this report. The Secretarial Compliance Report has been voluntarily disclosed as part of Annual Report as good disclosure practice.

The Secretarial Audit Report and/or Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

COMMITTEES of the board

As on 31st March, 2021, the Board has 7 (seven) committees: Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee, Stakeholders Relationship Committee, Investment Committee and Shareholders Committee.

During the year under review, the Board of Directors constituted a committee called the Investment Committee, inter alia, to consider, evaluate and recommend to the Board viable investment proposals which are in the interest of furthering the strategic goals of the Company.

During the year, all recommendations made by the committees were approved by the Board.

A detailed note on the composition of the Board and its committees, including its terms of reference is provided in the Corporate Governance Report. The composition and terms of reference of all the Committee(s) of the Board of Directors of the Company is in line with the provisions of the Act and Listing Regulations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the financial year ended 31st March, 2021, the Company incurred CSR Expenditure of Rs. 62.98 crores (Rupees sixty two crores and ninety eight lakhs). The CSR initiatives of the Company were under the thrust area of health & hygiene, education, water management and vocational training. The CSR Policy of the Company is available on the website of the Company at https://www.asianpaints.com/about-us.html.

Ministry of Corporate Affairs vide its Notification(s) dated 22nd January, 2021, notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, which, inter alia, provides for the revised format of annual report for publishing the CSR activities undertaken during the financial year ended 31st March, 2021. The other changes pursuant to said Notification(s) under the CSR provisions, have been briefly highlighted in the annual report of the Company’s CSR activities for the financial year ended 31st March, 2021.

The Company’s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2021, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure [C] to this report.

CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance and a Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms part of this Annual Report.

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2021 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.asianpaints.com/more/investors/AnnualReportFY2021.html.

RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on dealing with and materiality of Related Party Transactions and the Related Party Framework, formulated and adopted by the Company. An omnibus approval from the Audit Committee is obtained for the related party transactions which are unforeseen in nature. During the year under review, the Related Policy Framework was suitably amended to include the revised pricing structure and certain new transactions which were not anticipated earlier.

All contracts/arrangements/transactions entered into by the Company during the year under review with Related Parties were in the ordinary course of business and on arm’s length basis in terms of provisions of the Act.

The Company’s Policy on dealing with and Materiality of Related Party Transactions is available on the website of the Company at https://www.asianpaints.com/more/investors/policies-programs.html.

There are no materially significant related party transactions that may have potential conflict with interest of the Company at large. There were no transactions of the Company with any person or entity belonging to the Promoter(s)/Promoter(s) Group which individually holds 10% or more shareholding in the Company.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 43 to the Standalone Financial Statements of the Company.

The Company in terms of Regulation 23 of the Listing Regulations submits within 30 days from the date of publication of its standalone and consolidated financial results for the half year, disclosures of related party transactions on a consolidated basis, in the format specified in the relevant accounting standards to the stock exchanges. The said disclosures can be accessed on the website of the Company at https://www.asianpaints.com/more/investors/announcements.html.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure [D] to this report.

LOANS AND INVESTMENTS

Details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2021, are set out in Note 36(B) to the Standalone Financial Statements of the Company.

RISK MANAGEMENT

Risk management is integral to your Company’s strategy and for the achievement of our long-term goals. Our success as an organization depends on our ability to identify and leverage the opportunities while managing the risks.

The COVID-19 pandemic this year has posed several unprecedented challenges in the form of uncertain lockdowns, unlock phases, health hazards and supply chain disruptions across the globe. These have added a new dimension to the term VUCA (volatile, uncertain, complex and ambiguous).

These changes and challenges have brought a mix of opportunities and uncertainties impacting the Company’s objectives. Risk Management, which aims at managing the impact of these uncertainties, is an integral part of the Company’s strategy setting process. The Company regularly identifies uncertainties and after assessing them, devises short-term and long-term actions to mitigate any risk which could materially impact your Company’s long-term goals. This process of identifying and assessing the risks is a two-way process. Inputs are taken, both bottom up and top down while finalizing the risk treatment plans.

The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of reviewing the risk management process in the Company and ensuring that the risks are brought within acceptable limits.

Our approach to risk management is designed to provide reasonable assurance that our assets are safeguarded, the risks facing the business are being assessed and mitigated and all information that may be required to be disclosed is reported to Company’s Senior Management including, where appropriate, the Managing Director & CEO, the Chief Financial Officer, the Audit Committee, the Risk Management Committee and the Board.

Mitigation plans to significant risks are well integrated with functional and business plans and are reviewed on a regular basis by the senior leadership.

The Company endeavors to continually sharpen its Risk Management systems and processes in line with a rapidly changing business environment. There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Annual Report.

VIGIL MECHANISM

The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations.

The Company has engaged an agency for managing an ’Ethics Hotline’ which can be used to, inter alia, report any instances of financial irregularities, breach of code of conduct, abuse of authority, disclosure of financial/ unpublished price sensitive information other than for legitimate purposes, unethical/unfair actions concerning Company vendors/suppliers, malafide manipulation of Company records, discrimination to the Code of Conduct in an anonymous manner.

The Policy also provides adequate protection to the Directors, employees and business associates who report unethical practices and irregularities.

Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy. The Whistle Blower Policy of the Company can be accessed at website of the Company at https://www.asianpaints.com/more/investors/policies-programs.html.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Prevention of Sexual Harassment Act"), the Company has formulated a Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at workplace and an Internal Complaints Committees has also been set up to redress any such complaints received.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates. The Company periodically conducts sessions for employees across the organization to build awareness about the Policy and the provisions of Prevention of Sexual Harassment Act. Complaints of sexual harassment received during the financial year 2020-21 by the Company were investigated in accordance with the procedures prescribed and adequate steps were taken to resolve them.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has adequate Internal Financial Controls System over financial reporting which ensures that all transactions are authorized, recorded, and reported correctly in a timely manner. The Company’s Internal Financial Control over financial reporting is designed to provide reliable financial information and to comply with applicable accounting standards.

The Company has laid down Standard Operating Procedures and policies to guide the operations of the business. Functional heads are responsible to ensure compliance with all laws and regulations and also with the policies and procedures laid down by the Management.

During the year, the Company has updated the delegation of Authority Manual and Commercial Manual to make it in line with the changes in the business environment and underlying systems and processes. The Company has modified the format of the internal certification by functional heads on reporting accuracy (Financial Closure Certificate (FCC)) in line with the changes in accounting and reporting requirements.

The Shared Services Center (SSC) extended the coverage of digital invoice processing for transporters during the year. This has made the process touchless and seamless. Vendor Invoice Process Automation & Transporter Invoice Process Automation has inbuilt 3-way checks (PO, GR/Service Entry & invoice) in the system leading to accuracy and lower manual errors. To increase the digital footprints with added control, employee reimbursement and digital invoices are processed paperless.

The Company has invested in automation of inventory provisions for damaged, dead, defective, inert stock, etc. leading to robust review and faster closure of financial.

The Company has developed system with built in checks to ensure that GST and tax is collected at source correctly for all applicable transactions ensuring statutory compliance. The Company has also completed development to generate E-invoice through the system as per the government regulations.

The Company periodically tracks all amendments to Accounting Standards and makes changes to the underlying systems, processes and financial controls to ensure adherence to the same. All resultant changes to the policy and impact on financials are disclosed after due validation with the statutory auditors and the Audit Committee.

Corporate accounts function is actively involved in designing large process changes as well as validating changes to IT systems that have a bearing on the books of accounts.

The Company gets its Standalone financial statements audited every quarter by its Statutory Auditors. The policies to ensure uniform accounting treatment are prescribed to the subsidiary companies as well. International subsidiaries provide information required for consolidation of accounts in the format prescribed by the Company. The accounts of the subsidiary and joint venture companies are audited and certified by their respective Statutory Auditors for consolidation.

OTHER DISCLOSURES

a. None of the Directors of the Company have resigned during the year under review;

b. There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2020-21 and the date of this report;

c. During the year under review, the Company has launched its Home Décor Range in furniture, furnishings and lighting through ''Beautiful Homes''. This was in line with the Company’s vision of providing its customers complete home décor solution. There has been no other change in the nature of business carried out by the Company.

d. During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014;

e. 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;

f. 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;

The Competition Commission of India had passed a prima facie Order dated 14th January, 2020, directing the Director General (DG) to cause an investigation against the Company, under the provisions of Section 26(1) of the Competition Act, 2002. This Order is for initiating an investigation against the Company under the relevant provisions of the Competition Act, but it in no way affects the going concern status of the Company. The investigation is currently ongoing and the Company is fully co-operating and providing necessary information to the authority.

g. The Managing Director & CEO of the Company has not received any remuneration or commission from any of the subsidiary companies. Further the Company doesn’t have any Holding Company;

h. None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act;

i. The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Act read with the Companies (Accounts) Rules, 2014, is set out in the Annexure [E] to this report;

j. The Company has formulated Asian Paints Employees Stock Option Plan 2021 (ESOP) for Eligible Director(s) and Employees of the Company and its subsidiaries, which is subject to approval of the shareholders at the ensuing AGM. Hence, the disclosure requirement in relation to ESOP under Rule 12(9) and Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable yet;

k. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;

l. The Company has not issued any sweat equity shares to its directors or employees;

m. There was no revision of financial statements and Board''s Report of the Company during the year under review;

n. No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year is not applicable; and

o. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

APPRECIATION

The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.









For and on behalf of the Board of Directors
Place: Mumbai
Date: 12th May, 2021
Ashwin Dani
Chairman
(DIN: 00009126)


Mar 31, 2019

Dear Members,

The Board of Directors are pleased to present the Seventy-third Annual Report of the Company for the financial year ended 31st March, 2019.

Financial Results

The Company''s financial performance for the year ended 31st March, 2019 is summarized below:

(Rs. in Crores)

Standalone

Consolidated

Year ended 31.03.2019

Year ended 31.03.2018

Growth

(%)

Year ended 31.03.2019

Year ended 31.03.2018

Growth

(%)

Revenue from Operations*

16,391.78

14,153.71

15.8%

19,349.84

16,843.76

14.9%

Earning Before Interest, Taxes, Depreciation and

3,586.76

3,198.00

12.2%

3,751.58

3,418.23

9.8%

Amortisation

Less : Finance Cost

30.01

21.06

-

51.00

35.07

-

Less : Depreciation and Amortisation Expense

382.18

311.11

-

430.67

360.47

-

Profit for the period before share of profit of

3,174.57

2,865.83

10.8%

3,269.91

3,022.69

8.2%

associate

Share of profit of Associate

-

-

-

40.82

45.79

-

Profit Before Tax

3,174.57

2,865.83

10.8%

3,310.73

3,068.48

7.9%

Less : Tax Expense

1,039.81

971.03

-

1,098.82

1,040.96

-

Profit for the period from continuing operations

2,134.76

1,894.80

12.7%

2,211.91

2,027.52

9.1%

Profit before tax from discontinued operations

-

-

-

-

70.59

-

Tax expense of discontinued operations

-

-

-

-

0.59

-

Profit for the period from discontinued operations

-

-

-

-

70.00

-

Profit for the period

2,134.76

1,894.80

12.7%

2,211.91

2,097.52

5.5%

Attributable to:

Shareholders of the Company

2,134.76

1,894.80

12.7%

2,159.49

2,038.93

5.9%

Non Controlling Interest

-

-

-

52.42

58.59

-

Other Comprehensive Income (net of tax)

(18.18)

(3.97)

-

(13.60)

(34.80)

-

Total Comprehensive Income

2,116.58

1,890.83

11.9%

2,198.31

2,062.72

6.6%

Attributable to:

Shareholders of the company

2,116.58

1,890.83

11.9%

2,136.64

2,009.48

6.3%

Non-Controlling Interest

-

-

-

61.67

53.24

-

Opening balance in Retained Earnings

3,387.91

2,672.53

-

3,547.78

2,688.71

-

Amount available for Appropriation

5,496.31

4,575.33

-

5,681.56

4,736.24

-

Dividend - Interim - FY 2018-19

273.37

-

-

273.37

-

-

Interim - FY 2017-18

-

254.19

-

-

254.19

-

Final - FY 2017-18

580.31

-

-

580.31

-

-

Final - FY 2016-17

-

733.79

-

-

733.79

-

Tax on Dividend

173.50

199.44

-

173.50

199.44

-

Transfer to Other Reserve

-

-

-

0.74

1.04

-

Closing balance in Retained Earnings

4,469.13

3,387.91

-

4,653.64

3,547.78

-

* Figures for Revenue from Operations are comparable numbers i.e. Excise Duty has been removed as the same does not form part of Revenue post GST implementation.

Company’s Performance Review

During the financial year 2018-19:

- Revenue from operations on standalone basis increased to Rs.16,391.78 crores as against Rs.14,153.71 crores in the previous year - a growth of 15.8%.

- Cost of goods sold as a percentage to revenue from operations increased to 57.4% as against 56.4% in the previous year.

- Employee cost as a percentage to revenue from operations decreased to 5.5% (Rs. 902.79 crores) against 5.6% (Rs. 791.08 crores) in the previous year.

- Other expense as a percentage to revenue from operations decreased to 16.9% (? 2,770.42 crores) as against 17.4% (? 2,459.43 crores) in the previous year.

- The Profit after Tax for the current year is '' 2,134.76 crores against Rs.1,894.80 crores in the previous year - a growth of 12.7%.

- On a consolidated basis, the Company, its subsidiaries and joint venture companies, achieved revenue of Rs.19,349.84 crores as against Rs.16,843.76 crores - a growth of 14.9%. Net profit after non-controlling interest for the group for the current year is Rs. 2,159.49 crores as against Rs. 2,038.93 crores in the previous year - a growth of 5.9%.

Dividend

During the year under review, the Company paid to the shareholders, an interim dividend of Rs. 2.85 (Rupees two and paise eighty five only) per equity share of the face value of Rs.1 (Rupee one only) each in the month of November, 2018. In addition, the Board of Directors have recommended payment of Rs. 7.65 (Rupees seven and paise sixty fifty only) per equity share of the face value of Rs.1 (Rupee one only) each as final dividend for the financial year 2018-19, for the approval of the shareholders at the ensuing Annual General Meeting (''AGM'') of the Company.

If approved, the total dividend (interim and final dividend) for the financial year 2018-19 will be Rs.10.50 (Rupees ten and paise fifty only) per equity share of the face value of Rs.1 (Rupee one only) each as against the total dividend of Rs. 8.70 (Rupees eight and paise seventy only) per equity share of the face value of Rs.1 each (Rupee one only) paid for the previous financial year 2017-18.

The dividend declared and/or paid by the Company for the financial year 2018-19, is in compliance with the Dividend Distribution Policy

The Dividend Distribution Policy of the Company is set out as Annexure [A] and is also uploaded on the Company''s website https:// wwwasianpaints.com/more/investors/policies-proarams.html.

Investor Education and Protection Fund (IEPF)

In accordance with the applicable provisions of Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund ) Rules, 2016 (“IEPF Rules”), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority. The details relating to amount of dividend transferred to the IEPF and corresponding shares on which dividends were unclaimed for seven (7) consecutive years, are provided in the General Shareholders Information section of this Annual Report.

Material Changes Affecting the Company

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2018-19 and the date of this report. There has been no change in the nature of business of the Company.

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 2018-19, together with the Auditors'' Report form part of this Annual Report.

