16956575 Asian Paints

CONTENTS

S no. Topic Page No.1 Certificate -2 Acknowledgement -3 List of figures -4 Chapter – 1 (Profile of the Company)5 Chapter – 2 (SWOT analysis of the company)6 Chapter-3: Analysis of Financial Reports.

List of figures

Figure No. Title Page No.1. Organizational Structure2. The Process Flow of the Asian Paints3 Graphs of Ratio

List Of Tables

S No Topic Page No1. Profit & Loss Account.2. Balance Sheet3. Cash Flow Statement.

Chapter-1Profile Of The Company

Asian Paints

TYPE MultinationalFOUNDED 1942HEADQUARTER Mumbai, India

KEY PERSON Mr. P M Murthy, CEO , Asian Paints Ltd.INDUSTRY Chemicals, Paint & Resin ManufacturersPRODUCTS Automotive paints,Decorative Paints,Industrial Paints and Chemicals and Ancillaries

Asian Paints LimitedAsian Paints House6A, Shanti Nagar,Santa Cruz(E)Mumbai-400055India

Tel : 022-39818000Fax : 022-39818888Asian Paints Helpline : 1800-209-5678

For shares related Queries, E mail to [email protected] Customer Queries, E mail to [email protected] all other Queries, E mail to [email protected] 1.1 Profile/Introduction

1.1.1. In 1st February,1942 ,Armed with little knowledge and great determination, Sh.Champaklal H. Choksey, Sh. Chimanlal N. Choksi, Sh. Suryakant C. Dani and Sh. Arvind R. Vakil get together to manufacture paint in a garage on Foras Road,

Bombay. They name their company 'The Asian Oil & Paint Company', a name that they picked randomly from a telephone directory. 1.1.2.. In 1945 , Asian Paints touches a turnover of Rs. 3,50,000, with an innovative marketing strategy "to reach consumers in the remotest corners of the country with small packs."1.1.3. Asian Paints Ltd. has a combined turnover of 630 million US dollars. With its strong presence in the Indian subcontinent, south East Asia, Far East, South pacific Caribbean, Africa & Europe. Along with Asian paints the group consists of SCIB chemicals, Berger International & APCO coatings. Together the group has 30 manufacturing unit globally.

1.1.4. Asian Paints operates in 22 countries and has 30 paint manufacturing facilities in the world servicing consumers in over 65 countries.

1.1.5. The company was incorporated in the year 1942 in India. Asian paints have extensively computerized its operations in India using the cutting edge solution provided by SAP & i2. It helped the company drive benefits of faster market analysis for better decision making.

1.1.6 The Company's paint business in India consists of Decorative, Industrial & Automotive coatings. During the fiscal year ended March 31, 2006, paints accounted for 79.1% of the Company's sales. Decorative paints include wall finishes for interior and exterior use, enamels, wood finishes and ancillary products, such as primers and putties. Industrial Coatings comprise high performance coatings, powder coatings and auto refinish coatings. The automotive coating segments are catered to by the joint venture Asian PPG Industries Ltd. The Company also has chemicals businesses consisting of phthalic anhydride and pentaerythritol manufactured at Ankleshwar, Gujarat and Cuddalore, Tamil Nadu, respectively.

1.1.7. Asian paints’ wonderful promotional strategy helped the company to extend its business in several other countries with success. A very attractive distribution policies & proper distribution channel with more than 15000 dealers helped Asian paints to spread its business in more than 3500 big & small cities in India.1.1.8. The Group's principal activities are to manufacture and market paints. The Group also manufactures Phthalic Anhydride and Pentaerythritol. The Group operates in Australia, Fiji, Solomon Islands, Tonga, Vanuatu, Myanmar, China, Thailand, Malaysia, Singapore, Bangladesh, Nepal, Srilanka, Bahrain, the UAE, Oman, Barbados, Jamaica, Trinidad, Tobago, Egypt, Mauritius and Malta

1.2 Vision And Mission

1.2.1. VISION

Asian Paints aims to become one of the top five Decorative coatings companies world-wide by leveraging its expertise in the higher growth emerging markets. Simultaneously, the company intends to build long term value in the Industrial coatings business through alliances with established global partners.

1.2.2. Their main objectives is on the following areas. • Company is using PC, V-sats based line and internal mesh to become most networked corporation in India. • Company is trying to cutdown the inventory and improve the working capital cycle for a continuous production. • Asian paint is highly accepted in the urban sector and now the company is trying to access the rural market with low price product like Utsav targeting every customer of all income level. • To enhance their marketing in rural sector a huge amount investment is made in adcampaign and demonstration cum sales technique is going on. • To increase its sales in the urban sector Asian paints today have 30 colour world located in different cities of India where any body can have the real taste of the colour. • Online marketing has become an integrated part of the company and company is trying install a strong integrated for online marketing. • Asian paints international unit, which have a dedicated marketing team is also targeting for a rapid growth in overseal market. • Asian paint is concentrating on the development of technological improvement in their Industrial Coating so that to make the product more stronger positon in the market.

1.2.3. VALUES:

Even though we frequently talk about mission and vision first, the basic underlying

foundations for both are our core values. Core values are the principles and standards

at the very center of our character, and from which we will not budge or stray.

Core values are extremely stable and change only very slowly over long periods of

time. Core values form the basis for our beliefs about life, ourselves and those around

us, and the human potential of ourselves and others. Values and beliefs form our

attitudes and guide our behavior. The behaviors we engage in are what people

around us see, along with our skills and actions. Our outer or public shell of behaviors

and skills can change rapidly and dramatically through our lives, influenced by our

environment and guided by our more stable core values and beliefs.

Keeping in mind the values of oneself and believing in them, mother dairy focuses to:

• Be aligned with the core values of both the individuals and the business

• Be effectively communicated to and accepted by everyone involved in the company.

Along with the above mentioned views , asian paints also looks after the following aspects:

• Trust

• Openness

• Commitment

• Integrity

• Growth Orientation

• Quality

• Value For Money

• Customer Orientation

1.3. Product range

Ancillaries

Product Name: Asian Paints Deco prime Wall Primer WT

Description: Asian Paints Deco-Prime Wall Primer (WT) can be used as primer for painting of water-based wall finishes such as distempers & plastic emulsion paints. Its special features are easy brushing, excellent covering, alkali resistance, quick drying & good sealing properties. It is specially fortified with fungicides.

Product Name: Asian Paints Decoprime Wall Primer STDescription: Asian Paints Deco-Prime Wall Primer (ST) is suitable for use as primerfor masonary topcoats like distempers, emulsions,lustre & matt wall finishes.It helps in providing a suitable surface for applicationof subsequent coats of putty & finish paint.It seta fast,has good sealing properties,good resistance to wall alkalinity, moisture & fungus.

