BIJU PATNAIK INSTITUTE OF IT &

MANAGEMENT STUDIES
SUMMER INTERNSHIP REPORT
2020

STUDENT NAME BPUT REGD. NO.

ARPITA MOHAPATRA 1906258023
FACULTY GUIDE
Dr. NEHA GUPTA
 CERTIFICATE OF THE GUIDE WHOM SO EVER IT
MAY CONCERN

This is to certify that the Project Work titled “A STUDY ON CHALLENGES

AND OPPERTUNITIES OF NEROLAC PAINTS IN INDIA” is a bonafide
work of ARPITA MOHAPATRA Reg. No. 1906258023 carried out in partial
fulfilment for the award of degree of MASTER IN BUSINESS ADMIN
ISTRATION for the session (2019-2021) of Biju Patnaik University of
Technology, Odisha under my guidance. This project work is original and not
submitted earlier for the award of any degree/ diploma or associate ship of any
other University/ Institution. The thesis:

 Embodies the work of the candidate himself

 Has duly been completed
 Fulfils the requirement of the rules and regulation relating to the summer
internship of institute
 Is up to the standard both in respect to contents and language for being
referred to the examiner.

Signature of the Guide

Dr. Neha Gupta
Associate Professor, Marketing
 DECLARATION

I hereby declare that the project work entitled “A STUDY ON

CHALLENGES AND OPPERTUNITIES OF NEROLAC PAINTS IN
INDIA” work done by me under the guidance of Dr. Neha Gupta (Faculty
Guide, BIITM) and this project work is submitted in the partial fulfilment of
requirement for the award of the degree of Masters of Business Administration.
The results embodied in this project have not been submitted to any other
university or company for the award of any degree or diploma.

ARPITA MOHAPATRA
 ACKNOWLEDGEMENT

With immense pleasure, I would like to present this project report for Nerolac
Paints. It has been an enriching experience for me which would not have been
possible without the goodwill and support of the people around. As a student of
“Biju Patnaik Institute of IT and Management, Bhubaneswar” I would like to
extend my sincere gratitude and thanks to Prof.(Dr.) P.K Tripathy (Principal,
BIITM), K.Chandrasekhar (Placement head) and Dr. Neha Gupta (Faculty of
Marketing, BIITM) to shape my understanding towards the project. It was
because of their immense help and support that this project has been duly
completed.

However, I accept the sole responsibility for any possible error and would be
extremely grateful to the readers of this project report if they bring such
mistakes to my notice.

ARPITA MOHAPATRA
 CONTENTS

Chapter Topic

Chapter 1 Introduction

Chapter 2 Company Analysis

Chapter 3 Industry Analysis

Chapter 4 Competitor’s Analysis

Chapter 5 Customer Analysis

Chapter 6
 CHAPTER 1

INTRODUCTION
This is a crucial resource for industry executives and anyone looking into access
key information about “Kansai Nerolac Paints Limited”.
The report utilizes a wide range of primary and secondary sources, which are
analysed and presented in a consistent and easily accessible format. World
Market Intelligence strictly follows a standardized research methodology to
ensure high levels of data quality and these characteristics guarantee a unique
report.
Scope
 Examines and identifies key information and issues about “Kansai
Nerolac Paints Limited” for business intelligence requirements.
 Studies and presents the company’s strengths, weaknesses, opportunities
(growth potential) and threats (competition). Strategic and operational
business information is objectively reported.
 Provides data on company financial performance and competitive
benchmarking.
 The profile also contains information on business operations, company
history, major products, and locations and subsidiaries.

Reasons To Buy
 Quickly enhance your understanding of “Kansai Nerolac Paints Limited”.
 Gain insight into the marketplace and a better understanding of internal
and external factors which could impact the industry.
 Increase business/sales activities by understanding your competitor’s
businesses better.
 Recognize potential partnerships and suppliers.

