Microanalysis of Asian

Paints Ltd
Comprehensive Project 2

Submitted By: Aden Thakor

Dhruv Rokadia

Ronak Patel

Shikha Karamchandani

G H Patel Post Graduate Institute of Business

Management, SPU
PREFACE
The Indian paint industry has been witnessing a gradual shift in the
preferences of people from the traditional whitewash to higher quality paints
like emulsions and enamel paints, which is providing the basic stability for
growth of Indian paint industry. Besides, it is creating a strong competitive
market, where players are utilizing different strategies to tap the growing
demand in the market for a larger share. Moreover, rise in disposable income
of the average middle class coupled with increasing investment on education,
urbanization; development of the rural market; and various launches of many
innovative products, like friendly, odor free, and dust & water resistant paints,
are major drivers that are propelling the growth of the paint market in India.

The value of paint industry is expected to grow at a CAGR of around 12%

during 2016-17 to 2021-22 in value terms. The reports provide an in-depth
detailed insight on the Indian decorative and industrial paint segment.

The comprehensive project provides an opportunity in understanding the

industry with special emphasis on development of skills to analyze the
industry through exploratory research using secondary data. It is a platform of
learning through bombardment of industry related information and guidance of
faculty members.

A regular project work throughout 4th semester has been resulted in exploring
a wide picture of Indian Paint Industry with focus on Asian Paints and
successful completion of comprehensive study which would be of great help in
near future.
ACKNOWLEDGEMENT

This report has been submitted in partial fulfillment of the award of MBA from
G.H. Patel Postgraduate Institute of Business Management, MBA Programme,
Sardar Patel University, and VallabhVidyanagar.
We know that nothing can be done single handed. The Completion of this
study and the report is the result of the support of many co-operative hands,
which came forward & co-operated us in our work.
We take this opportunity to thank G.H. Patel Postgraduate Institute of
Business Management, MBA Programme, Sardar Patel University,
VallabhVidyanagar, for providing us a practical exposure of the industry and
express our sense of gratitude & indebtedness to our project guide Dr. P K
Priyan for helping us in gaining in depth understanding of Indian Paint
Industry. Constant guidance and meaningful suggestions provided by her also
helped in making this project a relevant and a rich source of learning for us.

We are very thankful to the employees at Asian Paints, who have provided
knowledge about the company and its working.

No words can be adequate to express our debt of gratitude to our friends who
have encouraged and supported us.
Finally, we thank all those who directly or indirectly helped us in bringing out
this unique report on time.

Aden Thakor (15M01)

Dhruv Rokadia (15F10)
Ronak Patel (15F35)
Shikha Karamchandani(15M38)
EXECUTIVE SUMMARY

The paint industry can easily grow at 12-13% annually over the next few years
from its current size of Rs 350 bn. The per capita paint consumption in India
which is a little over 4 kgs is still very low as compared to the developed
western nations. Therefore, as the country develops and modernizes, the per
capita paint consumption is bound to increase.

The unorganized sector controls around 35% of the paint market, with the
organized sector accounting for the balance. In the unorganized segment,
there are about 2,000 units having small and medium sized paint
manufacturing plants. Top organized players include Asian Paints, Kansai
Nerolac, Berger Paints and ICI.

Asian Paints Limited is an Indian multinational paint company

headquartered in Mumbai, Maharashtra. The Company is engaged in the
business of manufacturing, selling and distribution of paints, coatings,
products related to home decor, bath fittings and providing of related services.
Asian Paints is India's largest and Asia's third largest paints corporation. As of
2015, it has the largest market share with 54.1% in the Indian paint
industry. Asian Paints is the holding company of Berger International.

The paints sector is raw material intensive, with over 300 raw materials (50%
petro-based derivatives) involved in the manufacturing process. Since most of
the raw materials are petroleum based, the industry benefits from softening
crude prices.
Contents
PREFACE...................................................................................................... 0
ACKNOWLEDGEMENT.................................................................................. 2
EXECUTIVE SUMMARY.................................................................................. 3
Chapter 1Introduction.................................................................................6
Industry Details........................................................................................ 7
Details of the Firm..................................................................................10
History.................................................................................................... 12
Objectives of Asian Paints...........................................................................13
INTERNATIONAL PRESENCE....................................................................14
Organization structure............................................................................15
Asian paints Product............................................................................... 19
Chapter 2Marketing and Sales...................................................................24
Organizational structure of marketing department................................25
Services:................................................................................................. 26
Details of competitors............................................................................ 27
CUSTOMER SEGMENTATION &TARGETING :............................................28
Distribution Networks.............................................................................31
Comparison of 4 P..................................................................................32
Forecasting and Sales Plan Preparation..................................................33
Pricing.................................................................................................... 35
Promotion and Advertising.....................................................................37
Strategy For Brand Management.................................................................43
BRAND POSITIONING.............................................................................. 45
Chapter 3 Production and Operation.......................................................47
Introduction............................................................................................ 48
Manufacturing facilities..........................................................................50
CAPACITY UTILIZATION...........................................................................52
INVENTORY MANAGEMENT.....................................................................54
QUALITY ISSUES..................................................................................... 56
SUPPLIER BASE....................................................................................... 57
ENERGY MANAGEMENT...........................................................................58
CO-ORDINATION & COMMUNICATION BETWEEN PLANTS, OFFICES &
VENDORS................................................................................................ 60
PRODUCT FAILURES, IF ANY....................................................................61
WASTAGE AND SCRAP MANAGEMENT.....................................................62
 ENVIRONMENTAL MANAGEMENT.............................................................63
TECHNOLOGY UPGRADATION MANUFACTURING...................................64
R & D / INNOVATION STRATEGIES............................................................65
MATERIAL CONSUMPTION AND EFFICIENCY............................................66
CHAPTER 4 FINANCE AND ACCOUNTS.......................................................69
Capital Structure:................................................................................... 70
Share Holding Pattern:............................................................................71
Top Share Holders:.............................................................................. 71
Cost Structure:....................................................................................... 74
Cash Flow Statement:.............................................................................74
Balance sheet of Asian Paint:.................................................................75
Income Statement:................................................................................. 76
Key Financial Ratio:................................................................................ 77
Key Financial Ratios of Asian Paints.............................................................77
Peer Comparison of Asian Paint with Industry:.......................................80
Recent Financial Performance of Asian Paint:.........................................81
Chapter 5 Human Resource.....................................................................83
Introduction............................................................................................ 84
ENVIRONMENT, HEALTH & SAFETY.........................................................85
RECRUITMENT AND RETENTION.............................................................87
TRAINING AND DEVELOPMENT (T&D).....................................................92
MANAGEMENT OF CONTRACT WORKFORCE...........................................96
Chapter 6Business Strategy and Outlook..................................................99
CSR FOCUS AREAS AND INITIATIVES.....................................................100
SWOT ANALYSIS OF ASIAN PAINTS.........................................................107
BCG MATRIX OF ASIAN PAINTS..............................................................108
Future Plan........................................................................................... 110
Conclusion............................................................................................ 111
Bibliography............................................................................................ 112
Chapter 1 Introduction
Industry Details

Paint industry is characterized by low capacity utilization as most of the

companies get the work done on job work basis this is because of the longer
processing time required in the paint industry when paint is manufactured in
smaller batches the production falls. Most of the plant operates at 50%
capacity with the exception of Berger paints, which manages a capacity
utilization of around 70%. The main reason for this is that it has strong
presence in the premium enamel and emulsion segment and does not switch
between decorative and industrial paint like the other manufactures.

There is tremendous potential for the paints manufacturers in India because

as against an average per capita consumption of paints in India is very less
(.550 Kgs). Economic liberalization is attracting international giants like BASF
Germany,

Curtlauds, UK and Jotun, Norway has announced plans to set up a powder

coating plant, while International Paints, UK intends to set up a marine paints
plants. Since decorative paints are a consumer product, sales are price elastic
and any change in the Government policy on the excise duty has a direct
bearing on the sales. Over the last 4 years, the Government has reduced the
excise duty from a peak of 40% to current 16%.

The entire benefit of the duty reduction has been passed to the consumer,
which has not only enabled this segment to come out of the recession but
also enabled the organized sector to increase its market share at the expense
of organized sector. The share of organized sector has increased from 20% to
25% as a result of reduction in excise duty.

Distribution channel plays an important role in the industry. Awareness and

perception of specific brand is more important than the corporate brand
equity. Asian Paints, the market leader has around 15,000 dealers in its
network, which are spread, across the country. GoodlassNerolac comes
second with around 11,500 dealers.

Paint is a formulated product whose performance can be varied through

formulation latitude, materials composition, and processing, etc. Paints play a
critical role in preventing corrosion and enhancing values in various segments
such as architectural, household appliances, automobiles, industrial
equipments, ships, aircraft, consumer durables, etc.

The Indian Paint sector has an output of about 0.55 million TPA with a value
of Rs. 6.5 billion. Domestic tariff cuts, rapid industrialization have help this
sector post a compounded annual growth of 10.2% over the last 5 years. The
market for paints is fragmented and split among around 25 companies in the
formal or the organized sector, with the balance being shared among 3,000
units in the small scale or the unorganized sector. Given the fragmented
nature of the market accurate figures for production and consumption are not
available and most analysts rely upon broad estimates from the industry and
some Government agencies.

The Industrial segment is dominated by the organized sector due to being

highly technologically oriented. The industrial paints segment has grown at a
cumulative growth of more than 20% over the last 4 years owing to
tremendous growth achieved by the Indian automobile sector. However the
current scenario is not very encouraging as the Indian HCV, LCV and the
premium car market is facing demand recession.

The industrial paint sector is technology intensive. The Indian cost of

production is 24% more expensive than the international cost. In fact, Indian
majors like Asian Paints and GNL have embarked on hectic R&D to face the
competition and also reduce their cost of production.

The Rs 950 crore industrial paint markets are split into five segment
automotive coatings, high performance coatings, marine paints, powder
coatings and coil coatings.

Industrial segment is also the more profitable segment of the industry as

compared to decorative paints due to value addition in the form of specialized
functions that these paints perform.

Automotive coatings for 2 wheelers and 4 wheelers constitute nearly 50% of

the market where Goodlass is the leader. High performance coatings are used
in plants for fertilizers, petrochemicals and offshore oil installation where anti
corrosive protection is very essential and this market is shared amongst Asian
Paints, Goodlass and Berger
paints. This segment accounts for nearly 16% of the industrial paint market.
Powder coatings for white goods have a 10% market share of the industrial
paint market. Marine paint accounts for 8% and other special purpose paints
account for nearly 16%.

Before the entry of Maruti, the industrial paint market was sluggish as
Hindustan Motors and Premier Automobiles were preoccupied with cost of the
paint and not the quality. Maruti set stringent customer service standards by
laying emphasis on glossy finish and rust free body. Goodlass was first to
seize this opportunity and entered into collaboration with Kansai paints, which
was the largest supplier of paints to Suzuki in Japan. Thus in one stroke it
was able to control the entire Maruti's business. Thus by ridding piggyback on
Maruti, in a few years time Goodalss become the market leader. This
promoted other auto manufacturers viz. Bajaj Auto, Mahindra & Mahindra,
Kinectic Honda and Telco to switch to Goodlass because of superior
technology and glossy finish it gave to the automobile.

Sensing the growth potential of this industry Asian Paints entered into
collaboration with PPG of America and was able to gain contacts from
Daewoo & General Motors for their premium range of cars.

The automotive refinishes segment has emerged as a potential segment in

the Industrial paint sector. This 5 million-liter segment is expected to grow at a
rate of 25% per annum if the Indian automobile segments continue to grow at
a rate of 15%. ICI is the market leader in this segment with a 50% market
share. It has set up an auto color painting and demonstration center in
collaboration with MarutiUdyog in Mumbai and Channai. Asian PPG Pvt. Ltd.
is also planning to focus on this segment. Jenson and Nicholson have tied up
with HerbertsGmbh of Germany to manufacture automotive refinishes.
Details of the Firm
Asian Paints Limited is an Indian chemicals company headquartered in Mumbai; India.
It manufactures paints for decorative and industrial use. Asian Paints is India's largest
paint company and Asia's third largest paint company, with a turnover of Rs 140 billion.
Besides Asian Paints, the group operates around the world through its subsidiaries
Berger International Limited, Apco Coatings Limited, SCIB Paints and Taubmans.

Forbes Global magazine USA ranked Asian Paints among the 200 Best Small
Companies
in the World for 2002 and 2003 and presented the 'Best under a Billion' award, to the
company. Asian Paints is the only paint company in the world to receive this recognition.
In Nov 2005 and Nov 2007, Forbes ranked Asian Paints among the Best under a Billion
companies in Asia.

The company has come a long way since its small beginnings in 1942. Four friends who
were willing to take on the world's biggest, most famous paint companies operating in
India at that time set it up as a partnership firm. 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. Today it is double the size of any other paint company in India. Asian Paints
manufactures a wide range of paints for Decorative and Industrial use.

