AN ORGANISATION STUDY

AT

Kansai Nerolac Paints Ltd

Chennai

A PROJECT REPORT SUBMITTED BY

Alex Asirvatham R

(Reg. No 2887024)

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
OF MANONMANIAM SUNDARANAR UNIVERSITY,
TIRUNELVELI

DEPARTMENT OF MANAGEMENT STUDIES

NESAMONY MEMORIAL CHRISTIAN COLLEGE, MARTHANDAM,
KANYAKUMARI DISTRICT
2008-2010
 CERTIFICATE

This is to certify that the project study entitled “AN

ORGANISATIONAL STUDY AT KANSAI NEROLAC PAINTS LTD,

CHENNAI” is a bonafide work done by ALEX ASIRVATHAM R, Reg.

No.2887024 and submitted in partial fulfillment of the award of degree in

Master of business Administration, before Manonmaniam Sundaranar

University, Tirunelveli.

Faculty Guide Head of the Department

External Guide

1.

2.
 DECLARATION

I Alex Asirvatham R hereby declare that the project “Organizational

Study at Kansai Nerolac Paints Ltd, Chennai” submitted in partial fulfillment of the

award of the Master of Business Administration Degree of the Manonmaniam

Sundaranar University, Tirunelveli, has been carried out by me under the guidance and

supervision of Prof. Shini MBA., faculty of MBA Department, Nesamony Memorial

Christian College, Marthandam.

It has also not being submitted by me or anybody for the award of any

other degree or diploma of this or any other institution earlier.

Marthandam

Date: ALEX ASIRVATHAM R

 ACKNOWLEDGEMENT

First of all, I thank Lord Almighty for his abundant blessings bestowed

upon me for the successful completion of my organization study.

I am extremely grateful to my beloved parents for their excellent

encouragement and support without which I would be what I am today.

I extend my heartfelt thanks to Prof C.T.SAM LUTHER, Head of

the Department, for encouraging me to go for this organization study.

I would like to extend my heartfelt gratitude to Mr. Rajasekaran HR

Manager, Mr. Anandh Babu HR, and Mr. Sugumar HR, for guiding me

throughout the study and sharing his valuable time for providing information

and guidance for my endeavor. I would like to thank all the department heads

and management staff who helped me directly or indirectly for getting

information about each department.

I express my thanks to my friends for encouraging and supporting in

every part of my career.

ALEX ASIRVATHAM R
 CONTENT

S.No. Topic Page No.

1 Introduction
2 Objectives of the study
3 Methodology
4 Scope of the study
5 Industry Profile
6 Company Profile
7 Organization Structure
8 Material Control
9 Sales & Distribution Control
10 Review of Annual Accounts
11 SWOT Analysis
12 Corporate Social Responsibility
13 Future Plans
14 Conclusion

INTRODUCTION
 Colour has fascinated culture throughout history, every age

and every region has produced dyes and pigment depending on the

available resources. Colour has been with us for more than 20,000 years.

Evidence survives in early cave paintings and the ancient Chinese are

considered to have brought its manufacture and use to a state of

perfection tens of thousands of years ago.

OBJECTIVES OF THE STUDY

The objectives of the study are:

 • To familiarize with business organization.

• Getting practical experience regarding the organizational function.

• To learn about the policies and functions of the organization.

• To understand the culture in the organization and its effect on employees.

• To get industrial exposure and experience.

• To understand the production and marketing methods.

METHODOLOGY

This study was undertaken by visiting the Plant location of Kansai

Nerolac Paints Limited, Perungudi, Chennai and spanned over a period of one
month. The information was collected by interacting and interviewing with the

concerned personnel of various functional departments.

The methodology used for the study is through the collection of

• Primary data is collected through direct observation and live

discussion with the managers and the staff.

• Secondary data is collected annual reports, business journals,

existing records and also from the website of the company.

SCOPE OF THE STUDY

 The study is mainly based on the details collected from each department.

It provides a better understanding at functional level of each department i.e.

Purchase, materials, production, marketing, finance and human resource

management. Each and every activities of the company is studied very carefully

with the data available.

INDUSTRIAL PROFILE

The Indian paint industry is an Rs 49 billion sector. The demand for

paints is relatively price-elastic but is linked to the industrial and economical

growth. The per capita consumption of paints in India is very low at 0.5 kg per
annum if compared with 4 kgs in the South East Asian nations and 22 kgs in

developed countries. The global average per capita consumption is 15 kg.

In India the organised sector controls 70 percent of the total market with

the remaining 30 percent being in the hands of nearly 2000 small-scale units. In

India the industrial paint segment accounts for 30 percent of the paint market

while the decorative paint segment accounts for 70 per cent of paints sold in

India.

In most developed countries, the ratio of decorative paints vis-Ã -vis

industrial paints is around 50:50. All the industry majors have a vast dealership

network and are required to maintain high inventory levels. Most of the paint

leaders have technical tie-ups with global paint leaders.

Sector comments

Paint is a mixture of four elements - solvents, binders, pigments and

additives. Solvents give the paint a liquid flow while the binder binds it to the
surface. Pigments impart colour and opacity to the paint and the additives give it

special resistance properties.

Sector trends

The recession in the construction and automobile sector had thrown in shades of

grey across the Industry spectrum, but the revival in these sectors is cause for

cheer for the paint industry as well. The balance sheets of the industry majors

are now painted with bright colours.