Kansai Nerolac Paints Limited (KNPL) manufactures and supplies automotive

and industrial paints and coatings. The company offers decorative paints for
walls, woods and metals; and industrial paints for automotive coatings; general
industrial coatings and powder; and high performance coatings. It offers its
products under various brands that include Impressions, Beauty, Excel, Perfect
Match and Suraksha. It caters to automotive, residential and commercial, oil,
chemical, electronic and agricultural sectors. The company operates four
manufacturing facilities, which are located in Hosur, Tamil Nadu; Jainpur, Uttar
Pradesh; Lote, Maharashtra; and Bawal, Haryana. The company has operations
in Nepal and Sri Lanka. It also operates a network of 94 depots. The company is
a subsidiary of Kansai Paint Co. Ltd. KNPL is headquartered in Mumbai,
Maharashtra, India.


 CHAPTER 2

COMPANY ANALYSIS

Kansai Nerolac Paints Limited, (formerly known as Goodlass Nerolac Paints

Ltd) is the largest industrial paint and third largest decorative paint company of
India based in Mumbai. It is a subsidiary of Kansai paint of Japan. As of 2015,
it has the third largest market share with 15.4% in the Indian paint industry. It is
engaged in the industrial, automotive and powder coating business. It develops
and supplies paint systems used on the finishing lines of electrical components,
cycle, material handling equipment, bus bodies, containers and furniture
industries.

History

 1920 : It started as Gahagan Paints & Varnish Co. Ltd. at Lower panel in
Mumbai.
 1957 : Goodlass Wall Pvt. Ltd. grew popular as Goodlass Nerolac Paints
(Pvt.) Ltd. Also, it went public in the same year and established itself as
Goodlass Nerolac Paints Ltd.
 1976 : Goodlass Nerolac Paints Ltd. became a part of Tata Forbes Group
on acquisition of a part of the foreign shareholdings by Forbes  Gokak. .
 1983 : Goodlass Nerolac Paints Ltd. strengthened itself by entering in
technical collaboration agreement by Kansai Paint Co. Ltd., Japan and
Nihon Tokushu Tokyo Co. Ltd., Japan.
 1999 : Kansai Paint Co. Ltd. , Japan took over the entire stake of Tata
Forbes group and thus Goodlass Nerolac Paints became wholly owned
subsidiary of Kansai Paint Company Ltd.
 2006 : On 11 July, Goodlass Paint Ltd. name has been changed to Kansai
Nerolac Paints Ltd.

Company Overview
Kansai Nerolac Paints has 6 paint manufacturing plants and about 6–7 contract
manufacturers. The Nerolac owned plants are at 1. Jainpur, (Uttar Pradesh)
2. Bawal (Haryana) 3. Lote, Chiplun (Maharashtra) 4. Hosur (Tamil Nadu) 5.
Sayakha (Gujarat) 6. Goindwal (Punjab)
Kansai Nerolac Paints Ltd. has entered into many technical collaborations with
other industry leaders such as E.I. Du-products.
The Mumbai based company is the leader in the industrial paints segment with a
market share of over 40%. It is the third-largest player in the decorative paints
segment with a modest market share of 13%. Nearly 75% of the Indian paints
industry consists of the decorative segment.

Parent Company
Kansai Paint was founded by Katsujiro Iwai in Amagasaki City, Japan in May
1918. Kansai Paint is a comprehensive manufacturer of paints and coatings. The
Products include- Automotive Coatings, Industrial coatings, Decorative
coatings, Protective coatings and Marine Coatings. They are also present
in U.K, Turkey, U.S, Canada, Mexico, UAE. 

Products and Services

Technologically innovative products are the company's hallmark. Kansai
Nerolac Paint offers differentiated products with a focus on being eco-friendly
and healthy. Kansai Nerolac Paint’s key products and brands include the
following:

 Decorative Paints: Interior wall paints, exterior wall paints, Wood

surface paints, and Metals surface paints.
 Automotive Coatings : Pre-Treatment Chemicals, Electrodeposition.
Intermediate Coats/Primer Surfacers, Topcoats, Clear Coats, Touch Up
Paints, Auto Refinishing Products, Heat Resistant Paints, Underbody Paints
& PVC Sealants & Rapgard Transit Protection Films.
 Performance Coatings: Performance Coating is available for a wide
range of products. For household appliances and metal fittings in factories,
there is a comprehensive range of general industrial coating systems like
P.T. chemicals, Primers and lacquers, Coil Coat, Heat Resistant Paints &
Metal Decoration Coatings. Powder Coating is now increasing in popularity
because of its high quality, resistance to corrosion, the apparent ease of
application and the environmental friendliness of the technology.

