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Asian Paints Ltd.

BSE: 500820 Sector: Consumer
NSE: ASIANPAINT ISIN Code: INE021A01026
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OPEN 3290.10
PREVIOUS CLOSE 3307.70
VOLUME 76093
52-Week high 3588.05
52-Week low 2261.45
P/E 102.85
Mkt Cap.(Rs cr) 314,100
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3290.10
CLOSE 3307.70
VOLUME 76093
52-Week high 3588.05
52-Week low 2261.45
P/E 102.85
Mkt Cap.(Rs cr) 314,100
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Asian Paints Ltd. (ASIANPAINT) - Director Report

Company director report

Dear Members

The Board of Directors are pleased to present the 75 thIntegrated Annual Report of the Company along with the audited financial statements(standalone and consolidated) for the financial year 2020-21.

FINANCIAL RESULTS

RESULTS FOR THE FINANCIAL YEAR

Standalone

Consolidated

2020-21 2019-20 Growth (%) 2020-21 2019-20 Growth (%)
Revenue from Operations 18516.86 17194.09 7.7% 21712.79 20211.25 7.4%
Earning Before Interest Taxes Depreciation and Amortisation 4859.51 4214.58 15.3% 5158.65 4466.08 15.5%
Less : Finance Costs 71.66 78.38 91.63 102.33
Less : Depreciation and Amortisation Expense 697.47 689.97 791.27 780.50
Profit For the period before share of profit in associate 4090.38 3446.23 18.7% 4275.75 3583.25 19.3%
Share of profit of Associate - - 28.60 50.74
Profit before exceptional items & tax 4090.38 3446.23 4304.35 3633.99
Exceptional Items** - 33.20 - -
Profit before Tax 4090.38 3413.03 19.8% 4304.35 3633.99 18.4%
Less : Tax Expense 1037.87 759.08 1097.60 854.85
Profit for the period from continuing operations 3052.51 2653.95 15.0% 3206.75 2779.14 15.4%
Profit before tax from discontinued operations - - - (5.73)
Tax expense of discontinued operations - - - (0.78)
Profit for the period from discontinued operations - - - (4.95)
Profit for the period 3052.51 2653.95 15.0% 3206.75 2774.19 15.6%
Attributable to:
Shareholders of the company 3052.51 2653.95 15.0% 3139.29 2705.17 16.0%
Non-Controlling Interest - - 67.46 69.02
Other Comprehensive Income (net of tax) 50.53 50.40 (5.68) 58.31
Total Comprehensive Income 3103.04 2704.35 14.7% 3201.07 2832.50 13.0%
Attributable to:
Shareholders of the company 3103.04 2704.35 14.7% 3143.42 2755.61 14.1%
Non-Controlling Interest - - 57.65 76.89
Opening balance in Retained Earnings 4974.64 4424.53 5204.64 4604.60
Amount available for Appropriation 8023.17 7068.66 8339.68 7299.35
Dividend
Interim - FY 2020-21 321.35 - 321.35 -
Interim - FY 2019-20 - 1007.16 - 1007.16
Final - FY 2019-20 143.88 - 143.88 -
Final - FY 2018-19 - 733.79 - 733.79
Tax on Dividend - 353.07 - 353.07
Transfer to General Reserve - - - -
Transfer to other Reserve - - 0.43 0.69
Closing balance in Retained Earnings 7557.94 4974.64 7874.02 5204.64

"Comprise of impairment provision towards investment made in SleekInternational Private Limited & Maxbhumi Developers Limited wholly owned subsidiarycompanies of the Company of Rs. 29.7 crores and Rs. 3.5 crores respectively.

COMPANY PERFORMANCE OVERVIEW

During the financial year 2020-21:

• During the financial year 2020-21 revenue from operations onstandalone basis increased to Rs. 18516.86 crores as against Rs. 17194.09 crores in theprevious year - a growth of 7.7%.

• Cost of goods sold as a percentage to revenue from operationsdecreased to 54.5% as against 55.3% in the previous year.

• Employee cost as a percentage to revenue from operationsincreased to 6.1% ( Rs. 1128.66 crores) as against 5.7% (? 985.43 crores) in the previousyear.

• Other expense as a percentage to revenue from operationsdecreased to 15.2% ( Rs. 2812.48 crores) as against 16.5 % ( Rs. 2845.44 crores) in theprevious year.

