Home  »  Company  »  Asian Paints Ltd.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Asian Paints Ltd.

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, 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



 
Subscribe now to get personal finance updates in your inbox!