Vertical integration has seen it diversify into products such as Phthalic Anhydride and
Pentaerythritol, which are used in the paint manufacturing process. Asian Paints along
with PPG Inc, USA, one of the largest automotive coatings manufacturer in the world
has
begun a 50:50 joint venture, Asian PPG Industries to service the increasing
requirements
of the Indian automotive coatings market. Another wholly owned subsidiary, Asian
Paints Industrial Coatings Limited has been set up to cater to the powder coatings

11
market
which is one of the fastest growing segments in the industrial coatings market.

Asian Paints adopted some marketing objectives & strategies. Asian paint is ready to
achieve its corporate objective by taking care of the Customers, Employees, Brand
image, Dealer Vendor relationship & technology. Companys three divisions are not
equally performing well. So it has different objective & planning to gain the top most
position in the Indian paint market. Asian Paints has different marketing strategy for the
urban as well as the rural market in India.

The company always maintaining some alternate strategy & keeping in track with the
strategy maintaining by its competitor. In decorative sector company is strong enough,
but it need to take care of the Industrial sector so as to increase the overall sales.

Considering the pricing strategy of Asian paints, company has several priced products.
It starts from very low end to the premium level. Asian paints Color World concept
helped the consumer to choose the color combination & other appropriates according to
their wish from a very wide range of product. Companys famous logo GATTU helped it
overcome while entering into the rural market, as visualization has its own effect. Other
than this Asian Paints is using its website as a very good medium to reach the
high/upper middle class consumers. With these tools company is expecting to generate
much more revenue than the earlier years.

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.

The company used to maintain a very strong market research cell, which helps them to
take care of the consumers need & intensify their R&D accordingly. Asian Paints
approaches the environment issue from the perspective of waste minimization and
conservation of resources. Thus, the continued attempt is to reuse, recycle and
eliminate waste, which results in less and less waste being generated.

12
History
Today

Asian 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, over 2500 SKU's, Integrated

SAP - ERP & i2 - SCM solution.

Rated Best Employer by BT-Hewitt survey, 2000 Bluest of the blue chips by Hindu
Business Line; Most admired company to work for by ET-BT survey, 2000.

On the recommendations of Booz, Allen and Hamilton, Asian Paints restructured itself
into Growth, Decorative and International business units and adopted SCM and ERP
technology.

Asian Paints aims to become the 5th largest decorative paint company in the world.

1967

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

1957 - 66

The family-owned company makes the transition to a professionally managed

organisation.

British company BalmerLawrie rejects the products of a giant British paint company in
favour of Asian Paints.

Asian Paints embarks on an ambitious grassroots marketing campaign, partnering

with thousands of dealers in small towns all over India.

13
1954

Asian Paints mascot, Gattu, the mischievous kid, is born.

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."

1st February, 1942

Armed with little knowledge and great determination, Champaklal H. Choksey,

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', a name that they picked randomly from a telephone
directory.

Objectives of Asian Paints

a. To build new infrastructure in the country for Industrial coating to increase
the production capacity.

b. To develop the quality of the product with a higher technological up

gradation.

c. To increase the sales of the Industrial coating with the help of proper Ad.
Campaignprogramme.

14
INTERNATIONAL PRESENCE

Asian Paints operates in 18 countries across the world. It has manufacturing facilities in
each of these countries and is the largest paint company in eleven of these markets.
Asian Paints operates in five regions across the world viz. South Asia, Southeast Asia,
South Pacific, Middle East and Caribbean region through the five corporate brands viz.
Asian Paints, Berger International, SCIB Paints, Apco Coatings and Taubmans. The
countries that Asian Paints has presence are as follows:

1. Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka).

2. SCIB Paints in Egypt.

3.Berger in South East Asia (Singapore), Middle East (UAE, Bahrain and
Oman), Caribbean (Jamaica, Barbados, Trinidad & Tobago).

4. Apco Coatings in South Pacific (Fiji, Tonga, Solomon Islands and Vanuatu).

5. Taubmans in South Pacific (Fiji and Samoa).

The company has a dedicated Group R&D Centre in India and has been one of the
pioneering companies in India for effectively harnessing Information Technology
solutions to maximize efficiency in operations.

15
Organization structure

Source: www.google.co.in/organizational structure Asian paints

16
Location of offices and branches

Registered Office 6A, Shantinagar, Santacruz (East)

Mumbai - 400055
Maharashtra - India
Phone : 39818000
Fax : 39818888
Email : investor.relations@asianpaints.com
Internet : N.A.
Factory/plant Plot No 50-55, Industrial Development Area, Phase II, Patancheru
Medak District - 502309
Telangana - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Factory/plant LalBahadurShastriMarg, Bhandup
Mumbai - 400078
Maharashtra - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Factory/plant A-1, UPSIDC Industrial Area, Kasna - II, Kasna Village, Greater Noida
GautamBudh Nagar - 203207
Uttar Pradesh - India
Phone :
Fax :

17
 Email : N.A.
Internet : N.A.
Factory/plant Plot No. 2602/2702, GIDC Industrial Area
Ankleshwar - 393002
Gujarat - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Factory/plant Penta Plant: B-5 and 10, Sipcot Industrial Complex
Cuddalore - 607005
Tamil Nadu - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Factory/plant Pthalic Plant: Plot No. 2702, GIDC Industrial Area
Ankleshwar - 393002
Gujarat - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Factory/plant SIPCOT Industrial Park, Plot No. E6 - F13, Sriperumbudur
Kancheepuram Dist. - 602105
Tamil Nadu - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Factory/plant Taloja Plant (Industrial Paints): Plot No. 3/2, MIDC, Taloja
Raigad - 410208

18
 Maharashtra - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Factory/plant Plot A1, MIDC, Khandala Industrial Area, TalukaKhandala
Satara - 412802
Maharashtra - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
Registered Office 6A, Shantinagar, Santacruz East
Mumbai - 400055
Maharashtra - India
Phone : 39818000
Fax : 39818888
Email : investor.relations@asianpaints.com
Internet : N.A.

19
Asian paints Product

20
Product Name: Asian Paints Apex Ultima

Description: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 properties.

Product Name: Asian Paints Apex

Description: Apex Weatherproof Exterior Emulsion is a water-based 100% acrylic,

exterior wall finish. A high performance, long-lasting exterior paint specially formulated
to withstand extreme tropical conditions of high rainfall, humidity and heat, Apex
provides excellent resistance against the growth of algae and fungi on the walls. It offers
excellent protection against alkali and UV degradation too.

21
Product Name: Asian Paints Duracast Fine Tex

Description:Asian Paints Duracast Fine Tex is a 100% acrylicd water based exterior
productspecially designed as an intermediate coating.It facilitates excellent adhesion of
subsequent coats .Its unique texture pattern has distinctive appeal. 1.Asian Paint
Duracast Fine Tex is a rollable product which will provide opacity in single coat without
any sagging 2.It serves as an undercoat which will not only provide protection but also
decor for a variety of exterior & interior surfaces 3.It promotes adhesion of subsequent
coats 3.It hides surface undulation & fine cracks.

Product Name: Asian Paints Apex Stretch

Description: 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.

22
Product Name: Asian Paints Royale Play

Description:Asian Paints Royale Play is a water-based special effects paint designed to

create a variety of special effects on interior walls.

Product Name: Asian Paints Royale Play Dune

Description: Asian Paints Royale Play Dune offers a unique collection of subtle metallic
textures in Gold and Silver base, in 3 different styles for your interiors.

Product Name: Asian Paints Royale Play Safari

Description: Asian Paints Royale Play Safari offers rich metallic shades with unique
grain texturing that resemble islands on the wall.

23
Product Name: Asian Paints Royale Play Metallics

Description: Asian Paint Royale-Metallic is a water-based special effects paint that

creates a variety of effects on interior walls with a Metallic Designer look.

24
Chapter 2 Marketing and Sales

25
Organizational structure of marketing department

26
Services:
Asian paints offer a number of services to the customers. The aim of these services is to
provide the customer with a way to make an informed judgment as to which product
would be the most suited to their particular needs.

2.1 Color world:

Asian Paints provides the color mixing facility which is known as the color world. It
features a visual array of Asian Paints shades to help one make the right shade
decision. It features 8 color families of purples, blues, greens, greys, creams, beiges,
peaches and pinks. Each color family features a collection of popular Asian Paints
shades in that color family... these colors are then manufactured on the spot by mixing
various colors. This provides the customer with virtually indefinite number (around1500)
of shades to choose from.

2.2 Asian Paints Screen Test service

Through this service the customer is able to identify whether a particular shade will suit
their rooms. In this facility the customer can send picture of his room and the company
using computer techniques identifies the color most suited to the room.

2.3 Asian Paints Color Genie:

'Asian Paints Color Genie' is a concept that can get the shade of any sample in the
paint to be applied on the wall. It is based on the use of an instrument known as the
'Spectrophotometer' which can read the color of the sample and convert it into a
formulation to arrive at the same color for the paint on the walls. This service can be
availed very easily. Asian Paints Samplers are 200 ml paint tins which can be used to
sample shades on the wall. These come in a range of shades that are available through
an Asian Paints Color World outlet. It is currently available in Asian Paints Royale
Luxury Emulsion. Thus, all one need's to do is pick up these sampler tins at a nominal
price from any of the select Asian Paints Color World retail stores and experiment in
one's own house.

27
Details of competitors

Name Last Price Market Cap. Sales Net Profit Total Assets
(Rs. cr.) Turnover

Asian Paints 886.15 84,999.31 11,648.83 1,327.40 4,262.35

Berger Paints 243.40 16,879.25 3,806.51 266.03 1,581.29

Kansai Nerolac 282.40 15,219.09 3,549.06 271.67 1,638.32

Akzo Nobel 1,366.70 6,377.07 2,526.99 186.31 920.00

Shalimar Paints 114.35 216.65 433.27 -10.59 191.40

Jenson Nicholso 7.60 28.44 52.69 10.80 -255.47

Source: Asianpaints.com

28
 CUSTOMER SEGMENTATION &TARGETING :
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.

Base Decorative coating Industrial coating Automotive coat

Premium Medium Popular High Powder Quality Finished

performance coating coating coating
coating

Buyer Up market High Middle Used by Used by Large & Oldcarsar

characteristi buyers income class & fertilizer manufacturer small e mainly
c achiever group & rural petrochemical s of while scale car recolored
quality & Upper market s & atomic goods & other industrial
fashion middle mostly energy industrial mostly tied
Secker class low installations products up
Socially income mainly used companie
conscious group where to s
reduce
corrosion led
losses

Key Quality Quality Cost Quality & Quality & cot Quality, Brightness
p purchasing surfaces surfaces utilization surfaced & cost
influences shades power &conting
factor
strength

Search & Brand Brand Cost Utility Variety Brand Cost+

loyal loyal + seeking loyal variety
Evaluation
Cost + seeking
variety

29
 seeking

Company through Packet Company Other Tie up Old

s dealer or paint approaches & manufactures with the vehicles
Authorized paint or can points directly paints can anto send to
Purchase dealer purchasin sold company work
paints the g paint shops or
customer com of purchase
house 1,2, 5, 10,
litre

Post A warranty Limited or No High scale Medium or no Service Service

P Purchase period for no warrant service of warranty provided provided
some warranty y warranty for limited for 0-2
years years years.

Asian paint is the market paint Nerolac is the market leader. Nerolac market leader,
leader, with more than 50% market Asian paint have only 12% 50% share
Market
share. Nerolac, berger, ICI & market share. Other players
Asian paint penetrating
Shalimar are there ICI
slowly

TARGETING

Asian paints have a unique customer targeting strategy. They used to follow V tier
customer Target strategy.

Tire 1 - In the recipient end there are strategic solution seekers. Company thinks of
cost reductions, performance & productivity improvement for clients improving
customers & share holder profitability.

Tier 2 Here the Customers whom can be considered as the value or brand sensitive.
Asian paints target these customers with value added VDS integration customer level
service.

30
Tier 3 These part of the consumer are price sensitive. They least bothered about the
service. These are mainly middle or low income group people Asian paints have several
brand like UTSAV to serve them.

Tier-4 Here the company targets the small manufacturing & local companies, which can
generate revenue, company utilizes its & business & telesales technology to address &
satisfy their needs.

Tier-5 This tier is composed of specific targeted companies that although small in
size, deserve special attention because they are highly innovative in nature. Asian
paints have a good prospect over here.

31
Distribution Networks
Four manufacturing facilities are supported by Six Regional Distribution Centers (RDC)
and Seventy-seven depots.

Each RDC and depot is taken by Asian Paints on lease and then further assigned to a
C&F Agent distributing the Asian Paints products to the 14,500 dealers all over the
country.

There are 4 depots of Asian Paints in Mumbai and 73 outside Mumbai.

Asian Paints bypassed the bulk buyer segment and went to individual consumers of
paints. Then it went slow on urban areas and concentrated on semi-urban and rural
areas. Later captured the retail segment.

AP went in for an open-door dealer policy.

AP voted for nationwide marketing / distribution

32
Comparison of 4 P
The company frames the strategy about the products related issue and various other
things relating to the business. Most of the company follows the 4Ps policy namely
price, product peace and promotion.