• The Company has contributed approximately a sum of Rs. 10 crorestowards COVID-19 pandemic related relief activities.

• The Profit after Tax for the current year is Rs. 3052.51 croresas against Rs. 2653.95 crores in the previous year - a growth of 15.0%.

• On a consolidated basis the group achieved revenue of Rs.21712.29 crores as against Rs. 2021 1.25 crores - a growth of 7.4%. Net profit afternon-controlling interest for the group for the current year is Rs. 3139.29 crores asagainst Rs. 2705.17 crores in the previous year - a growth of 16.0%.

TRANSFER TO RESERVES

During the year under review there was no amount transferred to any ofthe reserves by the Company.

DIVIDEND

The Board of Directors at their meeting held on 12th May2021 has recommended payment of Rs. 14.50 (Rupees fourteen and paise fifty only) (1450%)per equity share of the face value of Rs. 1 (Rupee one only) each as final dividend forthe financial year ended 31st March 2021. The payment of final dividend issubject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) ofthe Company.

During the year under review the Board of Directors of the Company attheir meeting held on 22nd October 2020 declared an Interim dividend of Rs.3.35 (Rupees three and paise thirty five only) (335%) per equity share of the face valueof Rs. 1 (Rupee one only) each. The interim dividend was paid to the shareholders on 12thNovember 2020.

The total dividend amount for the financial year 2020-21 including theproposed final dividend amounts to Rs. 17.85 (Rupees seventeen and paise eighty fiveonly) per equity share of the face value of Rs. 1 (Rupee one only) each

[total dividend payout for the FY 2020-21 amounting to Rs. 1712.17crores (Rupees one thousand seven hundred twelve crores and seventeen lakhs only)] asagainst the total dividend of Rs. 12 (Rupees twelve only) per equity share of the facevalue of Rs. 1 (Rupee one only) each paid for the previous financial year 2019-20 [totaldividend payout for the FY 2019-20 amounting to Rs. 1151.04 crores (Rupees one thousandone hundred fifty one crores and four lakhs only)].

In view of the changes made under the Income-tax Act 1961 by theFinance Act 2020 dividends paid or distributed by the

Company shall be taxable in the hands of the Shareholders. The Companyshall accordingly make the payment of the final dividend after deduction of tax atsource.

The dividend recommended is in accordance with the DividendDistribution Policy of the Company. The Dividend Distribution Policy in terms ofRegulation 43A of the Securities and

Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is available on theCompany's website: https://www. asianDaints.com/more/investors/Dolicies-Droarams.html.

The dividend payout ratio of the Company since last three financialyears is more than 50%.

UNCLAIMED DIVIDEND

Pursuant to the applicable provisions of the Companies Act 2013("the Act") read with the Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 ("the IEPF Rules") duringthe year unpaid or unclaimed dividend amounting to Rs. 1.34 crores was transferred by theCompany to the Investor Education and Protection Fund ("IEPF") established bythe Government of India.

Further 143738 shares were transferred to the demat account of theIEPF Authority during the year in accordance with IEPF Rules as the dividend has notbeen paid or claimed by the shareholders for 7 (seven) consecutive years or more.

SUBSIDIARIES & ASSOCIATE COMPANIES

The Company has 23 subsidiaries and 2 joint-venture companies as on 31stMarch 2021.

Financial Performance

A list of bodies corporates which are subsidiaries/associates/ jointventures of the Company is provided as part of the notes to Consolidated FinancialStatements.

A separate statement containing the salient features of financialstatements of subsidiaries associates joint venture companies of the Company in theprescribed Form AOC-1 forms a part of Consolidated Financial Statements ("CFS")in compliance with Section 129(3) and other applicable provisions if any of the Act readwith Rules.

The Company does not have any material subsidiary.

Consolidated Financial Statements

In accordance with the provisions of the Act Regulation 33 of theListing Regulations and applicable Accounting Standards the Audited ConsolidatedFinancial Statements of the Company for the financial year 2020-21 together with theAuditors' Report form part of this Annual Report.

In accordance with Section 136 of the Act the audited financialstatements including the CFS and related information of the Company and the financialstatements of each of the subsidiary companies are available on our websitewww.asianpaints.com. Any Member desirous of making inspection or obtaining copies of thesaid financial statements may write to the Company Secretary atinvestor.relations@asianpaints.com.

