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Asian Paints

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Directors Report Year End : Mar '16    « Mar 15
Dear Members,
 
 The Directors have pleasure in presenting the 70th Annual Report of
 your Company for the financial year ended 31st March, 2016.
 
 FINANCIAL RESULTS
 
 The financial performance of your Company for the year ended 31st
 March, 2016 is summarized below:
 
                                                     (Rs. in crore)
     
                                              Standalone      
  
                                     Year ended   Year ended  Growth   
                                     31.03.2016   31.03.2015       %
 
 Revenue from Operations (Net)       12,645.88    11,648.83      8.6
 
 EBITDA                               2,704.86     2,197.34     23.1 
 
 Less: Finance Costs                     23.40        27.13 
 
 Less: Depreciation                     238.36       223.11 
 
 Profit Before Exceptional 
 Items & Tax                          2,443.10     1,947.10     25.5 
 
 Exceptional Items                       65.35        13.53    
 
 Profit Before Tax                    2,377.75     1,933.57     23.0 
 
 Less: Tax Expense                      780.32       606.17   
 
 Profit After Tax                     1,597.43     1,327.40     20.3
 
 Less: Minority Interest                     -            -
 
 Profit attributable to 
 shareholders of the Company          1,597.43     1,327.40     20.3 
 
 Opening balance in Statement 
 of Profit and Loss                   1,000.00     1,000.00
 
 
 AMOUNT AVAILABLE FOR 
 APPROPRIATION                        2,597.43     2,327.40
 
 That the Directors recommends 
 for appropriation as under:
 
 Dividend - Interim                     211.02       172.66 
 
          - Proposed Final              508.37       412.46
 
 Tax on Dividen                         145.14       112.95
 
 Transfer to General Reserve            532.90        629.33 
 
 Closing Balance in Statement 
 of Profit and Loss                   1,200.00      1,000.00
 
                                            Consolidated
 
 
                                     Year ended   Year ended  Growth   
                                     31.03.2016   31.03.2015       %
 
 
 Revenue from Operations (Net)       15,534.14    14,182.81       9.5
 
 EBITDA                               3,009,34     2,405,12      25,1 
 
 Less: Finance Costs                     40,51        34,76 
 
 Less: Depreciation                     287.97       265,92             
         
 
 Profit Before Exceptional 
 Items & Tax                           2,680.86     2,104,44      
                     
 Exceptional Items                        52.45        27.57  
                         
 Profit Before Tax                     2,628.41     2,076.87     26.6
                    
  
 Less: Tax Expense                       849,14       649,54                  
 
 Profit After Tax                      1,779,27      1,427.33    24.7          
 
 Less: Minority Interest                   53.06       32.18            
         
 
 Profit attributable to 
 shareholders of the Compay             1,726.21    1,395.15     23.7        
 Opening balance in Statement 
 of Profit and Loss                     1,000,00    1,000,00                  
 
 
 AMOUNT AVAILABLE FOR 
 APPROPRIATION                          2,726,21    2,395.15        
             
 
 That the Directors recommends 
 for appropriation as under:
 
 Dividend - Interim                       211.02      172.66                   
  
          - Proposed Final                508.37      412,46            
 
 Tax on Dividen145.14 112,46                      
 
 Transfer to General Reserve              661.68      697,08          
 
 Closing Balance in Statement 
 of Profit and Loss                     1,200,00    1,000,00                  
 
 
 
 OVERVIEW OF COMPANY''S FINANCIAL PERFOMANCE
 
 Net revenue from operations on standalone basis increased to Rs.
 12,645.88 crores as against Rs. 11,648.83 crores in the previous year - a
 growth of 8.6%. The performance includes results of bath business
 acquired in June, 2014. Cost of goods sold as a percentage to net
 revenue from operations decreased to 51.6% as against 55.3% in the
 previous year. The decrease is on account of reduction in key raw
 material prices on the back of significant drop in crude prices.
 Employee cost as a percentage to net revenue from operations increased
 to 5.3% (Rs. 664.20 crores) against 5.2% (Rs. 606.94 crores) in the
 previous year.  Other expenses as a percentage to net revenue from
 operations increased to 23.5% (Rs. 2,972.55 crores) as against 22.2% (Rs.
 2,591.52 crores) in the previous year.
 
 Your Company has made an assessment of the fair value of investment
 made in its subsidiary, Sleek International Private Limited (''Sleek'')
 taking into account the past business performance, prevailing business
 conditions and revised expectations of the future performance given the
 understanding built up since acquisition. Based on above factors and as
 a matter of prudence, your Company has made a provision for diminution
 in the value of investment made in Sleek to the tune of Rs. 65.30 crores
 in the year ended 31st March, 2016. The same is disclosed under
 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. 1,597.43 crores as
 against Rs. 1,327.40 crores in the previous year - a growth of 20.3%. The
 growth in profit is mainly driven by increase in net revenue from
 operations and softening of input prices during the year.
 
