Schedules Forming Part of the Accounts - domain-B

Transcription

Asian Paints Limited Annual Report 2007-2008
Board of Directors
Ashwin Choksi
Audit Committee
Chairman
Ms. Tarjani Vakil
Ashwin Dani
Chairperson
Vice Chairman & Managing Director
Mahendra Shah
Dipankar Basu
Abhay Vakil
Managing Director
Shareholders Grievance/
Investors Grievance Committee
Mahendra Choksi
Amar Vakil
Hasit Dani
Ms. Tarjani Vakil
Dipankar Basu
Mahendra Shah
Deepak Satwalekar
R.A. Shah
Dr. S. Sivaram
Mahendra Shah
Chairman
Abhay Vakil
Mahendra Choksi
Hasit Dani
Remuneration Committee
Dipankar Basu
Chairman
Ms. Tarjani Vakil
Deepak Satwalekar
Company Secretary
Jayesh Merchant
Share Transfer Committee
Abhay Vakil
Chairman
Auditors
Ashwin Choksi
Ashwin Dani
Jayesh Merchant
Shah & Co., Chartered Accountants
BSR & Associates, Chartered Accountants
Contents
08
Directors’ Report and Management Discussion & Analysis
19
Auditors’ Report
22
Balance Sheet
23
Profit and Loss Account
24
Cash Flow Statement
25
Schedules
54
Auditors’ Report on Consolidated Financial Statements
56
Consolidated Balance Sheet
57
Consolidated Profit and Loss Account
58
Consolidated Cash Flow Statement
59
Schedules for Consolidated Accounts
88
Corporate Governance Report
96
Shareholder Information
Notice
Chairman’s Letter
Dear Shareholders,
The last year was indeed, a
remarkable year for India as well as
your Company. The Indian economy
is now on the fulcrum of an increasing
growth curve, with the real GDP to
be estimated to have grown at 8.7%
with all three sectors – agriculture,
industry and services doing well.
The high growth rate since 2003
clearly represents structural increase
rather than cyclical upturn, driven
by favorable demographics, high
investment and productivity growth.
Inspite of the sharp appreciation in
Rupee from Rs. 43.4 per USD at
the beginning of the year to Rs. 39.9
by the end of the year; surprisingly,
exports showed resilience in growth.
Inflation was under control for most
part of the year, but interest rates
continued to be high.
In this environment, the Indian
paint industry also continued to do
well, especially in the consumer
segments. While some slowdown in
construction activity was reported,
growth was good in most parts of the
country.
Backed by good growth registered
by all business units and specially the
Paints-India business and the Middle
East region, the group sales grew by
20.0% and crossed the USD
1 billion mark with a turnover of
Rs. 4,404 crores. The profit after tax
grew by 45.6% to Rs. 409 crores.
Demand for the decorative products
was good throughout the year and
the interior and exterior emulsions
continued their impressive growth.
To meet the growing demand in
future, your Company has decided to
enhance its manufacturing capacity
and for this purpose secured land at
Rohtak, Haryana and it is expected to
commence commercial production in
the early part of the calendar
year 2010.
Last year, the prices of raw
materials were soft, especially during
the first half of the last financial year
largely due to appreciating rupee and
good supply situation. The strategy
of reducing prices whenever possible
by sharing the benefits with the
consumers was effective and resulted
in good growth for the Company.
However, towards the later part of the
year your Company was exposed to
the vagaries of a globalised economic
environment. The increases in global
crude oil and commodity prices have
started impacting inflation. It went
up sharply in the fourth quarter of
the financial year and is expected to
remain high.
The overall outlook for
2008-2009 seems positive but
challenging, with factors like inflation
and global financial turmoil being the
key concerns. On the consumption
side, the fiscal stimulus is positive
on account of the recent budgetary
proposals and increasing income levels
coupled with the Pay Commission
recommendations which are likely to
offset the impact of the extended pause
on rates. In an election year, when
the political tolerance for even supply
side inflationary pressures would
be low, near term growth could get
sacrificed to contain inflation. This
has increased the downside risk for
the economy and consequently could
squeeze the margins and impact the
growth of your Company.
The remarkable growth of your
Company has been the outcome
of the immense contribution of its
people at all levels, their efforts to
adapt to ever-changing environment
and to seek out innovation in every
sphere of activity. The core values
of your Company which include
identifying the need of the consumers,
delivering value-for-money products
and services, responsible use of
resources, contribution to the good
of the society and maximizing longterm value for the stakeholders,
continue to strengthen the foundation
of your Company. These values
are deeply etched in the culture of
your Company, its management
and people, which will stand the
test of time, notwithstanding, the
ever-changing outside world. Your
Company will always remain a
transparent Company, the key
principle being “Growth with
Humility”.
The future holds immense
potential and opportunities for growth
and I assure you that we will do our
best to capitalise on them.
With regards,
Ashwin Choksi
PRODUCT PORTFOLIO
Interior Wall
Paints
Exterior Wall
Paints
Wood &
Metal Paints
Wood
Finishes
Shade selection made easy through Sampler packs
Berger Paints Trinidad Limited
Plant in Trinidad
A view of Industrial Paint
Plant at Taloja, Maharashtra
Berger International Limited,
Singapore
2006-2007
3,360.7
2,821.3
21.65
1,660.7
58.86
738.8
26.19
462.2
6.9
45.4
409.9
14.53
21.10
–
409.9
14.53
269.9
2.1
272.0
39.82
95.9
648.2
22.1
125.7
346.5
334.4
211.0
0.17: 1
7,335.9
28.4
130.0
77.6
3,868
2007-2008
4,059.9
3,416.2
21.09
1,956.1
57.26
906.0
26.52
616.6
8.3
43.8
564.5
16.52
37.72
–
564.5
16.52
376.6
(1.4)
375.2
44.86
95.9
832.6
31.5
94.7
539.2
422.9
92.6
0.09: 1
11,509.9
39.1
170.0
96.8
3,924
3,681
**19.5
@ 125.0
64.9
95.9
526.4
28.5
91.1
324.7
274.6
142.6
0.15:1
6,177.7
2,777.4
2,319.2
18.65
1,351.7
58.29
615.5
26.54
387.9
3.8
45.5
338.5
14.60
23.07
(33.6)
304.9
13.15
187.8
(1.0)
186.8
31.27
2005-2006
3,550
**18.1
95.0
59.7
95.9
476.3
30.5
88.2
319.5
258.4
113.1
0.15: 1
3,751.4
2,338.8
1,954.6
15.24
1,128.4
57.73
532.3
27.24
325.4
2.8
47.6
275.0
14.07
15.59
(4.2)
270.8
13.85
173.8
(0.3)
173.5
31.43
2004-2005
3,356
**#15.4
$ 85.0
$ 55.4
95.9
435.6
48.7
70.5
344.4
242.5
63.8
0.13: 1
2,913.6
2,025.9
1,696.1
10.49
943.6
55.63
483.0
28.47
291.2
5.3
48.0
237.9
14.02
5.78
(6.8)
231.1
13.62
147.6
0.2
147.8
29.32
3,327
#14.8
110.0
74.3
64.2
412.4
58.2
103.6
366.2
147.7
124.46
0.22:1
2,118.8
1,806.7
1,535.0
11.93
807.1
52.58
458.8
29.89
281.7
8.4
48.5
224.9
14.65
23.98
–
224.9
14.65
143.4
(1.4)
142.0
32.01
2002-2003
3,188
#11.9
90.0
64.0
64.2
346.4
61.2
110.8
389.5
63.3
129.7
0.27:1
2,105.6
1,598.5
1,371.4
11.20
727.5
53.04
417.7
30.46
240.8
14.6
44.8
181.4
13.23
16.37
–
181.4
13.23
115.3
(1.0)
114.3
27.82
2001-2002
3,197
#11.0
$ 70.0
$ 64.1
64.2
347.0
–
226.8
380.5
44.1
213.5
0.55:1
1,580.3
1,469.5
1,233.3
13.18
661.2
53.61
369.9
29.99
211.5
22.1
33.5
155.9
12.64
8.95
–
155.9
12.64
106.4
(0.8)
105.6
27.47
2000-2001
2,984
#10.1
100.0
89.1
40.1
317.3
–
174.4
335.2
40.5
156.1
0.49:1
1,704.9
1,262.4
1,089.7
16.25
599.5
55.02
310.6
28.50
193.2
20.3
29.8
143.1
13.13
52.53
–
143.1
13.13
97.3
(0.1)
97.3
29.38
1999-2000
2,869
**#7.7
80.0
75.9
40.1
264.4
–
216.9
301.1
49.8
170.5
0.70:1
1,014.9
1,069.6
937.4
11.29
548.8
58.54
264.6
28.23
138.8
22.3
22.7
93.8
10.01
-0.20
7.07
100.9
10.76
76.9
2.6
74.3
26.3
1998-99
(Rs. in Crores except for per share data, number of employees and ratios)
2003-2004
RONW is calculated after provision for impairment on fixed assets in 2004-2005. ** EPS calculated on Net Profit after extraordinary item.
EPS is calculated after adjusting for Bonus issue and the reduction of capital on account of merger of Pentasia Investments Limited in accordance with Accounting Standard (AS 20) Earnings Per Share.
@ Includes one-time special dividend of 25%. $ On increased capital.
*
#
RESULTS FOR THE FINANCIAL YEAR
REVENUE ACCOUNT
Gross Sales
Net Sales and Operating Income
Growth Rates (%)
Material Cost
% to Net Sales
Overheads
% to Net sales
Operating Profit
Interest Charges
Depreciation
Profit Before Tax and Extraordinary item
% to Net Sales
Growth Rate (%)
Extraordinary item
Profit Before Tax and after Extraordinary item
% to Net Sales
Profit After Tax
Prior period items (net)
Profit After Tax and prior period items
Return on average net worth (RONW) (%)*
CAPITAL ACCOUNT
Share Capital
Reserves and Surplus
Deferred Tax Liability (Net)
Loan Funds
Fixed Assets
Investments
Net Current Assets
Debt-Equity Ratio
Market Capitalisation
PER SHARE DATA
Earnings Per Share (Rs.)
Proposed Dividend (%)
Book Value (Rs.)
OTHER INFORMATION
Number of Employees
Ten Year Review
Return on Net Worth
(In %)
Net Sales and Operating Income
(Rs. in Crores)
50
4000
1,696.1
1500
44.9
39.8
29.3
30
2,319.2
2000
1,954.6
2500
40
31.3
2,821.3
3000
31.4
3,416.2
3500
2004-05
2005-06
20
1000
10
500
2003-04
2004-05
2005-06
2006-07
2007-08
0
Profit Before Tax and Extraordinary Items
(Rs. in Crores)
2007-08
Earnings Per Share Before EOI
(In Rs.)
564.5
500
39.12
40
409.9
400
16.11
20
22.98
338.5
28.36
30
275.0
237.9
300
10
100
0
2006-07
50
600
200
2003-04
18.53
0
2003-04
2004-05
2005-06
2006-07
2007-08
0
2003-04
2004-05
2005-06
2006-07
2007-08
Dividend
(In %)
Return on Capital Employed
(In %)
200
70
170
125
130
150
100
95
37.7
40
41.4
47.8
50
51.0
58.9
60
85
30
20
50
10
0
6
2003-04
2004-05
2005-06
2006-07
2007-08
0
2003-04
2004-05
2005-06
2006-07
2007-08
Asian Paints Limited • Annual Report 2007-2008
Market Capitalisation
(Rs. in Crores)
Pay-out with dividend tax in %
12000
73.20%
70
6,177.7
50.85%
6000
7,335.9
50
52.37%
60
8000
59.75%
10000
62.24%
11,509.9
80
40
30
0
2,913.6
2000
3,751.4
4000
2003-04
20
10
2004-05
2005-06
2006-07
2007-08
APL Group Net Sales
(Rs. in Crores)
International
737.33 (16.7%)
0
2003-04
2004-05
2005-06
2006-07
2007-08
Percentage sales contribution of each region to
overall International Operations
South Pacific
9%
Others*
104.29 (2.4%)
Caribbean
21%
SE Asia
13%
South Asia
12%
Paints India
3,562.71 (80.9%)
Middle East
45%
* Others include Company’s business units manufacturing Phthalic
Anhydride and Pentaerythritol.
7
Directors’ Report and Management Discussion & Analysis
Dear Members,
Your Directors have pleasure in presenting the 62nd Annual Report of your Company and the Audited Accounts for
the financial year ended 31st March, 2008.
FINANCIAL RESULTS
(Rs. in Crores)
Asian Paints Group
Consolidated
Asian Paints Limited
Sales and Operating Income (Net)
2007-08
2006-07
Growth
(%)
2007-08
2006-07
Growth
(%)
3,416
2,821
21.1
4,404
3,670
20.0
617
462
33.5
720
515
39.8
8
7
21
19
44
45
59
61
565
410
640
435
7
8
633
427
203
147
430
280
(2)
3
428
283
19
2
409
281
Operating Profit
Less: Interest
Less: Depreciation
Profit Before EOI and Tax
37.7
Less: Extraordinary item (EOI)
Profit Before Tax
565
410
Less: Provision for current, fringe benefit and
deferred Tax
188
140
Profit After Tax
377
270
(2)
2
375
272
Add/(Less): Prior period items
Net Profit after prior period items
37.7
39.6
37.9
Less: Minority interest
Net Profit attributable to shareholders of
the Company
375
272
Add: Balance brought forward from the
previous year
150
110
150
110
DISPOSABLE PROFIT
525
382
559
391
62
53
62
53
–
62
–
62
- Final
101
10
101
10
Tax on Dividend
28
18
28
18
Transfer to General Reserve
134
89
168
98
Balance carried forward to Balance Sheet
200
150
200
150
Dividend - 1st Interim
- 2nd interim
RESULTS OF OPERATIONS
Net sales and operating income for the standalone entity
increased to Rs. 3,416 crores from Rs. 2,821 crores in the
previous year – a growth of 21.1%. The operating profit
(PBDIT) increased by 33.5%, from Rs. 462 crores to Rs. 617
crores. The profit after tax increased to Rs. 375 crores
from Rs. 272 crores, representing a growth of 37.9%.
8
37.9
47.1
48.2
53.6
51.2
45.6
The consolidated sales and operating income net of
discounts and excise duty increased to Rs. 4,404 crores
from Rs. 3,670 crores – a growth of 20%. Net profit after
minority interest for the group increased to Rs. 409 crores
from Rs. 281 crores, representing a growth of 45.6%.
The analysis on the performance of your Company is
discussed in the Management’s Discussion and Analysis
report.
CONSOLIDATED ACCOUNTS
Your Company has been granted exemption 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 2007-2008, under Section 212(8) of the Companies
Act, 1956 by the Ministry of Corporate Affairs (MCA). A
statement of summarised financials of all subsidiaries of
your Company, pursuant to the approvals under Section
212(8) of the Companies Act, 1956, forms part of this
report. Any further information in respect of the annual
report and the financial statements of the subsidiary
companies of your Company will be made available
to the members on request. In accordance with the
Accounting Standard (AS 21), Consolidated Financial
Statements presented by your Company include the
financial information of all its subsidiaries.
DIVIDEND
For the financial year 2007-2008, your Company
declared and paid an interim dividend of Rs. 6.50
per equity share (65%) in the month of October, 2007.
In addition, your Directors recommend payment of
Rs. 10.50 per equity share (105%) as the final dividend for
the financial year ended 31st March, 2008. If approved
by the shareholders at the Annual General Meeting,
the total dividend (the interim dividend and the final
dividend) for the financial year 2007-2008 will be Rs.17/per equity share (170%) as against Rs.13/- (130%) per
equity share paid for the previous year.
TRANSFER TO RESERVES
Your Company proposes to transfer Rs. 134.42 crores
to the general reserve. An amount of Rs. 200 crores is
proposed to be retained in the profit and loss account.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Indian economy continued to grow strongly in
2007-2008. GDP growth is estimated to have been
8.7%, driven by 2.6% growth in agriculture, 8.6% in
manufacturing and 10.6% in services. There are concerns
about the country’s ability to sustain a very high growth
rate into the future without further substantive reforms.
There seems to be little will to push ahead; as elections
approach, there is likely to be no movement on that
front. In spite of unprecedented prices for crude oil, there
is no change in selling prices of the major petroleum
products. Infrastructure development continued to
progress slowly.
The sub-prime crisis in the US snowballed and dominated
the news in the second half of the year. This impacted
US$ liquidity, health of the international banking sector,
housing demand and consumer spending in the US and
the stock markets across the globe. The US$ continued to
fall against most currencies, including the Indian Rupee
during the year.
The average inflation for the year was at 4.56% compared
to 5.39% last year. Inflation went up sharply in the fourth
quarter of the financial year and is expected to remain
high on back of high crude, food and metal prices.
The rising Rupee benefitted the importers though,
surprisingly, export growth held its ground. On the date
of this report, the Rupee has shown a weak trend against
the US$.
Prices of crude oil and commodities including agricultural
products have been rising and are far from reaching any
levels of stability. Thus, while the medium term outlook for
growth is good, albeit a little lower than in the recent
past, your Company will have to cope with volatile
prices as many of our raw and packing materials are
commodity based.
The Indian paint industry continued to do well, especially
in the consumer segments. While some slowdown in
construction activity was reported, growth was good in
most parts of the country.
I. PRODUCTS AND MARKET
Paints
It is estimated that the market for all paints produced
by all companies big and small would have been
about Rs. 13,400 crores in 2007-08. This is the result of
a growth of about 18% over the previous year. The
industry is estimated to have grown by about 15% in
volume terms during the year. Given the circumstances,
your Company has done very well during 2007-08 and
this is reflected in the financial results. Your Company’s
business in India consists of Decorative and Industrial
coatings. Decorative paints form 80% of the Company’s
group sales.
Decorative Paints
Your Company has been the leader in the decorative
paints segment for about four decades now. Decorative
paints accounts for over 75% of the overall paint market
in India. This segment includes Wall Finishes for interior
and exterior use, Enamels, Wood Finishes and ancillary
products such as Primer, Putties etc. The decorative
paints market as a whole is estimated to have grown
at about the same rate as the market as a whole.
Turnover increase was ahead of volume growth largely
due to change in the product mix. Emulsion paints
for interior use have been growing much faster than
the lower priced Distempers for quite some time now.
Exterior emulsion paints have grown explosively over
the last decade at the cost of cement paints and lime
colours.
9
Prices of raw materials had increased sharply in the
second and third quarter of the previous year 2006-07.
In the year under review, prices of raw materials were
soft compared to the previous year especially during
the first half. This was largely due to the strong Rupee
and good supply situation which negated the impact
of rising crude oil prices in the international market.
Accordingly, your Company benefitted considerably.
Price reductions were effected on 1st August, 2007 and
on 3rd December, 2007 in exterior emulsion paints and
a few other products. However, the spiraling prices of
crude oil led to a sharp increase in the price of mineral
turpentine and some other materials which caused your
Company to raise prices of solvent based paints from
1st February, 2008. Availability of materials was good
throughout the year.
Market conditions were good in all parts of the country
throughout most of the year. There was a temporary
impact due to prolonged rains in September. The Diwali
season was good all over Northern and Western India.
Robust growth continued after Diwali as well and your
Company was able to expand its business across all
markets and product segments.
Your Company has been strongly committed to growth
and, to this end, moved purposefully on several fronts.
Pricing was kept competitive and, when the opportunity
arose due to benign material costs, selling prices were
reduced so that opportunities in the market could be
aggressively pursued. Your Company strengthened
its range of effect finishes with the addition of Royale
Metallics and variants of products launched in previous
year. Thus, your Company has significantly expanded
the choices available to consumers. The exterior range
of products continues to grow strongly and Apex Ultima,
the top of the line offering has done very well.
During the year, your Company invested in upgrading
the ambience of its leading dealers and provided several
customer friendly services so as to improve the quality
of service to customers, so that the consumer is able
to experience an informative and enjoyable shopping
trip. Your Company continued to aggressively increase
ColourWorld installations; these were over 10,000 across
the country by the end of the year. ColourWorlds are
now located in many small towns and are taking to
consumers in these towns the wide choice of products
and shades that are now taken for granted by the urban
consumer.
Your Company also continued to invest in development
of capability in the area of colour. ColourNext was the
theme of the Annual Report last year; ColourNext 2008
was introduced to consumers early in 2008. Several
Colour Guides and Décor booklets are now available to
consumers at the dealers’ shops.
10
Your Company has the widest range of products – from
the economy and value-for-money ranges to the
premium range. It is committed to continually expand
and improve its products and make them available
in even small towns. Your Company believes that this
together with continual investment in a wide variety of
marketing activities will enable your Company to expand
its business into the future and effectively meet the
challenge from the many competitors in the market.
Asian Paints Home Solutions (APHS) was extended
to Chandigarh during the year. The service is now
available in thirteen cities. APHS has benefitted from the
introduction of the many novelty finishes and continues
to add to the brand Asian Paints.
The polymer plant in Sriperumbudur was commissioned
in the first quarter of 2007-08. Thereafter, the further
expansion of the Sriperumbudur plant was commenced;
the new capacity will come on stream during the first
quarter of 2008-09 raising the capacity of that plant to
100,000 KL.
After reviewing the growth of the market and making
projections, it was decided to expand capacity so
as to keep pace with expected production needs.
Accordingly, during the year under review, your
Company has acquired land at Rohtak, Haryana.
Environmental impact assessment was commenced
and the required permissions are expected to be
received during the early part of 2008-09. Your
Company will then commence the construction of
the sixth Decorative paints plant at Rohtak with the
first phase of 150,000 KL. Your Company expects the
new plant to commence commercial production from
early part of the calendar year 2010.
Industrial Coatings
Automotive Coatings: Asian PPG Industries Limited
(APPG):
You Company has a 50:50 Joint Venture with PPG
Industries Securities Inc., which was formed in the year
1997, for manufacturing Automotive, OEM, Refinish
and certain other Industrial Coatings. APPG is the
second largest automotive coatings supplier in the
country catering to the automotive and industrial paint
segment.
The Indian automobile industry posted a good
performance this year albeit at a lower rate compared
to the strong growth registered in 2006-07. While the
passenger vehicles recorded growth of 14% in builds, the
two-wheeler industry declined by 5.2%.
APPG had another outstanding year out-performing the
industry with record revenues and sales volumes. The
full impact of advanced refinish 2K business acquired
Asian
• Annual
Report
2007-2008
AsianPaints
PaintsLimited
Limited
• Annual
Report
2007-2008
from ICI (India) Limited during the fourth quarter of the
previous year, was seen during the year under review
as a result of successful integration. These developments
have resulted in improved top line performance during
the year under review. Total sales increased to Rs. 382.3
crores from Rs. 293.7 crores in the previous year – a
growth of 30.2%. The profit after tax jumped to Rs. 32.9
crores from Rs. 18.9 crores, representing a rise of 74.6%.
The consolidated sales were Rs. 391.9 crores and the
profit after tax was Rs. 33.5 crores.
The Board of Directors of APPG at their meeting held
on 28th April, 2008, have recommended a dividend of
Rs.1.40 (14%).
Faaber Paints Private Limited (FPPL), a wholly owned
subsidiary of APPG, which was acquired last year for
strengthening its supply link servicing to its automotive
customers, reported Profit Before Tax of Rs. 0.8 crores this
year as compared to Rs. 0.1 crores for the financial year
ended 31st March, 2007.
The manufacturing facility at Sriperumbudur, near
Chennai, was commissioned in March, 2008. At present,
the installed capacity is 3,200 KL per annum.
The hardening of consumer finance interest rates and
tight liquidity in the second half of the last fiscal have
already started to have an adverse impact on the
automotive industry. Despite these trends that will make
the current year challenging, your Company believes
that APPG’s strategy of offering better value to its
customers by providing superior products and service
will enable it to further strengthen its presence in the
market.
Non-Auto Industrial Coatings:
Your Company operates in the non-auto industrial
coatings segment through its Growth Business Unit and a
wholly owned subsidiary, Asian Paints Industrial Coatings
Limited. This market segment is estimated to have grown
by 28% as compared to the last year.
Your Company has achieved significant growth in
Industrial Protective Coatings. Companies involved in
construction and fabrication work, provided the impetus
to this business. In Road Marking Coatings, the pace of
project execution was slower than expected in 2007-08,
while regular maintenance demand helped maintain
business growth. Input costs, which had been benign for
most part of 2007-08, are showing an inflationary trend.
The trend of growth in the non-auto Industrial coatings
segment is expected to continue in the current year.
The industrial liquid paints plant at Taloja has a capacity
of 14,000 KL. This facility has helped in rationalizing the
number of Contract Manufacturers and has led to
efficiencies in production and improvement in customer
service through the manufacture and supply of bulk
products from a single location.
Asian Paints Industrial Coatings Limited:
Asian Paints Industrial Coatings Limited (APICL), a
wholly owned subsidiary of the Company engaged in
manufacturing and selling Powder Coatings, reported
Profit Before Tax of Rs. 3.2 crores in 2007-08 as compared
to Rs. 0.9 crores in the previous financial year. The
Powder Coatings market has witnessed robust growth
in the recent past and the same trend is expected to
continue. Therefore, APICL has expanded capacity at
its plant at Sarigam and commissioned the new facility
in March, 2008.
In order to fund the expansion plans of APICL, your
Company has made an investment of Rs. 5 crores in its
Equity Share Capital during the financial year 2007-2008.
Further, an additional investment of Rs. 2.7 crores was
also made on 9th May, 2008.
The growth recorded in Powder Coatings was led by
excellent demand in the heavy and light electrical
equipment segments. Business has also been obtained
from appliance, furniture and hardware manufacturers.
Demand conditions for many Original Equipment
Manufacturers using Powder Coatings are expected
to be good, while Powder Coatings are also replacing
liquid paints in specific applications.
Others
Your Company’s other businesses comprises of plants
manufacturing Phthalic Anhydride and Pentaerythritol,
located at Ankleshwar (Gujarat) and Cuddalore (Tamil
Nadu), respectively.
During the year 2007-2008, the in-house consumption
of Phthalic Anhydride and Pentaerythritol was 45% and
55% of the plants’ output respectively. The remaining
quantity was sold in the open market.
The profitability of the Phthalic Anhydride business was
marginally lower compared to the previous year partly
due to sluggish demand from the plasticizer industry.
Price realisation in the Pentaerythritol business improved
in the last quarter, resulting in higher profits compared to
the previous year.
Technical Instruments Manufacturers (India) Limited
(TIM) is a 100% subsidiary of your Company. It owns
the building which houses your Company’s Corporate
Office. It has no income except the rent it receives from
your Company.
11
International Business Unit
During the year under review, the International Business
Unit of your Company continued to focus on top line
growth and gaining market share. This was achieved
through introduction of new products, expanding the
dealer network, implementing initiatives to strengthen
equity with architects, builders and the trade, increasing
exports and sharper focus on the protective and industrial
coating segments. During the year under review, the
volume of paint sold increased by 23.4% to 1,16,200 KL
and the revenue from paint sales increased by 12.0% to
Rs. 699 crores; adjusted for exchange rate impact, the
revenue from paint sales has increased by 18.1%. New
products sale in volume terms contributed approximately
7% of total paint sales of overseas subsidiaries and over
875 dealer tinting systems have been installed so far in
various subsidiaries.
Material prices went up and impacted input cost.
However, the impact was neutralized to a large extent by
global sourcing and economies of scale in purchasing,
formulation engineering and reduction in material losses
in manufacturing.
Profit after tax for the overseas operations of the group
during the year is Rs 36.7 crores as compared to Rs 2.1
crores during the previous year. It may be noted that
during the second half of the year, the profit after tax is
Rs. 27.1 crores as compared to Rs 0.5 crores during the
corresponding period of the previous year.
During the financial year 2007-2008, Asian Paints
(International) Limited, your Company’s direct subsidiary
divested its entire stake in Asian Paints (Queensland) Pty.
Limited, Australia.
The profitability of the overseas operations of the group
was impacted by the following extraordinary items:
•
Loss of Rs. 6.8 crores arising from the disposal of the
group’s stake in its subsidiary in Australia.
•
Gain of Rs. 2.5 crores on sale of land/property in
Trinidad, Egypt and China.
•
Prior year tax write back of Rs 1.2 crores in Berger
International Limited (BIL), a subsidiary listed on the
Singapore Stock Exchange.
The revenue from paint sales of BIL has increased by 10.9%
to S$ 141.6 million (equivalent to Rs. 388.8 crores). BIL has
earned a profit after tax of S$ 2.2 million (equivalent
to Rs 5.9 crores) as compared to a loss of S$ 5 million
(equivalent to Rs. 14.4 crores) during the previous year.
12
The group operates in five regions across the world as
given here below:
Region
Countries
Caribbean
Barbados, Jamaica, Trinidad & Tobago
Middle East
Egypt, Oman, Bahrain & UAE
South Asia
Bangladesh, Nepal & Sri Lanka
East Asia
China, Malaysia,
Hongkong
South Pacific
Fiji, Solomon Islands, Samoa, Tonga & Vanuatu
Singapore,
Thailand
&
Caribbean Region
During the year under review, the volume of paint sold
in the region has increased by 9.4 % to 9,599 KL. The
revenue from paint sales has decreased by 1.4% to
Rs. 150.1 crores. Adjusted for exchange rate impact,
the revenue from paint sales has increased by 12.0%.
PBIT (Profit before Interest and Tax) for the region has
increased by 80.7 % to Rs. 7.1 crores.
Sales in local currency increased by 9-13% in the units
in the region. However, devaluation of the respective
currencies resulted in lower growth in rupee terms.
The subsidiaries in Jamaica and Barbados have
registered an increase in profit, while the subsidiary in
Trinidad has incurred a loss and corrective steps have
been taken to reduce the same.
Middle East Region
During the year under review, the volume of paint sold
in the region has increased by 28.0% to 80,172 KL and
the revenue from paint sales has increased by 22.6% to
Rs. 319.4 crores. Adjusted for exchange rate impact, the
revenue from paint sales has increased by 33.3%. PBIT
has increased by 55.7% to Rs. 42 crores.
The Middle East region is the largest operating region
for the group outside India. The region now contributes
45.4% of the sales from overseas operations. All the
subsidiaries in the region have performed well. Sales of
the Egyptian, Oman, UAE and Bahrain subsidiaries have
grown by 38.5%, 46.8%, 32.0% and 16.8% respectively
in local currency. The subsidiaries in Egypt, Oman and
UAE have registered good increase in profit, while the
subsidiary in Bahrain continues to be profitable. The
Oman subsidiary which has now migrated to ‘Berger’
as the operating brand has had good sales growth
due to strong performance in the retail and wood finish
segments. The region has had excellent growth in profit.
Asian
• Annual
Report
2007-2008
AsianPaints
PaintsLimited
Limited
• Annual
Report
2007-2008
South Asia Region
During the year under review, the volume of paint
sold in the region has increased by 51.3% to 14,555 KL
and revenue from paint sales has increased by 33.4%
to Rs. 82.9 crores. Adjusted for exchange rate impact,
the revenue from paint sales has increased by 46.2%.
The PBIT for the region has increased by 210.3% to Rs. 6
crores.
All subsidiaries in the region have performed well. The
Sri Lanka, Bangladesh and Nepal subsidiaries have
registered sales growth of 36.7%, 76.7% and 24.9%
respectively in local currency. New product launches
and several other sales and marketing initiatives have
helped all the subsidiaries to achieve healthy sales
growth. The subsidiaries in Sri Lanka and Nepal have
improved profits while the subsidiary in Bangladesh has
reduced losses.
East Asia Region
During the year under review, the volume of paint sold in
the region has decreased by 2.5% to 8,975 KL. However,
the revenue from paint sales has increased by 5.2% to
Rs. 88.7 crores. Adjusted for exchange rate impact, the
revenue from paint sales has increased by 8.5%. Loss
before interest and tax has reduced to Rs. 3.6 crores
from Rs. 14.3 crores during the previous year.
The subsidiary in Singapore has performed well. The
subsidiary in Hongkong has made a nominal profit
as compared to a loss in the previous year. The other
subsidiaries in Thailand, China and Malaysia have
managed to reduce their losses significantly.
South Pacific Region
During the year under review, the volume of paint sold in
the region (adjusted for sales of the Australian subsidiary
which was divested during the year) decreased by 17.1
% to 2,940 KL and revenue from paint sales decreased
by 7.2% to Rs. 54.8 crores. Adjusted for exchange rate
impact, the revenue from paint sales has decreased
by 4.3%. EBIT for the region (excluding Australia) has
increased by 16.6% to Rs. 7.3 crores.
The region has underperformed in sales mainly due to
the largest unit in the region, Fiji, being impacted by
the uncertain political climate and a slowdown in its
economy which has resulted in its sales declining by
15.3% in local currency.
II. SAFETY, HEALTH AND ENVIRONMENT
Your Company is committed to providing a safe
environment to all its employees. During the year
2007-08, the Company continued its efforts on improving
the safety capability in the plants. External audits were
carried out at all plants to identify further areas of
improvement. Further, your Company undertook steps
to strengthen the existing safety management system at
the plants.
The specific generation of industrial effluents was further
reduced in 2007-08 as also the specific generation of
total effluents.
During the year, the Company continued to focus on
resource conservation and reduction in generation
of hazardous wastes. Rainwater harvesting schemes
continued to be in operation in all plants. Water
harvested is about 7% of the total water consumed. The
consumption of power and fuel was reduced in 200708.
During the year, the hazardous waste incineration
facilities at all plants of your Company were upgraded
to ensure compliance to new guidelines issued by the
Central Pollution Control Board (CPCB) in this regard.
III. HUMAN RESOURCES
It is the commitment of employees at all levels and their
contribution to innovation and change that is essential
to compete successfully in an increasingly competitive
global market-place and achieve sustained growth
and profitability. Attracting, retaining and motivating
employees and creating an environment that nurtures
them to deliver their best has been a constant challenge
for your Company. Your Company continues to invest
in training, refining its goal setting and performance
evaluation processes through which employees can
share best practices and seek support to drive change
and improvement.
Three year wage settlements were signed at Ankleshwar
and Kasna plants. These are productivity settlements.
Your Company has a thirty-year history of productivity
settlements now. The employee relations continue to be
cordial and productive.
IV. CORPORATE SOCIAL RESPONSIBILITY
Your Company continued its efforts to positively impact
the environment in which it operates. In the area of
healthcare, camps for cataract surgeries, audiometry,
electrocardiography,
diabetes
detection,
oral
examination and immunization were organized in the
vicinity of the plants at Ankleshwar, Patancheru, Kasna
and Sriperumbudur. Further, mobile medical care was
rendered to communities near the Patancheru, Kasna and
Sriperumbudur plants with the help of Helpage India.
Your Company supported needy schools near the
Ankleshwar, Patancheru and Sriperumbudur plants
through provision of safe drinking water facilities,
infrastructure and educational aids.
Your Company continues to enhance the awareness of
interested parties on water conservation and Rain Water
Harvesting through the Total Water Management Centre
13
installed at the Mumbai plant. It also provides expert
advice on implementation of Rain Water Harvesting
projects at no cost.
The Total Water Management Center of your Company
was conferred the “Excellence Award” in the
Environmental Excellence Category at the Asian CSR
Awards 2007 by the Asian Institute of Management,
Philippines. Your Company was accorded this recognition
from amongst 186 entries from 14 countries across the
world.
V. INFORMATION TECHNOLOGY
During the financial year 2007-08, your Company has
implemented a Sales Force Automation platform
deployed on a smart phone for salesmen on the move.
This has increased the agility and responsiveness of
the sales force enabling the organization to respond
faster to customer needs. The applications supporting
the service business of your Company have been
enhanced to support surveys, customer complaints and
closer tracking of turn-around times of services. In the
current year we have also upgraded the website to a
new platform to leverage some of the emerging internet
technologies.
To facilitate better collaboration between employees
based in various locations your Company has
implemented a new mail messaging and collaboration
suite which leverages the latest internet technologies.
To IT enable the rapidly changing business processes,
your Company is adopting tools and technology that
support the Enterprise Services Oriented Architecture
paradigm. Your Company has acquired skills on a
leading platform in this technology area by developing
and implementing applications using this approach. We
are proud to report that your Company has received
global innovation awards for these applications.
You are aware that your Company has been an
aggressive user of IT for improving business processes. The
health of master data is critical to the smooth functioning
of IT applications and the reporting emanating out
of the same. In the current year your Company has
implemented a Master Data Management platform to
manage the process of introduction and updation of
various master data elements like – product, customer
and vendor to different IT applications.
In the current year, your Company has upgraded
a significant part of the IT server and data storage
infrastructure. While doing so we have deployed
virtualization technology which has significantly
improved the uptime and scalability of applications.
This technology improves percentage utilization of
hardware leading to reduced cost and uses lesser
energy for power and cooling and thus contributes to
energy conversation.
14
VI. RESEARCH & DEVELOPMENT
Your Company is executing an integrated strategy
for technology development and deployment. The
technology function is supporting your Company’s
strategy around four missions: technology development,
development
of
substantially
new
products,
productivity improvement, and cost reductions. The
focus for your Company in the financial year 200708 had been to lay the foundation for improving its
research and development capabilities and further
improve the productivity of the technology function.
Your Company further continues to focus on innovation
and collaboration which are essential for sustaining our
market position.
In keeping with environmental legislation in the
developed world, your Company needs to be prepared
with products that will be required in future to conform to
new rules and restrictions. The Labs are giving priority to
ensuring that your Company’s product range will meet
these emerging requirements.
Your Company has also started developing a network
of partners to leverage its internal capabilities with the
outside organization. Your Company would endeavour
to attract, motivate and retain competent and
committed people in the Technology function.
Also, a state-of-art R&D Center is being built at Turbhe,
Navi Mumbai for which the construction and other
related activities are nearing completion.
VII. FINANCIALS
Net sales and operating income of the standalone
entity increased to Rs. 3,416.2 crores from Rs. 2,821.3
crores recording a growth of 21.1 %. This is driven mainly
on account of good paint volume sales growth of 17.5%.