Marketing and advertising

Kansai Nerolac has run advertising campaigns, including television
commercials, with Bollywood actors including, Shah Rukh Khan & Ranveer
Singh and radio station Red FM.

Awards and Achievements

 Golden Peacock Environment Management Award, 2005.

 Short listed for the Best Managed Company Award from Business Today
& A.T Kearney 2005.
 Best Vendor Award from customers like Toyota Kirloskar Motors Ltd.
(TKML) for Cost and from Maruti Udyog Ltd.(MUL) on overall
commendation.
 Awards for Marketing Initiatives like Cannes 2007 Bronze for Press Ad.
 Reader’s Digest Trusted Brands Gold Awards, 2008.
 Product of the Year Award 2010 for Nerolac Excel April 2010.
 Product of the Year Award 2011 for Nerolac Excel Total with Heat-
Guard Technology April 2011.
 Sustainability Award for outstanding contribution by Mahindra &
Mahindra October 2011.
 Best Vendor Performance Award in Paint Supplier's Category
by Honda Motors cycles & scooters at their annual conference 2012.
 ASAPP Media Information Group – Construction World Magazine
Ranked Kansai Nerolac Paints First.

Kansai Nerolac Paints Marketing Mix (4Ps) Strategy

Marketing Mix of Kansai Nerolac Paints analyses the brand/company which

covers 4Ps (Product, Price, Place, Promotion) and explains the Kansai Nerolac
Paints marketing strategy. As of 2020, there are several Kansai Nerolac Paints
marketing strategies like product/service innovation, marketing investment,
customer experience etc. which have helped the brand grow.
Marketing strategy helps companies achieve business goals & objectives, and
marketing mix (4Ps) is the widely used framework to define the strategies. This
article elaborates the product, pricing, advertising & distribution strategies used
by Kansai Nerolac Paints.
Kansai Nerolac Paints Product Strategy:
The product strategy and mix in Kansai Nerolac Paints marketing strategy can
be explained as follows:
Kansai Nerolac Paints are one of the leading paint companies serving a huge
market. Kansai Nerolac Paints has a variety of products and services in its
marketing mix targeted at 3 types of segments:
• Home owner
• Professional
• Industrial
For both home owner and professional consumer segments, Nerolac Paints have
a wide range of product offerings in the decorative paint products category
consisting of interior wall paints, exterior wall paints, wood coatings, metal
enamel paints and paint ancillary. Interior and exterior wall Nerolac Paints are
classified into super premium, premium, popular and economy ranges, with
super premium being of the highest finish and quality and economy being the
lowest. In the industrial segment, general industrial coatings are offered for
heavy duty industrial products and high-performance coatings for large scale
equipment. Other offerings include powder coatings, coil coatings and floor
coatings for high endurance industrial paint solutions. Nerolac Paints also has a
strong presence in Automotive paints and auto refinish paints category. In
addition to products, Kansai Nerolac also provides coating technical services
and health and safety services for industries. Another line of product offering is
in online category with tools like Paint Calculator which helps users estimate
the price depending on their customised requirements of the project. Paint Your
Home app, Colour Picker app and the online colour palette are also offered
under this category.
Kansai Nerolac Paints Price/Pricing Strategy:
Kansai Nerolac paints follows a premium pricing strategy in the home owner
and professional market segment. It prices its products a notch higher than its
competitors like Berger and Asian Paints claiming eco-friendly and high-quality
products. The four product categories of Nerolac Paints based on price are- the
super-premium range products which are priced between Rs.980 to Rs.550,
premium range between Rs.478- Rs.310, popular range priced between Rs. 250-
170 and economy between Rs.190- Rs.125. Such pricing strategy also allows it
to maintain a higher perceived value for its brand. Nerolac Paints is a market
leader in industrial coating solutions and thus follows value-based pricing in
this product category. The prices are charged on the basis of exclusive features
of the product in addition to the value of raw-materials and technology used.
Services like Nvision for home owners and professionals and health and safety
for industrial customers are provided for free but Nerolac charges for the
technical services provided by Central Service Technology Laboratory situated
in Lower Parel, Mumbai. Online tools and apps are free to use. This throws
some light on the Nerolac Paints marketing mix strategy.
Kansai Nerolac Paints Place & Distribution Strategy:
Nerolac Paints have a strong distribution network reaching out to a lot of
geographies. For decorative paints segment, the supply chain consists of a wide
distribution network and production planning is done on the basis of forecasted
demand. Kansai Nerolac treats its vendors more as business partners. High
Quality raw materials are sourced from a pool of vendors which is the result of
Nerolac’s Best Vendor Performance Management System. Most of the
manufacturing is done at paint processing internal manufacturing sites, but
some part of it is outsourced to outside processing centres as well. The finished
goods from both internal and outside centres are then sent either directly to
depots or to regional distribution centres from where then they go to the depots.
Finally, they are distributed to retailers and customers. Another important part
of the supply chain are industrial customers who are mostly served by “Make to
Order” philosophy and the product is distributed to them directly from paint
processing internal manufacturing sites without the help of any intermediaries.
This strategy helps reduce the channel cost and encourages better customer
relationships.

