The Directors have pleasure in presenting the 65th Annual Report of
 your Company and the Audited Accounts for the financial year ended 31st
 March, 2011.
 
 FINANCIAL RESULTS
 
                                                      (Rs. in Crores)
 
                    Asian Paints Limited   Asian Paints Limited Group
                                                   Consolidated
 
                  2010-11  2009-10  Growth   2010-11  2009-10  Growth
                                     (%)                        (%)
 
 Sales and 
 Operating 
 Income (Net)   6322.24   5125.08   23.4    7706.24  6680.94   15.3
 
 Operating
  profit         1232.66   1153.71    6.8    1395.60  1367.90    2.0
 
 Less: Interest   15.35     13.76             22.23    28.47
 
 Less: 
 Depreciation     94.48     60.74            113.13    83.56
 
 Profit before 
 Tax and excep
 -tional Item   1122.83   1079.21    4.0    1260.24  1255.87    0.3
 
 Add/(Less): 
 Exceptional Item  -        25.46     -        -        1.15
 
 Profit before 
 Tax            1122.83   1104.67    1.6    1260.24  1257.02    0.3
 
 Less: Provision 
 for Taxes       347.68    330.17            378.89   373.11
 
 Profit After Tax 775.15    774.50    0.1     881.35   883.91   (0.3)
 
 Less: Minority 
 interest           -         -      -        38.11    48.27
 
 Net profit 
 attributable to 
 shareholders of 775.15    774.50    0.1     843.24   835.64    0.9
 the Company
 
 Add: Balance 
 brought forward 
 from the        600.00    230.00            600.00   230.00
 previous year
 
 DISPOSABLE 
 PROFIT         1375.15   1004.50           1443.24  1065.64
 
 That the 
 Directors 
 recommend for
 appropriation 
 as under:
 
 Dividend - 
 Interim          81.53     81.53             81.53    81.53
 
 - Final         225.41    177.45            225.41   177.45
 
 Tax on Dividend  50.11     43.33             50.11    43.33
 
 Transfer to 
 General Reserve 418.10    102.19            486.19   163.33
 
 Balance carried 
 forward to 
 Balance Sheet   600.00    600.00            600.00   600.00
 
 STANDALONE FINANCIALS
 
 Net sales and operating income for the standalone entity increased to Rs.
 6,322.24 crores from Rs. 5,125.08 crores in the previous year – a growth
 of 23.4%. The operating profit (PBDIT) increased by 6.8%, from Rs.
 1,153.71 crores to Rs. 1,232.66 crores. The profit After tax for the
 current year is Rs. 775.15 crores as against Rs. 774.50 crores in the
 previous year.
 
 CONSOLIDATED FINANCIALS
 
 The consolidated sales and operating income net of discounts and excise
 duty increased to Rs. 7,706.24 crores from Rs. 6,680.94 crores – growth of
 15.3%.  Net profit After minority interest for the group for the current
 year is Rs. 843.24 as against Rs. 835.64 crores in the previous year.
 
 CONSOLIDATED ACCOUNTS
 
 The Ministry of Corporate Affairs (MCA) by General Circular No. 2/2011
 dated 8th February, 2011, issued a direction under Section 212(8) of
 the Companies Act, 1956 that the provisions of Section 212 shall not
 apply to Companies in relation to their subsidiaries, subject to
 fulflling certain conditions mentioned in the said circular with
 immediate effect. The Board of Directors of your Company at its meeting
 held on 10th May, 2011, approved the Audited Consolidated Financial
 Statements for the financial year 2010-11 in accordance with the
 Accounting Standard (AS–21) and other Accounting Standards issued by
 the Institute of Chartered Accountants of India as well as Clause 32 of
 the Listing Agreement, which include financial information of all its
 subsidiaries, and forms part of this report. The Consolidated Financial
 Statements of your Company for the financial year 2010-11, are prepared
 in compliance with applicable Accounting Standards and where applicable
 Listing Agreement as prescribed by the Securities and Exchange Board of
 India.
 
 The annual accounts and financial statements of the subsidiary companies
 of your Company and related detailed information shall be made
 available to members on request and are open for inspection at the
 Registered office of your Company. Your Company has complied with all
 the conditions as stated in the circular and accordingly has not
 attached the financial statements of its subsidiary Companies for the
 fnancial year 2010-11. A statement of summarized financials of all
 subsidiaries of your Company including capital, reserves, total assets,
 total liabilities, details of investment, turnover, etc., pursuant to
 the General Circular issued by Ministry of Corporate office, forms part
 of this report.
 
 The Consolidated Financial Statements include results and financial
 statements of certain subsidiaries of your Company for the previous
 year for a ffiteen month period from 1st January, 2009 to 31st March,
 2010. This was done to align the accounting year of those subsidiary
 Companies with your Company in the previous year. Thus, the current
 year fgures are not comparable with the corresponding fgures for the
 previous year.
 