Product: Asian paint details with product that is (i) Decorative (ii) Industrial (iii)
Automotive. In decorative segment company has a wide range of product from low
price to high price low price product like Utsav which is basically targeted to the rural
customer and high price product Apex cefirma for exterior and interior emulsion.
Asian paint investing a huge amount of fun in R & D sector for Quality and the
technological development of product so that it competes globally.

Price: the price range of Asian paint varies according to the product. Asian paint had
always a strategy in domination in the rural sector. The product that is supplied to
the rural area has low price range. Where as in the urban sector some of the high
price product circulates.

Place: Asian paint is available to all types of customer and the main advantage of
the Asian paint is that it is easily accessible to its customer. At present there are
20,000 dealers and a large no. of retailer. Asian paints distribution channel extends
to the thirty state of India. An Asian paint is also exporting to countries like
Caribbean, Africa, Middle East Asia and south pacific.

Promotion: Asian paint follows good promotional strategy regarding their sales of
the product. Their promotional strategy is made looking at the different category of
the product and price associated with it. In urban areas Asian paint established color
world where the customer can enjoy the taste real color while in rural sector it follow
sales demonstration programmed along with van displaying the product of Asian
paint in the rural market. It also invests a huge amount of funds in the advertising
sector for the promotion of this product.

33
Forecasting and Sales Plan Preparation

Process Forecasting
The process is as follows:
Annual Retail audit conducted at dealer & Territory level
All products are accounted.
Audit gives the dealers actual potential & approximated turnover
Competitor turnover is also recorded.

Manufacturing Forecast

Forecasting activity carried out also by production.

i3 software highly sophisticated, simplifying the activity.

34
 5 yrs. data considered & a forecast created by the software.

Also movement of SKUs(Stock keeping unit) at depots, regions considered in

this activity

Delivery Forecasting

Once the forecasts are finalized, activities are planned to deliver the figures.

E.g. : for 2009/10- 1st half of the year will be slow. This period will focus at
influencer & consumer activities.

Shop meets for low end painters.

Contractor meets & training programmed for influencers.

In-shop selling activities (all show casing & educating on new & focus products
use & properties)

Pricing

Asian paints limited with its three business units decorative, industrial & International
business is one of the largest paint company in India. Asian Paints consolidated net
profit for the first half of 2015-16 was Rs 854.18 crore. It was Rs 686 crore in same
period of last fiscal.Net sales during the first half of the current fiscal wasRs 7,402.83
crore. It was Rs 6,995.19 crore a year ago.

35
The various products and its price ranges are as follows:

Product Price range

Exterior:-

Asian Paints Apex Price of 20 lts. Range from

Rs.3142.00 3328.00

Asian Paints Ace Price of 20 lts. Ranges from

Rs.1761.00 Rs. 2059.00

Asian Paints Tractor Emulsion Price of 20 lts. Ranges from

Rs.1435.00 Rs. 2047.00

Asian Paints Super Decoplast Plastic Price of 20 Ltd. ranges from

Emulsion Paints Rs.2239.00 Rs.2544.00

Asian Paints Interior Wall Finish Matt Price of 20 lts. Is Rs. 2244.00
(White)

Asian Paints Interior Wall Finish Price of 20 lts. Is Rs.2311.00

Luster (White)

Product Price range

Asian Paints Tractor Synthetic Its price ranges from Rs.690 to 757
Distemper

Wall Finishes It range from Rs.4638- Rs,4975

Asian Paints Royale The price for 20 lts. Ranges from

Rs.4638- Rs.4975.

36
Asian Paints Premium Emulsion Range of 20 lts of this product ranges
from Rs.2648-Rs.3118

Enamels

Asian Paints Apcoute Premium Gloss For 20 lts the range varies from
Enamel Rs.2068 to Rs.2350.

Asian Paints Gattu Synthetic Enamel For 20 lts the range varies from Rs.
1458 to Rs.1836

Asian Paints Utsav Enamel For 20 lts the range varies from
Rs.1425 to Rs.1652.

Stainer, Aluminium Paints & Others

Stainers

Apcolite Universal Stainers For per bottle in plastic bottle of 200ml

the price ranges from Rs.41-Rs.77.

UtsavStainer For per boltle in plastic bottle of 20 ml

its price is Rs.34.

Asian Paints Wood Stains For per bottle in plastic bottle of 5 lts
the range varies from Rs.1000-
Rs.1250.

Aluminium Paints (Asian paints 3 For 20 lts its price is Rs.2593

mangoes Aluminium)

Promotion and Advertising

Promotion
The paint industry until 1999 was concentrated mostly on increasing sales by intensive
trade promotion wherein the dealers, contractors and other components of the supply
chain. There was little emphasis on theme advertising directed towards the customer.

37
Are cent trend that is emerging in the Indian paint market is that the major brands have
all identified the importance of reaching out to the common man instead of just limiting
themselves to the intermediaries.

Asian Paints advertising has created brand awareness, highlighted what the brand has
to offer and has consistently brought all of it top-of-the-mind for the customer. But the
outreach effort does not end there. Asian Paints has recognized the importance
of communicating to and involving key players who influence the final brand choice.
These include channel partners, contractors and painters, on whom Asian Paints
focuses by initiating and developing innovative activities and promotions. This helps
build the Asian Paints family so that customers get a high degree of personalized
service and professional guidance to facilitate their final decision.

MARKET PROMOTION STRATEGY

Dealer Visit:

For the promotions of Asian Paints we visit various paint dealers in different markets.
We visit the dealers and make them aware about the various products of Asian Paints.
We ask from the dealers about the customer taste and preference towards the paints.
Dealers also told us about the market position of various paints companies.

Painter Visit:

We visited painter at the market for the promotions of Asian Paints. We met with the
painters and tell them about the products of Asian Paints and tell them about what
benefits they can get form the products like tokens for the painters, free gifts, etc. We
also got information from the painters that what are the customer needs and what
customer wants.

Distributor Visit:

38
We also visited distributors for the promotions purpose. We tell the distributors about the
lending price of various products of Asian Paints i.e. at what price they can get the
products of Asian Paints. We also tell them about the various schemes and offers that
they get from Asian Paints.

9.2 Advertisements:
Asian Paints has had several memorable advertising campaigns. There are two current
favorites. One for their exterior paints where they show the man, his wife, his car, in fact
everything, except the exterior paint ageing. People absolutely adore that
advertisement. In fact, when you start seeing take-offs on a creative effort, you know it
has really caught the imagination of people. A couple of take-offs have been noticed on
this TVC.The colorful, almost lyrical

Hargharkuchkehtahai...

campaign, which was launchnationally in February, is essentially about the relationship

people have with their homes.Specifically, the spots look at the effort and the strong
emotions that go into doing up ahome. The ads are a reflection of the fact that people
are a lot more involved in doing uptheir homes now. But while the choice of paints forms
an important part of the process, itis not the highlight; instead, there are glimpses of
hand-picked furniture, treasured pictures, the intimacy of the family and the pride that
comes at the end of the process.The creative idea behind the campaign is that a home
speaks volumes about the peoplewho live in it. This is expressed through a montage of
visuals of the family interactingwith the home -painting it, decorating it and simply living

39
in it. The visuals are complemented by a voice-over that is really a poem that expresses
the home's thoughts about its residents.

One of their most successful campaigns has been the merawala green.

40
It has a very subtle way of telling the people that all possible colors in all possible
shades are availablewith them. The performer in the katthakali make-up symbolizes a

wide range of colors.

41
The lady looking at all those colors take a long time to choose her color. This
symbolizes the idea that Asian Paints has the color range to satisfy even the most
selective of customers.

Pneumonic:

42
The companys mascot Gattu (designed by R.K. Laxman in 1954), animpish boy with
the paint tin and brush, is most popular and easily recognized, one of the epitomes of

the ideal mascot.

However, in line with the new branding strategy, the brand has gotten a facelift, with
newpackaging, a contemporary logo and corporate colors. Hence, Gattu has been
droppedfrom the communication except as an inch-high pneumonic on the back and lids
of the paint tins.The new look (Asian Paints is the logo, in yellow and red, with
the vertical of the P converted into a brushstroke), gives all the companys products a
uniform look which is very much more contemporary, urban and up market. This has
been incorporated in theadvertisement.

43
However, in line with the new branding strategy, the brand has gotten a facelift, with
newpackaging, a contemporary logo and corporate colors. Hence, Gattu has been
droppedfrom the communication except as an inch-high pneumonic on the back and lids
of thepaint tins.The new look (Asian Paints is the logo, in yellow and red, with

the vertical of the pconverted into a brushstroke),

gives all the companys products a uniform look which isvery much more contemporary,
urban and up market. This has been incorporated in theadvertisement.

Strategy For Brand Management

An origination like Asian paints will always restrict itself for its core strategy on
innovation. For an organization like Asian paints to create a strong future, it has to bred
innovation continuously. This strategy of innovative facts will help any organization to
fulfill their commitment and integrity in dealing, with internal and external customers.

For this core strategy of innovation Asian paints encouraged entrepreneurship. They
also give greater autonomy to managers in their reasonability. Organization also
develops high tolerance for failures and encouraged risk taking.

Asian Paints another important core strategy is of managing people and technology
which are also the two important assets.

As it is always a people focused company its employees are the main leaders who bring
a difference to the company.

44
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
employee for personal and personal growth.

Along with Mass customization, Asian paints have created a plat form where Talent is
shared across the organization as Manager is 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.

The second most important core strategy of Asian paints limited is its technology.
Technology includes both research and development and information technology. Asian
paints has used technology throughout its year to gain a competitive edge in the market
place today, the company has formulated the entire range of decorative coatings though
home grown technology. It has used IT as a tool to bring efficiencies and stress line
operations. This applications will continue in future and Asian paints will not hesitate in
making investment in these areas to gain advantages of the organization.

The Third but important core strategy of Asian paints in Reconfiguration of value chain
activities:

It is a key task for Asian paints to retain competitiveness and achieve highest
value cost leveraging. Here a Question arises that as per this given requirement who
were the Key initiatives taken by Asian paints during the last 5 years in this regard.

In last 5 year, reconfiguration of value chain activities to increase

competitiveness has been one of the Major core area of Asian paints. An fact Asian
paints has been drain stormed as an organization with highest sales and profit figures.
But most important has been initiatives under taken in all areas of operations to
increase efficiencies some of the key initiatives undertaken are :

- Initiatives in manufacturing to reduce losses at factory.

- Sourcing efficiencies

- Surat existing assets for better productivity

45
- Introduction of new technology to drive efficiencies and increase productivity.

- Implementation of new supply chain solution.

- Implementation of an ERP solution.

Besides the above Asian paints have focused on continuously improving

environmental Management standards at our plants. Today all Asian Paints
manufacturing facilities are accredited with ISO 1400/ certification for environment
management standards. These systems have Enable Company to reduce affluent from
the manufacturing facilities. The introduction of new supply chain has transformed
management of inventory and forecasting has brought significant benefit for the
company through reduction of working capital. It has completely changed the manner of
functioning of the supply chain division.

BRAND POSITIONING

It is how the Asian paints enabled people to form a mental image for their products in
the customers mind. The strategies that they followed where asfollows;

Brand Image

The ways in which Asian Paints attempted to meet the customers psychologicaland
social needs.Indian paint industry is a low involvement industry. Till 1990s people will
just tell their budget for painting their house to their contractors.And few customers will
also mention the color they need. During that periodAsian Paints analyzed the customer
market and found that people where not brand conscious but their concern was only the
price of the paint. To meet this needs of the customer Asian paints reduced the cost of
the raw materials by backward integration in order to reduce the cost of the paints
Established an advertising strategy with created an emotional touch among
thecustomersAll these strategies helped them in creating a Brand Image for their

46
productsamong people and people started realizing the need for brand conscious in
thisindustry.

Umbrella Brand
In 2004 the company realized that though they have almost 20 brands only
few products like Apex emulsion, Royale interior emulsion, Apcolite and Touchwood had
high recall among the customers. Therefore they decided to promotethe brand as a
whole, to create a corporate image and the various products under their Umbrella
Brand Asian Paint, which became their mother brand. Thiscreated a Brand
Awareness as a whole among the customers.

Brand Portfolio:
It was realized that instead of spending on individual brands and in promotingthem it
was logical to promote their corporate image and allthe brands under their
umbrella brands ...Asian Paints has embarked on an umbrella branding policy
encompassing all its products and services. The project includes a new visual identity
that establishesthe company name as the dominant reason for purchase. Tractor,
Royale, UtsavandApcolite names are no longer the focus on the can, rather consumers
will be buying "Asian Paints." Some key brand names are being retained for the
time being--to signal a position in the market rather than a product or surface.
For instance, Tractor will represent the "value for money" brands.The immediate
advantage is obvious. Rather than spread resources thinly across b r a n d s
and sub-
brands, a company centric portfolio can synergizecommunicationefforts. To be
competitive in a world of fragmentation andrising costs, traditional mass
media, such as television, can be prohibitivelycostly. With the umbrella
branding move, Asian Paints can also afford to moveforward from a mere functional
platform for each individual product to the highground of a mood-based emotional
dimension.