Kansai Nerolac Paints Promotion & Advertising Strategy:

Nerolac Paints is a brand which has always invested heavily in promotions and
campaigns as it had to compete against the tremendous brand equity of Asian
Paints. It came out with catchy jingles like- “Jab ghar ki raunak badhani ho,
deewaro ko sajana ho, NEROLAC NEROLAC!” and had a mascot- the painting
tiger named Goody. But the mascot was replaced by Amitabh Bachhan in 2003.
In 2008, the company roped in Shah Rukh Khan for its ad campaigns who still
continues to be the brand ambassador for Nerolac Paints. Nerolac teamed up
with DDB Mudra marketing agency to come up with the award-winning
marketing campaign “Rang de Patang”, where it used colourful kites as colour
palettes in the city of Ahmedabad during Uttarayan- the kite festival. The
customers were given the shade of kite they chose as a free gift. Later, on the
day of Uttarayan, the remaining kites were distributed among people of
Ahmedabad and the whole sky was filled with Nerolac kites. “Paint the change
you want to see” is another marketing campaign where people were urged to
donate the leftover paints to Nerolac, which then recycled these paints and used
them to paint structures across country which were in need of renovation. For
industrial segment, it uses its website to boast about the existing clientele and
projects to attract more customers. Hence, this completes the Nerolac Paints
marketing mix.
SWOT Analysis of Kansai Nerolac Paints
Strengths in the SWOT analysis of Kansai Nerolac Paints

 Huge product range – Kansai Nerolac Paints offers huge product types.

The main hallmark of the company is the technology innovative product.
The company provides unique eco-friendly products. The main products of
this brand are decorative paints – interior and exterior wall paints, wood
and metal surface paints, automotive coatings – top, clear coats, touch up
paints, heat resistant paints, auto refinishing products, underbody paints,
and PVC sealants, performance coatings.
 Large paint company – Kansai Nerolac Paints is one of the largest
coating companies in India and it is also a market leader in powder
coating.
  Tech-savvy – The technology edge of the company has helped to
innovate and serve the customers in a better way.
 Excellent Research and Development – The main factor of Kansai
Nerolac Paint is its excellent research and development. The company
gives more focus on research and develops new quality products to meet
the customer’s requirement.
 Branding and Marketing strategy – Kansai Nerolac Paint’s excellent
branding and marketing strategy has led them to the top in the industry and
to achieve more visibility among the people.
 Top customers in the list – The company being great market leaders in
the automotive category have served many top customers from the
automotive sector like Toyota Kirloskar, Maruti Suzuki, Tata Motors,
GM, Honda, Yamaha, Volvo, Ashok Leyland, etc.
 Strong supply  chain – The Company has an excellent supply chain
network to make the products available to customers.
 Celebrity ambassadors – To add to the company’s success, Kansai
Nerolac Paint is proud to have celebrities as its brand ambassadors.
 Awards and Achievements – Kansai Nerolac Paints has received many
awards across various functions