The Company's Policy for determining material subsidiaries may beaccessed on the website of the Company at https://www.asianpaints.com/more/investors/policies-programs.html.

Amalgamation of Reno Chemicals Pharmaceuticals & Cosmetics PrivateLimited with the Company

The Company Petition filed for amalgamation of Reno ChemicalsPharmaceuticals & Cosmetics Private Limited Company's wholly owned subsidiary withthe Company was admitted on 26th April 2021 by Hon'ble National Company LawTribunal Mumbai (NCLT).

The said Petition is listed for final hearing before the Hon'ble NCLT.

Merger of Asian Paints (Lanka) Limited with Causeway Paints Lanka(Private) Limited

With effect from 1st April 2021 indirect subsidiary of theCompany Asian Paints (Lanka) Limited amalgamated with Causeway Paints Lanka (Private)Limited.

Winding-up of Asian Paints (Tonga) Limited

Asian Paints (Tonga) Limited has ceased its business operations w.e.f.10th December 2020 and liquidated all its assets & liabilities. The nameof the Company was struck off from the Business Registries Office Kingdom of Tonga on 29thJanuary 2021.

ASIAN PAINTS EMPLOYEES' STOCK OPTION PLAN

The Board of Directors of the Company at their meetings held on 30thMarch 2021 and 12th May 2021 based on the recommendations of the Nominationand Remuneration Committee approved formulation of Asian Paints Employees' Stock OptionPlan 2021 ("2021 Plan") for grant of stock options to 'Eligible Employees' ofthe Company and its subsidiary companies. This 2021 Plan will be effective from thefinancial year 2020-21 onwards and is subject to approval of the shareholders at theensuing AGM of the Company. The 2021 Plan has been introduced for eligible employees ofthe Company and/or its subsidiary companies with an objective to motivate and retainprofessionals by rewarding performance and in order to further increase shareholdervalue.

The 2021 Plan is intended to cover Eligible Employees of the Companyand its subsidiary companies including the Managing Director & CEO of the Company. Assuch Mr. Amit Syngle Managing Director & CEO shall also be eligible to participatein the 2021 Plan.

The appointment and remuneration of Mr. Amit Syngle as the ManagingDirector & CEO was approved by the shareholders of the Company in the 74thAGM of the Company held on 5th August 2020 ("Original Resolution").

It is proposed to amend the Original Resolution to include appropriateclauses enabling the grant of stock options to Mr. Amit Syngle pursuant to the 2021 Plan.

The brief details of the 2021 Plan and other relevant details have beenprovided in explanatory statement annexed to the Notice of the ensuing 75th AGMof the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board of Directors

Re-appointment and continuation of Mr. R. Seshasayee as an IndependentDirector of the Company not liable to retire by rotation.

At the 71st AGM of the Company held on 27th June2017 the shareholders had approved the appointment of Mr. R Seshasayee (DIN: 00047985) asan Independent Director to hold office for a period of 5 (five) consecutive years up to 22ndJanuary 2022.

Based on the outcome of performance evaluation and recommendations ofthe Nomination and Remuneration Committee the Board of Directors of the Company at theirmeeting held on 12th May 2021 have recommended the reappointment of Mr. RSeshasayee as an Independent Director for second term of 5 (five) consecutive years upto22nd January 2027 (not liable to retire by rotation) in accordance withSection 149 152 Schedule IV and other applicable provisions if any of the Act and theListing Regulations.

In terms of the provisions of the Regulation 17(1A) of the

Listing Regulations consent of the Shareholders by way of SpecialResolution shall be required for continuation of directorship of Mr. R. SeshasayeeIndependent Director of the Company who would attain the prescribed age limit of 75 yearsduring the period of the proposed second term.

In the opinion of the Nomination & Remuneration Committee and Boardof Directors of the Company considering the wealth of experience and expertise of Mr. RSeshasayee and the immense value he brings to the Board and the Company there-appointment of Mr. R Seshasayee for a second term of 5 (five) consecutive years from 23rdJanuary 2022 to 22nd January 2027 (not liable to retire by rotation) andcontinuation of his directorship beyond 75 (seventy-five) years of age would be in theinterest of the Company and its shareholders. Mr. R. Seshasayee is exempt from therequirement to undertake online proficiency self-assessment test conducted by IndianInstitute of Corporate Affairs (IICA) Manesar.