An Underlying Theme

47
At Asian Paints, the underlying theme is "hargharkuchhkehtahai," or "everyhome has
something to say." The depth and texture visualized by this line goesinto the
customer's basic psyche of owning a home, and will carry through v a r i o u s
m e s s a g e s e m a n a t i n g f r o m t h e c o m p a n y, w h i c h i s t h e l e a d e r i n
t h e decorative coatings market in India.

Chapter 3 Production and Operation

48
 Introduction

Asian Paints India Ltd. 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.54.63 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.

Besides, the Company operates around the world through its subsidiaries Berger
International Limited, Apco Coatings and SCIB Chemicals. Asian Paints has its
presence in almost all the segment through its brands Royale in the premium segment,
Apcolite in the mid-segment, Gattu, Tractor, Utsav and 3-Mango etc. in the lower
segment.

PRODUCT LINE
Ancillaries: Decorative Paints:
Asian Paints Decoprime Wall Exterior Walls
o Asian Paints Ace
Primer WT
Asian Paints Decoprime Wall o Asian Paints Apex Stretch
o Asian Paints Apex Ultima
Primer ST Interior Walls
Asian Paints Acrylic Wall Putty o Asian Paints Tractor Acrylic
Asian Paints Wood Primer
Asian Paints Exterior Wall Primer Distemper
o Asian Paints Tractor Synthetic
Asian Paints Knifing Paste Filler

49
 Asian Paints Wood Stains Distemper
Asian Paints Exterior Sealer o Asian Paints Utsav Synthetic
Asian Paints Utsav Floor Color Distemper
Asian Paints Utsav Primer (ST) Metal Surface
Asian Paints Utsav Primer (WT) Asian Paints Luxury Ultra Gloss Enamel
Asian Paints Utsav Metal Primer Asian Paints Premium Semi Gloss
Red Oxide Enamel
Asian Paints UtsavStainer Asian Paints Utsav Enamel
Wood Surface
o Asian Paints Utsav Enamel
Automotive: o Asian Paints Luxury Ultra Gloss
2K Nexa Auto color
Enamel
Deltron o Asian Paints Premium Semi Gloss
Delfleet
Bilux range of Products Enamel
Aspa range of Products

Floor Coatings:
APCOFLOR

Road Markings:
APCOTRAK
APCOTRAK WBR
THERMOLINE

50
Manufacturing facilities
Asian Paints along with its subsidiaries has operations in 17 countries across the world
and 23 paint manufacturing facilities, servicing consumers in 65 countries through
Berger International, SCIB Paints-Egypt, Asian Paints, Apco Coatings and Taubmans.
Asian Paints operates in 5 regions across the world viz. South Asia, South East Asia,
South Pacific, Middle East and Caribbean region through the five corporate brands viz.
Asian Paints, Berger International, SCIB Paints, Apco Coatings and Taubmans. In 7
markets, it operates through its subsidiary, Berger International Limited; in Egypt
through SCIB Paints; in 5 markets in the South Pacific it operates through Apco
Coatings and in Fiji and Samoa it also operates through Taubmans.

Manufacturing
Country No. Countries Company Location
Plants
South Asia
India Ankleshwar, Patancheru, Kasna,
1 8 Sriperumbudur, Rohtak, Khandala,
Sarigam&Taloja
2 SriLanka 1 Asian Paints
3 Nepal 2 Asian Paints
4 Bangladesh 1 Asian Paints
South East Asia
5 Singapore 1 Berger International
South Pacific
6 Tonga Asian Paints
7 Fiji 1 Asian Paints &Taubmans
8 Samoa Islands 1 Taubmans
9 Vanuatu Asian Paints
10 Solomon Asian Paints

51
 Islands
Middle East
11 Oman 1 Berger International
12 Bahrain 1 Berger International
13 Dubai 1 Berger International
14 Egypt 2 SCIB Paints
Caribbean
15 Jamaica 1 Berger International
16 Barbados 1 Berger International
Trinidad & Berger International
17 1
Tobago
18 Ethiopia 3 Kadisco
Total 26

CAPACITY UTILIZATION
Decorative Paints:

Decorative Paints business contributes around 94% in the total paint business. The
company ranks no. 1, in the country in this segment with around 8500 colors to offer to

52
its customers. It has 5 manufacturing plants operating all over the country, which is
strategically located in-order to cater to the widely spread, market:

Plant Capacity
Bhandup, Mumbai 30,000 KL p.a.
Ankleshwar, Gujarat 1,00,000 KL
p.a.
Patancheru, Hyderabad 80,000 KL p.a.
Kasna, NOIDA 80,000 KL p.a.
Sriperumbudur, Chennai 50,000 KL p.a.
Kothak 1,50,000 KL
p.a.
Total Capacity 4,90,000 KL
p.a.

In Decorative paint segment, the Company operates in 4 main segments i.e. interior
wall finish, Exterior wall finish, Enamels and Wood Finishes. Besides, the company
outsources around 25-30% of its total production.

Industrial Paint:

: In this business, the company caters to automotive, powder, protective coatings, road
markings segment, floor coatings and General Industrial Paints. Most of the industrial
paints business is operated by two companies viz. Asian PPG Ltd. and Asian Paints
Industrial Coating Ltd. The company ranks first in the automotive paints business in
domestic market. The company ranks second in protective segment and first in the
road-marking segment. Recently it has entered in floor coating segment. The company
operates through following plants

Automotive Coating 14,000

KL
Non Industrial Coatings
Powder Coating
Baddi, Himachal Pradesh 1800 MT
Sarigam, Gujarat 3600 MT

53
Chemicals:

Chemical business includes manufacturing of Phthalic Anhydride(PAN) and

Pentaerythritol (PENTA). Asian Paints Ltd., has its PAN manufacturing plant at Gujarat
(capacity 25,200 MT) and PENTA manufacturing facility at Tamil Nadu (capacity
3000 MT). The company consumes nearly 50% of its production as captive
consumption and sells the remaining in the open market. This business contributes
around 3% to companys consolidated revenues.

Of the above mention total capacity of Asian Paint Plants the total utilization of all the
plants is 75 -80% of the total capacity. The plants do not utilize the total capacity of the
plants and the other excess paint is being outsourced from other companies.

INVENTORY MANAGEMENT
Asian Paints have been always on an upper hand when compared to others in terms
of inventory management. The inventory cost for Asian Paints is lowest in the industry.
Asian Paints average inventory level equals only 28 days sales, while the industry
average is 51 days sales. This right away provided a 45 per cent edge in inventory
costs to Asian Paints compared to its competitors. Asian Paints stock of finished goods
was just 7 per cent of its net sales while for the others in the industry it was nearly twice

54
that level. What is particularly striking in this achievement is that Asian Paint offered
customers and dealers a high level of service in product delivery compared to its
competitors and yet kept the inventory costs down by 45 per cent compared to the
competitors. But large credit outstanding, running beyond two months or more, was a
natural concomitant of the distribution strategy chosen by Asian Paint. The dealers are
required to maintain stocks of all the SKUs that are on demand in the territory. It pushes
up inventory levels at the outlets. They need credit. Asian Paints allowed15-21 days
credit for dealers located in the major towns and 22-30 days credit for dealers in
upcountry regions. Asian Paints had to pull off a smart credit control strategy for
survival. It resolved the thorny problem through an innovative dealer incentive scheme.
Asian Paints stipulated that each of its dealers should pay for the supplies within a
specified time norm and offered them as attractive incentive scheme for doing so. It
consisted of two components:

A special discount of 3.5 per cent. This was referred to as the discount
for perfection in payments. It was passed on at the end of the year, provided each and
every payment throughout the year was made within the stipulated time norms.

A cash discount of 5 per cent. This was paid for all outright cash purchases. It
was given whenever payments were received within 24 hours of the supply/invoice. In
respect of outstation accounts, the payments have been made in advance by draft in
order to be eligible for the cash discount. The scheme was a grand success. Asian
Paints credit outstanding always stood below 25 days, while the outstanding of the other
major companies were in the range of 40 days and above. Systematic computerization
also helped Asian Paints maintain the credit outstanding within limits. Asian Paints
Apcolite, the largest selling brand of paint in the country, is available in 151 different
shades and in eight different packs sizes. Being in the business of colors,Asian Paints
utilized color to achieve differentiation, and none of its competitors could match Asian
Paints in this aspect. Simultaneously, AP also achieved the lowest cost position in the
industry. Normally, when a firm consciously opts for the differentiation route with a wide
product line, it automatically points towards higher inventory levels and consequently
higher inventory and other costs. But Asian Paints, through its effective distribution

55
management, inventory management and control of credit outstanding, in particular,
managed to retain its inventory size and inventory costs at the lowest possible level.
Asian Paints actually saved so much on inventory carrying costs that it almost earned
its promotion budget through these savings. This is again praiseworthy because Asian
Paints spends as much as 10 per cent of its sales on promotion, the highest in the
industry. It has to spend so much in order to maintain its differentiation advantage. But
strikingly, it has kept its total marketing costs the lowest in the industry. The two factors
together i.e., the lowest cost position as well as the highest differentiation position has
conferred a significant competitive advantage on Asian Paints. This are few of the
techniques used by the Asian Paints to manage the inventory in a better way and to
decrease the cost of the products manufactured so as to reduce the price of the goods
supplied to the consumers.

QUALITY ISSUES

The company has various manufacturing units which are located at Mumbai,
Ankleshwar, Patancheru, Kasna, Cuddalore, Rohtak, Raigad, Buladshahar and
Sriperumbudur. Each plant is headed by the Factory Manager. Bhandup plant is the
oldest plant with an installed capacity of 30000 Tonnes per annum. All plants are
awarded with ISO 9000 & ISO 14000 certification.

Asian Paints has won many awards & recognitions which include:

56
Forbes rated it under 200 'Best Small Companies of the world' in 2002 and 2003 and
amongst the top 200 'Under a Billion Firms' of Asia in 2005, Best small company in
India by Asia Money in 2002.

Golden peacock environment management award national quality award by union

labor ministry.

Best supply chain award by i2 solutions.

Five star rating by British safety council in 2003 & 2005.

Awarded the "Sword of Honour" by the British Safety Council for all the paint plants in
India. This award is considered as the pinnacle of achievement in safety across the
world.

Ranked 24th amongst the top paint companies in the world by Coatings World - Top
Companies Report 2006.

The Asset - one of Asia's leading financial magazine ranked Asian Paints amongst the
leading Indian companies in Corporate Governance in 2002 and 2005.

Received the Ernst & Young "Entrepreneur of the Year - Manufacturing" award in 2003.

SUPPLIER BASE
Mostly the Alkyd resin used in the manufacturing of paints is manufactured by Asian
Paints itself, but as the quantity manufactured by it is not enough, the company
outsources from many other companies one of it is Piyanshu Resins Pvt. Ltd.,
Hyderabad.

Baba Containers is one of the suppliers of 20lit tins to the company.

Asian Metal Containers is one of the suppliers of the printed tins to the company.

57
Titanium Dioxide (TiO2) is the largest consumed raw material for manufacture of paints.
It constitutes around 30% of the total manufacturing cost. TiO 2 is available in two grade
i.e. rutile (imported and mainly used by the Indian paint industry) and anatase
(manufactured domestically). Travancore Titanium Products, Kerala & Kerala Minerals
and Metal Ltd., are some of the suppliers of the TiO 2 to the company.

Besides TiO2, there are other petroleum based raw materials which constitute around
40-50% of total raw material consumed. Hence any movement in crude oil prices will
impact the profitability of the company. These products are mostly supplied by HPCL
and BPCL.

Sudarshan Chemicals is major suppliers of pigments to the industry.

Alpha Chem are the suppliers of driers to the company.

20microns ltd., Vimal Minerals, Himalaya minerals are the suppliers of Extenders to the
Company.

Indofil chemicals, Pidilite Industries, Fine Organics ltd., are the few suppliers of
additives to the company.

But of all the above the majority of Raw Materials for Asian Paints is being imported
from other countries.

ENERGY MANAGEMENT

58
As energy cost is 16-18 % of total
overhead cost, Energy is treated as
major raw material
and not only just an overhead
expense so as to have special focus
on lowering down cost.

There are few Energy Conservation

Achievements achieved by the company:

Incinerator flue gas waste heat recovery:

The investment done for this project is Rs. 4 lacs. This has resulted in an energy
saving of 34500 units per year.

Direct discharge of Mill base from TSD to Mixer:

It is a process improvement change and it had helped the company to conserve
energy of 169456 units.

Caustic barrel heating by steam:

Electric heaters were eliminated by use of steam coil and power consumption is
reduced by 45000 units per year.

ETP Modernization:
Investment done for this project was Rs. 20 lacs. It also has given advantage in the
energy saving because numbers of mechanical equipment available in the
conventional ETP have become redundant. The power units saved are 116.4 per
day amounting to 42475 units/ year.

Reduction in stripping time of CED Resin Batches:

59
 This has given power reduction of 325 units/ batch. In 04-05 Power unit saving was
to the tune of 39000 units for processing 120 batches in year.

FRP fan for Cooling Towers:

Investment done for this improvement is Rs. 75000/- The total power units saved by
this modification in two cooling towers are 16500 units in a year.