 On a consolidated basis, your Company achieved net revenue of Rs.
 15,534.14 crores as against Rs. 14,182.81 crores - a growth of 9.5%. Net
 profit after minority interest for the group for the current year is Rs.
 1,726.21 crores as against Rs. 1,395.15 crores in the previous year - a
 growth of 23.7%.
 
 There are no material changes and commitments affecting the financial
 position of your Company which have occurred between the end of the
 financial year 2015-16 and the date of this report.
 
 CONSOLIDATED ACCOUNTS
 
 The Consolidated Financial Statements of your Company for the financial
 year 2015-16 are prepared in compliance with applicable provisions of
 the Companies Act, 2013 read with the Rules issued thereunder,
 applicable Accounting Standards and the provisions of SEBI (Listing
 Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter
 referred to as the Listing Regulations). The consolidated financial
 statements have been prepared on the basis of audited financial
 statements of your Company, its subsidiaries and associate companies,
 as approved by the 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 (''AQM'') 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
 (www.asianpaints.com).
 
 During the financial year 2015-16, M/s. Kitchen Grace (India) Private
 Limited, wholly owned subsidiary of Sleek, has merged with Sleek
 pursuant to an Order dated 12th February, 2016 passed by the Hon''ble
 High Court of Bombay. The said Order was filed with the Registrar of
 Companies, Maharashtra at Mumbai on 30th March, 2016 making the Order
 effective from the appointed date of 1st April, 2015.
 
 M/s. Multifacet Infrastructure (India) Limited, your Company''s wholly
 owned non-operative subsidiary, has on 21st March, 2016, filed an
 application with the Registrar of Companies, Pondicherry for striking
 off its name from the Register under Fast Track Exit mode pursuant to
 Section 560 and any other applicable provisions of the Companies Act,
 1956 (including any statutory modification) or re-enactment(s) for the
 time being in force).
 
 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 restructuring and
 investments made by your Company 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 details of the overall industry structure, economic
 developments, performance and state of affairs of your 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 2015-16.
 
 DIVIDEND
 
 During the financial year 2015-16, your Company declared and paid an
 interim dividend of Rs. 2.20 (Rupees two and paise twenty only) per
 equity share of the face value of Rs. 1 (Rupee one) each in the month of
 October, 2015. In addition, your Directors recommend payment of Rs. 5.30
 (Rupees five and paise thirty only) per equity share of the face value
 of Rs. 1 (Rupee one) each as final dividend for the financial year
 2015-16, for the approval of the shareholders at the ensuing AGM. If
 approved, the total dividend (interim and final dividend) for the
 financial year 2015-16 will be Rs. 7.50 (Rupees seven and paise fifty
 only) per equity share of the face value of Rs. 1 (Rupee one) each as
 against the total dividend of Rs. 6.10 (Rupees six and paise ten only)
 per equity share of the face value of Rs. 1 (Rupee one) paid for the
 previous financial year 2014-15.
 
 PUBLIC DEPOSITS
 
 During the year under review, your 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) or re-enactment(s) for the time being in
 force).
 
 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 your Company on
 the environmental, social and governance front forms an integral part
 of this report.
 
 INDUSTRIAL RELATIONS
 
 Your Company has always considered its workforce as its valuable asset
 and continues to invest in their excellence and development programs.
 Your Company has taken several initiatives for enhancing employee
 engagement and satisfaction.
 
 During the financial year 2015-16, a strike was called on 28th April,
 2015 at your Company''s plant situated at Sriperumbudur, Tamil Nadu,
 leading to cessation of work by the operators belonging to Asian Paints
 Employees'' Union. The operations at the said plant returned to normalcy
 by 10th July, 2015. During the period of strike, the markets were
 continued to be serviced from other manufacturing facilities of your
 Company
 
 The industrial relations in respect of all other manufacturing
 facilities and divisions of your Company are normal.
 
 APPOINTMENT OF M/S. TSR DARASHAW LIMITED AS THE REGISTRAR & TRANSFER
 AGENT OF YOUR COMPANY
 
 During the financial year 2015-16, your Company discovered certain
 irregularities at M/s. Sharepro Services (India) Private Limited
 (hereinafter referred to as Sharepro), your Company''s erstwhile
 Registrar & Transfer Agent, with regard to share related and dividend
 encashment activities. After conducting preliminary investigation, your
 Company filed a criminal complaint against Sharepro and some of its
 employees and terminated its services.
 