For the group, net sales and operating income shows
an increase of 20.0% to Rs. 4,404 crores. Operating
profit (PBDIT) margin of the standalone Company has
increased from 16.4% to 18.0% this year. This increase is
mainly on account of savings in material cost with rising
rupee helping it further. Material cost as a percentage to
Net sales and operating income as a result has reduced
to 57.3% from 58.9% last year. Profit before tax, for the
standalone entity has increased by 37.7% to Rs. 564.5
crores. For the group, Profit before tax and extraordinary
items has increased by 47.1% to Rs. 639.9 crores. Net
profit for the standalone entity in 2007-08 stands at Rs.
375.2 crores as against Rs. 272.1 crores in the previous
year, showing an increase of 37.9%. Net profit after
minority interest for the group stands at Rs. 409.2 crores,
an increase of 45.6% over the corresponding figure of
Rs. 281 crores in the previous year. Your Company
continues to maintain tight working capital control. The
net core working capital turnover ratio for the year has
improved to 17 times from 12 times in the previous year.
Asian
• Annual
Report
2007-2008
AsianPaints
PaintsLimited
Limited
• Annual
Report
2007-2008
VIII. RISK AND OUTLOOK
The overall outlook for 2008-09 appears to be positive but
nevertheless challenging. The Indian economy is expected
to register growth of 7.5% to 8% in 2008-09. The expected
growth, albeit lower than the previous two years, is still
strong to support consumer demand. In addition, recent
policy initiatives like increasing the income tax exemption
slabs, implementation of Sixth Pay Commission and the
farmer loan waiver scheme is expected to provide further
support to consumer demand. Also, with early prediction
of normal monsoon in 2008-09, your Company expects
the rural economy to also perform well and support
paint demand in the rural areas. The market for industrial
coatings is expected to maintain its growth momentum
on the back of continued thrust on infrastructure
development and capacity additions across industries.
However, there are certain risks that can impact the
performance of your Company. Disruptions in the global
financial markets continue to pose threat to the world
economy and its possible ripple effect on India cannot
be neglected. The foreign exchange market continues
to be volatile. Rising commodity prices including crude
oil prices and the resulting high inflation could lead to
further tightening of monetary conditions. This can have
an adverse impact on demand, particularly in interest
rate sensitive sectors like automobiles and housing.
Adverse impact of global financial turmoil, political,
economic and natural conditions in geographies where
your Company has significant presence, can affect the
business performance.
Mineral Turpentine prices have been raised very sharply
by the refineries. From Rs. 26.60 per liter in early 2007, the
price went up to Rs. 34.40 by year end and is, in May 2008,
at Rs. 45.40. Prices of solvent based paints were raised
in January 2008 and a very large hike in prices for such
products will take effect from 1st June, 2008. As there is
no let up in the price of crude oil, further hikes cannot
be ruled out. The impact of these unprecedented price
hikes may impact demand for this class of products;
these account for about a third of the decoratives’
business in India.
IX. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Internal Control Structure of your Company is
adequately designed to ensure the effectiveness of
its operations (both domestic & overseas), propriety in
the utilization of funds, safeguarding of assets against
unauthorized use or disposition, true and fair reporting
and compliance with all the applicable regulatory
laws and company policies. Your Company has a well
defined organization structure with state of the art ERP
systems to connect its different business locations, dealers
and vendors for real time information exchange. Clear
and well defined policies governing limits on financial
authority exist at each level of hierarchy. Budgetary and
other control and review mechanisms are established,
whereby the management regularly reviews actual
performance with reference to the plan and forecasts.
The Internal Audit function ensures the adequacy of
internal controls from Operating, Financial and Statutory
Compliances point of view as well as adherence to
management policies through a blend of process and
transaction audits, on an ongoing basis. A summary
of Audit Observations and Action Taken Reports are
placed before the Audit Committee on a periodical
basis, for review.
Cautionary Statement
Statements in this Management Discussion and Analysis
describing the Company’s objectives, projections,
estimates and expectation may be “forward looking
statement” within the meaning of applicable laws and
regulations. Actual results might differ materially from
those either expressed or implied.
CORPORATE GOVERNANCE
Pursuant to Clause 49(VII) of the Listing Agreement,
a separate report on Corporate Governance forms
part of the Annual Report. Your Company is compliant
with the requirements of the Listing Agreement and
necessary disclosures have been made in this regard in
the Corporate Governance Report. The Management
Discussion and Analysis and the report on Corporate
Governance are included as a part of the Directors’
Report.
A certificate from the Joint Statutory Auditors of the
Company regarding compliance with the conditions of
Corporate Governance as stipulated under Clause 49 of
the Listing Agreement is attached to this report.
DELISTING
The Company has received confirmation as to the
delisting of its securities from the Delhi Stock Exchange
Association Limited and with this, the Company’s
securities have been delisted from all the regional Stock
Exchange(s). Your Company’s securities continue to be
listed on the Bombay Stock Exchange Limited and the
National Stock Exchange of India Limited.
FIXED DEPOSITS
Your Company has not accepted any fixed deposits
during the year 2007-2008 and there are no outstanding
fixed deposits from the public as on 31st March, 2008.
SALES TAX DEFEREMENT 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. 5.1 crores has been availed
15
during the year 2007-2008 and with this, the total amount
of deferment availed upto 31st March, 2008 is Rs. 23.1
crores.
INSURANCE
•
The annual accounts have been prepared on a
going concern basis.
DIRECTORS
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.
Ms. Tarjani Vakil, Mr. Dipankar Basu and Mr. Deepak
Satwalekar are due to 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 Corporate Governance Section of this
report. Your Directors recommend their re-appointment
as Directors of your Company.
FOREIGN EXCHANGE EARNINGS AND OUTGO
AUDITORS
Details of expenditure and earnings in foreign
currencies are given under Schedule ‘M’ to the financial
statements.
Last year, your Company had sought an approval of the
shareholders at the Annual General Meeting held on 26th
June, 2007, as to the appointment of BSR & Associates,
Chartered Accountants, as Joint Statutory Auditors of the
Company. At the forthcoming Annual General Meeting,
M/s. Shah & Co., Chartered Accountants and M/s. BSR
& Associates, Chartered Accountants, Joint Auditors of
your Company retire and are eligible for re-appointment.
Your Directors recommend their re-appointment for the
ensuing year.
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
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 the Company sent to
the shareholders do not contain the said annexure. Any
shareholders 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 judgements and
estimates made, are reasonable and prudent, so as
to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of
the profit and loss of the Company for that period.
•
16
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.
COST AUDITOR
The Company has received the approval of the Central
Government for appointment of Mr. Damji Keshavji
Visariya as Cost Auditor to conduct the audit of the
cost records of your Company for the financial year
2007-2008.
APPRECIATION
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
of banks and other financial institutions, shareholders,
dealers and consumers for their continued support.
For and on behalf of the Board
Ashwin Choksi
Chairman
Mumbai:
9th May, 2008
Annexure to Directors’ Report
FORM A
FORM B
Disclosure of particulars with respect to Conservation of
Energy :
Disclosure of particulars with respect to Technology
Absorption :
Research and Development (R&D)
2007-08
A.
Power and fuel consumption:
1.
Electricity
2006-07
1.
The R&D Unit of your Company is carrying out the
following activities to support the business goals of
your Company:
(a) Purchased
Units (‘000 KWH)
29,575
27,727
13.10
12.10
4.43
4.36
Total amount (Rs. in crores)
Rate per unit (Rs.)
(b) Own Generation
Through diesel Generator
Units (‘000 KWH)
2,759
2,917
Units per ltr. of diesel oil
3.40
3.11
Cost/unit(Rs.)
9.43
10.41
7,466
7,595
Units per nm3
3.29
3.36
Cost/unit (Rs.)
3.66
3.27
Natural gas
Units (‘000 KWH)
2.
Coal
16,345
Quantity (in MTs)
Average rate/MT (Rs.)
3.
Average rate/Litre (Rs.)
4.
2,762
1,015
1,005
3.33
3.10
32.79
30.78
Furnace Oil
Quantity (in MTs)
Average rate/kg. (Rs.)
5.
4.25
3,251
2.
Development of new products and processes
related to surface coatings and intermediates.
•
Value engineering and improving formulation
efficiency of existing products.
•
Technology support to all overseas units.
•
Upgradation of products and processes to
reduce environmental and safety concerns.
•
Identification of alternate and new raw materials
and vendors enabling product development,
quality improvement, cost benefits, supply
chain flexibility and crisis management.
•
Development of analytical test methods,
characterization techniques and application
techniques essential for product development,
bench marking, process control and customer
services.
1,170
1,085
2.64
2.05
22.53
18.87
2,917
3,973
3.15
3.77
10.81
9.49
Benefits derived as a result of above R&D:
•
All decorative range of products made free
from heavy metals like Lead, Chrome and
Mercury.
•
An exterior clear coating was developed for
roof tile/ Stones and commercialized.
•
A special water based “Premium Aqua Primer”
was developed for improving performance
of water based semi gloss enamel/premium
top coats on various substrates and
commercialized.
•
Deep shades offered in tinting system introduced
in satin and premium semi gloss enamel.
•
Royale metallic workability improved.
•
Continuous upgrades of high end products.
•
New shade offering with additional bases for
luxury ultra gloss enamel.
•
Royale play metallics with higher workability.
•
New high durability exterior textures.
•
Kids range of products Chalk Board.
•
Royale Glitter - Range of metallic shades.
Natural gas
Quantity (in ‘000 cubic m.)
Average rate/cubic nm. (Rs.)
B. Consumption per unit of production:
Electricity
(KWH/Ton/KL)
Furnace Oil
(Ton/KL)
Natural Gas
(Ton/KL)
Coal
(Ton)
Diesel
(Ton/KL)
07-08 06-07 07-08 06-07 07-08 06-07 07-08 06-07 07-08 06-07
Paints
Phthalic
Penta
•
15,380
5.31
Diesel
Quantity (in KL)
Specific area in which R&D is carried out by the
Company.
89
94
80
72
52
55
-
-
44
63
16
44
-
-
51
107
-
-
-
-
921
959
13
3
-
-
3
3
-
-
Fluorescent, Glow,
17
•
Expenditure on R & D during the year is as follows:
(Rs. in Crores)
2007-08
2006-07
Capital
34.19
1.83
Recurring
17.66
12.90
Total
51.85
14.73
•
Development of amine cured chemical resistant
glossy epoxy enamel for high build application.
Total R&D expenditure as a
percentage of turnover
1.52%
0.52%
•
Development of solvent free self leveling
polyurethane coating for industrial flooring.
•
Development of gun grade polysulphide sealant
for vertical joints meeting BS 4254 specification
•
Development of solvent free self leveling epoxy
polyurethane floor coating.
•
Development of cementitious epoxy based self
leveling flooring as underlayment, repair coat
for damp concrete.
•
Development of solvent free EPN tank lining.
•
Development of solvent free amine cured
epoxy tank lining capable of application at
400-500 micron per coat.
•
Development of Asian PU barrel enamel.
•
Development of rapid recoat painting system
for fabrication industries.
•
Development of single pack, glossy, quick
drying and durable PU enamel for industrial
liquid paint segment.
•
Domain expertise development e.g. Surface
science and corrosion science.
•
Application of new instrumental techniques for
characterization of polymers and coatings.
Technology absorption, adaptation and innovation:
All developments were done indigenously.
Foreign exchange earnings and outgo:
Your Company’s exports primarily consist of
Di-pentaerythritol and Monopentaerythritol to US
and Europe respectively. These items are used
as additives to aviation fuel and as additives for
plasticizers respectively. Monopentaerythritol is also
used in the manufacture of explosives. The market
for both these items is increasing in the global arena
and we plan to export Dipenta to Taiwan in the
future.
Your Company also exports items to its overseas
units and licensees. Machine tinting colorants and
resins form the bulk of material exported. Support
is extended to overseas units through export of
marketing materials and machinery parts. Export
queries received in India from countries where
your Company has operations is routed through
respective overseas units.
Details of earnings and expenditure in foreign
currency have been given separately under Notes
B - 14 and B - 13 in Schedule ‘M’ Notes to Accounts.
Further plan of action:
Your Company considers the development of
technical capabilities to sustain its competitive
position in the market place of primary importance.
In order to address the needs of the customers in
a rapidly changing market place, the Company
is strengthening its technical programs and
strengthening the skills of his technical personnel.
It is aggressively developing advanced technical
capabilities and technology platforms to support its
product plans, improve its manufacturing and open
new applications.
18
4.
Development of high solid high build high
durable aliphatic 2K polyurethane coating for
industrial structures.
•
3.
Process improvements being continued
for improving productivity and energy
efficiencies in emulsion, colorants and enamel
manufacturing.
Ashwin Choksi
Chairman
Mumbai
9th May, 2008
Auditors’ Report to the Members of Asian Paints Limited
We have audited the attached Balance Sheet of ASIAN
PAINTS LIMITED (‘the Company’) as at 31 March, 2008,
and also the Profit and Loss Account and the Cash Flow
Statement of the Company for the year ended on that
date, annexed thereto. These financial statements are
the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis of our opinion.
As required by the Companies (Auditor’s Report) Order,
2003, issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Companies Act,
1956 (‘the Act’), we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the
said order to the extent applicable.
(f)
In our opinion, and to the best of our information and
according to the explanations given to us, the said
financial statements give the information required
by the Act, in the prescribed manner and give a
true and fair view in conformity with the accounting
principles generally accepted in India:
in the case of the Profit and Loss Account, of
the profit of the Company for the year ended
on that date; and
For BSR & Associates
Chartered Accountants
Ashish Shah
Partner
Membership No. 103750
Natrajan Ramkrishna
Partner
Mumbai
9th May, 2008
Annexure to the Auditors’ Report - 31 March, 2008
(Referred to in our report of even date)
1.
(a) The Company has maintained proper records
showing full particulars, including quantitative
details and situation of the fixed assets.
(b) The Company has a regular programme of
physical verification of fixed assets in a phased
manner, over a period of three years. In our
opinion, this periodicity of physical verification
is reasonable, having regard to the size of the
Company and the nature of fixed assets. No
material discrepancies have been noticed in
respect of the assets physically verified during
the year.
(b) In our opinion, proper books of account as required
by law have been kept by the Company so far as
appears from our examination of those books;
(e) On the basis of the written representations
received from the Directors of the Company as at
31 March, 2008, and taken on record by the Board of
Directors, we report that none of the Directors of the
Company is disqualified as on 31 March, 2008 from
being appointed as a Director in terms of clause (g)
of sub-section (1) of Section 274 of the Act; and
(ii)
For Shah & Co.
(a) We have obtained all the information and
explanations, which to the best of our knowledge
and belief were necessary for the purpose of our
audit;
(d) In our opinion, the Balance Sheet, Profit and Loss
Account and Cash Flow Statement dealt with by
this report comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
in the case of the Balance Sheet, of the state of
affairs of the Company as on 31 March, 2008;
(iii) in the case of the Cash Flow Statement, of the
cash flows for the year ended on that date.
Further to our comments in the Annexure referred to
above, we report that:
(c) The Balance Sheet, Profit and Loss Account and
Cash Flow Statement referred to in this report are in
agreement with the books of account;
(i)
(c) The Company has not disposed off substantial
part of the fixed assets during the year.
2.
(a) The
inventories,
except
goods-in-transit
and
stock
lying with third parties, have
been physically verified by the Company’s
management during the year. In our opinion,
the frequency of verification is reasonable.
For stocks lying with third parties written
confirmations at the year end, have been
obtained.
(b) The procedures of physical verification of stocks
followed by the Company’s management are
adequate in relation to the size of the Company
and the nature of its business.
(c) The Company is maintaining proper records
of inventory. The discrepancies noticed on
verification between the physical stocks and
book records were not material and have been
properly dealt with in the books of account.
19
3.
The Company has neither granted nor taken any
loans, secured or unsecured, to or from companies,
firms or other parties covered in the register required
to be maintained under Section 301 of the Act.
4.
In our opinion, and according to the information
and explanations given to us, there is an adequate
internal control system commensurate with the size
of the Company and the nature of its business with
regard to purchase of inventories and fixed assets
and with regard to sale of goods and services.
There is no major weakness in the internal control
procedures.
5.
(a) According to the information and explanations
given to us, the particulars of all contracts and
arrangements referred to in Section 301 of the
Act, have been properly entered in the register
maintained under that Section.
(b) In our opinion, and according to the
information and explanations given to us, the
transactions made in pursuance of contracts
and arrangements referred to in (a) above
and exceeding the value of Rs. 5 lakhs with
any party during the year have been made
at prices which are reasonable having regard
to the prevailing market prices at the relevant
time.
6.
7.
In our opinion and according to the information
and explanations given to us, the Company has
complied with the directives issued by the Reserve
Bank of India and the provisions of Section 58A and
58AA or any other relevant provisions of the Act and
the rules framed there under.
8.
We have broadly reviewed the books of accounts
maintained by the Company pursuant to the
rules prescribed by the Central Government for
the maintenance of cost records under Section
209(1)(d) of the Act in respect of paints, resins and
pentaerythritol and are of the opinion that prima
facie, the prescribed accounts and records have
been made and maintained. However, we have
not made a detailed examination of the records.
9.
(a) According to the information and explanations
given to us and on the basis of our examination
of the records of the Company, amounts
deducted/accrued in the books of account in
respect of undisputed statutory dues including
Provident Fund, Employees’ State Insurance,
Investor Education and Protection Fund,
Income-Tax, Sales-Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues have been generally
regularly deposited during the year by the
Company with the appropriate authorities and
no undisputed amounts were in arrears as at
31 March, 2008 for a period of more than six
months from the date they became payable.
There were no dues on account of Cess under
Section 441A of the Act, since the date from
which the aforesaid section comes into force
has not yet been notified by the Central
Government.
(b) According to the information and explanations
given to us, the following dues have not been
deposited by the Company on account of
disputes.
In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
Name of the
Nature of dues Financial Year
Statute
Assessment
F.Y. 1993-94 to 1995-96, F.Y. 1997-98 to
Sales Tax
dues
1999-2000, F.Y. 2001-02, 2003-04,
2004 -05 & 2007-08
F.Y. 1999-2000 to 2003-04
F.Y. 1992-93/1993-94
F.Y. 1991-92, F.Y. 1993-94, F.Y. 1996-97,
F.Y. 1997-98 to 1998-99, F.Y. 2000-01 to
2001-02 & F.Y. 2003-04
Excise
Central Excise
Act, 1944
20
Amount Forum where
(Rs. in Crores) dispute is pending
5.09 First Appellate
level
0.97 Second Appellate
level
0.16 Supreme Court
2.95 Tribunal
Total (A)
9.17
F.Y. 2006-07 & Oct, 99
Dispute
relating to
Cenvat Credit
F.Y. 1980-81 to 1990-91, F.Y. 1992-93 to
1995-1996, F.Y. 1997 -98 to 1999-00
F.Y. 2002-03, 2004-05 & 2007-08
F.Y. 1985-86, F.Y. 1994-95 to 1995-96,
F.Y. 2007-08
0.03 Adjudication level
Name of the
Statute
Nature of dues Financial Year
Dispute
relating to
Excise Duty
Dispute
relating to
Service Tax
F.Y. 1969-70 to 1972-73, F.Y. 2000-01 to
2001-02
F.Y. 1978 to 1997-98, F.Y. 2003-04 to
2004-05, F.Y. 2006-07
Amount Forum where
(Rs. In Crores) dispute is pending
0.18 High Court
F.Y. 1984-85 to 1988-89, F.Y. 1993-94
F.Y. 1995-96 to 1999-2000, F.Y. 2003-04,
F.Y. 2005-06 & 2007-08
F.Y. 1994-95, F.Y. 2000-01, F.Y. 2005-06 to
2007-08
F.Y. 1986-87 to 1999-2000
F.Y. 1998-99 to 2003-04, F.Y. 2005-06 to
2006-07
F.Y. 2007-08
Income Tax
Total (B)
IT matters
under dispute
A.Y. 2003-04
A.Y. 1986-87, A.Y. 1996-97 to 2004-05
Total (C)
Grand Total
11. In our opinion, and according to the information
and explanations given to us, the Company has
not defaulted during the year in repayment of
dues to its bankers. The Company did not have any
outstanding debentures or any outstanding loans
from financial institutions during the year.
12. The Company has not granted any loans and
advances on the basis of security by way of pledge
of shares, debentures and other securities.
and explanations given to us, the Company is not
a chit fund, nidhi, mutual benefit fund or society
and the provisions of Clause 4(xiii) of the Companies
(Auditor’s Report) Order, 2003 is not applicable to
the Company.
and explanations given to us, the Company is not
dealing or trading in shares, securities, debentures
and other investments and the provisions of Clause
4(xiv) of the Companies (Auditor’s Report) Order,
2003 is not applicable to the Company.
15. The Company has given certain guarantees on
behalf of its dealers and subsidiaries as mentioned
in Note B - 3 of Schedule ‘M’ of the accounts. In our
opinion, based on the information and explanations
0.16 Tribunal
0.10 First Appellate&
Second Appellate
15.67
A.Y. 1999-2000 & 2004-05
10. The Company does not have any accumulated
losses at the end of the financial year and has not
incurred cash losses in the current financial year and
in the immediately preceding financial year.
1.20 High Court
4.88 Tribunal
7.15
31.99
received, the terms and conditions of these
guarantees are not prejudicial to the interest of the
Company.
16. The Company has not taken any term loans during
the year.
17. According to the information and explanations given
to us, and on an overall examination of the Balance
Sheet of the Company, we are of the opinion that
funds raised on short term basis have not been used
for long term investment.
18. The Company has not made any preferential
allotment of shares during the year.
19. The Company has not issued any debentures during
the year.
20. The Company has not raised any money by public
issues during the year.
21. As per the information and explanation given to us,
no material fraud on or by the Company has been
noticed or reported during the course of our audit.
For Shah & Co.
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Mumbai
9th May, 2008
21
Balance Sheet as at 31st March, 2008
(Rs. in Crores)
As at
31.03.2008
Schedules
FUNDS EMPLOYED
Shareholders’ Funds
Share Capital
A
B
Loan Funds
C
95.92
832.58
95.92
648.16
928.50
36.70
58.00
Secured Loans
Unsecured Loans
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
94.70
31.52
125.67
22.15
1,054.72
891.90
D
Net Block
Add: Capital Work in Progress
Investments
E
Current Assets, Loans And Advances
Interest accrued on investments
Inventories
Sundry debtors
Cash and Bank Balances
Other Current Assets
Loans and Advances
F
Less:
744.08
66.90
58.77
(Refer Note B - 21 in Schedule ‘M’)
Total
As at
31.03.2007
Current Liabilities and Provisions
Current Liabilities
Provisions
937.89
509.06
806.20
471.29
428.83
110.39
334.91
11.62
539.22
422.88
0.09
538.97
251.90
41.35
33.09
178.82
0.03
434.07
235.96
42.49
31.23
115.45
1,044.22
859.23
785.11
166.49
594.10
54.15
G
951.60
92.62
648.25
210.98
1,054.72
891.90
Net Current Assets
Total
Significant accounting policies and
Notes to Financial Statements
346.53
334.39
M
As per our report of even date
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Chief Financial Officer &
Company Secretary
Mumbai
9th May, 2008
22
Profit and Loss Account for the year ended 31st March, 2008
(Rs. in Crores)
Year
2007-2008
Year
2006-2007
3,911.96
495.80
3,244.57
423.28
3,416.16
62.58
2,821.29
40.45
3,478.74
2,861.74
1,956.13
194.67
711.35
1,660.71
157.11
581.71
2,862.15
2,399.53
616.59
8.27
43.77
462.21
6.87
45.42
PROFIT BEFORE TAX
Less : Provision for Taxation
Current Tax
Deferred Tax (Refer Note B - 21 in Schedule ‘M’)
Fringe Benefit Tax
Short/(Excess) tax provision for earlier years
564.55
409.92
171.32
9.38
5.96
1.30
137.90
(2.37)
4.46
–
PROFIT AFTER TAX AND BEFORE PRIOR PERIOD ITEMS
(Less)/Add: Prior period items (Net)
376.59
(1.39)
269.93
2.12
PROFIT AFTER TAX
Add : Balance brought forward from previous year
375.20
150.00
272.05
110.00
Amount available for appropriation
APPROPRIATIONS
Dividend on Equity shares:
- Interim dividend I
- Interim dividend II
- Proposed Final dividend
Tax on Dividend (includes tax on proposed dividend)
Balance carried to Balance Sheet
525.20
382.05
62.35
–
100.71
27.72
134.42
200.00
52.76
62.35
9.59
17.77
89.58
150.00
525.20
382.05
39.12
28.36
Schedules
INCOME
Sales and operating income (Net of discounts)
Less: Excise duty
H
Sales and operating income (Net of excise duty)
Other income
I
EXPENDITURE
Material Cost
Employee Cost
Manufacturing, administrative, selling and distribution expenses
PROFIT BEFORE INTEREST, DEPRECIATION AND TAX
Less: Interest (Refer Note B - 17 in Schedule ‘M’)
Less: Depreciation
J
K
L
D
Earnings per share (Rs.) Basic and diluted
(Face value of Rs. 10/- each)
Notes to Financial Statements
M
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Company Secretary
Mumbai
9th May, 2008
23
Cash Flow Statement for the year ended 31st March, 2008
(Rs. in Crores)
2007-2008
(A) Cash flow from operating activities:
Profit before tax and prior period items
Adjustments for :
Depreciation/Impairment
Interest income
Dividend income
Interest expense
Prior period items (net)
Profit on sale of long term investments
Profit on sale of short term investments
Profit on sale of assets
2006-2007
564.55
409.92
43.77
(3.71)
(25.01)
8.27
(1.39)
–
(0.96)
(0.93)
45.42
(1.44)
(13.17)
6.87
2.12
(0.31)
(0.06)
(1.36)
Operating Profit before working capital changes
Adjustments for :
Trade receivables
Other receivables
Inventories
Trade and other payables
584.59
447.99
(15.94)
(31.10)
(104.90)
199.86
(50.85)
(14.17)
(84.36)
162.23
Cash generated from operations
Income Tax paid net of refund
632.51
(175.22)
460.84
(148.59)
Net cash generated from operating activities
457.29
(B) Cash flow from investing activities:
Purchase of fixed assets
Sale of fixed assets
Loans to subsidiaries
Repayment of loan subsidiaries
Purchase of investments
Sale of investments
Interest received
Dividend received
(258.28)
1.57
(18.60)
2.28
(202.71)
115.18
3.64
25.01
Net Cash used in investing activities
312.25
(67.73)
2.09
(1.91)
1.51
(116.33)
56.86
1.41
13.17
(331.91)
(C) Cash flow from financing activities:
Proceeds from long term borrowings
Proceeds from short term borrowings
Repayment of long term borrowings
Repayment of short term borrowings
Interest paid
Dividend and Dividend tax paid
5.07
–
(0.94)
(35.10)
(8.28)
(87.27)
Net Cash used in financing activities
(D) Net Increase/(Decrease) in cash
Cash and cash equivalent as at 01.04.2007 *
Cash and cash equivalent as at 31.03.2008 *
(110.93)
4.64
30.38
(0.45)
–
(6.91)
(214.88)
(126.52)
(1.14)
42.49
41.35
(187.22)
14.10
28.39
42.49
* Refer Clause (iv) of Schedule ‘F’
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Company Secretary
Mumbai
9th May, 2008
24
Schedules Forming Part of the Accounts
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
99.50
99.50
0.50
0.50
100.00
100.00
95.92
95.92
95.92
95.92
–
–
0.50
0.50
SCHEDULE A : SHARE CAPITAL
Authorised
9,95,00,000 (Previous year 9,95,00,000) Equity Shares of Rs.10/- each
50,000
(Previous year 50,000) 11% Redeemable Cumulative
Preference shares of Rs. 100/- each
Issued, Subscribed and Paid up capital
9,59,19,779 (Previous year 9,59,19,779) Equity Shares of Rs. 10/- each fully paid:
a) 9,39,89,940 (Previous year 9,39,89,940) Bonus Shares of Rs. 10/- each
fully paid up issued on capitalisation of Share premium account
(Rs. 2.19 crores) and General Reserves (Rs. 91.80 crores)
b) 2,94,000 (Previous year 2,94,000) shares of Rs. 10/- each issued as
fully paid up pursuant to the Scheme of Amalgamation of
Pentasia Chemicals Ltd., without payment being received in cash
SCHEDULE B : RESERVES AND SURPLUS
Capital Reserve [Rs. 5,000/-, (Previous year Rs. 5,000/-)]
Capital Redemption Reserve
General Reserve
As per last Balance Sheet
497.66
415.86
Add: Transfer from Profit and Loss Account
134.42
89.58
Less: Adjustment on account of adoption of AS 15 (Revised)
–
(7.78)
632.08
497.66
200.00
150.00
832.58
648.16
25
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
23.13
18.23
23.13
18.23
13.57
48.67
36.70
66.90
Trade deposits - interest free
17.30
18.07
Sales tax deferment scheme - State of Andhra Pradesh (Note No. 3)
40.70
40.70
58.00
58.77
23.13
18.23
2.60
0.17
(2) Secured by hypothecation of inventories, book debts and other current assets.
13.57
48.67
(3) Sales tax deferment – State of Andhra Pradesh represents interest free loan
availed under the Sales Tax Deferment Scheme of the Government of
Andhra Pradesh.
40.70
40.70
–
–
SCHEDULE C : SECURED AND UNSECURED LOANS
Secured Loans
Long Term :
Loans
Financial Institution (Sales tax deferment scheme - State of Uttar Pradesh)
(Note No. 1)
Short Term :
Loans from banks
Cash Credit Accounts (Note No. 2)
Unsecured Loans
Long Term :
Notes:
(1) Interest free term loan from the Pradeshiya Industrial Corporation of U.P.
Limited (PICUP) under Sales Tax Deferment Scheme of Government of
U.P. is secured by a first charge on the Company’s immovable properties
pertaining to the paint plant at Kasna and by way of hypothecation of all
movable properties at the above location.
Amount repayable within one year.
Amount repayable within one year.
26
806.20
736.14
Previous year
18.75
Software
Total
11.92
3.35
80.63
138.33
2.54
–
–
2.52
21.74
Trademark
Intangible Assets :
Vehicles
Furnitures and Office Equipment
–
0.50
0.17
3.11
11.51
Buildings
97.31
Scientific Research:
Equipment
44.78
467.02
Plant and Machinery
Assets given on Operating
Lease: Tinting systems
6.81
0.85
152.23
13.35
Leasehold Land
80.16
10.57
6.64
0.08
–
0.68
0.55
–
(0.14)
1.93
3.48
0.06
–
–
Additions Deductions
during
and / or
the year
transfers
Gross Block
Buildings
5.91
Freehold Land
Tangible Assets :
As at
01.04.07
SCHEDULE D : FIXED ASSETS
806.20
937.89
21.21
11.92
2.67
23.71
3.11
12.15
95.55
508.32
158.98
14.20
86.07
As at
31.03.08
393.89
430.92
15.82
11.92
1.76
15.35
0.67
7.43
59.98
281.10
36.07
0.82
–
As at
31.03.07
45.06
43.70
1.57
–
0.35
1.84
0.10
0.74
5.35
28.99
4.61
0.15
–
8.03
5.21
0.07
–
0.65
0.37
–
(0.01)
1.13
2.97
0.03
–
–
During the Deductions
year
and/or
transfers
Depreciation/Amortisation
430.92
469.41
17.32
11.92
1.46
16.82
0.77
8.18
64.20
307.12
40.65
0.97
–
As at
31.03.08
41.82
40.37
–
–
–
1.83
–
0.50
24.31
13.73
–
–
–
0.36
0.07
–
–
–
–
–
–
–
0.07
–
–
–
1.81
0.79
–
–
–
0.18
–
–
0.39
0.22
–
–
–
As at
Deductions
01.04.07 Additions
and/or
transfers
Impairment
40.37
39.65
–
–
–
1.65
–
0.50
23.92
13.58
–
–
–
As at
31.03.08
334.91
428.83
3.89
–
1.21
5.24
2.34
3.47
7.43
187.62
118.33
13.23
86.07
As at
31.03.08
300.43
334.91
2.94
–
1.58
4.56
2.44
3.59
13.02
172.19
116.15
12.53
5.91
As at
31.03.07
Net Block
(Rs. in Crores)
27
(Rs. in Crores)
Nos.
Face
Value
(RS.)
As at
31.03.2008
As at
31.03.2007
–
–
SCHEDULE E : INVESTMENTS
Long Term Investments
Unquoted
(i)
In Government Securities
National Savings Certificates, Indira Vikas Patra
and Defence Certificates deposited with
Government authorities
[Rs. 34,500/- (Previous year Rs. 34,500/-)]
(ii)
Trade Investments (Fully paid Equity shares)
(a) Asian PPG Industries Ltd.
(b) Patancheru Enviro-tech Ltd.
(c) SIPCOT Common Utilities Ltd.
(d) Bharuch Eco-Acqua Infrastructure Ltd.
1,46,25,000
10/-
14.63
14.63
12,900
10/-
0.01
0.01
2,830
100/-
0.03
0.03
4,78,270
10/-
0.48
0.48
15.15
15.15
0.50
0.50
0.50
0.50
(iii) Other investments
(a) Equity shares of SKH Metals Ltd.
62,500
10/-
(iv) Subsidiary Companies
(a) Equity shares of Technical Instruments
Manufacturers (India) Ltd.
5,000
100/-
18.19
18.19
1,50,00,000
10/-
15.00
10.00
(b) Equity shares of Asian Paints Industrial
Coatings Ltd. (50,00,000 shares
allotted during the year)
(1,00,00,000)
(c) Ordinary Shares of Asian Paints
(International) Ltd., Mauritius
2,80,45,444
US $ 1
Less: Provision for diminution
132.43
132.43
(33.60)
(33.60)
98.83
98.83
0.12
0.12
0.05
-
132.19
127.14
147.84
142.79
(d) Equity Shares of Asian Paints
(Nepal) Pvt. Ltd., Nepal
(e) Maxbhumi Developers Ltd.
10,84,770 NRs 10/50,000
10/-
(50,000 shares allotted during the year)
Total Long Term Unquoted Investments
Quoted (Fully Paid Equity Shares)
(i)
Trade Investments
(ii)
Other Investments
ICI (India) Ltd.
Housing Development Finance Corporation Ltd.
Apcotex Industries Ltd.
Total Long Term Quoted Investments
Total Long Term Investments
28
37,60,783
10/-
77.25
77.25
93,000
10/-
0.12
0.12
3,418
10/-
0.01
0.01
77.38
77.38
225.22
220.17
(Rs. in Crores)
Nos.
Face
Value
(Rs.)
As at
31.03.2008
As at
31.03.2007
10/-
–
10.00
10/-
–
10.08
10/-
–
4.02
10/-
–
10.14
10/-
–
10.25
10/-
–
10.10
10/-
–
10.14
10/-
–
4.00
10/-
–
5.00
10/-
–
5.07
10/-
–
5.11
10/-
–
10.15
10/-
–
10.06
10/-
–
10.10
10/10/10/10/10/10/10/10/-
29.27
29.00
29.00
10.00
19.00
29.23
29.00
23.16
197.66
–
–
–
–
–
–
–
–
114.22
Total Investments
422.88
334.39
Aggregate market value of Long term Quoted Investments :
254.26
183.02
Current Investments (Unquoted)
Birla Fixed Term Plan – Series H – Growth
–
(1,00,00,000 units sold during the year)
(1,00,00,000.000)
ABN Amro Fixed Term Plan Series 4 Quarterly Plan D–Div.
–
(1,00,81,340.789 units sold during the year)
(1,00,81,340.789)
Kotak Fixed Maturity Plan 3M Series 11 – Dividend
–
(40,24,225.464 units sold during the year)
(40,24,225.464)
Kotak Fixed Maturity Plan 3M Series 8 – Dividend
–
(1,01,37,731.134)
Kotak Fixed Maturity Plan 6 Months Series 2 – Dividend
–
(1,02,49,192.847)
ICICI Prudential Fixed Maturity
Plan Series 35 – 3 Months Plan B Dividend
–
(1,00,98,497.045)
Plan Series 35 – 3 Months Plan A Dividend
–
(1,01,36,000.000)
Plan Series 35 – 3 Months Plan C Dividend
–
(40,00,000.000)
Reliance Fixed Horizon Fund II Quarterly
Plan Series II Institutional Dividend
–
(50,00,000.000)
SBI Debt Fund Series 90 Days II (Dec. 06)
–
(50,71,565.342)
SBI Debt Fund Series 180 Days II (Nov. 06) Dividend
–
(51,09,500.259)
Standard Chartered Fixed Maturity Plan Quartely Series 3 – Div.
–
(1,01,47,600.000)
TATA Fixed Horizon Fund Series 9 – Scheme D Div. Inst. Plan
–
(1,00,64,461.323)
UTI Fixed Maturity Plan Quarterly Series QFMP/0207/I Div.
–
(1,01,00,702.400)
ABN AMRO Flexible Short Term Plan Series A Monthly Div. 2,92,69,876.206
HDFC Quarterly Interval Fund – Plan C Dividend
2,89,81,451.870
ICICI Prudential Interval Fund II Qtrly Interval Plan C.
2,90,00,000.000
ING Fixed Maturity Fund – Series 34 – Inst. – Dividend
1,00,00,000.000
ING Fixed Maturity Fund – 42 Institutional Dividend
1,90,00,000.000
Sundaram BNP Paribas Interval Fund – Qtrly. Plan C
2,92,30,884.826
TATA Fixed Income Portfolio Fund Scheme A2 Inst. Dividend
2,89,70,160.734
UTI Fixed Maturity Plan QFMP (0208/II) I Inst.
2,31,60,275.996
Total Current Investments
Note :
1. Figures in brackets indicate that of previous year.
2. Investments in shares are fully paid-up except where indicated.
29
3.
The following investments were purchased and sold during the year.
Nos.
Face Value
(Rs.)
Purchase Cost
(Rs. in crores)
4,50,00,000.000
10.00
45.00
Units in Mutual Funds
(1) ABN AMRO Cash Fund – Institutional Div.
(2) ABN AMRO Flexible Short Term Plan Series A – Quarterly Div.
