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Asian Paints
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Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Directors have pleasure in presenting the 68th Annual Report of
 your Company and the Audited financial statements for the financial
 year ended 31st March, 2014.
 
 FINANCIAL RESULTS
 
 The financial performance of your Company for the year ended 31st
 March, 2014 is summarised below:
 
 
                                                  (Rs. in Crores)
                                          Asian Paints Limited
  
                                    2013-141      2012-13       Growth
 
 Revenue from Operations (Net)     10,418.78     8,960.07        16.3%
 
 EBITDA                             1,950.93     1,673.42        16.6%
 
 Less: Finance Costs                   26.08        30.56
 
 Less: Depreciation                   212.32       126.98
 
 Profit Before Exceptional 
 Item & Tax                         1,712.53     1,515.88        13.0%
 
 Exceptional Item                       9.96            -
 
 Profit Before Tax                  1,702.57     1,515.88        12.3%
 
 Less: Tax expense                    533.51       465.88
 
 Profit After Tax                   1,169.06     1,050.00        11.3% 
 
 Less: Minority Interest                   -            -        
 
 Profit attributable to 
 shareholders of the 
 Company                            1,169.06     1,050.00        11.3%
 
 Opening balance in
 Statement of Profit and 
 Loss                               1,000.00       700.00
 
 AMOUNT AVAILABLE FOR               2,169.06     1,750.00 
 APPROPRIATION
 
 That the Directors 
 recommend for 
 appropriation as under:
 
 Dividend - Interim                   105.51        91.13
 
 - Proposed Final                     402.86       350.10
 
 Tax on Dividend                       82.02        74.29
 
 Transfer to General Reserve          578.67       234.48
 
 Closing balance in Statement 
 of Profit and Loss                 1,000.00     1,000.00
 
 
                                  Asian Paints Limited Group 
                                  Consolidated
 
                                  2013-14      2012-13     Growth
  
 Revenue from Operations (Net)    12,714.81    10,938.61       16.2%
 
 EBITDA                            2,132.11     1,846.46       15.5%
 
 Less: Finance Costs                  42.22        36.65
 
 Less: Depreciation                   245.66       154.60
 
 Profit Before Exceptional          1,844.23     1,655.21       11.4%
 
 Exceptional Item                       9.96            -
 
 Profit Before Tax                  1,834.27     1,655.21       10.8%
 
 Less: Tax expense                    571.51       495.69
 
 Profit After Tax                   1,262.76     1,159.52        8.9%
 
 Less: Minority Interest               43.95        45.64
 
 Profit attributable to 
 Shareholders of the 
 Company                            1,218.81     1,113.88        9.4%
 
 Opening balance in
 Statement of Profit and 
 Loss                               1,000.00       700.00
 
 AMOUNT AVAILABLE FOR               2,218.81     1,813.88
 APPROPRIATION
 
 That the Directors 
 recommend for 
 appropriation as under:
 
 Dividend - Interim                   105.51        91.13
 
 - Proposed Final                     402.86       350.10
 
 Tax on Dividend                       82.02        74.29
 
 Transfer to General Reserve          628.42       298.36
 
 Closing balance in Statement 
 of Profit and Loss                 1,000.00     1,000.00 
 
 
 
 RESULTS OF OPERATIONS
 
 Net revenue from Operations on standalone basis increased to Rs.
 10,418.78 crores as against Rs. 8,960.07 crores in the previous year - a
 growth of 16.3%. The profit after tax for the current year is Rs.
 1,169.06 crores as against Rs. 1,050.00 crores in the previous year - a
 growth of 11.3%.
 
 On Consolidated basis your Company achieved net revenue of Rs. 12,714.81
 crores as against Rs. 10,938.61 crores - a growth of 16.2%. Net profit
 after minority interest for the current year is Rs. 1,218.81 crores as
 against Rs. 1,113.88 crores in the previous year - a growth of 9.4%.
 