 DIVIDEND
 
 During the financial year 2010-11, your Company declared and paid an
 interim dividend of Rs. 8.50 per equity share in the month of November,
 2010. In addition, your Directors recommend payment of Rs. 23.50 per
 equity share as the final dividend for the financial year ended 31st
 March, 2011. If approved, the total dividend (interim and final
 dividend) for the financial year 2010-11 will be Rs. 32.00 per equity
 share; Rs. 27 per equity share was paid as dividend for the previous
 year.
 
 TRANSFER TO RESERVES
 
 Your Company proposes to transfer Rs. 418.10 crores to the general
 reserve. An amount of Rs. 600 crores is proposed to be retained in the
 profit and loss account.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 A detailed review of operations, performance and future outlook of your
 Company and its businesses is given in the Management Discussion and
 Analysis, which forms part of this Report.
 
 CORPORATE GOVERNANCE
 
 During the financial year, Asian Centre for Corporate Governance and
 Sustainability at its 11th International Conference on Governance and
 Sustainability held in February, 2011 recognised your Companys Audit
 Committee as Best Audit Committee for the year 2010. Your Company
 places on record its appreciation for the Audit Committee for its
 outstanding contribution in promoting the philosophy and culture of
 good governance and sustainable development in your Company.
 
 Your Company is compliant with the requirements of Clause 49 of the
 Listing Agreement. Necessary disclosures have been made in this regard
 in the Corporate Governance Report. A certifcate from the Joint
 Statutory Auditors of your Company regarding compliance with the
 requirements of Corporate Governance as stipulated under Clause 49 of
 the Listing Agreement is attached to this report. The report on
 Corporate Governance is included and forms part of this report.
 
 SECRETARIAL AUDIT
 
 Dr. K. R. Chandratre, Practicing Company Secretary conducted
 Secretarial Audit pursuant to provisions of Section 383A of the
 Companies Act, 1956, for the financial year 2010-11. Dr. K. R.
 Chandratre has submitted the Report confirming compliance with the
 applicable provisions of Companies Act, 1956 and other rules and
 regulations issued by SEBI/other regulatory authorities for Corporate
 law.
 
 EXPANSION OF THE JOINT VENTURE WITH PPG INDUSTRIES INC., USA, AND
 ACCELERATION OF GROWTH OF THE NON-DECORATIVE COATINGS BUSINESS
 
 During the year 2010-11, your Company has decided to enhance its
 fourteen year relationship with PPG Industries Inc., USA (PPG), one of
 the worlds leading coatings and specialty products company in order to
 accelerate growth of the non-decorative coatings businesses in India.
 As part of this arrangement, your Company and PPG have decided to
 enhance the existing presence in India by expanding the current 50-50
 joint venture relationship, Asian PPG Industries Limited (APPG), by
 partnering in all segments of the coatings space in India except
 decorative coatings and also establish a second 50:50 joint venture.
 
 APPG currently services the Indian transportation coatings markets and
 this change will expand its scope
 
 to additionally service the industrial liquid, marine and consumer
 packaging markets. The second joint venture will service the
 protective, industrial powder, industrial containers and light
 industrial coatings markets.
 
 The formation of the second Joint Venture involves certain statutory
 and procedural formalities to be complied with. As a frst step to the
 joint venture formation, a new company named AP Coatings Limited (100%
 owned subsidiary of your Company) was formed. Till the formation of new
 Joint Venture, the Industrial business of your Company as well as the
 business of Asian Paints Industrial Coatings Limited (APICL, your
 Companys wholly owned subsidiary carrying on the business of powder
 coatings) will be carried out by AP Coatings Limited.
 
 AP Coatings Limited along with two Indian subsidiaries of PPG will
 merge into APPG and thereAfter, certain businesses will demerge into
 the new 50:50 Joint Venture Company. This arrangement is subject to
 regulatory approvals and pending flling of applications and petitions
 for merger and demerger in accordance with Section 391 to 394 of the
 Companies Act, 1956, before the Honble High Court(s) and the
 subsequent sanction by the respective High Court(s).
 
 Your Company will have effective management control in the second joint
 venture while PPG will take the lead in APPG. This would enable
 utilization of respective strengths in order to capture the growth in
 infrastructure development and globally driven markets in India.
 
 FIXED DEPOSITS
 
 Your Company has not accepted any fxed deposits during the year 2010-11
 and there are no outstanding fxed deposits from the public as on 31st
 March, 2011.
 
 INSURANCE
 
 All the insurable interests of your Company including inventories,
 buildings, plant and machinery and liabilities under legislative
 enactments are adequately insured.
 
