GENESIS OF PAINT INDUSTRY

Managerial AccountsGroup MembersManoj Thakur - 26Vipul Raut - 54Amol Bamne - 03Arvind Yadav - 07Harikant Sharma - 13

COMPANY PROFILE

Company Name: Asian Paints.

Type: Public Ltd.

Industry: Paint.

Founded: 1ST FEB, 1942.

Head Quarter: Mumbai, India.

Key people: Mr. P.M.Murti CEO & MD.

Workforce: 4700

Website: www.asianpaints.com

Company History1st February, 1942Champaklal H. Choksi, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil get together to manufacture paint in a garage on Foras Road, Bombay. They name their company 'The Asian Oil & Paint Company.

1945Asian Paints touches a turnover of Rs. 3,50,000, with an innovative marketing strategy "to reach consumers in the outmost corners of the country with small packs."

Company History1954Paints mascot, Gattu, the mischievous kid, was born. Asian

1957 - 66The family-owned company makes the shift to a professionally managed organization.

Asian Paints embark on an ambitious mass marketing campaign, pertaining with thousands of dealers in small towns all over India.

Company History1967Asian Paints emerges as India's leading paint company ahead of any international competition.

1973 Asian paints becomes public ltd company 2002Asian paints was a market leader of Indian Decorative Paints with market share of 44%

P M MurtyCEO &MD

Mr. Ashwin ChoksiNon-Executive Chairman

Mr. Ashwin DaniNon-Executive Vice Chairman

Ms. Tarjani VakilChairperson of Audit CommitteeFounders of company

Asian paints todayAsian Paints becomes the 10th largest decorative paint company in the world

Asian Paints is more than twice the size of its nearest competitor. It is one of the most admired companies in India Present in 22 countries with 27 manufacturing locations. Asian Paints aims to become the 5th largest decorative paint company in the world. 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 alliance with established global partners.

9Group subsidiaries

Company in South pacific island. Asian paints operates in Australia, Fiji, Tonga,Soloman Island under brand name APCO.It is a England Company. In 2002 became part of Asian paints

Egypt company which became part of Asian paints in August 2002US Company with 50:50 equity sharing with Asian paints in 1997. Pittsburgh Paints and Glass Industries (PPG), USAFiji company became a part of Asian paints in September 2003.Group subsidiariesANKLESHWARPLANTKASNA PLANT

PATANCHERUPLANTBHANDUP

Secunderabad based locationDelhi based locationBangalore based locationChennaibasedlocationAhmedabadbasedlocationKolkatabasedlocation

77DEPOT CENTRESASIAN PAINTSHEADQUARTERSMUMBAIDistribution NetworkRaw material RequirementsPaint Industry is raw material intensive with RW being 70% of production costs.

300 types of raw materials used in manufacturing process

The most critical ones are Titanium Dioxide (TiO2) 30 % Phthalic Anhydride (PAN) 20 % Pentaerythritol (PENTA) 15 %

Product PortfolioSegmentsChemicalsDecorative paintsIndustrial PaintsPathetic AnhydridePentaerythritolPaints Total Raw material procured (2013 14)Product NameUnitQuantityValue (In Rs Cr.)Pigments, Extenders & MineralsNot ReportedNA1,743.26AdditivesNot ReportedNA873.84SolventsNot ReportedNA806.55MonomersNot ReportedNA748.42OilsNot ReportedNA277.51OthersNot ReportedNA224.55ResinsNot ReportedNA176.17OrthoxyleneNot ReportedNA0.00Total 4,850.30Source : Asian CERCMaking the pastePigment manufacturers send bags of fine grain pigments to paint plants. There, the pigment is premixed with resin (a wetting agent that assists in moistening the pigment), one or more solvents, and additives to form a paste.

Dispersing the pigmentThe paste mixture for most industrial and some consumer paints is now routed into a sand mill, a large cylinder that agitates tiny particles of sand or silica to grind the pigment particles, making them smaller and dispersing them throughout the mixture. The mixture is then filtered to remove the sand particles.Instead of being processed in sand mills, up to 90 percent of the water-based latex paints designed for use by individual homeowners are instead processed in a high-speed dispersion tank. There, the premixed paste is subjected to high-speed agitation by a circular, toothed blade attached to a rotating shaft. This process blends the pigment into the solvent.

The Production ProcessThinning the pasteWhether created by a sand mill or a dispersion tank, the paste must now be thinned to produce the final product. Transferred to large kettles, it is agitated with the proper amount of solvent for the type of paint desired.