Retirement by rotation and subsequent re-appointment

In accordance with the provisions of Section 152 and other applicableprovisions if any of the Act and the Articles of Association of the Company Mr. AbhayVakil and Mr. Jigish Choksi Non-Executive Directors of the Company are liable to retireby rotation at the ensuing AGM and being eligible have offered themselves forre-appointment.

The Managing Director & CEO and Independent Directors of theCompany are not liable to retire by rotation.

Declaration from Directors

The Company has received the following declarations from all theIndependent Directors confirming that:

1. They meet the criteria of independence as prescribed under theprovisions of the Act read with the Schedule and Rules issued thereunder and the

Listing Regulations. There has been no change in the circumstancesaffecting their status as Independent Directors of the Company; and

2. They have registered themselves with the Independent

Director's Database maintained by the IICA.

None of the Directors of the Company are disqualified for beingappointed as Directors as specified in Section 164(2) of the Act and Rule 14(1) of theCompanies (Appointment and Qualification of Directors) Rules 2014.

Key Managerial Personnel

Mr. Amit Syngle Managing Director & CEO and Mr. R. J. JeyamuruganCFO & Company Secretary are the Key Managerial Personnel of the Company.

Mr. Amit Syngle was appointed as the Managing Director & CEO of theCompany with effect from 1st April 2020. During the year under review therewere no other changes to the Key Managerial Personnel of the Company.

NUMBER OF MEETINGS OF THE BOARD

During the year under review 7 (seven) meetings of the Board ofDirectors were held. The details of the meetings of

the Board of Directors of the Company held and attended by theDirectors during the financial year 2020-21 are given in the Corporate Governance Reportwhich forms part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 daysas prescribed by the Act.

NOMINATION AND REMUNERATION POLICY The Nomination and RemunerationPolicy of the Company inter alia provides that the Nomination and Remuneration Committeeshall formulate the criteria for Board membership including the appropriate mix ofExecutive & Non-Executive Directors Board Diversity and approve and recommendcompensation packages and policies for Directors and Senior Management and lay down theeffective manner of performance evaluation of the Board its Committees and the Directorsand such other matters as provided under Section 178 of the Act and Listing Regulations.

The salient features of the Nomination and Remuneration Policy of theCompany are outlined in the Corporate Governance Report which forms part of this Annual

Report. The Policy is also available on the website of the CompanyhttDs://www.asianDaints.com/more/investors/ Dolicies-Droarams.html.

REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND SENIORMANAGEMENT

The remuneration paid to the Directors Key Managerial Personnel andSenior Management is in accordance with the Nomination and Remuneration Policy formulatedin accordance with Section 178 of the Act and Regulation 19 read with Schedule II of theListing Regulations. Further details on the same are given in the Corporate GovernanceReport which forms part of this Annual Report.

The information required under Section 197 of the Act read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors/ employees of the Company is set out in the Annexure [A] to this report and isalso available on the website of the Company at www.asianpaints.com.

BOARD EVALUATION

During the year under review the Nomination and Remuneration Committeeengaged M/s. Egon Zehnder external consultants to conduct evaluation of the BoardCommittees of the Board and Directors. The evaluation was conducted based on the criteriaand framework adopted by the Board. The evaluation parameters and the process have beenexplained in the Corporate Governance Report.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

All I ndependent Directors are familiarized with the operations andfunctioning of the Company. The details of the training and familiarization program areprovided in the Corporate

Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act the Directors of the Company statethat:

a. in the preparation of the annual accounts for the financial yearended 31st March 2021 the applicable

Asian Paints Limited

Board's Report (Contd.)

Accounting Standards have been followed and there are no materialdepartures from the same;

b. the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31stMarch 2021 and of the profits of the Company for the financial year ended 31stMarch 2021;

c. proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a 'going concern' basis;

e. proper internal financial controls laid down by the Directors werefollowed by the Company and that such internal financial controls are adequate andoperating effectively; and

f. proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems are adequate and operatingeffectively.

REGISTRAR AND TRANSFER AGENT

M/s. TSR Darashaw Consultants Private Limited (TSR) is the Registrarand Transfer Agent of the Company.