Subsidiaries & Associate Companies

Financial Performance:

A statement containing the salient features of financial statements of subsidiaries/joint venture companies of the Company in the prescribed Form AOC - 1 forms a part of Consolidated Financial Statements (CFS) in compliance with Section 129 (3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.

The said Form also highlights the financial performance of each of the subsidiaries and joint venture companies included in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.

In accordance with Section 136 of the Act, the financial statements of the subsidiary and associate companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the CFS, and all other documents required to be attached to this report have been uploaded on the website of the Company at www.asianpaints.com.

The Company has in accordance with the amendments to Listing Regulations revised the Policy for determining material subsidiaries. The said policy may be accessed on the website of the Company at https://www.asianpaints.com/more/investors/policies-programs. html. The Company has no material subsidiary company

The Board of Directors at their meeting held on 9th May, 2019, have, inter alia, approved the following investments approximately in accordance with the applicable provisions of law:

(i) Rs. 300 crores by way of subscription of equity shares of Asian Paints International Private Limited (APIPL), Singapore, wholly owned subsidiary of the Company, for the purpose of meeting funding requirements of its step down operating subsidiaries; and

(ii) Rs. 80 crores by way of subscription of equity shares of Sleek International Private Limited (Sleek), wholly owned subsidiary of the Company, to meet its requirements towards capital expenditure and working capital.

The aforementioned infusion in the equity shares of APIPL and Sleek is for furtherance of their business objectives.

Directors and Key Managerial Personnel

Sad Demise of Mr. Ashwin Choksi, erstwhile Chairman of the Company

Mr. Ashwin Choksi, erstwhile Non-Executive Chairman of the Company, left for heavenly abode on 19th September, 2018, after a brief illness.

Late Mr. Ashwin Choksi was associated with the Company since 1965. He became the Managing Director of the Company in 1984. As an Executive Chairman for more than a decade, he pioneered to imbibe the best governance standards with entrepreneurship in the Company. He stepped down as Executive Chairman of the Company in 2009 and continued to hold the position of Non - Executive Chairman since then.

Late Mr. Ashwin Choksi was the Chairman of the Company for more than two decades and the Company immensely benefitted from his vision and leadership. He was a humble and down to earth individual who led the Company without being in limelight. His sad demise is an irreparable loss to the Company.

The Board of Directors of the Company express their deep condolences and pay tribute to late Mr. Ashwin Choksi, a great visionary leader.

Appointment of Mr. Ashwin Dani as the Chairman of the Company

The Board of Directors of the Company at their meeting held on 5th November, 2018, elected Mr. Ashwin Dani as the Non-Executive Chairman of the Board and Company till the Annual General Meeting of the Company for the financial year 2020-21.

Change in Directorate

(i) Appointment of Mr. Manish Choksi on the Board of Directors of the Company

The Board of Directors of the Company at their meeting held on 22nd October, 2018, based on the recommendations of the Nomination & Remuneration Committee approved the appointment of Mr. Manish Choksi as a Non - Executive Promoter Director, to fill the casual vacancy created on the Board on account of the sad demise of Mr. Ashwin Choksi. The shareholders subsequently approved his appointment in casual vacancy by way of postal ballot with requisite majority.

The Board of Directors at their meeting held on 5th November, 2018, appointed Mr. Manish Choksi as the Non-Executive Vice-Chairman of the Board and the Company

Mr. Manish Choksi joined the Company in the year 1992 as an Executive and had grown in ranks by holding various positions across Sales, Engineering, Marketing in the Decorative and Industrial paint businesses. He transformed the Information Technology function of the Company and has been instrumental in leveraging the IT solutions across the extended enterprise and achieving improved business performance. He also headed the International Business of the Company and spearheaded the Company''s efforts in expansion of its emerging markets portfolio. He had been a catalyst for the Company''s foray into home improvement.

Before being inducted as the Non-Executive Director, he held the position of President - International Business, IT, HR & Chemicals in the Company. He was also a member of the Executive Council of the Company.

(ii) The Board of Directors at their meeting held on 21st December, 2018 on recommendations of the Nomination & Remuneration Committee, inter alia, approved the following changes to the Board of Directors of the Company, subject to approval of shareholders of the Company. The shareholders have since approved their appointments/re - appointments with requisite majority by way of postal ballot, the results of which were declared on 26th February, 2019:

(a) Continuation of Mr. Ashwin Dani (76 years) as a Non -Executive Promoter Director (liable to retire by rotation) of the Company after 31st March, 2019 in compliance with the Regulation 17(1A) of Listing Regulations

Regulation 17(1A) of the Listing Regulations provides that listed entities shall not appoint any person or continue the directorship of any person, who has attained the age of 75 years, unless approval of shareholders have been obtained by way of special resolution. Accordingly, approval of the shareholders was obtained for continuation of Mr. Ashwin Dani''s directorship.

Mr. Ashwin Dani has been associated with the Company since 1968. He joined the Company as a Senior Executive and moved through successive senior positions like Director - R&D, Works Director, Whole-time Director and served as Vice-Chairman and Managing Director from December, 1997 to March, 2009. He continued to hold the position of Non-Executive Vice Chairman of the Company until he was appointed as the Non- Executive Chairman of the Company on 5th November, 2018. Mr. Ashwin Dani is a technocrat and drives strong focus on Research and Development initiatives within the Company. His knowledge of the business environment and vast experience in general management has been an asset to the Company

(b) Appointment of Mr. Suresh Narayanan as an Independent Director on the Board of Directors of the Company for a period of 5 years w.e.f. 1st April, 2019 to 31st March, 2024, pursuant to applicable provisions of the Act read with the Rules issued thereunder and the Listing Regulations

Mr. Suresh Narayanan is currently the Chairman & MD of Nestle India Limited. He joined Nestle in the year 1999 and has been associated with the Company since then. He has grown across ranks in the Sales & Marketing Department and held various positions in Nestle, India and other countries. He was the Chairman and CEO of Nestle Philippines, Inc. prior to joining Nestle India.

(c) Appointment of Mrs. Pallavi Shroff as an Independent Director on the Board of Directors of the Company for a period of 5 years w.e.f. 1st April, 2019 to 31st March, 2024, pursuant to applicable provisions of the Act read with the Rules issued thereunder and the Listing Regulations

Mrs. Pallavi Shroff is the Managing Partner of M/s. Shardul Amarchand Mangaldas, with extensive experience of over 37 years. Her broad and varied representation of public and private corporations and other entities before legal institutions, has earned her national and international acclaim. Mrs. Shroff has always been active in public policy related work. She appears regularly in the Supreme Court and High Courts of India, and in arbitrations, mediations and international legal disputes.

(d) Re-appointment of the following Independent Directors, not liable to retire by rotation, (whose tenure came to an end on 31st March, 2019) for a second term pursuant to applicable provisions of the Act read with the Rules issued thereunder and Listing Regulations:

- Dr. S. Sivaram (72 years) re-appointed upto 30th September, 2021;

- Mr. M. K. Sharma (72 years) re-appointed upto 31st March, 2022;

- Mr. Deepak Satwalekar (70 years) re-appointed upto 30th September, 2023; and

- Mrs. Vibha Paul Rishi (59 years) re-appointed upto 31st March, 2024.

The aforementioned appointments were based on outcome of performance evaluation exercise, experience and contributions made by Dr. S. Sivaram, Mr. M. K. Sharma, Mr. Deepak Satwalekar and Mrs. Vibha Paul Rishi in their previous tenure.

The respective tenure(s) of Dr. S Sivaram, Mr. M. K. Sharma and Mr. Deepak Satwalekar were decided considering the year in which each of them will attain the age of 75 years.

(iii) Cessation of directorship of Mr. Mahendra Choksi, NonExecutive Director

Mr. Mahendra Choksi, Non - Executive Director of the Company informed the Board of Directors at its meeting held on 21st December, 2018, of his desire to step down from directorship in view of his age and in order to comply with Regulation 17(1A) of the Listing Regulations.

Mr. Mahendra Choksi had joined the Board in the year 1992 and since then has been an integral part of the Board and its Committees where he was a member. He has contributed immensely to the functioning of the Board and the management has also benefitted from his advice and directions. The Board places on record gratitude for his advice and guidance.

(iv) Retirement of Non - Executive Directors

Mr. Mahendra Shah and Mr. S Ramadorai, Independent Director(s) of the Company, informed the Board of Directors at its Meeting held on 21st December, 2018, that they would not be seeking re-appointment in view of their age and in compliance with Regulation 17(1A) of the Listing Regulations.

Mr. Mahendra Shah joined the Board as an Independent Director in the year 2001 and the Company has immensely benefitted from his guidance. The Board places on record appreciation for his thoroughness, dedication and commitment.

Mr. S Ramadorai joined the Board in the year 2009 and since then has significantly contributed to the functioning of the Board. The Board places on record appreciation for his perspective and thought leadership towards overall functioning of the Company.

(v) Appointment of Mr. Jigish Choksi as an Additional/Non -Executive Promoter Director of the Company

The Board of Directors of the Company at their meeting held on 29th March, 2019, based on the recommendation of the Nomination and Remuneration Committee, had approved the appointment of Mr. Jigish Choksi as an Additional/Non-Executive Director with effect from 1st April, 2019, subject to approval of shareholders of the Company.

Mr. Jigish Choksi has worked in the Sales & Marketing function of the Company for five years and is well versed with the functioning of the Company. He is also actively involved in his family businesses.

Approval of the shareholders is sought at the ensuing AGM for the appointment of Mr. Jigish Choksi as the Non-Executive Director of the Company, liable to retire by rotation. The Board and Nomination & Remuneration Committee recommend his appointment.

(vi) Retirement by rotation and subsequent re-appointment

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and the Articles of Association of the Company, Mr. Abhay Vakil and Mr. Malav Dani, Non-Executive Directors, are liable to retire by rotation at the ensuing AGM and being eligible have offered themselves for re-appointment.

In accordance with the provisions of the Act read with the Rules issued thereunder, the Listing Regulations and the Articles of Association of the Company, Additional Director, Independent Directors and the Managing Director of the Company are not liable to retire by rotation.

Board of Directors

Declaration of independence from Independent Directors:

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder, as well as clause (b) of sub-regulation (1) of Regulation 16 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.

Number of meetings of the Board:

7 (seven) meetings of the Board of Directors were held during the financial year 2018 - 19. The details of the meetings of the Board of Directors of the Company convened during the financial year 2018-19 are given in the Corporate Governance Report which forms part of this Annual Report.

Nomination and Remuneration Policy

During the year under review, the Company has revised the Nomination and Remuneration Policy, in accordance with the amendments to Section 178 of the Act and Listing Regulations. The salient features of the Policy and changes therein are set out in the Corporate Governance Report which forms part of this Annual Report.

The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Act and Listing Regulations.

The Policy is also available on the website of the Company https:// www.asianpaints.com/more/investors/policies-programs.html.

Remuneration of Directors, Key Managerial Personnel and particulars of employees:

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The information required under Section 197 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/employees of the Company is set out in the Annexure [B] to this report and is also available on the website of the Company (www.asianpaints.com).

Performance Evaluation:

The Nomination and Remuneration Policy of the Company empowers the Nomination and Remuneration Committee to formulate a process for evaluating the performance of Individual Directors, Committees of the Board and the Board as a whole.

The parameters for the performance evaluation of the Board, inter alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.

The parameters for the performance evaluation of the Directors include attendance, effective participation in meetings of the Board, domain knowledge, vision, strategy, etc.

The Chairperson(s) of the respective Committees based on feedback received from the Committee members on the outcome of performance evaluation exercise of the Committee, shares a report to the Board.

The details of the evaluation process are set out in the Corporate Governance Report which forms a part of this Annual Report.

Directors'' Responsibility Statement

Pursuant to Section 134 of the Act (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors of the Company state that:

a. in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profits of the Company for the financial year ended 31st March, 2019;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a ‘going concern'' basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

Management Discussion and Analysis

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report. It provides details about the overall industry structure, global and domestic economic scenarios, developments in business operations/ performance of the Company''s various businesses viz., decorative business, international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2018-19.

Auditors and Auditors’ Report

Statutory Auditor:

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), were appointed as Statutory Auditors of the Company at the 70th AGM held on 28th June, 2016, to hold office till the conclusion of the 75th AGM.

M/s. Deloitte Haskins & Sells LLP have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors have issued an unmodified opinion on the Financial Statements for the financial year ended 31st March, 2019. During the financial year ended 31st March, 2019, there had been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund, other than two instances of delays aggregating to '' 3.52 lakhs on account of unclaimed sales proceeds of fractional shares arising out of sale of bonus shares in earlier years.

The Auditors'' Report for the financial year ended 31st March, 2019 on the financial statements of the Company is a part of this Annual Report.

Cost Auditor:

The Company is required to maintain cost records for certain products as specified by the Central Government under sub-section (1) of Section 148 of the Act, and accordingly such accounts and records are made and maintained in the prescribed manner.

The Board of Directors of the Company, on the recommendations made by the Audit Committee, has appointed M/s. RA & Co., Cost Accountants, (Firm Registration No. 000242) as the Cost Auditor of the Company to conduct the audit of cost records of certain products for the financial year 2019 - 20.

The remuneration proposed to be paid to the Cost Auditor, subject to ratification by the members of the Company at the ensuing 73rd AGM, would not exceed Rs. 6.75 lakhs (Rupees six lakhs and seventy five thousand only) excluding taxes and out of pocket expenses, if any.

The Company has received consent from M/s. RA & Co., Cost Accountants, to act as the Cost Auditor for conducting audit of the cost records for the financial year 2019-20 along with a certificate confirming their independence and arm''s length relationship.

Secretarial Auditor:

The Board of Directors of the Company has appointed Dr. K R Chandratre, Practicing Company Secretary (Certificate of Practice No. 5144), as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2019 - 20.

The Company has received consent from Dr. K. R. Chandratre to act as the auditor for conducting audit of the secretarial records for the financial year ending 31st March, 2019.

The Secretarial Audit Report for the financial year ended 31st March, 2019 under Companies Act, 2013, read with Rules made thereunder and Regulation 24A of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in the Annexure [C-1] to this report.

The Secretarial Compliance Report for the financial year ended 31st March, 2019, in relation to compliance of all applicable SEBI Regulations/circulars/ guidelines issued thereunder, pursuant to requirement of Regulation 24A of Listing Regulations is set out in Annexure [C-2] to this report. The Secretarial Compliance Report has been voluntarily disclosed as part of Annual Report as good disclosure practice.

The Secretarial Audit Report and/or Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Audit Committee

As on 1st April, 2019, the Audit Committee comprises of Mr. M. K. Sharma (Chairman), Mr. Abhay Vakil, Mr. R Seshasayee and Mr. Suresh Narayanan. The Board of Directors at their meeting held on 29th March, 2019 appointed Mr. Suresh Narayanan, Independent Director as a member of the Committee in place of Mr. Mahendra Shah who retired as a Director on 31st March, 2019. Mr. Jayesh Merchant acts as Secretary to the Audit Committee.

All members of the Audit Committee are financially literate and have experience in financial management.

All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company.

Corporate Social Responsibility (CSR)

As on 1st April, 2019, the CSR Committee comprises of Mr. Malav Dani (Chairman), Mrs. Vibha Paul Rishi, Mr. KBS Anand and Ms. Amrita Vakil. The Board of Directors at their meeting held on 29th March, 2019 appointed Ms. Amrita Vakil as a member of the Committee and Mr. Mahendra Choksi and Mr. S Ramadorai ceased to be members of the Committee consequent to their ceasing to be Directors of the Company. Mr. Jayesh Merchant acts as Secretary to the CSR Committee.