2,90,00,000.000
10.00
29.00
(3) ABN AMRO Flexible Short Term Plan Series C Quarterly
1,00,00,000.000
10.00
10.00
(4) ABN AMRO FTP Series 7 Quarterly PLAN C – Monthly Div.
1,00,00,000.000
10.00
10.00
(5) ABN AMRO Money Plus – Inst. Plan Div.
(6) BIRLA Cash Plus–Institutional Premium Plan Dividend
(7) BIRLA FTP Quarterly Series 14 – Div.
(8) BIRLA SUNLIFE Liquid Plus – Inst. – Div.
4,50,05,768.398
10.00
45.01
28,77,46,258.512
10.00
288.31
1,00,00,000.000
10.00
10.00
13,39,54,586.957
10.00
134.05
(9) DSP Merrill Lynch Liquid Plus Institutional Plan Div.
2,19,969.200
1,000.00
22.00
(10) DSP Merrill Lynch Liquid Fund–Inst. – Daily Dividend
2,19,956.008
1,000.00
22.00
(11) DWS Insta Cash Fund – Institutional Plan – Daily Div.
13,77,31,423.723
10.00
138.00
1,09,78,043.912
10.00
11.00
(13) DWS Money Plus Fund – Institutional Plan – Daily Div.
12,89,22,021.329
10.00
129.03
(14) HDFC Cash Management Fund Savings Plus – Wholesale – Div.
11,56,58,222.333
10.00
116.02
(15) HDFC Cash MGT Fund–Savings Plan–Daily Div. Reinvestment
16,57,17,482.724
10.00
176.26
9,49,46,829.775
10.00
95.00
(12) DWS Insta Cash Plus Fund Super Institutional Div.
(16) HSBC Cash Fund – Institutional Plus – Dividend
(17) HSBC Liquid Plus – Inst. Plus – Daily Dividend
8,59,06,584.206
10.00
86.01
(18) ICICI Prudential Flexible Income Plan – Daily Div
5,01,70,788.348
10.00
53.05
49,62,089.635
10.00
5.00
(19) ICICI Prudential Interval Fund I Mnth Plan A – Div.
(20) JM Fixed Maturity Fund – Series VI – Qtrly Plan 4 – Inst. Div.
90,00,000.000
10.00
9.00
2,00,00,000.000
10.00
20.00
2,00,00,000.000
10.00
20.00
(23) KOTAK Fixed Maturity Plan 3M Series 16 – Div.
1,00,00,000.000
10.00
10.00
12,66,26,504.131
10.00
127.02
1,00,00,000.000
10.00
10.00
13,74,84,072.013
10.00
168.12
(24) KOTAK Flexi Debt Scheme – Daily Div.
(25) KOTAK FMP 3M Series 17– Dividend
(26) KOTAK Liquid (Institutional Premium – Div.)
(27) LIC MF Liquid Fund – Dividend
2,18,57,724.428
10.00
24.00
13,89,90,270.681
10.00
139.00
(29) Principal Floating Rate Fund FMP – Inst. Div.
8,59,08,793.764
10.00
86.01
(30) ICICI Prudential Liquid–Super IP Plus–Dividend
9,19,97,300.126
10.00
92.00
9,99,489.873
1,000.00
100.06
(32) Reliance Liquidity Fund – Daily Dividend Reinv
7,59,76,447.301
10.00
76.00
(33) Reliance Monthly Interval Fund – Series II – Inst. Div.
4,89,78,359.560
10.00
49.00
49,96,864.557
10.00
5.00
1,00,00,000.000
10.00
10.00
(28) Principal Cash Management Fund Liquid Option – Inst. Pre. Div
(31) Reliance Liquid Plus Fund – Institutional Option – Daily
(34) Reliance Monthly Interval Fund – Series I – Inst. Div. Plan
(35) Reliance Quarterly Interval Fund Series II – Inst. Plan
29,994.001
1,000.00
3.00
(37) Tata Fixed Horizon Fund Series 11 Scheme E – IM – Mthly Div.
(36) Standard Chartered Liquidity Manager Plus Fund Dividend
2,00,00,000.000
10.00
20.00
(38) Tata Floater Fund – Daily Div.
5,08,36,832.557
10.00
51.02
14,89,839.265
1,000.00
166.05
6,89,827.543
1,000.00
69.00
(41) Templeton Quaterly Interval Plan – Plan A Inst. Div.
1,00,00,000.000
10.00
10.00
(42) UTI Fixed Maturity Plan Quarterly Series QFMP/0607/II
1,00,00,000.000
10.00
10.00
(43) UTI Fixed Maturity Plan Quarterly Series QFMP/0507/I
1,00,00,000.000
10.00
10.00
10,40,076.069
1,000.00
106.03
3,80,018.609
1,000.00
38.01
(39) Tata Liquid Super High Investment Fund – Daily Dividend
(40) Templeton India TMA Super Institutional Plan
(44) UTI Liquid Cash Plan Institutional–Daily Income Option
(45) UTI Liquid Plus Fund – Inst. Plan – Div.
30
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
0.09
0.03
538.97
124.97
13.00
256.35
25.73
11.14
2.88
434.07
7.54
4.34
4.54
8.88
247.59
255.13
3.23
251.90
231.62
231.62
240.50
4.54
235.96
SCHEDULE F : CURRENT ASSETS, LOANS AND ADVANCES
Current Assets
(i) Interest accrued on investments
(ii) Inventories - valued and certified by the Management
(a) Raw materials
(b) Packing materials
(c) Finished goods
(d) Work-in-process
(e) Stores, spares and consumables
(f) Other traded items
(iii) Sundry debtors (Unsecured)
(a) Outstanding for more than six months
Considered good
Considered doubtful
(b) Other debts
Considered good
Considered doubtful
190.82
15.48
287.16
29.95
13.80
1.76
4.42
3.12
247.48
0.11
Less: Provision for doubtful debts
(iv) Cash and Bank Balances
(a) Cash on hand
(b) Balances with Scheduled Banks:
(i) Current Accounts
(ii) Term Deposits
(v) Other Current Assets
(a) Retirement Benefit Asset
(b) Other Receivables
Loans and Advances
(i) Wholly owned subsidiaries
(a) Interest bearing loan
unsecured and considered good
Asian Paints Industrial Coatings Ltd.
(Maximum outstanding during the year Rs. 12.75 crores Previous year Rs. 12.75 crores)
(b) Interest free loan – unsecured and considered good
Technical Instruments Manufacturers (India) Ltd.
(Maximum outstanding during the year Rs. 16.89 crores Previous year Rs. 15.52 crores)
(c) Interest free loan – unsecured and considered good
Maxbhumi Developers Limited
(Maximum outstanding during the year Rs. 14.29 crores Previous year Rs. Nil )
(ii)
Other Loans and Advances :
Unsecured and considered good
(a) Balances with Customs, Central Excise etc.
(b) Sundry deposits
(c) Advances/claims recoverable in cash or in kind
(d) Advances to employees
(e) Advances against capital expenditure
(f) Amount due from subsidiaries
(g) Advance payment of taxes (Net of provision for tax)
0.12
0.14
41.21
0.02
41.35
42.33
0.02
42.49
33.09
5.49
25.74
31.23
–
33.09
12.75
12.75
16.75
14.72
14.29
–
43.79
27.47
135.03
178.82
1,044.22
14.43
13.73
43.82
0.73
4.70
2.69
7.88
87.98
115.45
859.23
25.80
15.79
58.96
0.70
25.86
3.39
4.53
31
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
214.47
165.09
SCHEDULE G : CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
(i) Acceptances
(ii) Sundry creditors
–
Dues of Micro and small enterprises
–
Others
0.80
–
374.93
267.35
375.73
590.20
(iii) Investor Education and Protection Fund *
(a) Unpaid/Unclaimed dividend
(b) Unpaid/Unclaimed matured deposits
(c) Unclaimed interest
(d) Unclaimed amount of sale proceeds of fractional
coupons of bonus shares
3.10
0.03
–
6.20
0.04
0.01
0.04
0.04
3.17
(iv) Other liabilities
(a) Employees (including Rs. 3.81 crores due
to Whole time Directors – Previous year Rs. 3.24 crores)
(b) Others
267.35
432.44
6.29
30.33
23.15
161.41
132.22
(including Rs. 0.77 crores due to Non Executive Directors –
Previous year Rs. 0.61 crores)
Provisions
(i) Proposed Dividend
(ii) Provision for tax on Proposed Dividend
(iii) Provision for accrued leave
(iv) Defined benefit obligations (Refer Note B - 24 in Schedule ‘M’)
(v) Other provisions (Refer Note B - 20 in Schedule ‘M’)
*
There is no amount due and outstanding to be paid to the Investor
Education and Protection Fund as at 31st March, 2008. These amounts
shall be paid to the fund as and when they become due.
32
191.74
785.11
155.37
594.10
166.49
951.60
9.59
1.63
35.93
2.74
4.26
54.15
648.25
100.71
17.12
39.31
5.09
4.26
(Rs. in Crores)
Year
2007-2008
Year
2006-2007
SCHEDULE H : SALES AND OPERATING INCOME
Sales :
Home Market (Net of returns)
Exports
4,042.63
17.30
3,343.42
17.27
Turnover
Less: Discounts
4,059.93
170.73
3,360.69
136.42
Sales (Net of discounts)
Operating income:
Processing charges
Lease Rent
Revenue from Home Solutions operations
3,889.20
12.38
0.59
9.79
3,224.27
11.52
1.73
7.05
22.76
20.30
3,911.96
3,244.57
3.71
1.44
0.23
0.07
SCHEDULE I : OTHER INCOME
Interest
(TDS Rs. 0.23 crores - Previous year Rs. 0.27 crores)
Claims received
Dividends received
(i) From subsidiary companies
[TDS Rs. 0.07 crores – (Previous year Rs. 0.03 crores)]
(ii) Long term investments – Trade
(iii) Long term investments – Others
(iv) Short term investments
Royalty
(TDS Rs. 1.14 crores – Previous year Rs. 1.19 crores)
Sundry balances written back (Net)
Profit on sale of long term investments (Net)
Profit on sale of short term investments (Net)
Profit on sale of assets (Net)
Exchange difference (Net)
Miscellaneous income
0.68
0.51
10.15
0.20
13.98
4.50
0.19
7.97
25.01
9.67
13.17
8.80
0.09
–
0.96
0.93
–
21.98
0.68
0.31
0.06
1.36
0.33
14.23
62.58
40.45
33
(Rs. in Crores)
Year
2007-2008
Year
2006-2007
SCHEDULE J : MATERIAL COST
Raw Materials Consumed
Opening Stock
Add: Purchases
124.97
1,659.52
107.97
1,391.94
Less: Closing Stock
1,784.49
190.82
1,499.91
124.97
1,593.67
1,374.94
Packing Materials Consumed
Opening Stock
Add : Purchases
13.00
341.75
21.36
281.34
Less: Closing Stock
354.75
15.48
302.70
13.00
339.27
289.70
Cost of Paints purchased for resale
Opening Stock
Add: Purchases
4.23
30.30
4.01
26.42
(Quantity MT 17,697 - Previous year 14,511 MT)
Less: Closing Stock
34.53
3.03
30.43
4.23
31.50
26.20
Cost of other goods sold
Opening Stock
Add: Purchases
2.88
25.76
1.48
29.41
Less: Closing Stock
28.64
1.76
30.89
2.88
Increase in finished and semi-finished stocks
Opening Stock
Closing Stock
Increase in Excise duty on finished goods
26.88
28.01
1,991.32
1,718.85
277.86
314.08
206.58
277.86
(36.22)
1.03
(71.28)
13.14
1,956.13
1,660.71
167.66
10.09
8.14
134.49
10.04
4.84
8.78
7.74
194.67
157.11
SCHEDULE K : EMPLOYEE COST
Salaries, wages, allowances, commission, bonus and accrued leave salary
Contribution to Defined contribution plans: Provident and other Funds
Defined Benefit Plans (Gratuity and other Plans)
(Refer Note B – 24 in Schedule ‘M’)
Staff welfare expenses
(For managerial remuneration, Refer note B – 6b in Schedule ‘M’)
34
(Rs. in Crores)
Year
2007-2008
Year
2006-2007
14.37
35.86
25.03
14.21
33.29
19.39
SCHEDULE L : MANUFACTURING, ADMINISTRATIVE,
SELLING AND DISTRIBUTION EXPENSES
Stores and spares
Power and fuel
Processing charges
Repairs and Maintenance:
Buildings
Machinery
Other assets
Rent
Rates and taxes
Insurance
Printing, stationery and communication expenses
Travelling expenses
Donations
Commission to Non-Executive Directors
Directors’ sitting fees
Auditors’ remuneration
Bank charges
Information Technology expenses
Legal and professional expenses
Training and recruitment
Freight and handling charges
Advertisement and sales promotional expenses
Cash and payment performance discount
Commission on sales
Bad and doubtful debts
Miscellaneous expenses
3.97
5.46
13.35
3.18
5.00
11.51
22.78
25.68
8.76
3.63
18.02
25.60
1.60
0.87
0.10
0.97
5.19
0.53
8.77
4.75
4.46
151.60
164.85
158.96
0.44
1.18
27.35
19.69
21.24
13.52
3.58
14.10
22.02
1.58
0.65
0.09
0.52
5.05
7.13
4.40
3.70
128.39
110.98
132.59
0.49
1.87
23.23
711.35
581.71
35
SCHEDULE M: NOTES ON BALANCE SHEET AND PROFIT AND LOSS ACCOUNT
A.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED IN THE COMPILATION OF ACCOUNTS
1.
Basis of preparation of financial statement
(a) Basis of Accounting:
The financial statements have been prepared and presented under the historical cost convention on
accrual basis of accounting to comply with the accounting standards prescribed in the Companies
(Accounting Standards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.
(b) Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles
(GAAP) in India requires Management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial
statements.
2.
Fixed Assets
(a) Fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation. The
cost of fixed assets includes taxes (other than those subsequently recoverable from tax authorities),
duties, freight and other incidental expenses related to the acquisition and installation of the respective
assets. Interest on borrowed funds directly attributable to the qualifying assets up to the period such
assets are put to use, is included in the cost.
(b) Know-how related to plans, designs and drawings of buildings or plant and machinery is capitalised
under relevant asset heads.
(c) Depreciation on all fixed assets is provided under Straight Line Method. The rates of depreciation
prescribed in Schedule XIV to the Companies Act, 1956 are considered as the minimum rates. If the
management’s estimate of the useful life of a fixed asset at the time of acquisition of the asset or of the
remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid schedule,
depreciation is provided at a higher rate based on the management’s estimate of the useful life/
remaining useful life. Pursuant to this policy, depreciation on following assets has been provided at rates
which are higher than the corresponding rates prescribed in Schedule XIV.
Information Technology Assets
:
4 years
Scientific Research Equipment
:
8 years
Furniture and Fixtures
:
8 years
Office Equipment and Vehicles
:
5 years
For Phthalic Anhydride and Pentaerythritol plants, depreciation is provided on all eligible plant and
machinery at rates applicable for continuous process plants and for other eligible plant and machinery
depreciation is provided on triple shift basis.
Depreciation on tinting systems except computers leased to dealers is provided under Straight Line
Method over the estimated useful life of nine years as per technical evaluation. Depreciation on
computers given on lease is provided under Straight Line Method and at rates specified under Schedule
XIV to the Companies Act, 1956.
Leasehold land and major leasehold improvements are amortised over the primary period of lease.
Purchase cost, User licence fees and consultancy fees for major software are amortised over a period
of four years. Acquired Trade Mark is amortised over a period of five years.
(d) At Balance Sheet date, an assessment is done to determine whether there is any indication of
impairment in the carrying amount of the Company’s fixed assets. If any such indication exists, the
asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount.
An assessment is also done at each Balance Sheet date whether there is any indication that an
impairment loss recognised for an asset in prior accounting periods may no longer exist or may have
decreased. If any such indication exists the asset’s recoverable amount is estimated. The carrying
36
amount of the fixed asset is increased to the revised estimate of its recoverable amount but so that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss is
recognised in the Profit and Loss Account.
After recognition of impairment loss or reversal of impairment loss as applicable, the depreciation charge
for the asset is adjusted in future periods to allocate the asset’s revised carrying amount, less its residual
value (if any), on straight line basis over its remaining useful life.
3.
Revenue Recognition
Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the
buyer which is on dispatch of goods. The amount recognised as sale is exclusive of, sales tax / VAT and
are net of returns. Sales are stated gross of excise duty as well as net of excise duty; excise duty being the
amount included in the amount of gross turnover. The excise duty related to the difference between the
closing stock and opening stock is recognised separately as part of ‘Material Cost’.
Revenue from service is recognised on rendering of services to customers.
Dividend income is recognised when the right to receive payment is established.
Interest income is recognised on the time proportion basis.
4.
Lease Accounting
Assets taken on lease:
Lease rentals on assets taken on lease are recognised as expense in the Profit and Loss Account on an
accrual basis over the lease term.
Assets given on lease:
The Company has provided tinting systems to dealers on an operating lease basis. Lease rentals are
accounted on accrual basis in accordance with the respective lease agreements.
5.
6.
Inventory
a)
Raw materials, work in progress, finished goods, packing materials, stores, spares, traded goods and
consumables are carried at the lower of cost and net realisable value. The comparison of cost and net
realisable value is made on an item-by-item basis. Damaged, unserviceable and inert stocks are suitably
depreciated.
b)
In determining cost of raw materials, packing materials, traded goods, stores, spares and consumables,
weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties, taxes
(other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing
the inventory to their present location and condition.
c)
Cost of finished goods and work-in-process includes the cost of raw materials, packing materials, an
appropriate share of fixed and variable production overheads, excise duty as applicable and other
costs incurred in bringing the inventories to their present location and condition. Fixed production
overheads are allocated on the basis of normal capacity of production facilities.
Investments
Long term investments are carried at cost. Provision for diminution in the value of long term investments is
made only if such a decline is not temporary in the opinion of the management. Current investments are
carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect
of each category of investments.
Profit and loss on sale of investments is determined on a first in first out (FIFO) basis.
7.
Transactions in Foreign Exchange
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction.
Exchange differences arising on foreign exchange transactions settled during the year are recognised in the
Profit and Loss Account of the year.
Monetary assets and liabilities denominated in foreign currencies, which are outstanding as at the year end
are translated at the closing exchange rate and the resultant exchange differences are recognised in the
Profit and Loss Account.
37
The premium or discount on forward exchange contracts is recognized over the period of the contracts in
the Profit and Loss Account.
8.
Sundry Debtors
Sundry debtors are stated after writing off debts considered as bad. Adequate provision is made for debts
considered doubtful. Discounts due, yet to be quantified at the customer level are included under the head
‘Current Liabilities and Provisions’.
9.
Employee Benefits
A.
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as
short term employee benefits and they are recognised in the period in which the employee renders the
related service. The Company recognises the undiscounted amount of short term employee benefits
expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting
any amount already paid.
B.
Post-employment benefits:
(a) Defined contribution plans
Defined contribution plans are Provident Fund Scheme, Employee State Insurance Scheme and
Government administered Pension Fund Scheme for all employees and Superannuation scheme
for eligible employees. The Company’s contribution to defined contribution plans are recognised
in the Profit and Loss Account in the financial year to which they relate.
The Company makes specified monthly contributions towards employee provident fund to a Trust
administered by the Company. The interest payable by the trust to the beneficiaries every year is
being notified by the Government. The Company has an obligation to make good the shortfall, if
any, between the return on investments of the trust and the notified interest rate.
(b) Defined benefit plans
(i)
Defined benefit gratuity plan
The Company operates a defined benefit gratuity plan for employees. The Company
contributes to a separate entity (a fund), towards meeting the Gratuity obligation.
(ii)
Defined benefit pension plan
The Company operates a defined benefit pension plan for certain specified employees and
is payable upon the employee satisfying certain conditions, as approved by the Board of
Directors.
(iii) Defined Post Retirement Medical benefit plan
The Company operates a defined post retirement medical benefit plan for certain specified
employees and is payable upon the employee satisfying certain conditions.
The cost of providing defined benefits is determined using the Projected Unit Credit Method with
actuarial valuations being carried out at each Balance Sheet date. Past service cost is recognised
immediately to the extent that the benefits are already vested, else is amortised on a straight-line
basis over the average period until the amended benefits become vested.
The defined benefit obligations recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and
unrecognised past service costs, and as reduced by the fair value of plan assets, if applicable.
Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is
recognised representing the unrecognised past service cost plus the present value of available
refunds and reductions in future contributions to the plan.
C.
Other long term employee benefits
Entitlements to annual leave and sick leave are recognised when they accrue to employees. Sick leave
can only be availed while annual leave can either be availed or encashed subject to a restriction
on the maximum number of accumulation of leaves. The Company determines the liability for such
accumulated leaves using the Projected Accrued Benefit Method with actuarial valuations being
carried out at each Balance Sheet date.
38
10. Research and Development
a)
Capital expenditure is shown separately under respective heads of fixed assets.
b)
Revenue expenses including depreciation are charged to Profit and Loss account under the respective
heads of expenses.
11. Provision for Taxation
Income tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance
with the Income Tax Act, 1961), deferred tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the period) and fringe benefit tax (computed in
accordance with the relevant provisions of the Income Tax Act, 1961).
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised
using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be
realised in future; however, where there is unabsorbed depreciation or carry forward loss under taxation laws,
deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax
assets are reviewed as at each Balance Sheet date to reassess realisation.
12. Provisions and Contingencies
The Company creates a provision when there exists a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may, but probably will not require an outflow of resources. When there is a possible obligation or a present
obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.
13. Earnings per share
The basic and diluted earnings per share (“EPS”) is computed by dividing the net profit after tax for the year
by weighted average number of equity shares outstanding during the year.
14. Proposed Dividend
Dividend recommended by the Board of Directors is provided for in the accounts, pending approval at the
Annual General Meeting.
B.
NOTES:
(Rs. in Crores)
1. Estimated amount of contracts remaining to be executed on capital account
and not provided for
2. Letters of Credit and Bank guarantees issued by bankers and outstanding as on
31st March, 2008.
3. Contingent Liabilities:
(a) Guarantee given on behalf of Company’s dealers in respect of loans granted
to them by a bank for acquiring dealer tinting systems
(b) Corporate guarantees issued by the Company to certain banks on behalf of
some of its subsidiaries.
(c) Claims against the Company not acknowledged as debts
i. Tax matters in dispute under appeal
ii. Others
4. The Company has issued letters of comfort/support to banks on behalf of some
of its subsidiaries from time to time and also a letter of financial support to the
board of a subsidiary. The financial support/comfort based on such letters is
limited to Rs. 115.69 crores as on 31st March, 2008 (Rs.126.33 crores as on 31st
March, 2007).
5. Auditors’ remuneration
Statutory audit fee
Tax audit fees
Certification fees and other services
Out of pocket expenses
Cost audit fees
In addition, an associate firm of one of the joint statutory auditor’s firm has been paid
Rs. 0.04 crores for taxation services during the year (Previous year Rs. 0.02 crores).
2007-2008
75.09
2006-2007
19.07
35.25
27.96
34.72
34.83
75.16
77.32
33.72
3.36
46.09
2.92
0.65
0.05
0.16
0.04
0.03
0.24
0.05
0.16
0.03
0.02
39
(Rs. in Crores)
6. (a) Computation of Profit for the year ended 31st March, 2008 under section 349
of the Companies Act, 1956.
Net Profit as per Profit and Loss Account
Add: Provision for tax and fringe benefit tax
Provision for deferred tax
Less: Surplus on sale of long term Investments (Net)
Profit under Section 349 of the Companies Act,1956
Add: Managerial remuneration
Profit under Section 198 of the Companies Act,1956
Commission to Non-Executive Directors:
Subject to a ceiling of 1% of profit as computed above
Commission actually paid
Remuneration to Whole-time Directors:
Subject to a ceiling of 10% of profit as computed above
Total Remuneration actually paid
(b) Details of managerial remuneration under Section 198 of the Companies Act,
1956
Salaries and allowances
Commission to Executive Directors (Maximum permissible limit is 2% of the Profit
as computed under Section 349 in aggregate to all three Executive Directors
as approved by the shareholders).
Contribution to Provident and Superannuation funds
Perquisites
Sub Total
Sitting Fees to Non-Executive Directors
Sub Total
Grand Total
2007-2008
2006-2007
375.20
178.58
9.38
–
0.93
562.23
6.75
568.98
272.05
142.36
(2.37)
0.31
1.36
410.37
5.66
416.03
5.69
0.87
4.16
0.65
56.90
5.78
41.60
4.92
1.29
3.00
1.10
2.55
1.06
0.43
5.78
0.10
0.87
0.97
6.75
0.90
0.37
4.92
0.09
0.65
0.74
5.66
The above remuneration does not include contribution to gratuity fund and leave encashment/entitlement as
this contribution is a lump sum amount based on actuarial valuation.
The Company depreciates certain fixed assets at higher rates of depreciation based on estimated useful lives
which are lower or equal to the implicit estimated useful lives prescribed by Schedule XIV of the Companies
Act, 1956. The above higher value of depreciation has been considered as deduction for the computation of
managerial remuneration in (a) above.
7.
Production :
Items
(a) Paints, enamels,
varnishes and blacks
(b) Synthetic Resins
(Mainly for captive
consumption)
(c) Phthalic Anhydride
(d) Pentaerythritol
(e) Sodium Formate
(f)
40
Formaldehyde (100%) (7)
Unit
Location
Installed Capacity(1)
Production
As at 31st
March,
2008
3,69,150
As at 31st
March,
2007
3,54,150
2007-2008
2006-2007
3,16,871(3)
2,82,602(3)
MT/KL
In-house(2)
–
–
1,29,977
1,02,960
MT
Contract
Manufacture/
Purchase
In-house(2)
1,19,380
99,880
70,147(4)
59,671(4)
MT
Ankleshwar
25,200(8)
25,200(8)
24,261(5)
21,864(5)
Cuddalore
5,400
(9)
5,400
(9)
(6)
5,216(6)
(9)
3,240
(9)
3,093
3,034
8,100(9)
6,197
5,775
MT
MT
Cuddalore
3,240
MT
Cuddalore
8,100(9)
5,270
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Installed capacities are as certified by the management on which auditors have relied.
Manufacturing plants at Mumbai, Ankleshwar, Patancheru, Kasna, Sriperumbudur and Taloja.
Includes 8166 MT (Previous year 7730 MT) of products processed for third party.
Includes 3348 MT (Previous year 3116 MT) of resins processed for third party.
Includes 10860 MT (Previous year 10587 MT) Phthalic Anhydride transferred to paint plants for captive
consumption.
Includes 2877 MT (Previous year 2751 MT) Pentaerythritol transferred to paint plants for captive consumption.
Mainly for internal consumption in the manufacture of Pentaerythritol.
Based on rated capacity per month.
Capacities have been recomputed for current as well as previous year.
8. Stocks and Turnover:
Unit
(a) Paints, enamels,
MT/KL
varnishes and blacks
(b) Phthalic Anhydride
MT
(c) Pentaerythritol
MT
(d) Sodium Formate
MT
(e) Formaldehyde
(100%)
(f) Others
(Refer Note (ii) below)
TOTAL
MT
*
(i)
(ii)
Opening Stock
Qty.
Value
Closing Stock
Qty.
Value
Turnover *
Qty.
Value
(Rs. in Crores)
(Rs. in Crores)
(Rs. in Crores)
37,810
(29,312)
347
(655)
358
(472)
252
(278)
39
(143)
250.35 43,127
(183.48) (37,810)
2.16
965
(3.55)
(347)
3.26
108
(3.46)
(358)
0.49
179
(0.44)
(252)
0.09
132
(0.26)
(39)
279.97 4,33,318
(250.35) (3,68,920)
5.62
12,783
(2.16) (11,575)
0.93
2,642
(3.26)
(2,579)
0.34
3,166
(0.49)
(3,054)
0.30
368
(0.09)
(142)
256.35
(191.19)
287.16
(256.35)
3,906.22
(3,218.45)
86.59
(78.72)
27.30
(23.73)
6.42
(5.48)
1.21
(0.65)
32.19
(33.66)
4,059.93
(3,360.69)
Includes sale of materials processed outside, resale of finished paints and dealer tinting systems
purchased.
Figures in brackets are for the previous year.
This comprises of resins, machinery spares, stationery items, plant and machinery, dealer tinting systems
and other miscellaneous items.
9. Raw materials consumed:
2007-2008
(a) Pigments, Extenders, Minerals
etc.
(b) Additives
(c) Solvents
(d)
(e)
(f)
(g)
(h)
(I)
(j)
Resins
Oils
Ortho Xylene
Methanol
Acetaldehyde
Monomers
Others
TOTAL
Unit
Qty.
MT
2,07,832
MT
MT
KL
MT
MT
MT
MT
MT
MT
MT
26,062
7,562
65,828
26,105
29,239
27,487
7,386
1,990
13,750
19,617
}
2006-2007
Value
(Rs. in Crores)
501.10
220.12
}
241.93
135.70
150.58
133.92
14.33
7.46
107.78
80.75
1,593.67
Qty.
Value
(Rs. in Crores)
444.39
177,228
21,032
6,961
61,141
23,193
26,912
23,821
6,900
1,984
9,566
16,919
180.81
}
228.92
127.79
116.03
113.62
14.59
7.32
75.86
65.61
1,374.94
41
10. CIF value of direct imports:
(Rs. in Crores)
2007-2008
336.49
1.35
4.69
(a) Raw materials
(b) Stores and Spares
(c) Capital goods
2006-2007
222.42
1.59
1.47
11. Value of imported and indigenous raw materials and spares consumed and percentage of each to total
consumption:
2007-2008
(Rs. in Crores)
% to Total
(a) Raw materials:
Direct imports
Others (including value of consumption
of imported raw materials purchased
through indigenous sources)
2006-2007
(Rs. in Crores)
% to Total
335.43
1,258.24
21.05
78.95
247.03
1,127.91
17.97
82.03
1,593.67
100.00
1,374.94
100.00
0.74
13.63
14.37
5.15
94.85
100.00
1.41
12.80
14.21
9.92
90.08
100.00
(b) Stores and spares:
Direct imports
Others
12. Net dividend remitted in foreign currency:
2007-2008
2006-2007
Number of
Number
Dividend
Number of
Number
Dividend
Non-resident of Equity
remitted
Non-resident
of Equity
remitted
Shareholders Shares held (Rs. in Crores) Shareholders Shares held (Rs. in Crores)
Final Dividend 2005-2006
Interim Dividend I 2006-2007
Interim Dividend II 2006-2007
Final Dividend 2006-2007
Interim Dividend 2007-2008
–
–
–
18
18
–
–
–
33,598
33,598
–
–
–
*
0.02
17
17
18
–
–
33,589
33,589
33,598
–
–
0.03
0.02
0.02
–
–
* Dividend Rs. 33,598/13. Expenditure in foreign currency:
(Rs. In Crores)
(a)
(b)
(c)
(d)
(e)
Annual maintenance for software
Professional fees
Shade cards and other sales promotional Items
Travelling and Training Expenses
Others
Total
2007-2008
0.87
0.67
5.30
6.49
1.32
14.65
2006-2007
0.90
1.26
1.68
5.43
0.56
9.83
14. Earnings in foreign currency:
(Rs. In Crores)
(a)
(b)
(c)
(d)
Export of own products at FOB value
Export of traded goods at FOB value
Royalty
Other receipts including recoveries from subsidiaries
Total
2007-2008
13.48
1.02
7.75
2.04
24.29
2006-2007
13.97
2.63
6.09
1.38
24.07
15. Sundry debtors include Rs. 1.45 crores (Previous year Rs. 1.67 crores) due from subsidiary companies.
42
16. The Company has incurred following expenditure on Research and Development:
(a) Revenue Expenditure:
(Rs. In Crores)
Employee cost
Depreciation on equipment and building
Traveling expenditure
Testing and laboratory expenditure
Power and fuel
Stores and spares
Repairs and maintenance
Materials consumed
Others
2007-2008
13.71
0.84
0.61
0.55
0.39
0.24
0.19
0.37
0.76
2006-2007
8.96
0.88
0.36
0.37
0.55
0.34
0.24
0.34
0.86
17.66
12.90
Total
(b) Capital Expenditure:
(Rs. In Crores)
For Bhandup research and development facility
2007-2008
0.50
2006-2007
1.25
33.69
0.58
34.19
1.83
For Turbhe research and development facility
(included in Capital Work in Progress)
Total
17. Interest expense:
(Rs. In Crores)
2007-2008
0.27
2006-2007
0.18
On Bill discounting
7.39
5.95
Other Interest
0.61
0.74
Total
8.27
6.87
On Bank borrowings
18. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for
more than 45 days as at 31st March, 2008. This information as required to be disclosed under the Micro, Small
and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been
identified on the basis of information available with the Company.
19. The Company uses forward exchange contracts to hedge against its foreign currency exposures relating
to the underlying transactions and firm commitments. The Company does not enter into any derivative
instruments for trading or speculative purposes.
The forward exchange contracts outstanding as at 31st March, 2008 are as under:
Number of
Contracts
2
FY 2007-2008
Buy Amount
(USD in mn.)
1.70
Indian Rupees
equivalent
(in Crores)
6.89
Number of
Contracts
12
FY 2006-2007
Buy Amount
(USD in mn.)
4.60
Indian Rupees
equivalent
(in Crores)
19.91
The foreign currency exposure not hedged as at 31st March, 2008 for payables is USD 14.2 millions (Rs. 56.66
crores)[Previous year USD 6.30 millions (Rs. 27.38 crores)] and for receivables is USD 3.20 millions (Rs. 12.82
crores)[Previous year USD 2.40 millions (Rs. 10.59 crores)].
43
20. Pursuant to the Accounting Standard (AS 29) – Provisions, Contingent Liabilities and Contingent Assets, the
disclosure relating to provisions made in the accounts for the year ended 31st March, 2008 is as follows:
(Rs. In Crores)
Provision for Excise
2007-2008
4.26
2006-2007
4.15
Additions
-
0.27
Utilisations
-
-
Opening Balance
Reversals
Closing Balance
-
0.16
4.26
4.26
Note: Excise provision is made towards matters disputed at various appellate levels.
21. The Company has recognised deferred tax arising on account of timing differences, being the difference
between the taxable income and accounting income, that originates in one period and is capable of
reversal in one or more subsequent period(s) in compliance with Accounting Standard (AS 22) – Accounting
for Taxes on Income.
The major components of deferred tax assets/(liabilities) arising on account of timing differences as at 31st
March, 2008 are as follows:
(Rs. in Crores)
Deferred tax assets
Expenses allowed for tax purpose on payment basis
Provision for doubtful debts
Voluntary Retirement Scheme (VRS) expenditure debited to Profit and
Loss Account but allowed in Income Tax over five years
Capital Losses carried forward under the Income Tax Act, 1961.
Total deferred tax assets
Deferred tax liabilities
Difference between the Written Down Value/Capital work in progress of
assets as per books of account and Income Tax Act, 1961.
Total deferred tax liabilities
Net deferred tax asset/(liability)
Deferred tax asset on employee benefit obligations, pursuant to adoption of AS 15 (revised), adjusted against General Reserve
Deferred tax benefit/(expense) for the year
22. I.
As at 31st
March, 2008
As at 31st
March, 2007
13.49
1.07
0.71
10.45
1.55
1.01
1.58
16.85
1.69
14.70
(48.38)
(36.85)
(48.38)
(36.85)
(31.52)
–
(22.15)
3.95
(9.38)
2.37
Pursuant to Accounting Standard (AS 19) – Leases, the following information is given:
(a) The Company has provided tinting systems to its dealers on an operating lease basis. The lease
period varies between six and ten years. Lease rentals are payable monthly by the dealers. A
refundable security deposit is collected at the time of signing the agreement. The equipment shall
be used only to tint products of the lessor.
(b) Future minimum lease rentals receivable as at 31 March, 2008 as per the lease agreements:
(Rs. in Crores)
i) Not later than one year
ii) Later than one year and not later than five years
iii) Later than five years
Total
44
2007-2008
0.54
0.47
0.00
1.01
2006-2007
0.61
1.02
0.01
1.64
The information pertaining to future minimum lease rentals receivable is based on the lease agreements
entered into between the Company and the dealers and variation made thereto. Lease rentals are
reviewed periodically taking into account prevailing market conditions.
(c) Total amount of contingent rents recognised as income - Nil.
(d) The initial direct cost relating to acquisition of tinting system is capitalised.
(e) The information on gross amount of leased assets, depreciation and impairment is given in Schedule
‘D’ to the Balance Sheet.
II.
(a) The Company has taken certain assets such as cars, computers and Systems hardware on an
operating lease basis. The lease rentals are payable by the Company on a monthly or quarterly
basis.
(b) Future minimum lease rentals payable as at 31st March, 2008 as per the lease agreements:
(Rs. in Crores)
i) Not later than one year
ii) Later than one year and not later than five years
Total
2007-2008
3.53
5.18
8.71
2006-2007
3.05
5.15
8.20
(c) Lease payments recognised in the Profit and Loss Account for the period are Rs. 3.52 crores (Previous
year Rs. 3.33 crores).
23. Pursuant to Accounting Standard (AS 27) - Financial Reporting of Interests in Joint Venture, the disclosures
relating to the Joint Venture viz., Asian PPG Industries Limited (hereinafter referred to as JV) are as follows:
(a) The proportion of interest of the Company in the JV is by way of equal equity participation with PPG
Industries Securities Inc., U.S.A.
(b) The aggregate amount of assets, liabilities, income and expenses related to the Company’s interests in
the JV as at 31st March, 2008 is as follows:
(Rs. In Crores)
i)
ii)
iii)
iv)
Assets
Liabilities
Income
Expenses
2007-2008
135.06
69.05
197.12
180.35
2006-2007
103.67
52.03
149.88
140.40
(c) The Company’s share of capital commitments of the JV as at 31st March, 2008 is Rs. 6.29 crores (Previous
(d) The Company’s share of contingent liabilities of the JV as at 31st March, 2008 is Rs. 2.92 crores (Previous
(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2008 in relation
to the Company’s interests in the JV along with the other venturer (Previous year Rs. Nil).