Sector specifics

On product lines, paints can be differentiated into decorative or

architectural paints and industrial paints. While the former caters to the housing

sector, the automotive segment is a major consumer of the latter. Decorative

paints can further be classified into premium, medium and distemper segments.

Premium decorative paints are acrylic emulsions used mostly in the metros. The

medium range consists of enamels, popular in smaller cities and towns.

Distempers are economy products demanded in the suburban and rural markets.

Nearly 20 per cent of all decorative paints sold in India are distempers and it is

here that the unorganised sector has dominance. Industrial paints include

powder coatings, high performance coating and automotive and marine paints.

But two-thirds of the industrial paints produced in the country are automotive

paints.
 COMPANY PROFILE

Kansai Nerolac Paints Limited embarked their journey in 1920 as

Gahagan Paints and Varnish Co. Ltd. at Lower Parel in Bombay. In 1930, three

British companies merged to formulate Lead Industries Group Ltd. In 1933,

Lead Industries Group Ltd. acquired entire share capital of Gahagan Paints in
1933 and thus, Goodlass Wall (India) Ltd. was born.

Subsequently, by 1946, Goodlass Wall (India) Ltd. was known as

Goodlass Wall Pvt. Ltd. In 1957, Goodlass Wall Pvt. Ltd. grew popular as

Goodlass Nerolac Paints (Pvt.) Ltd. Also, it went public in the same year and

established itself as Goodlass Nerolac Paints Ltd.

In 1976, Goodlass Nerolac Paints Ltd. became a part of the Tata Forbes

Group on acquisition of a part of the foreign shareholdings by Forbes Gokak.

In 1983, Goodlass Nerolac Paints Ltd. strengthened itself by entering in

technical collaboration agreements with Kansai Paint Co. Ltd., Japan and Nihon

Tokushu Toryo Co. Ltd., Japan.

In 1986, Goodlass Nerolac Paints Ltd. turned into a joint venture of the

Tata Forbes and the Kansai Paint Co. Ltd., with the latter acquiring 36% of its

share capital.

In 1999, Kansai Paint Company Ltd., Japan took over the entire stake of

Tata Forbes group and thus GNP became a wholly owned subsidiary of Kansai

Paint Company Ltd.

 In 2006, on the 11th of July, Goodlass Nerolac Paints Ltd. name has been

changed to Kansai Nerolac Paints Ltd.

During the journey of continuous performance excellence, we have

entered in to many technical collaborations with other industry leaders such as

E.I. Du-Pont de Nemours & Company Inc., USA and Oshima Kogya Company

Ltd., Japan for our different products.

Our incessant journey of successes will go on backed by our present

human asset of over 2000 professionals and a sales turnover of Rs. 1484 crores

KNPL are the second largest coating company in India with a market

share of over 20%. We are the market leader in industrial / automotive segment

supplying over 90% of the OEM requirements. We are the leader in powder

coatings.

NATURE OF PRODUCTS
 Vision

KNP is gaining from the positive changes triggered by the fast growing

economy in India. The ‘India shining’ story is likely to continue in the years to
come. Conscious of our responsibility towards the society, we stand committed

to invest in neighborhood communities, more and more and improve the quality

of life and inculcate a sense of well-being amongst the people, settled around.

The Corporate Vision of CSR goes like this, “To behave fairly &

responsibly contributing to sustainable economic development and improving

the quality of life in the neighborhood, in the process maximizing stakeholders’

value.”

• Accountable for impact on stakeholders – work force, their

family, the local community and society at large

• Improving the quality of life of the neighborhood in ways good

for development.

Mission
 “To contribute positively to the development of the society, by acting as a

good neighbor, considerate of others, playing the role of a good corporate

citizen with passion and compassion.”

Milestones

During FY 2008, KNPL group has sustained Zero lost time injury. ISO

14001, OHSAS 18001 re-certification

ORGANIZATIOAL STRUCTURE
 HR MANAGER

HR DEPARTMENT
HR OFFICERS T&D OFFICER

OFFICE ASSISTANT
FUNCTION OF HR DEPARTMENT

• To maintain good relationship with the employees.

• To look into the welfare of the employees.

• To maintain leave register.

• Attendance making.

• Overtime confirmation.

• Recruiting new staff.

• Giving training

PURCHASE DEPARTMENT
 COMMERCIAL MANAGER

MANAGER

PURCHASE

JUNIOR MANAGER

PURCHASE

JUNIOR EXECUTIVE

OFFICER

OFFICE ASSISTANTS OFFICE ASSISTANTS

FUNCTION OF PURCHASE DEPARTMENT

• Placing order

• Inviting quotation

• Correspondents

FINANCE DEPARTMENT
 UNIT HEAD

FINANANCE MANAGER

ACCOUNTANT

ASSISTANT

SUPERINDENTEN
T

OFFICE ASSISTANT

FUNCTIONS OF FINANCE DEPARTMENT

• Financial forecasting and planning.

 • Acquisitions of funds.

• Investment of funds.

• Maintaining proper liquidity.

• Assigning the chief accounts officer and others.

• Accounting of all annual accounts and other periodical report and

statement.

• Checking of wages and salaries.

• Regular payment of stationary dues like provident fund, sales tax etc.