 The Board of Directors of your Company, at their meeting held on 14th
 March, 2016, approved the appointment of M/s. TSR Darashaw Limited, as
 the Registrar & Transfer Agent with effect from 1st April, 2016. Your
 Company has also sought your consent by way of its Postal Ballot notice
 dated 14th March, 2016, for shifting the Register and Index of Members
 and Returns pertaining to the period(s) on or after 1st April, 2003
 from the office of Sharepro to the office of M/s. TSR Darashaw Limited.
 
 The Register and Index of Members and Returns pertaining to the
 period(s) upto 31st March, 2003 would continue to be maintained at the
 Registered Office of your Company
 
 In accordance with the Interim Order dated 22nd March, 2016, issued by
 the Securities and Exchange Board of India (hereinafter referred to as
 SEBI) against Sharepro and some of its employees, among other things,
 all client companies of Sharepro are required to conduct a thorough
 audit of the records and systems of Sharepro for the past ten years,
 concerning dividend payments and transfer of securities to determine
 whether dividends have been paid to actual/beneficial holders and
 whether securities have been transferred as per the provisions of law.
 The audit is required to be completed within three (3) months from the
 date of the SEBI''s Order and the report is required to be submitted to
 SEBI.
 
 Accordingly, your Company has appointed M/s. Deloitte Touche Tohmatsu
 India LLP, Chartered Accountants, for conducting the audit and the same
 is in progress.
 
 Your Company is committed to protecting the interests of its
 shareholders and has taken necessary steps as per the provisions of law
 against Sharepro and some of its employees.
 
 DIRECTORS AND KEY MANAGERIAL PERSONNEL Retirement by rotation and
 subsequent re-appointment:
 
 Shri Mahendra Choksi and Shri Malav 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 70th AGM of your Company.
 Your Directors recommend their re-appointment as Non-Executive
 Directors of your Company
 
 The Independent Directors of your Company hold office upto 31st March,
 2019 and are not liable to retire by rotation.
 
 Shri K.B.S. Anand, Managing Director & CEO and Shri Jayesh Merchant,
 CFO & Company Secretary, President - Industrial JVs, 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
 (including any statutory modification) or re-enactment(s) 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) or re-enactment(s)
 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 part of this report.
 
 The Managing Director & 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 also
 available on the website of your Company (www.asianpaints.com).
 
 Directors Responsibility Statement:
 
 Pursuant to Section 134(3)(c) of the Companies Act, 2013 (including any
 statutory modification) or re-enactment(s) for the time being in
 force), the Directors of your Company confirm that:
 
 (a) in the preparation of the annual accounts for the financial year
 ended 31st March, 2016, the applicable Accounting Standards and
 Schedule III of the Companies Act, 2013 (including any statutory
 modification) or re-enactment(s) for the time being in force), 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, 2016 and of the profit and loss of
 the Company for the financial year ended 31st March, 2016;
 
 (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 (including any statutory modification) or
 re-enactment(s) for the time being in force) 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 your 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 were adequate and
 operating effectively
 
 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 the Companies Act, 2013 read with
 the Schedules and Rules issued thereunder as well as Regulation
 16(l)(b) of Lisiting Regulations (including any statutory
 modification) or re-enactment(s) for the time being in force).
 
 Evaluation of Board''s Performance;
 
 Pursuant to the provisions of the Companies Act, 2013 read with the
 Rules issued thereunder and the Listing Regulations (including any
 statutory modification(s) or re-enactment(s) for the time being in
 force), the process for evaluation of the annual performance of the
 Directors/ Board/ Committees was carried out. The criteria applied in
 the evaluation process are detailed in the Corporate Governance Report
 which forms part of this report.
 
 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 2015-16 are given in the
 Corporate Governance Report which forms a part of this report.
 
 AUDITORS AND AUDITORS'' REPORT
 
 Statutory Auditors;
 
 At the 69th AGM of your Company, the shareholders had approved the
 appointment of M/s. B S R & Co. LLP, Chartered Accountants (Firm
 Registration No. 101248 W/W - 100022) as the Statutory Auditors to hold
 office till the conclusion of the 70th AGM.
 
 The tenure of office of M/s. B S R & Co. LLP, Chartered Accountants, as
 Statutory Auditors of the Company will expire with the conclusion of
 71st AGM of your Company. M/s. B S R & Co. LLP, Chartered Accountants,
 have been the Statutory Auditors of your Company since the financial
 year 2007-08.
 
 In order to ensure smooth transition and handover, the Board of
 Directors of your Company at their meeting held on 18th January, 2016,
 have on the recommendations of the Audit Committee and subject to your
 approval at the ensuing 70th AGM, approved the appointment of:
 
 (a) M/s. B S R & Co. LLP, Chartered Accountants, jointly with M/s.
 Deloitte Haskins & Sells LLP, Chartered Accountants, as the Joint
 Statutory Auditors for the financial year 2016-17, till the conclusion
 of 71st AGM of your Company.
 