Product Name: Asian Paints Acrylic Wall PuttyDescription:Asian Paints Acrylic Wall Putty is water_based putty.It is one of the best product of its kind available in the market.It provides a very strong durable foundation & brings out the best performance from the finish paints.both in looks & durability.

Product Name: Asian Paints Wood PrimerDescription:Asian Paints Wood Primer is specially formulated to protect wood.It has an excellent sealing & filling properties which protects wood from swelling due to absorption moisture.Wood Primer penetrates wood fibre & gives excellent adhesion to substrates & also serves as a sound base for application of undercoats & finishing coats.It also protects the finish coat from exudation of resinous matter oozing out from wood.

Product Name: Asian Paints Exterior Wall PrimerDescription: Asian Paints Exterior Primer is water-based wall coating suitable for application on exteriors as an undercoat to exterior emulsions.It has a good opacity & whiteness, which helps improve the appearance of the emulsion top coat.Exterior Wall Primers doesnot chalk & can be applied on freshly plastered surfaces that are adequately cured.It doesnot require any water curing.

Product Name: Asian Paints Knifing Paste FillerDescription: Asian Paints Knifing Paste Filler is used on metallic or wooden surfaces for filling of dents & other surface imperfections.It has a butter like consistency & is easy in application.It is supplied at ready to use consistency but can be thinned easily to any desired consistency by using recommended thinner.On air drying or stoving,it dries hard.Cutting is easy & involves no strain

Product Name: Asian Paints Wood StainsDescription:Asian Paints Wood Stains hav been formulated specifically to impart colour to wood.they offer4 uniform penetration along with a depth & clarity of tones that emphasises the natural pattern & character of wood grain.they can be used on all kinds of veneers & MDF surfaces Product Name: Asian Paints Exterior SealerDescription:Asian Paints Exterior Sealer is an acrylic copolymer-based surface conditioner for exterior surfaces.It is designed to penetrate into the exterior substrate & also improves adhesion of the Exterior Emulsion Paint topcoats.

Product Name: Asian Paints Utsav Floor ColourDescription: Asian Paints Utsav Floor Colour is a high quality oxidepowder,which keepsyour concentrate flooring looking attractive for years.It has high colouring strengtyh &mixes easily with cement.It is manufactured using genuine Oxide imported from Persian Gulf.Its brilliance & gloss keeps increasing with time.Also,it is UV light resistant & doesnot fade when exposed to sunlight

Product Name: Asian Paints Utsav Primer (ST)Description:Asian Paints Utsav Primer (E3) is a Solvent-Based primer that can be used on cement as well as wooden surfaces.It is an under coat that provides good adhesion to the surface, thereby increasing the life of the entire paint system.It hasw good sealing properties,which leads to lower absorption, ensuring a uniform deposition of top coats.it is a quality product available at economical price.

Product Name: Asian Paints Utsav Primer (WT)Description: Asian Paints Utsav Primer (Water Thinnable)is a water based wall primer that can be usedv in interior masonary surfaces.It has good whiteness, good coverage & flow & leveling properties.

Product Name: Asian Paints Utsav Metal Primer Red OxideDescription:Asian Paints Utsav Metal Primer Red Oxide can be used as an undercoat for ferrous substrates.It has a good Anti-Settiling properties & offers good opacity, coverage, flow & leveling.

Product Name: Asian Paints Utsav StainerDescription: Asian Paints Utsav Stainer is a high strength stainer which can be used with decorative interior water-based paints only.it contains high quality pigments which inpart high tinting strength.they mix well with all water based paints thus giving a uniform shade tone.

Automotive

The actual look and feel of a vehicle undergoes a sea of change over time. The paint on a vehicle loses gloss, is subjected to a lot of wear and tear and hence starts deteriorating. Asian Paints is not having a very good market share in this segment.2K Nexa Auto color

2K Nexa Autocolor® works in partnership with its customers to improve the profitability and well being of their businesses.Valued by body repair shops, dealers and industry influencers in over 140 countries, Nexa Autocolor brand is a market leader in markets including the UK, Spain, France, Malaysia, China, Brazil, and Argentina. It’s no different in India ! The Nexa Autocolor brand, a leader internationally in the refinish market, has a history of more than 100 years experience in the paint industry. This experience has enabled us to gain a thorough understanding of our customers’ needs and the issues our customers face on a daily basis. Technical and training teams of PPG collaborate globally to develop innovative products, processes and programs to help our customers continually improve the efficiency and profitability of their business. Manufactured at PPG’s plant in Stow market, England, Nexa Autocolor stands for innovation in paint chemistry and leads the industry with products such as Aqua

base, the first waterborne basecoat. With the technology to colour-match even the most difficult of special-effect colours, Nexa Auto color continues to develop state-of-the-art processes while maintaining its reputation for high-level customer satisfaction.

Our Mission

Innovative Repair SolutionsWith a track record of technical innovation and products designed for improved productivity and reduced material usage, Nexa Autocolor implements repair processes that reduce cycle times and increase profits.Quick and Accurate Colour MatchingWith over 100 years of experience in the paint industry, Nexa Autocolor satisfies the number one need of the collision center - quick and accurate colour matching - with the right colour, the first time, every time.High-Quality, High-Performance ProductsThe Nexa Autocolor 2K Product System is a complete line of high-quality products designed to bring profit to a collision center. Simple and easy-to-use, it delivers fast processes, reduced material consumption and outstanding results, every time. Satisfied CustomersThe Nexa Autocolor 2K Product System was designed with the professional collision center in mind. Outstanding colour matching, fast process times and top-quality results enable any collision center to achieve the highest levels of customer satisfaction - time after time.Deltron

A premium 2-pack polyurethane based automotive refinishing system. It comes as a fully integrated package of products, right from bare metal pretreatment to plastic component systems through to polishing and finishing compounds. It is available in more than 40000 shades. Its comprehensive range takes care of all kinds of painting needs. Deltron is available on a mixing system with a range of tinters, which when mixed together in different proportions offer a wide variety of shades to the customer. These tinters are mounted on a mixing rack that is installed at the shops of each Deltron dealer.Advantages of Deltron :

• It is one of the best automotive refinish systems available in the world today. It is a product sold in more than 40 countries around the world, and is suitable for all types of weather and environment conditions.• It is supported by a global R&D and colour matching division. The same product and shade match is available across the globe irrespective of which country your car comes from, or which country it is bound for. • The colour centre in Mumbai ensures that all shade-matching problems are resolved at the earliest. • It is a very cost-effective system. This is due to an advanced tinter based technology, which offers a superior coverage per litre of paint. Furthermore, it uses smaller amounts of hardeners and thinners, ensuring further savings in costs.

