The year 2013-14 marked a subtle turnaround in the fortunes of the global economy.Europe witnessed greater financial stability and there were signs of revival in a numberof its constituent nations led by Germany and U.K. The U.S. too saw better employmentnumbers and an improvement in its growth prospects which prompted its leaders to considerwithdrawing the easy money policies that bolstered the economy. Emerging markets howeverexperienced some deceleration in their growth.
On the domestic front the economy seems to have finally bottomed out. After dipping to4.5% during the previous year GDP growth recovered to grow at 4.9% largely due to therevival in agriculture growth. However the volatile rupee stubborn inflation andstagnant industrial production continued to be a drag on the economy. Looking ahead thereare indications of a turnaround on account of better global growth an improvement inexport competitiveness and the implementation of recently approved investment projects.Additionally the formation of a strong and stable government at the Centre is expected toaugur well for Indias economy due to speedier implementation of progressivepolicies.
Until now stagnant domestic growth hurt consumer sentiments which were reflected insubdued demand and consumption. The paint industry was faced with hardships such as anoverall sluggish economy excessive rainfall in parts of Southern India and slowdown inconstruction in some states. Further the inflationary impact on raw material priceslargely due to the depreciation in Rupee led to frequent price increases.
Domestic demand for your Companys products was comparatively resilient althoughnot as good as expected. Your Companys product mix continued to improveconsistently. Demand from the rural areas was relatively better than the urban markets andwhile retail demand was encouraging the industrial market remained stagnant.
At the international business level despite a persistently challenging globalenvironment some markets where your Company operates showed signs of recovery.
A tight control on expenses and lower raw material inflation helped the internationaloperations of the Group to deliver a strong performance despite difficult marketconditions. Your Companys wholly owned subsidiary in Mauritius Asian Paints(International) Limited has signed an agreement with shareholders of Kadisco ChemicalIndustry PLC. Ethiopia to acquire either directly or through its subsidiaries 51% of itsshare capital.
Your Company always believed that keeping a keen ear to customers requirement andfeedback goes a long way.We have kept the customer at the center of all our strategies andthis approach of Customer Centricity is paying rich dividends. Your Voice onour website is the blog where people can interact with the company directly and givefeedback. The Online Colour Lab is an excellent interaction cum feedback forumwhich was started last year where customers discuss various aspects of the brand with us.This is the unique first of its kind in India platform which allows the brand to interactwith the customer in the digital space other than the social media.
Technology has been the backbone of innovation at Asian Paints. The endeavour at ourResearch and Technology labs is to provide Technology to solve problems and offerinnovative products to customers. Last year your Company launched a range of new productsoffering new and comprehensive solutions to customers on dampnessundulations and cracks in various substrates under the Smart Care range.Heralding new technology platforms for top end premium products has been another foray forthe Company and most of the top end new products like Royale Aspira andUltima Protek offer unique possibilities to the customers and clearly standout to be the best products across the globe. Your Company is continuously investing inTechnology both with respect to people and equipment and we feel this will be a strongdifferentiator in the Industry in future.
Last year your Company embarked on a new journey of transformation by expanding itsofferings to cater to the changing perspectives of home aesthetics. The acquisition ofSleek Group marked Asian Paints maiden foray into the contemporary Home Improvementsegment. Your Companys endeavour and journey to enable customers fulfil theiraspiration of beautiful homes continued during the year and has identified bath and washsegment as another opportunity area. Your Company has entered into a binding agreement inMay 2014 with Ess Ess Bathroom Products Pvt. Ltd. to acquire its entire front end salesbusiness including brands network and sales infrastructure. Our aim to partner withcustomers in their endeavour to fulfil their aspirations of transforming their houses intohomes the ordinary into the extraordinary and the me-too into my exclusive spaces willcontinue.
The drive for greening of your Companys product portfolio continues and hasinfact accelerated with the objective of making all our premium range of productscompliant to the Green Seal Standard GS-11.
The Companies Act 2013 applicable now has brought in provisions which require thecompanies to adhere to stringent corporate governance norms. I am proud to state that yourCompany has always followed the highest standards of Corporate Governance and considers itas more of an ethical requisite than a regulatory necessity.
With astute guidance from our Board of Directors the unflinching support of ourstakeholders and the loyalty of our customers we are optimistic of our abilities to availof the opportunities and address the challenges that the future presents us.