During the financial year ended 31st March, 2019, the Company incurred CSR Expenditure of '' 52.70 crores (Rupees fifty two crores and seventy lakhs only). The CSR initiatives of the Company were under the thrust area of health & hygiene, education, water management and vocational training. The CSR Policy of the Company is available on the website of the Company at https://www.asianpaints.com/more/about-us. html.

The Company''s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2019, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in Annexure [D] to this report.

Corporate Governance Report

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance forms an integral part of this Annual Report.

Business Responsibility Report

A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.

Extract of Annual Return

The extract of the Annual Return of the Company as on 31st March, 2019 in Form MGT - 9 in accordance with Section 92 (3) of the Act read with Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.asianpaints.com/more/investors/ financial-results.html and is set out in Annexure [E] to this Report.

Related Party Transactions

During the year under review, the Company revised its Policy on dealing with and Materiality of Related Party Transactions, in accordance with the amendments to the applicable provisions of the Listing Regulations. The Policy is also available on the website of the Company at https://www.asianpaints.com/ more/investors/policies-programs.html.

All contracts/arrangements/transactions entered into by the Company with Related Parties were in ordinary course of business and on arm''s length basis.

The Company has not entered into any contracts/ arrangements/transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions.

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on dealing with and Materiality of Related Party Transactions, formulated by the Company.

There are no materially significant related party transactions that may have potential conflict with interest of the Company at large. There are no person(s) or entities forming part of the Promoter(s)/Promoter(s) Group which individually hold 10% or more shareholding in the Company.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 42 to the Standalone Financial Statements of the Company.

Form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure [F] to this report.

Loans and Investments

Details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2019, are set out in Note 37(B) to the Standalone Financial Statements of the Company.

Manufacturing Capacity Expansion

During the year under review, the Company commenced commercial production of water based paints and intermediaries at its following manufacturing facilities, in India:

i. Mysuru Plant situated in the state of Karnataka, with an initial capacity of 3 (three) lakh KL p.a., having ultimate capacity of 6(six) lakh KL p.a.

ii. Vishakhapatnam Plant situated in the state of Andhra Pradesh, with an initial capacity of 3 (three) lakh KL p.a., having ultimate capacity of 5(five) lakh KL p.a.

The said expansion will give the Company the ability to ensure it has sufficient capacity to meet future needs.

Risk Management

The Company has a well-defined process in place to ensure appropriate identification and mitigation of risks. Risk identification exercise is inter-woven with the annual planning cycle which ensures both regularity and comprehensiveness. The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of identification of risks at strategic, business, operational and process levels, formulating mitigation plan and actions for the identified risks, which are driven by senior leadership.

The key strategic, business and operational risks which are significant in terms of their impact to the overall objectives of the Company along with status of the mitigation plans are periodically presented and discussed in the Risk Management Committee meetings. Inputs from the Risk Management Committee are duly incorporated in the action plans. All significant risks mitigation plans are well integrated with functional and business plans and are reviewed on a regular basis by the senior leadership.

The Company, through its risk management process, aims to contain the risks within its risk appetite. There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Annual Report.

Vigil Mechanism

The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177 (10) of the Act and Regulation 22 of the Listing Regulations.

The Company has engaged an agency for managing an ''Ethics Hotline'' which can be used to, inter alia, report any instances of financial irregularities, breach of code of conduct, abuse of authority, disclosure of financial / price sensitive information, unethical / unfair actions concerning company vendors / suppliers, mala-fide manipulation of Company records, discrimination to the Code of Conduct in an anonymous manner.

The Policy also provides protection to the employees and business associates who report unethical practices and irregularities.

Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy.

The Whistle Blower Policy of the Company can be accessed at website of the Company at https://www.asianpaints.com/more/ investors/policies-programs.html.

Policy on Prevention of Sexual Harassment at Workplace

The Company has formulated a Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter referred to as “Prevention of Sexual Harassment Act”). Internal Complaints Committees have also been set up to redress any such complaints received.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

The Company periodically conducts sessions for employees across the organization to build awareness about the Policy and the provisions of Prevention of Sexual Harassment Act.

Complaints of sexual harassment received during the financial year 2018-19 by the Company were investigated in accordance with the procedures prescribed and adequate steps were taken to resolve them.

Internal Financial Controls Related to Financial Statements

The Company has sound internal financial controls commensurate to the size and nature of its business. The Company periodically reviews the internal financial controls in the light of new statutes, changes in business models, adoption of new technology solutions and suggestions for improvements received from employees.

During the year, the Company upgraded its core ERP system to the latest SAP S/4 HANA version. All key internal controls over financial reporting identified as part of the risk and control matrix were thoroughly tested along with the core functionalities before migrating to the new system.

The shared services center (SSC) deployed automation to read digitally signed invoices from select vendors and after necessary validations parks the document in the SAP system. This has increased efficiency and also works towards eliminating manual errors. The Company is in the process of extending this to other vendors in the coming year.

The Company has workflows to ensure adherence to the delegation of authority manual. This manual specifies the limits at a grade level for approval of various expenses, including capital expenditure. For the ones where workflows have not been deployed, the SSC verifies the same before clearing the payments.

For all amendments to Accounting Standards and the new standards notified, the Company carries out a detailed analysis and presents the impact on accounting policies of the Group, the impact on financial results, including revised disclosures to the Audit Committee. The approach and changes in policies are also validated with the statutory auditors. The Company takes steps to make these amendments as part of the underlying ERP systems to the extent possible.

All key controls are periodically tested by the management and few of them are critically tested for adequacy in design and operating effectiveness by the internal auditors of the Company.

The Company has a stated process and periodicity for physical verification of its inventory and fixed assets. Any variances are analysed and accounted post necessary approvals.

Estimates and judgements made in the preparation of financial statements are reviewed closely by the corporate accounts team. Past trends and variances are analysed by the management and verified by the Statutory auditors.

The Company gets its Standalone financial statements audited every quarter by its Statutory Auditors. The policies to ensure uniform accounting treatment are prescribed to the subsidiary companies as well. The accounts of the subsidiary and joint venture companies are audited and certified by their respective Statutory Auditors for consolidation.

Other Disclosures

a. During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re- enactment(s) thereof for the time being in force);

b. 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;

c. 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;

d. The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Act read with the Companies (Accounts) Rules, 2014, is set out in the Annexure [G] to this report;

e. The Managing Director & CEO of the Company has not received any remuneration or commission from any of the subsidiary companies;

f. None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force);

g. The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors; and

h. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

Appreciation

The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of Directors

Ashwin Dani

Chairman

(DIN: 00009126)

Place : Mumbai,

Date : 9th May, 2019


Mar 31, 2018

Board''s Report

Dear Members,

The Board of Directors are pleased to present the 72nd Annual Report of the Company for the financial year ended 31st March, 2018.

FINANCIAL RESULTS

The Company''s financial performance for the year ended 31st March, 2018 is summarized below:

(Rs, in Crores)

Standalone

Consolidated

Year ended 31.03.2018

Year ended 31.03.2017

Growth

(%)

Year ended 31.03.2018

Year ended 31.03.2017

Growth

(%)

Revenue from Operations*

14,153.71

12,722.76

11.2%

16,843.76

15,168.18

11.0%

Earning BeFore Interest, Taxes, Depreciation and Amortisation

3,198.00

2,971.01

7.6%

3,418.23

3,248.85

5.2%

Less : Finance Cost

21.06

18.86

-

35.07

29.99

-

Less : Depreciation and Amortisation Expense

311.11

295.43

-

360.47

334.79

-

Profit For the period beFore share of profit

2,865.83

2,656.72

7.9%

3,022.69

2,884.07

4.8%

in associate

Share of profit ofAssociate

-

-

-

45.79

49.61

-

Profit BeFore Tax

2,865.83

2,656.72

7.9%

3,068.48

2,933.68

4.6%

Less: Tax Expense

971.03

855.00

1,040.96

943.29

Profit For the period From continuing

1,894.80

1,801.72

5.2%

2,027.52

1,990.39

1.9%

operations

Profit before tax From discontinued operations

-

-

-

70.59

30.55

-

Tax expense of discontinued operations

-

-

-

0.59

4.69

-

Profit For the period From discontinued

-

-

-

70.00

25.86

-

operations

Profit For the period

1,894.80

1,801.72

5.2%

2,097.52

2,016.25

4.0%

Attributable to:

Shareholders of the Company

1,894.80

1,801.72

5.2%

2,038.93

1,939.43

5.1%

Non Controlling Interest

-

-

-

58.59

76.82

-

Other Comprehensive Income (net of tax)

(3.97)

139.04

-

(34.80)

9.26

-

Total Comprehensive Income

1,890.83

1,940.76

-2.6%

2,062.72

2,025.51

1.8%

Attributable to:

Shareholders of the company

1,890.83

1,940.76

-2.6%

2,009.48

1,999.99

0.5%

Non-Controlling Interest

-

-

-

53.24

25.52

-

Opening balance in Retained Earnings

2,672.53

2,282.32

-

2,688.71

2,141.50

-

AMOUNT AVAILABLE FOR APPROPRIATION

4,575.33

4,089.42

-

4,736.24

4,106.21

-

Dividend - Interim - FY 2017-18

254.19

-

-

254.19

-

-

Interim - FY 2016-17

-

254.19

-

-

254.19

-

Final- FY 2016-17

733.79

-

-

733.79

-

-

Final- FY 2015-16

-

508.37

-

-

508.37

-

Tax on Dividend

199.44

154.33

-

199.44

154.33

-

Transfer to General Reserve

-

500.00

-

-

500.00

-

Transfer to Other Reserve

-

-

-

1.04

0.61

-

Closing balance in Retained Earnings

3,387.91

2,672.53

-

3,547.78

2,688.71

-

* Figures for Revenue from Operations are comparable numbers .i.e Excise Duty has been removed as same does not form part of Revenue post GST implementation.

COMPANY''S PERFORMANCE REVIEW

During the financial year 2017-18, revenue from operations on standalone basis increased to Rs, 14,153.71 crores as against Rs, 12,722.76 crores in the previous year - a growth of 11.2%.

Cost of goods sold as a percentage to revenue from operations increased to 56.40 % as against 54.58 % in the previous year.

Employee cost as a percentage to revenue From operations decreased to 5.6% (Rs, 791.08 crores) against 5.8% (Rs, 742.83 crores) in the previous year.

Other expense as a percentage to revenue From operations decreased to 17.4% (Rs, 2,459.43 crores) as against 18.6% (Rs, 2,365.04 crores) in the previous year.

The Profit After-tax For the current year is Rs, 1,894.80 crores against Rs, 1,801.72 crores in the previous year - a growth of 5.2%.

On a consolidated basis, the group achieved revenue of Rs, 16,843.76 crores as againstRs, 15,168.18 crores - a growth of11.0%. Net profit after non-controlling interest for the group for the current year is W 2,038.93 crores as against W 1,939.43 crores in the previousyear-a growth of 5.1%.

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2017-18and the date of this report. There has been no change in the nature of business of the Company.

DIVIDEND

During the year under review, the Company declared and paid to the shareholders, an interim dividend of Rs, 2.65 (Rupees two and paise sixty Five only) per equity share of the Face value of Rs, 1 (Rupee one only) each in the month of October, 2017. In addition, the Directors have recommended payment of Rs, 6.05 (Rupees six and paise Five only) per equity share of the Face value ofRs, 1 (Rupee one only) each as Final dividend For the Financial year 2017-18, For the approval of the shareholders at the ensuing Annual General Meeting of the Company. IF approved, the total dividend (interim and Final dividend) For the Financial year 2017 - 18 will be Rs, 8.70 (Rupees eight and paise seventy only) per equity share of the Face value ofRs, 1 (Rupee one only) each as against the total dividend of Rs, 10.30 (Rupees ten and paise thirty only) per equity share of the Face value of Rs, 1 each (Rupee one only) paid For the previous Financial year 2016-17 which included one-time special dividend of Rs, 2 (Rupees two only) per equity share of the Face value of Rs, 1 each (Rupee one only).

The Dividend Distribution Policy of the Company is set out as Annexure [A] and the same is uploaded on the Company''s website (https://www.asianpaints.com/more/investors/ policies-programs.html).

CONSOLIDATED FINANCIAL STATEMENTS

As per 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 provisions of the Companies Act, 2013 read with the Rules issued there under, the Consolidated Financial Statements of the Company For the Financial year 2017-18 have been prepared in compliance with applicable Accounting Standards and on the basis of audited Financial statements of the Company, its subsidiaries and associate companies, as approved by the respective Board of Directors.

The Consolidated Financial Statements together with the Auditors'' Report Form part of this Annual Report.

SUBSIDIARIES & ASSOCIATE COMPANIES Financial Performance:

A separate statement containing the salient Features of Financial statements of all subsidiaries of the Company in the prescribed Form AOC - 1 Forms a part of consolidated Financial statements in compliance with Section 129 (3) and other applicable provisions, iF any, of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014. The said Form also highlights the Financial performance of each of the subsidiaries and joint venture companies included in the consolidated Financial statements of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.

In accordance with Section 136 of the Companies Act, 2013, the Financial statements of the subsidiary and associate companies are available For inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (''AGM''). Any member desirous of obtaining a copy of the said Financial statements may write to the Company Secretary at the Registered Office of the Company. The Financial statements including the consolidated Financial statements, and all other documents required to be attached to this report have been uploaded on the website of the Company (www.asianpaints.com). The Company has Formulated a policy For determining material subsidiaries. The policy may be accessed on the website of the Company (https://www. asianpaints.com/more/investors/policies-programs.html).

During the year under review:

a. In order to consolidate, the Company''s investments in overseas subsidiary companies, Asian Paints (International) Limited, Mauritius, wholly owned subsidiary was amalgamated with the Company pursuant to an Order dated 29th November, 2017 passed by the Mumbai Bench of the Hon''ble National Company Law Tribunal pursuant to Sections 230 to 232 and 234, other applicable provisions of the Companies Act, 2013 and any other applicable Regulations. The appointed date For the Scheme of amalgamation was 1st January, 2017.

The merger was effective 15th January, 2018 after obtaining necessary approvals including approval From the Registrar of Companies, Mauritius.

b. The Company acquired the balance 49% of the paid up share capital of Sleek International Private Limited (Sleek) From the Ahuja Family For a consideration of Rs, 50 crores (Rupee Fifty crores only). Sleek is now a wholly owned subsidiary of the Company.

c. The Company acquired 100% stake in Reno Chemicals Pharmaceuticals & Cosmetics Private Limited (Reno) for an amount of Rs, 159.52 crores (Rupees one hundred fifty nine crores and fifty two lakhs only) with an objective of using the land and building of Reno to meet the Company''s growing infrastructure requirements.

d. The Company fully exited from its operations in the Caribbean region carried on through Lewis Berger (Overseas Holdings) Limited (LBOH), United Kingdom, indirect subsidiary of the Company, for a consideration of Rs, 189.16 crores (Rupees one hundred eighty nine crores and sixteen lakhs only) (approx). The divestment was with an objective to focus on its international presence in growing geographies across the continents of Asia and Africa.

EXPANSION OF MANUFACTURING CAPACITY AT ANKLESHWAR, GUJARAT

During the year under review, the Company resolved to expand the existing paint manufacturing capacity at its unit situated at Ankleshwar, Gujarat, from 1,30,000 KL to 3,00,000 KL per annum and to augment the manufacturing capacity of synthetic resins and emulsions from existing

32,000 MT to 85,000 MT (approx.) over a span of the next 3 - 4 years.