• The same set of hardeners and thinners can be used for all the tintable shades on offer. • The clearcoats offer exceptionally high levels of gloss and mar-resistance. This ensures that the cars finished in Deltron retain their superior finish even years after they have been painted

Delfleet

The latest advance in fleet coatings technology.Delfleet is PPG's premium paint system for meeting the demanding needs and exacting specifications of OEM commercial vehicle manufacturers and fleet maintenance operations. Incorporating the very latest fleet coatings technology, this premier fleet coatings system is supported by one of the most comprehensive colour-matching systems in the industry. Whether it is superior chemical resistance or top-of-the-line gloss and durability, customers seeking a paint system configured to very specific performance needs will find that Delfleet offers a wide selection of topcoats, clearcoats and primers to choose from. Moreover, painters will find that a Delfleet system is easy to apply and achieves exceptional colour match.• High gloss finish • Superior durability • Ultimate product performance • Ease of application • Superior chemical and corrosion resistance • Comprehensive colour tools and training support Ideal for • OE truck manufacturers • Repair facilities for trucks and national fleets • OEM builders of: o Trucks o Buses o Airport ground equipment o Fire and Emergency vehicles

Bilux

Bilux - the international range of Economy PU paint products is a complete system in itself. More so, there have been several products specifically designed and modified keeping in mind the changing market trends. Here's what the Bilux range has on offer for you• Bilux Topcoats - Bilux has more than 500 shades to offer in solid and metallic colours and this number is increasing by dozens every month. If you want

a particular shade, we can make it available for you in 3 days' time. The quality of finish, gloss level retention, excellent coverage and the shade fidelity have resulted in Bilux Topcoats getting huge acceptance in the refinish industry. • Bilux Undercoats - The complete Bilux System has the following to offer to you in terms of product range • Bilux Primers - Bilux range offers a host of primers to take care of the various requirements of each and every customer- o Bilux HB Primer Surfacer - It is a fast-drying two-pack High Build Primer Surfacer specially formulated for new work, spot repairs and complete re-spray. It is easy to apply, sand and offers corrosion resistance and excellent adhesion to a variety of substrates. o Bilux Etch Primer - An economical primer providing excellent anti-corrosion protection, it has been specially pigmented to provide better filling. It has a long pot life, hence reducing wastage due to incorrect mixing. o Bilux Epoxy Primer - A high performance undercoat for a variety of substrates providing excellent adhesion to topcoat. It is designed to provide smooth laydown for minimal sanding, while still giving excellent dry film thickness. It can also be used on old finishes to prevent lifting. • Bilux Putty / Bilux Light Weight Putty - Two range of polyester putties to take care of different kinds of requirements - one of the bestsellers from the Bilux range due to its ease of application, sanding and smooth finish. • Bilux Clear / Bilux High Gloss Clear - Bilux Metallics have earned the acceptance that they have, partly, because of the high gloss level and its retention under both Bilux PU Clear as well as Bilux HG Clear. They provide a hard glossy film that can be easily polished to remove dirt.

Aspa

Old is Gold - This popular adage best describes AsianPPG's oldest brand in the automotive paints category which was integrated from Asian Paints. Since its launch in 1973, Aspa (an Alkyd based product) won the hearts of all its patrons and continues to remain the market leader.With a network of over 1300 direct dealers spread across the country, its consumers vouch for its quality. This brand offers variety of hues i.e. 45 shades in metallics and 85 in solids.With technological advancement, Aspa is now available on the mixing rack. The dealers are therefore able to generate over 80 different shades by combining various base and tinters.The distinctive attributes of Aspa are :• Unmatched coverage • Quick drying • High gloss level • Good Distinctiveness of Image(DOI) feature giving mirror like finish The product range is as follows :• Aspa Synthetic Putty • Aspa Synthetic Automotive Paint - Solids • Aspa Synthetic Automotive Paint - Metallics

• Aspa High Gloss Clear • Aspa Thinner

DECORATIVE PAINTS

Major segments in decoratives include exterior wall paints, interior wall paints, wood finishes and enamel and ancillary products such as primers, putties etc. Decorative paints account for over 75% of the overall paint market in India. Asian Paints is the market leader in this segment. Demand for decorative paints arises from household painting, architectural and other display purposes. Demand in the festive season (September-December) is significant, as compared to other periods. This segment is price sensitive and is a higher margin business as compared to industrial segment.

Exterior Walls

Product Name: Asian Paints AceDescription:Ace Exterior Emulsion is a water-based exterior wall finish suitable for dry to moderately humid climatic conditions. It offers excellent resistance to

chalking, cracking and weathering in comparison to Cement Paint. Ace gives cleaner shades which do not fade and last longer. Ace offers good anti-algal performance in dry to moderately humid climatic conditions.Cost Range: EconomyFinish: MattAvailability: Across all Colour World Dealers.

Product Name: Asian Paints Apex StretchDescription: Asian Paints Apex Stretch Water Repellent Exterior Paint is a 100% acrylic, water-based hi-performance long-lasting exterior wall finish. This has an in built elasticity (Stretches more than 150% of its original size) which with adequate dry film thickness can bridge hairline cracks in the plaster up to 0.5mm. Due to the compactness Apex Strtech resists penetration of water caused by wind driven rain and is coupled with excellent anti-algal and anti-fungal properties.Cost Range: Mid-RangeFinish: Rich SheenAvailability: Available through Asian Paints Project Sales Only.

Product Name: Asian Paints Apex UltimaDescription:Asian Paints Apex Ultima Advanced Anti Algal Weather Proof Emulsion is a water-based,modified acrylic, anti algal, high performance exterior wall finish. It incorporates the latest state-of-the-art technology to provide long-lasting exterior performance even in the most extreme tropical conditions of india. Its unique advanced anti algal chemistry ensures that exterior walls are provided with power-packed resistance aganist algae and fungi growth. Its has very good dirt pick up resistance and dirt cleaning propertiesCost Range: PremiumFinish: Rich SheenAvailability: Across all Colour World Dealers.

Interior Walls

Product Name: Asian Paints Tractor Acrylic DistemperDescription:Tractor Acrylic Distemper is a water-based, interior wall paint and gives walls a delightful, attractive, matt finish that lasts for ages. A time-tested formulation with acrylic copolymer binder, its special formulation ensures

shade retention for a long time and its fast drying property facilitates quicker completion of painting jobs.Cost Range: Mid-RangeFinish: MattAvailability: Across all Colour World Dealers.

Product Name: Asian Paints Tractor Synthetic Distemper Description: Asian Paints Tractor Synthetic Distemper is a water-based, interior wall paint. It is the most popular distemper brand in India and gives walls a finish that is good looking, time-tested, durable and value for money. Asian Paints Tractor Synthetic Distemper gives a uniform matt film, which can be wiped with clean water. Being oil bound, the paint film becomes harder over a period of time, which gives better washability and durability.Cost Range: Mid-RangeFinish: MattAvailability: Across all Colour World Dealers.

Product Name: Asian Paints Utsav Synthetic DistemperDescription:Asian Paints Utsav Synthetic Distemper is a water based finish which doesnot come off on hands or clothes like chunna.It imparts a durable matt finish,which lasts all year round.Utsav Distemper gives you a distemper finish at an economical price.Cost Range: EconomyFinish: MattAvailability: Across all Colour World Dealers.