• Furnishing necessary records relating to finance cash to managing

director or chief accountant officer.

DEPARTMENT

MANAGER

STORE

SUPERINDENTENT

STORE KEEPER

ASSISTANT
STORES DEPARTMENT
STORE KEEPER

HELPERS

ATTENDERS
FUNCTIONS OF STORES DEPARTMENT
 • To store the raw materials for the different departments.

• To prepare the purchase order.

• To prepare the stores records as Bin card and Karade – X card.

General store is the department for storing the raw materials. The

materials are collected as per the order made by the department, which is

known as the purchase order.

MANAGER

CHEMIST

QUALITY CONTROL DEPARTMENT

TESTER

SAMPLE BOYS

HELPERS
FUNCTIONS OF QUALITY CONTROL DEPARTMENT

• To test the quality of raw materials

• To check whether the product involves the right proportion of raw

materials.

• To maintain the quality of the products.

WELFARE FACILITIES PROVIDED BY THE COMPANY

There were several welfare measures provided by the company. They

were provided with the following benefits:

 • Uniform

• Footwear allowances

• Washing soap & toilet soap

• Turkey towel

• Medical reimbursement

• Company scholarship

• Tour programs

• Factory day complement

• Special advances

MATERIAL CONTROL

Material control is done by a proper planning. Kansai Nerolac depends

mainly on the planning of the material planning. Another important aspect is

that the centralized purchase of the materials. Rather than buying the materials

for different sources, it is better to purchase from a single vendor, and it is

profitable. The packaging is done locally i.e. in the plant itself so as to reduce

the moving cost and less time.

Another aspect of the material control is done accurately by SAP. The

whole organization is familiar SAP and it accelerates the performance of the

whole unit. A report prepared by SAP is ZMSR report in which the current

stock, last month produced, moving average reports are produced. It helps in

foreseeing the planning and also useful to review the performance of the month.

Purchase policy

The materials to be purchased have to get the approval of the

Research & Development inorder to make a purchase order. And then the

materials are purchased.

In case of scarcity of raw materials substitute materials are also used to make

production. The substitute raw materials have two grades. The 1st material and

the 2nd material. The first material is considered as the low grade (2702) and the

second material is to be the high grade (2356).

Types of purchase

The purchase of raw materials is done only with the well reputed

organization. Everything which is purchased is made by only bulk ordering. The

important material to be purchased for Kansai Nerolac is the Mineral Turbine

oil. It is purchased bulk from BPL (Bharat Petroleum Corporation). In case a

purchase is done outside it should not exceed the period of time. And if it

exceeds the time limit the penalty certificate is issued. Nerolac has a strict

policy on these areas.

Credit Policy

Kansai Nerolac’s credit policy is based on its vendors. Materials are

purchased from different vendors. Normally Nerolac gives credit for the local

vendors for a period of 30days. And this policy differs to the outside vendors.
The main vendor for Nerolac is BPC. And the company has an agreement with

BPC i.e. if the purchase is done between 1-15 days the payment date is 20 and if

the purchase if done between 15-30 days the payment date is 3. Some other

payments for credit for the new vendors are done by negotiations.

Inventory Control

The inventory of Kansai Nerolac is playing an important role in the

organization. The inventory control is mainly based on the requirements of

materials. As it is mentioned above there are two premier products i.e. the

Industrial paints and the Decorative paints. These two raw materials has to be

controlled separately. Industrial paints are kept separately and the decorative

paints to be kept separately. The materials of decorative product can be used in

industrial products in case of scarcity and changes made accordingly. But the

materials of industrial cannot be used in decorative section.

Stores

Kansai Nerolac has 63 depots all over India and 9 factories. The sales

from the stores department are done by certain procedures. Sales request is

given to the stores and also the requirement is to be specified. Then the request
is consolidated by the Head Office. The order, request and consolidated is

updated in the systems and it acts according to the directions given by the Head

Office.

Purchase department asks the stores department about the moving items

and the non moving items in order to make the purchase order for the moving

item. The moving batch is the successful one in the market and the non moving

items are failure batch in the market. According to the information of the

moving and non moving items the purchase order is made for the material. So

there is a link between the purchase department and the stores department. By

having a link with such department the planning, production department focuses

on the business effectively. While making the purchase order the receipts are

maintained. The receipts consist of serial no, date, v.no, time in and time out.

While the materials are to be unloaded into the company, the materials

have to get the QC test certificate. If the QC test certificate is positive the

materials are accepted and it is unloaded from the trucks. And then the store

department gives the out pass receipt with reference to the entry pass.

If the QC test certificate is negative the materials are not accepted and it

is returned back in the initial stage itself. The entry pass and the out pass are

maintained clearly when a vehicle is in and out of the plant.

 Each vendor’s material has its unique code number. And each order has

different code numbers. The orders are purchase order [4100], STO (Stock

Transfer Order) [700] and local purchase [460].

SALES AND DISTRIBUTION CONTROL

Kansai Nerolac has a unique indigenous export and sales. The sale is

mainly to the Industrial coatings i.e. the automobiles industry and some other

industry. The sales and the distribution controls are as follows.

Credit Policy

Kansai Nerolac’s credit policy is based on its vendors. Materials are

purchased from different vendors. Normally Nerolac gives credit for the local

vendors for a period of 30days. And this policy differs to the outside vendors.