24. Employee Benefits:
(1) Short term employee benefits:
The liability towards short term employee benefits for the year ended 31st March, 2008 has been
45
(2) Post-employment benefits:
The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defined Benefit Plans:
(Rs. in Crores)
Gratuity
(Funded Plan)
Amount recognised in Balance Sheet
Present value of funded obligations
Fair value of plan assets
Present value of unfunded obligations
Unrecognized past service cost
Amount not recognised as an asset (limit in para 59(b)
of AS 15
Net Liability/(Asset)
Amounts in Balance Sheet
Liability
Assets
Expense Recognised in the Profit and Loss Account
Opening defined benefit obligation less benefits paid
Current service cost
Interest on defined benefit obligation
Expected return on plan assets
Net actuarial losses/(gains) recognized in the year
Past service cost
Effect of the limit in Para 59 (b) of AS 15 (Revised)
Losses/(gains) on "Curtailments and Settlements"
Total, included in "Employee Benefit Expense"
Actual return on plan assets
Reconciliation of benefit obligations and plan assets for
the period
Change in defined benefit obligation
Opening defined benefit obligation
Interest cost
Actuarial losses/(gain)
Liabilities extinguished on curtailment
Liabilities extinguished on settlements
Liabilities assumed on acquisition
Exchange difference on foreign plans
Benefits paid
Closing defined benefit obligation
Change in fair value of assets
Opening fair value of plan assets
Actuarial gain/(losses)
Assets distributed on settlements
Contributions by employer
Assets acquired due to acquisition
Benefits paid
Closing fair value of plan assets
46
Pension
(Unfunded Plan)
Post
Retirement
Medical
Benefit
(Unfunded
Plan)
2007-08
2006-07
2007-08
2006-07
2007-08
51.73
(50.04)
–
–
–
44.21
(49.99)
–
–
0.29
–
–
2.41
–
–
–
–
2.74
–
–
–
–
0.92
–
–
1.69
(5.49)
2.41
2.74
0.92
1.69
–
1.69
–
5.49
(5.49)
2.41
–
2.41
2 .74
–
2.74
0.92
–
0.92
–
2.68
3.44
(3.56)
5.04
–
(0.29)
–
2.95
3.30
(3.19)
(1.25)
–
0.29
–
0.02
0.22
–
(0.44)
–
–
2.85
0.02
0.22
–
(0.35)
–
–
0.96
0.04
0.08
–
(0.15)
–
–
7.31
4.02
2.10
2.52
(0.20)
–
2.74
–
0.93
–
44.21
2.68
3.44
5.49
–
–
–
–
(4.09)
51.73
45.71
2.96
3.31
(1.93)
–
–
–
–
(5.84)
44.21
2.74
0.02
0.22
(0.44)
–
–
–
–
(0.13)
2.41
2.98
0.02
0.22
(0.35)
–
–
–
–
(0.13)
2.74
0.96
0.04
0.08
(0.15)
–
–
–
–
(0.02)
0.91
49.99
3.56
0.45
–
0.13
–
–
(4.09)
50.04
48.04
3.19
(0.67)
–
5.27
–
–
(5.84)
49.99
–
–
–
–
0.13
–
–
(0.13)
–
–
–
–
0.13
–
–
(0.13)
–
–
–
–
0.02
–
–
(0.02)
Gratuity
(Funded Plan)
Assets information
Category of assets
Government of India Securities
Corporate Bonds
Special Deposit Scheme
Equity Shares of Listed Companies
Property
Insurer Managed Funds
Others
Grand Total
Summary of the actuarial assumptions
Discount rate
Expected rate of return on assets
Pension
(Unfunded Plan)
Post
Retirement
Medical
Benefit
(Unfunded
Plan)
2007-08
2006-07
2007-08
2006-07
2007-08
50%
31%
14%
–
–
–
5%
100%
52%
26%
14%
–
–
–
8%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8.55%
7.50%
8.25%
7.50%
8.55%
–
8.25%
–
8.55%
–
Notes:
(a) The estimates of future salary increases, considered in actuarial valuation, takes into account the
inflation, seniority, promotion and other relevant factors.
(b) The Company estimates that the amount to be contributed to the Gratuity fund for the financial
year 2008-2009 will be Rs. 1.69 crores.
(c) Comparative values of defined benefit plans (Gratuity and Pension) for the past one year instead
of four financial years, as required by AS 15 (Revised) are provided, this being the second year of
adoption of the standard.
(d) Until 31st March, 2007 the liability to certain specified employees under the Company’s Post
Retirement Medical Benefit Plan was charged to Profit and Loss Account as and when the liability
was discharged. In the current year, the Company has charged Rs. 0.93 crores to Profit and Loss
Account towards accrued liability based on actuarial valuation carried out as at Balance Sheet
date. Comparative value is not provided, this being the first year of actuarial valuation.
(e) The guidance on implementing AS 15 (Revised) issued by Accounting Standards Board (ASB) of the
Institute of Chartered Accountants of India states benefit involving employer established provident
funds, which require interest shortfalls to be recompensed are to be considered as defined benefits
plans. Pending the issuance of the guidance note from Actuarial Society of India, the Company’s
actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly the
Company is unable to exhibit the related information.
(3) Long term employee benefits:
The liability towards compensated absences (annual leave and sick leave) for the year ended 31st
March, 2008, based on actuarial valuation carried out using the Projected Accrued Benefit Method
amounting to Rs. 3.38 crores ( Previous year – Rs. 4.02 crores) has been recognised in the Profit and Loss
Account.
25. Earnings per share:
(a) Basic and diluted earnings per share (face value – Rs. 10/- per share)
(b) Profit after tax and prior period items as per Profit and Loss Account
(Rs. in crores)
(c) Weighted average number of equity shares outstanding
2007-2008
39.12
375.20
2006-2007
28.36
272.05
9,59,19,779
9,59,19,779
47
26. Information on related party transactions as required by Accounting Standard (AS 18) for the year ended
31st March, 2008.
(Rs. In Crores)
Particulars
Joint Venture
Subsidiaries
Key
Relatives
Management
of Key
Personnel (1) Management
Personnel (2)
2007-08
2006-07
2007-08
2006-07
Processing of goods (Income)
12.34
11.25
–
0.31
Sale of goods
15.14
16.97
6.28
5.35
0.20
1.00
Royalty received
1.91
1.71
Deposits refunded
0.06
–
Other recoveries
9.18
6.42
Purchase of goods
2007-08
2006-07
2007-08
2006-07
Processinq of goods (Expense)
Interest received on Loan given
8.07
7.57
0.84
0.99
0.89
0.89
5.05
12.11
Sale of investments
Equity contribution
18.60
1.91
Repayment of loan given
Loan given
2.28
1.51
Rent paid
1.95
1.95
Remuneration
1.70
1.57
Commission to Non-executive Directors
5.78
0.27
0.21
Sitting fees paid to Non-Executive Directors
0.03
0.02
Sitting fees received
0.22
0.19
1.05
0.71
4.92
Companies
controlled
by Director/
Relatives
2007-08
Employee
benefit plans
where control
exists
2006-07
4.50
4.37
98.16
82.94
1.02
1.93
–
0.02
–
5.31
2007-08
2006-07
Others
2007-08
2006-07
1.25
0.65
{from subsidiaries for nominee directors)
Other services - receipts
Donation
Sale of assets
Dividend received
0.20
–
–
0.44
–
2.05
0.68
0.51
–
(0.01)
–
0.20
Contributions during the year
19.34
19.76
Outstanding as at 31st March
Loans
–
–
43.79
27.47
–
–
–
–
–
–
–
–
–
–
Deposits accepted
–
0.07
–
–
–
–
–
–
–
0.01
–
–
–
–
Amount receivable
8.82
5.24
4.98
5.22
–
–
–
–
–
–
–
–
–
–
(2.24) (1.40)
(0.66)
–
–
Amount payable
–
– (0.12)
(0.89) (3.81)
(3.24) (0.27)
(0.21) (2.24)
Corporate guarantee issued by the Company on behalf of its subsidiaries amounting to Rs. 75.16 crores as at
31st March, 2008 (Previous year Rs. 77.32 crores).
The Company has issued letters of comfort/support to banks on behalf of some of its subsidiaries from time to time
and also a letter of financial support to the board of a subsidiary. The financial support/comfort based on such
letters is limited to Rs. 115.69 crores as on 31st March, 2008 (Rs.126.33 crores as on 31st March, 2007).
(1) Key management personnel and relatives of key management personnel are entitled for post employment
benefits and other long term employee benefits recognised as per AS 15 (Revised) Employee Benefits in the
financial statements. As the same is based on actuarial valuations not identifiable at an individual employee
level, the same is not included above.
(2) Under the employment of the Company pursuant to the necessary approvals from the shareholders and the
Central Goverment under Section 314 of the Companies Act, 1956.
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with
related parties during the year.
(Rs. in Crores)
Sale of Goods
Asian PPG Industries Ltd.
Resins & Plastics Limited
Others
48
2007-2008
2006-2007
15.14
4.33
6.45
25.92
16.97
4.29
5.43
26.69
(Rs. in Crores)
2007-08
2006-07
83.53
14.83
98.36
68.94
15.00
83.94
3.40
2.87
1.91
1.80
9.98
2.31
1.98
1.71
3.28
9.28
9.45
7.83
1.93
0.13
19.34
8.52
7.42
2.02
1.80
19.76
Purchase of Goods
Hitech Plast Ltd.
Others
Royalty Received
SCIB Chemical S.A.E., Egypt
Berger International Limited
Asian PPG Industries Ltd.
Others
Contributions during the year
Asian Paints Office Provident Fund
Asian Paints Factory Employees Provident Fund
Asian Paints Management Cadres Superannuation Scheme
Others
(a) Joint Venture :
Subsidiary of Joint Venture
Asian PPG Industries Limited
Fabber Paints Pvt. Limited
(b) Subsidiaries :
Direct Subsidiaries:
Asian Paints (Nepal) Pvt. Limited
Asian Paints Industrial Coatings Limited
Asian Paints (International) Limited
Subsidiaries of the wholly owned subsidiary, Asian Paints (International) Limited, Mauritius
Asian Paints (South Pacific) Holdings Limited
Asian Paints (South Pacific) Limited
Asian Paints (Tonga) Limited
Asian Paints (S.I.) Limited
Asian Paints (Vanuatu) Limited
Asian Paints (Queensland) Pty. Limited *
Asian Paints (Lanka) Limited
Asian Paints (Bangladesh) Limited
Asian Paints (Middle East) LLC.
SCIB Chemicals S.A.E., Egypt
Berger International Limited, Singapore
* Sold during the year.
Subsidiary of Asian Paints (South Pacific) Limited:
Taubmans Paints (Fiji) Limited*
* The company ceased trading and has transferred its assets, liabilities and business to shareholder
Asian Paints (South Pacific) Limited.
Subsidiary of Taubmans Paint (Fiji) Limited:
**
Samoa Paints Limited**
With the holding company Taubmans Paints (Fiji) Limited having ceased trading and transferred
its assets, liabilities and business to shareholder Asian Paints (South Pacific) Limited, Samoa Paints
Limited has become a direct subsidiary of Asian Paints (South Pacific) Limited.
Subsidiary of Asian Paints (Lanka) Limited:
Asian Paints Distributors (Pvt.) Limited
(In voluntary liquidation)
Subsidiaries of Berger International Limited, Singapore
Berger Paints Singapore Pte Limited
Berger International Sdn Bhd., Malaysia
Berger Paints (China) Co. Limited
(formerly known as Berger Paints (Ningbo) Co. Limited)
Enterprise Paints Limited
Lewis Berger (Overseas Holdings) Limited
Subsidiary of Berger Building Services
(Singapore) Pte Limited
Subsidiary of Enterprise Paints Limited:
Subsidiary of Nirvana Investments Limited
Berger Building Services (Singapore) Pte. Limited
Berger Paints (Thailand) Limited
Berger Paints (Hong Kong) Limited
Universal Paints Limited
Berger Contractor (Singapore) Pte. Limited
Nirvana Investments Limited
Berger Paints Emirates Limited
49
Subsidiaries of Lewis Berger (Overseas Holdings) Limited:
Berger Paints Jamaica Limited
Berger Paints Barbados Limited
Subsidiary of Universal Paints Limited:
Berger Paints Bahrain W.L.L.
(c) Key management personnel:
Name of the Director
Designation
Ashwin Choksi
Ashwin Dani
Abhay Vakil
Chairman
Vice Chairman & Managing Director
Managing Director
(d) Relatives of Key management personnel:
Directors
Mahendra Choksi
Amar Vakil
Hasit Dani
Non-Executive Director
Employees
Jalaj Dani
Manish Choksi
Nehal Vakil
Vishal Choksi *
* Employed for part of the year
(e) Companies controlled by Directors/Relatives :
AR Intertect Design Pvt. Ltd.
Hitech Plast Ltd.
Ricinash Oil Mill Ltd.
Ashwin Holdings Pvt. Ltd.
Jalaj Trading and Investments Pvt. Ltd.
Rita Choksi Holdings Pvt. Ltd.
Asteroids Trading and Investments Pvt. Ltd.
Jaldhar Investments and Trading Co. Pvt. Ltd.
Rupen Investments and Industries Pvt. Ltd.
Castle Investments and Industries Pvt. Ltd.
Jatayu Investments Ltd.
S.C. Dani Research Foundation Ltd.
Centaurus Trading and Investments Pvt. Ltd.
Kalica Paper Industries Pvt. Ltd.
Sadavani Investments and Trading Co. Pvt. Ltd.
Clear Plastics Limited
Lambodar Investments & Trading Co. Ltd.
Sapan Investments Pvt. Ltd.
Coating Specialties (India) Ltd.
Lyon Investments and Industries Pvt. Ltd.
Satyadharma Investments & Trading Co. Pvt. Ltd.
Dakshina Properties Pvt. Ltd.
Mipak Polymers Ltd.
Sudhanva Investments and Trading Co. Pvt. Ltd.
Dani Finlease Ltd.
Murahar Investments and Trading Co. Ltd.
Suprasad Investments & Trading Co. Ltd.
Doli Trading and Investments Pvt. Ltd.
Navbharat Packaging Industries Ltd.
Suptaswar Investments and Trading Co. Ltd.
Elcid Investments Ltd.
Nehal Trading and Investments Pvt. Ltd.
Tru Trading and Investments Pvt. Ltd.
ELF Trading and Chemical Mfg. Co. Ltd.
Omega Properties Pvt. Ltd.
Ultramarine & Pigments Ltd.
Geetanjali Trading & Investments Pvt. Ltd.
Pragati Chemicals Ltd.
Unnati Trading and Investments Pvt. Ltd.
Gujarat Organics Ltd.
Pragati Marketing Pvt. Ltd.
Urvashi Holding Pvt. Ltd.
Himanshu Holdings Pvt Ltd
Resins and Plastics Ltd.
Vikatmev Containers Ltd.
Hiren Holdings Pvt. Ltd.
(f)
Employee Benefit Funds where control exists:
Asian Paints Factory Employees’ Provident Fund
Asian Paints Management Cadres’ Superannuation Scheme
Asian Paints (India) Limited Employees’ Gratuity Fund
(g) Other entities over which there is a significant control:
Asian Paints Charitable Trust
50
27. Segment Information for the year ended 31st March, 2008:
(Rs. In Crores)
2007-2008
REVENUE
Net sales
External sales (Net)
Inter-Segment sales
Other income
Total revenue
RESULT
Segment result
Unallocated expenses
Operating Profit
Interest expenses
Interest income
Dividends
Exchange difference
Profit/(Loss) on sale of long term
investments
Profit/(Loss) on sale of short
term investments
Profit on sale of assets
Sundry balance written back
Income taxes
Net Profit
OTHER INFORMATION
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Unallocated capital expenditure
Total
Depreciation/ impairment
Unallocated depreciation/
impairment
Total
2006-2007
Paints
Others*
Total
Paints
Others*
Total
3,311.87
–
23.74
3,335.61
104.29
86.41
3.82
194.52
3,416.16
86.41
27.56
3530.13
2,728.59
–
16.57
2,745.16
92.70
82.12
3.46
178.28
2,821.29
82.12
20.03
2,923.44
566.47
26.06
592.53
(54.74)
422.64
24.63
447.27
(50.91)
1335.24
104.50
779.72
15.63
134.67
1.54
38.76
3.30
537.79
(8.27)
3.41
24.33
–
–
396.36
(6.87)
0.93
12.66
0.33
0.31
0.96
0.06
0.89
5.07
0.37
(187.96)
376.59
0.85
4.76
0.53
(139.99)
269.93
1439.74
581.78
2,021.52
795.35
297.67
1,093.02
136.21
2.14
138.35
42.06
1.71
1063.30
78.00
598.96
22.80
74.89
0.38
40.11
3.45
43.77
1141.30
417.53
1,558.83
621.76
192.99
814.75
75.27
5.36
80.63
43.56
1.86
45.42
* Others include Company’s business units manufacturing Phthalic Anhydride and Pentaerythritol.
28. Previous year’s figures have been regrouped, wherever necessary.
Signatures to Schedules A to M
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Company Secretary
Mumbai
9th May, 2008
51
Statement
PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956 BALANCE SHEET ABSTRACT
AND COMPANY’S GENERAL BUSINESS PROFILE
1. Registration Details
Registration No.
0
4
5
9
3 1
Date
Balance Sheet Date
II.
III.
State Code 1 1
8
0 3
Month
2 0 0 8
Year
Capital Raised During the Year (Amount - Rs. in Thousands)
Public Issue
N
I
L
Bonus Issue
N
I
L
Rights Issue
N
Cancellation of Shares
N I L
I
L
Private Placement
N I L
Position of Mobilisation and Deployment of Funds
(Amount - Rs. in Thousands)
Total Liabilities
1 0 5 4
2
4
0
Total Assets
1 0 5
2
4
0
Paid-up Capital
9 5 9
1
9
8
8 3 2 5 6
8
9
Secured Loans
3 6
0
4
2
Unsecured Loans
5 8 0
0
3
1
Deferred Tax Liability
3 1 5 2
8
0
7
9
9
7
4
7
Sources of Funds
7
Application of Funds
Net Fixed Assets
5 3 9 2
1
5
2
Investments
4 2
Net Current Assets
9 2 6
2
8
9
Deferred Revenue Expenditure
N I L
2
8
Accumulated Losses
N I L
IV.
Performance of Company (Amount - Rs. in Thousands)
Turnover
4 0
+
-
5
9
9
3
3
Total Expenditure
3 4 9 5 3
7
+
Profit/(Loss) Before Tax
5 6 4 5 4 8 2
-
8
5
5
Profit/(Loss) After Tax
3 7 5 1 9 9 8
(Please tick appropriate box + for profit, – for loss)
Earnings Per Share (Rs.)
3 9 . 1
V.
Generic Names of three Principal Products/Services of the Company
(As per Monetary Terms)
Item Code No. (ITC Code)
3 2 0 8 9 0 0 3
2 9 1 7 3 5 0 0
2 9 0 5 4 2 0 0
52
Dividend Rate %
1 7 0
2
Product Description
S Y N T
H E
T
O T
R
C O
H E
I
Product Description
P H T H A L I C
Product Description
P E N T A E R Y
C
E N A M E
L O U R
A N H Y D R
T H R
I
L
,
S
T O L
I
D E
Consolidated
Financial Statements
53
Auditors’ Report to the Board of Directors
We have audited the attached consolidated Balance
Sheet of Asian Paints Limited and its subsidiaries
(collectively referred to as Asian Paints Group) as at
31 March, 2008, and also the Consolidated Profit and Loss
Account and the Consolidated Cash Flow Statement for
the year ended on that date annexed thereto.
These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards in India. These standards
require that we plan and perform the audit to obtain
reasonable assurance whether the financial statements
are prepared, in all material respects, in accordance with
and identified financial reporting framework and are free of
material misstatements. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
We have not audited the financial statements of
subsidiaries mentioned in Annexure to this report whose
total assets and total revenues are mentioned in the
annexure to this report. These financial statements have
been audited by other auditors whose reports have been
furnished to us, and our opinion, in so far as it relates to
the amounts included in respect of the subsidiaries, is
based solely on the reports of the other auditors.
The financial statements of the subsidiaries, Asian
Paints Industrial Coatings Limited, Technical Instruments
Manufacturers (India) Limited and Maxbhumi Developers
Limited for the year ended 31 March, 2008 have been
audited by one of the joint auditors, Shah & Co.,
Chartered Accountants.
54
We report that the consolidated financial statements
have been prepared by the Company in accordance
with the requirements of Accounting Standard (AS 21) Consolidated Financial Statements, (AS 23) - Accounting
for Investments in Associates in Consolidated Financial
Statements and (AS 27) - Financial reporting of interests in Joint
Ventures issued by the Institute of Chartered Accountants
of India and on the basis of the separate audited financial
statements of the Company and its subsidiaries, associates
and joint venture as listed in Note B - 4 of Schedule ‘M’ of
notes on consolidated financial statements included in the
consolidated financial statement.
On the basis of the information and explanations given
to us and on the consideration of the separate audit
report/report of other auditors as explained above,
on individual audited financial statements of the
Company and its aforesaid subsidiaries, associates and
joint venture, we are of the opinion that the attached
consolidated financial statements give a true and
fair view in conformity with the accounting principles
generally accepted in India:
(i)
in the case of Consolidated Balance Sheet, of the
consolidated state of affairs of the Asian Paints
group as at 31 March, 2008;
(ii)
in the case of Consolidated Profit and Loss Account,
of the consolidated profit for the Asian Paints group
for the year ended on that date; and
(iii) in the case of the Consolidated Cash Flow Statement,
of the consolidated cash flows of the Asian Paints
group for the year ended on that date.
For Shah & Co.
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Mumbai
9th May, 2008
Asian Paints Limited • Annual Report 2007-2008 • Consolidated Financial Statements
v)
Annexure
Subsidiaries of Berger International Limited, Singapore:
The subsidiary companies considered in the consolidated
financial statements are:
Accounting period
Berger Paints Singapore Pte. Limited January–December
Berger Building Services (Singapore) January–December
Pte. Limited
Berger International Sdn. Bhd.
January–December
January–December
(Rs. in Crores)
Name of the Company
Financial
Year
Asian Paints (Nepal) Pvt. 15th January–
Limited
14th January
Total Assets
Total
Revenues
17
23
Asian Paints
(International) Limited
January–
December
473
725
Asian Paints Industrial
Coatings Limited
April–March
47
59
Technical Instruments
Manufacturers (India)
Limited
April–March
24
2
Maxbhumi Developers
Limited*
April–March
14
-
vi)
* Incorporated on 15th November, 2007
Indirect Subsidiaries:
i)
Berger Paints (China) Limited
(formerly known as Berger Paints
(Ningbo) Limited)
January–December
January–December
January–December
Lewis Berger (Overseas Holdings)
Limited
January–December
January–December
Subsidiary of Berger Building Services (Singapore)
Pte. Ltd.;
Berger Contractor (Singapore) Pte. Limited January–December
Subsidiaries of the wholly owned subsidiary, Asian
Paints (International) Limited, Mauritius.
vii) Subsidiary of Enterprise Paints Limited:
Accounting period
January–December
January–December
January–December
January–December
January–December
January–December
Asian Paints (Queensland) Pty. Limited**
January–December
January–December
January–December
January–December
January–December
January–December
Asian Paints (Middle East) LLC
January–December
SCIB Chemicals S.A.E.
January–December
Berger International Limited, Singapore
January–December
viii) Subsidiary of Nirvana Investments Ltd.
ix)
x)
January–December
Subsidiaries of Lewis Berger (Overseas Holdings) Ltd.:
Berger Paints Bahrain W.L.L.,
January–December
**divested during the year on 30th June, 2007
Joint Venture:
ii)
The Joint Venture unit considered in the consolidated
financial statements is Asian PPG Industries Limited, a
joint venture between the parent company and PPG
Industries Securities Inc., U.S.A. wherein the parent
company has equal equity participation.
Taubmans Paints (Fiji) Limited**
**
iii)
The Company ceased trading and has transferred
its assets, liabilities and business to shareholder Asian
Paints (South Pacific) Limited
Subsidiary of Taubmans Paint (Fiji) Limited:
Samoa Paints Limited**
**
iv)
January–December
January–December
With the holding company Taubmans Paints (Fiji) having
ceased trading and transferred its assets, liabilities and
business to shareholder Asian Paints (South Pacific)
Limited, Samoa Paints Limited has become a direct
subsidiary of Asian Paints (South Pacific) Limited.
Subsidiary of Joint Venture:
Asian PPG Industries Ltd. has a 100% stake in Faaber
Paints Pvt. Ltd. The accounts of the said company are
incorporated with that of the Joint Venture for the
purpose of consolidation.
For Shah & Co.
Subsidiary of Asian Paints Lanka Limited:
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Asian Paints Distributors (Pvt.)
Limited (In voluntary liquidation)
Mumbai
9th May, 2008
January–December
55
Consolidated Balance Sheet as at 31st March, 2008
(Rs. in Crores)
Schedules
FUNDS EMPLOYED
Shareholders’ Funds
Share Capital
As at
31.03.2008
As at
31.03.2007
95.92
886.45
95.92
681.87
982.37
777.79
145.14
130.07
121.10
185.07
275.21
39.08
306.17
26.79
A
B
Loan Funds
Secured Loans
Unsecured Loans
C
(Refer Note B-11 in Schedule ‘M’)
Minority Interest
57.37
60.08
1,354.03
1,170.83
44.35
46.86
1,211.22
633.66
1,083.15
603.77
577.56
114.18
479.38
13.78
691.74
276.65
493.16
192.72
0.09
714.01
460.33
110.71
73.27
153.07
0.03
598.01
420.61
105.39
69.36
97.93
1,511.48
1,291.33
992.30
177.89
787.04
66.20
Net Current Assets
1,170.19
341.29
853.24
438.09
Total
1,354.03
1,170.83
Total
APPLICATION OF FUNDS
Goodwill on consolidation
Fixed Assets
Gross Block
Less: Depreciation
D
Net Block
Add : Capital Work in Progress
Investments
E
Current Assets, Loans and Advances
Interest accrued on investments
Inventories
Sundry debtors
Cash and Bank Balances
Other Current Assets
Loans and Advances
F
Less: Current Liabilities and Provisions
Current Liabilities
Provisions
G
Notes to Consolidated Financial Statements
M
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Company Secretary
Mumbai
9th May, 2008
56
Consolidated Profit and Loss Account for the year ended 31st March, 2008
(Rs. in Crores)
Schedules
INCOME
Sales and operating income (Net of discounts)
Less: Excise duty
Sales and operating income (Net of discounts and excise duty)
Other income
EXPENDITURE
Material Cost
Employee Cost
Manufacturing, administrative, selling and distribution expenses
PROFIT BEFORE INTEREST, DEPRECIATION AND TAX
Less: Interest
Less: Depreciation
Add: Profit/(Loss) from Associate Company
PROFIT BEFORE TAX AND EXTRAORDINARY ITEMS
Less: Extraordinary Items
(Refer Note B - 6 and Note B - 8 in Schedule ‘M’)
PROFIT BEFORE TAX AND PRIOR PERIOD ITEMS
Less: Provision for Taxation
Current Tax
Deferred Tax (Refer Note B - 11 in Schedule ‘M’)
Fringe Benefit Tax
Tax Provision for earlier years (Refer Note B - 15 in Schedule ‘M’)
PROFIT AFTER TAX BEFORE PRIOR PERIOD ITEMS
Add/(Less): Prior period items (Net)
PROFIT AFTER TAX AND PRIOR PERIOD ITEMS
Less: Minority Interest
H
I
J
K
L
Year
2007-2008
As at
2006-2007
4,935.66
531.33
4,404.33
61.95
4,466.28
4,133.52
463.55
3,669.97
37.25
3,707.22
2,577.64
306.66
861.80
3,746.10
2,199.40
262.04
730.47
3,191.91
720.18
21.16
59.17
—
639.85
6.84
515.31
18.91
61.14
(0.40)
434.86
7.76
633.01
427.10
184.79
10.56
6.43
1.59
429.64
(1.59)
428.05
18.87
148.31
(2.88)
4.81
(3.58)
280.44
2.65
283.09
2.06
D
ATTRIBUTABLE TO SHAREHOLDERS
409.18
281.03
Add: Balance brought forward from previous year
Amount available for appropriation
APPROPRIATIONS
Dividend to shareholders of parent company
Equity Shares - Interim dividend
- Proposed Final dividend
Tax on Dividend (includes tax on proposed dividend)
Balance carried to Balance Sheet
150.00
559.18
110.00
391.03
62.34
100.71
27.72
168.41
200.00
115.10
9.59
18.06
98.28
150.00
559.18
42.66
391.03
29.30
Earnings per share (Rs.) Basic and diluted - (Face value of Rs. 10 each)
Notes to Consolidated Financial Statements
M
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Company Secretary
Mumbai
9th May, 2008
57
Consolidated Cash Flow Statement for the year ended 31st March, 2008
(Rs. in Crores)
A.
B.
2007-2008
2006-2007
633.01
427.10
59.17
(1.59)
(1.60)
6.84
—
(3.78)
—
—
21.16
(4.47)
(24.54)
61.14
2.65
(0.39)
0.69
0.40
(1.47)
7.07
0.28
18.91
(1.43)
(11.53)
Operating Profit before working capital changes
(Increase)/Decrease in stocks
(Increase)/Decrease in trade an other receivables
(Decrease)/Increase in payables and accruals
684.20
(119.43)
(88.79)
212.28
503.42
(104.48)
(111.18)
128.67
Cash generated from operations
Income tax paid (Net of refund)
688.26
(190.60)
416.43
(158.50)
497.66
257.93
(308.05)
26.25
(198.17)
115.83
4.41
24.54
(0.36)
0.69
—
(81.95)
13.37
(39.56)
5.40
1.40
11.53
—
0.55
6.73
Cash Flow from operating activities:
Profit before tax and prior period items
Adjustment for:
Depreciation
Prior period adjustment
Profit on sale of investments
(Profit)/loss on disposal of subsidiaries
Share of (profit)/loss of associate
(Gain)/loss on disposal of assets
Loss on disposal of Associate Company
Fair value adjustment on receivable from disposal of subsidiary
Interest expense
Interest income
Dividend income
Net cash generated from operating activities
Cash Flows from investing activities:
Purchase of fixed assets
Proceeds from sale of fixed assets
Purchase of investment
Sale of investment
Interest received
Dividend received
Cash inflow/(outflow) on additional stake in subsidiary
Cash inflow arising on disposal of subsidiary (net of costs of disposal)
Cash inflow/(outflow) on disposal of Associate Company
Cash outflow on acquisitions made by Joint Venture
C.
D.
E.
—
(26.94)
Net cash used in investing activities
Cash flows from financing activities
Repayment of long term loans
Repayment of short term loans
Short term loans availed
Long term loans availed
Interest paid
Dividend paid (including dividend paid to minority)
(334.86)
(109.47)
—
(38.08)
—
7.10
(21.16)
(96.82)
(28.05)
—
73.68
—
(18.91)
(137.49)
Net cash used in financing activities
Net effect of changes in exchange rate on other Balance Sheet items
(148.96)
(2.43)
(110.77)
(4.34)
11.41
105.39
(6.09)
110.71
33.35
73.41
(1.37)
105.39
Net (Decrease)/Increase in cash and cash equivalents
Cash and cash equivalents as at 1st April, 2007*
Net effect of changes in exchange rate on cash and cash equivalents
Cash and cash equivalents as at 31st March, 2008*
* Refer Clause (iv) of Schedule ‘F’
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Company Secretary
Mumbai
9th May, 2008
58
Schedules forming part of the Accounts
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
99.50
99.50
0.50
0.50
100.00
100.00
95.92
95.92
95.92
95.92
2.24
2.24
–
–
5.37
5.37
528.61
168.41
439.07
98.28
0.21
–
(0.68)
(8.06)
697.23
528.61
(4.35)
(13.00)
(1.04)
–
(6.36)
(3.85)
1.73
4.13
(18.39)
(4.35)
200.00
150.00
886.45
681.87
SCHEDULE A : SHARE CAPITAL
Authorised
9,95,00,000 (Previous year 9,95,00,000) Equity Shares of Rs.10/- each
50,000
(Previous year 50,000) 11% Redeemable Cumulative
Preference shares of Rs. 100/- each
Issued, Subscribed and Paid up capital
9,59,19,779 (Previous year 9,59,19,779) Equity Shares of Rs. 10/- each fully paid:
a) 9,39,89,940 (Previous year 9,39,89,940) Bonus Shares of Rs. 10/- each
fully paid up issued on capitalisation of Share premium account
(Rs. 2.19 crores) and General Reserves (Rs. 91.80 crores)
b) 2,94,000 (Previous year 2,94,000) shares of Rs. 10/- each issued as
fully paid up pursuant to the Scheme of Amalgamation of
Pentasia Chemicals Ltd., without payment being received in cash.
SCHEDULE B : RESERVES AND SURPLUS
Capital Reserve on consolidation
Capital Reserve [Rs. 5,000/- (Previous year Rs. 5,000/-)]
Capital Redemption Reserve
General Reserve
Add: Transfer from Profit and Loss Account
Add/(Less): Transitional provision on implementation of International Financial
Reporting Standards by certain subsidiaries
Less: Adjustment on account of adoption of AS 15 (Revised)
Foreign Currency Translation Reserve
Add: Currency translation during the year
(Add)/Less: Realised on disposal of Subsidiary Company
Less: Realised on disposal of Associate Company
59
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
26.43
0.66
18.56
1.00
118.05
101.54
145.14
121.10
17.40
40.70
18.15
40.70
71.97
126.22
130.07
185.07
(1) (a) Interest free term loan from the Pradeshiya Industrial Corporation of
U.P. Ltd. (PICUP) under Sales Tax Deferment Scheme of U.P. is secured
by a first charge of the Parent Company’s immovable properties
pertaining to the paint plant at Kasna and by way of hypothecation of
all movable properties at the above location.
23.13
18.23
(b) Partially secured either by fixed/floating charge on the assets of various
subsidiaries.
3.30
0.33
SCHEDULE C : SECURED AND UNSECURED LOANS
Secured Loans
Long Term:
Loans
From Banks & Financial Institutions (Note No.1)
Finance Lease liability
Short Term:
Loans from banks
Cash Credit Accounts/Loans (Note No. 2)
Unsecured Loans
Long Term:
Trade Deposits - Interest free
Sales tax deferment scheme - State of Andhra Pradesh (Note No. 3)
Short Term:
Loans:
Loan from banks (Note No. 4)
Notes:
26.43
18.56
(2) Partially secured by hypothecation of inventories, book debts and other
current assets.
118.05
101.54
(3) Interest free loan availed under the sales tax deferment Scheme of the
Government of Andhra Pradesh by parent company.
40.70
40.70
71.97
126.22
(4) Other Loans represent:
Loans availed by various subsidiaries based on Guarantees/Letter of comfort
from the parent company.
60
Plant and Machinery
12.57
Vehicles
52.50
Previous Year
976.56
1,083.15
Intangible Assets
TOTAL
97.48
2.01
– Vehicles
Assets given under
operating lease
0.14
– Furniture
Assets acquired on
financial lease
55.25
3.11
Furnitures and Office
Equipment
Buildings
Equipment
11.82
49.84
568.67
Leasehold Buildings
Scientific Research:
196.17
19.09
Buildings – Owned
14.50
Leasehold Land
As at
01.04.07
Freehold Land
Tangible Assets:
Particulars
(0.62)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.72
(18.92)
(0.06)
(0.02)
(0.12)
(0.01)
(0.97)
(2.71)
–
(0.01)
(7.68)
(3.21)
(2.79)
(0.26)
(1.08)
Adjust- Translament
tion
as per
DifferIFRS
ence
SCHEDULE D : FIXED ASSETS
Gross Block
133.81
193.25
2.55
0.28
0.29
–
1.03
4.69
–
0.51
66.47
3.40
17.68
13.26
83.09
1.56
–
–
–
–
–
–
–
–
–
–
–
–
–
–
AddiAdditions tions on
during consolithe
dation
year
25.58
39.03
10.51
1.93
0.15
–
1.83
2.67
0.16
4.93
13.86
0.21
2.65
0.13
3.30
7.23
–
–
–
–
0.45
0.61
–
–
1.90
3.45
0.82
–
Deduc- Dispostion durals of
ing the Subsidiyear
aries
1,083.15
1,211.22
44.48
95.81
2.03
0.13
10.35
53.95
3.11
12.16
620.63
36.17
207.40
28.62
96.38
As at
31.03.08
514.56
559.58
31.03
60.01
1.19
0.13
8.53
39.33
0.67
7.56
340.40
24.93
44.43
1.37
–
Upto
31.03.07
–
(0.03)
(0.01)
(0.07)
(0.01)
(0.78)
(1.98)
–
(0.01)
(5.04)
(1.72)
(0.67)
(0.02)
(1.68)
0.83
–
1.01
5.51
0.22
3.35
5.41
0.35
0.01
1.08
4.26
0.10
0.76
0.46 59.14
– 58.52
–
–
–
–
–
–
–
– 36.46
–
–
–
–
11.87
13.74
0.09
1.13
0.08
–
1.58
2.33
–
0.13
4.33
3.46
0.07
0.54
–
1.86
2.22
–
–
–
–
0.23
0.37
–
–
1.05
–
0.57
–
–
Dur- Deduc- Disposing
tions
als of
the
Subsidiyear
aries
Depreciation/Amortisation
TransAddilation tions on
Differ- Consolience
dation
– (10.34)
–
–
–
–
–
–
–
–
–
–
–
–
–
Adjustment
as per
IFRS
559.58
591.80
34.26
64.28
1.39
0.13
7.02
38.91
0.77
8.18
366.44
20.76
48.63
1.03
–
As at
31.03.08
43.88
44.19
–
24.31
–
–
–
1.83
–
0.50
13.75
3.80
–
–
–
As at
01.04.07
0.12
(0.16)
–
–
–
–
–
–
–
–
(0.16)
–
–
–
2.00
0.65
–
–
–
–
0.03
0.15
–
–
0.43
0.04
–
–
–
1.81
2.82
0.39
–
–
–
0.18
–
–
0.22
2.03
–
–
–
Dur- Deducing
tion/
the Adjustyear
ment
Impairment
Translation
Difference
44.19
41.86
–
23.92
–
–
0.03
1.80
–
0.50
13.96
1.65
–
–
–
As at
31.03.08
479.38
577.56
10.22
7.61
0.64
–
3.30
13.24
2.34
3.48
240.23
13.76
158.77
27.59
96.38
As at
31.03.08
418.11
479.38
21.47
13.16
0.82
–
4.04
14.09
2.44
3.76
214.53
21.11
151.74
17.72
14.50
As at
31.03.07
Net Block
(Rs.in Crores)
61
(Rs. in Crores)
Nos.