 (b) M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm
 Registration No. 117366W/W - 100018), as the Statutory Auditors, for a
 period of five (5) years i.e. from the conclusion of the 70th AGM till
 the conclusion of 75th AGM of your Company
 
 Your 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 thereunder
 (including any statutory modification(s) or re-enactment(s) for the
 time being in force), from both M/s. Deloitte Haskins & Sells LLP and
 M/s. B S R & Co. LLP Further, both have confirmed that they 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 Statutory Auditors of the Company have not reported any
 fraud as specified under the second proviso of Section 143(12) of the
 Companies Act, 2013 (including any statutory modification) or
 re-enactment(s) for the time being in force).
 
 The Auditors'' Report for the financial year ended 31st March, 2016,
 does not contain any qualification, reservation or adverse remark.
 
 Cost Auditor:
 
 The Board of Directors of your Company, on the recommendations made by
 the Audit Committee at its meeting held on 11th May, 2016 has approved
 the appointment of M/s. RA & Co., Cost Accountants, (Firm Registration
 No. 000242) as the Cost Auditor of your Company to conduct the audit of
 cost records for the financial year 2016-17. The remuneration proposed
 to be paid to the Cost Auditor, subject to your ratification at the
 ensuing 70th AGM, would not exceed Rs. 5.50 lakhs (Rupees five lakhs
 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 for conducting audit of the cost records for
 the financial year 2016-17 along with a certificate confiming their
 independence and arm''s length relationship.
 
 Secretarial Auditor:
 
 In terms of Section 204 of the Companies Act, 2013, the Board of
 Directors of your Company at its meeting held on 11th May, 2016 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
 2016-17.
 
 Your 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, 2017.
 
 The Secretarial Audit Report for the financial year ended 31st March,
 2016 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 as on 31st
 March, 2016 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 herewith as Annexure [D] to this report.
 
 ADOPTION OF NEW ARTICLES OF ASSOCIATION OF YOUR COMPANY
 
 During the financial year 2015-16, new Articles of Association of your
 Company were adopted in accordance with the provisions of the Companies
 Act, 2013 read with the Rules issued thereunder.
 
 RELATED PARTY TRANSACTIONS
 
 During the financial year 2015-16, 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, 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
 thereunder 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. 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 thereunder and the Listing Regulations.
 
 The details of the related party transactions as per Accounting
 Standard 18 are set out in Note [48] to the Standalone Financial
 Statements forming part of this 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].
 
 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, 2016,
 are set out in Note [41] to the Standalone Financial Statements forming
 part of this report.
 
 RISK MANAGEMENT
 
 Your Company has in place an enterprise-wide risk management (ERM)
 system which takes care of risk identification, assessment and
 mitigation. Compliance management has been significantly strengthened
 by the deployment of an integrated compliance management and governance
 framework.
 
 As per the requirements of Regulation 21 of the Listing Regulations,
 your Company has constituted a Risk Management Committee to oversee the
 risk management efforts in your 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.
 
 Risk Management Committee reviews the process of risk management in
 your Company. The management periodically briefs the Committee on the
 emerging risks along with the risk mitigation plans put in place. Risk
 management is interlinked with the annual planning exercise where each
 function and business carries out a fresh risk identification,
 assessment and draws up treatment plans.
 
 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 Regulation
 22 of the Listing Regulations. Your Company has an ethics hotline
 managed by a third party which employees of your Company can use to
 report any violations to the Code of Conduct in an anonymous manner. In
 addition to the hotline, the third party also provides a portal wherein
 employees can raise any suspected or actual violations to the Code of
 Conduct. Specifically, employees can raise concerns regarding any
 discrimination, harassment, victimization, any other unfair practice
 being adopted against them or any instances of fraud by or against your
 Company
 
 Any incidents that are reported are investigated and suitable action
 taken in line with the whistle blower policy. The Whistle Blower Policy
 is also available on your Company''s website (www.asianpaints.com).
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 The CSR expenditure incurred by your Company during the financial year
 2015-16 was Rs. 34.44 crores which was higher than the statutory
 requirement of 2% of the average profit for the last three financial
 years.
 
 The CSR initiatives of your Company were under the thrust areas of
 health & hygiene, education, water management and enhancement of
 vocational training.
 
 Your Company''s CSR Policy statement and annual report on the CSR
 activities undertaken during the financial year ended 31st March, 2016,
 in accordance with Section 135 of the Companies Act, 2013 and Companies
 (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this
 report as Annexure [F],
 
 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 Statutory 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 Statutory
 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 Statutory 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
 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 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: 11th May, 2016
Source : Dion Global Solutions Limited
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