During the year under review the registered office and place ofoperation of TSR has been shifted to Vikhroli Mumbai.

Accordingly the Company is required to seek shareholders' approvalunder Section 94 and other applicable provisions of the Act read with the Companies(Management and Administration) Rules 2014 for maintenance of the Registers and Indexesof Members of the Company under Section 150 of the Companies Act 1956 or Section 88 ofthe Act as applicable and copies of the returns prepared under Section 159 of theCompanies Act 1956 or Section 92 of the Act as applicable read with the Companies(Management and Administration) Rules 2014 and in accordance with Article 144 of theArticles of Association of the Company for the period(s) on or after 1st April2003 at TSR's office located in Vikhroli Mumbai.

Appropriate resolution seeking approval of the shareholders has beenplaced at the ensuing AGM of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as stipulated under the ListingRegulations is presented in a separate section forming part of this Annual Report.

AUDITORS AND AUDITORS' REPORT

Statutory Auditor

M/s. Deloitte Haskins & Sells LLP Chartered Accountants (FirmRegistration No. 1 17366W/W-100018) were appointed as Statutory Auditors of the Companyat the 70th AGM held on 28th June 2016 to hold office till theconclusion of the ensuing 75th AGM.

M/s. Deloitte Haskins & Sells LLP Chartered Accountants areeligible to be re-appointed for a further term of 5 (five) years in terms of provisionsof Sections 139 and 141 of the Act.

Accordingly the Board of Directors of the Company at their meetingheld on 12th May 2021 on the recommendation of the Audit Committee and subjectto the approval of the shareholders of the Company at the ensuing AGM have approved there-appointment of M/s. Deloitte Haskins & Sells LLP Chartered Accountants (FirmRegistration No. 117366W/ W-100018) as the Statutory Auditors for a further period of 5(five) years i.e. from the conclusion of the 75th AGM till the conclusion of 80thAGM of the Company.

The Company has received written consent and certificate of eligibilityin accordance with Sections 139 141 and other applicable provisions of the Act and Rulesissued thereunder from M/s. Deloitte Haskins & Sells LLP. They have confirmed to holda valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India (ICAI) as required under the Listing Regulations.

The Auditors have issued an unmodified opinion on the FinancialStatements both standalone and consolidated for the financial year ended 31stMarch 2021. The said Auditors' Report(s) for the financial year ended 31stMarch 2021 on the financial statements of the Company forms part of this Annual Report.

Cost Auditor

The Company has maintained cost records for certain products asspecified by the Central Government under sub-section (1) of Section 148 of the Act. M/s.RA & Co.

Cost Accountants (Firm Registration No. 000242) have carried out thecost audit for applicable products during the financial year 2020-21.

The Board of Directors of the Company on the recommendations made bythe Audit Committee have appointed M/s. RA & Co. as the Cost Auditors of the Companyto conduct the audit of cost records of certain products for the financial year 2021-22.M/s. RA & Co. being eligible have consented to act as the Cost Auditors of theCompany for the financial year 2021-22.

The remuneration proposed to be paid to the Cost Auditor subject toratification by the members of the Company at the ensuing 75th AGM would notexceed Rs. 8 lakhs (Rupees eight lakhs only) excluding taxes and out of pocket expensesif any.

Secretarial Auditor

The Board of Directors of the Company have appointed Dr. K. R.Chandratre Practicing Company Secretary (Certificate of Practice No. 5144) as theSecretarial Auditor to conduct an audit of the secretarial records for the financial year2021-22. The Company has received consent from Dr. K.

124 Annual Report 2020-21

R. Chandratre to act as the auditor for conducting audit of thesecretarial records for the financial year ending 31st March 2022.

The Secretarial Audit Report for the financial year ended 31stMarch 2021 under the Act read with Rules made thereunder and Regulation 24A of theListing Regulations is set out in the Annexure [B-1] to this report.

The Secretarial Compliance Report for the financial year ended 31stMarch 2021 in relation to compliance of all applicable SEBIRegulations/circulars/guidelines issued thereunder pursuant to requirement of Regulation24A of the Listing Regulations is set out in Annexure [B-2] to this report. TheSecretarial Compliance Report has been voluntarily disclosed as part of Annual Report asgood disclosure practice.