The said expansion and augmentation would involve phasing out the current Phthalic Anhydride and its allied products manufactured at this facility.

The Company is awaiting necessary approvals from statutory authorities and will thereafter work on this project in a phased manner.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by rotation and subsequent re-appointment:

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and the Articles of Association of the Company, Mr. Ashwin Choksi (Non-Executive Chairman) and Mr. Ashwin Dani (Non-Executive Vice-Chairman), are liable to retire by rotation at the ensuing AGM and being eligible have offered themselves for re-appointment.

In accordance with the provisions of the Companies Act,

2013 read with the Rules issued thereunder, the Listing Regulations and the Articles of Association of the Company, the Independent Directors and the Managing Director of the Company are not liable to retire by rotation.

Declaration of independence from Independent Directors:

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and

Rules issued thereunder as well as Regulation 16 of Listing

Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

Number of meetings of the Board:

8 (eight) meetings of the Board of Directors were held during the financial year. The details of the meetings of the Board of Directors of the Company convened during the financialyear 2017-18 are given in the Corporate Governance Report which forms part of this Annual Report.

Remuneration of directors, key managerial personnel and particulars of employees:

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any

statutory modification(s) or re-enactment(s) thereof for the time being in force).

The information required underSection 197 ofthe Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/ employees of the Company is set out in the Annexure [B] to this report and is also available on the website of the Company (www.asianpaints.com).

Nomination and Remuneration Policy:

The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations.

The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Executive, Non-Executive and Independent Directors on the Board of Directors of the Company and persons in the Senior Management of the Company, their remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The salient features of the Policy is set out in the Corporate Governance Report which forms part of this Annual Report. The Policy is also available on the website of the Company https://www.asianpaints.com/more/investors/policies-programs.html.

Performance Evaluation:

The Nomination and Remuneration Policy of the Company empowers the Nomination and Remuneration Committee to formulate a process for evaluating the performance of Directors, Committees of the Board and the Board as a whole.

The process for evaluation of the performance of the Director(s) / Board / Committees of the Board for the

financialyear 2017-18was initiated by the Nomination and

Remuneration Committee, by triggering online Survey(s) to all Directors.

The Directors carried out the annual performance evaluation of the Board, Committees of Board and individual Directors

along with assessing the quality, quantity and timeliness of How ofinformation between the Company management and the Board that is necessary For the Board to effectively and reasonably perform their duties.

The details of the evaluation process are set out in the Corporate Governance Report which forms a part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013

(including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors of the Company confirm that:

a. in the preparation of the annual accounts for the financialyear ended 31st March, 2018, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as

to give a true and Fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit and loss of the Company for the financial year ended 31st March, 2018;

c. proper and sufficient care has been taken 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;

d. the annual accounts have been prepared on a ''going concern'' basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

AUDIT COMMITTEE

The composition of the Audit Committee is in alignment with provisions of Section 177 of the Companies Act, 2013 read with the Rules issued there under and Regulation 18 of the Listing Regulations. The members of the Audit Committee are financially literate and have experience in financial management.

The Audit Committee comprises of Mr. M. K. Sharma,

Mr. Mahendra Shah, Mr. Abhay Vakil and Mr. R Seshasayee. Mr. Jayesh Merchant acts as Secretary to the Audit Committee.

All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report. It speaks about the overall industry structure, global and domestic economic scenarios, developments in business operations/ performance of the Company''s various businesses viz., decorative business, international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2017-18.

CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance forms an integral part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.

AUDITORS AND AUDITORS'' REPORT

Statutory Auditor:

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), were appointed as Statutory Auditors of the Company at the 70th AGM till the conclusion of the 75th AGM.

M/s. Deloitte Haskins & Sells LLP have confirmed their eligibility and qualification required under Sections 139,

141 and other applicable provisions of the Companies Act, 2013 and Rules issued there under (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The Auditors'' Report for the financial year ended 31st March, 2018 on the financial statements of the Company is a part of this Annual Report. The Auditors'' Report for the financial year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark.

Cost Auditor:

The Board of Directors of the Company, on the recommendations made by the Audit Committee, has appointed M/s. RA & Co., Cost Accountants, (Firm Registration No. 000242) as the Cost Auditor of the Company to conduct the audit of cost records For the financial year 2018-19. The remuneration proposed to be paid to the Cost Auditor, subject to ratification by the shareholders of the Company at the ensuing 72nd AGM, would not exceed '' 6.75 lakhs (Rupees six lakhs seventy five thousand only) excluding taxes and out of pocket expenses, if any.

The Company has received consent From M/s. RA & Co.,

Cost Accountants, to act as the Cost Auditor For conducting audit of the cost records for the financial year 2018-19 along with a certificate confirming their independence and arm''s length relationship.

Secretarial Auditor:

The Board of Directors of the Company has appointed Dr. K R Chandratre, Practicing Company Secretary

(Certificate of Practice No. 5144), as the Secretarial Auditor to conduct an audit of the secretarial records For the financial year 2018-19.

The Company has received consent From Dr. K. R. Chandratre to act as the auditor For conducting audit of the secretarial records for the financial year ending 31st March, 2018.

The Secretarial Audit Report for the financial year ended 31st March, 2018 is set out in the Annexure [C] to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return of the Company as on 31st March, 2018 in Form MGT - 9 in accordance with Section 92 (3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out in the Annexure [D] to this report.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company with Related Parties were in ordinary course of business and at arm''s length basis.

During the year under review, the Company has not entered into any contracts/arrangements/transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions.

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions Formulated by the Company.

There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 43 to the Standalone Financial Statements of the Company.

Form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure [E] to this report.

LOANS AND INVESTMENTS

Details of loans, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2018, are set out in Note 38 to the Standalone Financial Statements of the Company.

RISK MANAGEMENT

The Company has a well-defined process in place to ensure appropriate identification and treatment of risks. Risk identification exercise is inter-woven with the annual planning cycle which ensures both regularity and comprehensiveness. The identification of risks is done at strategic, business, operational and process levels. While the mitigation plan and actions For risks belonging to strategic, business and key critical operational risks are driven by senior leadership, For rest of the risks, operating managers drive the conception and subsequent auctioning of mitigation plans.

The key strategic, business and operational risks which are significant in terms of their impact to the overall objectives of the Company along with status of the mitigation plans are periodically presented and discussed in the Risk Management Committee (RMC) meetings. Inputs From the RMC are duly incorporated in the action plans. AH significant risks are well integrated with Functional and business plans and are reviewed on a regular basis by the senior leadership.

The Company, through its risk management process, aims to contain the risks within its risk appetite. There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which Forms part of this Annual Report.

VIGIL MECHANISM

The Whistleblower Policy has been approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations.

The Company has engaged a third party For managing an ''Ethics Hotline'' which can be used by employees and business associates of the Company to, inter alia, report any instances of financial irregularities, breach of code of conduct, abuse of authority, disclosure of financial / price sensitive information, unethical / unfair actions concerning company vendors / suppliers, malaise manipulation of company records, discrimination to the Code of Conduct in an anonymous manner.

The Policy also provides protection to the employees and business associates who report unethical practices and irregularities.

Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company''s Policy on Prevention of Sexual Harassment at Workplace is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Prevention of Sexual Harassment of Women at Workplace Act) and Rules framed there under. Internal Complaints Committees have also been set up to redress complaints received regarding sexual harassment.

The Company conducts sessions for employees across the organization to build awareness amongst employees about the Policy and the provisions of Prevention of Sexual Harassment of Women at Workplace Act.

During the financialyear2017-18, 4 (four) complaints of sexual harassment were received by the Company and the same were investigated in accordance with the procedures prescribed and adequate steps were taken to resolve them.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the financial year ended 31st March, 2018, the Company incurred CSR Expenditure of Rs, 46.51 crores (Rupees forty six crores and fifty one lakhs only). The CSR initiatives of the Company were under the thrust areas of health & hygiene, education, water management and enhancement of vocational training.

The Company''s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2018, in accordance with Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in the Annexure [F] to this report.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Internal financial control systems of the Company have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable Accounting Standards.

The Company has a well-defined and documented delegation of authority manual with specified limits for approval of expenditure, both capital and revenue. The Company has a Shared Services Center (SSC) which centrally handles payments made by the Company. While compliance with the policies are well integrated with the underlying processes, SSC acts as a second line of defence to ensure adherence to certain laid down policies.

The Company uses an established Enterprise Risk Management (ERP) system to record day to day transactions for accounting and financial reporting. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of accounts.

The Company periodically conducts physical verification of inventory, fixed assets and cash on hand and matches them with the books of account. Explanations are sought for any variances noticed from the respective functional heads.

The Company has a robust financial closure self-certification mechanism wherein the line managers certify adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates. There are adequate polices, authorization matrices governing financial transactions and approvals.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015. These are in accordance with Generally Accepted Accounting Principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.

The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also audited by the Statutory Auditors and reviewed by the Audit Committee.

For each major element in the financial statements, the inherent reporting risks have been identified by the Company. Controls have been put to mitigate these risks. These risks and the mitigation controls are revisited periodically. Corporate accounts function of the Company is actively involved in designing large process changes as well as validating changes to IT systems that have a bearing on the books of account.

The Company gets its Standalone financial statements audited every quarter by its Statutory Auditors. The policies to ensure uniform accounting treatment are prescribed to the subsidiary companies as well of the Company. The accounts of the subsidiary and joint venture companies are audited and certified by their respective Statutory Auditors for consolidation.

OTHER DISCLOSURES

a. During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or reenactments) thereof for the time being in force);

b. 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;

c. 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;

d. The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out in the Annexure [G] to this report;

e. The Managing Director & CEO of the Company has not received any remuneration or commission from any of Companies subsidiary;

f. None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force);

g. The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors; and

h. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

APPRECIATION

The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board

Ashwin Choksi

Chairman

Place: Mumbai

Date: 10th May, 2018


Mar 31, 2017

Board’s Report

Dear Members,

The Directors have pleasure in presenting the 71st Annual Report of Asian Paints Limited for the financial year ended 31st March, 2017. FINANCIAL RESULTS

(Rs, in crores)

Standalone

Consolidated

Year ended 31.03.2017

Year ended 31.03.2016

Growth

(%)

Year ended 31.03.2017

Year ended 31.03.2016

Growth

(%)

7.8

Revenue from Operations

14,360.43

13,332.18

7.7

17,084.76

15,841.69

Earnings Before Interest, Taxes, Depreciation and Amortization

2,972.34

2,726.36

9.0

3,284.03

2,982.54

10.1

Less : Finance Costs

18.86

23.40

30.58

40.66

Less : Depreciation and Amortisation expense

295.43

234.51

338.84

275.58

Profit Before Exceptional Item & Tax

2,658.05

2,468.45

7.7

2,914.61

2,666.30

9.3

Exceptional Item

-

65.35

-

52.45

Profit Before Tax

2,658.05

2,403.10

10.6

2,914.61

2,613.85

11.5

Less : Tax Expense

854.95

780.29

947.98

844.49

Profit After Tax

1,803.10

1,622.81

11.1

1,966.63

1,769.36

11.1

Share of profit of Associate

49.61

33.42

Profit After Tax including share of Associate

1,803.10

1,622.81

11.1

2,016.24

1,802.78

11.8

Attributable to:

Shareholders of the Company

1,803.10

1,622.81

11.1

1,939.42

1,745.16

11.1

Non-Controlling Interest

76.82

57.62

Other Comprehensive Income (net of tax)

139.04

(17.26)

7.68

(23.49)

Total Comprehensive Income

1,942.14

1,605.55

21.0

2,023.92

1,779.29

13.7

Attributable to:

Shareholders of the Company

1,942.14

1,605.55

21.0

1,998.40

1,726.97

15.7

Non-Controlling Interest

25.52

52.32

Opening balance in Retained Earnings

2,181.55

1,839.64

2,141.50

1,807.76

AMOUNT AVAILABLE FOR APPROPRIATION

3,990.03

3,464.17

4,090.25

3,552.90

Dividend - Interim - FY 2016-17 Interim - FY 2015-16

254.19

211.03

254.19

211.03

- Final - FY 2015-16 Final - FY 2014-15

508.37

412.45

508.37

412.45

Tax on Dividend

154.33

126.24

154.33

126.24

Transfer to General Reserve

500.00

532.90

500.00

660.82

Transfer to Other Reserve

-

-

0.61

0.86

Closing Balance in Retained Earnings

2,573.14

2,181.55

2,672.75

2,141.50

COMPANY’S PERFORMANCE

The Company has adopted Indian Accounting Standards (Ind AS) with effect from 1st April, 2016, pursuant to the notification of Companies (Indian Accounting Standard) Rules, 2015 issued by the Ministry of Corporate Affairs. Previous years'' figures have been restated and audited by the Joint Statutory Auditors of the Company, namely, M/s. BSR & Co. LLP Chartered Accountants (Firm Registration No. 101248W/W-100022) and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018).

During the financial year 2016-17, revenue from operations on standalone basis increased to '' 14,360.43 crores as against Rs, 13,332.18 crores in the previous year - a growth of 7.7%.

Cost of goods sold as a percentage to revenue from operations decreased to 59.8% as against 60.7% in the previous year. Employee cost as a percentage to revenue from operations increased to 5.2% (Rs, 742.83 crores) against 5% (Rs, 666.83 crores) in the previous year.

Other expenses as a percentage to revenue from operations increased to 16.5% (Rs, 2,364.44 crores) as against 15.8% (Rs, 2,101.70 crores) in the previous year.

The Profit After Tax for the current year is Rs, 1,803.10 crores as against Rs, 1,622.81 crores in the previous year - a growth of Rs, 11.1%. The growth in profit is mainly driven by increase in revenue from operations and softening of input material prices during the year.

On a consolidated basis, the group achieved revenue of Rs, 17,084.76 crores as against Rs, 15,841.69 crores - a growth of 7.8%. Net profit after non controlling interest for the group for the current year is Rs, 1,939.42 crores as against Rs, 1,745.16 crores in the previous year - a growth of Rs, 11.1%.

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2016-17 and the date of this report.

CONSOLIDATED FINANCIAL STATEMENTS

As per 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 provisions of the Companies Act, 2013 read with the Rules issued there under, the Consolidated Financial Statements of the Company for the financial year 2016-17 have been prepared in compliance with applicable Accounting Standards and on the basis of audited financial statements of the Company, its subsidiaries and associate companies, as approved by the respective Board of Directors.

The Consolidated Financial Statements together with the Auditors'' Report form part of this Annual Report.

SUBSIDIARIES

A separate statement containing the salient features of financial statements of all subsidiaries of the Company forms a part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. In accordance with Section 136 of the Companies Act, 2013, the financial statements of the subsidiary and associate companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (‘AGM''). Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company (www.asianpaints.com). The Company has formulated a policy for determining material subsidiaries. The policy may be accessed on the website of the Company (www.asianpaints.com)

During the year under review,

- In order to consolidate, the Company''s investments in overseas subsidiary companies, Asian Paints (International) Limited, Mauritius (APIL), wholly owned subsidiary of the Company, has transferred holdings in its operational subsidiary companies to Berger International Private Limited, Singapore (BIPL), indirect subsidiary of the Company.