Face
value (Rs.)
As at
31.03.2008
As at
31.03.2007
–
–
SCHEDULE E : INVESTMENTS
Long Term Investments (at cost)
Unquoted
(i) In Government Securities
National Savings Certificates, Indira Vikas Patra
and Defence Certificates deposited with
Government authorities
[Rs. 34,500/- (Previous year Rs. 34,500/-)]
(ii)
Trade Investments (Fully paid Equity shares)
(a) Patancheru Enviro-tech Ltd.
(b) SIPCOT Common Utilities Ltd.
(c) Bharuch Eco-Acqua Infrastructure Ltd.
(d) Apco Coatings (NZ) Ltd.
(e) Danish for Wood
Less: Provision for diminution in the value of
Investments
(f) Middle East Company for Sealants &
Adhesives, Egypt (erstwhile Den Braven)
(Rs. 35,945/- Previous year Rs. 38,914/-)
12,900
10/-
0.01
0.01
2,830
100/-
0.03
0.03
4,78,270
10/-
0.48
0.48
23,500
1 NZ
0.08
0.08
2,500
10LE
0.02
–
–
–
–
–
–
–
–
500
10LE
Less: Provision for diminution in the value of
Investments
(Rs. 35,945/- Previous year Rs. 38,914/-)
(g) Master Builders Technologies, Egypt
(50 shares sold during the year,
Previous year Rs. 38,914/-)
(h) Misr Quena
(1,000 shares sold during the year)
(i)
Master Builders Technologies for trading,
Egypt (Rs. 35,945/- Previous year Rs. 38,914/-)
(iii) Other investments
(a) Equity shares of SKH Metals Ltd.
(50)
100LE
–
–
(1,000)
10LE
–
0.01
50
100LE
–
–
0.60
0.61
0.50
0.50
0.50
0.50
1.10
1.11
10/-
77.25
77.25
10/10/-
0.12
0.01
0.12
0.01
77.38
78.48
77.38
78.49
62,500
10/-
Total Long Term Unquoted Investments
Quoted (Fully Paid Equity Shares)
(i) Trade Investments
ICI (India) Ltd.
37,60,783
(ii) Other Investments
Housing Development Finance Corporation Ltd. 93,000
Apcotex Industries Ltd.
3,418
Total Long Term Quoted Investments
Total Long Term Investments
Current Investments (Unquoted)
62
0.02
(Rs. in Crores)
Nos.
Birla Fixed Term Plan - Series H - Growth
Face
value (Rs.)
As at
31.03.2008
As at
31.03.2007
–
(1,00,00,000)
10/-
–
10.00
ABN Amro Fixed Term Plan Series 4 Quarterly Plan D - Div.
–
(1,00,81,340.789)
10/-
–
10.08
Kotak Fixed Maturity Plan 3M Series 11 - Div.
–
(40,24,225.464)
10/-
–
4.02
Kotak Fixed Maturity Plan 3M Series 8 - Div.
–
(1,01,37,731.134)
10/-
–
10.14
Kotak Fixed Maturity Plan 6 Months Series 2 - Div.
–
(1,02,49,192.847)
10/-
–
10.25
ICICI Prudential Fixed Maturity Plan Series 35 3 Months Plan B Div.
–
(1,00,98,497.045)
10/-
–
10.10
ICICI Prudential Fixed Maturity Plan Series 35 3 Months Plan A Div.
–
(1,01,36,000.000)
10/-
–
10.14
ICICI Prudential Fixed Maturity Plan Series 35 3 Months Plan C Div.
–
(40,00,000.000)
10/-
–
4.00
Reliance Fixed Horizon Fund II Quarterly
Plan Series II Inst. Div.
–
(50,00,000.000)
10/-
–
5.00
SBI Debt Fund Series 90 Days II (Dec. 06)
–
(50,71,565.342)
10/-
–
5.07
SBI Debt Fund Series 180 Days II (Nov. 06) Div
–
(51,09,500.259)
10/-
–
5.11
Standard Chartered Fixed Maturity Plan Quarterly Series 3
–
(1,01,47,600.000)
10/-
–
10.15
TATA Fixed horizon fund series 9 - Scheme D Div. Inst. Plan
–
(1,00,64,461.323)
10/-
–
10.06
UTI Fixed Maturity Plan Quarterly Series QFMP/0207/I Div.
–
(1,01,00,702.400)
10/-
–
10.10
ABN AMRO Flexible Short Term Plan Series A Monthly Div.
HDFC Quarterly Interval Fund - Plan C Div.
2,92,69,876.206
2,89,81,451.870
10/10/-
29.27
29.00
–
–
ICICI Prudential Interval Fund II Qtrly Interval Plan C.
2,90,00,000.000
10/-
29.00
–
ING Fixed Maturity Fund - Series 34 - Inst - Div.
1,00,00,000.000
10/-
10.00
–
ING Fixed Maturity Fund - 42 Inst
1,90,00,000.000
10/-
19.00
–
Sundaram BNP Paribas Interval Fund - Qtrly Plan C
2,92,30,884.826
10/-
29.23
–
TATA Fixed Income Portfolio Fund Scheme A2 Inst Div.
2,89,70,160.734
10/-
29.00
–
UTI Fixed Maturity Plan QFMP (0208/II) I Inst.
2,31,60,275.996
10/-
23.16
–
SBI Premier Liquid Fund - IP - Daily Dividend
4,99,329.976
10/-
0.51
–
Total Current Investments
198.17
114.22
Total Investments
276.65
192.72
Aggregate market value of Long Term Quoted Investments:
254.26
183.02
Note :
1. Figures in brackets indicate that of previous year.
2. Investments in shares are fully paid-up except where indicated.
63
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
0.09
0.03
SCHEDULE F : CURRENT ASSETS, LOANS AND ADVANCES
Current Assets
(i) Interest accrued on investments
(ii) Inventories - valued and certified by the Management
(a) Raw and packing materials
(b) Finished goods
(c) Work-in-process
(d) Stores, spares, consumables and other traded goods
301.32
359.99
33.86
18.84
226.39
326.34
30.49
14.79
714.01
(iii) Sundry debtors (Unsecured)
(a) Outstanding for more than six months
Considered good
Considered doubtful
16.14
28.50
17.32
46.15
44.64
(b) Other debts
Considered good
Considered doubtful
444.19
0.11
Less : Provision for doubtful debts
(iv) Cash and Bank Balances
(a) Cash on hand
(b) Balances with Banks:
(i) Current Accounts
(ii) Term Deposits
(v) Other Current Assets
Retirement Benefit Asset (Refer Note B - 12 in Schedule ‘M’)
Other Receivables
Loans and Advances
(i) Loans and Advances :
Unsecured and considered good
(a) Balances with Customs, Central Excise etc.
(b) Sundry deposits
(c) Advances/claims recoverable in cash or in kind
(d) Advances to employees
(e) Advances against capital expenditure
(f) Advance payment of tax (Net of provisions)
(g) Others
64
598.01
63.47
403.29
–
444.30
403.29
488.94
28.61
466.76
46.15
460.33
420.61
0.15
0.17
107.11
3.45
103.24
1.98
110.71
105.39
73.27
25.25
44.11
69.36
16.85
56.42
26.59
16.25
79.54
0.80
28.28
1.61
–
15.22
14.10
47.43
0.83
13.88
3.53
2.94
153.07
97.93
1,511.48
1,291.33
(Rs. in Crores)
As at
31.03.2008
As at
31.03.2007
218.32
172.93
SCHEDULE G : CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
(i) Acceptances
(ii) Sundry creditors
–
Trade
–
Others
(iii) Investor Education and Protection Fund*
(a) Unpaid/Unclaimed dividend
(b) Unpaid/Unclaimed matured deposits
(c) Unclaimed interest
(d) Unclaimed amount of sale proceeds of fractional
coupons of bonus shares
166.15
411.63
*
577.78
448.53
796.10
621.46
3.10
0.03
–
6.20
0.04
0.01
0.04
(iv) Other liabilities
Provisions
(i) Proposed Dividend
(ii) Provision for tax on Proposed Dividend
(iii) Defined benefit obligations (Refer Note B - 12 in Schedule ‘M’)
(iv) Provision for accrued leave
(iv) Provision for Excise (Refer Note B - 16 in Schedule ‘M’)
(iv) Provision for Warranties (Refer Note B - 16 in Schedule ‘M’)
(v) Other provisions
369.28
79.25
0.04
3.17
193.03
6.29
159.29
992.30
787.04
100.71
17.12
11.49
40.68
4.26
1.04
2.59
9.59
1.63
9.35
39.29
4.26
1.44
0.64
177.89
66.20
1,170.19
853.24
There is no amount due and outstanding to be paid to the Investor
Education and Protection Fund as at 31st March, 2008. These
amounts shall be paid to the fund as and when they become due.
65
(Rs. in Crores)
Year
2007-2008
Year
2006-2007
5,073.00
4,259.85
185.04
180.17
4,887.96
4,079.68
SCHEDULE H : SALES AND OPERATING INCOME
Revenue from sales (Net of returns)
Less: Discounts
Sales (Net of discounts)
Operating Income:
Processing charges
12.38
11.21
Lease Rent
0.59
1.73
Revenue from Home Solutions operations
9.79
7.05
Revenue from painting and related services
24.94
33.85
4,935.66
4,133.52
Interest received
4.47
1.43
Claims received
0.28
0.41
24.54
11.53
Royalty
2.82
2.85
Sundry balances written back (Net)
SCHEDULE I : OTHER INCOME
Dividends
0.43
0.84
Profit on sale of long term investments
–
0.31
Profit on sale of short term investments
1.60
0.08
3.78
1.47
66
0.52
1.15
23.51
17.18
61.95
37.25
(Rs. in Crores)
Year
2007-2008
Year
2006-2007
SCHEDULE J : MATERIAL COST
Raw and Packing Materials consumed:
Opening Stock
Add: Purchases
226.39
2,578.13
207.17
2,196.19
Less: Closing Stock
2,804.52
(301.32)
2,403.36
(226.39)
Purchase of Paints for resale
Cost of other goods sold
Decrease/(Increase) in finished and
semi-finished stock
Opening stock
Closing stock
2,503.20
83.23
26.88
2,176.97
64.44
28.01
2,613.31
2,269.42
356.83
(393.85)
272.60
(356.83)
(37.02)
(84.23)
1.35
14.21
2,577.64
2,199.40
266.17
234.62
Contribution to Defined contribution plans: Provident and other funds
12.92
12.53
Defined Benefit Plans (Gratuity and other plans)
10.07
4.17
Increase/(Decrease) in Excise duty on finished goods
SCHEDULE K : EMPLOYEE COST
Salaries, wages, allowances, commission,
bonus and accrued leave salary
Staff welfare expenses
17.50
10.72
306.66
262.04
67
(Rs. in Crores)
Year
2007-2008
Year
2006-2007
Stores and spares
24.78
24.44
Power and fuel
41.23
39.18
Processing charges
26.08
21.59
SCHEDULE L : MANUFACTURING, ADMINISTRATIVE,
SELLING AND DISTRIBUTION EXPENSES
Repairs and Maintenance:
Buildings
4.51
Machinery
9.16
7.76
16.23
15.23
Other assets
4.00
29.90
26.99
Rent
30.31
27.59
Rates and taxes
14.44
18.36
6.46
6.48
Printing, stationery and communication expenses
24.49
20.09
Travelling expenses
Insurance
37.20
32.24
Donations
1.86
1.77
0.87
0.78
Directors’ fees
0.10
0.09
Auditors’ remuneration
2.96
2.40
Bank charges
5.21
5.08
Legal and professional expenses
5.84
5.23
5.42
3.75
Freight and handling charges
172.78
145.67
Advertisement and sales promotional expenses
198.03
129.96
Cash and payment performance discount
Training and recruitment
162.37
134.69
Commission on sales
2.01
0.93
Bad and doubtful debts
1.53
7.55
Miscellaneous expenses
67.93
75.61
861.80
730.47
68
SCHEDULE M: NOTES ON CONSOLIDATED FINANCIAL STATEMENTS
A.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED IN THE COMPILATION OF ACCOUNTS
1.
Basis for preparation of consolidated financial statements
a)
Basis of Preparation:
The financial statements have been prepared and presented under the historical cost convention on
accrual basis of accounting to comply with the accounting standards prescribed in the Companies
(Accounting Standards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.
b)
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting
principles (GAAP) in India requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of
financial statements.
2.
Fixed Assets
a)
Fixed assets are carried at the cost of acquisition or construction less accumulated depreciation. The
cost of fixed assets includes taxes (other than those subsequently recoverable from tax authorities),
duties, freight and other incidental expenses related to the acquisition and installation of the respective
assets. Interest on borrowed funds directly attributable to the qualifying assets up to the period such
assets are put to use is included in the cost.
b)
Know-how related to plans, designs and drawings of buildings or plant and machinery is capitalised
under relevant asset heads.
c)
Depreciation on fixed assets is provided under Written Down Value / Straight Line Method as the case
may be and at rates permissible under applicable local laws or at such rates so as to write off the value
of assets over their useful life.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as
owned assets or where shorter, the term of the relevant lease.
Intangible assets are capitalised and amortised over their estimated useful life.
d)
At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment
of the carrying amount of the Group’s fixed assets. If any such indication exists, an asset’s recoverable
amount is estimated. An impairment loss is recognised whenever the carrying amount of asset exceeds
its recoverable amount.
An assessment is also done at each Balance Sheet date whether there is any indication that an
impairment loss recognised for an asset in prior accounting periods may no longer exist or may have
decreased. If any such indication exists the asset’s recoverable amount is estimated. The carrying
amount of the fixed asset is increased to the revised estimate of its recoverable amount but so that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss is
After recognition of an impairment loss or reversal of an impairment loss as applicable, the depreciation
charge for the asset is adjusted in future periods to allocate the asset’s carrying amount, less its residual
value (if any), over its remaining useful life.
3.
Goodwill
Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over
the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the
subsidiary recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is
subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units
expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has
been allocated are tested for impairment annually, or more frequently when there is an indication that
the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying
69
amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
4.
Revenue Recognition
Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to
the buyer which is on dispatch of goods. The amount recognised as sale is exclusive of sales tax/VAT, sales
are stated gross of excise duty as well as net of excise duty; excise duty being the amount included in the
amount of gross turnover. The excise duty related to the difference between the closing stock and opening
stock is recognised separately as part of ‘Material Cost’.
Revenue from rendering of services is recognised by reference to the stage of completion of the transaction
at the Balance Sheet date determined by services performed to date as a percentage of total services.
Revenue from processing services is recognised on rendition of services.
Dividend income is recognised when the right to receive the dividend is unconditional at the Balance Sheet
date.
Interest income is recognised on the time proportion basis.
5.
Lease Accounting
Assets taken on lease:
In respect of operating leases, lease rentals are accounted on accrual basis in accordance with the
respective lease agreements.
In respect of assets obtained on finance leases, assets are recognised at their fair value at the date of
acquisition or if lower, at the present value of the minimum lease payments. The corresponding liability to the
lessor is included in the Balance Sheet as a finance lease obligation. The excess of lease payments over the
recorded lease obligations are treated as finance charges which are allocated to each lease term so as to
produce a constant rate of charge on the remaining balance of the obligations. The assets are depreciated
as owned depreciable assets.
Assets given on lease:
In respect of assets provided on finance leases, amounts due from lessees are recorded as receivables at
the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting
periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in
respect of the leases.
Lease rentals on assets given on operating lease are accounted on accrual basis in accordance with the
respective lease agreements.
6.
Inventory
a)
Raw materials, work in progress, finished goods, packing materials, stores, spares, traded goods and
consumables are carried at the lower of cost and net realisable value. The comparison of cost and
net realisable value is made on an item-by-item basis. Damaged, unserviceable and inert stocks are
suitably depreciated.
b)
In case of raw materials, packing materials, stores, spares, traded goods and consumables, the cost
includes duties and taxes (net of tax credits as applicable) and is arrived at on weighted average cost
basis.
In respect of the joint venture, stores, spares and consumables are charged to revenue at the time of
procurement.
c)
70
Cost of finished goods and work-in-process includes the cost of raw materials, packing materials, an
appropriate share of fixed and variable production overheads, excise duty as applicable and other cost
incurred in bringing the inventories to their present location and condition. Fixed production overheads
are allocated on the basis of normal capacity of production facilities.
7.
Investments
Long term investments are carried at cost. Provision for diminution in the value of long term investments is
made only if such a decline is not temporary in the opinion of the management. Current investments are
carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect
of each category of investments.
Profit and loss on sale of investments is determined on a first in first out (FIFO) basis.
8.
Transactions and Translations in Foreign Currency
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction.
Exchange differences arising on foreign exchange transactions settled during the year are recognised in the
Profit and loss account of the year.
Monetary assets and liabilities denominated in foreign currencies, which are outstanding as at the year end
are translated at the closing exchange rate and the resultant exchange differences are recognised in the
Profit and loss account.
The premium or discount on forward exchange contracts is recognized over the period of the contracts in
the profit and loss account.
In translating the financial statements of foreign entities for incorporation in the consolidated financial
statements, the assets and liabilities are translated at the exchange rate prevailing at the Balance Sheet date
of respective subsidiaries and the income and expense items are translated at the average rates of exchange
for the year. The resulting exchange differences are classified as foreign currency translation reserve.
9.
Sundry Debtors
Sundry debtors are stated after writing off debts considered as bad. Adequate provision is made for debts
considered doubtful. Discounts due, yet to be quantified at the customer level are included under the head
‘Current Liabilities and Provisions’.
10. Employee Benefits
A.
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as
short term employee benefits and they are recognised in the period in which the employee renders
the related service. The Group recognises the undiscounted amount of short term employee benefits
expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting
any amount already paid.
B.
Post-employment benefits:
(a) Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the parent and its
subsidiary companies pay fixed contributions into separate entities (funds) or to financial institutions
or state managed retirement benefit schemes. The group’s contribution to defined contribution
plans are recognised in the Profit and Loss Account in the financial year to which they relate.
The parent company and its Indian subsidiaries/joint venture operate defined contribution plans
pertaining to Provident Fund schemes, Employee State Insurance Scheme and Government
administered Pension Fund Scheme for all employees and the parent company operates a
Superannuation scheme for eligible employees.
(b) Defined benefit Plans
(i)
Defined benefit Gratuity plan
The parent company and its Indian subsidiaries/joint venture operate a defined benefit gratuity
plan for employees. The contribution is paid to a separate entity (a fund) or to a financial
institution towards meeting the Gratuity obligation.
71
(ii)
Defined benefit Pension plan
The parent company operates a defined benefit pension plan for certain specified employees
and is payable upon the employee satisfying certain conditions, as approved by the Board of
Directors.
(iii) Defined Post Retirement Medical benefit plan
The parent company and some of its foreign subsidiaries operates a defined post retirement
medical benefit plan for certain specified employees and is payable upon the employee
satisfying certain conditions.
The cost of providing defined benefits is determined using the Projected Unit Credit Method with
actuarial valuations being carried out at each Balance Sheet date. Past service cost is recognised
immediately to the extent that the benefits are already vested, else is amortised on a straight-line
basis over the average period until the amended benefits become vested. In case of certain
foreign subsidiaries, actuarial gains and losses that exceed 10% of the greater of the present
value of the subsidiary companies’ defined benefit obligation and the fair value of plan assets are
amortised over the expected average remaining working lives of the participating employees.
The defined benefit obligations recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and
unrecognised past service costs and as reduced by the fair value of plan assets, if applicable.
Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is
recognised representing the unrecognised past service cost plus the present value of available
refunds and reductions in future contributions to the plan.
C.
Other long term employee benefits
Entitlements to annual leave and sick leave are recognised when they accrue to employees. Sick leave
can only be availed while annual leave can either be availed or encashed subject to a restriction on
the maximum number of accumulation of leaves. The parent company and its Indian subsidiaries and
joint venture determine the liability for such accumulated leave using the Projected Accrued Benefit
Method with actuarial valuations being carried out at each Balance Sheet date.
11. Research and Development
Capital expenditure is shown separately under respective heads of fixed assets. Revenue expenses including
depreciation are charged to Profit and Loss Account under the respective heads of expense.
12. Taxes on Income
Income tax expense comprises of current tax (i.e. amount of tax as per ‘Total Income’ returnable under the
applicable laws taking into account deductions and exemptions), deferred tax charge or credit, and fringe
benefit tax for the period.
Deferred tax is recognised for all timing differences being the differences between taxable income and
accounting income that originate in one period and are capable of reversal in one or more subsequent
periods. Deferred tax assets are not recognised unless there is a virtual certainty that sufficient future taxable
income will be available against which such deferred tax assets can be realised.
13. Provisions and Contingencies
The Group creates a provision when there exists a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation
that may, but probably will not require an outflow of resources. When there is a possible obligation or a
present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure
is made.
14. Earnings per share
The basic and diluted earnings per share (“EPS”) is computed by dividing the net profit after tax for the year by
weighted average number of equity shares outstanding during the year.
72
15. Proposed Dividend
Dividend proposed by the Board of Directors is provided for in the accounts, pending approval at the Annual
General Meeting.
B.
NOTES:
(Rs. in Crores)
1.
2.
3.
2007-2008
2006-2007
84.21
24.86
39.35
31.96
34.72
34.83
9.88
8.70
Estimated amount of contracts remaining to be executed on capital account
and not provided for.
Letters of credit issued by bankers and outstanding as at the Balance Sheet
date.
Contingent Liabilities:
(i) Guarantees given a. to a bank on behalf of Parent Company’s dealers in respect of loans
granted to them by a bank for acquiring dealer tinting systems
b. to others
(ii) Claims against the Group not acknowledged as debts
37.87
48.76
a. Tax matters in dispute under appeal
3.36
2.92
b. Others
(iii) Berger International Limited and its subsidiary, Berger Paints Trinidad Limited, are engaged in litigation
initiated by its former Regional Managing Director. The Company upon discontinuing his services has
paid him compensation as per his contract of employment and the same has been charged to income
statement. This matter is subject to Trinidad and Tobago’s High Court Action No.3085 of 2004. Based
on the information presently available, the likely outcome of this trial cannot be determined with any
reasonable certainty. Therefore, no further provision has been made in these financial statements for
this matter.
4.
Details of Subsidiaries and Joint Venture:
Subsidiaries:
The subsidiary companies considered in the consolidated financial statements are:
Name of the Company
Asian Paints (Nepal) Pvt. Limited
Country of
Incorporation
Nepal
% of voting Financial Year
power
51%
15th Jan-14th Jan
Asian Paints (International) Limited
Mauritius
100%
Asian Paints Industrial Coatings Limited
India
100%
1st Apr - 31st Mar
India
100%
1st Apr - 31st Mar
Maxbhumi Developers Limited*
India
100%
1st Apr - 31st Mar
1st Jan - 31st Dec
*Incorporated on 15th November, 2007
73
Indirect Subsidiaries:
i)
Subsidiaries of the wholly owned subsidiary, Asian Paints (International) Limited, Mauritius:
Subsidiaries of Asian Paints (International)
Limited, Mauritius
Asian Paints (Queensland) Pty. Limited**
Berger International Limited
Country of
Incorporation
Vanuatu
Fiji Islands
Kingdom of Tonga
Solomon Islands
Republic of Vanuatu
Australia
Sri Lanka
Bangladesh
Sultanate of Oman
Egypt
Singapore
% holding Accounting period
100%
51.3%
51%
75%
60%
88.57%
98.74%
89.78%
49%
60%
50.10%
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
100%
1st Jan - 31st Dec
** divested during the year on 30th June, 2007
ii)
Taubmans Paints (Fiji) Limited**
**
iii)
The company ceased trading and has transferred its assets, liabilities and business to shareholder
Asian Paints (South Pacific) Limited.
Subsidiary of Taubmans Paints (Fiji) Limited:
Samoa Paints Limited **
**
iv)
80%
1st Jan - 31st Dec
Subsidiary of Asian Paints (Lanka) Limited:
Sri Lanka
100%
1st Jan - 31st Dec
Subsidiaries of Berger International Limited, Singapore:
Subsidiaries of Berger International Limited,
Singapore
Berger Paints Singapore Pte. Limited
Berger Building Services (Singapore) Pte. Limited
Country of
Incorporation
Singapore
Singapore
Malaysia
Thailand
100%
100%
100%
88.6%
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
Berger Paints (China) Limited
People’s Republic of 100%
China
Hongkong
100%
Isle of Man, U.K.
100%
Isle of Man, U.K.
100%
U.K.
100%
1st Jan - 31st Dec
Lewis Berger (Overseas Holdings) Limited
vi)
Samoa
With the holding company Taubmans Paints (Fiji) Limited having ceased trading and transferred
its assets, liabilities and business to shareholder Asian Paints (South Pacific) Limited, Samoa Paints
Limited has become a direct subsidiary of Asian Paints (South Pacific) Limited.
Asian Paints Distributors (Pvt.) Limited
(Under voluntary liquidation)
v)
Fiji Islands
% holding Accounting period
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
Subsidiary of Berger Building Services (Singapore) Pte. Limited:
Berger Contractor (Singapore) Pte. Limited
Singapore
100%
1st Jan - 31st Dec
Isle of Man, U.K.
100%
1st Jan - 31st Dec
vii) Subsidiary of Enterprise Paints Limited:
74
viii) Subsidiary of Nirvana Investments Limited:
ix)
1st Jan - 31st Dec
Jamaica
Trinidad
Barbados
51%
70%
100%
1st Jan - 31st Dec
1st Jan - 31st Dec
1st Jan - 31st Dec
xi)
100%
Subsidiaries of Lewis Berger (Overseas Holdings) Limited:
x)
U.A.E.
Bahrain
100%
1st Jan - 31st Dec
Joint Venture:
Asian PPG Industries Limited, a joint venture between the parent company and PPG Industries Securities
Inc., U.S.A., wherein the parent company has 50% equity participation.
xi)
Direct subsidiary of the Joint Venture:
Faaber Paints Pvt. Limited
India
100%
1st Apr - 31st Mar
The accounts of the said company are incorporated with that of the Joint Venture for the purpose of
consolidation.
5.
Principles of consolidation:
i)
The consolidated financial statements are based on the audited financial statements of the subsidiaries
for their respective financial years. In respect of indirect subsidiaries of Asian Paints (International)
Limited, the audited consolidated financial statements of Asian Paints (International) Limited have
been considered for the purpose of consolidation.
ii)
The financial statements of the parent company and its subsidiaries have been combined to the extent
possible on a line by line basis by adding together like items of assets, liabilities, income and expenses.
The results of subsidiaries acquired or disposed off during the year are included in the Consolidated
Profit and Loss Account from the effective date of acquisition or upto the effective date of disposal,
as appropriate. All significant intra group balances and transactions have been eliminated on
consolidation. The amounts shown in respect of reserves comprise the amount of the relevant reserves
as per the Balance Sheet of the parent company and its share in the post – acquisition increase in the
relevant reserves of the subsidiaries.
iii)
The consolidated financial statements have been prepared using uniform accounting policies for like
transactions and other events in similar circumstances and are presented to the extent possible, in the
same manner as the parent company’s financial statements.
iv)
Minority interest in the net income and net assets of the consolidated financial statements are computed
and shown separately. Losses applicable to minority in excess of the minority’s interest in the subsidiary’s
equity are allocated against the interests of the group.
v)
The unamortised carrying value of goodwill is tested for impairment as at each Balance Sheet date.
6.
In the previous year, the investment in the associate company, Dutch Boy Philippines Inc., where Berger
International Limited, Singapore held a 30% stake was disposed off on 28th November, 2006. The consideration
received on sale was Rs. 6.73 crores. The loss on disposal recognised in the Profit and Loss Account was
Rs. 7.07 crores for the year ended 31st March, 2007 and is included under extraordinary item.
7.
As required under Accounting Standard (AS 27) - Financial Reporting of Interests in Joint Venture, the audited
consolidated financial statements of Asian PPG Industries Limited (hereinafter referred to as JV), the Joint
Venture between the parent company and PPG Industries Securities Inc., U.S.A. have been consolidated
using proportionate consolidation method.
•
The financial year of the JV is April to March. The parent company's share of each of the assets, liabilities,
income and expenses of JV has been included in the consolidated financial statements.
•
The parent company's share of capital commitments in the JV as at 31st March, 2008 is Rs. 6.29 crores.
(Previous year Rs.4.72 crores).
75
8.
•
The parent company's share of contingent liabilities of the JV as at 31st March, 2008 is Rs. 2.92 crores
(Previous year Rs. 2.42 crores).
•
No contingent liabilities and capital commitments have been incurred as at 31st March, 2008 in relation
to the parent company's interests in the JV along with the other venturer. (Previous year Rs. NIL).
During the year, the group disposed off its stake in its subsidiary, Asian Paints Queensland Pty Ltd. on
30th June, 2007. In the previous year, the group disposed its 60% stake in subsidiary, Berger Paints Manufacturing
Limited, Myanmar on 31st December, 2006. The net assets of Asian Paints Queensland Pty Ltd. and Berger
Paints Manufacturing Limited as at their dates of disposal were as follows:
(Rs. in Crores)
Cash and cash Equivalents
Inventories
Trade receivables
Other receivables and prepayments
Fixed assets
Other assets
Trade payables and accrued liabilities
Overdraft and loans
Foreign exchange translation reserve
Costs of disposal (including liabilities of subsidiary taken over)
Loss on disposal (accounted as extra-ordinary item)
Total Consideration
Satisfied by:
Cash consideration
Deferred consideration
Net cash inflow on disposal:
Cash consideration
Cash (in hand)/overdrawn disposed off
Net cash inflow
9.
76
2007-2008
Asian Paints
Queensland
Pty. Ltd.
0.98
3.43
1.55
0.62
5.01
2.44
(4.16)
(9.53)
2006-2007
Berger Paints
Manufacturing
Ltd.
0.03
0.86
1.40
0.08
1.44
–
(0.39)
(4.32)
0.34
(1.04)
9.55
(6.84)
(0.90)
3.45
2.01
1.86
2.01
–
2.01
0.55
1.31
1.86
2.01
(0.98)
1.03
0.55
1.32
1.87
(0.69)
In the previous year on 30th August, 2006, Joint Venture Company, Asian PPG Industries Limited acquired
100% stake in Faaber Paints Private Limited. The Goodwill arising on acquisition of Faaber Paints Private
Limited has been recognised in the consolidated financial statements using proportionate consolidation
method.
10. a)
In the previous year, the Joint Venture Company, Asian PPG Industries Limited acquired the ‘2K
Business’ from ICI (India) Limited (hereinafter referred to as ‘ICI India’). This business of purchase and
sale of “advanced refinish” paints was acquired as a going concern, on a slump sale basis at an
aggregate consideration of Rs. 51.80 crores (excluding stamp duty), this consideration was subject to
final determination of certain amounts in respect of fixed/net current assets. Consequent to the final
determination which was effected in the current year, the revised consideration for the transaction is
Rs. 48.81 crores, this includes an amount of Rs. 35.02 crores allocated to various intangible assets based
on valuation report obtained from approved valuers.
b)
Imperial Chemical Industries Plc., the holding company of ICI India was acquired by Akzo Nobel NV on
2nd January, 2008. Consequently, in accordance with the ‘change in control’ clause in the ‘Agreement
for Purchase of Business’ with the Joint Venture, the Joint Venture is entitled to recover from ICI India,
an amount of Rs. 1.10 crores per month from 2nd January, 2008 till 30th July, 2009 aggregating to
Rs.20.83 crores. Accordingly, the entire amount has been accounted by the Joint Venture as a
receivable from ICI India with the corresponding credit to the written down value of intangible assets as at
1st January, 2008, whereby the value of Goodwill and Non-compete fees has been reduced to NIL
while the balance amount has been allocated to other intangible assets in the proportion of their
written down values as on 1st January, 2008.
11. The group recognises deferred tax arising on account of timing differences, being the difference between
the taxable income and accounting income, that originates in one period and is capable of reversal in one
or more subsequent periods in compliance with the applicable accounting standards.
The major components of Deferred tax assets/(liabilities) arising on account of timing differences as at
31st March, 2008 are as follows:
(Rs. in Crores)
As at
31st March, 2008
As at
31st March, 2007
Deferred tax liabilities
Difference between the Written Down Value of assets as per
books of account and Income Tax
Accelerated capital allowances and unremitted income
Deferred tax liability on account of income on retirement assets
(50.69)
(4.77)
(4.69)
(38.78)
(4.65)
(5.52)
Preconstruction interest capitalised in accounts, deductions for
the same claimed in Income Tax over a period of 5 years
Others
(0.69)
(0.04)
(0.70)
–
(60.88)
(49.65)
13.49
1.47
10.80
1.91
4.05
2.79
4.54
5.61
21.80
22.86
(39.08)
(26.79)
–
–
(1.43)
(0.30)
(10.56)
4.09
0.03
0.28
–
2.88
Total
Deferred tax assets
Expenses allowed for tax purpose on payment basis
Expenditure debited to Profit and Loss Account but allowed in
Income Tax over a longer period.
Losses carried forward under Income Tax
Total
Net deferred tax asset/(liability)
Deferred Tax asset on employee benefit obligations, pursuant to
adoption of AS 15 (Revised), adjusted against General Reserve
Adjustment on account of adoption of IFRS by certain subsidiaries
Foreign exchange fluctuation
Under provision of deferred tax expense
Deferred tax benefit/(expense) for the year
77
12. Employee Benefits:
(1) Short term employee benefits:
The liability towards short term employee benefit obligations is recognised as an expense for the year in
the Profit and Loss Account.
Post-employment benefits: The following disclosures are made in accordance with AS 15 (Revised)
pertaining to Defined Benefit Plans:
(Rs. in Crores)
Gratuity (Funded)
2007-08
2006-07
95.09
(111.27)
–
89.20
(116.12)
–
–
–
10.05
–
–
10.08
1.02
(15.16)
1.67
(25.25)
(0.33)
9.72
(0.73)
9.35
1.69
16.85
(15.16)
–
25.25
(25.25)
9.72
–
9.72
9.35
–
9.35
Expense recognised in the Profit and Loss Account
Opening defined benefit obligation less benefits
paid
Interest on defined benefit obligation
Net actuarial losses/(gains) recognized in the year
Past service cost
Effect of the limit in Para 59(b) of AS 15 (Revised)
Losses/(Gains) on “Curtailments and Settlements”
Total, included in “Employee Benefit Expense”
–
5.05
7.10
(9.86)
6.12
–
(0.29)
–
8.12
–
5.50
5.06
(8.56)
(3.99)
–
2.46
–
0.47
0.96
0.59
0.83
–
(0.54)
–
–
–
1.84
2.85
0.57
0.63
–
(0.35)
–
–
–
3.70
Actual return on plan assets
10.93
5.20
–
–
(25.25)
2.68
8.12
(0.71)
(15.16)
(20.14)
0.50
0.47
(6.08)
(25.25)
9.35
(1.13)
1.84
(0.34)
9.72
6.23
(0.10)
3.82
(0.60)
9.35
Amount Recognised in Balance Sheet
Present value of funded obligations
Fair value of plan assets
Present value of unfunded obligations
Unrecognised past service cost
Amount not recognised as an asset, because of the
limitation as per AS 15 (Revised) and unrecognised
actuarial gains/losses
Amounts in Balance Sheet
Liability
Assets
Movement in the asset recognised in the
Balance Sheet:
Opening Net (Asset)/Liability
Currency translation difference
Total charge as above
Contribution
Closing Net (Asset)/Liability
78
Pension and Medical
Plan (Unfunded)
2007-08
2006-07
Reconciliation of Benefit Obligations & Plan Assets for the Period
(Rs. in Crores)
Gratuity (Funded)
2007-08
Change in defined benefit obligation:
Opening defined benefit obligation as at 1st April, 2007
Interest cost
Actuarial losses/(gain)
Liabilities extinguished on curtailment
Liabilities extinguished on settlements
Liabilities assumed on acquisition
Benefits paid
Pension and Medical
Plan (Unfunded)
2006-07
2007-08
2006-07
89.20
4.40
7.10
7.69
–
–
–
(5.60)
(7.70)
89.25
4.81
7.21
(3.78)
–
–
–
(0.28)
(8.01)
10.08
1.55
0.83
(0.74)
–
–
–
(1.71)
0.04
9.17
0.57
0.63
0.42
–
–
–
(0.10)
(0.61)
95.09
89.20
10.05
10.08
Opening fair value of plan assets as at 1st April, 2007
Actuarial gain/(losses)
Assets distributed on settlements
Contributions by employer
Assets acquired due to acquisition
Benefits paid
116.12
9.86
1.48
–
0.71
113.21
9.43
(3.96)
–
6.08
(9.20)
(7.70)
(0.63)
(8.01)
–
–
–
–
0.15
–
–
(0.15)
–
–
–
–
–
–
–
–
Closing fair value of plan assets as at 31st March, 2008
111.27
116.12
–
–
Closing defined benefit obligation as at
31st March, 2008
Change in fair value of assets:
Note:
1)
The estimates of future salary increases, considered in actuarial valuation, take into account the
inflation, seniority, promotion and other relevant factors.
2)
Comparative values of defined benefit plans (Gratuity and Pension) for the past one year instead
of four financial years, as required by AS 15 (Revised) are provided, this being the second year of
adoption of the standard.
3)
Until 31st March, 2007 the liability to certain specified employees under the Parent Company’s Post
Retirement Medical Benefit Plan was charged to Profit and Loss Account as and when the liability
was discharged. In the current year, the Parent Company has charged Rs. 0.93 crores to Profit and
Loss Account towards accrued liability based on actuarial valuation carried out as at Balance
Sheet date.