The Secretarial Audit Report and/or Secretarial Compliance Report doesnot contain any qualification reservation or adverse remark.

COMMITTEES OF THE BOARD

As on 31st March 2021 the Board has 7 (seven) committees:Audit Committee Nomination and Remuneration Committee

Corporate Social Responsibility Committee Risk Management CommitteeStakeholders Relationship Committee Investment Committee and Shareholders Committee.

During the year under review the Board of Directors constituted acommittee called the Investment Committee inter alia to consider evaluate and recommendto the Board viable investment proposals which are in the interest of furthering thestrategic goals of the Company.

During the year all recommendations made by the committees wereapproved by the Board.

A detailed note on the composition of the Board and its committeesincluding its terms of reference is provided in the Corporate Governance Report. Thecomposition and terms of reference of all the Committee(s) of the Board of Directors ofthe Company is in line with the provisions of the Act and Listing Regulations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the financial year ended 31st March 2021 theCompany incurred CSR Expenditure of Rs. 62.98 crores (Rupees sixty two crores and ninetyeight lakhs). The CSR initiatives of the Company were under the thrust area of health& hygiene education water management and vocational training. The CSR Policy of theCompany is available on the website of the Company athttDs://www.asianDaints.com/about-us.html.

Ministry of Corporate Affairs vide its Notification(s) dated

22nd January 2021 notified the Companies (Corporate SocialResponsibility Policy) Amendment Rules 2021 which inter alia provides for the revisedformat of annual report for publishing the CSR activities undertaken during the financialyear ended 31st March 2021. The other changes pursuant to said Notification(s)under the CSR provisions have been briefly highlighted in the annual report of theCompany's CSR activities for the financial year ended 31st March 2021.

The Company's CSR Policy statement and annual report on the CSRactivities undertaken during the financial year ended 31st March 2021 inaccordance with Section 135 of the Act and Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is set out in Annexure [C] to this report.

CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34 of the Listing Regulations a separatereport on Corporate Governance along with a certificate from the Auditors on itscompliance and a Business Responsibility Report as per Regulation 34 of the ListingRegulations detailing the various initiatives taken by the Company on the environmentalsocial and governance front forms part of this Annual Report.

ANNUAL RETURN

The Annual Return of the Company as on 31st March 2021 inForm MGT - 7 in accordance with Section 92(3) of the Act read with the Companies(Management and Administration) Rules 2014 is available on the website of the Company athttDs://www.asianDaints.com/more/investors/ AnnualReportFY2021.html.

RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved by theAudit Committee and are in accordance with the Policy on dealing with and materiality ofRelated Party Transactions and the Related Party Framework formulated and adopted by theCompany. An omnibus approval from the Audit Committee is obtained for the related partytransactions which are unforeseen in nature. During the year under review the RelatedPolicy Framework was suitably amended to include the revised pricing structure and certainnew transactions which were not anticipated earlier.

All contracts/arrangements/transactions entered into by the Companyduring the year under review with Related Parties were in the ordinary course of businessand on arm's length basis in terms of provisions of the Act.

The Company's Policy on dealing with and Materiality of Related PartyTransactions is available on the website of the Company athttDs://www.asianDaints.com/more/investors/ Dolicies-Droarams.html.

There are no materially significant related party transactions that mayhave potential conflict with interest of the Company at large. There were no transactionsof the Company with any person or entity belonging to the Promoter(s)/Promoter(s) Groupwhich individually holds 10% or more shareholding in the Company.

The details of the related party transactions as per Indian AccountingStandards (IND AS) - 24 are set out in Note 43 to the Standalone Financial Statements ofthe Company.

The Company in terms of Regulation 23 of the Listing Regulationssubmits within 30 days from the date of publication of its standalone and consolidatedfinancial results for the half year disclosures of related party transactions on aconsolidated basis in the format specified in the relevant accounting standards to thestock exchanges. The said disclosures can be accessed on the website of the Company athttps://www. asianpaints.com/more/investors/announcements.html.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2)of the Companies (Accounts) Rules 2014 is set out in the Annexure [D] to this report.

LOANS AND INVESTMENTS

Details of loans guarantees and investments under the provisions ofSection 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules2014 as on 31st March 2021 are set out in Note 36(B) to the StandaloneFinancial Statements of the Company.