- The Board of Directors of the Company, at their meeting held on 25th October, 2016, approved the Scheme of Amalgamation of APIL into the Company (“Scheme”). The Company has also received approval from SEBI in the form of ‘No adverse Observation letters'' regarding the Scheme, from the BSE Limited and the National Stock Exchange of India Limited, in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations. During the financial year 2016-17, the Ministry of Corporate Affairs notified Section 230 to 234 of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2017, pursuant to which any foreign company which is proposed to merge with an Indian company requires prior approval of the Reserve Bank of India (“RBI”). Accordingly, the Company has made an application to the RBI and post receiving approval from RBI would file necessary applications with the National Company Law Tribunal for obtaining sanction to the Scheme.

On 3rd April, 2017, BIPL acquired 100% controlling stake in Causeway Paints Lanka (Private) Limited (“CPLPL”), Sri Lanka, for a consideration of Rs, 386.75 crores (approx.) in cash. The aforesaid transaction was entered into with an objective of enhancing the group''s presence in the Sri Lankan market where the Company through its indirect subsidiary Company, Asian Paints (Lanka) Limited, already has operations. CPLPL is a key player in the Sri Lankan coatings market, operating for more than 2 (two) decades and supplies mainly decorative paints (including wood finishes) and automotive paints.

A statement containing the financial performance of each of the subsidiaries and joint venture companies included in the consolidated financial statements of the Company is set out in the Annexure [A] to this Report. Additional details of the performance and operations of the subsidiaries and joint venture companies along with details of the restructuring and investments made by the Company are set out in the Management Discussion and Analysis which also forms a part of this report.

TRANSFER TO GENERAL RESERVE

The Company proposes to transfer Rs, 500 crores to the General Reserve. An amount of Rs, 2,573.14 crores is proposed to be retained in the Retained Earnings.

DIVIDEND

During the financial year 2016-17, the Company declared and paid to the shareholders, an interim dividend of Rs, 2.65 (Rupees two and paise sixty five only) per equity share of the face value of Rs, 1 (Rupee one) each in the month of October, 2016. For celebrating 75 years of Excellence at Asian Paints, the Board of Directors of the Company have recommended payment of one-time special dividend of Rs, 2 (Rupees two only) per equity share of the face value of Rs, 1 (Rupee one) each in addition to final dividend of Rs, 5.65 (Rupees five and paise sixty five only) per equity share of the face value of Rs, 1 (Rupee one) each, for approval of the shareholders at the ensuing AGM. If approved, the total dividend (interim dividend, one-time special dividend and final dividend) for the financial year 2016-17 will be Rs, 10.30 (Rupees ten and paise thirty only) per equity share of the face value of Rs, 1 (Rupee one) each as against the total dividend of Rs, 7.50 (Rupees seven and paise fifty only) per equity share of the face value of Rs, 1 (Rupee one) paid for the previous financial year 2015-16.

In accordance with Regulation 43A of the Listing Regulations, the Company has formulated a ‘Dividend Distribution Policy'' and details of the same have been uploaded on the Company''s website (www.asianpaints.com).

REGISTRAR AND TRANSFER AGENT OF THE COMPANY

As mentioned in the last year''s Annual Report, the Company had during the financial year 2015-16, discovered certain irregularities with regard to the share related and dividend encashment activities carried out by M/s. Sharepro Services (India) Private Limited (hereinafter referred to as “Sharepro”), Company''s erstwhile Registrar & Transfer Agent. The Board of Directors of the Company, at their meeting held on 14th March, 2016, had approved the appointment of M/s. TSR Darashaw Limited, as the Registrar and Transfer Agent with effect from 1st April, 2016. Further, SEBI, vide its Interim Order dated 22nd March, 2016, has restrained Sharepro from conducting Registrar & Transfer Agent activities.

The Company has taken necessary legal steps and action against Sharepro and some of its employees.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Resignation of Mr. Dipankar Basu:

Mr. Dipankar Basu, Independent Director, stepped down from the Board of Directors of the Company w.e.f. 1st January, 2017, due to his advancing age.

During his long association with the Company, his contribution to the Audit Committee as the Chairman as well as to the Board and the Nomination and Remuneration Committee has been immensely valuable. The Board places on record, its appreciation for his inspiring guidance and his outstanding contribution to improve the overall functioning of the Company.

Appointment of Mr. R. Seshasayee:

During the financial year 2016-17, the Board of Directors at their meeting held on 23rd January, 2017, had appointed Mr. R. Seshasayee as an Additional Director (Independent Director) of the Company. Appropriate resolution for the appointment of Mr. R. Seshasayee as an Independent Director of the Company is being placed for the approval of the shareholders of the Company at the ensuing AGM for a period of 5 (five) years from the date of his appointment. The Board of Directors of the Company recommend his appointment as an Independent Director of the Company.

Retirement by rotation and subsequent re-appointment:

Mr. Abhay Vakil and Ms. Amrita Vakil, Non-Executive Directors, are liable to retire by rotation at the ensuing AGM, pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Articles of Association of the Company and being eligible have offered themselves for re-appointment. Appropriate resolutions for their re-appointment are being placed for the approval of the shareholders of the Company at the ensuing AGM. The brief resume of the Directors and other related information has been detailed in the Notice convening the 71st AGM of the Company. The Directors recommend their re-appointment as Non-Executive Directors of the Company.

In accordance with the provisions of the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations, the Independent Directors of the Company (other than Mr. R. Seshasayee) shall hold office upto 31st March, 2019 and are not liable to retire by rotation.

Re-appointment of Managing Director & CEO:

The Board of Directors at their meeting held on 11th May, 2017, subject to the approval of the shareholders at the ensuing AGM, considered and approved the re-appointment of Mr. K.B.S. Anand as the Managing Director & CEO of the Company for a further period of 2 (two) years commencing from 1st April, 2018.

Mr. K.B.S. Anand, Managing Director & CEO and Mr. Jayesh Merchant, CFO & Company Secretary, President - Industrial JVs, are Key Managerial Personnel of the Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

Disclosure Relating to Remuneration of Directors, Key Managerial Personnel and particulars of Employees:

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). The salient aspects covered in the Nomination and Remuneration Policy have been outlined in the Corporate Governance Report which forms a part of this report.

The Managing Director & CEO of the Company does not receive remuneration from any of the subsidiaries of the Company.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of Directors/employees of the Company is set out in the Annexure [B] to this report and is also available on the website of the Company (www.asianpaints.com).

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors of the Company confirm that:

a. in the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. the Directors 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 as at 31st March, 2017 and of the profit and loss of the Company for the financial year ended 31st March, 2017;

c. proper and sufficient care has been taken 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;

d. the annual accounts have been prepared on a ‘going concern'' basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the

Companies Act, 2013 read with the Schedules and Rules issued there under as well as Regulation 16 of Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there under, Regulation 17(10) of the Listing Regulations and the circular issued by SEBI dated 5th January, 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the annual performance of the Directors/Board/Committees was carried out for the financial year 2016-17.

The details of the evaluation process are set out in the Corporate Governance Report which forms a part of this report.

NOMINATION AND REMUNERATION POLICY

The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with the Rules issued there under and the Listing Regulations. The details of the Nomination and Remuneration Policy are set out in the Corporate Governance Report which forms a part of this report.

The Nomination and Remuneration Policy of the Company provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Executive, Non-Executive and Independent Directors on the Board of Directors of the Company and persons in the Senior Management of the Company, their remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The Nomination and Remuneration Policy can be accessed on the website of the Company (www.asianpaints.com).

NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES

The details of the meetings of the Board of Directors and its Committees, convened during the financial year 2016-17 are given in the Corporate Governance Report which forms a part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of the Company''s various businesses viz., the decorative business, international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2016-17.

CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance, forms an integral part of this report.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this report.

AUDITORS AND AUDITORS’ REPORT

Statutory Auditor(s):

At the 70th AGM of the Company held on 28th June, 2016, the shareholders had approved the appointment of M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) jointly with M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018) as the Joint Statutory Auditors to hold office till the conclusion of the 71st AGM.

M/s. B S R & Co. LLP, Chartered Accountants, have been the Statutory Auditors of the Company since the financial year 2007-08 and their tenure as the Joint Statutory Auditors of the Company will expire with the conclusion of this ensuing AGM, in accordance with Section 139 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The Board places on record, its appreciation for the contribution of M/s. B S R & Co. LLP, Chartered Accountants, during their tenure as the Statutory Auditors of the Company.

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, were appointed as Statutory Auditors of the Company at the 70th AGM held on 28th June, 2016 till the conclusion of the 75th AGM, subject to ratification of their appointment by the shareholders of the Company at every AGM held thereafter.

The Company has received written consent(s) and certificate(s) of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules issued there under (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) from M/s. Deloitte Haskins & Sells LLP. Further, M/s. Deloitte Haskins

& Sells LLP, Chartered Accountants, have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under the Listing Regulations.

The Auditors'' Report for the financial year ended 31st March, 2017 on the financial statements of the Company is a part of this Annual Report. During the financial year ended 31st March, 2017, there has been no delay in depositing amounts required to be transferred to the Investor Education and Protection Fund (IEPF), other than one instance of delay in transferring the unclaimed final dividend for the financial year 2008-09 to the IEPF which has been explained in detail in Note 46 to the Standalone Financial Statements of the Company.

Cost Auditor:

The Board of Directors of the Company, on the recommendations made by the Audit Committee, at their meeting held on 11th May, 2017, has approved the appointment of M/s. RA & Co., Cost Accountants, (Firm Registration No. 000242) as the Cost Auditor of the Company to conduct the audit of cost records for the financial year 2017-18. The remuneration proposed to be paid to the Cost Auditor, subject to ratification by the shareholders of the Company at the ensuing 71st AGM, would not exceed Rs, 5.50 lakhs (Rupees five lakhs and fifty thousand only) excluding taxes and out of pocket expenses, if any.

The Company has received consent from M/s. RA & Co., Cost Accountants, to act as the Cost Auditor for conducting audit of the cost records for the financial year 2017-18 along with a certificate confirming their independence and arm''s length relationship.

Secretarial Auditor:

In terms of Section 204 of the Companies Act, 2013, the Board of Directors of the Company at their meeting held on 11th May, 2017 has appointed Dr. K. R. Chandratre, Practicing Company Secretary (Certificate of Practice No. 5144), as the Secretarial Auditor to conduct an audit of the secretarial records, for the financial year 2017-18.

The Company has received consent from Dr. K. R. Chandratre to act as the auditor for conducting audit of the Secretarial records for the financial year ending 31st March, 2018.

The Secretarial Audit Report for the financial year ended 31st March, 2017 is set out in the Annexure [C] to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

POLICIES OF THE COMPANY

The Company is committed to good corporate governance and has consistently maintained its organizational culture as a remarkable confluence of high standards of professionalism and building shareholder equity with principles of fairness, integrity and ethics.

The Board of Directors of the Company have from time to time framed and approved various Policies as required by the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations. These Policies and Codes are reviewed by the Board and are updated, if required.

Some of the key policies adopted by the Company are as follows:

Sr. Name of the Policy No.

1. Dividend Distribution Policy

2. Policy on Determination of materiality of events/ information

3. Code of Conduct for Board Members and Senior Management Personnel

4. Policy on Archival of Information

5. Code of Conduct for Employees

6. Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information

7. Code of Conduct to Regulate, Monitor and Report trading by Insiders

8. Policy on Related Party Transactions

9. Policy on Materiality of Subsidiaries

10. Whistle Blower Policy

11. Corporate Social Responsibility Policy

12. Nomination and Remuneration Policy

The above mentioned policies and code are also available on the website of the Company (www.asianpaints.com).

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return as on 31st March, 2017 in Form MGT - 9 in accordance with Section 92 (3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out in the Annexure [D] to this report.

RELATED PARTY TRANSACTIONS

During the financial year 2016-17, the Company entered into transactions with related parties as defined under Section 2 (76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which were in the ordinary course of business and on arm''s length basis and in accordance with the provisions of the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations. Further, there were no transactions with related parties which qualify as material transactions under the Listing Regulations.

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated in accordance with the provisions of Companies Act, 2013 read with the Rules issued there under and the Listing Regulations.

Prior omnibus approvals are granted by the Audit Committee for related party transactions which are of repetitive nature, entered in the ordinary course of business and are on arm''s length basis in accordance with the provisions of Companies Act, 2013 read with the Rules issued there under and the Listing Regulations.

The details of the related party transactions as per Indian Accounting Standards (Ind AS) - 24 are set out in Note 43 to the Standalone Financial Statements of the Company.

The Form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure [E] to this report.

LOANS AND INVESTMENTS

Details of loans, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2017, are set out in Note 38 to the Standalone Financial Statements of the Company.

RISK MANAGEMENT

The Company has a well defined process to ensure risks are identified and steps to treat them are put in place at the right level in the management. The operating managers are responsible for identifying and putting in place mitigation plan for operational and process risks. Key strategic and business risks are identified and managed by the senior leadership team in the organization.

The risks identified are updated along with the mitigation plans as part of the annual planning cycle. The mitigation plans are then woven into the plans/initiatives for each function and are monitored accordingly. The senior leadership team reviews the status of the initiatives as part of business review meetings.

The key strategic and business risks which are significant in terms of their impact to the overall objectives of the Company along with status of the mitigation plans are periodically presented and discussed at the Risk Management Committee meetings. Inputs from the Committee are duly incorporated in the action plans. During these meetings, brief synopsis of risks with low to medium impact on the objectives of the Company are also shared for the perusal of the Committee. The details of the Committee are set out in the Corporate Governance Report. There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms a part of this report.

VIGIL MECHANISM

The Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations.

As a part of the Policy, the Company has engaged a third party for managing an ''Ethics Hotline'' which can be used by employees and business associates of the Company to, inter alia, report any violations, fraud, unfair trade practices, discrimination to the Code of Conduct in an anonymous manner.

In line with the commitment of the Company to open communications, the Policy provides protection to the employees and business associates reporting unethical practices and irregularities and also encourages employees and business associates to report incidences of fraud.

Any incidents that are reported are investigated and suitable action is taken in line with the whistle blower policy.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Prevention of Sexual Harassment of Women at Workplace Act”) and Rules framed there under and an Internal Complaints Committee has also been set up to redress complaints received regarding sexual harassment.

The Company has ensured organization wide dissemination of the Policy and the provisions of Prevention of Sexual Harassment of Women at Workplace Act by conducting sessions throughout the Company.

During the financial year 2016-17, 4 (four) complaints were received by the Company and the same were investigated in accordance with the procedure prescribed and adequate steps were taken to resolve them.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR expenditure incurred by the Company during the financial year 2016-17 was '' 47.84 crores, which was higher than the statutory requirement of 2% of the average profit for the last three financial years.

The CSR initiatives of the Company were under the thrust areas of health & hygiene, education, water management and enhancement of vocational training.

To celebrate 75 years of Excellence at Asian Paints, Kaleidoscope was launched to begin a wonderful journey to touch multiple lives and inspire even more. The key objective of Kaleidoscope is to provide infrastructure support, development oriented activities and events across health and education areas, centered around schools and communities along with activate employee contribution and participation.

The Company''s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2017, in accordance with Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in the Annexure [F] to this report.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has put in place adequate internal financial controls over financial reporting. These are reviewed periodically and made part of work instructions or processes in the Company. The Company continuously tries to automate these controls to increase its reliability.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015. These are in accordance with Generally Accepted Accounting Principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.