4)
The guidance on implementing AS 15 (Revised) issued by Accounting Standards Board (ASB) of the
Institute of Chartered Accountants of India states benefit involving employer established provident
funds, which require interest shortfalls to be recompensed are to be considered as defined
benefits plans. Pending the issuance of the guidance note from Actuarial Society of India, the
parent company’s actuary has expressed an inability to reliably measure provident fund liabilities.
Accordingly the parent company is unable to exhibit the related information.
13. Earnings per share:
a.
b.
Basic and diluted earnings per share in rupees (face value - Rs.10/per share)
Profit after tax as per Profit and Loss Account (Rs. in crores)
c.
Weighted average number of equity shares outstanding
2007-2008
42.66
2006-2007
29.30
409.18
281.03
9,59,19,779
9,59,19,779
79
14. Pursuant to the Accounting Standard (AS 19) – Leases, the following information is given:
I.
a)
The parent company has provided tinting systems to its dealers on an operating lease basis. The
lease period varies between six to ten years. The lease rentals are payable by dealers monthly. A
refundable security deposit is collected at the time of signing the agreement. The equipment shall
be used only to tint the products of the lessor. The initial direct cost relating to acquisition of tinting
system is capitalised.
b)
In addition, the Joint Venture has given certain ‘mixing racks’ on non-cancellable operating lease
to its dealers. Initial direct costs are recognised as expenses in the Profit and Loss Account.
c)
Certain subsidiaries provide tinting systems to their dealers on an operating lease basis. The lease
normally ranges for a five year period. A security deposit is collected at the time of signing the
agreement.
d)
Future minimum lease rentals receivable as at 31st March, 2008 as per the lease agreements:
(Rs. in Crores)
i)
ii)
Not later than one year
Later than one year and not later than five years
iii)
Later than five years
Total
2007-2008
0.92
0.71
2006-2007
0.90
1.33
–
1.63
0.01
2.24
The information pertaining to future minimum lease rentals receivable is based on the lease
agreements entered into between the respective companies and the dealers and variation
made thereto in the current year. The lease rentals are reviewed periodically taking into account
prevailing market conditions.
II.
e)
Total amount of contingent rents recognised as income – Rs. NIL.
f)
The information on gross amount of leased assets and depreciation is given in Schedule ‘D’ to the
Balance Sheet.
a)
The parent company has taken cars, computers and other systems hardware on an operating
lease basis for a period of 48 (forty eight) months. The lease rentals are payable by the parent
company on a monthly and quarterly basis respectively.
b)
In addition, the Joint Venture has entered into an arrangement to obtain computer equipments,
mixing racks etc, on non-cancellable operating lease for 36 (thirty six) months. As per the lease
agreement the Joint Venture does not have an option to purchase the assets.
c)
In addition, certain overseas subsidiaries have also taken certain assets on operating lease.
d)
Future minimum lease rentals payable as at 31st March, 2008 as per the lease agreements:
(Rs. in Crores)
i)
ii)
iii)
Not later than one year
Later than one year and not later than five years
Later than five years
Total
III.
80
2007-2008
8.81
16.61
5.38
2006-2007
7.99
14.00
7.37
30.80
29.36
e)
Operating Lease payments recognised in the Profit and Loss Account for the period is Rs. 8.49
crores (Previous year Rs. 7.27 crores).
f)
Total amount of contingent rents recognised as expense – Rs. NIL.
a)
Certain subsidiaries have taken property, plant and equipment on finance lease which effectively
transferred to the respective subsidiaries substantially all of the risks and benefits incidental to the
ownership.
b)
Future minimum lease rentals payable as at 31st March, 2008 as per the lease agreements:
(Rs. in Crores)
Minimum
lease
payments
Not later than one
year
ii) Later than one year
and not later than
five years
2007-2008
2006-2007
Finance
Present Minimum
Finance
Present
charge
value
lease
charge
value
allocated to
payments allocated to
future periods
future periods
i)
IV.
0.29
0.06
0.23
0.51
0.06
0.45
0.49
–
0.06
–
0.43
–
0.63
–
0.08
–
0.55
–
0.78
0.12
0.66
1.14
0.14
1.00
c)
The information on gross amount of leased assets and depreciation is given in Schedule ‘D’ to the
Balance Sheet.
a)
Certain subsidiaries have leased certain of its plant and equipment on finance lease which
effectively transferred substantially all of the risks and benefits incidental to the ownership.
b)
Future minimum lease rentals receivable as at 31st March, 2008 as per the lease agreements:
(Rs. in Crores)
Minimum
lease
payments
i)
ii)
iii)
Not later than one
year
Later than one year
and not later than
five years
Later
than
five
years
2007-2008
Unearned
finance
income
Present
value
Minimum
lease
payments
2006-2007
Unearned
finance
income
Present
value
0.34
0.16
0.18
0.37
0.17
0.20
0.13
0.04
0.09
0.20
0.06
0.14
–
0.47
–
0.20
–
0.27
–
0.57
–
0.23
–
0.34
15. For the financial year ended 31st March, 2007, the provision for taxation of previous year includes write
back of tax provision of Rs.3.00 crores made in respect of notice for additional assessment received for the
assessment years 2000 to 2004 by the Company’s subsidiary Berger International Ltd (BIL), Singapore. BIL had
made a total tax provision of Rs.4.52 crores in the financial year ended 31st December, 2005.
16. Pursuant to the Accounting Standard (AS 29) – Provisions, Contingent Liabilities and Contingent Assets, the
disclosure relating to provisions made in the accounts for the year ended 31st March, 2008 is as follows:
(Rs. in Crores)
Provision for Excise (1)
Opening Balance
Additions
Utilisations
Reversals
Currency translation
Closing Balance
2007-2008
4.26
–
–
–
–
4.26
2006-2007
4.15
0.27
–
(0.16)
–
4.26
Provision for Warranties (2)
2007-2008
1.44
–
(0.08)
(0.24)
(0.08)
1.04
2006-2007
1.21
0.34
(0.07)
–
(0.04)
1.44
1.
Excise provision is made towards matters disputed at various appellate levels.
2.
Provision for warranties represents management’s best estimate of the liability for warranties granted on
paints by some of the subsidiaries based on past experience of claims.
81
17. Information on related party transactions as required by Accounting Standard (AS 18) for the year ended
31st March, 2008.
Particulars
Key
Management
Personnel (1)
Relatives of Key
Management
Personnel (2)(*)
Companies
controlled by
Directors/
Relatives
Employee benefit
plans where
control
exists
(Rs. in Crores)
Others
2007–08 2006–07 2007–08 2006–07 2007–08 2006–07 2007–08 2006–07 2007–08 2006–07
Sale of goods
4.50
4.37
103.75
86.58
Processing of goods
(Expense)
1.02
1.93
Royalty Paid
3.23
2.89
1.02
0.02
0.09
0.33
2.05
2.24
Purchase of goods
Other recoveries
Remuneration
10.61
9.45
Commission to
Non-Executive
Directors
Sitting Fees Paid
to Non-Executive
Directors
1.70
1.57
0.27
0.21
0.03
0.02
Other services
Donation
Dividend received
Contributions during
the year
1.25
0.65
19.34
19.76
Deposits accepted
–
–
–
–
–
0.01
–
–
–
–
Amount receivable
–
–
–
–
2.33
–
–
–
–
–
(3.81)
(3.24)
(0.27)
(0.21)
(4.29)
(2.24)
(1.40)
(0.66)
–
–
Amount payable
* Under the employment of the Parent Company pursuant to the necessary approvals from the shareholders
and the Central Govt. under Section 314 of the Companies Act, 1956.
1.
Key Management Personnel:
•
Directors of parent company: Mr. Ashwin Choksi - Chairman, Mr. Ashwin Dani - Vice Chairman and
Managing Director and Mr. Abhay Vakil - Managing Director.
•
Directors/key management personnel of subsidiaries/joint venture:
Mr. V. S. Ram, Mr. Jagdish Acharya, Mr. J. N. Shahani (Retired on 12th April, 2007), Mr. I. K. Jaiswal,
Mr. Warren McDonald, Mr. Vivek Subramanian.
2.
82
Relatives of Key Management Personnel: Mr. Jalaj Dani*, Mr. Manish Choksi, Ms. Nehal Vakil,
Mr. Vishal Choksi**, Mr. Mahendra Choksi - Non-Executive Director, Mr. Amar Vakil - Non-Executive
Director and Mr. Hasit Dani - Non-Executive Director.
*
Mr. Jalaj Dani, a relative of Parent Company’s Vice Chairman and Managing Director is also
Chairman of Berger International Limited and director on most of the subsidiary companies.
**
Mr. Vishal Choksi was employed for part of the year.
3.
a)
Companies over which the Directors have significant influence or control :
AR Intertect Design Pvt. Ltd.
Hi-tech Plast Ltd.
Ricinash Oil Mill Ltd.
Ashwin Holdings Pvt. Ltd.
Jalaj Trading and Investments Pvt. Ltd.
Rita Choksi Holdings Pvt. Ltd.
Asteroids Trading and Investments Pvt. Ltd.
Jaldhar Investments and Trading Co. Pvt. Ltd. Rupen Investments and Industries Pvt. Ltd.
Castle Investments and Industries Pvt. Ltd.
Jatayu Investments Ltd.
S.C. Dani Research Foundation Ltd.
Centaurus Trading and Investments Pvt. Ltd.
Kalica Paper Industries Pvt. Ltd.
Sadavani Investments and Trading Co. Pvt. Ltd.
Clear Plastics Limited
Lambodar Investments & Trading Co. Ltd.
Sapan Investments Pvt. Ltd.
Coating Specialties (India) Ltd.
Lyon Investments and Industries Pvt. Ltd.
Satyadharma Investments & Trading Co. Pvt. Ltd.
Dakshina Properties Pvt. Ltd.
Mipak Polymers Ltd.
Sudhanva Investments and Trading Co. Pvt. Ltd.
Dani Finlease Ltd.
Murahar Investments and Trading Co. Ltd.
Suprasad Investments & Trading Co. Ltd.
Doli Trading and Investments Pvt. Ltd.
Navbharat Packaging Industries Ltd.
Suptaswar Investments and Trading Co. Ltd.
Elcid Investments Ltd.
Nehal Trading and Investments Pvt. Ltd.
Tru Trading and Investments Pvt. Ltd.
ELF Trading and Chemical Mfg. Co. Ltd.
Omega Properties Pvt. Ltd.
Ultramarine & Pigments Ltd.
Geetanjali Trading & Investments Pvt. Ltd.
Pragati Chemicals Ltd.
Unnati Trading and Investments Pvt. Ltd.
Gujarat Organics Ltd.
Pragati Marketing Pvt. Ltd.
Urvashi Holding Pvt. Ltd.
Himanshu Holdings Pvt. Ltd.
Resins and Plastics Ltd.
Vikatmev Containers Ltd.
Hiren Holdings Pvt. Ltd.
b)
Associates, promoters and affiliates of subsidiary companies/joint venture:
LKP Hardware, Solomon Islands
Sultan Bin Sulayem, UAE
ABM Santo
Asset Management Unit
Port Vila Hardware
PPG Industries Securities Inc.
PPG Industries Inc.
Ariza Holdings Limited
Al - Hassan Group, Oman
Aladdin Investments Limited
4.
Employee Benefit Funds where control exists:
Asian Paints Factory Employees’ Provident Fund
Asian Paints Management Cadres’ Superannuation Scheme
Asian Paints (India) Limited Employees’ Gratuity Fund
5.
Other entities over which there is a significant control:
Asian Paints Charitable Trust
83
18. Segment Information for the year end 31st March, 2008
i)
Primary segment information:
Business Segment:
(Rs. in Crores)
2007-2008
REVENUE
External sales (Net)
Inter-segment sales
Other income
Total Revenue
RESULT
Segment result
Unallocated expenses
Operating Profit
Interest expenses
Paints
4,300.04
2006-2007
58.13
4,358.17
Others*
104.29
86.41
3.82
194.52
Total
4,404.33
86.41
61.95
4,552.69
660.80
26.06
686.86
63.71
623.15
(21.16)
Paints
3,577.27
33.80
3,611.07
Others*
92.70
82.12
3.46
178.28
Total
3,669.97
82.12
37.26
3,789.35
470.07
24.63
494.70
60.49
434.21
(18.91)
Interest income
Dividends
Profit/(Loss) on sale of investments
Profit/(Loss) on sale of fixed assets
Profit/(Loss) on sale of subsidiaries
4.47
24.54
3.78
(6.84)
1.43
11.53
0.39
1.47
(7.76)
Income taxes
Net Profit before prior period items
5.07
(203.37)
429.64
4.76
(146.68)
280.44
OTHER INFORMATION
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Unallocated capital expenditure
Total
Depreciation/Impairment
Una1located depreciation/impairment
Total
1,958.50
104.50
895.92
15.63
2,063.00
461.23
2,524.23
911.55
1.54
630.31
1,541.86
191.12
3.30
2.13
193.25
57.26
189.58
53.96
1.91
59.17
1,641.96
78.00
607.42
22.80
1,719.96
304.11
2,024.07
630.22
0.38
616.06
1,246.28
128.45
3.45
5.36
133.81
59.08
128.07
55.63
2.06
61.14
* Others include the parent company’s business units manufacturing Phthalic Anhydride and
Pentaerythritol.
84
ii)
Secondary segment information: Geographical Segment:
2007-2008
Domestic International
operations
operations
Total
2006-2007
Domestic International
operations
operations
Total
Segment revenue
3,718.72
747.56 4,466.28
3,042.40
664.82 3,707.22
Carrying cost of segment assets
2,074.38
449.85 2,524.23
1,570.85
453.22 2,024.07
Additions to fixed and
intangible assets
174.50
18.75
193.25
108.68
25.13
133.81
19. Previous year’s figures have been regrouped, wherever necessary.
Signatures to Schedules A to M
For Shah & Co.
Ashwin Choksi
Chairman
Ashwin Dani
Vice Chairman &
Managing Director
Abhay Vakil
Managing Director
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Tarjani Vakil
Chairperson of
Audit Committee
Mahendra Shah
Director
Jayesh Merchant
Company Secretary
Mumbai
9th May, 2008
85
86
BHD
Barbados $
AED
Jamaican $
SG$
Trinidad $
GBP
GBP
INR
GBP
WST $ (Samoa)
Egyptian pound
Fiji $
INR
GBP
Berger Paints Barbados Ltd
Berger Paints Emirates Ltd.
Berger Paints Jamaica Ltd.
Berger Paints Singapore Pte. Ltd.
Berger Paints Trinidad Ltd.
Enterprise Paints Ltd.
Lewis Berger (Overseas Holdings) Ltd.
Nirvana Investments Ltd.
Samoa Paints Ltd.
Taubmans Paints Fiji Ltd.
Technical Instruments Manufacturers (India) Ltd.
Universal Paints Ltd.
Sales
Other Income
22.73
23.88
7.21
66.50
3.19
0.61
14.32
32.26
16.65
31.00
26.63
53.61
63.04
23.30
34.26
12.06
11.75
0.84
12.93
84.32
–
0.02
6.41
20.04
47.36
5.18
4.36
32.54
8.43
–
17.03
19.19
85.88
22.72
16.82
20.85
7.74
60.72
3.41
0.67
–
37.90
10.33
32.25
29.23
56.95
54.21
27.51
27.75
10.25
14.16
1.06
14.81
117.51
0.00
0.02
7.17
20.20
40.38
4.68
5.19
31.74
7.80
14.31
13.92
16.72
89.67
19.37
–
9.90
150.43
4.11
–
–
–
–
33.72
40.69
92.10
125.38
32.27
47.01
16.29
12.45
3.57
19.67
–
–
–
–
29.97
58.75
5.77
2.59
30.10
6.73
7.09
23.99
26.78
–
32.65
–
–
10.20
114.07
3.44
–
–
–
–
32.72
55.19
90.16
98.48
30.69
42.63
13.81
7.34
4.11
21.78
–
–
–
–
24.26
47.72
4.70
2.86
32.01
5.89
15.49
19.69
19.44
–
19.83
7.77
1.97
1.14
2.10
0.07
–
–
7.27
–
1.07
16.36
0.06
0.53
–
0.27
0.17
0.02
0.00
–
19.83
–
–
0.01
0.68
0.60
0.08
0.08
3.09
0.75
0.03
0.36
0.26
12.17
0.04
7.61
1.95
1.05
0.90
0.11
0.03
–
7.13
0.02
–
0.08
–
0.44
0.06
0.25
0.17
–
0.03
–
11.19
0.01
0.01
0.15
0.60
0.39
0.04
0.14
3.07
0.10
0.23
0.35
0.18
4.51
0.04
7.77
1.38
1.37
31.07
1.12
–
(0.01)
2.39
(0.19)
(0.44)
1.97
4.85
2.20
1.84
6.67
(3.36)
(4.38)
0.01
(0.77)
6.81
(0.00)
(0.00)
(0.04)
0.51
3.17
1.14
(0.13)
2.10
1.66
(0.53)
2.70
2.77
2.75
(1.21)
Tax provision
Dividend
All figures in INR Crores
PAT
7.41
1.36
2.02
16.51
0.91
0.03
–
2.75
(0.75)
(1.06)
1.63
3.72
1.59
0.72
6.76
(9.27)
(5.64)
(0.42)
(2.13)
4.08
0.01
0.01
0.02
0.10
0.98
0.49
(0.11)
1.94
0.90
(1.18)
2.20
1.11
3.96
(3.58)
–
(0.36)
(0.31)
(0.40)
(0.30)
–
–
(0.52)
–
0.28
(0.17)
(1.85)
–
(0.23)
–
–
–
–
–
0.09
–
–
–
–
(1.23)
–
0.02
(0.33)
(0.15)
–
(0.57)
–
(0.11)
(0.15)
–
(0.36)
(0.59)
(0.29)
(0.27)
–
(0.43)
–
0.05
1.61
(1.02)
–
(0.23)
–
–
–
–
–
1.00
–
–
–
–
(0.41)
–
0.05
(0.18)
(0.10)
0.21
(0.63)
–
(0.12)
(0.32)
7.77
1.02
1.06
30.66
0.82
–
(0.01)
1.87
(0.19)
(0.16)
1.80
3.00
2.20
1.61
6.67
(3.36)
(4.38)
0.01
(0.77)
6.89
(0.00)
(0.00)
(0.04)
0.51
1.94
1.14
(0.11)
1.77
1.50
(0.53)
2.13
2.77
2.64
(1.36)
7.41
0.99
1.44
16.23
0.64
0.03
2.33
(0.75)
(1.01)
3.24
2.70
1.59
0.49
6.76
(9.27)
(5.64)
(0.42)
(2.13)
5.08
0.01
0.01
0.02
0.10
0.58
0.49
(0.06)
1.75
0.80
(0.97)
1.57
1.11
3.83
(3.90)
0.01
–
0.96
21.45
0.72
–
–
3.90
–
0.67
1.38
2.44
–
0.64
6.26
–
–
–
–
–
–
–
0.08
–
–
0.72
–
2.82
0.66
–
1.36
–
–
–
0.08
–
1.26
6.44
0.74
–
–
0.76
–
0.71
0.89
3.00
0.05
0.57
7.12
–
–
–
–
–
–
–
0.12
–
–
–
0.05
0.19
0.61
–
1.05
–
–
–
Previous Current Previous Current Previous Current Previous
Period Period Period Period Period Period Period
PBT
Current Previous Current Previous Current Previous Current
Period Period Period Period Period Period Period
Sales, other income, profit before tax, profit after tax and proposed dividend has been translated at average rates prevailing during the respective financial years.
–
15.43
2.53
32.55
1.14
0.77
–
0.78
10.16
12.59
16.13
27.46
65.53
11.31
5.40
19.80
14.10
0.75
25.31
109.38
0.08
0.06
0.13
16.50
29.57
0.91
0.66
7.60
1.68
13.44
5.39
12.87
4.92
10.60
Previous
Period
Capital, reserves, total assets and total liabilities have been translated at the rates prevailing at the end of the respective financial years.
–
17.44
1.53
31.64
0.85
0.70
14.29
0.36
16.67
14.09
13.79
28.84
71.09
11.28
13.48
23.14
14.72
0.56
23.67
69.90
0.07
0.05
5.38
11.10
29.25
1.06
0.42
10.50
2.15
–
8.72
13.14
7.61
16.21
Current
Period
4.
13.11
5.38
4.78
14.16
2.12
(0.09)
–
20.96
(1.09)
15.42
(28.73)
19.63
(12.52)
11.98
17.45
(16.66)
(33.05)
(0.65)
(40.51)
(97.60)
(13.02)
(2.91)
1.27
(10.06)
0.81
2.43
4.27
23.00
5.73
(7.41)
7.13
(3.31)
(42.61)
(17.32)
Previous
Period
Total Assets
Maxbhumi Developers Limited was incorporated on 15th November, 2007.
19.35
6.39
5.25
21.93
2.20
(0.09)
(0.01)
17.17
(1.17)
13.12
(26.82)
16.66
(9.12)
8.25
16.31
(21.30)
(34.60)
(0.57)
(39.31)
(85.82)
(12.35)
(2.76)
1.03
(8.43)
3.11
2.80
3.71
20.83
5.91
–
6.97
(0.34)
(35.57)
(16.68)
Current
Period
Total Liabilities
3.
3.71
0.05
0.43
14.01
0.14
0.00
–
16.16
1.26
4.24
41.84
9.85
1.20
4.21
4.90
7.11
33.12
0.96
30.01
105.73
12.95
2.88
5.77
13.76
10.00
1.34
0.26
1.14
0.40
8.29
1.40
7.15
127.37
26.09
Previous
Period
Reserves
Asian Paints (International) Limited disposed of the entire stake in subsidiary, Asian Paints (Queensland) Pty. Ltd. on 30th June, 2007
3.38
0.05
0.43
12.94
0.14
0.00
0.05
14.73
1.15
3.79
39.67
8.10
1.07
3.76
4.47
10.23
31.64
0.86
28.57
100.24
12.27
2.73
0.00
17.37
15.00
1.32
0.23
1.21
0.36
–
1.33
6.39
113.84
23.19
Current
Period
Capital
2.
Jan to Dec
Apr to Mar
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Apr to Mar
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Apr to Mar
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
Jan to Dec
15th Jan to
14th Jan
Jan to Dec
Jan to Dec
Jan to Dec
Accounting
period
1.
Notes :
THB
SG$
Berger International Ltd.
SG$
Berger Contractor (Singapore) Pte. Ltd.
Berger Paints (Thailand) Ltd.
SG$
Berger Building Services (Singapore) Pte Ltd.
CNY
US $
Asian Paints South Pacific Holdings Ltd.
Berger Paints (China) Co. Ltd.
SL Rs
Asian Paints Lanka Ltd.
MYR (Malaysia)
INR
Asian Paints Industrial Coatings Ltd.
HK $
Vatu
Asian Paints (Vanuatu) Ltd.
Berger Paints (Hong Kong) Ltd.
$ Top
Asian Paints (Tonga) Ltd.
Fiji $
Asian Paints (South Pacific) Fiji Ltd.
Nepal Rs
Asian Paints (Nepal) Pvt. Ltd.
Aus $
Oman OR
SI $
US $
Asian Paints (International) Ltd.
Asian Paints (S.I.) Ltd.
Taka
Asian Paints (Bangladesh) Ltd.
Asian Paints (Queensland) Pty. Ltd.
Currency
Subsidiary Name
SUMMARY OF FINANCIAL STATEMENTS OF SUBSIDIARY COMPANIES PURSUANT TO THE APPROVAL UNDER SECTION 212 (8) OF THE COMPANIES ACT, 1956
Corporate Governance Report
•
Shareholder Information
•
Annual General Meeting (AGM) Notice
87
Report on Corporate Governance
COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:
With the globalization of the economy, corporatisation of
enterprises and institutionalization of the capital markets,
the freedom and the liberty of the corporate(s) and
business institutions have increased manifold together
with the responsibility towards the stakeholders. Corporate
Governance which encompasses the moral, ethical and
legal framework within which an organisation functions
has become imperative, today. Your Company has a
very strong foundation of the above principles which is
reflected in the culture and mindset of the management
and its employees. Your Company continues to strengthen
on an ongoing basis, its principles of transparency, fairness,
integrity and accountability to generate long-term wealth
and value for its stakeholders.
Your Company is in compliance with all the regulations
stipulated by Securities Exchange Board of India (SEBI) in
the Listing Agreement. This chapter, along with chapters
on Management Discussion and Analysis and Additional
Shareholders’ Information, constitutes Asian Paints’
compliance with Clause 49 of the Listing Agreement.
BOARD OF DIRECTORS:
Composition:
The composition of the Board of your Company consists
of three (3) Executive Directors and nine (9) Non-
Executive Directors, out of which six (6) are Independent
Directors. All the Directors, except the three Executive
Directors, are liable to retire by rotation and one third
of the Directors who are liable to retire by rotation, are
eligible for re-election.
Number of Board Meetings:
During the financial year ended 31st March, 2008, the
Board of Directors met 9 times, on the following days:
Date(s) on which the meeting(s) were held:
10th May, 2007
29th January, 2008
26th May, 2007
3rd February, 2008
30th July, 2007
24th March, 2008
19th October, 2007
29th March, 2008
3rd November, 2007
The Board of Directors meet at least once in every four
months and the maximum time gap between two meetings
does not exceed four months. The date(s) on which the
quarterly and annual results are proposed to be declared
in the next financial year are determined in advance and
published elsewhere in the Annual Report. Additional
meetings are convened as and when necessitated.
Composition, nature of Directorship, the number of meetings attended and the Directorships in other companies, of the Board of
Directors as on 31st March, 2008:
Name of the Director Nature of Directorship
Date of joining the
Board
Attendance
Directorship
in other
Companies
(*)
At the Board
At the
Meetings
last AGM
Ashwin Choksi
Ashwin Dani
Executive
Chairman/Promoter
Executive Vice Chairman &
Managing Director/Promoter
Membership and
Chairmanship
of the Committees of the
Board of other Companies (**)
Committee
Member
Committee
Chairman
18.10.1970 (***)
9
Yes
–
–
–
18.10.1970 (***)
9
Yes
6
2
1
Abhay Vakil
Managing Director/Promoter
01.03.1983 (***)
9
Yes
3
2
1
Mahendra Choksi
Non-Executive/Promoter
27.11.1992
9
Yes
3
2
–
Amar Vakil
01.10.1995
8
No
3
–
–
Hasit Dani
23.07.2001
9
Yes
4
–
–
Tarjani Vakil
Non-Executive/Independent
01.12.1998
9
Yes
5
5
3
Dipankar Basu
15.04.2000
8
Yes
9
4
3
Deepak Satwalekar
30.05.2000
8
No
6
3
2
R. A. Shah
07.04.2001
8
Yes
14
10
5
S. Sivaram
07.04.2001
6
Yes
3
1
–
Mahendra Shah
06.06.2001
9
Yes
4
–
–
Note:
* Excludes directorship in Asian Paints Limited. Also excludes directorship in Indian Private Limited Companies, Foreign Companies and Alternate
Directorships. As per the disclosure(s) received from the Directors, the Directors do not hold directorship in more than 15 Companies.
** For the purpose of considering the limit of the committee memberships and chairmanships of a Director, the Audit Committee and the Shareholders’
Grievance Committee of public listed committees have been considered. As per disclosure(s) received from the Directors, the Directors do not hold
Memberships in more than 10 Committees and Chairmanship in more than 5 Committees.
*** The Executive Directors are appointed under a service contract which is renewable after five years of appointment, as governed by the agreement(s)
entered into with the Company. They were last re-appointed on 18th December, 2003.
88
BOARD PROCEDURES:
•
Investment of funds of the Company,
Agenda papers consisting of all the necessary information
and material for ensuring effective deliberations and
discussions at the meetings of the Board are circulated
in advance to all the Directors. The proceedings of
every meeting are recorded and minutes are prepared
accordingly. The draft minutes is circulated to the
members of the Board, for their noting and approval,
after which the same is signed by the Chairman.
•
Quarterly details of foreign exchange exposure and
the steps taken by management to limit the risks of
adverse exchange rate movement,
•
Status on legal cases,
•
Proposals for investments, divestments,
guarantees, mergers and acquisitions,
•
Approval of related party transactions,
•
Compliance reports of all laws applicable to the
Company,
•
Minutes of the meetings of the Board of Directors of
unlisted subsidiary companies and statement of all
significant transactions and arrangements entered
into by the unlisted subsidiary companies,
•
Disclosures made by the senior management
personnel as to all material financial and commercial
transactions, where they have personal interest.
•
All other information which is relevant for decisionmaking by the Board.
The Board has complete access to all the information and
data, relevant to understand the business of the Company
in general as well as the agenda items circulated
are comprehensive in nature. Following information
inter-alia is supplied to the Board on a periodical basis:
•
Annual budgets, operating plans and budgets,
capital budgets,
•
Quarterly, half yearly and annual results of the
Company and its operating divisions or business
segments along with the consolidated results of the
group,
•
Minutes of meetings of the audit committee and
other committee(s) of the Board,
•
Information on recruitment and remuneration of
senior officers just below the Board level,
•
Materially important show cause,
prosecution and penalty notices,
•
Fatal or serious
occurrences,
•
Any materially significant effluent or pollution
problems,
•
Any materially relevant defaults in financial
obligations to and by the Company or substantial
non-payment for goods sold by the Company,
accidents
or
demand,
dangerous
•
Any issue which involves possible public or product
liability claims of a substantial nature,
•
Details of any joint venture or collaboration
agreement,
•
Transactions that involve substantial payment
towards goodwill, brand equity or intellectual
property,
•
Significant labour problems and their proposed
solutions,
•
Significant initiatives and developments on the
human resource and industrial relations fronts,
•
Sale of a material nature of investments, subsidiaries
and assets, which are not in the normal course of
business,
loans,
COMMITTEES OF THE BOARD:
Currently, there are four Committee(s) of the Board: Audit
Committee, Remuneration Committee, Shareholders/
Investors Grievance Committee and Share Transfer
Committee. The terms of reference of the Committee(s)
detailing their scope of work are determined by the
Board from time to time. The Board periodically reviews
the minutes of the meetings of Audit Committee,
Remuneration Committee and Shareholders/Investors
Grievance Committee. Composition, terms of reference,
number of meetings and related attendance, etc., of
these Committees are detailed.
AUDIT COMMITTEE:
The Audit Committee plays a key role, standing at the
intersection of management, independent auditors,
internal auditors and the Board of Directors. Audit
Committees need to ensure accountability on the part
of management and internal and external auditors;
make all groups involved in the financial reporting and
internal controls process and understand their roles;
gain input from the internal auditors, external auditors,
and outside experts when needed; and safeguard the
overall objectivity of the financial reporting and internal
controls process.
The Audit Committee of your Company comprises of 3
(Three) Independent Directors. The members of the Audit
Committee as on 31st March, 2008, are Ms. Tarjani Vakil
(Chairperson), Mr. Dipankar Basu and Mr. Mahendra
Shah, all of whom are financially literate.
89
Details as to the date(s) on which the meetings were
held and the attendance details of the members of the
Committee during the financial year ended 31st March,
2008:
Date(s) on which the meeting(s) were held during the
financial year 2007-2008
8th May, 2007
21st September, 2007
26th May, 2007
17th October, 2007
28th July, 2007
28th January, 2008
Meeting details
Attended
% of
total
Tarjani Vakil
(Chairperson)
6
5
83.6%
Y
Mahendra Shah
6
6
100%
Y
Dipankar Basu
6
5
83.6%
Y
The role of the Audit Committee inter-alia includes the
following:
•
Overseeing the Company’s financial reporting
process and the disclosure of its financial information
to ensure that the financial statements are correct,
sufficient and credible.
•
Recommending to the Board, the appointment, reappointment and, if required, the replacement or
removal of the statutory auditor, fixing of audit fees
and approving payments for any other service.
•
Reviewing, with the management, the annual
financial statements before submission to the Board
for approval, with particular reference to:
•
•
•
90
Reviewing adequacy of internal audit systems
and the internal audit department including the
structure, staffing, reporting structure and frequency
of internal audit.
•
Discussion with the internal auditors on any significant
findings and follow up thereon.
•
Reviewing the Company’s
management policies.
•
Reviewing the internal investigations by the internal
auditors into matters where there is a suspected fraud
or irregularity or failure of internal control systems of
a material nature and reporting the matter to the
Board.
•
Discussion with the statutory auditors before the
audit commences, about the nature and scope of
audit as well as post-audit discussion to ascertain
any area of concern.
•
Reviewing reports furnished by the internal auditors
and statutory auditors and ensuring suitable follow
up thereon.
•
Looking into reasons for substantial defaults in
payment to the depositors, debenture holders,
shareholders and creditors.
•
Reviewing the appointment and terms of
remuneration of the Chief Internal Auditor of the
Company.
Whether
attended last
AGM (Y/N)
Held
during
the year
Name
•
Matters required to be included in the Directors’
Responsibility Statement to be included in the
Board’s report as per Section 217(2AA) of the
Companies Act, 1956;
financial
and
risk
Apart from the above, the Committee also reviews the
Management Discussion and Analysis of the financial
condition and results of operations, the financial
statements and investments made by the unlisted
subsidiary companies and any other matter which may
be a part of its terms of reference or referred to by the
Board of Directors.
The Executive Chairman, Vice-Chairman and Managing
Director, Chief Financial Officer & Company Secretary,
General Manager – Accounts and Taxation, Financial
Controller, Statutory Auditor(s) and Chief Internal
Auditor are special invitees to the meetings of the Audit
Committee. The Chief Financial Officer & Company
Secretary acts as Secretary to the Committee.
•
Changes in the Accounting policies and
practices and the reasons for the same, major
accounting entries and significant adjustments
made in the financial statements arising out of
audit findings;
•
Compliance with listing and other legal
requirements relating to financial statements;
•
Disclosure of any related party transactions;
and
The composition, procedures, role, powers and the terms
of reference of the Audit Committee are as stipulated in
Section 292A of the Companies Act, 1956 and the Clause
49 of the Listing Agreement.
•
Qualifications in the draft audit report, if any.
REMUNERATION COMMITTEE:
Reviewing with management quarterly and halfyearly financial statements before submission to the
Board for approval.
Reviewing with the management performance of
statutory and internal auditors.
Composition and terms of reference:
The Committee, comprising of Independent Directors,
determines and recommends to the Board, the
remuneration payable to the Executive Directors of
the Company. The members of the Committee are
Mr. Dipankar Basu (Chairman), Ms. Tarjani Vakil and
Mr. Deepak Satwalekar. The Committee met once
during the financial year 2007-2008 on 10th May, 2007,
wherein all the members except Mr. Dipankar Basu were
present.
The terms of reference of the Remuneration Committee
are as follows:
•
•
To review and recommend to the Board, the salaries,
commission, other benefits, service agreements and
employment conditions of Executive Directors.
To approve the selection, appointment and
remuneration of relatives of Directors for holding
an office of profit pursuant to Section 314 of the
Companies Act, 1956.
REMUNERATION POLICY:
The remuneration policy of the Company is based on
the fundamental rule of rewarding performance as
against benchmarked objectives. The policy is revised
from time to time to make it commensurate with the
Industry standards. The objective of the Company is to
attract, retain, develop and motivate talent within the
organisation.
Details of the remuneration paid to the Directors of the
Company are as follows:
Executive Directors:
The three Executive Directors of the Company are paid
remuneration on the basis of the recommendation of
the Remuneration Committee to the Board. Their position
in the Company is bound by agreements entered into
with the Company, which are approved by the Board
of Directors as well as the shareholders of the Company,
containing the terms and conditions of their employment
and their remuneration. The Executive Directors were
re-appointed on 18th December, 2003, for a period of
five years and in accordance with the terms of their
agreements, their appointments can be terminated by
giving six months notice in writing. Their remuneration
structure comprises of salary, house rent allowance,
commission, perquisites, etc. No severance is payable to
the Directors on termination of employment.
Non-Executive Directors:
The Non-Executive/Independent Directors of the Company
play a crucial role for ensuring the quality of corporate
governance in a Company. They constitute a necessary
component of a balanced Board structure where the indepth knowledge of the Executive Directors is blended with
the wider experience, unbiased opinions and knowledge
of the Independent Directors. The contribution of the NonExecutive Directors is rewarded by paying commission on the
basis of their performance and their commitment towards
attending the meetings of the Board. The commission paid
to the Non-Executive Directors of the Company is within
the limits set under Section 309 of the Companies Act,
1956 and the limits approved by the shareholders at their
meeting held on 28th June, 2004. The commission payable
is determined as a percentage to the profits (as determined
under Section 349 and 350 of the Companies Act, 1956) of
the Company. Apart, from commission the Non-Executive
Directors are also paid sitting fees of Rs. 10,000 per meeting,
for attending the meeting(s) of the Board of Directors and
Committees thereof, except for attending the meeting(s)
of the Share Transfer Committee. The Company has not
granted any Stock Options to any of its Directors.
The table below signifies the relationship of the Directors
with each other as required to be disclosed in terms of
the amendment to Clause 49 of the Listing Agreement
vide a circular of the Securities Exchange Board of India
dated 8th April, 2008.
Remuneration paid to the Directors and their relationship with each other
(Figures in Rs.)
Name of the Director
Relationship with each other
Salary
HRA
Perquisites*
Sitting Fees
Commission
Total
Ashwin Choksi
Brother of Mahendra Choksi
30,79,800
12,31,920
48,50,160
–
1,00,00,000
1,91,61,880
Ashwin Dani
Father of Hasit Dani
30,79,800
12,31,920
51,34,166
–
1,00,00,000
1,94,45,886
Abhay Vakil
Brother of Amar Vakil
30,79,800
12,31,920
48,59,400
–
1,00,00,000
1,91,71,120
Mahendra Choksi
Brother of Ashwin Choksi
–
–
–
1,00,000
9,00,000
10,00,000
Amar Vakil
Brother of Abhay Vakil
–
–
–
80,000
9,00,000
9,80,000
Hasit Dani
Son of Ashwin Dani
–
–
–
1,00,000
9,00,000
10,00,000
Tarjani Vakil
**
–
–
–
1,50,000
11,00,000
12,50,000
Dipankar Basu
**
–
–
–
1,30,000
11,00,000
12,30,000
Deepak Satwalekar
**
–
–
–
90,000
9,00,000
9,90,000
R. A. Shah
**
–
–
–
80,000
9,00,000
9,80,000
S. Sivaram
**
–
–
–
60,000
9,00,000
9,60,000
Mahendra Shah
**
–
–
–
1,60,000
11,00,000
12,60,000
Note:
*
Perquisites include Company’s contribution to provident and superannuation fund, medical and leave travel allowance etc., as well as monetary
value of perquisites as per Income Tax rules.