The main vendor for Nerolac is BPC. And the company has an agreement with

BPC i.e. if the purchase is done between 1-15 days the payment date is 20 and if

the purchase if done between 15-30 days the payment date is 3. Some other

payments for credit for the new vendors are done by negotiations.

Distribution control

The distribution of Kansai Nerolac is playing an important role in the

organization. The distribution control is mainly based on the requirements of

products. As it is mentioned above there are two premier products i.e. the
Industrial paints and the Decorative paints. These two products have to be

controlled separately. Industrial paints are kept separately and the decorative

paints to be kept separately. The product of decorative product can be used in

industrial products in case of scarcity and changes made accordingly. But the

products of industrial cannot be used in decorative section.

Kansai Nerolac has 63 depots all over India and 9 factories. The sales

from the stores department are done by certain procedures. Sales request is

given to the stores and also the requirement is to be specified. Then the request

is consolidated by the Head Office. The order, request and consolidated is

updated in the systems and it acts according to the directions given by the Head

Office.

The sales target for the month period is allotted by the Head Office for

every month. And the marketing executives act accordingly.

POLLUTION CONTROL

Whether you're painting, plating, performing mechanical finishing

operations or doing something else, pollution control equipment is a necessary

part of most every metal finishing operation. Suppliers of pollution control

equipment are constantly working to upgrade the performance of their systems

in terms of both environmental control and energy efficiency.

For wastewater disposal, evaporators and similar types of equipment are

common. With natural gas costs high and showing no signs of a let-up,

suppliers of evaporator systems have focused their efforts on enabling their

equipment to provide the needed evaporation while using less energy.

Preventing air pollution and improving worker safety in some operations

such as hex chrome plating may require use of a ventilation system. Suppliers of

this type of equipment work to improve the extraction capability of the

equipment while minimizing maintenance. This means increasing use of

corrosion-resistant materials of construction ranging from stainless steel and

superalloys to a variety of polymer materials.

In many paint shops, thermal oxidizers are common to prevent volatile

organic compounds (VOCs) and other hazardous air pollutants (HAPs) from

reaching the atmosphere outside the plant. These systems operate at such high

temperatures that they can be one of the big consumers of natural gas in the

plant.

Some suppliers are reducing energy consumption by employing

regenerative thermal oxidizers that recover the vast majority of heat that would

normally exhaust out the stack to the atmosphere. The recovered heated air can

be used for warehouse or building comfort heating and process make-up air.
 Energy consumption is not such a big issue with filter systems, but

system maintenance is. Back-flushing systems and other concepts that reduce

maintenance and extend media life are coming more common in filtration

applications.

REVIEW OF ANNUAL ACCOUNTS

Annual Accounts

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' Mar ' 05

06
Sources of funds
Owner's fund
Equity share capital 26.95 26.95 25.51 25.51 25.51
Share application money - - 1.44 - -
Preference share capital - - - - -
Reserves & surplus 627.50 566.74 484.78 380.55 297.89
Loan funds
Secured loans 16.08 19.18 30.02 38.56 32.59
Unsecured loans 77.54 78.77 79.98 71.22 54.55
Total 748.07 691.64 621.73 515.83 410.54
Uses of funds
Fixed assets
Gross block 541.98 480.15 424.41 354.62 294.34
Less : revaluation reserve - - - - -
Less : accumulated 304.55 272.94 234.59 194.73 162.71

depreciation
Net block 237.44 207.20 189.82 159.89 131.63
Capital work-in-progress 35.62 26.64 17.63 17.96 29.26
Investments 294.43 232.14 154.82 163.93 179.12
Net current assets
Current assets, loans & 508.67 478.84 460.91 407.20 293.95

advances
Less : current liabilities & 328.08 253.18 201.46 233.16 223.43

provisions
Total net current assets 180.59 225.66 259.45 174.04 70.53
Miscellaneous expenses not - - - - -

written
Total 748.07 691.64 621.73 515.83 410.54
Notes:
Book value of unquoted 273.70 224.78 147.46 157.92 173.11

investments
Market value of quoted 21.25 7.89 7.53 6.37 6.33

investments
Contingent liabilities 2.85 5.91 2.88 6.90 14.36
Number of equity 269.46 269.46 255.08 255.08 255.08

sharesoutstanding (Lacs)
Ratio Analysis
 Mar Mar Mar '07 Mar '08 Mar '09

'05 '06
Investment Valuation Ratios
Face Value 10.00 10.00 10.00 10.00 10.00
Dividend Per Share 11.50 20.00 11.50 12.00 12.00
Operating Profit Per 51.65 61.72 67.36 69.73 58.76

Share (Rs)
Net Operating Profit Per 363.01 416.0 504.74 489.68 513.14

Share (Rs) 8
Free Reserves Per Share 116.78 149.1 189.94 210.21 232.76

(Rs) 9
Bonus in Equity Capital 61.23 61.23 61.23 57.96 57.96
Profitability Ratios
Operating Profit 14.22 14.83 13.34 14.24 11.45

Margin(%)
Profit Before Interest 11.80 11.67 10.62 11.15 8.62

And Tax Margin(%)

Gross Profit Margin(%) 15.50 15.97 14.17 11.23 8.73
Cash Profit Margin(%) 11.97 15.83 10.85 10.95 9.43
Adjusted Cash 10.66 10.30 10.04 10.95 9.43