The Company has identified inherent reporting risks for each major element in the financial statements and put in place controls to mitigate the same. These risks and the mitigation controls are revisited periodically in the light of changes in business, IT systems, regulations and internal policies. Corporate accounts function is involved in designing large process changes as well as validating changes to IT systems that have a bearing on the books of account.

International subsidiaries provide information required for consolidation of accounts in the format prescribed by the Company. These are certified by the respective statutory auditors for being compliant with the group accounting policies for the purpose of annual consolidation of accounts.

The Company periodically conducts physical verification of inventory, fixed assets and cash on hand and matches them with the books of account. Explanations are sought for any variance noticed from the respective functional heads.

The Company has a robust financial closure self-certification mechanism wherein the line managers certify adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

The Company, in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Audit Committee of the Board of Directors of the Company in consultation with the Joint Statutory Auditors of the Company. The management periodically compares the actual spends against the estimates and makes necessary adjustments to the same based on changes noticed.

The Company has a Code of Conduct applicable to all its employees along with a Whistle Blower Policy which requires employees to update accounting information accurately and in a timely manner. Any non-compliance noticed is to be reported and auctioned upon in line with the Whistle Blower Policy.

The Company gets its Standalone accounts audited every quarter by its Joint Statutory Auditors.

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.

OTHER DISCLOSURES

a. During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force);

b. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings;

c. The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out in the Annexure [G] to this report;

d. The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors; and

e. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

APPRECIATION

The Board of Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

Further, the Board sincerely conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board

Ashwin Choksi

Chairman

Place: Mumbai

Date:11th May, 2017


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 69th Annual Report of your Company for the financial year ended 31st March, 2015.

FINANCIAL RESULTS

The financial performance of your Company for the year ended 31st March, 2015 is summarized below:

(Rs. in crores)

Standalone Consolidated

Year ended Year ended Growth Year ended Year ended Growth

31.03.2015 31.03. 2014 (%) 31.03. 2015 31.03. 2014 (%)

Revenue from Operations (Net) 11,648.83 10,418.78 11.8 14,182.81 12,714.81 11.5

EBITDA 2,197.34 1,950.93 12.6 2,405.12 2,132.11 12.8

Less : Finance Costs 27.13 26.08 34.76 42.22

Less : Depreciation 223.11 212.32 265.92 245.66

Profit Before Exceptional Items & Tax 1,947.10 1,712.53 13.7 2,104.44 1,844.23 14.1

Exceptional Items 13.53 9.96 27.57 9.96

Profit Before Tax 1,933.57 1,702.57 13.6 2,076.87 1,834.27 13.2

Less : Tax Expense 606.17 533.51 649.54 571.51

Profit After Tax 1,327.40 1,169.06 13.5 1,427.33 1,262.76 13.0

Less: Minority Interest - - 32.18 43.95

Profit attributable to shareholders of the Company 1,327.40 1,169.06 13.5 1,395.15 1,218.81 14.5

Opening balance in Statement of Profit and Loss 1,000.00 1,000.00 1,000.00 1,000.00

AMOUNT AVAILABLE FOR APPROPRIATION 2,327.40 2,169.06 2,395.15 2,218.81

That the Directors recommend for appropriation as under:

Dividend - Interim 172.66 105.51 172.66 105.51

- Proposed Final 412.46 402.86 412.46 402.86

Tax on Dividend 112.95 82.02 112.95 82.02

Transfer to General Reserve 629.33 578.67 697.08 628.42

Closing Balance in Statement of Profit and Loss 1,000.00 1,000.00 1,000.00 1,000.00

OVERVIEW OF COMPANY''S FINANCIAL PERFORMANCE

Net revenue from operations on standalone basis increased to Rs. 11,648.83 crores as against Rs. 10,418.78 crores in the previous year - a growth of 11.8%. The performance for the current year is after considering results of bath business acquired in June, 2014.

Cost of goods sold as a percentage to net revenue from operations decreased to 55.3% as against 57.0% in the previous year. The decrease is on account of reduction in key raw material prices, specifically in the second half of the year, on the back of significant drop in crude prices.

Employee cost as a percentage to net revenue from operations increased to 5.2% (Rs. 606.94 crores) as against 4.6% (Rs. 482.43 crores) in the previous year. The increase is mainly on account of falling bond yields during the year which adversely impacted the provision for retirement benefits.

Other expenses as a percentage to net revenue from operations increased to 22.2% (Rs. 2,591.52 crores) as against 21.3% (Rs. 2,219.13 crores) in the previous year. The Company was carrying a provision of Rs. 14.04 crores in respect of the diminution in carrying value of its investment in Asian Paints (International) Limited (APIL), Mauritius in the earlier years. Based on the assessment of the fair value of the investment in APIL as at 31st March, 2015, the aforesaid provision for diminution has been reversed in the current year. The same is included in "Exceptional items" in the Statement of Profit and Loss. The details of

"Exceptional items" are given in Note 51 to the Standalone Financial Statements and Note 28 to the Consolidated Financial Statements.

The Profit After Tax for the current year is Rs. 1,327.40 crores as against Rs. 1,169.06 crores in the previous year - a growth of 13.5%. The growth in profit is mainly driven by softening of input prices during the second half of the year.

On a consolidated basis, your Company achieved net revenue of Rs. 14,182.81 crores as against Rs. 12,714.81 crores - a growth of 11.5%. Net profit after minority interest for the group for the current year is Rs. 1,395.15 crores as against Rs. 1,218.81 crores in the previous year - a growth of 14.5%.

There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 2014-15 and the date of this Report.

CONSOLIDATED ACCOUNTS

The consolidated financial statements of your Company for the financial year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI). The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiary and associate companies, as approved by their respective Board of Directors.

SUBSIDIARIES

A separate statement containing the salient features of financial statements of all subsidiaries of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of your Company (wwwasianpaints.com).

The financial performance of each of the subsidiaries and joint venture companies included in the consolidated financial statements of your Company is set out in the "Annexure [A]" to this Report. Additional details of the performance and operations of the subsidiaries and joint venture companies along with details of the acquisitions and investments made by your Company and its subsidiaries during the financial year in Ethiopia, Indonesia and acquisition of Bath business are set out in the Management Discussion and Analysis which also forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overall industry structure, developments, performance and state of affairs of the Company''s various businesses viz., the decorative business, international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year.

DIVIDEND

During the financial year 2014-15, your Company declared and paid an interim dividend of Rs.1.80 (Rupee one and paise eighty only) per equity share of the face value of Rs. 1 (Rupee one) each in the month of September, 2014. In addition, your Directors recommend payment of Rs. 4.30 (Rupees four and paise thirty only) per equity share of the face value of Rs. 1 (Rupee one) each as final dividend for the financial year 2014-15, for the approval of the shareholders at the ensuing AGM. If approved, the total dividend (interim and final dividend) for the financial year 2014-15 will be Rs. 6.10 (Rupees six and paise ten only) per equity share of the face value of Rs. 1 (Rupee one) each as against the total dividend of Rs. 5 .30 (Rupees five and paise thirty only) per equity share of the face value of Rs. 1 (Rupee one) paid for the previous financial year 2013-14.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 629.33 crores to the general reserve. An amount of Rs. 1,000 crores is proposed to be retained in the Statement of Profit and Loss.

PUBLIC DEPOSITS

During the financial year 2014-15, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE GOVERNANCE REPORT

In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance, forms an integral part of this Report.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as per Clause 55 of the Listing Agreement, detailing the various initiatives of your Company forms an integral part of this Report.

INDUSTRIAL RELATIONS

As informed in the last year''s Annual Report, your Company has discontinued manufacturing activities at its plant situated at Bhandup in Mumbai, Maharashtra with effect from 5th May, 2014.

A strike was called in December, 2013, at your Company''s plant situated at Sriperumbudur, Tamil Nadu which ended in April, 2014 and the plant had resumed operations. The said plant at Sriperumbudur was again affected due to the cessation of work by the operators belonging to Asian Paints Employees'' Union since 29th April, 2015. The industrial relations at Sriperumbudur plant in Tamil Nadu continue to be challenging.

The industrial relations in respect of all other manufacturing facilities and divisions of your Company are normal.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors at their meeting held on 22nd July, 2014 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report.

The Managing Director and CEO of your Company does not receive remuneration from any of the subsidiaries of your Company.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in "Annexure [B]" to this Report and is available on the website of your Company (www.asianpaints.com).

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments:

During the financial year 2014-15, Ms. Amrita Vakil and Mrs. Vibha Paul Rishi were appointed as Additional/Non- Executive Directors of your Company at the meeting of the Board of Directors held on 14th May, 2014 and subsequently they were appointed as a Non-Executive Directors by the shareholders at the AGM held on 26th June, 2014.

Further, in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Shri Dipankar Basu, Shri Mahendra Shah, Shri Deepak Satwalekar, Dr. S. Sivaram, Shri S. Ramadorai, Shri M. K. Sharma and Mrs. Vibha Paul Rishi were appointed as Independent Directors on the Board of Directors of your Company at the 68th AGM of your Company held on 26th June, 2014 to hold office up to 5 (five) consecutive years up to 31st March, 2019.

At the aforementioned AGM, Shri K.B.S Anand, Managing Director & CEO of your Company was re-appointed for 3 (three) years commencing from 1st April, 2015 to 31st March, 2018.

During the financial year 2014-15, the Board of Directors appointed Shri Abhay Vakil as an Additional/Non-Executive Director with effect from 22nd July, 2014. Shri Abhay Vakil is proposed to be appointed as the Non-Executive Director of your Company at the ensuing AGM. Your Directors recommend his appointment as a Non-Executive Director of your Company.

Resignations/Retirements:

Shri R.A. Shah, Non-Executive/Independent Director expressed his desire to not be appointed as an Independent Director on the Board of Directors of your Company pursuant to provisions of Sections 149, 152, Schedule IV and other applicable provisions, in any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 and accordingly stepped down as a Director at the 68th AGM of your Company held on 26th June, 2014.

Shri Amar Vakil retired as a Non-Executive/Promoter Director of your Company at the 68th AGM of your Company held on 26th June, 2014.

The Board places on record its appreciation for their valuable contribution during their association with your Company.

Shri Ashwin Choksi and Shri Ashwin Dani, Non-Executive Directors, are liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible have offered themselves for re- appointment. Appropriate resolutions for their re-appointment are being placed for your approval at the ensuing AGM. The brief resume of the Directors and other related information has been detailed in the Notice convening the 69th AGM of your Company. Your Directors recommend their re-appointment as Non-Executive Directors of your Company.

Shri K.B.S. Anand, Managing Director & CEO and Shri Jayesh Merchant, CFO & Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Annual Evaluation of Board''s Performance:

In terms of the provisions of the Companies Act, 2013 read with Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board/Director(s) for the financial year 2014-15.

NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of the number of Board and Audit Committee meetings of your Company are set out in the Corporate Governance Report which forms part of this Report.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

(b) the Directors 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 your Company as at 31st March, 2015 and of the profit and loss of the Company for the financial year ended 31st March, 2015;

(c) proper and sufficient care has been taken 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;

(d) the annual accounts have been prepared on a ''going concern'' basis;

(e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

AUDITORS AND AUDITORS'' REPORT:

Auditors

At the 68th AGM of your Company, M/s. Shah & Co., Chartered Accountants (Firm Registration No. 109430W) and M/s. B S R & Co., LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) were appointed as the Joint Auditors to hold office till the conclusion of the 69th AGM of your Company.

During the financial year under review, your Company received a letter from Shri Ashish Shah, Partner, M/s. Manubhai & Shah, Chartered Accountants (Formerly Partner of M/s. Shah & Co., Chartered Accountants) informing that M/s. Shah & Co., Chartered Accountants had merged with M/s. Manubhai & Shah, Chartered Accountants with effect from 1st December, 2014. The letter also stated that on account of the aforesaid merger, M/s. Shah & Co., Chartered Accountants, had ceased to exist as an entity under the regulations issued by Institute of Chartered Accountants of India (ICAI).

The Board of Directors at its meeting held on 20th December, 2014, on the recommendations of the Audit Committee, in accordance with the provisions of Section 139 (8) of the Companies Act, 2013 appointed M/s. B S R & Co. LLP Chartered Accountants, remaining Auditor, to continue to act as the sole Auditor of your Company till the conclusion of the 69th AGM.

The Board places on record its appreciation for the contributions of erstwhile M/s. Shah & Co., Chartered Accountants during their tenure as the Auditors of your Company.

M/s. B S R & Co. LLP, Chartered Accountants, who retire at the ensuing AGM of your Company are eligible for re-appointment. Your Company has received written consent and a certificate stating that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued thereunder. As required under Clause 49 of the Listing Agreement, M/s. B S R & Co. LLP Chartered Accountants, have also confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

The Audit Committee and the Board of Directors recommend the appointment of M/s. B S R & Co. LLP Chartered Accountants, as the Auditors of your Company for the financial year 2015- 16 till the conclusion of the next AGM. The Auditors'' Report for the financial year 2014-15, does not contain any qualification, reservation or adverse remark.

Cost Auditor

The Board of Directors had appointed M/s. RA & Co., Cost Accountants, as the Cost Auditor of your Company for the financial year 2014-15 to conduct the audit of the cost records of your Company.

As per Section 148 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company has appointed M/s. RA & Co., Cost Accountants as the Cost Auditor for the financial year 2015-16 on the recommendations made by the Audit Committee. The remuneration proposed to be paid to the Cost Auditor, subject to the ratification by the members at the ensuing AGM, would be not exceeding Rs. 4,50,000 (Rupees four lakhs and fifty thousand only) excluding taxes and out of pocket expenses, if any.

Your Company has received consent from M/s. RA & Co., Cost Accountants, to act as the Cost Auditor of your Company for the financial year 2015-16 along with a certificate confirming their independence.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Dr. K.R. Chandratre, Practicing Company Secretary to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure - [C]" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as "Annexure [D]" to this Report.

RELATED PARTY TRANSACTIONS

During the financial year 2014-15, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms'' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Clause 49 of the Listing Agreement. During the financial year 2014-15, there were no transactions with related parties which qualify as material transactions under the Listing Agreement.

The details of the related party transactions as required under Accounting Standard - 18 are set out in Note 48 to the standalone financial statements forming part of this Annual Report.

The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as "Annexure [E]" to this Report.

LOANS AND INVESTMENTS

The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

A. Details of investments made by the Company as on 31st March, 2015 (including investments made in the previous years):

(i) Investments in equity shares:

The aforementioned loan as on 1st April, 2014, was given for purchase of land. The same was converted into equity shares during the financial year 2014-15. A further amount of Rs. 0.10 crores was given as loan for administrative expenses in relation to land after the end of the financial year.

C. There are no guarantees issued by your Company in accordance with Section 186 of the Companies Act, 2013 read with the Rules issued thereunder.

RISK MANAGEMENT

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in its strategy, business and operational plans.

Your Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as agreed from time to time with the Board of Directors.

As per the requirements of Clause 49 of the Listing Agreement, your Company has constituted a Risk Management Committee to oversee the risk management efforts in the Company under the Chairmanship of Shri M.K. Sharma, Independent Director. The details of the Committee along with its charter are set out in the Corporate Governance Report forming part of this Report.

During the financial year 2014-15, the Board of Directors have approved the risk management policy and the risk appetite for your Company as proposed by the Management and recommended by the Risk Management Committee.

There are no risks which in the opinion of the Board threaten the existence of your Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Report.

