It is my privilege to communicate with you at the end of another
 successful year for Asian Paints.
 
 The financial year 2010-11 was one in which both the world as well as
 the Indian economy showed resilience.  While the global economy
 rebounded amidst fears of a double-dip recession, the Indian economy
 surged ahead on the back of its strong fundamentals. There were and are
 concerns that cannot be ignored: high inflation and shortage of
 liquidity in India; the Aftermath of the dreadful earthquake and
 tsunami in Japan; sovereign debt crisis in several countries in the EU;
 and uprisings in the Middle East and the impact on oil prices. These
 have had and continue to have an impact on the business environment.
 
 The biggest impact on your Company was high increase in material costs.
 This was primarily due to spiraling cost of key Items like titanium
 dioxide, monomers, crude- based derivatives, etc.
 
 In spite of this, your Company achieved a revenue growth of 23.4% while
 net profit remained fat in its standalone operations. This makes it a 5
 year CAGR of 22.2% in revenue and 32.9% in net profits.
 
 Our Decorative business achieved good growth aided by buoyant demand
 across geographies. Its interesting to note that demand from rural and
 smaller towns were significantly better than large cities and towns of
 the country.
 
 Due to high inflation in material prices, five price increases
 aggregating 12% were implemented during the year.
 
 We persisted with our mission of building strengths and capabilities
 for the future which will help us achieve long term market growth to
 further consolidate our leadership position. The focus continued to be
 on initiatives to increase customer satisfaction, improving our product
 mix, expanding the dealer network and enhancing our manufacturing and
 supply chain capabilities. We feel that our stress on customer
 centricity will go a long way in creating a sustainable and competitive
 advantage for your Company.
 
 To keep pace with the increasing demand for our decorative coatings
 year-on-year, your Company is continually investing in augmenting its
 manufacturing capabilities. In April 2010, the state-of-the-art
 manufacturing facility at Rohtak in Haryana was commissioned with an
 initial capacity of 150,000 Kilo Liters (KL) per annum. Your Company
 plans to increase the installed capacity at this plant to 200,000 KL
 per annum by fourth quarter of FY 2011-12. You will be also happy to
 learn that construction work for your Companys proposed seventh
 decorative paint plant in Khandala, Maharashtra has commenced After
 obtaining the requisite permissions. Your Company expects to commission
 this plant by end of FY 2012-13 with an initial capacity of 300,000 KL
 per annum.
 
 Your Companys Joint Venture with PPG Industries Inc., Asian PPG
 Industries Limited performed well aided by good demand for automotive
 coatings.  Although demand environment for non-automotive industrial
 coatings was challenging in FY 2010-11, we are optimistic about the
 growth opportunities that exist in this segment going ahead. A
 testimony to this optimism is the announcement of our plans to enhance
 the fourteen year old relationship with PPG by forming a new 50:50
 joint venture for servicing the protective, powder coatings, industrial
 containers and light industrial coatings markets. This new joint
 venture will leverage PPGs technology and global customer
 relationships while continuing to build on Asian Paints customer base,
 manufacturing footprint, distribution channels and local relationships.
 
 FY 2010-11 was a challenging year for our International Business Unit
 with many of our overseas subsidiaries still impacted by global
 economic slowdown. The recent uprisings in Egypt and Bahrain, which
 were markets that were performing well, have added to the uncertainty;
 normalcy is yet to return to those two markets. Our South Asian units
 in Nepal, Sri Lanka and Bangladesh, however, proved to be the silver
 lining as they registered good growth during the period. The
 International Business Unit is now well positioned to capitalize on
 growth opportunities that may emerge, After having divested its loss
 making subsidiaries in South East Asian market in the financial year
 2009-10.
 
 While there is still some nervousness about the global economy, India
 seems frmly set on the growth path.  Consumer demand is strong, exports
 are rising and investment is picking up. Most important, the macro-
 fundamentals of our economy are sound despite factors like high
 inflation.
 
 The road ahead for FY 2011-12 is not devoid of obstacles; some
 immediate ones being the surging inflation in raw material prices which
 is putting pressure on margins, suppressed demand conditions in the
 Middle East and Caribbean regions and the uncertainties prevailing in
 the global economy specifcally with respect to sovereign debt crisis in
 some of the European Union countries which could have global
 repercussions on demand conditions. But your Company has always risen
 above challenges; driven by its resilience, foresight and strategic
 direction and I am sure this year will be no different.
 
 Your Company has always followed the highest standards of Corporate
 Governance and considers it as more of an ethical requisite than a
 regulatory necessity. Its a matter of great pride that our success
 over the years, have come without ever compromising on integrity, our
 environmental and social obligations or regulatory compliance.
 Moreover, going ahead we commit to continually update and strengthen
 your Companys governance structures.
 
 Success of any business enterprise like your Company can only be
 possible because of its employees and people who put in unrelenting
 efforts to rise to excellence.  I would like to reiterate that your
 Companys employees are its greatest asset and it is entirely due to
 their hard work, perseverance, committment and dedication that your
 Company has been able to deliver superior growth and value creation
 with every passing year. I sincerely thank all our shareholders,
 business partners and our customers for the continued support and faith
 reposed in your Company. I would like to assure you that your Company
 would continue to remain committed to deliver strong growth and enhance
 shareholder and customer value in every possible way we can.
 
 Warm regards,
 
 Yours sincerely,
 
 Ashwin Choksi