Trimming of Dowtherm impeller:

This improvement has resulted in reduction of power by 15 KW (48 KW earlier to 33
KW current). The pump runs 60 hrs in a month and hence the saving is of 10800
units in a year.

Screw pumps in place of Diaphragm Pumps:

These air operated pumps were replaced with electrically operated screw pumps.
Thus the saving is 1.06 KW per batch. The numbers of batches produced as per
production plan are 2800 which resulted in a saving of 3000 units in one year.

60
CO-ORDINATION & COMMUNICATION BETWEEN PLANTS,
OFFICES & VENDORS
Asian Paints has harnessed the powers of state-of-the-art supply chain system using
cutting edge technology to integrate all its plants, regional distribution centres, outside
processing centres and branches in India. Eight of the company's paints plants in India,
2 chemical plants, 18 processing centres, 350 raw material and intermediate goods
suppliers, 140 packing material vendors, 6 regional distribution centres, 72 depots are
integrated.

Asian Paints always make sure the technology it implements is cost effective and
increases employee productivity. It has deployed SAP R3, i2 supply chain planning
suite, ERM employee platform formula management, product lifestyle platform, and so
on. Its very essential to adopt new technologies, since IT is an enabler to service
retailers. Also, the supply chain effectiveness has helped to capture more of the
enterprise platform. The i2 software, which was deployed nearly in 2001, has helped to
increase productivity from 3 tons to 8 tons.

Considering today's competitive scenario, it is essential that organizations have the best
technology in place to ensure good results. Asian Paints deploys technology that
connects the entire field-force across all its branches in the country as well as globally.
To ensure connectivity we have provided laptops and PDAs in the retail sales force
areas. Laptops with data cards are a key driver for enterprises. We have implemented
VSAT, which is an early adopter in far-flung locations. All the offices within the country
and globally are connected through MPLS, VSAT, and radio, but the preferred medium
is landline. Ninety percent of our offices have MPLS and we use radio strategically
where last mile connectivity is required. It has VSATs for its operations in rural areas
and there is a backup of two VSATs in every location of operations.

Companys biggest requirement is that it expects its vendors to be competent enough to

be able to forge a long-term partnership. They do not look for a vendor for a short period
of time. All these partnerships-large platform applications such as SAP, i2, and so on-
have been long-term. Therefore, while selecting a vendor, they spend a lot of time

61
understanding their roadmap, their fit with companys strategies, their fit with companys
IT architecture, and so on. After a careful selection, company makes sure that it
implements the technology efficiently.

PRODUCT FAILURES, IF ANY

If we consider the case of Product Failures of Paint in Paint Industry then the Company
had been a great failure in terms of Industrial Paints and then the company had done
many R & D and then they had come up with the formulations used for the Industrial
Paints.

One more product issue is the content of Lead in the paints which is harmful and can be
dangerous for the health of the consumers and also for the environment, so to
overcome this issue the company had come up with the Lead free paints which will
not harm even the environment and also the consumers thus improving the quality and
thus increasing the sales of the company.

62
WASTAGE AND SCRAP MANAGEMENT
Asian Paints has identified a total of 78 types of wastes from paint manufacturing
facilities, out of which 18 are hazardous as per HW Amendment Rules, 2000.

Given below is the approach to waste minimization adopted by the company. (Options
are not given in order of preference)

Recycling a potential waste or portion of it 'on site' where it is generated;

Improving process technology and equipment that alter the primary sources of waste
generation;

Improving plant operations, such as housekeeping, materials handling, equipment

maintenance, automating process and packing equipment;

Redesigning or reformulating products;

Conducting waste audits and monitoring and tracking of waste generation;

The companys efforts have resulted into almost no wastage during production. There
are almost no damages during transportation also.

63
ENVIRONMENTAL MANAGEMENT
Asian Paints approaches the environment issue from the perspective of waste
minimisation and conservation of resources.

It attempt is to reuse, recycle and eliminate waste, which results in less and less waste
being generated. Accordingly, the material losses in manufacturing have been reduced
substantially over the last few years.

It has ISO 14001 certification for environment management standards.

It has achieved 'zero industrial discharge' capability. This has been achieved by the
installation of upgraded effluent treatment facilities and installation of reverse osmosis
plants in conjunction with appropriate recycling and reuse schemes. Our emulsion
manufacturing facility has also achieved 'zero waste' status. It has adopted the
principles of "green productivity".

Some of its innovative schemes which enhance green productivity are dealer tinting
systems which has resulted in large batch sizes ; bulk storage facility for monomers
which reduces wastage; Use of natural gas which is a cleaner fuel ; solvent recovery
plants have been set up which has resulted in zero reduction of solvent disposal ;
Improved incinerating systems and reverse osmosis.

64
TECHNOLOGY UPGRADATION MANUFACTURING
Screw Compressor with Variable Frequency Drive: Total saving/annum = 7.03 lacs
Hydrofoil Agitators in Medium Tank Yard: Total saving/annum = 1.16 lacs
Variable Frequency drive in 2 Twin Shaft Dispenser machine: Total saving/annum = 1.31
lacs
Replacement of Heat tracing in 3 Medium Tank Yard storage tanks: Total saving/annum
= 0.90 lacs
Air Pre-heaters on Thermopack: Total Saving/annum = 19.11 lacs
Small Group Activities:
Adjustable Timers in 4 Ball Mill of Liquid Paint processing: Total saving/annum = 0.46
lacs
Energy Savers Units in Room Air Conditioner: Total saving/annum = 0.43 lacs
Adjustable Timers in Twin Shaft Dispenser of Liquid Paint Processing & Stiff
Section:Total Saving/annum = 0.69 lacs
RH Filtration Pump Upgradation: Total saving/annum = 0.20 lacs
QRC Replacement in Liquid Paint Processing: Total Saving/annum = 0.41 lacs
Solar Photovoltaic Street Light installed as non conventional Energy Source: Total
Saving/annum = 0.00650 lacs
Installation of Energy Efficient Tube lights in Central UPS room & Canteen: Total
savings/annum = 0.24 lacs

65
R & D / INNOVATION STRATEGIES
At Asian Paints, Research and Development (R&D) plays an important role in
developing new products and innovations, and reducing costs by value re-engineering
of formulations.

In India, the company's 140 strong R&D team consisting of 7 doctorates and around 115
qualified scientists, has always backed the company's business plan and demands of
the market place. Right from the company's inception, all its decorative products for the
Indian market and also in the overseas market have been developed in-house. In the
last few years, companys R&D efforts have been focused on developing new exterior
finishes, economy emulsions and distempers.

Asian Paints' R&D team has successfully managed to develop High-end exterior
finished and wood finishes in-house, which was earlier imported into the country. These
products are currently marketed under Asian Paints Elastomeric Hi-Stretch Exterior
paint and Asian Paints PU wood finish respectively.

Company is also in the development of the water based wood polish which is a new
product as all the other wood polish are solvent based, and they have odour which
causes irritation. So, company is in the process of developing a polish which is odorless
and is of same quality as of solvent based polish.

The R&D team also provides technological support and develops customized products
for the company's international operations spanning across 19 countries.

The company is also in the process of setting up new a new R&D center near Mumbai
(India).

66
MATERIAL CONSUMPTION AND EFFICIENCY

About 57% of our net revenues is spent on procuring raw material and packing material.
Material effciency allows us to reduce our resource consumption and save cost. Higher
material wastage implies greater expenditure for treatment of waste and effluents. We
are increasingly promoting automation in our factories. With larger production batch
sizes and improved material addition accuracy, material wastage is being reduced to

low levels.

Environment and Safety:

Asian Paints approaches the environment issue from the perspective of waste
minimisation and conservation of resources. Thus, the continued attempt is to reuse,
recycle and eliminate waste, which results in less and less waste being generated.
Accordingly, our material losses in manufacturing have been reduced substantially over
the last few years.

Further, the company's four paint plants and the two chemical plants have the ISO
14001 certification for environment management standards. The company's latest
manufacturing facility which is situated at Sriperumbudur near Chennai will be certified
for ISO 14001 in this financial year 2006-07.

67
All our paint plants have achieved 'zero industrial discharge' capability. This has been
achieved by the installation of upgraded effluent treatment facilities and installation of
reverse osmosis plants in conjunction with appropriate recycling and reuses schemes.
Our emulsion manufacturing facility has also achieved 'zero waste' status. We have
adopted the principles of "green productivity".

Some of our innovative schemes which enhance green productivity are dealer tinting
systems which has resulted in large batch sizes ; bulk storage facility for monomers
which reduces wastage; Use of natural gas which is a cleaner fuel ; solvent recovery
plants have been set up which has resulted in zero reduction of solvent disposal ;
Improved incinerating systems and reverse osmosis.

Safety at its best

The company has made significant investments in the area of safety over the past
several years. Its steadfast commitment to safety is reinforced by the fact that four of
Asian Paints plants were conferred with the 'Sword of Honour' by the British Safety
Council for the second time in quick succession. The British Safety Council is the
world's leading occupational health, safety and environmental organizations, working
closely with the world's leading companies in developing safe systems for work. The
"Sword of Honour", instituted by the BSC, is recognized the world over as the pinnacle
of achievement in safety management systems.

Certification

Green Assure from Asian Paints is more than just VOC (Volatile Organic Compound)
Safe. Our best-in-class products* conform to true Green standards. These products not
only conform to international VOC specifications but they also do not contain any

68
hazardous raw materials like lead, heavy metals, APEO (Alkyl phenol Ethylates) and
toxic materials.
Some of our best in class wall coatings like Royale, Royale Shayne and Apex Ultima
follow the hazardous material usage guidelines laid out by the International GS - 11
(Green Seal) standard.
For Wood coatings, Aquadur water-based PU follow the hazardous material usage
guidelines laid out by the International GS - 47 (Green Seal) standard.
Some of our Best in Class products include Royale Aspira, Royale, Royale Shyne,
Royale Enamel, ApexUltima for Wall Coatings and Aquadur PU for Wood Coatings.

69
CHAPTER 4 FINANCE AND ACCOUNTS

70
 Capital Structure:
Capital Structure (Asian Paints)
Period Instrument Authorized Issued Capital -PAIDUP-
Capital
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital
2015 2016 Equity Share 99.5 95.92 959197790 1 95.92
2014 2015 Equity Share 99.5 95.92 959197790 1 95.92
2013 2014 Equity Share 99.5 95.92 959197790 1 95.92
2012 2013 Equity Share 99.5 95.92 95919779 10 95.92
2011 2012 Equity Share 99.5 95.92 95919779 10 95.92
2010 2011 Equity Share 99.5 95.92 95919779 10 95.92
2009 2010 Equity Share 99.5 95.92 95919779 10 95.92
2008 2009 Equity Share 99.5 95.92 95919779 10 95.92
2007 2008 Equity Share 99.5 95.92 95919779 10 95.92
2006 2007 Equity Share 99.5 95.92 95919779 10 95.92
2005 2006 Equity Share 99.5 95.92 95919779 10 95.92
2004 2005 Equity Share 99.5 95.92 95919779 10 95.92
2003 2004 Equity Share 99.5 95.92 95919779 10 95.92
2002 2003 Equity Share 99.5 64.19 64185952 10 64.19
2001 2002 Equity Share 99.5 64.19 64185952 10 64.19
2000 2001 Equity Share 99.5 64.19 64185952 10 64.19
1994 1995 Equity Share 34.5 19.91 19911110 10 19.91
1993 1994 Equity Share 34.5 19.91 19911110 10 19.91
1992 1993 Equity Share 34.5 19.91 19911110 10 19.91
1990 1992 Equity Share 19.5 12.44 12444444 10 12.44
1987 1990 Equity Share 19.5 12.44 12444444 10 12.44
1985 1987 Equity Share 9.5 8.3 8296296 10 8.3
1984 1985 Equity Share 7.5 5.19 5185185 10 5.19
1983 1984 Equity Share 7.5 5.19 5185185 10 5.19
1980 1983 Equity Share 2.5 2.5 250000 100 2.5
1978 1980 Equity Share 2.5 2.5 250000 100 2.5
1975 1978 Equity Share 2.5 1.5 150000 100 1.5

Share Holding Pattern:

Top Share Holders:

71
No. Name of the Shareholder Total Shares held

1 Bodies Corporate 65,447,285

2 FII 172,907,397

3 Life Insurance Corporation of India 44,859,732

4 Ojasvi Trading Private Limited 46,987,850

5 NRI 12,961,163

6 Trusts 2,867,875

In detail-
CATEGORY OF NO. OF TOTAL TOTAL NO. OF TOTAL SHARES PLEDGED
SHAREHOLDER SHARE- NO. SHARES HELD SHAREHOLDING AS A OR
HOLDER OF IN % OF TOTAL NO. OF OTHERWISE
S SHARE DEMATERIALIZE SHARES ENCUMBERED
S D AS A % OF NUMBER OF
FORM
(A+B) SHARES
AS A % OF
(A+B+C)

(1) Indian

Individuals / 56 102,208,177 102,208,177 10.66 10.66 769,000 0.75

Hindu Undivided
Family

Central - - - - - -
Government /
State
Government(s)