**
There is no relationship between any of the Independent Directors
91
Directors with materially significant, pecuniary or business
relationship with the Company:
The transactions with related parties are furnished
under Schedule ‘M’ of the Notes to the Accounts as
stipulated under Accounting Standard 18 (AS-18). There
are no transactions of material nature with the Promoter
Directors or their relatives etc., which may have a
potential conflict with the interest of the Company.
Disclosures have also been received from the Directors
and the Senior Managerial Personnel relating to the
financial transactions in which they or their relatives
may have a personal interest. However, none of these
transactions have a potential conflict with the interest
of the Company. The Register of Contracts required to
be maintained under Section 301 of the Companies Act,
1956, containing the contracts in which the Directors are
concerned and interested is placed at the meeting of
Board of Directors of the Company for their approval
and noting, on a periodical basis.
No pecuniary or business relationship exists between
the Non-Executive Directors and the Company,
except for the commission payable to them annually.
Mr. R. A. Shah, Independent Director of the Company, is a
senior partner of M/s. Crawford Bayley & Co., Solicitors &
Advocates, of the Company, which renders professional
services to the Company. The quantum of fees paid to
M/s. Crawford Bayley & Co, is an insignificant portion of
their total revenue, thus, M/s. Crawford Bayley & Co, is
not be construed to have any material association with
the Company.
Employees holding an office or place of profit in the
Company pursuant to Section 314 of the Companies
Act, 1956, who are relatives of the Directors:
Mr. Jalaj Dani, son of Mr. Ashwin Dani, Vice
Chairman & Managing Director, holds the position of
President – International Business Unit and had drawn a
gross remuneration of Rs. 76,90,602/- p.a. (Rupees Seventy
Six Lakhs Ninety Thousand Six Hundred and Two only),
during the financial year 2007-2008. Mr. Manish Choksi,
son of Mr. Mahendra Choksi, Non-Executive Director,
holds the position of Chief – Corporate Strategy & CIO
and had drawn a gross remuneration of Rs. 77,03,468/p.a. (Rupees Seventy Seven Lakhs Three Thousand Four
Hundred and Sixty Eight only), during the financial year
2007-2008. Ms. Nehal Vakil, daughter of Mr. Abhay Vakil,
Managing Director, holds the position of a Manager
– Business Process Renovation and had drawn a gross
remuneration of Rs. 12,19,218/- p.a. (Rupees Twelve Lakhs
Nineteen Thousand Two Hundred and Eighteen only),
during the financial year 2007-2008. The appointment and
the terms and conditions as to remuneration payable to
Mr. Jalaj Dani, Mr. Manish Choksi and Ms. Nehal Vakil
were approved by the shareholders at the Annual
General Meeting held on 27th June, 2005, as well as the
Central Government.
92
During the financial year ended 31st March, 2008,
Mr. Vishal Choksi, son of Mr. Shailesh Choksi, a relative
of Company’s Directors Mr. Ashwin Choksi and
Mr. Mahendra Choksi, held the position of a Management
Trainee for part of the year and drew a remuneration for
an amount not exceeding Rs. 4,24,610/- p.a. (Rupees
Four Lakhs Twenty Four Thousand Six Hundred and Ten
only). He separated from the Company on 5th February,
2008. The Company at the Annual General Meeting held
on 26th June, 2007, had approved his appointment in
terms of Section 314(1)(b) of the Companies Act, 1956,
and Directors’ Relatives (Office or Place of Profit) Rules,
2003.
Your Directors have proposed, based on the
recommendation of the Remuneration Committee,
revision in remuneration payable to Mr. Jalaj Dani,
President – International Business Unit, Mr. Manish Choksi,
Chief – Corporate Strategy & CIO and Ms. Nehal Vakil,
Manager – Business Process Renovation, with effect from
1st April, 2008, in accordance with Section 314 and any
other applicable provisions of the Companies Act, 1956,
subject to approval of the shareholders at the ensuing
Annual General Meeting and approval of the Central
Government.
Shareholding of the Non-Executive/Independent Directors of
the Company as on 31st March, 2008
Name of the
Director
Nature of
Directorship
No of shares
held*
Percentage
to the paid up
capital
Mahendra Choksi
Non-executive/
Promoter
1,65,638
0.173
Amar Vakil
Non-executive/
Promoter
10,64,021
1.109
Hasit Dani
Non-executive/
Promoter
5,15,560
0.537
Tarjani Vakil
Non-executive/
Independent
Nil
Nil
Dipankar Basu
Non-executive/
Independent
Nil
Nil
Deepak Satwalekar Non-executive/
Independent
Nil
Nil
R. A. Shah
Non-executive/
Independent
Nil
Nil
S. Sivaram
Non-executive/
Independent
Nil
Nil
Mahendra Shah
Non-executive/
Independent
Nil
Nil
17,45,219
1.819
Total
* As per the declarations made to the Company by the Directors
as to the shares held in their own name.
SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE:
The Board has constituted Shareholders/Investors
Grievance Committee, chaired by a Non-Executive
Director/Independent Director to specifically look into
the redressal of shareholders complaints. The members
of the Committee are Mr. Mahendra Shah, Chairman,
Mr. Abhay Vakil, Mr. Mahendra Choksi and Mr. Hasit Dani.
During the financial year ended 31st March, 2008, the
Committee met once on 17th October, 2007 and all
the members of the Committee were present in the
meeting.
•
To effect transfer of shares;
•
To effect transmission or deletion of shares;
•
To issue duplicate share certificates as and when
required;
The terms of reference of the Committee include the
following:
•
To specifically look into complaints received from
the shareholders of the Company.
To approve the register of members as on the record
date(s) and/or book closure dates for receiving
dividends and other corporate benefits;
•
To oversee the performance of the Registrar and
Transfer Agent of the Company.
To review correspondence with the shareholders
and take appropriate decisions in that regard; and
•
To redress complaints from shareholders from time to
time.
•
•
•
To recommend measures for overall improvement in
the quality of services to the investors.
Mr. Jayesh Merchant, Chief Financial Officer & Company
Secretary is the Compliance Officer of the Company as
per the Listing Agreement.
Details pertaining to the number of complaints received
and resolved and the status thereof during the financial
year ended 31st March, 2008 are given as follows:
Nature of Complaints
Received
during
the year
Addressed
during the
year
Non receipt of Share Certificates lodged for
transfer
1
1
Non receipt of Dividend warrants
5
5
Non receipt Share Certificate(s)
lodged for split/Bonus shares
4
4
Letters received from Stock Exchange(s)
9
9
Others/miscellaneous
5
5
Total
24
24
All the complaints as at the end of financial year
31st March, 2008, were duly addressed and no
complaints are pending for redressal except where
they are constrained by dispute or legal impediments
or due to incomplete or non submission of documents
by the shareholders. Certain Court cases are pending in
the Courts/Consumer Forums, relating to disputes over
the titles to the shares of the Company in which either
the Company has been made a party or necessary
intimation thereof has been received by the Company.
The Company shall comply with the decrees or orders
of the Hon’ble Courts pertaining to these cases as when
the same are received by the Company.
SHARE TRANSFER COMMITTEE:
The Share Transfer Committee, comprising of the three
Executive Directors and the Company Secretary,
is constituted to facilitate processing of transfers,
transmissions, deletion, etc., more expeditiously by the
Company in co-ordination with Sharepro Services (India)
Private Limited, the Company’s Registrar and Transfer
Agent.
The Share Transfer Committee has been delegated
powers to administer the following:
The Committee, in accordance with Clause 49 (IV) (G),
attends to the share transfer and other formalities once
in a fortnight and has met 26 times during the financial
year 2007-2008.
SUBSIDIARY COMPANIES:
Your Company In terms of Clause 49 (III) of the Listing
Agreement, does not have a material non-listed Indian
subsidiary company, whose turnover or net worth
exceeds 20% of the consolidated turnover or networth
respectively, of the Company and its subsidiaries in the
immediately preceding accounting year.
The Audit Committee reviews the financial statements
including investments by the unlisted subsidiary
Companies of the Company. Also, copies of the minutes
of the subsidiary companies of the Company are placed
before the Board of the Company on a periodical basis.
CEO /CFO CERTIFICATION:
As required by Clause 49(V) of the Listing Agreement,
the CEO/CFO Certificate signed by Mr. Ashwin Choksi,
Chairman and Mr. Jayesh Merchant, Chief Financial Officer
& Company Secretary was placed before the Board of
Directors at their meeting held on 9th May, 2008.
GENERAL BODY MEETINGS:
Venue and the time of the last three Annual General Meetings
of the Company
Year
Location
Meeting Time
Date
No. of
Special
Resolutions
set out at
the AGM
2006-2007 Yashwantrao Chavan
26th
June,
Pratisthan Auditorium,
Y.B. Chavan Centre,
2007
General Jagannath
Bhosle Marg, Next to
Sachivalaya Gymkhana,
Mumbai 400021
3.00 p.m.
2
2005-2006 Patkar Hall, Nathibai
Thackersey Road,
New Marine Lines,
Mumbai 400 020
26th
June,
2006
3.00 p.m.
NIL
2004-2005 Patkar Hall, Nathibai
Thackersey Road,
New Marine Lines,
Mumbai 400 020
27th
June,
2005
3.00 p.m.
7
All special resolutions set out in the notices for the AGMs
were passed by the shareholders at the respective
93
The Board of Directors at their meeting held on 25th
March, 2005, had adopted a Code of Conduct for
all the Board Members and senior management
personnel of the Company in consonance with
the requirement under Clause 49(I)(D) of the Listing
Agreement. The code of conduct has been posted
on the website of the Company. All the Board
members and the senior management personnel
have affirmed their compliance with the said
code of conduct for the financial year ended 31st
March, 2008. The declaration to this effect signed by
Mr. Ashwin Choksi, Chairman of the Company forms
part of the report.
meetings with requisite majority. There were no resolutions
passed through postal ballot during the financial year
DISCLOSURES:
•
Disclosures on materially significant related party
transactions:
The Company has not entered into any other
transaction of a material nature with the Promoters,
Directors or the Management, their subsidiaries or
relatives etc. that may have potential conflict with
the interest of the Company at large. All transactions
were carried out on an arms length basis and were
not prejudicial to the interest of the Company.
•
•
Details of non-compliance(s) by the company:
Your Company has adopted a Code of Conduct
for Prevention of Insider Trading, in accordance
with the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 1992.
Mr. Jayesh Merchant, Chief Financial Officer &
Company Secretary is the Compliance Officer. All
the Directors, senior management personnel and
such other designated employees of the Company
who are expected to have access to unpublished
price sensitive information relating to the Company
are covered under the said code. The Directors, their
relatives, senior management personnel, designated
employees etc. are restricted in purchasing, selling
and dealing in the shares while possession of
unpublished price sensitive information about the
Company as well as during certain periods known
as “Quiet Period”.
The Company has complied with all the requirements
of the Stock Exchange(s) or Securities Exchange
Board of India on matters related to Capital Markets,
as applicable from time to time. There were no
penalties imposed or strictures passed against the
Company by the statutory authorities in this regard.
•
Disclosure of Accounting Treatment:
The Company follows Accounting Standards
prescribed by the Companies (Accounting Standards)
Rules, 2006 and relevant provisions of the Companies
Act, 1956 and in preparation of financial statements,
the Company has not adopted a treatment different
from that prescribed in the Accounting Standard(s).
•
Details of compliance with mandatory and nonmandatory requirements of Clause 49 of the Listing
Agreement:
Your Company has complied with all the mandatory
requirements of the revised Clause 49 of the Listing
Agreement. Following is the status of the compliance
with the Non-Mandatory requirements of the Clause
49 of the Listing Agreement:
•
94
•
The Company has constituted a Remuneration
Committee. The Remuneration Committee
determines the remuneration payable to
the Executive Directors of the Company. The
Chairman of the Committee was present at the
Annual General Meeting of the Company held
on 26th June, 2007.
•
Half-yearly results of the Company are sent to
all shareholders.
•
During the year under review, there was no
audit qualification in the Company’s financial
statements. The Company continues to adopt
best practices to ensure a regime of unqualified
financial statements.
Code of Conduct for the Board of Directors and
senior management personnel.
Code of Conduct for Prevention of Insider Trading.
•
Management Discussion and Analysis.
This annual report has a detailed section on
Management Discussion and Analysis.
MEANS OF COMMUNICATION:
The quarterly results of Company are published in all
India editions of Business Standard and Mumbai editions
of Free Press Journal and Navshakti. The results of the
Company are also put up on the Company’s corporate
website: www.asianpaints.com. The Company’s official
news releases and presentations made to the institutional
investors and analysts are also available on the
Company’s website. All important information pertaining
to the Company is also mentioned in the Annual Report
of the Company containing inter-alia Audited Accounts,
Consolidated Financial Statements, Directors’ Report,
Auditors’ Report and the Corporate Governance Section
which is circulated to the members and others entitled
thereto for each financial year.
As per the Securities and Exchange Board of India
circular No. SEBI/CFD/DIL/LA/4/2007/27/12 dated
27th December, 2007 pertaining to the Amendments
in the Listing Agreement, Clause 51 relating to EDIFAR
filing has been removed and a new Clause 52, which
deals with filing of the Annual Report, quarterly results,
shareholding pattern etc. through Corporate Filing and
Dissemination System (CFDS) with the Stock Exchanges,
has been introduced. The necessary filings as required
have been made through CFDS by the Company and
are posted on the website: www.corpfiling.co.in.
DISCLOSURES REGARDING RE-APPOINTMENT OF DIRECTORS:
As per the Companies Act, 1956, at least two-thirds of
the Board should consist of retiring Directors. Of these,
one-third of the retiring Directors are required to retire
every year. All the Directors, excepting the three
Executive Directors are liable to retire by rotation.
Details of the Directors retiring by rotation at the ensuing Annual General Meeting, as required pursuant to Clause 49(IV):
Ms. Tarjani Vakil
Profile of the
Director
Ms. Tarjani Vakil has contributed
immensely for almost 40 years in
the field of Development Banking.
She retired in October 1996 as
Chairperson and Managing Director
of Export - Import Bank of India
(‘EXIM Bank”). Ms. Vakil was actively
involved in extensive interaction with
multilateral agencies for initiation of
an informed annual dialogue among
heads of Export Credit Agencies in
Asia and Australia. Ms. Vakil has been
a member consultant for carrying a
study of the feasibility for establishment
of an Export Credit Guarantee facility
for GCC Countries for establishment
of Export-Import Bank of Malaysia
and other developing countries of
Asia and Africa. Ms. Vakil has won
several awards including Mahila
Shiromani, CEO of the Year, Woman
of the Year, etc. She was also ranked
as the highest woman official in
Banking in Asia and named in the
50 world - class women executives in
the 1996 Survey conducted by KPMG
Peat Marwick, USA. After retirement,
Ms. Vakil, is serving as a Director on a
number of Body Corporate(s).
1st December, 1998
Date of joining
the Board
• i-flex Solutions Limited
Directorships
and
Member - Audit Committee
Committee
Chairperson - Shareholder
Memberships
Grievance Committee
in other
• Idea Cellular Limited
Companies
Member – Audit Committee
Mr. Dipankar Basu
Mr. Deepak Satwalekar
Mr. Dipankar Basu retired as Chairman,
State Bank of India (SBI) in August 1995.
As Chairman of India’s largest Bank,
he concurrently chaired the Boards
of 10 commercial banking subsidiaries
of SBI (seven in India and one each in
UK, Canada and USA) and three nonbanking subsidiaries. Joining SBI in 1956,
after obtaining a Master’s degree
in Economics from Delhi University,
Mr. Basu spent his entire professional
career with SBI, serving in India as well
as in the U K. In India, he spearheaded
the Bank’s entry into investment
banking and mutual fund businesses
and was responsible for setting up SBI
Capital Markets Limited, and SBI Mutual
Fund. While serving as Chairman,
SBI, Mr. Basu served on the Boards of
several apex financial institutions of
India (e.g. IDBI, Export Import Bank of
India, General Insurance Corp. of India
Ltd., National Bank for Agriculture and
Rural Development, etc.) as also on
the Governing Boards of national level
Banking Association and Institutes.
After retirement Mr. Basu, has been
serving on the Board of several Body
Corporate(s).
15th April, 2000
Mr. Deepak Satwalekar is a
B.Tech. from the Indian Institute of
Technology (IIT), Bombay and has
completed his post graduation in
business administration from the
American University, Washington
DC. He was appointed as a Dy.
Managing Director of HDFC in 1990
and became Managing Director in
1993. Presently he holds the position
of Managing Director & CEO of
HDFC Standard Life Insurance Co.
Ltd. Has been a consultant to the
World Bank, the Asian Development
Bank, United States Agency for
International Development (USAID)
and the United Nations Centre for
Human Settlement (HABITAT). He was
involved in policy work as a member
of the Steering Committee on Urban
Infrastructure and Housing for the
Ninth Five Year Plan of the Govt. of
India and Chairman of the Working
Group on avoidance of conflict
of interest in the financial services
sector set up by the Reserve Bank of
India.
• Securities Trading Corporation of
India Limited
Chairman – Audit Committee
• Housing Development Finance
Corporation Limited
Member - Investors Grievance
Committee
• Mahindra Intertrade Limited
Chairperson - Audit Committee
• Deepak Fertilizers &
Petrochemicals Corporation
Limited
Chairman – Shareholders
Grievance Committee
• Aditya Birla Nuvo Limited
Chairperson – Audit Committee
• Rain CII Carbon (India) Limited
• Alkyl Amines Chemicals Limited
• Peerless Securities Limited
• Peerless General Finance &
Investment Company Limited
30th May, 2000
• Infosys Technologies Limited
Chairman - Audit Committee
• Nicholas Piramal India Limited
Chairman – Investors Grievance
Committee
• HDFC Standard Life Insurance
Company Limited
• Entertainment Network (India)
Limited
• Tata Power Company Limited
• Saregama India Limited
• STCI Primary Dealer Limited
• Chambal Fertilizers & Chemicals
Limited
• Standard Chartered - Capital
STCI Capital Markets Limited
95
GENERAL SHAREHOLDER INFORMATION
Listing:
Annual General Meeting:
The Company’s shares are listed on:
Date
Venue
Tuesday, 24th June, 2008
Patkar Hall, Nathibai Thackersey Road
New Marine Lines
Mumbai 400 020
3.00 p.m
Time
•
Bombay Stock Exchange Limited (BSE)
Phiroze Jeejeebhoy Towers, 25th Floor, Dalal Street,
Mumbai 400 023.
•
National Stock Exchange of India Limited (NSE)
Exchange Plaza, 5th Floor, Plot No. C/1
“G” Block, Bandra-Kurla Complex, Bandra (East),
Mumbai 400 051
Financial calendar:
Financial year: 1st April to 31st March.
For the year ended 31st March, 2008, results were
announced on:
30th July, 2007
19th October, 2007
29th January, 2008
9th May, 2008
First Quarter
Half Yearly
Third Quarter
Fourth Quarter and Annual
For the year ending 31st March 2009, results will be
announced:
On or around 22nd July, 2008
On or around 24th October, 2008
On or around 23rd January, 2009
On or around 10th May, 2009
First Quarter
Half Yearly
Third Quarter
Fourth Quarter and Annual
Book Closure:
The dates of book closure are from 14th June, 2008 to
24th June, 2008, inclusive of both days.
Dividend:
An interim dividend of Rs. 6.50 per share (65 per cent
dividend) was declared on 19th October, 2007 and
paid on 30th October, 2007. A final dividend of Rs.10.50
(Rupees Ten and Fifty Paise only) (105 per cent) per share
has been recommended on 9th May, 2008 and subject
to the approval from the shareholders at the AGM, will
be paid after 24th June, 2008, as follows:
•
•
to those members whose names appear on the
Company’s Register of Members, after giving effect
to all valid share transfers in physical form lodged on
or before 13th June, 2008.
in respect of shares held in electronic form, to those
members whose names appear in the statement of
beneficial ownership furnished by NSDL and CDSL as
at the closing hours of 13th June, 2008.
Dividend declared and paid during last five years by the
Company:
Year
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008 (interim)
* On increased capital
96
Percentage
110
85*
95*
125*
130*
65*
Proportion to
capital (in crores)
70.6
81.5
91.1
119.9
124.7
62.3
The Company has paid the listing fees for the financial
year 2007-2008 to the Stock Exchange(s) on which
Company’s shares are listed. The Company has also paid
custodial fees for the year 2007-2008 to National Securities
Depository Limited (NSDL) and Central Depository
Services (India) Limited (CDSL). The International Security
Identification Number (ISIN) allocated to the Company
by NSDL and CDSL is INE021A01018.
The stock exchange codes assigned to your Company’s
shares are as follows:
Stock Exchange codes:
Name of the Stock Exchange
BSE
NSE
Code
500820
ASIANPAINT
Stock Price Data:
The monthly high and low prices and volumes of your
Company’s shares at Bombay Stock Exchange Limited
(BSE) for the year ended 31st March, 2008 are given as
follows:
High, low and volumes of Asian Paints’ shares for 2007-2008
Month
High
(Rupees)
Low
(Rupees)
Volume
(No of
shares)
Date on
which it
touched
the high
Date on
which it
touched the
low
April
819.90
731.10
1,67,956
16.04.2007
03.04.2007
May
869.20
751.00
2,84,193
28.05.2007
11.05.2007
June
900.00
800.00
8,07,430
04.06.2007
29.06.2007
July
899.25
803.10
1,30,076
24.07.2007
16.07.2007
August
995.00
860.00
2,86,137
13.08.2007
01.08.2007
September
1000.05
921.65
9,46,221
26.09.2007
21.09.2006
October
1120.00
900.00
2,80,036
26.10.2007
22.10.2007
November
1095.00
953.00
2,83,020
01.11.2007
12.11.2007
December
1125.00
981.00
5,94,617
31.12.2007
03.12.2007
January
1319.95
875.00
21,60,077
31.01.2008
22.01.2008
February
1255.00
1047.10
1,69,942
01.02.2008
21.02.2008
March
1205.00
1072.00
17,73,197
19.03.2008
03.03.2008
Note: High and low are in rupees per traded share. Volume is
the total monthly volume of trade in Asian Paints shares
on BSE.
Chart A shows the comparison of your Company’s share
price movement on BSE vis-à-vis the movement of the
BSE Sensex for the year 2007-2008:
Distribution pattern of Shareholdings as on 31st March, 2008:
Others
24.46%
Chart A
Promoters
49.47%
1500
22500
1350
21000
FIIs
15.04%
19500
1200
18000
1050
16500
900
15000
Asian Paints
Feb 08
Mar 08
Jan 08
Dec 07
Nov 07
Sep 07
Oct 07
Jul 07
Aug 07
12000
Jun 07
600
May 07
13500
Apr 07
750
Banks,
Other Financial Institutions
and Insurance Companies
9.06%
Sensex
Asian Paints
Asian Paints Share Price Movement
Mutual Funds/UTI
1.96
Distribution of Shareholder holdings:
The distribution pattern of shareholding of your Company
as on 31st March, 2008 by ownership and size class,
respectively, is given as follows:
Distribution of shareholding by ownership
Sensex
Category of shareholder
Performance of the Company’s share price as at the
beginning and end of the financial year 2007-2008:
(A)
Shareholding of Promoter and
Promoter Group
(a)
Individuals/Hindu Undivided Family
(b)
Bodies Corporate
(c)
Trust
Performance of the Company’s share price on BSE and NSE (In Rs.)
Name of the Stock Exchange
Price as on 2nd April, 2007
Price as on 31st March, 2008
Change in value
% Change
BSE
740.65
1199.95
+ 459.30
+ 62.01%
NSE
740.25
1199.90
+ 459.65
+ 62.09%
Total Shareholding of Promoter and
Promoter Group (A)
(B)
SHARE TRANSFER SYSTEM:
The applications and requests received by your Company
for transfer of shares held in physical form are processed and
the share certificates for the same are sent to the transferee
within the stipulated period under the Companies Act, 1956
and the Listing Agreement. A summary of all the transfers,
transmissions, deletion requests, etc., approved by the
Share Transfer Committee is placed before the Board of
Directors from time to time for their review. The Committee
ordinarily meets once every fortnight.
Institutions
(a)
Mutual Funds/UTI
(b)
Financial Institutions/Banks
(c)
Insurance Companies
(d)
Shareholders
Amount
in Rupees
Number % to Total
Upto
500
39332
82.68
4,76,96,290
4.97
501
1000
5215
10.96
4,15,59,370
4.33
i) Individual shareholders holding
nominal share Capital up to
Rs. 1 lakh
1,34,66,894
14.04
ii) Individual shareholders holding
nominal share capital in excess
of Rs.1 lakh
12,36,670
1.29
Individual (Non-Resident
individuals)
19,44,112
2.03
Individuals
Sub-Total (B) (2)
2,34,61,845
24.46
4,84,65,617
50.53
9,59,19,779
100.00
1564
3.29
2,29,83,120
2.40
471
0.99
1,18,29,880
1.23
Total (A)+(B)
3001
4000
215
0.45
76,21,700
0.8
4001
5000
182
0.38
82,80,300
0.86
219
0.46
1,61,90,390
1.69
0.79
80,30,36,740
83.72
47573
100.00
95,91,97,790
100.00
Total
9.00
7.10
(b)
2000
375
0.06
86,36,852
68,14,169
Non-Institutions
3000
10000
1.96
60,127
15.04
1001
and above
18,76,625
26.07
2001
10001
1.29
49.47
1,44,30,168
Total Public Shareholding
(B)=(B)(1)+(B)(2)
5001
12,41,806
4,74,54,162
2,50,03,772
Bodies Corporate
c)
9.84
38.34
Foreign Institutional Investors
(a)
% to Total
Rs.
94,40,770
3,67,71,586
Sub-Total(B) (1)
2)
shares held as on 31st March, 2008:
Percentage
of total no.
of shares
Public shareholding
1)
Distribution of shareholding of the Company by number of
Rs.
Total No. of
shares
Details about Company’s dematerialised shares:
Number of
shares
69384604
% of total
shares
Number of
shareholders
% of total
shareholders
72.34%
32873
69.10%
97
Shareholders, who still continue to hold shares in physical
form, are requested to dematerialise their shares at the
earliest and avail of the various benefits of dealing in securities
in electronic/dematerialised form. For any clarification,
assistance or information, please contact the Registrar and
Transfer Agent of the Company. The shareholders have the
option to hold Company’s shares in demat form through
the National Securities Depository Limited (NSDL) or Central
Depository Securities Limited (CDSL).
Break up of shares in physical and demat form as on 31st March,
2008:
No. of Shares
Percentage
of shares
2,65,35,175
27.66
Physical Segment
Demat Segment
NSDL
6,82,89,125
71.20
CDSL
10,95,479
1.14
Total
9,59,19,779
100.00
Outstanding GDRs / ADRs / Warrants / Convertible
Instruments and their impact on equity:
The Company does not have any outstanding GDRs/ADRs/
Warrants/Convertible Instruments as on 31st March, 2008.
Details of public funding obtained in the last three years:
Your Company has not obtained any public funding in
the last three years.
Other Information:
out the Secretarial Audit to reconcile the total admitted
capital with National Securities Depository Limited (NSDL)
and Central Depository Services (India) Limited (CDSL)
and the total issued and listed capital. This audit is carried
out every quarter and the report thereon is submitted
to the Stock Exchanges and is also placed before the
Board of Directors. The audit, interalia, confirms that the
total listed and paid up capital of the Company is in
agreement with the aggregate of the total number of
shares in dematerialised form (held with NSDL and CDSL)
and total number of shares in physical form.
Electronic Clearing Scheme (ECS) for dividend:
The Reserve Bank of India (RBI) has provided an Electronic
Clearing Scheme (ECS) to the investors as an option to
receive dividend directly through their bank accounts
rather than receiving the same in the form of Dividend
Warrants. Under this option, an investor’s bank account
is directly credited and intimation thereof is sent by the
Company to the shareholder.
This service provides instantaneous credit to the
shareholders account and protects against fraudulent
interception and encashment of dividend warrants
but also eliminates dependence on the postal
system, loss/damage of dividend warrants in transit
and correspondence relating to revalidation/issue of
duplicate warrants.
Shareholders holding shares in physical form:
Corporate Identification Number (CIN No.):
L24220MH1945PLC004598
Year of
issue
Ratio
Paid up Capital (Pre-IPO)
1982
–
IPO
1982
Bonus issue
1985
3:5
31,11,111
82,96,296
Bonus issue
1987
1:2
41,48,148
1,24,44,444
Investors who would like to avail this facility and are
holding shares in physical form may send in their
ECS Mandate Form, duly filled in to the Company’s
Registrar and Transfer Agent, Sharepro Services (India)
Private Limited, Satam Estate, Cardinal Gracious Road,
Chakala, Andheri (East), Mumbai 400 099 or Sharepro
Services (India) Private Limited, 912, Raheja Centre, Free
Press Journal Road, Nariman Point, Mumbai 400 021. The
ECS mandate form is annexed at the end of the Annual
Report. The ECS Mandate instruction should be under
the signature of the shareholder(s) as per the specimen
signature records lodged with the Company.
Bonus issue
1992
3:5
74,66,666
1,99,11,110
Shareholders holding shares in electronic/demat form:
Bonus issue
1996
1:1 1,99,11,110
3,98,22,220
Issue of shares pursuant
1996
History of IPO/Bonus Issue/Allotment of shares of the
Company:
Build up of the Company’s share capital:
Type of issue
1:25
No. of
shares
Total
cumulative
shares (No.)
–
35,00,000
16,85,185
51,85,185
2,94,000
4,01,16,220
to merger with Pentasia
Chemicals Limited
Bonus issue
2000
3:5 2,40,69,732
6,41,85,952
Bonus issue
2003
1:2 3,20,92,976
9,62,78,928
Cancellation of shares
pursuant to merger of
Pentasia Investments
2003
3,59,149
9,59,19,779
Limited with the Company
Total paid up capital as on 31st March, 2008
9,59,19,779
Secretarial Audit Report:
As stipulated by the Securities and Exchange Board of
India, a qualified Practicing Company Secretary carries
98
Investors holding shares in demat or electronic form may
send in their ECS mandate to the concerned Depository
Participant (DP) directly, in the format prescribed by the
DP. Pursuant to the Depository Regulations, the Company
is obliged to pay dividend on dematerialised shares
as per the details furnished by the concerned DP. The
Company or the Registrar and Transfer Agent cannot
make any change in such records received from the
Depository.
SMS Alert Facility:
National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL) have
announced the launch of SMS alert facility for demat
account holders whereby investors will receive alerts for
debits/credits (transfers) to their demat accounts a day
after the debit. These alerts will be sent to those account
holders who have provided their mobile numbers to their
Depository Participants (DPs). No charge will be levied by
NSDL/CDSL on DPs for providing this facility to investors.
This facility will be available to investors who request for
the same and provide their mobile numbers to the DPs.
Further information is available vide NSDL Circular
No: NSDL/POLICY/2007/0046 dated August 10, 2007 and
on the website of CDSL.
Financial Year
Unclaimed dividend
amount as on
31.3.2008
(Rupees in Lakhs)
2004-2005 Interim
21.05
26.11.2011
2004-2005 Final
24.15
26.07.2012
2005-2006 Interim
22.28
25.11.2012
2005-2006 Final
34.34
25.07.2013
2006-2007 1st interim
25.31
29.11.2013
2006-2007 2nd interim
28.94
12.04.2014
6.49
25.07.2014
33.70
18.11.2014
2006-2007 Final
2007-2008 Interim
Nomination facility:
Registrar & Transfer Agent:
Pursuant to the provision of Section 109A of the Companies
Act, 1956, members are entitled to make a nomination
in respect of the shares held by them. Members holding
shares in physical form and desirous of making a
nomination are requested to send their requests in Form
2B (A format is given at the end of the annual report), to
the Company’s Registrar and Transfer Agent, Sharepro
Services (India) Private Limited, Satam Estate, Cardinal
Gracious Road, Chakala, Andheri (East), Mumbai 400
099 or Sharepro Services (India) Private Limited, 912,
Raheja Centre, Free Press Journal Road, Nariman Point,
Mumbai 400 021. Members holding shares in electronic
form are requested to give the nomination request to
their respective Depository Participants directly.
Consolidation of Folios:
Members holding shares of the Company in physical
form through multiple folios are requested to consolidate
their shareholding into single folio, by sending their
original share certificates along with a request letter to
consolidate their shareholding into a single folio, to the
Registrar & Transfer Agent of the Company.
Unpaid/Unclaimed dividend:
In terms of Sections 205A and 205C of the Companies Act,
1956, the Company is required to transfer the amount
of dividend remaining unclaimed for a period of seven
years from the date of transfer to the unpaid dividend
account to the Investor Education and Protection Fund
(IEPF). Shareholders are requested to ensure that they
claim the dividend(s) from the Company before transfer
to the Investor Education and Protection Fund.
Due dates for transfer of dividend unclaimed to IEPF:
Financial Year
Due Date
for transfer
to IEPF
Unclaimed dividend
amount as on
31.3.2008
(Rupees in Lakhs)
Due Date
for transfer
to IEPF
Sharepro Services (India) Pvt. Ltd. is the Registrar &
Transfer Agent of the Company.
Shareholders, beneficial owners and depository
participants (DPs) are requested to send/deliver the
documents/correspondence relating to the Company’s
share transfer activity etc. to Sharepro Services (India)
Pvt. Ltd., Registrar and Transfer Agent of the Company
at the following addresses:
Sharepro Services (India) Pvt. Ltd.
Unit: Asian Paints Limited
Satam Estate, 3rd Floor, Above Bank of Baroda,
Cardinal Gracious Road, Chakala,
Andheri (E), Mumbai 400 099.
Tel. No. 67720300/67720351/67720353 Fax No. 2837 5646
Email: sharepro@vsnl.com
912, Raheja Centre, Free Press Journal Road,
Nariman Point, Mumbai 400 021.
Tel. No: 2288 1568, 2288 1569, 2282 5163, 2288 4527
Fax No. 2282 5484
Email: sharepro_services@roltanet.com
For the benefit of shareholders, documents will also continue
to be accepted at the following office of the Company:
6A Shantinagar, Santacruz (E)
Mumbai - 400 055
Email: investor.relations@asianpaints.com
Members are requested to quote their e-mail address,
telephone number and full address for prompt reply to
their communication.
Website: www.asianpaints.com
E-mail Id for Investor’s Grievances:
2000-2001 Final
13.57
27.09.2008
2001-2002 Interim
12.48
29.11.2008
2001-2002 Final
16.42
25.08.2009
2002-2003 Interim
13.63
22.11.2009
2002-2003 Final
22.97
17.08.2010
2003-2004 Interim
15.26
29.11.2010
2003-2004 Final
19.42
27.07.2011
The e-mail address for investor grievance is
investor.relations@asianpaints.com
The above e-mail id is disclosed by the Company on its
websites and all the various materials, correspondence,
publications and communication to the shareholders at
large.
99
Plant locations:
AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
Paint Plants:
TO THE MEMBERS OF ASIAN PAINTS LIMITED
Lal Bahadur Shastri Marg,
Bhandup, Mumbai 400 078, Maharashtra.
We have examined the compliance of conditions of
Corporate Governance by Asian Paints Limited (‘the
Company’) for the year ended 31 March, 2008 as
stipulated in Clause 49 of the Listing Agreement of the
Company entered into with the stock exchanges in
India.
Plot No. 2602, GIDC Industrial Area,
Ankleshwar 393 002, Gujarat.
Plot Nos. 50-55, Industrial Development Area,
Phase II, Patancheru 502 309
Dist. Medak, Andhra Pradesh.
A-1, UPSIDC Industrial Area, Kasna - II,
Kasna Village, Tehsil Sikandarabad,
Dist. Bulandshahr 203 207, Uttar Pradesh.
SIPCOT Industrial Park,
Plot No. E6-F13,
Sriperumbudur 602 105,
Kancheepuram District, Tamil Nadu.
In our opinion and to the best of our information
and according to the explanations given to us, and
the representations made by the Directors and the
Management, we certify that the Company has complied
with the conditions of Corporate Governance as
stipulated in the above mentioned Listing Agreement.
Phthalic Plant:
Plot No. 2702, GIDC Industrial Area,
Ankleshwar 393 002, Gujarat.
Penta Plant:
B5-B10, Sipcot Industrial Complex,
Cuddalore 607 005, Tamil Nadu.
We state that no investor grievances are pending for a
period exceeding one month against the Company as
per the records maintained by the Shareholders/Investors
Grievance Committee.
Taloja Plant:
Plot No. 3/2, MIDC, Taloja,
Raigad 410 208
Maharashtra
We further state that such compliance is neither an
assurance as to the future viability of the Company nor the
efficiency or effectiveness with which the management
has conducted the affairs of the Company.
Address for Correspondence:
Registered Office:
6A, Shantinagar, Santacruz (East),
Mumbai 400 055.
Tel: +91-(0)22-3981 8000
Fax: +91-(0)22-3981 8888
DECLARATION OF COMPLIANCE WITH THE CODE OF
CONDUCT
I hereby confirm that the Company has obtained from
all the members of the Board and Senior Management
Personnel, affirmation that they have complied with
the Code of Conduct for Board Members and Senior
Management Personnel in respect of the financial year
Ashwin Choksi
Chairman
Mumbai
9th May, 2008
100
The compliance of conditions of Corporate Governance
is the responsibility of the Company’s management.
Our examination was limited to procedures and
implementation thereof, adopted by the Company for
ensuring the compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
For Shah & Co.