Metal Surface

Product Name: Asian Paints Luxury Ultra Gloss EnamelDescription:Luxury Ultra Gloss Enamel is an enamel with far superior performance parameters than conventional enamels. Luxury Ultra Gloss Enamel offers Superior Gloss, superi anti yellowing properties and a Unique formulation with anti fungal properties.This product is currently available in only Sparkling White.Cost Range: PremiumFinish: High GlossAvailability: Available in select markets

Product Name: Asian Paints Premium Semi Gloss EnamelDescription: Premium Semi Gloss Enamel is a safe and healthy water-based enamel which can be applied on suitably prepared masonry surfaces, wooden and metal surfaces. It has features like odour and fumes free, meets EN 71 standards, has low VOC, and is quick-drying such that 2 coats can be completed in the same day. Cost Range: PremiumFinish: Semi GlossAvailability: Available through Asian Paints Project Sales or Asian Paints Home Solutions Only

Product Name: Asian Paints Utsav EnamelDescription:Utsav Enamel is a solvent-based paint that gives a long lasting glossy finish, which keeps the surface looking as good as new. It forms a tough film that is resistant to stains and water, and provides a durable finish at economical prices. Recommended for interior surfaces, it can be applied on wooden surfaces (like doors, windows, furniture, cabinets), on metal surfaces like grills, furniture and on suitably prepared masonry wall surfaces.Cost Range: EconomyFinish: GlossyAvailability: Across all Colour World Dealers.

Wood Surface

Product Name: Asian Paints Utsav EnamelDescription:Utsav Enamel is a solvent-based paint that gives a long lasting glossy

finish, which keeps the surface looking as good as new. It forms a tough film that is resistant to stains and water, and provides a durable finish at economical prices. Recommended for interior surfaces, it can be applied on wooden surfaces (like doors, windows, furniture, cabinets), on metal surfaces like grills, furniture and on suitably prepared masonry wall surfaces.Cost Range: EconomyFinish: GlossyAvailability: Across all Colour World Dealers.

Product Name: Asian Paints Luxury Ultra Gloss EnamelDescription:Luxury Ultra Gloss Enamel is an enamel with far superior performance parameters than conventional enamels. Luxury Ultra Gloss Enamel offers Superior Gloss, superi anti yellowing properties and a Unique formulation with anti fungal properties.This product is currently available in only Sparkling White.Cost Range: PremiumFinish: High GlossAvailability: Available in select markets

Product Name: Asian Paints Premium Semi Gloss EnamelDescription: Premium Semi Gloss Enamel is a safe and healthy water-based enamel which can be applied on suitably prepared masonry surfaces, wooden and metal surfaces. It has features like odour and fumes free, meets EN 71 standards, has low VOC, and is quick-drying such that 2 coats can be completed in the same day. Cost Range: PremiumFinish: Semi GlossAvailability: Available through Asian Paints Project Sales or Asian Paints Home Solutions Only.

INDUSTRIAL

Industrial: Three main segments of the industrial sector include automotive coatings, powder coatings and protective coatings. Kansai Nerolac is the market leader in this segment. User industries for industrial paints include automobiles

engineering and consumer durables. The industrial paints segment is far more technology intensive than the decorative segment.

PROTECTIVE COATING

Protecting industrial assets is increasingly becoming critical owing to rising asset costs, harsh weather conditions and mounting chemical pollution. Therefore asset owners are looking at specialised protective coatings specific to their requirements. We perceive this to be just the right environment for Asian Paints to demonstrate its growing technical strength.Protective Coatings from Asian paints offer a choice of high-performance, heavy-duty coatings, designed to protect assets against the specific corrosive environment they are exposed to. Asian Paints Protective Coatings are tested under extreme conditions to ensure that they are durable and can withstand the vagaries of the different climatic conditions. Today the range of coatings find use across diverse industries such as nuclear, thermal or hydel power plants, chemical, petrochemical or fertilizer plants, refineries, sugar, pulp and paper industry, offshore structures, pharmaceuticals etc.At Asian Paints, we understand the specific environment that your assets are exposed to, so as to offer the right coating solution for your needs.

Floor Coatings

Concrete floors represent a significant investment for any industry. Despite this, it is often the most neglected and abused part of the structure. Apart from the mechanical abuse, spillages of various kinds of chemicals also occur often weakening the reinforcement and concrete surface. The need to protect the surface with a suitable coating is quite obviously there.An increasing awareness of the limitations/drawbacks of concrete flooring is now resulting in wider acceptance of floor coatings. Limitations include the accumulation of dust due to the formation of laitance and difficulty encountered during cleaning owing to surface texture. Furthermore, the presence of cracks and surface porosity allows various oils to seep in, resulting in unappealing patches. Weakening of the reinforcement and concrete surface due to chemical spillage and the possibilities of microbial growth are other significant drawbacks. Apart from these, concrete floors are aesthetically unappealing making the workplace dull. The APCOFLOR coatings are hard wearing, abrasion resistant coatings available in wide range of attractive colours. They have excellent mechanical properties and

provide floors that are tough and long lasting. They, apart from protecting the concrete surface, help tide over the limitations without affecting the intrinsic strength of concrete floor.

Road Markings

Road markings are the silent custodians of road safety in this era of four and six lane highways. Markings signify the delineation of traffic path and the lateral clearance from traffic hazard for the safe, smooth and orderly movement of traffic. Apart from traffic guidance, they also serve as a tool for controlling, warning and providing information to road users.Though the cost of road markings is fractional in comparison to the cost of the road, its importance is indisputable. Often a key parameter used to judge the road quality is the quality of the installed road marking.Asian paints commands market leadership in the field of thermoplastic road markings.Asian Paints offers a variety of road markings. These include hot applied retroreflective thermoplastic material, fast drying highly durable 100% acrylic retro-reflective water borne paints and conventional water / solvent based road marking paints.APCOTRAK range of coatings includes coatings such as water based road marking paints conforming to IS-164, 1981 (Amended 1993) - Specification for ready mixed paint for road marking, ordinary water based road marking paint and the 3rd generation road markings: APCOTRAK WBR, fast drying highly durable 100% acrylic retro-reflective water borne paints. These represent a generational shift in markings. They are safer to handle as heating is not required. Do not soften on environmental heat and hence dirt pickup is eliminated. They take less time for application as can be sprayed by Air / Airless spray machines leading to lower disruption in traffic movements, provide very high retroreflectivity, very ideal for edge lines on highways and apron / taxiways at airports.APCOMARK range of markings includes hot applied retroreflective thermoplastic road markings conforming to clause 803.4, "Specifications for Road and Bridge Works" of Ministry of Road Transport & Highways. APCOMARK has been widely used in the famed Golden Quadrilateral and NSEW project of NHAI and on various national and state highway projects across the country.THERMOLINE range of markings include hot applied retroreflective thermoplastic road markings conforming to BS 3262 specificationsAsian Paints also offers Type 2 Retro-reflective Drop-On Glass Beads conforming to BS 6088 specification.