Bodies - - - - - -
Corporate

Financial - - - - - -
Institutions /
Banks

Any Others 27 404,176,305 404,176,305 42.14 42.14 66,259,360 16.39

(Specify)

Sub Total 83 506,384,482 506,384,482 52.79 52.79 67,028,360 13.24

(2) Foreign

Individuals (Non- - - - - - -
Residents
Individuals /
Foreign
Individuals)

72
 Bodies - - - - - -
Corporate

Institutions - - - - - -

Qualified - - - - - -
Foreign Investor

Any Others - - - - - -
(Specify)

Sub Total - - - - - -

Total 83 506,384,482 506,384,482 52.79 52.79 67,028,360 13.24

shareholding of
Promoter and
Promoter
Group (A)

(B) Public Shareholding

(1) Institutions

Mutual Funds / 219 20,335,527 19,851,337 2.12 2.12 - -

UTI

Financial 35 1,118,584 1,112,824 0.12 0.12 - -

Institutions /
Banks

Central 4 1,008,605 1,008,605 0.11 0.11 - -

Government /
State
Government(s)

Venture Capital - - - - - -
Funds

Insurance 71 51,172,502 51,171,502 5.33 5.33 - -

Companies

Foreign - - - - - -
Institutional
Investors

Foreign Venture - - - - - -
Capital Investors

Qualified - - - - - -
Foreign Investor

Nominated - - - - - -
investors (as
def. in Ch. XA of
SEBI (ICDR)

73
 Regulations)

Market Makers - - - - - -

Any Others 681 172,907,397 172,907,397 18.03 18.03 - -

(Specify)

Sub Total 1,010 246,542,615 246,051,665 25.70 25.70 - -

(2) Non-
Institutions

Bodies - - - - - -
Corporate

Individuals - - - - - -

Individual - - - - - -
shareholders
holding nominal 0
share capital up
to Rs. 1 lakh

Individual 124,820,452 112,755,180 13.01 13.01 - -

shareholders
holding nominal
199,285
share capital in
excess of Rs. 1
lakh

Qualified - - - - - -
Foreign Investor

Any Others 8,919 81,450,241 79,617,801 8.49 8.49 - -

(Specify)

Sub Total 208,204 206,270,693 192,372,981 21.50 21.50 - -

Total Public 209,214 452,813,308 438,424,646 47.21 47.21 - -

shareholding
(B)

209,29 959,197,79 944,809,12 100.00 100.00 67,028,36 13.24

Total (A)+(B)
7 0 8 0

74
Cost Structure:
Value % of RM cost
Raw Materials
(Rs in Cr.) to Total Cost

Pigments, Extenders & Minerals 1,841.33 38.42

Additives 949.32 19.81

Monomers 647.73 13.52

Solvents 465.35 9.71

Others 448.02 9.35

Oils 273.11 5.70

Resins 167.55 3.50

Cash Flow Statement:

Particular 2015-16 2014-15 2013-14 2012-13 2011-12

(Rs. In Crore)

Net Profit/Loss Before Extraordinary Items

2,377.75 1,933.57 1,702.57 1,515.88 1,362.93
And Tax

Net CashFlow From Operating Activities 2,045.69 1,143.57 1,368.84 1,081.12 753.67
Net Cash Used In Investing Activities -862.78 -292.23 -615.38 -424.87 -464.87
Net Cash Used From Financing Activities -771.06 -726.55 -559.67 -590.35 -297.06
Foreign Exchange Gains / Losses 0.00 0.00 0.00 0.00 0.22
Net Increase /Decrease In Cash And Cash
Equivalents 411.85 124.79 193.79 65.90 -8.04

Cash And Cash Equivalents Begin of Year 862.69 745.08 551.57 500.97 509.01
Cash And Cash Equivalents End Of Year 1,274.54 869.87 745.36 566.87 500.97

Source : Dion Global Solutions Limited

Balance sheet of Asian Paint:

75
Particulars 2015-16 2014-15 2013-14 2012-13 2012-11
(Rs. In Crores)
Sources Of Funds
Total Share Capital 95.92 95.92 95.92 95.92 95.92
Equity Share Capital 95.92 95.92 95.92 95.92 95.92
Reserves 4,867.24 4,134.34 3,505.01 2,926.34 2,391.86
Networth 4,963.16 4,230.26 3,600.93 3,022.26 2,487.78
Secured Loans 9.37 3.47 6.65 9.28 12.37
Unsecured Loans 22.18 28.62 32.86 37.48 150.78
Total Debt 31.55 32.09 39.51 46.76 163.15
Total Liabilities 4,994.71 4,262.35 3,640.44 3,069.02 2,650.93

Application Of Funds
Gross Block 3,869.41 3,008.41 2,908.10 2,803.73 1,612.24
Less: Accum. Depreciation 1,244.27 1,042.92 895.90 701.84 603.20
Net Block 2,625.14 1,965.49 2,012.20 2,101.89 1,009.04
Capital Work in Progress 92.79 139.54 37.95 52.55 602.84
Investments 2,439.68 1,893.78 1,030.19 449.70 542.22
Inventories 1,610.12 1,802.18 1,665.05 1,480.79 1,264.42
Sundry Debtors 759.06 728.87 712.36 633.88 500.24
Cash and Bank Balance 155.02 61.81 745.36 566.86 500.97
Total Current Assets 2,524.20 2,592.86 3,122.77 2,681.53 2,265.63
Loans and Advances 682.34 681.53 478.60 362.61 560.30
Total CA, Loans & Advances 3,206.54 3,274.39 3,601.37 3,044.14 2,825.93
Current Liabilities 2,563.82 2,313.57 2,423.55 2,078.94 1,908.87
Provisions 805.62 697.28 617.72 500.32 420.23
Total CL & Provisions 3,369.44 3,010.85 3,041.27 2,579.26 2,329.10
Net Current Assets -162.90 263.54 560.10 464.88 496.83
Total Assets 4,994.71 4,262.35 3,640.44 3,069.02 2,650.93

Contingent Liabilities 351.20 598.28 447.75 464.28 785.37

Book Value (Rs) 51.74 44.10 37.54 315.08 259.36

76
Income Statement:

Particulars 2015-16 2014-15 2013-14 2012-13 2011-12

(Rs. In Crore)
INCOME
Revenue From Operations [Gross] 13,992.15 12,878.80 11,542.02 9,990.04 8,708.30
Less: Excise/Sevice Tax/Other Levies 1,533.50 1,393.13 1,241.80 1,068.91 783.60
Revenue From Operations [Net] 12,458.65 11,485.67 10,300.22 8,921.13 7,924.70
Other Operating Revenues 187.23 163.16 118.56 50.57 39.46
Total Operating Revenues 12,645.88 11,648.83 10,418.78 8,971.70 7,964.16
Other Income 225.30 186.82 173.66 126.15 141.49
Total Revenue 12,871.18 11,835.65 10,592.44 9,097.85 8,105.65
EXPENSES
Cost Of Materials Consumed 5,842.29 6,191.72 5,758.71 5,125.48 4,722.74
Purchase Of Stock-In Trade 524.42 380.56 256.58 199.56 120.41
Changes In Inventories Of FG,WIP And
162.86 -132.43 -75.34 -175.91 -143.78
Stock-In Trade
Employee Benefit Expenses 664.20 606.94 482.43 404.59 341.63
Finance Costs 23.40 27.13 26.08 30.56 30.82
Depreciation And Amortisation Expenses 238.36 223.11 212.32 126.98 99.49
Other Expenses 2,972.55 2,591.52 2,219.13 1,870.71 1,571.41
Total Expenses 10,428.08 9,888.55 8,879.91 7,581.97 6,742.72

Profit/Loss Before Exceptional,

2,443.10 1,947.10 1,712.53 1,515.88 1,362.93
ExtraOrdinary Items And Tax
Exceptional Items -65.35 -13.53 -9.96 0.00 0.00
Profit/Loss Before Tax 2,377.75 1,933.57 1,702.57 1,515.88 1,362.93
Tax Expenses-Continued Operations
Current Tax 743.74 616.42 498.63 406.03 402.76
Deferred Tax 39.91 -9.29 33.74 62.59 4.16
Tax For Earlier Years -3.33 -0.96 1.14 -2.74 -2.38
Total Tax Expenses 780.32 606.17 533.51 465.88 404.54
Profit/Loss For The Period 1,597.43 1,327.40 1,169.06 1,050.00 958.39
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 16.65 13.84 12.19 109.47 99.92
VALUE OF IMPORTED AND INDIGENIOUS RAW
MATERIALS
Imported Raw Materials 1,646.58 1,687.50 2,084.48 1,918.68 1,029.06
Indigenous Raw Materials 3,145.83 3,465.78 2,765.82 2,436.04 2,994.48
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares 3.79 1.80 1.30 3.12 0.65
Indigenous Stores And Spares 42.09 35.66 28.07 32.84 22.83
DIVIDEND AND DIVIDEND PERCENTAGE

77
Equity Share Dividend 719.39 585.12 508.37 441.23 383.69
Tax On Dividend 145.14 112.95 82.02 74.29 62.24
Equity Dividend Rate (%) 750.00 610.00 530.00 460.00 400.00

Key Financial Ratio:

Key Financial Ratios of Asian Paints

Particular
Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
s

Investment Valuation Ratios

Face Value 1.00 1.00 1.00 10.00 10

Dividend Per Share 7.50 6.10 5.30 46.00 40

Operating Profit Per Share (Rs) 25.85 20.96 18.53 161.31 140

Net Operating Profit Per Share (Rs) 131.84 121.44 108.62 935.33 830

Free Reserves Per Share (Rs) -- -- -- --

Bonus in Equity Capital 97.98 97.98 97.98 97.98 97

Profitability Ratios

Operating Profit Margin(%) 19.60 17.25 17.05 17.24 16

Profit Before Interest And Tax Margin(%) 17.41 15.10 14.77 15.61 15

Gross Profit Margin(%) 17.72 15.34 15.02 15.83 15

Cash Profit Margin(%) 14.77 13.21 13.13 12.93 13

Adjusted Cash Margin(%) 14.77 13.21 13.13 12.93 13

Net Profit Margin(%) 12.63 11.39 11.22 11.70 12

Adjusted Net Profit Margin(%) 12.41 11.21 11.03 11.54 11

Return On Capital Employed(%) 49.38 46.31 47.75 50.38 52

Return On Net Worth(%) 32.18 31.37 32.46 34.74 38

Adjusted Return on Net Worth(%) 33.50 31.69 32.74 34.74 38

78
Return on Assets Excluding Revaluations 51.74 44.10 37.54 315.08 259

Return on Assets Including Revaluations 51.74 44.10 37.54 315.08 259

Return on Long Term Funds(%) 49.38 46.31 47.75 50.38 54

Liquidity And Solvency Ratios

Current Ratio 0.95 1.09 1.18 1.18 1

Quick Ratio 0.47 0.49 0.64 0.61 0

Debt Equity Ratio 0.01 0.01 0.01 0.02 0

Long Term Debt Equity Ratio 0.01 0.01 0.01 0.02 0

Debt Coverage Ratios

Interest Cover 105.41 72.77 66.66 50.60 45

Total Debt to Owners Fund 0.01 0.01 0.01 0.02 0

Financial Charges Coverage Ratio 115.59 80.99 74.81 54.76 48

Financial Charges Coverage Ratio Post Tax 79.45 58.15 53.97 39.51 35

Management Efficiency Ratios

Inventory Turnover Ratio 8.81 7.24 7.00 6.78 6

Debtors Turnover Ratio 17.00 16.17 15.48 15.82 18

Investments Turnover Ratio 8.81 7.24 7.00 6.78 6

Fixed Assets Turnover Ratio 3.35 3.98 3.63 3.23 5

Total Assets Turnover Ratio 2.58 2.78 2.89 2.95 3

Asset Turnover Ratio 2.73 2.95 3.11 3.14 3

Average Raw Material Holding -- -- -- --

Average Finished Goods Held -- -- -- --

Number of Days In Working Capital -8.76 5.15 19.42 20.44 22

Profit & Loss Account Ratios

Material Cost Composition 50.70 56.74 58.01 59.75 61

79
Imported Composition of Raw Materials Consumed 34.35 32.74 42.97 44.05 25

Selling Distribution Cost Composition -- -- -- --

Expenses as Composition of Total Sales 0.63 0.61 0.61 0.61 0

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 45.03 44.08 43.48 42.02 40

Dividend Payout Ratio Cash Profit 39.18 37.73 36.80 37.48 36

Earning Retention Ratio 56.74 56.37 56.89 57.98 59

Cash Earning Retention Ratio 62.17 62.59 63.47 62.52 63

AdjustedCash Flow Times 0.02 0.02 0.03 0.04 0

80
Peer Comparison of Asian Paint with Industry:
I. Market Capitalisation:

Company Name Market Capitalisation

(Rs. cr)

Asian Paints 103,790.00

Berger Paints 23,924.28

Kansai Nerolac 20,519.37

Akzo Nobel 8,993.08

Shalimar Paints 328.33

Jenson Nicholso 54.72

Hardcastle 20.71

From the above table, it is said that Asian Paint is the market leader in Paint Industry
followed by berger paints and Kansai- having 2nd and 3rd position respectively.