Ashish Shah
Partner
Natrajan Ramkrishna
Partner
Mumbai
9th May, 2008
Registered Office: 6 A, Shanti Nagar, Santacruz (E), Mumbai - 400 055.
E-mail: investor.relations@asianpaints.com
PAYMENT OF DIVIDEND THROUGH ELECTRONIC CLEARING SERVICE (ECS)
Securities and Exchange Board of India (SEBI) has made it mandatory for all the companies to use the bank account
details furnished by the investors for distributing dividends through Electronic Clearing Service (ECS) to the investors
wherever ECS and bank details are available. In the absence of ECS facility, the companies are required to print the
bank account details, if available, on the payment instrument, for the distribution of dividends to the investors.
Sailent features of the scheme:
•
Instant Credit
This facility provides instant credit of dividend amount to your bank account electronically at no cost. ECS also
eliminates the delay in postal transit and fraudulent encashment of warrants.
•
Coverage
ECS through RBI clearing is presently available at Mumbai, New Delhi, Kolkata, Chennai, Ahmedabad, Bangalore,
Hyderabad, Kanpur, Nagpur, Jaipur, Chandigarh, Patna, Bhubaneshwar, Guwahati and Thiruvananthapuram.
•
Procedure for Credit
Under this facility, the amount of dividend payable to you would be directly credited to your bank account. Your
bank branch will credit your account and indicate the credit entry as ‘ECS transaction’ in your passbook/statement
of account.
In case ECS facility is not made available to you by the Company/their Bankers at a particular centre the dividend
amount due to you would be remitted by means of a dividend warrant which would be posted to your address with
the particulars of the bank branch and account number furnished by you duly incorporated on it.
If you wish to avail of this facility and hold shares in physical form, kindly fill in the Form printed overleaf and return
the same alongwith a xerox copy of the cancelled cheque pertaining to the Bank Account where you would like the
amount to be credited to the following address:
Cardinal Gracious Road, Chakala, Andheri (E),
Mumbai 400 099.
Tel. No. : 6772 0300, 6772 0351, 6772 0353
Please send the same to the above mentioned address to enable us to credit the future dividend entitlements to
your account through ECS.
This arrangement is subject to the RBI guidelines issued from time to time.
Bank particulars to be incorporated on warrants
If you do not wish to opt for ECS facility, we request you to provide us your bank details for printing the same on the
dividend warrants which will be mailed to you in future, in the space provided overleaf. In case you have already
furnished these particulars and if there is any change/correction in the same, kindly fill up the required details.
In case you have dematerialised your shares and hold shares in electronic form, kindly convey necessary bank
details to your Depository Participant.
All queries to be addressed to the Company’s Registrar & Transfer Agent:
SHAREPRO SERVICES (INDIA) PVT. LTD.
Tel. No. : 6772 0300, 6772 0351, 6772 0353
Fax No. : 2837 5646
E-mail : sharepro@vsnl.com
Tel. No. : 2288 1568, 2288 1569,
2282 5163, 2288 4527
Fax No. : 2282 5484
E-mail : sharepro_services@roltanet.com
E-mail Id
Telephone No.:
STD Code
Tel. No.
Unit : Asian Paints Limited
Cardinal Gracious Road, Chakala, Andheri (E),
Mumbai 400 099.
Dear Sirs,
I request you to register the bank details against my account as given below:
FOLIO NO.
:
NAME(S) OF THE HOLDERS
:
ACCOUNT TYPE
:
ACCOUNT NO.
:
SAVINGS
CURRENT
CASH CREDIT
(PLEASE TICK FOR THE FACILITY YOU OPT)
1.
Mail the warrant directly to the bank.
2.
Mail the warrant at my registered address with the bank particulars incorporated.
3*.
Directly credit to the account through Electronic Clearing System (ECS).
* If opted for ECS, kindly provide the following information:
9 DIGIT CODE NUMBER OF THE BANK AND BRANCH AS
APPEARING ON THE MICR CHEQUE ISSUED BY THE BANK
LEDGER FOLIO NO. (IF ANY) OF YOUR ACCOUNT.
(in case if you have opted for ECS, affix photocopy of your cancelled cheque here)
I hereby declare that the particulars given are correct and complete. If the payment transaction through ECS is
delayed or not effected at all for any reasons, I would not hold the Company or the Registrar & Transfer Agent
responsible.
_________________
Signature
Date: ________________
FORM 2B
[Rule 5 D of Companies (Central Govt.’s) Rules & Forms)]
NOMINATION FORM
(To be filled in by individual applying singly or jointly)
I/We ______________________________________________________________________________ the holder(s) of Equity Shares
bearing Folio Number and accruals thereon of Asian Paints Limited wish to make a nomination and do hereby
nominate the following person in whom all rights of transfer and/or amount payable in respect of shares shall vest in
the event of my/our death.
Name and Address of the nominee
Name : ______________________________________________________________________________________________________
Address : ______________________________________________________________________________________________________
____________________________________________________________________ Phone : __________________________
Date of Birth* : ______________________
________________________
(to be furnished in case
the nominee is minor)
Signature of Nominee
* The nominee is a minor whose guardian is –
Name and address of the guardian _____________________________________________________________________________
________________________________________________________________________________________________________________
________________________________________________________________________________________________________________
Signature(s) of Holder(s)
Signature : ______________________________________
(1st Holder)
Signature : __________________________________________
(1st Joint Holder, if any)
Name
: ______________________________________
Name
: __________________________________________
Address
: ______________________________________
Address
: __________________________________________
______________________________________
Date
: ______________________________________
__________________________________________
Date
: __________________________________________
Signature of two witnesses
Name and Address
Signature and date
1.
2.
Instructions :
1. The nomination can be made by individuals only applying/ holding shares/ on their own behalf singly or jointly
upto two persons. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu
Undivided Family, holder of Power of Attorney cannot nominate. If the securities are held jointly, all joint holders
will sign the nomination form.
2. A minor can be nominated by holders of shares/and in that event the name and address of the Guardian shall
be given by the holders.
3. The nominee shall not be a trust, society, body corporate, partnership firm, karta of Hindu Undivided Family or a
power of attorney holder. A non-resident Indian can be a nominee on repatriable basis, provided RBI approval
granted to the nominee is registered with the Company.
4. Nomination shall stand rescinded upon transfer of shares.
5. Transfer of shares/in favour of a nominee and repayment of amount of deposits to nominee shall be valid
discharge by a Company against the legal heir.
FOR OFFICE USE ONLY
Nomination Regn. No. : __________________________
Checked by :____________________________
Date of Registration
Signature
: __________________________
: ___________________________
INSTRUCTIONS
1.
Nomination per Folio
Nomination for only one folio can be made on this Form. In case you have many folios, then you may take a
photocopy of this Form and nominate separately.
2.
Signatures
The sole/joint holders should sign as per the specimen signature recorded with the Company. Otherwise, the
Form is liable to be rejected.
3.
Change in Composition of the Account
Nomination stand rescinded upon transfer of shares. Whenever the shares in the given folio are transferred/
transposed/ transmitted/ dematerialised/ amalgamated with some other folio, then this nomination stands
void. A new Nomination Form will have to be filled in by the person(s) in whose name(s) the shares have been
transferred/ transposed/ transmitted/ amalgamated.
4.
Electronic Holding
The nomination given in the Form would be considered for the physical holding only. In case securities are
held in electronic form, then the holder(s) have to approach the Depository Participant for registering their
nomination.
5.
Accruals and Acquisitions
Once a nomination is registered by a Company for a given folio, the same is valid for all future accruals and
acquisitions made by the holder(s) in that folio unless notified to the contrary by the holder(s).
6.
Validity of Nomination
The nomination made through Form 2B will be considered valid and recognised by the Company if the nomination
made by the holder(s) of the shares/is registered with the Company before the death of the holder(s) of the
shares.
7.
Entitlement of Nominee
The nominee will be entitled to all the rights in the shares of the Company only in the event of death of the Sole/
all holders in the account. The nominee will be required to approach the Company for transmitting the securities
in his/her name and will be required to produce the death certificate of the holder(s), the share certificates and
proof of identity as required by the Company.
8.
Date of Execution
Kindly note that nomination being a legal document should be dated by the nominator and the witnesses
certifying that the Form has been signed by the nominator in their presence. Furthermore the date of execution
on the Nomination Form should match with the date of witnesses witnessing the document.
All queries to be addressed to the Company’s Registrar & Transfer Agent:
Tel. No. : 6772 0300, 6772 0351, 6772 0353
Fax No. : 2837 5646
E-mail : sharepro@vsnl.com
Tel. No. : 2288 1568, 2288 1569,
2282 5163, 2288 4527
Fax No. : 2282 5484
E-mail : sharepro_services@roltanet.com
Notice
NOTICE is hereby given that the SIXTY-SECOND ANNUAL
GENERAL MEETING OF ASIAN PAINTS LIMITED will be held at
Patkar Hall, Nathibai Thackersey Road, New Marine Lines,
Mumbai 400 020, on Tuesday, 24th June, 2008, at 3.00 p.m.
to transact the following business:
constituted, or as the case may be, the Directors
or any Committee(s) thereof, assembled at the
Board collectively.
ii.
Ordinary Business:
1.
To consider and declare payment of final dividend
and confirm the interim dividend of Rs. 6.50 per equity
share, declared and paid during the financial year
3.
To appoint a Director in place of Ms. Tarjani Vakil, who
retires by rotation and, being eligible, offers herself for
re-appointment.
4.
Issue of further pari passu shares not to affect the
right of shares already issued
To receive, consider and adopt the accounts for the
year ended 31st March, 2008 together with the Reports
of the Board of Directors and Auditors’ thereon.
2.
The rights conferred upon the holders of the
shares of any class, issued with preferred or other
rights shall not unless otherwise expressly provided
by the terms of the issue of the shares of that class
be deemed to be varied by the creation or issue
of further shares ranking pari passu therewith.
iii.
To appoint a Director in place of Mr. Deepak
Satwalekar, who retires by rotation and, being eligible,
offers himself for re-appointment.
6.
To appoint Auditors of the Company and to fix their
remuneration and in this regard to consider and if
thought fit, to pass with or without modification(s), the
following resolution as an Ordinary Resolution:
Notwithstanding anything contained in Article
21, the Board of Directors may in its absolute
discretion refuse any application for subdivision or consolidation of share certificate(s) or
debenture certificate(s) in denominations of less
than the marketable lot except when such subdivision or consolidation is required to be made
to comply with a statutory provision or an order of
a competent Court or Law.
“RESOLVED THAT M/s. Shah & Co., Chartered
Accountants and M/s. BSR & Associates, Chartered
Accountants, be and are hereby appointed as Joint
Statutory Auditors of the Company, to hold office from
the conclusion of this Annual General Meeting until
the conclusion of the next Annual General Meeting of
the Company on such remuneration as shall be fixed
by the Board of Directors.”
iv.
The existing Article 53A be and is hereby
deleted.
v.
The existing Article 56 be and is hereby substituted
as follows:
Board may refuse to register transfer and notice
of such refusal
The Board may at its own, absolute and
uncontrolled discretion, decline to register or
acknowledge any transfer of shares in any cases
in which the Company has a lien upon the shares
or any of them, or whilst any moneys in respect
of the shares desired to be transferred or any of
them remain unpaid and such refusal shall not be
affected by the fact that the refused transferee
is already a member. If the Company refuses to
register a transfer of any share or transmission of
any right therein, the Company shall within two
months from the date on which the instrument of
transfer or intimation of transmission was lodged
with the Company, send notice of refusal to the
transferee and transferor or to the person giving
intimation, as the case may be.
Special Business:
7.
To consider and if thought fit, to pass with or without
modification(s), the following resolution as a Special
Resolution:
“RESOLVED THAT pursuant to the provisions of Section
31 and all other applicable provisions, if any, of the
Companies Act, 1956 or any rules or regulations
thereunder (including any statutory modification(s) or
re-enactment thereof, for the time being in force), and
subject to such approvals as may be necessary, the
Articles of Association (“AOA”) of the Company be
and is hereby amended, altered and/or substituted
in the manner and to the extent as is set out herein
below:
i.
The existing Article 21A be and is hereby
substituted as under.
Power of Board of Directors to regulate subdivision or consolidation
To appoint a Director in place of Mr. Dipankar Basu,
who retires by rotation and, being eligible, offers
himself for re-appointment.
5.
After the existing Article 9, the following new
Article to be numbered Article 9A be and is
hereby inserted as follows:
vi.
The existing Article 60 be and is hereby deleted.
vii. The existing Article 64 be and is hereby deleted.
Under the existing Article 2 of the AOA of the
Company, the definition of the term Board or
Board of Directors be and is hereby substituted as
follows:
viii. After the existing Article 65, the following new
Article(s) to be numbered Articles 65A to 65F be
and are hereby inserted as follows:
65A. Notwithstanding
anything
contained
in these Articles, the Company shall be
entitled to dematerialise its securities and
to offer securities in a dematerialised form
pursuant to the Depositories Act, 1996.
“Board” or “Board of Directors”
means a meeting of the Directors of the Board
of the Company or any Committee(s) constituted
thereof for any purpose duly called and
.......
i
65B. Option for investors.
in the AOA of the Company and to file such forms,
applications, documents with statutory authorities
and perform all such other acts, deeds and things as
may be necessary or desirable and to sign, execute
any application, forms, undertaking or confirmation
as may be required by the Registrar of Companies,
Maharashtra.”
Every person subscribing to securities offered
by the Company shall have the option to
receive the security certificates or to hold the
securities with a depository. Such a person who
is a beneficial owner of the securities can at
any time opt out of the depository, if permitted
by the law, in respect of any security in the
manner provided by the Depositories Act and
the Company shall in the manner and within the
time prescribed, issue to the beneficial owner
the required certificates of the securities. If a
person opts to hold his security with a depository,
the Company shall intimate such depository the
details of allotment of the security, and on the
receipt of the information, the depository shall
enter in its record the name of the allottee as
the beneficial owner of the security.
8.
314 and other applicable provisions, if any, of the
Companies Act, 1956 and rules and regulations
thereunder, or any statutory modification(s) or any
amendment or substitution or re-enactment thereof
and subject to the approval of the Central Government,
consent of the Company be and is hereby accorded
to the revision of the remuneration payable to
Mr. Jalaj Dani (a relative of Company’s Directors,
Mr. Ashwin Dani and Mr. Hasit Dani) holding an office
or place of profit under the Company as President
– International Business Unit, at a monthly salary of
Rs. 4,15,000 (Rupees Four Lakhs Fifteen Thousand
only) and other allowances, perquisites, benefits
and amenities as applicable to the Company’s
Presidents in the same grade, with effect from
1st April, 2008.
65C. Rights of Depositories and Beneficial Owners.
Notwithstanding anything to the contrary
contained in the Act or these Articles, a depository
shall be deemed to be the registered owner for
the purpose of effecting transfer of ownership
of security on behalf of the beneficial owner.
Save as otherwise provided, the depository
as the registered owner of the securities shall
not have any voting rights or any other right in
respect of the securities held by it. Every person
holding securities in the name of the Company
and whose name is entered as the beneficial
owner in the records of the depository shall be
deemed to be a member of the Company. The
beneficial owner of the securities shall be entitled
to all the rights and benefits and be subject to
all the liabilities in respect of his securities which
are held by a depository.
RESOLVED FURTHER THAT the Board be and is hereby
authorised to make and submit applications to the
Central Government or any other statutory authority
as may be required, settle any question, difficulty or
doubt, that may arise in giving effect to this resolution,
do all such acts, deeds, matters and things and
sign and execute all documents or writings as may
be necessary, proper or expedient for the purpose
of giving effect to this resolution and for matters
concerned therewith or incidental thereto.”
65D. Service of documents.
Notwithstanding anything contained in the
Act or these Articles to the contrary, where
securities are held in a depository, the records
of the beneficial owner may be served by
such depository on the Company by means of
electronic mode or by delivery of floppies or
discs.
9.
Nothing contained in Section 108 of the Act or
these Articles, shall apply to transfer of securities
effected by a transferor and transferee both of
whom are entered as beneficial owners in the
records of the depository.
securities
dealt
with
by
To consider, and, if thought fit, to pass with or without
Resolution:
thereunder, or any statutory modification(s) or
any amendment or substitution or re-enactment
thereof and subject to the approval of the Central
Government, consent of the Company be and is
hereby accorded to the revision of the remuneration
payable to Mr. Manish Choksi (a relative of Company’s
Director, Mr. Mahendra Choksi) holding an office
or place of profit under the Company as ChiefCorporate Strategy & CIO, at a monthly salary of
Rs. 4,15,000 (Rupees Four Lakhs Fifteen Thousand
Only) and other allowances, perquisites, benefits and
amenities as applicable to the Company’s Presidents
in the same grade, with effect from 1st April, 2008.
65E. Transfer of Securities.
65F. Allotment of
Depository.
To consider and if thought fit, to pass with or without
Resolution:
a
Notwithstanding anything contained in the Act
or these Articles, where securities are dealt with
by a depository, the Company shall intimate the
details thereof to the depository immediately on
allotment of such securities.
RESOLVED FURTHER THAT the Board of Directors (which
shall include Committee(s) of the Board of Directors or
a representative authorised by the Board) be and are
hereby severally authorised to carry out the aforesaid
amendments, alteration, substitutions and/or deletion
.......
ii
the dividend will be payable on the basis of beneficial
ownership as at the close of 13th June, 2008, as per
the details furnished by National Securities Depository
Limited (NSDL)/Central Depository Services (India)
Limited (CDSL) for the purpose as on that date.
10. To consider, and, if thought fit, to pass with or without
Resolution:
6.
thereunder, or any statutory modification(s) or
any amendment or substitution or re-enactment
thereof and subject to the approval of the Central
Government, consent of the Company be and is
hereby accorded to revision of the remuneration
payable to Ms. Nehal Vakil (a relative of Company’s
Director Mr. Abhay Vakil) holding an office or place
of profit under the Company as Manager- Business
Process Renovation, at a monthly salary of Rs. 56,800
(Rupees Fifty Six Thousand Eight Hundred only) and
other allowances, perquisites, benefits and amenities
as applicable to the Company’s employees in the
same grade, with effect from 1st April, 2008.
NOTES:
1.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE
ANNUAL GENERAL MEETING MAY APPOINT A PROXY TO
ATTEND AND, ON A POLL, VOTE INSTEAD OF HIMSELF/
HERSELF. A PROXY NEED NOT BE A MEMBER. PROXIES
IN ORDER TO BE EFFECTIVE MUST BE RECEIVED BY THE
COMPANY AT ITS REGISTERED OFFICE NOT LATER THAN
FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT OF
THE MEETING.
2.
Explanatory Statement pursuant to Section 173(2) of
the Companies Act, 1956, in respect of the Special
Business to be transacted at the Annual General
Meeting as set out in the Notice is annexed hereto.
3.
The documents referred to in the proposed resolutions
are available for inspection at the Registered Office of
the Company on working days, during working hours
between 11.00 a.m to 1.00 p.m, except holidays.
4.
The Register of Members and Share Transfer Books of
the Company will remain closed from 14th June, 2008
to 24th June, 2008 (both days inclusive).
5.
Dividend recommended by Directors, if approved by
the Members at the Annual General Meeting, will be
paid after 25th June, 2008 to those members whose
names appear on the Register of Members as on 24th
June, 2008. In respect of shares held in electronic form,
Members holding shares in physical form are requested
to notify/send the following to the Company’s
Registrar and Transfer Agent at: Sharepro Services
(India) Pvt. Ltd., Unit: Asian Paints Limited, 912, Raheja
Centre, Free Press Journal Road, Nariman Point,
Mumbai 400 021 or Sharepro Services (India) Pvt.
Limited, Satam Estate, 3rd Floor, Above Bank of
Baroda, Cardinal Gracious Road, Chakala, Andheri
(East), Mumbai 400 099 at the earliest but not later
than 13th June, 2008.
•
Any change in their address/mandate/bank
details; and
•
Particulars of their bank account, in case the
same have not been sent earlier.
7.
Members holding shares in the electronic form are
advised to inform changes in address/bank mandate
directly to their respective Depository Participants. The
address/bank mandate as furnished to the Company
by the respective Depositories viz., NSDL and CDSL will
be printed on the dividend warrants.
8.
Members desirous of making a nomination in respect
of their shareholding in the Company, as permitted
under Section 109A of the Companies Act, 1956, are
requested to fill up the form annexed as a part of the
Annual Report and send the same to the office of the
Registrar and Transfer Agent of the Company.
9.
Members are requested to hand over the enclosed
Attendance Slip, duly signed in accordance with their
specimen signature(s) registered with the Company
for admission to the meeting hall. Members who hold
shares in dematerialised form are requested to bring
their Client ID and DP ID Numbers for identification.
10. Corporate Members are requested to send to
the Company’s Registrar & Transfer Agent, a duly
certified copy of the Board Resolution authorising
their representative to attend and vote at the Annual
General Meeting.
11. In terms of Sections 205A and 205C of the Companies
Act, 1956, the amount of dividend remaining
unclaimed or unpaid for a period of seven years from
the date of transfer to the unpaid dividend account
is required to be transferred to the Investor Education
and Protection Fund (IEPF). Accordingly, in the year
2008-2009, the Company would be transferring the
unclaimed or unpaid Final Dividend for the financial
year ended 31st March, 2001 and Interim Dividend
for the financial year ended 31st March, 2002, to the
Investor Education and Protection Fund on or before
27th September, 2008 and 29th November, 2008,
respectively. Shareholders are requested to ensure
that they claim the dividend(s) from the Company
before transfer of the said amounts to the Investor
Education and Protection Fund.
12. Information required under Clause 49 IV G of the Listing
Agreement (relating to Corporate Governance) with
respect to the Directors retiring by rotation and being
eligible seeking re-appointment is as under:
.......
iii
Profile of the
Director
Date of joining
the Board
Directorships
and
Committee
Memberships
in other
Companies
Ms. Tarjani Vakil
Mr. Dipankar Basu
Mr. Deepak Satwalekar
Ms. Tarjani Vakil has contributed
immensely for almost 40 years in
the field of Development Banking.
She retired in October 1996 as
Chairperson and Managing Director
of Export - Import Bank of India
(‘EXIM Bank”). Ms. Vakil was actively
involved in extensive interaction with
multilateral agencies for initiation of
an informed annual dialogue among
heads of Export Credit Agencies in
Asia and Australia. Ms. Vakil has been
a member consultant for carrying a
study of the feasibility for establishment
of an Export Credit Guarantee facility
for GCC Countries for establishment
of Export-Import Bank of Malaysia and
other developing countries of Asia
and Africa. Ms. Vakil has won several
awards including Mahila Shiromani,
CEO of the Year, Woman of the
Year, etc. She was also ranked as the
highest woman official in Banking in
Asia and named in the 50 world - class
women executives in the 1996 Survey
conducted by KPMG Peat Marwick,
USA. After retirement, Ms. Vakil, is
serving as a Director on a number of
Body Corporate(s).
Mr. Dipankar Basu retired as Chairman,
State Bank of India (SBI) in August 1995.
As Chairman of India’s largest Bank,
he concurrently chaired the Boards of
10 commercial banking subsidiaries
of SBI (seven in India and one each in
UK, Canada and USA) and three nonbanking subsidiaries. Joining SBI in 1956,
after obtaining a Master’s degree
in Economics from Delhi University,
Mr. Basu spent his entire professional
career with SBI, serving in India
as well as in the U K. In India, he
spearheaded the Bank’s entry into
investment banking and mutual
fund businesses and was responsible
for setting up SBI Capital Markets
Limited, and SBI Mutual Fund. While
serving as Chairman, SBI, Mr. Basu
served on the Boards of several apex
financial institutions of India (e.g. IDBI,
Export Import Bank of India, General
Insurance Corp. of India Ltd., National
Bank for Agriculture and Rural
Development, etc.) as also on the
Governing Boards of national level
Banking Association and Institutes.
After retirement Mr. Basu, has been
serving on the Board of several Body
Corporate(s).
15th April, 2000
Mr. Deepak Satwalekar is a B.Tech. from
the Indian Institute of Technology (IIT),
Bombay and has completed his post
graduation in business administration
from
the
American
University,
Washington DC. He was appointed as
a Dy. Managing Director of HDFC in
1990 and became Managing Director
in 1993. Presently he holds the position
of Managing Director & CEO of HDFC
Standard Life Insurance Co. Ltd.
Has been a consultant to the World
Bank, the Asian Development Bank,
United States Agency for International
Development (USAID) and the United
Nations Centre for Human Settlement
(HABITAT). He was involved in policy
work as a member of the Steering
Committee on Urban Infrastructure
and Housing for the Ninth Five
Year Plan of the Govt. of India and
Chairman of the Working Group on
avoidance of conflict of interest in the
financial services sector set up by the
Reserve Bank of India.
• Securities Trading Corporation of
India Limited
• Housing Development Finance
Corporation Limited
Member - Investors Grievance
Committee
1st December, 1998
• i-flex Solutions Limited
Member - Audit Committee
Chairperson - Shareholder
Grievance Committee
• Mahindra Intertrade Limited
Chairperson - Audit Committee
• Deepak Fertilizers &
Petrochemicals Corporation
Limited
Chairman – Shareholders
Grievance Committee
• Aditya Birla Nuvo Limited
Chairperson – Audit Committee
• Rain CII Carbon (India) Limited
• Alkyl Amines Chemicals Limited
• Peerless Securities Limited
• Idea Cellular Limited
• Peerless General Finance &
Investment Company Limited
30th May, 2000
• Infosys Technologies Limited
Chairman - Audit Committee
• Nicholas Piramal India Limited
Chairman – Investors Grievance
Committee
• HDFC Standard Life Insurance
Company Limited
• Entertainment Network (India)
Limited
• Tata Power Company Limited
• Saregama India Limited
• STCI Primary Dealer Limited
• Chambal Fertilizers & Chemicals
Limited
• Standard Chartered - Capital STCI
Capital Markets Limited
For Asian Paints Limited
None of the above Directors hold any shares of the
Company either in their own name or on behalf of others
on beneficial basis.
The Board of Directors recommend the re-appointment
of Ms. Tarjani Vakil, Mr. Dipankar Basu and Mr. Deepak
Satwalekar, as Directors of the Company. Excepting,
Ms. Tarjani Vakil, Mr. Dipankar Basu and Mr. Deepak
Satwalekar, none of the Directors of the Company may be
deemed to be concerned or interested in this item.
Registered Office:
6A, Shantinagar
Santacruz (East)
Mumbai 400 055
9th May, 2008
.......
iv
Jayesh Merchant
Company Secretary
at its Registered Office on any working day of the Company
between 11.00 a.m and 1.00 p.m upto the date of the
Meeting.
ANNEXURE TO NOTICE
EXPLANATORY STATEMENT: (Pursuant to Section 173(2) of
the Companies Act, 1956)
None of the Directors of your Company are concerned or
interested in the said Resolution, except as a member, if
any, of the Company.
Item No. 7:
The enactment of the Depositories Act, 1996, (“The Act”)
brought about changes in the Companies Act, 1956 as well
as Securities Contracts (Regulation) Act, 1956, in respect of
transferability of the securities of public listed Companies.
Consequent to the said amendment, the Act introduced
a concept of free transferability of shares and debentures
of public listed companies. Accordingly, listed Companies
cannot refuse to transfer its shares unless there is a lien on
its shares or the transfer requests are not lodged as per the
rules laid down by the Securities Exchange Board of India
(SEBI) or in accordance with the Listing Agreement.
Item No. 8:
At the Fifty-ninth Annual General Meeting of the
Company held on 27th June, 2005, the shareholders
had, pursuant to the provisions of Section 314 and other
applicable provisions, if any, of the Companies Act, 1956,
accorded their approval through a Special Resolution
to Mr. Jalaj Dani, a relative of the Company’s Directors,
Mr. Ashwin Dani and Mr. Hasit Dani, to hold and continue
to hold office or place of profit under the Company
as its President - International Business Unit at the salary,
allowances, perquisites, benefits, and amenities as
approved by the shareholders effective 27th June, 2005.
As the salary, allowances and perquisites, benefits and
amenities as approved by shareholders and payable to
Mr. Jalaj Dani exceeded the monetary ceiling prescribed
under Section 314 (1B) of the Companies Act, 1956,
approval of the Central Government was also obtained
for the same by its letter with reference No.3/38/2005-CL.VII
dated 26th October, 2005.
The Articles of Association (“AOA”) of your Company have
to be in conformity with the aforesaid amendments. It is
therefore, proposed to amend the AOA of your Company
in order to remove certain restrictions on transfers/
transmissions embodied in it and to add certain provisions
in respect of the shares held in dematerialised form in the
following manner:
•
Article 2 of the AOA pertaining to the definition of
Board or Board Members is proposed to be amended
in order to include Committee(s) of the Board under
the said definition.
•
Article 9A is proposed to be inserted, which states that
the rights conferred upon the shareholders holding
shares in the Company, which may include right to
vote, to receive dividend, etc., shall not be affected
or varied as a result of issue of fresh shares ranking pari
passu with the existing shares.
•
The existing Article 21A which imposes certain
restriction on sub-division or consolidation of shares, is
proposed to be amended to bring it in conformity with
the provisions contained in the Companies Act, 1956.
•
Articles 53A, 56, 60 and 64 of the AOA contain certain
restrictions as to the transferability of shares of the
Company. Accordingly, they are proposed to be
amended/deleted as mentioned in the resolution.
•
Mr. Jalaj Dani holds a Bachelor’s Degree in Chemical
Engineering from the University of Wisconsin, USA. He has
obtained a post graduate degree in Chemical Engineering
from Massachusetts Institute of Technology, USA and has
working experience in the field of specialty chemicals. In
the course of his association with the Company, Mr. Jalaj
Dani, has made significant contribution in achieving the
Company’s growth plans and particularly in leading,
managing and developing international business and
the overseas subsidiaries. Mr. Jalaj Dani spearheads the
operations at International Business Unit and also plays
a major role in the Corporate Communication as well as
the Corporate Social Responsibilities. His participation in
mergers and acquisitions, both domestic and international
in the past few years has been significant.
In view of the contributions by Mr. Jalaj Dani towards the
progress of the Company, his increased responsibilities and
the overall increase in the compensation payable as per
industry standards, there is a need to review and revise the
remuneration payable to him. Also, the proposed revision
would align the remuneration payable to Mr. Jalaj Dani to
the remuneration payable to other Senior Management
Personnel in the same Management Cadre within the
Company.
Articles 65A to Article 65F are proposed to be inserted
subsequent to Article 65. These Articles contain
provisions in respect of the shares held in dematerialised
form in accordance with the Depositories Act, 1996.
As per the provisions of the Companies Act, 1956,
amendment(s) to the Articles of Association of the
Company require the approval of the Shareholders in a
General Meeting, by way of a Special Resolution.
The Board of Directors at their meeting held on
9th May, 2008, on recommendation by the Remuneration
Committee, approved the proposed revision in the
remuneration payable to Mr. Jalaj Dani. The details of the
salary, allowances, perquisites, benefits and amenities
proposed to be paid to Mr. Jalaj Dani with effect from
Your Directors recommend the Special Resolution as set
out in the Notice for approval of the shareholders.
A copy of the AOA of the Company together with the
proposed alterations, deletions and/or modification(s) is
available for inspection by the Members of the Company
.......
v
perquisites, benefits, and amenities as approved by the
shareholders with effect from 27th June, 2005. As the
salary, allowances and perquisites, benefits and amenities
as approved by shareholders and payable to Mr. Manish
Choksi exceeded the monetary ceiling prescribed under
Section 314 (1B) of the Companies Act, 1956, approval of
the Central Government was also obtained for the same
by its letter with reference No.3/41/2005-CL.VII dated 26th
October, 2005.
1st April, 2008, as applicable to employees in the same
grade are as follows:
(in Rupees)
Particulars
Salary (Per month)
Proposed
Remuneration
4,15,000
House Rent Allowance (Per month)
1,50,000
Furnishing Allowance (Per annum)
2,00,000
Leave Travel Allowance (Per annum)
2,00,000
Performance Incentive (Per annum)
50,00,000 *
Medical Reimbursement (Per annum)
Provident Fund and Superannuation
benefits (Per annum)
Company’s Car with driver
Mr. Manish Choksi is a bachelor of Chemical Engineering
from the University of Houston, USA. He obtained his
Masters of Business Administration with specialisation
in Entrepreneurial Management and MIS from the
same University. In the course of his association with
the Company, Mr. Manish Choksi has made significant
contribution in achieving the Company’s growth plans,
more particularly in the critical areas of implementation
of Supply Chain Management solution as well as the
Enterprise Resource Planning software and demonstrated
maturity and foresight in identifying opportunities and
guiding the Company’s e-business initiatives. Mr. Manish
Choksi has worked exceptionally well while executing his
role in the area of strategic planning and integration of IT
with the business of the Company.
15,000
As per the
rules of the
Company
Yes
*Not exceeding Rs.50,00,000 per annum.
Increment: On the basic salary on annual basis not
exceeding 20% of the basic salary.
Perquisites: As per the rules of the Company payable in his
grade but not lower than as stated above.
Performance Incentive: As per the rules of the Company
payable in his grade but subject to the ceiling as stated
above and at the discretion of the Board of Directors of
the Company.
In view of the contributions by Mr. Manish Choksi towards
the progress of the Company, his increased responsibilities
and the overall increase in the compensation payable as
per industry standards, there is a need to review and revise
the remuneration payable to him. Also, the proposed
revision would align the remuneration payable to
Mr. Manish Choksi to the remuneration payable to other
Senior Management Personnel in the same Management
Cadre within the Company.
Since the proposed increase in the remuneration payable
to Mr. Jalaj Dani would exceed the monetary ceiling
prescribed under Section 314 (1B) of the Companies Act
1956, if approved by the shareholders, it would be necessary
to obtain the approval of the Central Government.
Necessary application under Section 314 (1B) and other
applicable provisions, if any, of the Companies Act, 1956
for obtaining the approval of the Central Government will
be preferred after obtaining consent of the shareholders.
Committee approved the proposed revision in the
remuneration payable to Mr. Manish Choksi. The details of
the salary, allowances, perquisites, benefits and amenities
proposed to be paid to Mr. Manish Choksi with effect from
1st April, 2008, as applicable to employees in the same
grade are as follows:
(in Rupees)
Accordingly, your Directors recommend the Special
Resolution as set out under Item No. 8 in the Notice for
approval of the shareholders under Section 314 and other
applicable provisions, if any, of the Companies Act, 1956.
Excepting Mr. Ashwin Dani and Mr. Hasit Dani no other
Director of the Company may be deemed to be concerned
or interested in the Special Resolution at Item No. 8 of this
Notice, except as a member, if any, of the Company.
Particulars
Salary (Per month)
Proposed
Remuneration
4,15,000
Item No. 9:
House Rent Allowance (Per month)
1,50,000
accorded their approval through a Special Resolution to
Mr. Manish Choksi, a relative of the Company’s Director,
Mr. Mahendra Choksi, to hold and continue to hold
office or place of profit under the Company as its ChiefCorporate Strategy & CIO, at the salary, allowances,
Furnishing Allowance (Per annum)
2,00,000
Leave Travel Allowance (Per annum)
2,00,000
50,00,000 *
Company’s Car with driver
*Not exceeding Rs. 50,00,000 per annum
.......
vi
15,000
As per the
rules of the
Company
Yes
the salary, allowances, perquisites, benefits and amenities
proposed to be paid to her with effect from 1st April, 2008,
as applicable to employees in the same grade are as
follows:
Perquisites: As per the rules of the Company payable in his
(in Rupees)
payable in his grade but subject to the ceiling as stated
the Company.
Particulars
Proposed
Remuneration
56,800
Salary (Per month)
to Mr. Manish Choksi would exceed the monetary ceiling
prescribed under Section 314 (1B) of the Companies Act
Flexible Grade Allowance (Per annum)
6,75,000
5,00,000 *
15,000
As per the rules
of the Company
* Not exceeding Rs.5,00,000 per annum.
Perquisites: As per the rules of the Company payable in her
Resolution as set out under Item No.9 in the Notice for
payable in her grade but subject to the ceiling as stated
the Company.
Excepting Mr. Mahendra Choksi, no other Director of the
Company may be deemed to be concerned or interested
in the Special Resolution at Item No. 9 of this Notice, except
as a member, if any, of the Company.
to Ms. Nehal Vakil would exceed the monetary ceiling
prescribed under Section 314 (1B) of the Companies Act,
Item No. 10:
accorded their approval through a Special Resolution
to Ms. Nehal Vakil, a relative of the Company’s Director,
Mr. Abhay Vakil, to hold and continue to hold office or place
of profit under the Company as Finance Executive, at the
salary, allowances, perquisites, benefits, and amenities as
approved by the shareholders effective 27th June, 2005.
As the salary, allowances and perquisites, benefits and
amenities as approved by shareholders and payable to
Ms. Nehal Vakil, exceeded the monetary ceiling prescribed
under Section 314 (1B) of the Companies Act, 1956, approval
of the Central Government was also obtained for the same
by its letter with reference No. 3/39/2005-CL.VII dated
24th October, 2005.
Resolution as set out under Item No. 10 in the Notice for
Excepting Mr. Abhay Vakil, no other Director of the
Company may be deemed to be concerned or interested
in the Special Resolution at Item No. 10 of this Notice,
except as a member, if any, of the Company.
For Asian Paints Limited
Ms. Nehal Abhay Vakil has obtained a degree of Bachelor of
Arts in Finance from the Michigan State University of USA. The
annual increments and performance incentives, currently
being paid to Ms. Nehal Vakil are not commensurate
with the capabilities and potential demonstrated in the
performance of her functional responsibilities.
Jayesh Merchant
Company Secretary
Registered Office:
6A, Shantinagar
Santacruz (East)
Mumbai 400 055
9th May, 2008
Committee, approved the proposed revision in the
remuneration payable to Ms. Nehal Vakil. The details of
.......
vii
NOTES
Experience what colour can do for your home
Asian Paints Limited, 6A, Shantinagar, Santacruz (East), Mumbai - 400 055.
www.asianpaints.com

Schedules Forming Part of the Accounts - domain-B

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