 CONSOLIDATED ACCOUNTS
 
 The Consolidated Financial Statements of your Company for the financial
 year 2013-14 are prepared in compliance with applicable Accounting
 Standards and applicable clauses of the Listing Agreement as prescribed
 by the Securities and Exchange Board of India. The consolidated
 accounts have been prepared on the basis of audited financial
 statements received from subsidiaries and joint venture companies, as
 approved by their respective Boards.
 
 A separate statement containing the salient features of all
 subsidiaries of your Company which includes capital, reserves, total
 assets, total liabilities, details of investment, turnover, etc., forms
 part of this report in compliance with the General Circular No. 2/ 2011
 dated 8th February, 2011 issued by Ministry of Corporate Affairs
 granting a general exemption from the provisions of Section 212(8) of
 the Companies Act, 1956. The annual accounts and financial statements
 of the subsidiary companies and related detailed information shall be
 made available to members on request and are open for inspection at the
 Registered Office of your Company
 
 SUBDIVISION OF SHARES
 
 Pursuant to the approval of the members at the 67th Annual General
 Meeting of the Company held on 24th June, 2013 to the sub-division of
 the equity shares of the Company, each equity share of nominal face
 value of Rs. 10 (Rupees ten) each was sub-divided to 10 (ten) equity
 share of the face value of Rs. 1 (Rupee one) each. The effective date for
 the said sub-division was 1st August, 2013.
 
 The paid up equity share capital of your Company after sub- division of
 the face value of equity shares is Rs. 95,91,97,790 (Rupees ninety five
 crores ninety one lakhs ninety seven thousand and seven hundred ninety
 only) divided into 95,91,97,790 of the face value of Rs. 1 (Rupee one)
 each.
 
 DIVIDEND
 
 During the financial year 2013-14, your Company declared and paid an
 interim dividend ofRs. 1.10 (Rupee one and paise ten only) per equity
 share of the face value of Rs. 1 (Rupee one) each in the month of
 October, 2013. In addition, your Directors recommend payment of Rs. 4.20
 (Rupees four and paise twenty only) per equity share as the final
 dividend for the financial year 2013-14. If approved, the total
 dividend (interim and final dividend) for the financial year 2013-14
 will be Rs. 5.30 (Rupees five and paise thirty only) per equity share of
 the face value of Rs. 1 (Rupee one) each.
 
 TRANSFER TO RESERVES
 
 Your Company proposes to transfer Rs. 578.67 crores to the general
 reserve. An amount of Rs. 1,000 crores is proposed to be retained in the
 statement of profit and loss.
 
 CORPORATE GOVERNANCE
 
 In compliance with the requirements of Clause 49 of the Listing
 Agreement, a separate Report on Corporate Governance along with the
 Auditors Certificate 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 with the Stock Exchanges, detailing the various initiatives
 of the Company forms part of this Report.
 
 SECRETARIAL AUDIT
 
 Dr. K.R. Chandratre, Practicing Company Secretary, conducted
 Secretarial Audit pursuant to the provisions of Section 383A of the
 Companies Act, 1956, for the financial year 2013-14. 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
 
 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.
 
 HOME IMPROVEMENT & DECOR
 
 As informed in the last year''s Annual Report, your Company as a part of
 its strategic initiative in the direction of Home Improvement & Decor,
 identified modern kitchen space as a key opportunity to be explored in
 synergy with the existing line of the decorative paints business in
 India. In August, 2013 your Company acquired 51% stake in Sleek group,
 which is a major player in the organized kitchen space with a pan India
 presence and is engaged in the business of manufacturing, selling and
 distribution of modular kitchens as well as kitchen components
 including wire baskets, cabinets, appliances, accessories, etc.
 
 Your Company is also exploring other home improvement segments and has
 identified bath and wash business segment as another opportunity area.
 In early May 2014, your Company has entered into a binding agreement
 with Ess Ess Bathroom Products Private Limited (Ess Ess) for
 acquisition of its entire front end sales business including Brands,
 Network and Sales infrastructure, subject to the satisfaction of
 certain condition precedents and applicable statutory approvals. Ess
 Ess is a prominent player in this space, with high quality products
 across consumer segments.
 