1.4. Size of Organisation

Manpower Asian Paints believes that people are its strongest assets, for a company can go only as high as its people aim. It is people who innovate and invent, and who engineer the efficiencies that make a business succeed. It is they who drive growth and lead to greater heights. At Asian Paints, our human resources systems are designed to create a focused, performance oriented and agile company. A talent pool of over 4700 employees employed across 23 countries bring in a unique blend of mindsets and skills. An open and interactive work culture brings out the best in our people. A sense of ownership and freedom to experiment at their workplace brings out creativity and innovation in every individual. Excellent training is provided to develop leaders and re-strengthen competencies from within the organisation. Besides encouraging achievers from within the organisation, we absorb the best talent from some of the best management and technology institutes in the country. Turnover

Asian Paints’s turnover has been growing at the rate of 11.85% (CAGR) over the last 3 years and is expected to exceed Rs. 112 billion to 156.7 billion by end of 2010. Asian Paints is India's largest paint company and the third largest paint company in Asia today, with a turnover of Rs 36.7 billion (around USD 851 million).The Indian Paint Industry growing at 1.5 times the GDP growth. Assuming thecountry GDP grows @7.5% p.a, the Indian paint industry is expected to grow ata CAGR of 11.85% from Rs. 112 bn. in FY07 to Rs. 156.7 bn in FY10E.In order to cater the incremental demand of the domestic paint industry, totalcapacity addition coming upstream in over the period of two year i.e. from FY08Eto FY10E is around 255450 tonne. Out of this incremental supply around 82%will be contributed from APL resulting in increase in market share from 37% inFY07 to 42% in FY10E.APL’s dominance in paint industry and presence across all segments will enableit to maintain the margins going forward.ValuationsWe expect the company to register a 3-year EPS CAGR of 28.2% from 29.3 in FY07(Rs. mn) to 61.7 FY10E. At CMP of Rs. 1200.0 the stock is trading at 25.0x FY09E & 19.5x FY10E earnings per share. We initiate coverage on Asian Paints Ltd with a BUY recommendation and price-objective of Rs.1419 (implying a forward P/E multiple (Rs. mn) of 23x) on account of robust domestic demand for decorative paints.

1.5. Organizational Structure in Asian Paints

1.6. Objectives and Business Philosophy of Asian Piants 1.6.1. Asian paints the leader in Indian paint Industry has a very strong marketing division. With more than 35% market share Asian paint is still growing in leaps and bounce to achieve higher targets. It is changing fundamentally with two objective in mind a huge ramp in the market share and better growth over the next three years. Previously company used to function as undifferentiated organization. But now they have divided it into three section each. And each section has its own independent support system, targets and performance parameter. . This was to be done through: • Common branding

• Centralized marketing • Centralized quality control • Centralized purchases

1.6.2. Asian paint is following unlque strategy of marketing in the rural areas by using their official mascot. According to the company it feels that picture are more dominant than name. • Asian paint website Asian paints com provides several information regarding the product and various other information that is being required by customer and dealer. • Asian paint is now targeting to provide paint solution with insurance.

The Process Flow of the Asain Paints

1.7. Market share and Position of the Company1.7.1. The ‘AAA’ rating assigned to the Rs 850 million non-convertible debenture issue of Asian Paints (India) Ltd (APIL) has been reaffirmed. Simultaneously, the ‘P1+’ rating assigned to the 700 million Commercial Paper Programme has also been reaffirmed. The ‘P1+’ rating assigned to the Rs 500 million Short-term Debenture Programme of the company has been withdrawn. The company has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 21countries and has 29 paint manufacturing facilities in the Industry: world servicing consumers in over 65 countries.

1.7.2. Asian Paints Limited (APL) incorporated in 1942 ranks among the top ten decorativepaint companies in the world. It has presence in decorative and industrial coatingsegment of the paint business. Besides, the Company operates around the worldthrough its subsidiaries Berger International Limited, Apco Coatings and SCIBChemicals. APL has its presence in almost all the segment through its brands Royalein the premium segment, Apcolite in the mid-segment, Gattu, Tractor, Utsav and 3-Mango etc. in the lower segment.

1.7.3 The Board of Directors recommended the payment of final dividend of Rs. 11 per share (110 %). An interim dividend of Rs. 6.50 per share (65%) was distributed in Nov’08 Thus total dividend announced for financial year 2008-09 will be Rs 17.50 per share (175%). The total dividend distributed in FY2008 was Rs. 17 per share (170%).

1.7.4 APIL is primarily engaged in the manufacture and sale of decorative paints. In addition, the company is integrated backwards for manufacture of two major intermediate chemicals - Phthalic anhydride and Pentaerythritol. During 2001-02, APIL has acquired the powder coatings business from Hawcoplast Chemicals, with the objective to establish itself in the fast growing powder coating segment. The company also has an international presence through its subsidiaries in Sri Lanka, Australia, Fiji, Middle East, Mauritius and Nepal. APIL, through its 50:50 joint venture (Asian PPG Industries Ltd) with PPG Industries Inc USA, also operates in the automotive paints segment1.7.5 The market size of the Indian paints sector has been pegged at Rs 134 bn in value terms and is very fragmented. While in value terms, the industry grew by 18% in FY08, in volume terms, the growth stood at 15% YoY. The current demand is estimated to be around 650,000 tonnes per annum and is seasonal in nature. The per capita consumption of paints in India stands at 0.5 kg per annum as compared to 1.6 kgs in China and 22 kgs in the developed economies. India's share in the world paint market is just 0.6%.The unorganised sector controls around 35% of the paint market, with the organised sector accounting for the balance. In the unorganised segment, there are about 2,000 units having small and medium sized paints manufacturing plants. Top organised players include Asian Paints (30% market share), Kansai Nerolac (20% market share), Berger Paints (19% market share) and ICI (12% market share1.8. Present Leadership

P M Murthy – CEOP M Murthy – Managing DirectorMr. Ashwin Choksi – Non-Executive ChairmanMr. Ashwin Dani – Non-Executive Vice Chairman

Ms. Tarjani Vakil – Chairperson of Audit CommitteeNS (Subba) Iyer – General Manager - Human ResourcesSudipto Mandal – Senior HR Manager

Salil Chinchore – General Works ManagerJagannath B – Manager-ProductionNilay Verma – Marketing managerMr. Abhijit Bhattacharya – Sr. Manager-Training