Margin(%)
Net Profit Margin(%) 9.77 12.88 8.27 9.00 7.04
Adjusted Net Profit 8.46 7.35 7.46 9.00 7.04

Margin(%)
Return On Capital 30.66 27.33 24.41 22.90 18.49

Employed(%)
Return On Net 28.44 34.17 21.04 20.17 15.06

Worth(%)
Adjusted Return on Net 24.61 19.49 19.03 17.85 14.43

Worth(%)
Return on Assets 126.78 159.1 200.05 220.33 242.87

Excluding Revaluations 9
Return on Assets 126.78 159.1 200.05 220.33 242.87

Including Revaluations 9
Return on Long Term 30.93 27.87 24.74 22.94 18.53

Funds(%)
Liquidity And Solvency Ratios
SWOT ANALYSIS
Strengths

• Asia’s no.1 in Industrial coatings.

• 80% share holder in Industrial coatings.

• Supplying industrial coatings for major reputed companies.

Weakness

• Lowest share market in Decorative Coatings.

• Not using CNC machines.

• Bad marketing techniques.

Opportunities
 • South Indian market shows opportunity.

• Decorative segment can considered as an opportunity.

Threats

• Growing competitors like Berger, Asian paints in Industrial coatings.

• Rising crude oil prices and resultant change in derivatives prices is a big

concern.
 CORPORATE SOCIAL RESPONSIBILITY AND REPORTING

CSR Policy

Kansai Nerolac Paints will make a positive contribution to

society by targeting social and cultural issues, maintaining a humanitarian

approach, focus on areas in and around our factories and areas of operations.

KNP, is a socially responsible organization, while transacting

business, will adopt fair and just means, that meet the norms of Corporate

Governance. KNP will make a positive contribution to society by targeting

social and cultural issues, maintaining a humanitarian approach, focus on areas

in and around our factories and areas of operations. KNP will lend a helping

hand to the society in which it operates, covering areas of health, education,

preservation of environment and community development.

KNP believes that good neighbors are considerate of each other,

are inter-dependent and believe in partnering at times in times of trouble. As far

as possible, KNP will encourage its employees to render support in the areas of

social activities, make them participate in the CSR initiatives at the Company

level and recognize their work and contribution to the society. Most of the

activities will be carried out through the GNP Charitable Trust. KNP will
contribute 0.4 - 0.5% of its net profit annually, to the corpus of the Trust, in

order to carry out its activities from the interest earned of the accumulated fund.

Triple Bottom Line

CSR covers four core areas like social responsibility,

business responsibility, environmental responsibility & stakeholder

involvement.
 The concept of “Triple Bottom line” (TBL) is catching up fast

in the corporate sector, which measures overall performance of the company

based on its combined contribution to economic prosperity, environmental

quality and social capital. TBL focuses, not just on the economic value added,

but also on the environmental and social value impacted-positively or

negatively. Such reporting for the corporate will increasingly become essential

in coming times. At Kansai Nerolac, our effort to publish Annual reports on

CSR & Environment (ER) is a positive step taken in this direction.

The CSR covers four core areas like social responsibility,

business responsibility, environmental responsibility & stakeholder

involvement.

Social responsibility

We respect human rights, work on employee welfare, protect

consumers’ interest, and make community & socially responsible investments,

keeping the socioeconomic development in mind.

Business responsibility

We meet statutory & legal compliances, are conscious of

corporate governance obligations and invest in R&D, to offer best of the

products to our customers.

Environmental Responsibility

We believe in environmental friendly technology and practice

the same. All our automotive coatings meant for painting of passenger cars and

decorative product formulations are free of lead. All our factory locations work

for safe disposal of hazardous solid waste & reduce the same every year.

Measures for preventive & precautionary control of environment pollution are

taken to minimize the pollution load. Waste reduction is strictly followed &

demonstrated. We voluntarily publish Environment Report (ER), annually a

practice followed for the last six years.

Stakeholder Involvement

We propagate principles and ethical values enshrined in the

organization to the stakeholders. Wherever possible, we do encourage

employees to volunteer for carrying out social responsibility activities. Ours

therefore is an enlightened company which has chartered the journey of CSR in

order to broaden the traditional corporate goals of profitability by adopting

social trusteeship as a desirable objective. Set of policies, vision, mission is

integrated in business operations & decision making processes to achieve this

objective. The CSR report presented here covers Community & Socially

Responsibility activities & investments.

Karmayog Ratings

This year the rating for KNPL has improved and we have been

rated 4/5. There are only 10 companies in this bracket, out of 1000 assessed,

and we share this space with some top-notch companies.

www.karmayog.org is a unique free platform for concerned

citizens – for social and civic issues since June 2004.It provides a networking

platform for ordinary citizens and NGO’s to engage with each other and with

government ,media, corporates, institutions, etc. They had undertaken a study

and rating of the 1000 largest Indian companies in 2008. This is the second CSR

study and rating by them, the first one being done in 2007 for the largest 500

companies in India.