RISK MANAGEMENT

Risk management is integral to your Company's strategy and for theachievement of our long-term goals. Our success as an organization depends on our abilityto identify and leverage the opportunities while managing the risks.

The COVID-19 pandemic this year has posed several unprecedentedchallenges in the form of uncertain lockdowns unlock phases health hazards and supplychain disruptions across the globe. These have added a new dimension to the term VUCA(volatile uncertain complex and ambiguous).

These changes and challenges have brought a mix of opportunities anduncertainties impacting the Company's objectives. Risk Management which aims at managingthe impact of these uncertainties is an integral part of the Company's strategy settingprocess. The Company regularly identifies uncertainties and after assessing them devisesshort-term and long-term actions to mitigate any risk which could materially impact yourCompany's long-term goals. This process of identifying and assessing the risks is atwo-way process. Inputs are taken both bottom up and top down while finalizing the risktreatment plans.

The Risk Management Committee of the Company has been entrusted by theBoard with the responsibility of reviewing the risk management process in the Company andensuring that the risks are brought within acceptable limits.

Our approach to risk management is designed to provide reasonableassurance that our assets are safeguarded the risks facing the business are beingassessed and mitigated and all information that may be required to be disclosed isreported to Company's Senior Management including where appropriate the ManagingDirector & CEO the Chief Financial Officer the Audit Committee the Risk ManagementCommittee and the Board.

Mitigation plans to significant risks are well integrated withfunctional and business plans and are reviewed on a regular basis by the seniorleadership.

The Company endeavors to continually sharpen its Risk Managementsystems and processes in line with a rapidly changing business environment. There are norisks which in the opinion of the Board threaten the existence of the Company. Howeversome of the risks which may pose challenges are set out in the Management Discussion andAnalysis which forms part of this Annual Report.

VIGIL MECHANISM

The Company has a robust vigil mechanism through its Whistle BlowerPolicy approved and adopted by Board of Directors of the Company in compliance with theprovisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations.

The Company has engaged an agency for managing an 'Ethics Hotline'which can be used to inter alia report any instances of financial irregularities breachof code of conduct abuse of authority disclosure of financial/ unpublished pricesensitive information other than for legitimate purposes unethical/unfair actionsconcerning Company vendors/suppliers malafide manipulation of Company recordsdiscrimination to the Code of Conduct in an anonymous manner.

The Policy also provides adequate protection to the Directorsemployees and business associates who report unethical practices and irregularities.

Any incidents that are reported are investigated and suitable action istaken in line with the Whistle Blower Policy.

The Whistle Blower Policy of the Company can be accessed at website ofthe Company at https://www.asianpaints.com/ more/investors/Dolicies-Droorams.html.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 ("Prevention of Sexual HarassmentAct") the Company has formulated a Policy on Prevention of Sexual Harassment atWorkplace for prevention prohibition and redressal of sexual harassment at workplace andan Internal Complaints Committees has also been set up to redress any such complaintsreceived.

The Company is committed to providing a safe and conducive workenvironment to all of its employees and associates.

The Company periodically conducts sessions for employees across theorganization to build awareness about the Policy and the provisions of Prevention ofSexual Harassment Act.

Complaints of sexual harassment received during the financial year2020-21 by the Company were investigated in accordance with the procedures prescribed andadequate steps were taken to resolve them.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has adequate Internal Financial Controls System overfinancial reporting which ensures that all transactions are authorized recorded andreported correctly in a timely manner. The Company's Internal Financial Control overfinancial reporting is designed to provide reliable financial information and to complywith applicable accounting standards.

The Company has laid down Standard Operating Procedures and policies toguide the operations of the business. Functional heads are responsible to ensurecompliance with all laws and regulations and also with the policies and procedures laiddown by the Management.

During the year the Company has updated the delegation of AuthorityManual and Commercial Manual to make it in line with the changes in the businessenvironment and underlying systems and processes. The Company has modified the format ofthe internal certification by functional heads on reporting accuracy (Financial ClosureCertificate (FCC)) in line with the changes in accounting and reporting requirements.

The Shared Services Center (SSC) extended the coverage of digitalinvoice processing for transporters during the year.

This has made the process touchless and seamless. Vendor InvoiceProcess Automation & Transporter Invoice Process Automation has inbuilt 3-way checks(PO GR/Service Entry & invoice) in the system leading to accuracy and lower manualerrors. To increase the digital footprints with added control employee reimbursement anddigital invoices are processed paperless.