Canning the paintThe finished paint product is then pumped into the canning room. For the standard 8 pint (3.78 liter) paint can available to consumers, empty cans are first rolled horizontally onto labels, then set upright so that the paint can be pumped into them. A machine places lids onto the filled cans, and a second machine presses on the lids to seal them. From wire that is fed into it from coils, a bailometer cuts and shapes the handles before hooking them into holes precut in the cans. A certain number of cans (usually four) are then boxed and stacked before being sent to the warehouse.

The Production Process

Total Sales for year 2013 14Product NameSales Value (In Rs. Cr.)Paints, Enamels, Varnishes & Black11,445.84Traded Goods415.39Others181.35Subsidy65.89Processing Charges45.56Scrap7.03Sale of services5.88Lease Rentals0.08Total12,167.02Source : Asian CERC

Marketing StrategyCompany is using different techniques such as advertising Campaign, sales promotion, personal selling, direct marketing and public relation to increase salesA total amount of 85 crore is spent on the ad campaign by Asian paint. Their particular ads campaign Mera Walla Blue har ghar kuch kehta hai are being liked by the customer.

Asian paint online marketing system is helping the company in lot of ways, providing all the necessary information to the customer. It is an unique way of promotion. ..19

PROMOTION Costumer Engagement Activities

Famous Campaign: Har Ghar Kuch Kehta Hai

Celebrity engagement

CSR Activities

HOME OWNERSARCHITECT & CONTRACTORS

PROMOTION HOME PAINTING GUIDE

COLOR BOOKS

WEB COLOR DESIGNER/ COLOR GENIE

BE COLOR CONFIDENT

COLOR CHEF

HASSLE FREE HOME SOLUTIONS

INSPIRATION WALLS

EARN STARS AND ENCASH DISCOUNTS

SERVICES/CONSUMER ENGAGEMENT ACTIIVITES FOR HOME OWNERSMarket Share in IndiaAsian Paints 55%ICI 11%

HR Strategies A talent pool of over 4700 employees employed across 23 countries bring in a unique blend of mindsets and skills. Asian paints provide an open and interactive work culture to the employees to bring out the best.

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 organization.

RecruitmentCompany is following aptitude test , group discussion and personal interview for recruitment process.

Company has training centre in Mumbai for fresher's.

Company is recruiting : MBA Students for marketing. Bsc (chemistry),BE Mechanical & Chemical students For production and CA & Mcom for finance Dept.

Mar '14 (In Rs. CR's)Mar '13 (In Rs. CR's)Mar '12 (In Rs. CR's)Sources Of FundsTotal Share Capital95.9295.9295.92Equity Share Capital95.9295.9295.92Share Application Money000Preference Share Capital000Reserves3,505.012,926.342,391.86Revaluation Reserves000Net worth3,600.933,022.262,487.78Secured Loans6.659.2817.01Unsecured Loans32.8637.48151.21Total Debt39.5146.76168.22Total Liabilities3,640.443,069.022,656.00Balance Sheet of Asian PaintsMar '14 (In Rs. CR's)Mar '13 (In Rs. CR's)Mar '12 (In Rs. CR's)Application Of FundsGross Block2,908.102,803.731,659.51Less: Accum. Depreciation895.9701.84650.47Net Block2,012.202,101.891,009.04Capital Work in Progress37.9552.55827.3Investments1,030.19449.7542.22Inventories1,665.051,480.791,264.42Sundry Debtors712.36633.88500.24Cash and Bank Balance745.36566.86450.94Total Current Assets3,122.772,681.532,215.60Loans and Advances478.6362.61361.22Fixed Deposits0050.03Total CA, Loans & Advances3,601.373,044.142,626.85Current Liabilities2,423.552,078.941,929.18Provisions617.72500.32420.23Total CL & Provisions3,041.272,579.262,349.41Net Current Assets560.1464.88277.44Miscellaneous Expenses000Total Assets3,640.443,069.022,656.00Mar '14 (In Rs. CR's)Mar '13 (In Rs. CR's)Mar '12 (In Rs. CR's)IncomeSales Turnover10,418.788,971.709,139.39Excise Duty00812.31Net Sales10,418.788,971.708,327.08Other Income163.7126.1590.43Stock Adjustments75.34175.91143.78Total Income10,657.829,273.768,561.29ExpenditureRaw Materials6,044.665,361.004,866.63Power & Fuel Cost114.65101.6574.29Employee Cost482.43404.59343.51Other Manufacturing Expenses0077.05Selling and Admin Expenses001,672.74Miscellaneous Expenses2,075.111,733.1036.77Preoperative Exp Capitalised000Total Expenses8,716.857,600.347,070.99Profit & Loss account of Asian PaintsMar '14 (In Rs. CR's)Mar '13 (In Rs. CR's)Mar '12 (In Rs. CR's)Operating Profit1,777.271,547.271,399.87PBDIT1,940.971,673.421,490.30Interest26.0830.5627.88PBDT1,914.891,642.861,462.42Depreciation212.32126.9899.49Other Written Off000Profit Before Tax1,702.571,515.881,362.93Extra-ordinary items002.38PBT (Post Extra-ord Items)1,702.571,515.881,365.31Tax533.51465.88406.92Reported Net Profit1,169.061,050.00958.39Accounting RatiosOperating Profit Ratio= Operating Profit/Net sales*100Mar '14Mar '13Mar '121777.27/10418.78*1001547.27/8971.7*1001399.87/8327.08*10017.05%17.25%16.81%II.Net Profit Margin ratio= Net profit/net sales*100Mar '14Mar '13Mar '121169.06/10418.78*1001050/8971.7*100958.39/8327.08*10011.22%11.7%11.51%III.Return on Net worth= Net Profit/Net worth*100IV.Debt equity ratio= Total debt/net worthMar '14Mar '13Mar '121169.06/3600.93*1001050/3022.26*100958.39/2487.78*10032.47%34.74%38.52%Mar '14Mar '13Mar '1239.51/3600.9346.76/3022.26168.22/2487.780.010.020.07Accounting RatiosV.Debtors turnover ratio= Net sales/debtorsVI.Total asset turnover ratio= Net sales/Total assetsMar '14Mar '13Mar '1210418.78/712.368971.70/633.388327.08/500.2414.6314.1516.65Mar '14Mar '13Mar '1210418.78/3640.448971.70/3069.028327.08/26562.862.923.14Accounting RatiosVII.Profit Volume ratio (P/V)= Contribution/total sales * 100VIII.Break Even Point= Fixed Cost/Profit volume ratioMar '14Mar '13Mar '128234.42/10418.8*1007195.75/8971.70*1005054.74/8327.08*10020.97%19.80%39.30%Mar '14Mar '13Mar '12482.43/20.97%404.59/19.80%2016.25/39.30%2301.062043.905130.73Accounting Ratios