This was the first-of-its-kind rating in India and the world. In

their first year study for the year FY2007- 2008 KNP had been rated at 3, on a

scale of 1 to 5. There were only 40 Companies forming this elite class (roughly

8%).This year the rating for KNP has improved & we have been rated 4/5.There

are only 10 companies in this bracket, out of 1000 assessed & we share this

space with some top notch companies like Infosys Technologies, TCS, TATA

Steel, ACC to name a few. The Karmayog CSR Ratings are based on various
parameters and are from Level 0 to Level 5 with level 0 being the lowest on

CSR.

For 2008-2009

Karmayog (Highest) 4/5 3/5 2/5 1/5 0/5 TOTAL

CSR Rating 5/5

No. of 0 10 45 221 231 493 1000

Companies

Percentage 0 1 5 22 23 49 100

(%)

KNPL’s FY09 rating

For 2007-2008

Karmayog (Highest) 4/5 3/5 2/5 1/5 0/5 TOTAL

CSR Rating 5/5

No. of 0 4 40 138 89 229 500

Companies

Percentage 0 1 8 27 18 46 100

(%)

KNPL’s FY08 rating

Areas of Focus

From the time we started out on the CSR journey, the focus has

been on core work areas of Health, Education, Community Development &

Environment Preservation. In the current financial year, most of the activities

pursued have centered around these areas with a prime focus on Health and

Community Development.

Areas of
Focus

Activities 2008-09
 The CSR issues adopted for support by the company are relevant &

contemporary and well supported by staff volunteers, wherever feasible. Staff

volunteering is a good practice as it builds up a positive image encouraging

social involvement of employees, which in turn develops a sense of

loyaltytowards the organization, helping and creating a dedicated work force

proud of its company. The management acts as a facilitator in promoting the

activities. We have tried to cover variety of activities in the area chosen. The

distribution of expense in areas of focus is given below in the pie chart.

% OF EXPENSE HEAD WISE

(2008-09)

How we operate
 For every unit of ours we prepare a detailed Annual plan of the CSR

activities to be carried out in respective areas. The activities are evaluated for its

relevance and a budget/ schedule is assigned. The plant in the scheduled month

rolls out the activity by involving an agency or plans to execute on its own.

Wherever required, volunteers are deployed for carrying out the activity.

The activity once completed is documented and reviewed on a quarterly

basis. CC & CSR team in HR also gets proposals or identifies activities at local

level and on merit decides to participate, once approved by the Trustees.

Health
Program Vision

The objective is to support various activities towards improving and

generating awareness about general health & primary health care to the general

masses, and the people residing with the vicinity of our plants. Activities It is a

challenge to create general awareness about health issues & improving public

health especially in the rural regions. It is our constant endeavor to address to

the various health issues faced by the people in areas where our manufacturing

units are located. Various activities are carried out to address the health related

issues faced by men, women, children, senior citizens and so on. This is carried

out with the help of supportive team of doctors/ NGO’s within the vicinity of

our plants and coordinated by our employees. Through the various activities we

aspire to educate & bring about health awareness amongst local community

which will address their ignorance towards general health care.

 Activity Numbers No. of persons

Covered
Health 18 1865

Camps

Through the various activities, we aspire to educate and bring about

health awareness amongst the local community and address their ignorance

about general health care.

Key Activities
Health Check-up camp in Haryana

Two health camps were organized for the villagers in Rewari district,

where 495 patients were covered. The tests conducted at the health camp were

ECG, diabetes, general health check up & opthal. The camp was organized with

a team of 4 external doctors and our employees. Awareness about the camp was

created amongst the villagers through articles published in the local news

papers, distributing leaflets and announcements made on public address systems

Free Medical Check Up Camp in Uttar Pradesh

Free medical check up camp was organized on 12th Dec 2008, at the

nearby Primary School at Nabipur, Kanpur Dehat. Local Villagers as well as

school children were covered for the programme. They were checked for Blood

Sugar, BP, Eyes, Teeth and general check up. The team of doctors comprised of

four specialist doctors from Ganga Ram Hospital, Kanpur. The programme was

inaugurated by the principal of the Primary School. She appreciated the

efforts taken by Nerolac in helping out the needy and in her address asked

nearby industries to follow the same so that overall development of the area can

take place at a faster pace.120 villagers benefited from the camp.

Medical Camp
 Kansai Nerolac Paints conducted Free Health Checkup Camps in the

month of August’08 in 15 towns of India. The duration of each camp was 2

days per town. A total of 1250 people participated in this camp. The facilities

provided were general check up of blood pressure, pulse rate, sugar and skin

related diseases. Eye & blood sugar test were also performed. All the

Participants were given personal Health Check-up cards and informed about dos

and

don’ts to keep fit. The check-ups were conducted by certified MBBS Doctors

and Eye Specialist.

Indian Medical Association (IMA) Chiplun, Maharashtra

IMA is a well known association of Medical Practitioners which

undertakes various health activities in the form of medical check up camps,

health education campaigns and health education series to focus on health of

tribal women and children who are deprived of basic health

facilities. The association had planned to conduct at least two health camps for

tribal community

in the remote areas of Khed and Chiplun taluka. Kansai Nerolac participated in

this endeavor

of IMA by providing financial assistance towards this activity, and also

distributed Health Education Materials to the schools in the villages around

Khed & Chiplun.

Sri Shanmukhananda Fine Arts & Sangeetha Sabha, requested for financial

assistance to provide proper medical treatment to the poor & needy patients who

were visiting the ‘Nerolac Eye Care Centre’ and the same was met. The

free/subsidized medical activities, both diagnostic and operative, are targeted at

the poor and low income groups.