The Company has invested in automation of inventory provisions fordamaged dead defective inert stock etc. leading to robust review and faster closure offinancial.

The Company has developed system with built in checks to ensure thatGST and tax is collected at source correctly for all applicable transactions ensuringstatutory compliance. The Company has also completed development to generate E-invoicethrough the system as per the government regulations.

The Company periodically tracks all amendments to Accounting Standardsand makes changes to the underlying systems processes and financial controls to ensureadherence to the same. All resultant changes to the policy and impact on financials aredisclosed after due validation with the statutory auditors and the Audit Committee.

Corporate accounts function is actively involved in designing largeprocess changes as well as validating changes to IT systems that have a bearing on thebooks of accounts.

The Company gets its Standalone financial statements audited everyquarter by its Statutory Auditors. The policies to ensure uniform accounting treatment areprescribed to the subsidiary companies as well. International subsidiaries provideinformation required for consolidation of accounts in the format prescribed by theCompany. The accounts of the subsidiary and joint venture companies are audited andcertified by their respective Statutory Auditors for consolidation.

OTHER DISCLOSURES

a. None of the Directors of the Company have resigned during the yearunder review;

b. There are no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear 2020-21 and the date of this report;

c. During the year under review the Company has launched its HomeDecor Range in furniture furnishings and lighting through 'Beautiful Homes'. This was inline with the Company's vision of providing its customers complete home decor solution.There has been no other change in the nature of business carried out by the Company.

d. During the year under review the Company has not accepted anydeposit within the meaning of Sections 73 and 74 of the Act read with the Companies(Acceptance of Deposits) Rules 2014;

e. The Company has complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on Meetings of the Board of Directors andGeneral Meetings;

f. There are no significant material orders passed by the Regulators orCourts or Tribunals impacting the going concern status of the Company and its operationsin future;

The Competition Commission of India had passed a prima facie Orderdated 14th January 2020 directing the Director General (DG) to cause aninvestigation against the Company under the provisions of Section 26(1) of theCompetition Act 2002. This Order is for initiating an investigation against the Companyunder the relevant provisions of the Competition Act but it in no way affects the goingconcern status of the Company. The investigation is currently ongoing and the Company isfully co-operating and providing necessary information to the authority.

g. The Managing Director & CEO of the Company has not received anyremuneration or commission from any of the subsidiary companies. Further the Companydoesn't have any Holding Company;

h. None of the Auditors of the Company have reported any fraud asspecified under the second proviso of Section 143(12) of the Act;

i. The information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134 of the Act read withthe Companies (Accounts) Rules 2014 is set out in the Annexure [E] to this report;

j. The Company has formulated Asian Paints Employees Stock Option Plan2021 (ESOP) for Eligible Director(s) and Employees of the Company and its subsidiarieswhich is subject to approval of the shareholders at the ensuing AGM. Hence the disclosurerequirement in relation to ESOP under Rule 12(9) and Rule 16(4) of the Companies (ShareCapital and Debentures) Rules 2014 is not applicable yet;

k. The Company has not issued equity shares with differential rights asto dividend voting or otherwise;

l. The Company has not issued any sweat equity shares to its directorsor employees;

m. There was no revision of financial statements and Board's Report ofthe Company during the year under review;

n. No application has been made under the Insolvency and BankruptcyCode; hence the requirement to disclose the details of application made or any proceedingpending under the Insolvency and Bankruptcy Code 2016 (31 of 2016) during the yearalongwith their status as at the end of the financial year is not applicable; and

o. The requirement to disclose the details of difference between amountof the valuation done at the time of onetime settlement and the valuation done whiletaking loan from the Banks or Financial Institutions along with the reasons thereof isnot applicable.

APPRECIATION

The Board of Directors place on record sincere gratitude andappreciation for all the employees at all levels for their hard work solidaritycooperation and dedication during the year.

The Board conveys its appreciation for its customers shareholderssuppliers as well as vendors bankers business associates regulatory and governmentauthorities for their continued support.

For and on behalf of the Board of Directors

Ashwin Dani
Chairman
(DIN: 00009126)
Place: Mumbai
Date: 12th May 2021

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