 Your Company strongly believes that these business/ventures will offer
 significant opportunities and synergy to your Company in Home
 Improvement & Decor segment.
 
 ACQUISITION OF SHARES IN BERGER INTERNATIONAL LIMITED, SINGAPORE
 
 During the year, your Company, through its wholly owned subsidiary -
 Asian Paints (International) Limited, Mauritius acquired a 25.72% stake
 from a minority shareholder in Berger International Limited (BIL), a
 subsidiary which was listed on the Singapore Stock Exchange.
 Thereafter, a voluntary cash offer was made to all the shareholders of
 BIL. Post such offer, the stake in BIL increased to 96.79% and
 consequently, BIL has been delisted from the Singapore Stock Exchange.
 BIL has no operations in India.
 
 AGREEMENT TO ACQUIRE SHARES IN KADISCO CHEMICAL INDUSTRY PLC, ETHIOPIA
 
 Asian Paints (International) Limited, Mauritius, your Company''s wholly
 owned subsidiary signed an agreement with the shareholders of Kadisco
 Chemical Industry PLC, Ethiopia (Kadisco) in April, 2014 to acquire
 either directly or through its subsidiaries 51% of the equity share
 capital of Kadisco, subject to necessary regulatory approvals and
 documentation. Kadisco is engaged in the manufacturing and selling of
 paints, other coatings and adhesives in Ethiopia.
 
 INDUSTRIAL RELATIONS
 
 In December, 2013 a strike was called by the Asian Paints Employees
 Union, Sriperumbudur and workmen at your Company''s plant situated at
 Sriperumbudur, Tamil Nadu which affected the operations of that plant.
 The strike has ended in April, 2014 and the plant has resumed normal
 operations.
 
 Your Company has discontinued manufacturing activities at its Bhandup
 plant with effect from 5th May, 2014. A Voluntary
 Retirement/Separation Scheme along with an alternate option of
 relocation to other facilities of your Company was offered to all the
 workmen at the Bhandup plant in Mumbai. All workmen have accepted
 either the Voluntary Retirement/Separation Scheme or relocation to
 other facilities of your Company
 
 Asian Paints Industrial Coatings Limited (APICL), your Company''s wholly
 owned subsidiary has closed down the operations at its powder coatings
 plant at Baddi, Himachal Pradesh in November, 2013, due to significant
 decline in the processing volume of powder coatings in the last two
 years. APICLs plant at Sarigam, Gujarat will continue its normal
 operations and is sufficient to cater to the future requirements.
 
 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(l)(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.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Details of expenditure and earnings in foreign currencies are given
 under Note 33 and 34 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(l)(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 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
 confirm that:
 
 - in preparation of the annual accounts for the year ended 31st March,
 2014 the applicable accounting standards read with requirements set out
 under Schedule VI of the Companies Act, 1956 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 your Company
 as on 31st March, 2014 and of the profit of the Company for the year
 ended that date;
 
 - proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 and Companies Act, 2013 to the extent applicable,
 for safeguarding the assets of your Company and for preventing and
 detecting fraud and other irregularities; and
 
 - the annual accounts have been prepared on a going concern basis.
 
 DIRECTORS
 
 During the year 2013-14, Shri Abhay Vakil and Mrs. Ina Dani resigned as
 Non-Executive Directors of your Company on 24th September, 2013 and
 21st October, 2013, respectively. Ms.  Tarjani Vakil retired as a
 Director of your Company at the last year''s Annual General Meeting. In
 terms of Section 152 of the Companies Act, 2013, Shri Amar Vakil,
 liable to retire by rotation at the ensuing Annual General Meeting,
 does not wish to seek re- appointment at the ensuing Annual General
 Meeting and wishes to retire as Director of your Company. Shri R.A.
 Shah, Independent Director on the Board of Directors of your Company
 does not wish to be appointed at the ensuing Annual General Meeting on
 the Board of your Company pursuant to the provisions of Section 149,
 152, Schedule IV and other applicable provisions of the Companies Act,
 2013 read with Companies (Appointment and Qualification of Directors)
 Rules, 2014. The Board places on record its appreciation for their
 valuable contribution to your Company as Directors during their
 association with your Company.
 