1.9. Historical Background of Asian Paints

Asian Paints was founded in 1942 as a small partnership firm & now is India's largest paint company. It ranks amongst the top ten decorative coatings companies in the world today, with a turnover of Rs.25.6 billion. Asian Paints operates in 22 countries and has 28 paint manufacturing facilities in the world servicing consumers in over 65 countries. Asian Paints product range includes Decorative Paints, Industrial Paints & Automotive Paints. The company has five manufacturing units which are located at Mumbai, Ankleshwar, Patancheru, Kasna and Sriperambdur. Each plant is headed by the Factory Manager. Bhandup plant is the oldest plant with an installed capacity of 30000 Tonnes per anum. All plants are also awarded with ISO

9000 & ISO 14000 certification. Asian paints has won many awards & recognitions which includes rating under “200 best under a billion” by Forbes global in 2002, “Best small company in India” by Asia Money in 2002, “Golden peacock” national quality award by union labour ministry, “Best supply chain” award by i2 solutions, “Golden peacock environment management award”, “Five star rating” by British safety council in 2003 & 2005.The product portfolio of the Asian Paints group covers a large spectrum of finish coasts & ancillary products in decorative paints, wood finishes, automobile OEMs & refinishes, marine & Industrial coatings.Asian paints limited with its three business units decorative, Industrial & International business is one of the largest paint company in India. It had a sell over 300 million litres of paint in 2005-06. Significantly the group has crossed the Rs.3000 crore turnover mark-a preset mile stone for the company. Asian paint with its natural competitive advantage of size (Number 1 in India), Strong brand equity & largest distribution Network has acquired the number one position in Decorative segment in India.

1.10. Advertisement and Promotion by Asian Paints 1.10.1. Asian paints the market leader of the decorative segment in the paint market of the India. In achieve the current position a lot things are being done by the Asian paints. The promotion strategy of Asian paints is bringing a lot of positive output to the company. Company is using different techniques such ad. Campaign, sales promotion, personal selling, direct marketing and public relation.

1.10.2 Asian paints is dominating the television advertisemnt by increasing other ad campaign cost over 50% from next year. A total amount of 85 crores is spent ont eh ad campaign by asian paint. With huge ad campaign support behind the product the company is able to making a brand name in the mind of customer. Their particular ad campaign ‘Mera Walla Blue” “har ghar kuch kehta hia” are being liked by the customer.

1.10.3 Online marketing for urban customer: Asian paint online marketing system is helping company in lot of ways many customers all the necessary information to the customer. It is an unique way of promotion. Asian paint had established 30 colur world through out the country giving the people real taste of colour. The punchline for the colour world is “Jahan Milen world ke saare colour” Asian paint has large area of Network of distribution. It has almost retail outlets through out the country situated in the different city of India. All the customer could easily access the product of Asian paint anywhere and any time.

1.11. Product and Process Technology

Asian paint produces a wide range of products which have more than 1100 shades. Their product were targeted to the different segment of the society. The cost of the produce of Asian paint varies according different income level of the consumer. Company follows the principle providing the customer different kind of products and different price. In company’s Decorative premium sector company have products like Asian paint Royals and Asian paint Emulsion. The cost of these product is Rs.275 and the latter Rs. 201 where the product like GATTU and Utsav-family product are targeted to lower income segment people the cost varies from Rs.15 – Rs. 20. . Products of Asian paints in decorative segment :

As Asian Paint is the leader in the decorative segment in the Indian paint market it has wide variety of product. The products are : (i) Asian Paints Royale (ii) Asian Paints Premium Emulsion (iii) Asian Paints Apcolite Premium Enamel (iv) Asian Paints Gattu Synthetic(v) Asian Paints Utsav Enamel(vi) Asian Paints Trator Acylic Distemper (vii) Asian Paint Utsav Acrylic Distemper (viii) Asian Paint Apex(ix) Asian Paint Ace(x) Asian Paints Tractor Synthetic Distemper. Products of Asian Paints in Industrial sector : it is the second category of the product that Asian paint produces. In this segment Asian Paints targets to industry where the paint are used for protective coatings of the machinery. Road mapping and various other industrial uses. In these segment the product are normally sold at the premium price. Asian paint in these sector is behind its competitor Nerolac. Now Asian Paints is trying a lot to improve the product technology and by bringing new product in this sector to compete with its competitor. The products are

(i) Apcomin Synthetic Enamel (ii) Apcomin Synthetic Powder (iii) Stainer (iv) Premium surface & fillers Product for automotive sector : This is the third category of product which is produced by Asian paint. These segment is slowly being emerging great user of paint in the Indian market previously automotive company used to import the product from other country. But now some companies like Asian paint, nerolac, Berger have their products in this segment. This sector is emerging market in India. Products : The products of Asian paint in this segment are (1) Allumium Paint (2) Fibre Paint (3) Apcolite Hammertone finish

1.12. Diversification Moves by Asian Paints

Although operating in commodity market. Asian paints have invested heavily in branding, GATTU, the Asian paints official Mascot is a familiar icon across India. The company recently augmented their web pressure. Their website, Asian paints.com is an exhaustive hub of ‘Painting solutions’. The site use Maximum interactivity to enhance user experience. There are painting lips, online shades cards, cost calculation (based on floor area and number of rooms dealer locator and a short of other innovative services. Customer segmentation is the most important part of the marketing strategy of any company. Asian paints, the market leader in the Indian paint market segmented their products mainly in three sectors. (i) Decorative (ii) Industrial (iii) Automotive. Their customers are all also segmented based on the usage of these products. Asian paints has stressed on employee development and creating leaders of tomorrow. It always have strong belief in individual ability and creating an environment in which an entrepreneurial spirit in encouraged. This is why Asian paints have believed to be a best employees for personal and personal growth. Asian paints have created a platform where Talent is shared across the organization as Managers are given in different areas of operations. It gives Asian paints on overall good perspectives of business along with challenges of chandelling new Ares of operations.

1.13. Major Players In the Indian paint industry Asian paints is the leader keeping the other competitors far behind. There are three main Players is this sector we can rank the competitors of Asian paints as : i) Nerolac paints (ii) Berger Paints (iii) ICI Paints.

In industry they are recognized as trailing firms. But with their high growth in the industry the competitors can touch or even overtake Asian paitns, for that the three main competitors have different strategies. Initially one common strategy must be their mind – is to increase the market share.

Now we are considering individual strategies of the three companies. Nerolac Paints : Nerolac, despite a strong brand name has grossly underutilized its potential in decorative paints. But in industrial paint sector it is far ahead of other competitors. So, its two main targets are : - i) to keep hold of the Industrial paint market ii) increase the market share in Decorative paint sector. All their business strategies mainly rounded this two issues. The different strategies they are dealing with : (1) They want to see high growths from decorative segments. In Industrial sector their supply chasing demand strategy accumulated lot of inefficiencies, so there is a scoe for cost reduction. So they want to upgrde the equipments to improve efficiency in manufacturing & secondly they are taking advantage of IT to improve over all efficiencies. (2) In decorative segment, they are logging behind the demand. So now set up is needed as well as they are concentrating on enamels. They are installing colour dispensing machine across the country. (3) Concentration on emulsions & distempers, other words interior paints.