Stock Exchange AnalysisAsian Paints

Stock Exchange AnalysisAsian Paints

PeriodPaid Up CapitalFromToInstrumentAuthorised Capital (Rs. Cr)Issued Capital (Rs. Cr)Shares (nos)Face ValueCapital (Rs. Cr)20132014Equity Share99.595.92959,197,790.00195.9220122013Equity Share99.595.9295,919,779.001095.9220022003Equity Share99.564.1964,185,952.001064.1920002001Equity Share99.564.1964,185,952.001064.1919941995Equity Share34.519.9119,911,110.001019.9119921993Equity Share34.519.9119,911,110.001019.9119901992Equity Share19.512.4412,444,444.001012.4419871990Equity Share19.512.4412,444,444.001012.4419851987Equity Share9.58.38,296,296.00108.319841985Equity Share7.55.195,185,185.00105.1919831984Equity Share7.55.195,185,185.00105.1919801983Equity Share2.52.5250,000.001002.519781980Equity Share2.52.5250,000.001002.519751978Equity Share2.51.5150,000.001001.5Capital StructureFuture growth of Paint IndustryPaint industry estimated at Rs. 135bn.Unorganized sector accounts to 35% of paint market.Volume growth estimated at 15%.Indias share in the world paint market is 0.6%.Per capita consumption of paint in India is 1.2kg/annum.

Future growth of Paint IndustryThough competition is increasing due to entry of global players and capacity expansions, analysts believe companies have reasonable pricing power on account of rising incomes and a shift in consumer preferences to the high-margin and fast-growing emulsions category.

The demand for decorative paints, which account for a bulk of Asian Paints revenues, is robust, as paints are increasingly being looked at as a necessity and not just a discretionary spend. The industry has a strong linkage to the gross domestic product (GDP) growth. As a result, the Indian paint industry gets to cater the second-fastest growing market after China.

Future Growth of Asian PaintAsian Paints is planning an international network of technology centers spread across Australia, Jamaica, Egypt, Dubai, Mauritius, Fiji and Singapore. The paint project will use the latest techniques in production, packing, conveying and storage in an eco-friendly manner, with zero discharge of effluents.With a 55 per cent market share,Asian Paints will be the biggest beneficiary of the industry growth. Moreover, competition is limited, as its distribution network of 27,000 dealers (twice its closest peer) is a good entry barrier.Company aims to come under top-5 paints companies list in the world in next 2 year.

CONCLUSIONAsian Paints, Indias largest paint company and Asias third largest paint company, with a turnover of Rs 96.32 billion.

Have an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity.

Over the course of 25 years Asian Paints became a corporate force and India's leading paints company. Driven by its strong consumer-focus and innovative spirit, the company has been the market leader in paints since 1968.