 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
 
 Particulars in respect of conservation of energy and technology
 absorption by the Company as per Section 217(1)(e) of the Companies
 Act, 1956, are given as Annexure to this report in Form ‘A and ‘B,
 respectively.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Details of expenditure and earnings in foreign currencies are given
 under Schedule ‘M to the financial statements.
 
 PERSONNEL
 
 The Ministry of Corporate Affairs by notifcation dated 31st March,
 2011, issued the Companies (Particulars of Employees) Amendment Rules,
 2011, which amended the limits of remuneration of the employees
 mentioned under Companies (Particulars of Employees) Rule, 1975.
 Accordingly, as per the Companies (Particulars of Employees) Amendment
 Rules, 2011 and the provisions of Section 217(2A) of the Companies Act,
 1956, details of the names and other particulars of employees drawing
 remuneration aggregating to more than Rs. 60,00,000 (Rupees Sixty Lacs
 Only) per annum and Rs. 5,00,000 (Rupees Five Lacs) per month, are
 required to be attached to this report. However, as per the provisions
 of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
 Annual Accounts of your Company sent to the shareholders do not contain
 the said annexure. Any shareholder desirous of obtaining a copy of the
 said annexure may write to the Company Secretary at the Registered
 office of the Company.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 hereby confirm that:
 
 In preparation of the annual accounts, the applicable accounting
 standards have been followed.
 
 The accounting policies have been selected and applied consistently and
 the judgments and estimates made, are reasonable and prudent, so as to
 give a true and fair view of the state of affairs of the Company as on
 31st March, 2011 and of the profit and loss of the Company for that
 period.
 
 Proper and suffcient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities.
 
 The annual accounts have been prepared on a going concern basis.
 
 DIRECTORS
 
 Mr. P. M. Murty, Managing Director & CEO of your Company was awarded
 the ‘CEO of the Year by Business Standard for the year 2009-10.  Mr.
 P. M. Murty was felicitated by the Honble Prime Minister Shri Manmohan
 Singh in New Delhi on 25th March, 2011. Your Company congratulates Mr.
 P.M. Murty for this recognition and is proud of his contribution to the
 growth of your Company.
 
 Mr. Deepak Satwalekar was recognised and awarded the ‘Best Independent
 Director-2010 by the Global Advisory Board of Asian Centre for
 Corporate Governance & Sustainability at its 11th International
 Conference on Governance and Sustainability held in February, 2011.
 Your Company congratulates Mr. Deepak Satwalekar for this recognition.
 
 As disclosed in the last years Annual Report, Mr. Hasit Dani resigned
 as a Non-Executive Director of your Company on 3rd June, 2010. During
 the financial year 2010-11, the Board of Directors appointed Mrs.  Ina
 Dani as an Additional Director with effect from 27th July, 2010. Mrs.
 Ina Dani is being appointed as the Director of your Company at the
 forthcoming Annual General Meeting. Your Directors recommend her
 appointment as a Director of your Company.
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Mr. Dipankar Basu, Mr. Deepak
 Satwalekar, Mr. Amar Vakil and Mr. R. A. Shah retire by rotation at the
 conclusion of the forthcoming Annual General Meeting and being
 eligible, offer themselves for re-appointment.  Appropriate resolutions
 for their re-appointment are being placed before you for your approval
 at the ensuing Annual General Meeting. The brief resume of the
 aforesaid Directors and other information have been detailed in the
 Notice. Your Directors recommend their re-appointment as Directors of
 your Company.
 
 AUDITORS
 
 M/s. Shah & Co., Chartered Accountants and M/s. B S R & Associates,
 Chartered Accountants, Joint Auditors of your Company are due for
 retirement at the ensuing Annual General Meeting and are eligible for
 re-appointment. Your Directors recommend their re-appointment for the
 ensuing year. The Statutory Auditors of your Company have submitted a
 certifcate to your Company that they have subjected themselves for the
 peer review process of the Institute of Chartered Accountants of India
 for the financial year 2010-11.
 
 COST AUDITOR
 
 Your Company has received approval from the Central Government for
 appointment of Ms. Ketki Visariya, as the Cost Auditor of the Company
 for the financial year 2010-11 to conduct the audit of the cost records
 of the Company. Futher, the due date for submission of Cost Audit
 Report for the FY 2010-11 is 27th September, 2011.
 
 APPRECIATION
 
 Your Directors wish to thank and place on record their appreciation for
 all the employees at all levels for their hard work, solidarity,
 co-operation and support during the year. Your Directors wish to place
 on record their appreciation to customers, shareholders, vendors and
 bankers for their continued support.
 
 For and on behalf of the Board
 
 Ashwin Choksi
 Chairman
 
 Mumbai
 
 10th May, 2011