II. Sales Turnover, Net Profit & Total Assets: (Rs. In Crore)
Name Last Price Sales Net Profit Total Assets
Turnover

Asian Paints 1,081.35 13,332.18 1,622.81 4,994.71

Berger Paints 245.50 3,853.26 356.45 1,576.96

Kansai Nerolac 381.00 3,830.22 891.10 2,317.95

Akzo Nobel 1,925.00 2,740.14 202.10 729.00

Shalimar Paints 172.00 402.93 5.28 193.65

81
Jenson Nicholso 14.50 37.71 -10.32 -265.98

Recent Financial Performance of Asian Paint:

Net revenue from operations on standalone basis increased to Rs. 12,645.88

crores as against Rs.11,648.83crores in the previous year - a growth of 8.6%.
Cost of goods sold as a percentage to net revenue from operations decreased to
51.6% as against 55.3% in the previous year.
The decrease is on account of reduction in key raw material prices on the back of
significant drop in crude prices.
Employee cost as a percentage to net revenue from operations increased to
5.3% (Rs. 664.20 crores) against 5.2% (Rs. 606.94 crores) in the previous year.
Other expenses as a percentage to net revenue from operations increased to
23.5% (Rs. 2,972.55 crores) as against 22.2% (Rs. 2,591.52 crores) in the
previous year.
The Profit After Tax for the current year is Rs. 1,597.43 crores as against Rs.
1,327.40 crores in the previous year - a growth of 20.3%. The growth in profit is
mainly driven by increase in net revenue from operations and softening of input
prices during the year.

Dividend

During the financial year 2015-16, the Company declared and paid an interim dividend
of Rs. 2.20 (Rupees two and paise twenty only) per equity share of the face value of
Rs. 1 (Rupee one) each in the month of October, 2015. In addition, your Directors
recommend payment of Rs. 5.30 (Rupees five and paise thirty only) per equity share of
the face value of Rs. 1 (Rupee one) each as final dividend for the financial year 2015-
16, for the approval of the shareholders at the ensuing AGM. If approved, the total
dividend (interim and final dividend) for the financial year 2015-16 will be Rs. 7.50
(Rupees seven and paise fifty only) per equity share of the face value of Rs. 1 (Rupee
one) each as against the total dividend of Rs. 6.10 (Rupees six and paise ten only) per
equity share of the face value of Rs. 1 (Rupee one) paid for the previous financial year
2014-15.

Moreover, The Company has made an assessment of the fair value of investment
made in its subsidiary, Sleek International Private Limited (''Sleek'') taking into account

82
the past business performance, prevailing business conditions and revised expectations
of the future performance given the understanding built up since acquisition. Based on
above factors and as a matter of prudence, the Company has made a provision for
diminution in the value of investment made in Sleek to the tune of Rs. 65.30 crores in
the year ended 31st March, 2016. The same is disclosed under Exceptional items in
the Statement of Profit and Loss. The details of
Exceptional items are given in Note [51] to the Standalone Financial Statements and
Note [28] to the Consolidated Financial Statements.

83
Chapter 5 Human Resource

84
Introduction
One of the principal anchors of A Companys ability to cope with challenging business
environment is its strong culture of customer centricity, innovation and people focus. A
Company has embarked on several initiatives to strengthen its Employee Relations. A
Company has a longstanding practice of developing talent from within by providing on-
the-job learning opportunities and career development platforms to all including front
line employees of the organization.
A Companys commitment to the development of employees is best reflected in how
individual development conversations and the People Review Programs are being
institutionalized in the organization. There is a constant endeavor to identify individual
capability development needs and provide structured support and intervention to hone
these capabilities. All the manufacturing locations are working on an ambitious
Employee Relations agenda through various initiatives like Continuous Education
Scheme, providing vertical growth plans from operator to staff level and create an
environment of inclusive participation by involving operators in decision-making process
through Quality Circles and Total Preventive Maintenance programs.
Throughout the year, A Company has worked on integrating employees of the
businesses acquired during the year, namely EssEss in India and Kadisco in Ethiopia.
To strengthen employee experience, ACompany has launched an Employee Help Desk
named SAMPARK. ACompany has started a Diversity focused initiative called
SWARA, to promote inclusivity and enable employees from different backgrounds,
cultures and lifestages to perform to the best of their potential.

85
ENVIRONMENT, HEALTH & SAFETY

Environment, Health and Safety (EHS) is one of the primary focus areas for a Company.
A Companys EHS policy is to consider compliance to statutory EHS requirements as
the minimum performance standard and is committed to go beyond and adopt stricter
standards wherever appropriate. A Companys paint manufacturing facilities and the two
intermediates manufacturing facilities have the ISO 14001 environmental certification. In
the 2014-15, the six decorative paint factories have undertaken extremely challenging
initiatives in the following areas of environmental sustainability
a. reducing non-process water consumption
b. improving water-neutrality
c. reducing trade-effluent generation
d. reducing hazardous waste generation
e. reducing electricity consumption
f. improving the contribution of renewable energy

A Company has made substantial investments in the past year to generate more
Renewable Energy in our manufacturing facilities. A Rooftop Solar Power plant was
commissioned at the Sriperumbudurfactory in the middle of 2014-15 and a substantial
portion of energy consumption is now generated from this source. Similar rooftop solar
power plants are being commissioned at Rohtak, Khandala&Kasna plants and will be
operational in 2015-16.
Another company-wide initiative that was worked upon was about reducing the usage of
virgin-paper consumptionas also its wastage whilst improving therecycling of waste
paper. The factories and corporate office have run awareness campaigns to sensitize
and educate employees on judicious use of paper and to avoid its wastage. ACompany
also gives priority and attention to the health and safety of its employees and trains all
the employees to work as per prescribed procedures designed to meet all EHS
requirements of the Company. A Company is implementing a pilot project on Behavior
Based Safety program at one of the factories. Put together, the three facets of a

86
sensitized safety culture, high quality safety infrastructure and strong management
practices will help us produce consistent results in safety performance.

Our employees our strength (Asian Paint)

Asian Paint has a long-standing practice of developing talent from within. Many
employees who began their careers at their organization have risen to spearhead
leadership positions. Much of this can be attributed to living and espousing their values,
employee-friendly policies and practices and nurturing a culture of shared vision and
commitment.

Asian Paints dedication to development translates into retention of a strong bench of

committed individuals with a stake in the organizations success. They place a premium
on helping their people to pursue their passions and goals through internal self-
development programs and capability building endeavors. They believe the long tenure
of their team members and excellent industry reputation are strong indicators of their
corporate success.

Asian Paint provides employees the space to cultivate team and leadership qualities
and adopt this approach across hierarchies. Their organizational development strategy
is geared to provide adequate tools to equip their employees with the necessary skills to
excel. An unbiased, meritocracy based performance focused management system

87
supports this philosophy to appropriately recognize and reward employees for their
consistent performance and contribution.
They have implemented a modern cloud-based HR platform, with improved analytical
capabilities for better decision making, to cover all aspects of people management
including employee life cycle, career development and succession planning, learning
and growth, operational and performance management and employee collaboration
across their operations.

RECRUITMENT AND RETENTION

Asian Paints continue to pursue innovative means to hire talent and are early movers in
sourcing talents from the country's best management schools. They tap into this fresh
talent pool through a range of sources including pre-placement offer conversions,
campus recruitment, and social networks e.g. LinkedIn & Facebook. They also
encourage internal job postings to provide their employees a diverse experience.
Employee referrals are another strong source in recruiting talent, and extending
commitment and belief in their employer brand. Some of

Asian Paints key recruitment initiatives include:

CANVAS

This case study competition, is their marquee campus engagement initiative

which has been expanded to cover their target tier-I management schools. The winners
are interviewed for suitable positions within the Company.

Asian Paints Careers'

This Facebook page was launched to connect with the student community. The
page has been an effective medium to actively engage with students.

88
Alma-Matters'

Is an initiative where alumni from various campuses who are working with us re-visit
their institutions to engage with students and spread awareness about the Asian Paints
brand and employee experience?

IMPRINTS'
Is a summer internship programme for students from leading business schools. On
completion, students are evaluated and if successful, they are awarded with
replacementoffers to joinAsian Paints.

Companys commitment to attract and retain talent further gets demonstrated through
below processes: Robust induction programmes with structured exposures to various
organizational processes and functional leadership interactions Structured training
interventions and customized developmental intervention as on-going support to aid
employee development and growth
Encouragement towards job rotations to gain diversity of experience
Equal employment and promotion philosophy we do not discriminate on the basis of
race, religion or gender.
Fairness, transparency and care are our core values strongly ingrained in the cultural
fabric of the Organization Equal compensation and benefits for a similar role and no
discrimination in gender The voluntary employee attrition rate in FY 2014-15 at Asian
Paints was 8.85% which is substantially lower than the market average of approximately
14%* across sectors.

89
DIVERSITY AND INCLUSION

Asian Paints promote an inclusive culture where merit is rewarded, openness is

fostered, diversity is valued and an individualsopinion is respected. In March, 2014,
company began exploring 'Diversity & Inclusion' (D&I) as a focus area to create an
enabling work environment where there is appreciation, acknowledgement and
acceptance of differences. A benchmarking study was conducted with over 20 industry
peers to review best practices that can be replicated at Asian Paints. In collaboration
with the senior management, company conducted a diagnostic exercise with external
assistance to facilitate discussion on the future trajectory. The outcome was a concerted
focus on gender diversity over the next few years.

90
 1. INFRASTRUCTURE

Identify gaps in the existinginfrastructure support and make the workplace comfortable
for all employees. Company has engaged with an external consultant to conduct a
gender readiness audit in manufacturing locations. They have started an in-house
crche at our R&T center and are evaluating options to provide a similar facility at their
head office.

EMPLOYEE RESOURCE GROUP

A women's network called 'SWARA' was created to provide a platform for women to
voice their opinions on the gaps in requirements in systems, structures and processes.

91
REPRESENTATION & TALENT ACQUISITION

To ensure equal opportunity is provided to all aspiring candidates, a proactive attempt is

made to send resumes of female candidates in proportion to the pool to the line
manager for every open position.

WORKPLACE SAFETY
In accordance with the Prevention of Sexual Harassment Act 2013, they have designed
an internal module to apprise employees on the provisions of the Act and redressal
mechanisms. All executive level employees have been sensitized through a workshop.
An Internal Complaints Committee has been constituted at all locations with an
empanelled external expert. As an extension, the travel safety policy was re-visited and
modeled.

EMPLOYEE RESOURCE GROUP

A women's network called 'SWARA' was created to provide a platform for women to
voice their opinions on the gaps in requirements in systems, structures and processes.

REPRESENTATION &TALENT ACQUISITION

To ensure equal opportunity is provided to all aspiring candidates, a proactive attempt is
made to send resumes of female candidates in proportion to the pool to the line
manager for every open position.

92
TRAINING AND DEVELOPMENT (T&D)

Company believes in nurturing talent internally by providing them with on-the-job

learning opportunities and career development platforms. Learning is an integral part of
the culture at their organization, which is best achieved by observation, experimentation
and rejection. Company follows the 70:20:10 rule: 70% of learning happens on the job,
20% through observation and interaction with colleagues, and 10% via classrooms
instruction. The HR function has dedicated divisions (across functions) to facilitate the
training and development of our employees.
A need-assessment is performed to help employees (executives and above) bridge
gaps between their existing skill-set and changing job requirements, adapt to newer
technologies (at plants) and to full employee aspirations (e.g. for internal transfers).
There is a constant endeavour to identify individual capability development needs and
provide structured support and intervention to hone them. Succession planning for
major critical leadership positions is an on-going effort of the leadership team and is
reviewed annually. Company also builds capabilities through internal skill enhancement
programs.

They follow a conscious approach for exploring various learning platforms and enabling
the managers and employees to match their learning needs. The following key learning
platforms are offered to their employees:

93
E-LEARNING 3I PORTAL
This involves migrating from classroom based learning to an online platform which
improves accessibility and reach with instant online assessments.

COACHING AND MENTORING

Since a significant proportion of learning is on-thejob, trained and skilled coaches are
available for formal coaching sessions.

INSTRUCTOR LED TRAINING (ILT)

These trainings are based on group needs like time management, project management,
increasing business perspective and negotiation skills.

WORLD CLASS LEARNING COURSES

Company has licensed world-class learning courses from Harvard Business School and
SkillsoftManagement.
Besides these, they also work on creating grade specific learning inputs that enable
employees to transition from one level to the next. These programmes are augmented
by coaching from internal coaches and cross functional projects. Some
warshipprogrammes in this category are:

LEARNSCAPE
A workshop-based programme to identify appropriate traits and set expectations of roles
and responsibilities required at the managerial level. It focusses on the unlearning-
learning process to refresh the organisation's expectations from its managers in terms
of people management.

EXECUTIVE DEVELOPMENT PROGRAM

A programme designed to engage with employees and provide inputs aimed atvbuilding
skill sets for roles with higher responsibilities.