Distinguishing the high – low end products. (4) They want to concentrate also on the automobile paint industry. Here they are already established but Asian paints is also targeting this sector heavily.

Berger Paints : Berger paints is considered as the dark horse of paint industry. While company’s main strength is in decorative sector, it has been actively pushing its presence in the industrial paint segment. To improve its business the company have some strategy : i) Company is mainly spreaded in Eastern & Southern part of the company, now it is looking for a rapid expansion at the western region also. ii) Recognizing the saturation of the urban market, Berger is targeting the rural market. iii) They are looking to export in nearby countries such as Bangladesh, Bhutan, Nepal to boost its revenue. iv) Within the paint industry, Industrial paint segment has a higher growth rate. Keeping this in mind company has targeted a 15% share of Industrial paints in the company’s product mix. v) Berger’s performance in Automotive sector over the lst few years has been fairly. Here also they are targeting to build up some tie-up with automobile companies. vi) Berger had ticups with Nippon paints of Japan & orica of Australia. Here they would like to go for the branding of products through proper advertisement compaign & with their new logo. vii) An establishment of new plant in Russia was done in 2005, which is expected to start production by the end of 2006. company is likely to utilize the Russian plant to cater to the markets of CIS countries in the future.

ICI Paints : Within 3 years of launch of colour future from ICI it proved to define the International interior designing trend. The company has invested a million dollars in the R&D of the colour futures concept. Which helps to forecast the international colour trends in paints. Though ICI is considered as the 4th paint against in India, but its presence & development can be a threat to the others.

As a part of its strategy ICI is taking the measures : -

(i) It is not looking at the increasing Investments but focusing on debottenecking the capacity. (ii) Considering the increment of channel partners. (iii) Improving technology & offering better quality at a moderate price will help to capture the rural market easily. (iv) Improved service & solution to the customers. The company is slowing penetrating to both of decorative & Industrial paint segment.

1.14. Source Of Data Collection

Official website of ASIAN PAINTS.

By personal interaction with the public relations officer of the organization concerned.

CHAPTER-2SWOT Analysis of the Company

SWOT ANALYSIS OF ASIAN PAINTS

SWOT analysis is a basic, straightforward model that provides direction and serves as a basis for the development of marketing plans. It accomplishes this by assessing an

organizations strengths (what an organization can do) and weaknesses (what an organization cannot do) in addition to opportunities (potential favorable conditions for an organization) and threats (potential unfavorable conditions for an organization). SWOT analysis is an important step in planning and its value is often underestimated despite the simplicity in creation. The role of SWOT analysis is to take the information from the environmental analysis and separate it into internal issues (strengths and weaknesses) and external issues (opportunities and threats).

SWOT analysis is done for a company, to find out its overall Strengths, Weaknesses,

Threats and opportunities leading to gauging the competitive potential of the company.

The SWOT Analysis enables a company to recognize its market standing and adopt

strategies accordingly. Here SWOT analysis of Asian Paints is made to understand the

positioning of the company better.

2.1. Strengths:

1. Market leaders with 35% market share in the organized sector, the closest competitor does not have even half of AP’s share;

2. Comprehensive nation wide coverage of the market – urban, semi-urban and rural areas. They have quite a number of brands, covering all segments and filling all gaps. For example, they have brands in different price slots like Utsav for rural lower-end markets and Apcolite for high end-markets;

3. AP’s logo ‘Gattu’, an impish boy with the paint tin and brush, is most popular and easily recognized;

4. Widest product range in terms of products, shades, pack sizes - 40 different decoratives, some in 150 shades, 8 different pack sizes;

5. Unlike its competitors who concentrate only in urban areas, AP is found everywhere. It has a country wide distribution

6. A network of 13,000 dealers spread all over the country. The nearest competitor has less than 8,000. For this, they have large network of regional offices and company depots and sales personnel to service the nationwide dealer network;

7. Strong in inventory control. APs average inventory level is 28 days sales against 51 days for the industry. AP has 45% edge in inventory carrying costs;

8. The pricing strategy is oriented to middle/lower end consumers;

9. AP is quite strong in production-marketing coordination. Their policy of offering tailor-made products to suit customer need has resulted in an ever growing product range;

10. In-house production, no outsourcing, high reliability in suppliers, superior in quality assurance;

11. Leader in profit and operating margins, ROI of AP is 40% while ROI of the rest of the industry is 22%, Net worth of Rs 204 crores against Rs 58 crores of Goodlass Nerolac and Rs 41 crores of Berger.

12. High caliber human resource, employs maximum number of MBAs, as a proportion to total number of employees;

13. Corporate reputation has been a major strength for AP. The image is that of a successful and well-managed company. They have won many accolades and awards. For example, 1995 Corporate Excellence Award from HBSA and ET, IDBI study rated AP as one of India’s most excellent companies, another study rated AP among top 5 paint manufacturers in the world. They have an enviable track record in breaking the position of MNCs in the Indian paint industry.

2.2. Weaknesses:1. In industrial paints, AP has only a 15% market share. It is far behind the

leader Goodlass Nerolac, which has a market share of 43%. Since this is going to be the major growth segment in the future, a lag in this segment will end up as a major weakness;

2. Widening product mix puts strain on production distribution, accounting and administration;

3. Innovation in developing new products is adequate;

4. AP has a major weakness on the technology front in industrial paints. Most paint firms have technology tie-ups with manufacturers abroad. For example, Goodlass Nerolac has a tie-up with Kansai paints, which has provided the company with Cathodic Electro Deposition (CED) technology. Since Kansai is the supplier to Suzuki, Japan, Goodlass with its Kansai connection finds it easy to tap Maruti in India. AP has not been able to make any significant advances either with Maruti or the auto segment in general. Berger has a technical tie up wuth Herbets, Germany, for automotive paints, Valspar Corp, USA for heavy-duty coatings and Teodur NV, Holland for powder coatings;

5. Ever expanding product mix throws some strain on inventory management;

6. Seasonal demand and hence in off seasons it can lead to cash flow problems;

7. No tie up with foreign manufactures. Through it has units in several countries

2.3. Opportunities:

1. Acquiring/ increasing market share in Industrial paint sector.

2. Developing market in automobile industry, which accounts for 50% of Industrial paint market.

3. AP has always encashed on opportunities that have come its way. It has maintained a product profile keeping the market trends in picture. It shifted to a predominance in industrial paints than industrial paints than in decorative paints as was evident from the production figures of 1995-96;

4. The automobile industry accounted for 50% of the industrial paint market.

2.4. Threats:

1. Domination of few foreign companies;

2. Since both Goodlass Nerolac (43%) and Berger’s (14%) have a higher market share than AP’s (14%), it is possible that in the future, they may capture the entire industrial paint market;

3. Competitors have gone in for hi-tech with instacolour spot mixing. For example, J&N’s instacolour offers 626 shades;

4. Automated paint blending in retail points already there. ICI’s Touch Colour and Berger’s Colour Bank are indicative of this;

5. Competiton is catching up fast, hi-tech facilities gives abundant choices.

The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far

outweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and

weaknesses and threats are transitory. Any investment idea can do well only when

you have three essential ingredients: entrepreneurship (the ability to take risks),

innovative approach (in product lines and marketing) and values (of quality/ethics).