VIGIL MECHANISM

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The Board of Directors at its meeting held on 22nd July, 2014 approved the Corporate Social Responsibility (CSR) Policy for your Company pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, on the recommendations of the CSR Committee. The CSR Policy outlines the CSR vision of your Company which is based on embedded tenets of trust, fairness and care.

The initiatives undertaken by your Company during the financial year 2014-15 in CSR have been detailed in this Annual Report.

The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out herewith as "Annexure [F]" to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as "Annexure [G]" to this Report.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956, to the extent applicable. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of your Company. The accounts of the subsidiary companies are audited and certified by their respective Auditors for consolidation.

Your Company operates in SAP an ERP system, and has many of its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of account. Your Company has automated processes to ensure accurate and timely updation of various master data in the underlying ERP system.

Your Company has a robust financial closure self-certification mechanism wherein the line managers certify adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

Your Company operates a shared service center which handles all payments made by your Company. This center ensures adherence to all policies laid down by the Management.

Your Company, in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Auditors and Audit Committee.

The Management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary.

Your Company has a code of conduct applicable to all its employees along with a Whistle Blower Policy which requires employees to update accounting information accurately and in a timely manner. Any non-compliance noticed is to be reported and actioned upon in line with the Whistle Blower Policy.

Your Company gets its standalone accounts audited every quarter by its Auditors.

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 your Company and its operations in future.

GENERAL

a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and

b) Your Company does not have any ESOP scheme for its employees/Directors.

APPRECIATION

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board

Ashwin Choksi

Chairman

Place: Mumbai Date : 18th May, 2015


Mar 31, 2012

The Directors are delighted to present the 66th Annual Report of your company and the company and the Audited Accounts for the financial year ended 31st March, 2012.

FINANCIAL RESULTS

The financial performance of your company, for the year ended 31st March, 2012 is summarized below:

(Rs in Crores)

Asian Paints Limited Asian Paints Limited Group Consolidated 2011-12 2010-11 Growth 2011-12 2010-11 Growth

Revenue from Operations (Net) 7964.16 6336.08 25.7% 9632.24 7722.30 24.7%

EBITDA 1493.24 1232.16 21.2% 1616.18 1396.08 15.8%

Less: Finance Costs 30.82 15.35 40.97 23.21

Less: Depreciation 99.49 94.48 121.13 113.13

Profit before tax 1362.93 1122.33 21.4% 1454.08 1259.74 15.4%

Less: Tax expense 404.54 347.18 433.50 378.39

Profit After Tax 958.39 775.15 23.6% 1020.58 881.35 15.8%

Less: Minority Interest - - - 31.85 38.11

Profit attributable to share holders of the 958.39 775.15 23.6% 988.73 843.24 17.3% Company

Opemng balance in Statement of Profit 600.00 600.00 600.00 600.00 and Loss

AMOUNT AVAILABLE FOR 1558.39 1375.15 1588.73 1443.24 APPROPRIATION

That the Directors recommend for appropriation as under:

Dividend - Interim 91.13 81.53 91.13 81.53

- Proposed Final 292.56 225.41 292.56 225.41

Tax on Dividend 62.24 50.11 62.24 50.11

Transfer to General Reserve 412.46 418.10 442.80 486.19

Closing balance in Statement of Profit 700.00 600.00 700.00 600.00 and Loss

STANDALONE FINANCIALS

The Ministry of Corporate Affairs (MCA) vide notification no. S.O. 447(E) dated 28th February, 2011 amended the existing Schedule VI to the Companies Act, 1956. The Revised Schedule VI is applicable from financial year commencing from 1st April, 2011. The financial statements of your Company for the year ended 31st March, 2012 have been prepared in accordance with the Revised Schedule VI and accordingly, the previous year's figures have been reclassified/ regrouped to conform to this year's classification.

Net Revenue from Operations for the standalone entity increased to Rs 7964.16 crores from Rs 6336.08 crores in the previous year - a growth of 25.7%. The operating profit (EBITDA) increased by 21.2%, from Rs 1,232.16 crores to Rs 1493.24 crores. The profit after tax for the current year is Rs 958.39 crores as against Rs 775.15 crores in the previous year - a growth of 23.6%.

CONSOLIDATED FINANCIALS

The Consolidated Net Revenue from Operations increased to Rs 9,632.24 crores from Rs 7722.30 crores - growth of 24.7 %. Net profit after minority interest for the group for the current year is Rs 988.73 as against Rs 843.24 crores in the previous year - a growth of 17.3%

CONSOLIDATED ACCOUNTS

The Ministry of Corporate Affairs (MCA) by General Circular No. 2/2011 dated 8th February, 2011, had granted an exemption to companies from complying with Section 212 of the Companies Act, 1956, provided such companies fulfill conditions mentioned in the said circular. Accordingly, the Board of Directors of your Company at its meeting held on 8th May, 2012, approved the Audited Consolidated Financial Statements for the financial year 2011-12 in accordance with the Accounting Standard (AS-21) and other Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the Listing Agreement, which include financial information of all its subsidiaries, and forms part of this report. The Consolidated Financial Statements of your Company for the financial year 2011-12, have been prepared in compliance with applicable Accounting Standards and where applicable Listing Agreement as prescribed by the Securities and Exchange Board of India.

The annual accounts and financial statements of the subsidiary companies of your Company and related detailed information shall be made available to members on request and are open for inspection at the Registered Office of your Company. Your Company has complied with all the conditions as stated in the circular and accordingly has not attached the financial statements of its subsidiary Companies for the financial year 2011-12. A statement of summarized financials of all subsidiaries of your Company including capital, reserves, total assets, total liabilities, details of investment, turnover, etc., pursuant to the General Circular issued by the Ministry of Corporate Affairs, forms part of this report.

DIVIDEND

During the financial year 2011-12, your Company declared an interim dividend of Rs 9.50 (Rupees Nine and Paise Fifty only) per equity share in the month of October, 2011 and paid it in the month of November, 2011. In addition, your Directors recommend payment of Rs 30.50 (Rupees Thirty and Paise Fifty only) per equity share as the final dividend for the financial year ended 31st March, 2012. If approved, the total dividend (interim and final dividend) for the financial year 2011-12 will be Rs 40 (Rupees Forty only) per equity share; Rs 32 (Rupees Thirty Two only) per equity share was paid as dividend for the previous year.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs 412.46 crores to the general reserve. An amount of Rs 700.00 crores is proposed to be retained in the statement of profit and loss.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis, which forms part of this Report.

CORPORATE GOVERNANCE

Your Company is compliant with the requirements of Clause 49 of the Listing Agreement. Necessary disclosures have been made in this regard in the Corporate Governance Report. A certificate from the Joint Statutory Auditors of your Company regarding compliance with the requirements of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report. The report on Corporate Governance is included and forms part of this report.

SECRETARIAL AUDIT

Dr. K. R. Chandratre, Practicing Company Secretary conducted Secretarial Audit pursuant to provisions of Section 383A of the Companies Act, 1956, for the financial year 2011-12. Dr. K. R. Chandratre has submitted the Report confirming compliance with the applicable provisions of Companies Act, 1956 and other rules and regulations issued by SEBI/other regulatory authorities for Corporate law.

EXPANSION OF THE JOINT VENTURE WITH PPG INDUSTRIES INC., USA.

During the FY 2011-12, your Company has filed a Composite Scheme of restructuring under Section 391- 394 of the Companies Act, 1956 and other applicable provisions with the Hon'ble High Court of Judicature of Bombay. The Scheme envisages merger of AP Coatings Ltd (100% subsidiary of your Company) and a wholly owned Indian subsidiary of PPG Industries Securities Inc., USA (PPG) i.e PPG Coatings India Private Limited into Asian PPG Industries Limited (APPG), 50:50 joint venture between your company and PPG and thereafter, certain businesses will demerge into Asian Paints PPG Limited (APPL), new 50:50 joint venture between your Company and PPG.

As informed in the last year's Annual Report, the new Joint venture will service the protective, industrial powder coatings, industrial containers and light industrial coatings markets. Your Company will have effective management control in APPL while PpG will take lead in APPG. This would enable utilization of respective strengths in order to capture the growth in infrastructure development and globally driven markets in India.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits during the year 2011-12 and there are no outstanding fixed deposits from the public as on the Balance Sheet date.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The information on Conservation of Energy and Technology absorption by your Company as per Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are given as Annexure to this report in Form 'A' and 'B', respectively.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of expenditure and earnings in foreign currencies are given under Note 34 and 35 to the financial statements.

PERSONNEL

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, names and other particulars of employees are required to be attached to this report. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the Report and Annual Accounts of your Company sent to the shareholders do not contain the said annexure. Any member desirous of obtaining a copy of the said annexure may write to your Company Secretary at the Registered Office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

- In preparation of the annual accounts, the applicable accounting standards have been followed;

- The accounting policies have been selected and applied consistently and the judgments and estimates made, are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2012 and of the profit and loss of the Company for that period;

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- The annual accounts have been prepared on a going concern basis.

DIRECTORS

The term of Mr. P M Murty as Managing Director & CEO came to an end on 31st March, 2012 and consequently he ceased to be a Director on the Board of your Company. The Board has placed on its record a deep sense of appreciation for the valuable contributions rendered by Mr. P M Murty during his tenure of three years.

The Board appointed Mr. K B S Anand as an Additional Director in accordance with Section 260 of the Companies Act, 1956 with effect from 1st April, 2012 and as Managing Director & CEO with effect from 1st April, 2012 to 31st March, 2015.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Ashwin Choksi, Mr. Ashwin Dani, Mr. Abhay Vakil and Dr. S Sivaram retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Appropriate resolutions for their re-appointment are being placed before you for your approval at the ensuing Annual General Meeting. The brief resume of the aforesaid Directors and other information have been detailed in the Notice. Your Directors recommend their reappointment as Directors of your Company.

AUDITORS

M/s. Shah & Co., Chartered Accountants and M/s. B S R & Associates, Chartered Accountants, Joint Auditors of your Company are due for retirement at the ensuing Annual General Meeting and are eligible for re-appointment. Your Directors recommend their re-appointment for the ensuing year. The Statutory Auditors of your Company have submitted a certificate to your Company that they have subjected themselves for the peer review process of the Institute of Chartered Accountants of India for the financial year 2011-12.

COST AUDITOR

Pursuant to the direction from the Ministry of Corporate Affairs for appointment of Cost Auditors, your Board has reappointed Ms. Ketki Visariya, as the Cost Auditor of your Company for the financial year 2011-12 to conduct the audit of the cost records of the Company.

The Cost Audit report for the FY 2010-11 due on 27th September, 2011 was filed by the Cost Auditor on 3rd August, 2011. Further, for the FY 2011-12, due date for submission of Cost Audit Report is 27th September, 2012.

APPRECIATION

Your Directors take this opportunity to thank and place on record their appreciation for all the employees at all levels for their hard work and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their consistent support.

For and on behalf of the Board

Mumbai Ashwin Choksi

8th May, 2012 Chairman


Mar 31, 2011

The Directors have pleasure in presenting the 65th Annual Report of your Company and the Audited Accounts for the financial year ended 31st March, 2011.

FINANCIAL RESULTS

(Rs. in Crores)

Asian Paints Limited Asian Paints Limited Group Consolidated

2010-11 2009-10 Growth 2010-11 2009-10 Growth (%) (%)

Sales and Operating Income (Net) 6322.24 5125.08 23.4 7706.24 6680.94 15.3

Operating profit 1232.66 1153.71 6.8 1395.60 1367.90 2.0

Less: Interest 15.35 13.76 22.23 28.47

Less: Depreciation 94.48 60.74 113.13 83.56

Profit before Tax and excep -tional Item 1122.83 1079.21 4.0 1260.24 1255.87 0.3

Add/(Less): Exceptional Item - 25.46 - - 1.15

Profit before Tax 1122.83 1104.67 1.6 1260.24 1257.02 0.3

Less: Provision for Taxes 347.68 330.17 378.89 373.11

Profit After Tax 775.15 774.50 0.1 881.35 883.91 (0.3)

Less: Minority interest - - - 38.11 48.27

Net profit attributable to shareholders of 775.15 774.50 0.1 843.24 835.64 0.9 the Company

Add: Balance brought forward from the 600.00 230.00 600.00 230.00 previous year

DISPOSABLE PROFIT 1375.15 1004.50 1443.24 1065.64

That the Directors recommend for appropriation as under:

Dividend - Interim 81.53 81.53 81.53 81.53

- Final 225.41 177.45 225.41 177.45

Tax on Dividend 50.11 43.33 50.11 43.33

Transfer to General Reserve 418.10 102.19 486.19 163.33

Balance carried forward to Balance Sheet 600.00 600.00 600.00 600.00

STANDALONE FINANCIALS

Net sales and operating income for the standalone entity increased to Rs. 6,322.24 crores from Rs. 5,125.08 crores in the previous year – a growth of 23.4%. The operating profit (PBDIT) increased by 6.8%, from Rs. 1,153.71 crores to Rs. 1,232.66 crores. The profit After tax for the current year is Rs. 775.15 crores as against Rs. 774.50 crores in the previous year.

CONSOLIDATED FINANCIALS

The consolidated sales and operating income net of discounts and excise duty increased to Rs. 7,706.24 crores from Rs. 6,680.94 crores – growth of 15.3%. Net profit After minority interest for the group for the current year is Rs. 843.24 as against Rs. 835.64 crores in the previous year.

CONSOLIDATED ACCOUNTS

The Ministry of Corporate Affairs (MCA) by General Circular No. 2/2011 dated 8th February, 2011, issued a direction under Section 212(8) of the Companies Act, 1956 that the provisions of Section 212 shall not apply to Companies in relation to their subsidiaries, subject to fulflling certain conditions mentioned in the said circular with immediate effect. The Board of Directors of your Company at its meeting held on 10th May, 2011, approved the Audited Consolidated Financial Statements for the financial year 2010-11 in accordance with the Accounting Standard (AS–21) and other Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the Listing Agreement, which include financial information of all its subsidiaries, and forms part of this report. The Consolidated Financial Statements of your Company for the financial year 2010-11, are prepared in compliance with applicable Accounting Standards and where applicable Listing Agreement as prescribed by the Securities and Exchange Board of India.

The annual accounts and financial statements of the subsidiary companies of your Company and related detailed information shall be made available to members on request and are open for inspection at the Registered office of your Company. Your Company has complied with all the conditions as stated in the circular and accordingly has not attached the financial statements of its subsidiary Companies for the fnancial year 2010-11. A statement of summarized financials of all subsidiaries of your Company including capital, reserves, total assets, total liabilities, details of investment, turnover, etc., pursuant to the General Circular issued by Ministry of Corporate office, forms part of this report.

The Consolidated Financial Statements include results and financial statements of certain subsidiaries of your Company for the previous year for a ffiteen month period from 1st January, 2009 to 31st March, 2010. This was done to align the accounting year of those subsidiary Companies with your Company in the previous year. Thus, the current year fgures are not comparable with the corresponding fgures for the previous year.

DIVIDEND

During the financial year 2010-11, your Company declared and paid an interim dividend of Rs. 8.50 per equity share in the month of November, 2010. In addition, your Directors recommend payment of Rs. 23.50 per equity share as the final dividend for the financial year ended 31st March, 2011. If approved, the total dividend (interim and final dividend) for the financial year 2010-11 will be Rs. 32.00 per equity share; Rs. 27 per equity share was paid as dividend for the previous year.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 418.10 crores to the general reserve. An amount of Rs. 600 crores is proposed to be retained in the profit and loss account.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis, which forms part of this Report.