94
ESSENTIAL COMPETENCY ACQUISITION
A staff level programme designed to groom high potential individuals and to assist
them in their transition to executive roles.

EMPLOYEE REMUNERATION AND BENEFITS

The key elements of our compensation philosophy are based on a commitment to
fairness in compensation, transparency and communication. Asian Paints compensation
is benchmarked regularly with the external market. To build a competitive reward
structure, we follow strong internal equity and implement effective compensation and
benefit policies for all our employees.

REMUNERATION POLICY

Companys remuneration policy aims at attracting, retaining and motivating high

calibretalent and ensures fairness and consistency in reward mechanisms. The pay-for-
performance concept is implemented through a transparent rating system that is
dependent on an employee's performance against the annual objectives. The salary
structure of employees includes fixed and variable pay components which reject the
performance objectives of the individuals benchmarked against Asian Paints overall
performance and achievement of strategic objectives.

For the MD-CEO and promoters, salaries are decided by the Remuneration Committee
and approved by the Board. MD & CEO Mr. K.B.S. Anand is the highest paid employee

95
with an annual salary of INR 61,016,095/-. The year-on-year increase in remuneration
for the employees is implemented to keep up with the initiation, overall industry scenario
and Company performance.

EMPLOYEE BENEFITS

Variable Pay Component

The variable pay component
ensures that performance
assessment is conducted in a
holistic manner, combining
financial parameters with
essential goals. For employees comprising staff and operator cadres, there is a well
instituted yearly bonus scheme. This is reviewed every year and communicated to
employees. All statutory requirements pertaining to bonuses are adhered to.

MANAGEMENT OF CONTRACT WORKFORCE

Fair treatment and safeguarding the interests of companys contract workforce is their
top priority. Their terms of contract clearly stipulate statutory requirements for
contractors and they undergo stringent selection criteria and screening. Contract labor

96
is deployed at their manufacturing facilities and in other functions like sales & marketing.
Each facility maintains suitable checks and balances to ensure that wage payments,
statutory contributions, provision of safety equipment and other such obligations are met
by the contractor. A limited number of women are present in their contract workforce and
there is no discrimination between men and women with regard to working conditions
and payment of wages. They have a zero-tolerance approach to employment of child
labor and compulsory/forced labor of any kind. Adequate safeguards (e.g. verification of
age proof documentation) are ensured.

INDUSTRIAL AND EMPLOYEE RELATIONS

97
Healthy industrial relations are maintained at Asian Paints through a process of
inclusive participation and collective bargaining with trade unions at our manufacturing
plants.
Employee representatives are elected by employees through a transparent election
process and are authorized to make decisions on their behalf. The process of collective
bargaining is carried out effectively at companys plants. Wage settlements are signed
on a three-year basis in accordance with statutory provisions.
They have laid out an ambitious employee relations agenda executed through various
initiatives like Continuous Education Scheme that implements vertical growth plans
from operator to staff level and creating an environment of inclusive participation by
involving operators in decision-making through Quality Circles and Total Preventive
Maintenance programs.

VERTICAL GROWTH PLAN

98
Responding to the growth aspirations of Asian Paints workmen, the Vertical Growth
Plan (VGP) provides a platform to recognize, develop and promote operators and
technicians to supervisory positions. The program consists of training modules and
capacity building workshops aimed at developing managerial skills. Company engaged
with all relevant stakeholders to communicate the intent, approach and potential
benefits of the project. A comprehensive plan has been drafted to expand the VGP
across all our decorative plant. In FY 2014-15, a total of 22 employees have been
promoted to a supervisory role as part of the VGP.

99
Chapter 6 Business Strategy and Outlook

100
CSR FOCUS AREAS AND INITIATIVES
Asian Paints CSR policy focuses on four thrust areas namely, education, vocational
training, healthcare & hygiene and water management.
Over the last year, company has spent INR 19.01 crore on our CSR interventions, with
beneficiaries in more than 50 villages across Uttar Pradesh, Haryana, Gujarat, Andhra
Pradesh, Maharashtra, and Tamil Nadu.

PROMOTING DIGITAL LITERACY IN RURAL INDIA

Company promotes digital literacy and English language skills in rural India by providing
training to children who do not have access to quality education. Through this initiative,
regular classes are conducted on English language, MS Office & personality
development. Company has expanded this project at Rohtak, Haryana, in collaboration
with Nephenthus, BSComent and the students of Indian Institute of Management (IIM),
Rohtak. English language and MS Office modules are delivered by professional trainers
while the personality development module is delivered by students from IIM who infuse
an enterprising spirit and energy into the programme.

101
DEVELOPING INFRASTRUCTURE FOR EDUCATION

Company strives to provide quality infrastructure and access to learning resources to

local schools.
In 2014-15, they renovated ve schools and improved their kitchens to support the
government's Mid-Day Meal scheme. For better hygiene, toilets were also constructed
in government schools. Our Scrap-to- School project entailed repurposing waste
wooden pallets into over 1,500 school benches which were then donated to government
schools.

PROVIDING AND IMPROVING SANITATION FACILITIES

For the underserved communities around companys plants, they have partnered with
local organizations to help build toilets for these communities and improve their sanitary
conditions. Company has partnered with local community development organizations to
develop and construct 100 toilets in FY 2014-15. By identifying homes through the
Panchayat head and requests from under privileged families, company supports the
project and is directly involved in its structuring, location selection, customization,
execution and awareness building sessions to educate beneciaries on proper
maintenance. The toilets are designed to promote hygiene they require minimal
maintenance and have leach pits to convert domestic waste into manure.

102
HEALTHCARE SUPPORT THROUGH LOCALISED MEDICAL CAMPS

Rural communities residing around our plants lack access to basic healthcare facilities.
Company provides healthcare support through periodic medical check-ups and
diagnosis camps that are facilitated by specialists and trained doctors. Patients who
require further medical care and treatment are referred to local hospitals. All expenses
related to medical camps or treatment charges at the hospital are borne by Asian Paints
and employees actively volunteer and participate in organizing medical camps by
campaigning for the program, coordinating with project partners and helping with
logistics. To effectively conduct health camps, company has partnered with several local
hospitals and the NGO HelpAge India.

CSR EFFORTS AT MANUFACTURING LOCATIONS

Around the areas of the manufacturing locations, Asian Paints pursuit of sustainable
development programs enables the Company to make a difference by empowering
communities, and also lends inspiration to the efforts on environment sustainability.
Specific projects focused at improving quality of community life through programmes in
education, healthcare and water recharge have been implemented. Partnering with
several agencies of repute and expertise to achieve far-reaching impact and better

103
outcomes, A Company is continually investing in programs to create measurable and
lasting value for neighboringcommunities. A Companys dedicated efforts have enabled
radical transformation in the lives of people of more than 50 villages in the states of
Uttar Pradesh, Haryana, Gujarat, Telangana, Maharashtra and Tamil Nadu.
Education Health Water A Companys employees have built a remarkable reputation of
volunteerism and involvement for community work.
Their contribution and enthusiasm makes A Company a responsible corporate citizen
committed to partnering Indias social and environmental development.

EDUCATION

Guided by the mantra of evolving lives through education, A Company remained

steadfast in its effort to provide better access to education for local children.
Cognizant that rural areas need special focus, as awareness level about the necessity
of education is still low and requisite infrastructure is absent or poor, A Company places
high priority to the cause of education in these regions. The support provided at each
and every stage of childs educational cycle has not only enabled to improve literacy
levels in various sections of the society but has also improved retention.

104
Salient measures undertaken

Developing infrastructure for schools/ educational centers including e-learning classes;

Provision of basic sanitation facilities in school;
In addition to providing aid, closely associated with the Gattu School in Ankleshwar and
supervising the needs and development of children in the school. The Karaikadu Govt.
Higher Secondary School in Cuddalore, Tamilnadu was also provided with necessary
infrastructure including electronic tablets for children.
Rewarding meritorious students with scholarships for higher studies;
Coaching assistance for competitive examinations;
Emphasis on holistic development by encouraging participation in sports, promoting
personality development, conducting English speaking classes, teaching self-defense
techniques, etc;
Training girls in self-defense techniques;
Engaging with teachers and parents to make education exciting and interesting;
Conducting health check-up to increase awareness on good health;
Adopting Centre Arpan which looks after the needs of the different labeled children.

HEALTH AND HYGIENE

105
A Company is committed to using resources to promote partnerships and programs that
foster better access to reliable and quality healthcare facilities for surrounding
communities.

Salient measures undertaken:

Launching Mobile Medicare Units across various factories which serve as vital
infrastructure for attending to the healthcare needs of the community;
Regular free medical camps providing diagnosis, treatment and medicines;
Setting up and managing rehabilitation centers;
Promoting awareness about sanitation and constructing toilets;
Partnering with non-profit organizations to support health and hygiene awareness,
treatment programs;
Ongoing Program Safar improves health and awareness among truck drivers;
Provision of safe drinking water.

WATER MANAGEMENT

A Company recognises the importance of water management stewardship in pursuit of

its goal of environment sustainability. Several water conservation and harvesting
initiatives have been undertaken by A Company to enhance its positive water footprint.

Salient measures undertaken:

Awareness on water conservation in schools and nearby villages
Installation of roof top rainwater harvesting and recharge systems in village
communities and schools
Promoting integrated watershed development in areas around manufacturing locations

106
 Water recharge through de-silting of Lakes De-silting of lake was done at Vataria
village near our Ankleshwar plant which has generated a catchment of approximately
25000 KL of rain water
for subsequent usage in nearby villages.

CSR EFFORTS AT CITIES Vocational Training

A Company offers vocational training programs across a variety of skills to painters and
painting contractors thereby directly impacting their ability to earn a better livelihood.
Presently, A Company has eight Training Academies located across the cities of
Mumbai, New Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad.
A Company also has two mobile Training Academies covering the states of Kerala &
Punjab (including Chandigarh). Going ahead, A Company will launch more training
academies across the country to train and benefit more people.

107
SWOT ANALYSIS OF ASIAN PAINTS
Strengths:

Quality of products

Low price high quality

Hi tech buckets of paints

Brightness of wall putty

Weakness:

Less advertisement

Less Promotions

Awareness

Opportunities:

Position in market

Wall putty

Rural markets

Threats:

DECOTOUCH paints

JK wall putty

Birla white cement

108
BCG MATRIX OF ASIAN PAINTS
The growth-share matrix or BCG-matrix is a chart that had been created in 1970 to
help corporations with analyzing their business units or product lines. This helps the
company allocate resources and is used as an analytical tool in brand
marketing, product management, strategic management, and portfolio analysis.

Asian Paints lays in Question marks (also known as problem children) quadrant i.e.
their business operating in a high market growth, but having a low market share. They
are a starting point for business. Question marks have a potential to gain market share
and become stars, and eventually cash cows when a market growth slows. If question

109
 marks do not succeed in becoming a market leader, then after perhaps years of cash
consumption, they will degenerate into dogs when a market growth decline. Question
marks must be analyzed carefully in order to determine whether they are worth the
investment required to grow market share.

Future Plan
The company plans to consolidate its dominant position in India by launching new
products in line with the market developments in both decorative paint and industrial

110
coating segments. The company is focusing on further improving the operations of all of
its subsidiaries in India and abroad and has already launched E-Strides, an ERP
initiative through which all the overseas ventures are being covered for sharing of global
knowledge, best practices and better control on operations. The companys objective is
to be among the top three players in each market where it is currently operating or plans
to operate in the future.

Introducing Water based Paints;

Repositioning of existing Brands in Rural Market;

Broadening of Distribution Network;

Adding more choices for shades and effects;

Enhancing Better Quality;

Demand will be generated through the new;

Constructions coming in housing and industries;

Conclusion
Asian paints ltd is the fast growing company of paint industry having about 37% shares.
The company has effective distribution network all over the country. It is trying its best to
increase its direct dealers. It has implemented the pricing strategy. It has also

111
implemented Color Bank system, which enabled the customers to choose his desired
shades from an exclusive array of over 5,000 shades. It is constantly working to
improve its products quality through comparative study and customer feedback in order
to maintain competitive edge.

No other company is planning to increase its capacity in the near future; this will give
Asian Paints a competitive advantage in terms of pricing. Growth rate of two important
activities i.e. repaints activity and construction activity will have direct impact on the
volume of demand, thus affecting its profitability and margins. Rural markets have
developing potential. Companies that can establish a dealer network in these markets
are likely to get the edge in positing above par growth rates over the next few years. As
setting up distribution infrastructure is expensive, it would mean that the competition is
limited to the top players. Due to substantial hike in raw material prices, Asian Paints
has raised the prices of solvent based paints, thus demand would be affected to some
extent.

Bibliography

Annual report of ASIAN PAINTS 2014-15

Cluster profile report of Asian paint 2013-14

112
www.asianpaints.com
www.moneycontrol.com
www.asianpaintsppg.com/
https://en.wikipedia.org/wiki/Asian_Paints
www.google.co.in/organizational structure Asian paints
www.documentmx.com
www.slideshare.net
www.scribd.com

113