Benjamin Franklin discovered electricity, but it was the man who

invented the meter that really made the money.

CHAPTER-3ANALYSIS OF FINANCIAL STATEMENTS

Balance Sheet

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Sources of fundsOwner's fund Equity share capital 95.92 95.92 95.92 95.92 95.92Share application money - - - - -Preference share capital - - - - -Reserves & surplus 998.55 832.58 648.16 526.36 476.30Loan fundsSecured loans 24.59 36.70 66.90 31.88 28.37Unsecured loans 40.70 40.70 40.70 40.70 36.68Total 1,159.76 1,005.90 851.68 694.86 637.27Uses of funds Fixed assets Gross block 1,116.93 937.89 806.20 736.14 712.70Less : revaluation reserve - - - - -Less : accumulated depreciation 494.02 509.06 471.29 435.71

401.47Net block 622.91 428.83 334.91 300.43 311.23Capital work-in-progress 164.64 136.25 16.31 5.87 12.53Investments 234.77 422.88 334.39 274.55 258.43Net current assets Current assets, loans & advances 1,172.36 1,035.22 869.21 686.15

597.47Less : current liabilities & provisions 1,034.92 1,017.28 703.15 596.40

542.38Total net current assets 137.44 17.94 166.06 89.75 55.08Miscellaneous expenses not written - - - 24.26 -Total 1,159.76 1,005.90 851.68 694.86 637.27Notes: Book value of unquoted investments 157.39 345.50 257.01 197.17

163.91Market value of quoted investments 178.76 254.26 183.02 158.25

92.50Contingent liabilities 356.87 222.05 180.22 187.26 148.83Number of equity sharesoutstanding (Lacs) 959.20 959.20 959.20

959.20 959.20

Profit and loss Account

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Income: Operating income 4,510.12 3,595.53 2,953.38 2,447.78 2,052.28Expenses Material consumed 2,640.48 1,969.47 1,661.78 1,365.30 1,125.40Manufacturing expenses 86.23 75.12 64.82 53.05 49.34Personnel expenses 239.77 195.54 155.60 129.43 118.35Selling expenses 779.34 646.58 508.88 423.76 352.83Adminstrative expenses 170.37 139.33 126.00 110.20 101.62Expenses capitalised - - - - -Cost of sales 3,916.19 3,026.04 2,517.09 2,081.74 1,747.55Operating profit 593.93 569.49 436.29 366.04 304.73Other recurring income 35.63 50.93 32.32 25.12 21.50Adjusted PBDIT 629.56 620.42 468.61 391.16 326.23Financial expenses 15.91 13.46 15.34 8.16 6.58Depreciation 57.15 43.77 45.42 45.53 47.61Other write offs - - - - 2.29Adjusted PBT 556.50 563.19 407.86 337.47 269.76Tax charges 185.97 186.66 139.99 117.08 96.98Adjusted PAT 370.53 376.53 267.86 220.39 172.77Non recurring items -11.77 1.36 2.06 -34.52 1.04Other non cash adjustments 3.60 -2.69 2.12 0.91 -0.33Reported net profit 362.36 375.20 272.05 186.78 173.48Earnigs before appropriation 562.36 525.20 382.05 286.78 255.48Equity dividend 167.86 163.06 124.70 119.90 91.13Preference dividend - - - - -Dividend tax 28.53 27.72 17.77 16.82 12.54Retained earnings 365.97 334.42 239.58 150.06 151.82

CASH FLOW

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Profit before tax 547.88 564.55 409.92 304.89 270.80Net cashflow-operating activity 325.21 457.29 312.25 218.69

156.45Net cash used in investing activity -16.69 -331.91 -110.92 -105.97

-73.08Netcash used in fin. activity -221.61 -126.52 -187.23 -110.06 -82.19Net inc/dec in cash and equivlnt 86.91 -1.14 14.11 2.66 1.18Cash and equivalnt begin of year 41.35 42.49 28.39 25.73 24.55Cash and equivalnt end of year 128.26 41.35 42.49 28.39 25.73

Ratio Analysis

1. Liquidity Ratios08 07

• Current Ratio 1.02 1.24• Quick Ratio 0.47 0.59

Comments

1. Current ratio of the company is 1.24 in 2007 and it has decreased to 1.02 in 2008 which indicates good investment policies of the management and good inventory control. A current ratio of 2 is normally considered satisfactory. In other words, a low ratio indicates that the company may not be able to meet its current liabilities on time and inadequate working capital.2. Quick ratio of the company is 0.59 in 2007 and it has increased to 0.47 in 2008 which indicates there is not overstocking by the management of the organization.

2. Leverage Ratios08 07

• Long term debt/ Equity 0.06 0.07• Total debt/ Equity 0.08 0.14• Fixed Assets Turnover

Ratio 3.97 3.81

Comments

1. Long term debt ratio expresses a relationship between debt and the equity. The company has a debt equity ratio of 0.07 in 2007 and it decreases to 0.06 in 2008 which indicates that the utilization and management of resources is has decreased as in the previous year.

2. The company has total debt equity ratio of 0.14 in 2007 and decreased to 0.08 in 2008 which means that company’s shareholders funds has increased but total long term debts remain unchanged. In other words, it indicates that the company’s shares have not been favored by investors.

3. Fixed assets turnover ratio indicates a relationship between net sales and net fixed assets. The company had a fixed asset turnover ratio of 3.81 in 2007 and it increased to 3.97 in 2008 which indicates efficient utilization of fixed assets by the company.3. Profitability Ratios

08 07

• Operating Ratio 15.83 14.77• Gross Profit Ratio 14.62 13.23• Net Profit Ratio 10.28 9.11• Return On Long Term Funds 58.11 52.70

1. Operating Ratio establishes a relationship between operating costs and net sales. The operating ratio of the company is 14.77 in 2007 and increased to 15.83 in 2008. A rise in operating ratio indicates decline in efficiency. Lower the ratio, the better it is.

2. The Gross Profit Ratio establishes relationship of gross profit to net sales of a company. The company had a ratio of 13.23 in 2007 and it increased to 14.62 in 2008 which indicates that there has been adequate coverage of administrative and marketing expenses.

3. Net Profit Ratio establishes the relationship between net profit and sales. The company had a ratio of 9.11 in 2007 and it decreased to 10.28 in 2008 which means the company’s efficiency has increased because higher the net profit ratio better the business.