CORPORATE GOVERNANCE

During the financial year, Asian Centre for Corporate Governance and Sustainability at its 11th International Conference on Governance and Sustainability held in February, 2011 recognised your Companys Audit Committee as Best Audit Committee for the year 2010. Your Company places on record its appreciation for the Audit Committee for its outstanding contribution in promoting the philosophy and culture of good governance and sustainable development in your Company.

Your Company is compliant with the requirements of Clause 49 of the Listing Agreement. Necessary disclosures have been made in this regard in the Corporate Governance Report. A certifcate from the Joint Statutory Auditors of your Company regarding compliance with the requirements of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report. The report on Corporate Governance is included and forms part of this report.

SECRETARIAL AUDIT

Dr. K. R. Chandratre, Practicing Company Secretary conducted Secretarial Audit pursuant to provisions of Section 383A of the Companies Act, 1956, for the financial year 2010-11. Dr. K. R. Chandratre has submitted the Report confirming compliance with the applicable provisions of Companies Act, 1956 and other rules and regulations issued by SEBI/other regulatory authorities for Corporate law.

EXPANSION OF THE JOINT VENTURE WITH PPG INDUSTRIES INC., USA, AND ACCELERATION OF GROWTH OF THE NON-DECORATIVE COATINGS BUSINESS

During the year 2010-11, your Company has decided to enhance its fourteen year relationship with PPG Industries Inc., USA (PPG), one of the worlds leading coatings and specialty products company in order to accelerate growth of the non-decorative coatings businesses in India. As part of this arrangement, your Company and PPG have decided to enhance the existing presence in India by expanding the current 50-50 joint venture relationship, Asian PPG Industries Limited (APPG), by partnering in all segments of the coatings space in India except decorative coatings and also establish a second 50:50 joint venture.

APPG currently services the Indian transportation coatings markets and this change will expand its scope

to additionally service the industrial liquid, marine and consumer packaging markets. The second joint venture will service the protective, industrial powder, industrial containers and light industrial coatings markets.

The formation of the second Joint Venture involves certain statutory and procedural formalities to be complied with. As a frst step to the joint venture formation, a new company named AP Coatings Limited (100% owned subsidiary of your Company) was formed. Till the formation of new Joint Venture, the Industrial business of your Company as well as the business of Asian Paints Industrial Coatings Limited (APICL, your Companys wholly owned subsidiary carrying on the business of powder coatings) will be carried out by AP Coatings Limited.

AP Coatings Limited along with two Indian subsidiaries of PPG will merge into APPG and thereAfter, certain businesses will demerge into the new 50:50 Joint Venture Company. This arrangement is subject to regulatory approvals and pending flling of applications and petitions for merger and demerger in accordance with Section 391 to 394 of the Companies Act, 1956, before the Honble High Court(s) and the subsequent sanction by the respective High Court(s).

Your Company will have effective management control in the second joint venture while PPG will take the lead in APPG. This would enable utilization of respective strengths in order to capture the growth in infrastructure development and globally driven markets in India.

FIXED DEPOSITS

Your Company has not accepted any fxed deposits during the year 2010-11 and there are no outstanding fxed deposits from the public as on 31st March, 2011.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Particulars in respect of conservation of energy and technology absorption by the Company as per Section 217(1)(e) of the Companies Act, 1956, are given as Annexure to this report in Form ‘A and ‘B, respectively.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of expenditure and earnings in foreign currencies are given under Schedule ‘M to the financial statements.

PERSONNEL

The Ministry of Corporate Affairs by notifcation dated 31st March, 2011, issued the Companies (Particulars of Employees) Amendment Rules, 2011, which amended the limits of remuneration of the employees mentioned under Companies (Particulars of Employees) Rule, 1975. Accordingly, as per the Companies (Particulars of Employees) Amendment Rules, 2011 and the provisions of Section 217(2A) of the Companies Act, 1956, details of the names and other particulars of employees drawing remuneration aggregating to more than Rs. 60,00,000 (Rupees Sixty Lacs Only) per annum and Rs. 5,00,000 (Rupees Five Lacs) per month, are required to be attached to this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Annual Accounts of your Company sent to the shareholders do not contain the said annexure. Any shareholder desirous of obtaining a copy of the said annexure may write to the Company Secretary at the Registered office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

In preparation of the annual accounts, the applicable accounting standards have been followed.

The accounting policies have been selected and applied consistently and the judgments and estimates made, are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2011 and of the profit and loss of the Company for that period.

Proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

The annual accounts have been prepared on a going concern basis.

DIRECTORS

Mr. P. M. Murty, Managing Director & CEO of your Company was awarded the ‘CEO of the Year by Business Standard for the year 2009-10. Mr. P. M. Murty was felicitated by the Honble Prime Minister Shri Manmohan Singh in New Delhi on 25th March, 2011. Your Company congratulates Mr. P.M. Murty for this recognition and is proud of his contribution to the growth of your Company.

Mr. Deepak Satwalekar was recognised and awarded the ‘Best Independent Director-2010 by the Global Advisory Board of Asian Centre for Corporate Governance & Sustainability at its 11th International Conference on Governance and Sustainability held in February, 2011. Your Company congratulates Mr. Deepak Satwalekar for this recognition.

As disclosed in the last years Annual Report, Mr. Hasit Dani resigned as a Non-Executive Director of your Company on 3rd June, 2010. During the financial year 2010-11, the Board of Directors appointed Mrs. Ina Dani as an Additional Director with effect from 27th July, 2010. Mrs. Ina Dani is being appointed as the Director of your Company at the forthcoming Annual General Meeting. Your Directors recommend her appointment as a Director of your Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Dipankar Basu, Mr. Deepak Satwalekar, Mr. Amar Vakil and Mr. R. A. Shah retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Appropriate resolutions for their re-appointment are being placed before you for your approval at the ensuing Annual General Meeting. The brief resume of the aforesaid Directors and other information have been detailed in the Notice. Your Directors recommend their re-appointment as Directors of your Company.

AUDITORS

M/s. Shah & Co., Chartered Accountants and M/s. B S R & Associates, Chartered Accountants, Joint Auditors of your Company are due for retirement at the ensuing Annual General Meeting and are eligible for re-appointment. Your Directors recommend their re-appointment for the ensuing year. The Statutory Auditors of your Company have submitted a certifcate to your Company that they have subjected themselves for the peer review process of the Institute of Chartered Accountants of India for the financial year 2010-11.

COST AUDITOR

Your Company has received approval from the Central Government for appointment of Ms. Ketki Visariya, as the Cost Auditor of the Company for the financial year 2010-11 to conduct the audit of the cost records of the Company. Futher, the due date for submission of Cost Audit Report for the FY 2010-11 is 27th September, 2011.

APPRECIATION

Your Directors wish to thank and place on record their appreciation for all the employees at all levels for their hard work, solidarity, co-operation and support during the year. Your Directors wish to place on record their appreciation to customers, shareholders, vendors and bankers for their continued support.

For and on behalf of the Board

Ashwin Choksi Chairman

Mumbai

10th May, 2011


Mar 31, 2010

The Directors have pleasure in presenting the 64th Annual Report of your Company and the Audited Accounts

for the financial year ended 31st March, 2010.

(Rs. in Crores)

Asian Paints Limited Asian Paints Limited Group Consolidated

2009-10 2008-09 Growth 2009-10 2008-09 Growth (%) (%)

Sales and Operating Income (Net) 5125 4270 20 6681 5464 22

Operating Profit 1154 621 86 1368 721 90

Less: Interest 14 10 28 26

Less: Depreciation 61 57 84 75

Profit before Tax and exceptional item 1079 554 95 1256 620 103

Less: Exceptional items (25) 6 (1) 1

Profit before Tax and prior period items 1105 548 102 1257 619 103

Add/(Less): Prior period items (0) (2) (0) (2)

Profit before Tax 1105 546 102 1257 617 104

Less: Provision for Taxes 330 184 373 197

Profit After Tax 775 362 114 884 420 111

Less: Minority interest - - 48 22

Net Profit attributable to shareholders of the Company 775 362 114 836 398 110

Add: Balance brought forward from the previous year 230 200 230 200

1005 1066

That the Directors recommend for appropriation as under:

Dividend - Interim 82 62 82 62

-Final 177 106 177 106

Tax on Dividend 44 28 44 29

Transfer to General Reserve 102 136 163 171

Balance carried forward to Balance Sheet 600 230 600 230

PERFORMANCE FINANCIAL:

Net sales and operating income for the standalone entity increased to Rs. 5,125 crores from Rs. 4,270 crores in the previous year - a growth of 20%. The operating profit (PBDIT) increased by 86 %, from Rs. 621 crores to Rs. 1,154 crores. The profit aftertax for the current year is Rs. 775 crores as against Rs. 362 crores in the previous year, a growth of 114%, Exceptional item of current year includes Rs. 5.77 crores being the write back of provision for diminution in the value of investments in the Companys wholly owned subsidiary Asian Paints (International) Limited, Mauritius in consequent to the buy back of 41,00,000 shares at US$ 1 per share by Asian Paints (International) Limited.

Exceptional item of current year includes Rs. 19.69 crores being the reversal of provision made towards dimunition in the value of investments in the Companys wholly owned subsidiary Asian Paints (International) Limited, Mauritius, based on managements assessment of the fair value of its investments.

In accordance with the Accounting Standard (AS 21) and other Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the Listing Agreement, Consolidated Financial Statements presented by your Company include financial information of all its subsidiaries. The Consolidated Financial Statements of your Company for the year ended 31st March, 2010 include results and financial statements of certain overseas subsidiaries of your Company for a fifteen month period from 1st January, 2009 to 31st March, 2010, in order to align the accounting year of those subsidiary Companies with your Company, Thus, these figures are not comparable with the corresponding figures for the previous year.

The Ministry of Corporate Affairs (MCA) has granted your Company, exemption under Section 212(8) of the Companies Act, 1956, from attaching the financial statements of the subsidiary companies in India and abroad, both direct and indirect, to the balance sheet of your Company for the financial year 2009-10. A statement of summarised financials of all subsidiaries of your Company, pursuant to the approval under Section 212(8) of the Companies Act, 1956, forms part of this report. Additional information in respect of the annual report and the financial statements of the subsidiary companies of your Company will be made available to members on request. The annual accounts of the subsidiary companies are open for inspection by the members at the Registered Office of the Company. The accounts of individual subsidiary companies will also be hosted on the website

DIVIDEND

Your Company, during the financial year 2009-10, declared and paid an interim dividend of Rs.8.50 per equity share in the month of October, 2009. In addition, your Directors recommend payment of Rs. 18.50 per equity share as the final dividend for the financial year ended 31st March, 2010. If approved, the total dividend (interim and final dividend) for the financial year 2009-10 will be Rs. 27 per equity share; Rs.17.50 per equity share was paid as dividend for the previous year.

Your Company proposes to transfer Rs.102.19 crores to the general reserve. An amount of Rs. 600 crores is proposed to be retained in the profit and loss account.

MANAGEMENT & DISSCUSSION

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis.

CORPORATE GOVERANANCE

Your Company is compliant with the requirements of the Clause 49 of the Listing Agreement. Necessary disclosures have been made in this regard in the Corporate Governance Report. A certificate from the Joint Statutory Auditors of your Company regarding compliance with the requirements of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

As a good Corporate Governance practice, your Company had appointed Dr. K R Chandratre, Practicing Company Secretary to conduct Secretarial Audit pursuant to provisions of Section 383A of the Companies Act, 1956, for the financial year 2009-10. Dr. K R Chandratre has submitted the Report confirming compliance by the Company with all the applicable provisions of corporate law.

As disclosed by your Company in the Annual Report for the year 2008-09, Technical Instruments Manufacturers (India) Limited (TIM), a 100% subsidiary of your Company had filed an application before the Honble Bombay High Court for its merger with your Company. The Honble Court sanctioned the scheme of amalgamation and passed the final order on 24th July, 2009. Accordingly, TIM has ceased to carry on any operations and has been merged with your Company effective 1st April, 2009.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits during the year 2009-10 and there are no outstanding fixed deposits from the public as on 31st March, 2010.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured.

SALES TAX DEFERMENT BENEFIT

Your Company continues to avail sales tax deferment benefit for the expanded capacity at Kasna plant for which eligibility certificate for Rs. 38.2 crores has been received. A sum of Rs. 3.2 crores has been availed during the year 2009-10 and with this, the total amount of deferment availed upto 31st March, 2010 is Rs. 30.6 crores.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Particulars in respect of conservation of energy and technology absorption by the Company as per Section 217(1)(e) of the Companies Act, 1956, are given as Annexure to this report in Form A and B, respectively.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of expenditure and earnings in foreign currencies are given under Schedule M to the financial statements.

PERSONNEL

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, names and other particulars of the employees are required to be set out in the annexure to this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Annual Accounts of your Company sent to the shareholders do not contain the said annexure. Any shareholder desirous of obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

- In preparation of the annual accounts, the applicable accounting standards have been followed.

- The accounting policies have been selected and applied consistently and the judgments and estimates made, are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2010 and of the profit and loss of the Company for that period.

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The annual accounts have been prepared on a going concern basis.

As mentioned in the Annual Report for the year 2008-09, your Company appointed Mr. P. M. Murty as the whole-time Director with effect from 5th March, 2009 and as Managing Director & CEO of your Company with effect from 1st April, 2009. Mr. Ashwin Choksi, Mr. Ashwin Dani and Mr. Abhay Vakil, were appointed as Non-Executive Chairman, Non-Executive Vice-Chairman and Non-Executive Director, respectively, with effect from 1st April, 2009.

During the financial year 2009-10, the Board of Directors appointed Mr. S. Ramadorai as an Additional Director with effect from 16th September, 2009. Your Directors recommend the appointment of Mr. S. Ramadorai as a Director of your Company at the forthcoming Annual General Meeting.

Mr. Hasit Dani, Non-Executive Director, has resigned as a Director of the Company effective 3rd June, 2010. The Board places on record its appreciation for his contribution to the Company as a Director during his association with the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Mahendra Shah, Mr. Mahendra Choksi and Ms. Tarjani Vakil are due to retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. Appropriate resolutions for their reappointment are being placed before you for your approval at the ensuing Annual General Meeting. The brief resume of the aforesaid Directors and other information have been detailed in the Notice, forming part of this report. Your Directors recommend their reappointment as Directors of your Company.

M/s. Shah & Co., Chartered Accountants and M/s. B S R & Associates, Chartered Accountants, Joint Auditors of your Company are due for retirement at the ensuing Annual General Meeting and are eligible for reappointment. Your Directors recommend their reappointment for the ensuing year. The Statutory Auditors of your Company have submitted a certificate to your Company that they have subjected themselves for the peer review process of the Institute of Chartered Accountants of India for the financial year 2009-10.

The Board of Directors at their meeting held on 25th July, 2009, appointed Ms. Ketki Visariya as the Cost Auditor of the Company for the financial year 2009-10 to conduct the audit of the cost records of the Company. The Company has also received approval from the Central Government for appointing Ms. Ketki Visariya as the Cost Auditor of your Company for the financial year 2009-10.

Your Directors wish to place on record their appreciation of the contribution made by employees at all levels to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation for the shareholders, dealers, consumers, banks and other financial institutions for their continued support.

For and on behalf of the Board

Chairman

Mumbai

3rd June, 2010

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