Medical Research Foundation, Chennai

Sankara Nethralaya, Chennai has been providing eye care surgeries and

assistance towards eye care free of cost to the economically backward segment

of the population. This year they also inaugurated Sankara Nethralay-Kolkata

and kick started the Tele-Opthalmology Project. This project would help

dispensing of glasses to the people in rural areas and the first 1000 cataract

surgeries free – of - cost program was also launched. Kansai Nerolac provided

financial assistance to this Foundation.

Shri Jalaram Arogya Seva Trust, Gujarat approached us with a request for

financial assistance towards purchase of a Laser Machine for their eye care

department. Kansai Nerolac supported this institution towards this activity.

Maharogi Sewa Samiti, Warora is a society working towards the

rehabilitation of leprosy patients & coordinated for some of India’s most daring
and prominent ecological and social programs. We provided assistance for

painting of the dormitory at Baba Amte’s Ashram.

Kewalram Chanrai Hospital, Mumbai

Is a private hospital in Ulhasnagar near Mumbai, which caters to the local

population under the management of Jaslok Hospital. As a part of the CSR

activity Kansai Nerolac got associated with KC hospital to decorate the walls of

the children ward and made them more playful with our Disney paint designs.

KNPL conducted Free Health Check-up Camps in the month of

August’08 in 15 towns of India. The duration of each camp was 2 days per

town.

Education

Program Vision
 Education plays an important role in the progress and development of an

individual as well as of the nation. Our goal is encouraging & supporting

institutions imparting education. We also try to focus on educating girl child &

children residing in nearby villages in the vicinity of our manufacturing units.

The Right to Education Bill is the legislation to notify the 86th

Constitutional amendment, which gives every child between the age of 6 and 14

years the right to free and compulsory education.

 We realise that a lot of work needs to be done in this area, especially in

rural India. Our objective is to support educational institutions and to impart

education to children particularly residing in smaller areas. The goal is to work

towards long term economic & social growth of the weaker sections of the

society.

Education plays an important role in the progress and development of an

individual as well as of the nation. Our goal is encouraging & supporting

institutions imparting education.

Key Activities

Shashi Mangalyam, Mumbai (School for children in need of special care)

imparts education to special children, mainly belonging to under privileged

section of our society and also works in multiple ways to support them. They

also provide Medical & Paramedical services, psychological

Testing/Counseling, psychiatric treatment as per need and many other facilities.

They were raising funds for extension of their Building to accommodate more

children and provide them better facilities. We provided financial support to this

institute towards the building extension.

OM Sairam Charitable foundation, Navi Mumbai

 Is a foundation, which is tirelessly working towards providing for

education & education facilities to the children belonging to the economically

weaker strata of the society of the fishermen community. We pledged a

donation to support this institution in their cause.

Bharitiya Samaj Sewa Kendra,Chiplun

Is a non-political,non-profit making Organisation working in the field of

Child & family Welfare. Their scope of work has been tremendously growing

and hence to cater to the need for bigger space for their office & for conducting

education sponsorship activities they have started construction of a new

building at Chiplun. We provided them support to maintain their building.

Canossa special school, Mumbai for special children approached us with a

request for providing financial assistance towards the building fund. We

provided the same as it would go a long way in providing the much needed

accommodation facilities to the under privileged & disabled children.

The Akanksha Foundation, Mumbai is a non-profit organization with the

vision to equip all students with the education, skills and character they need to

lead empowered lives. Akanksha works primarily in the field of education,

addressing non formal education through the Akanksha centre and also formal

education through the Akanksha Schools. They approached us with a request for
donation towards maintenance and upkeep of the King George Memorial

Centre, at Mahalaxmi Mumbai, which is utilized by 120 kids for learning of

subjects. To make their environment conducive for learning, we extended our

support.

Bunyad School, Haryana is a reputed school in Bawal providing

primaryeducation. The institute had approached us with a request for a donation

towards purchase of a photocopier machine. They were facing problems in this

area since there was no photocopy facility available near the school. With this

assistance provided to them we eliminated the problems they faced towards

photocopying the exam question papers and various study & educational

material

Child development Centre, Haryana

The school aims at providing a playful & informal learning environment

to children from kindergarten to the 5th grade through early childhood

educational activity oriented plays, Audio-Visual Teaching aids, Music &

dance. We pledged our support by donating a Water Cooler and 29’’ Flat screen

colour television to this centre.

Primary Schools, Uttar Pradesh

We took up the initiative of distributing desks and chairs to various

Primary Schools in the areas around Kanpur Dehat. Local Villagers as well as
school children were present during the inaugural ceremony, which was

presided over by Village Pradhan, School Principal, Staff members and the

Works Manager at Jainpur. The school Principal appreciated the efforts taken

up by Nerolac towards providing the basic facilities for the students, which shall

go a long way in development of the students.

Deaf & Dumb School Akbarpur (Jainpur)

We distributed 7 Lunch Table Sets, 1 Daisy Player and 40 Tracksuits to

Deaf and Dumb School at Akbarpur on. Teachers, Staff members and Students

were present during the inaugural ceremony, which was presided over by the

Principal and our Works Manager, Jainpur .The Principal appreciated the efforts

taken up by KNPL in providing the basic amenities for the deaf and dumb

children, which motivates the morale of the students, and grooms them to

become responsible citizens of the nation.