 The Board of Directors appointed Shri Malav Dani as a Non-Executive
 Director of your Company with effect from 21st October, 2013 due to the
 casual vacancy created by resignation of Mrs. Ina Dani. In terms of
 Section 161 of the Companies Act, 2013, Mrs. Ina Dani would have held
 office up to the date of the ensuing Annual General Meeting and
 accordingly, the term of Shri Malav Dani as a Director appointed in
 casual vacancy will expire at the ensuing Annual General Meeting. Shri
 Malav Dani is being appointed as the Director of your Company at the
 ensuing Annual General Meeting.
 
 The Board of Directors at their meeting held on 14th May, 2014, subject
 to the approval of the shareholders at the ensuing Annual General
 Meeting, considered and approved the re-appointment of Shri K.B.S.
 Anand as the Managing Director & CEO of your Company for a further term
 of three (3) years commencing from 1st April, 2015 to 31st March, 2018.
 
 The Board of Directors of your Company at the aforementioned meeting
 also appointed Ms. Amrita Vakil and Mrs. Vibha Paul Rishi as an
 Additional/Non-Executive Director and Additional / Independent
 Director, respectively, on the Board of Directors of your Company
 
 In terms 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, the
 Independent Directors can hold office for a term of up to five (5)
 consecutive years on the Board of Directors of your Company and are not
 liable to retire by rotation. Accordingly, it is proposed to appoint
 Shri Dipankar Basu, Shri Mahendra Shah, Shri Deepak M. Satwalekar, Dr.
 S. Sivaram, Shri S. Ramadorai, Shri M.K. Sharma and Mrs. Vibha Paul
 Rishi as Independent Directors of your Company up to 5 (five)
 consecutive years up to on 31st March, 2019.
 
 Appropriate resolutions for the appointment/ re-appointment of
 Directors 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 appointment/re- appointment as Directors of your
 Company
 
 AUDITORS
 
 M/s. Shah & Co., Chartered Accountants and M/s. B S R & Associates LLP,
 Chartered Accountants, Joint Statutory Auditors are due for retirement
 in accordance with the provisions of the Companies Act, 1956 at the
 ensuing Annual General Meeting.  M/s. Shah & Co., Chartered Accountants
 and M/s. B S R & Co., LLP, Chartered Accountants are being appointed as
 the Joint Statutory Auditors of your Company at the ensuing Annual
 
 General Meeting. Your Directors recommend their appointment for the
 ensuing year.
 
 The Company has received letters from M/s. Shah & Co., Chartered
 Accountants and M/s. B S R & Co., LLP, Chartered Accountants, to the
 effect that their appointment, if made, would be within the prescribed
 limits under Section 141(3)(g) of the Companies Act, 2013 and that they
 are not disqualified from being appointed as the Joint Statutory
 Auditors of the Company
 
 COST AUDITOR
 
 Your Company had appointed M/s. RA & Co., Cost Accountants as the Cost
 Auditor of your Company for the financial year 2013-14 to conduct the
 audit of the cost records of your Company
 
 As per Section 148 read with Companies (Audit & Auditors) Rules, 2014
 and other applicable provisions, if any, of the Companies Act, 2013 the
 Board of Directors of your Company has appointed M/s. RA & Co., Cost
 Accountants as the Cost Auditor of your the Company for the financial
 year 2014-15 on the recommendations made by the Audit Committee. The
 remuneration proposed to be paid to the Cost Auditors, subject to the
 ratification by the members at the ensuing Annual General Meeting,
 would be Rs. 6,00,000 (Rupees six lacs only) excluding out of pocket
 expenses, if any
 
 The Cost Audit report for the financial year 2012-13 was filed within
 the due date. The due date for submission of the Cost Audit Report for
 the year 2013-14 is within 180 days from 31st March, 2014.
 
 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 Mumbai 
 
 14th May, 2014
Source : Dion Global Solutions Limited
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