Environment Preservation

Program Vision

It is our continuous endeavor to support preservation of resources like water

& the green cover and provide clean environment.

Key Activities

Tree plantation has been carried out in our plants on World Environment

day. We undertook the activity of renovating a park in Bawal.

Lead Free Paints- KNPL has been proactively working on eliminating

Lead and Mercury from paint formulations.

All Architectural paints & passengervehicle coatings have been made

lead & mercury free.

Community Development
 Our goal is to provide basic facilities to the community settled in the

vicinity so as to support and improve their basic living and thus fulfill the role

of being a good Corporate Citizen.

We believe that supporting activities which focus towards development

of the society as a whole is essential towards building a strong & sound

community. A vital part of being a good corporate citizen is giving back to the

society & communities that we live & work in. Our goal is to provide basic

facilities to the community settled in the vicinity so as to support & improve

their basic living and thus fulfill the role of being a good Corporate citizen. Our
commitment towards sustainable development of communities reflects through

the various activities

that we undertake.

Key Activities

Armed Forces Flag Day

The Collector of Mumbai has been tirelessly working for the Welfare of

the ex servicemen & their families. We have pledged our support towards this

noble cause.

Concern India Foundation, Mumbai is a non profit, public charitable trust

that supports development-oriented oragnisations working with the most

vulnerable people of our society in the areas of education, health, community

development and the environment. We pledged a donation to this foundation &

this endeavor of ours will go a long way in our achieving their aim of helping

the underprivileged help themselves.

Kherwadi Social Welfare Association, Mumbai (KSWA) is a 80-year-old

NGO, founded in 1928. KSWA has been providing uninterrupted service to the

slum dwellers in the field of Education, Healthcare and Vocational Training.

We have provided donation to this foundation to support them in carrying out

the renovation of the Rural development & Vocational Centre situated at Wada

Taluka head quarters in Thane District of Maharashtra.

Senior Citizen’s Settlement Foundation, Mumbai works towards the cause of

Elders’ Home. We supported them in this cause by providing financial

assistance and villagers while waiting outside the Railway Station for city buses

& local transport.

Akbarpur Police Station, Uttar Pradesh

We distributed 4 computers at Akbarpur Police Station. The Local Police

Staff were present during the inaugural ceremony, which was presided over by

the Circle Officer and our Works Manager. The Circle Officer appreciated the

efforts taken up by Nerolac in providing the facilities for the authorities at the

police station, which shall help in maintaining database, relevant information

that can be accessed readily.

Old age Home, Haryana

To provide good quality potable water & good life to the inmates of the

old home, we donated a water filter & few chairs.

Pick Up Shed, Chiplun

 A Pickup Shed was constructed outside the Chiplun Railway Station,

which is used by passengers and villagers while waiting out side the Railway

Station for city buses & local transport.

Summary of CSR expense

Health Education Community Environment Total

Development Preservation Expense

Share of 21.7 10.55 11.22 1.62 45.3

Expense

OUTSTANDING PERFORMANCE, AWARDS

 Best Vendor Award from customers like Toyota Kirloskar Motors

(TKML) for Cost and from Maruti Udyog Limited (MUL) on overall

commendation.
 Awards for marketing initiatives like Cannes 2007 Bronze for press Ad.

 Emvies 2007 Gold & Silver for Best Media innovation, Best case study -

Media innovation (Impression Rang Jama De), Best Integrated

Campaign, Best Media strategy & People’s Choice Award.

 Readers Digest Trusted Brands Gold Award for 2008.

 Frost & Sullivan Market Leadership Award in Indian Industrial Paints

 & Coating Market.

 Hall of Fame from CTO Forum, PC Quest & Best Implementation-APO

in IT.

 ICSI National Award for Excellence in Corporate Governance – 2007

from the Institute of Company Secretaries of India.

 Greentech Environment Excellence Gold and Silver for Bawal and

Chennai units.

 ABCI Silver for Annual Environment Report.

 FUTURE PLANS

Kansai Nerolac plans 45 ‘impression style’ zones

 Kansai Nerolac Paints, a leading paint manufacturer, has lined up a total

of 45 ‘Impression Style Zones’ in Chennai, Bangalore and Hyderabad in the

next six months. First of such zones was set up in Chennai recently. “We will

open 15 such zones in each of these cities in the pilot, catering to the whole

population there,” Mr C. Venugopal, General Manger (Marketing), told

Business Line. After studying the results of the pilot, the company would set up

a number of such outlets across major cities. “What we offer at these outlets is

unique. We help the customers visualise design and conceptualise their homes,”

he said. The concept showroom is equipped with a workstation where a trained

associate, using a specially designed software, would show the customer how

things would look like. “Upfront, the customers would know what colour would

fit into the scheme of things. They can try out other combinations, if they don’t

like a particular pattern,” Mr Venugopal explained. Each outlet would be

backed by 20-25 company-approved contractors. They, in turn, would employ

Nerolac-certified painters to take up the job.

 CONCLUSION

The tremendous growth of automobile industry and construction

activities in the country has increased the demand for industrial/decorative

materials, especially paints and its allied products. With the implementation of

new technology, improving the marketing strategies and solving the existing

problems, the company is ensured of bright prospects.