Weaknesses in the SWOT analysis of Kansai Nerolac Paints

 Change in market Demand – The decorative paint industry is a look and
feels one, where the customer’s taste and perception keep changing quite
often. The products become outdated soon with the change in trend. This
is a big weakness for the brand as there will be issues in product
planning  and inventory.
 The Business model of Kansai Nerolac Paint – Kansai Nerolac Paint’s
business model can be copied easily by its competitors. Hence the
company will have to build a platform model where they can integrate
vendors, suppliers, and end users.
 Revamp supply chain and logistics – The business model of the Basic
Material industry finds its way to flourish using the Internet and Artificial
Intelligence. Hence owing to this, Kansai Nerolac Paints supply chain has
to be in a robust way that is extremely expensive.

Opportunities in the SWOT analysis of Kansai Nerolac Paints

 Scope in new products – Kansai Nerolac Paints has a good scope to
develop new products with PODs which highlights the brand in the midst
of a competitive environment. 
  Enhanced technology innovations – Technologies increases industrial
productivity, thereby allowing suppliers to manufacture many types of
products and services. This provides an opportunity to Kansai Nerolac
Paints to consider undertaking new products.
 Online opportunities – Online services are increasing and customers
tend to avail them quite often. This also provides new offerings to the
customers.
 Low Inflation rate – Low inflation rate brings out more stability in the
market. It provides credit at a low-interest rate to the company’s customer.
This increases the consumption of the company’s products thereby
providing them with huge opportunities.

Threats in the SWOT analysis of Kansai Nerolac Paints

 Variations in Government rules – Strict Government rules and
regulations with regards to the quality of the products and manufacturing
facilities is a big threat to the company’s business. The environment
policies are given more importance and the company will have to take care
of that on regular basis.
 Scarce in raw material – Scarcity in raw material and instability in
prices is also a huge threat to the company. The production is very much
dependent on the raw materials; hence it gets affected when there is
unavailability in the raw material or when the prices keep fluctuating.
 The threat from competitors – Even though Kansai Nerolac Paints is
the leader in the paint manufacturing segment, it faces a rigid competition
from the local and international market.

Corporate Social Responsibility (CSR)

The Company has constituted a CSR Committee of the Board, consisting of a
judicious combination of independent and non- independent directors with
majority being independent to guide CSR agenda of an organization.
CSR Committee guides through following major activities
1. Recommending CSR activities to be undertaken by the Company as specified
in schedule VII of the Companies Act, 2013.
2. Recommendation of the amount of expenditure to be incurred on the
activities.
3. Monitoring the CSR Policy of the Company from time to time. CSR Sub-
Committee ensures proper execution of various CSR activities.

Board of Directors

Corporate Social
Responsible(CSR) Committee

CSR Sub-committee for

execution

CSR Activities of Kansai Nerolac Paints Ltd.

 Preventive Health Care & Sanitation Projects (2018-19)
 Activities under Swacch Bharat Abhiyan (2018-19)
 Rural Development Projects (2018-19)
 Promoting Education (2018-19)
 Ensuring Environmental Sustainability (2018-19)
 Donation to Museum in Chiplun (2018-19)
 Donation to K.J. Research Foundation (2018-19)
 CHAPTER 3

INDUSTRY ANALYSIS
PESTEL Analysis of Nerolac Paints Limited
The PESTEL analysis refers to six main factors: POLITICAL ECONOMICAL
SOCIAL TECHNOLOGICAL ENVIRONMENTAL LEGAL. The analysis will
focus towards the industry that how the political stability, rules and regulation
and the legal system of the country affecting the overall industry. The economic
condition, liberalization, policy toward foreign investment and growth rate of
the economy as a whole also help to analyse the overall industry attractiveness
and potential for the growth.

The social aspects like people are more involved in the painting process, trend
of nuclear family, low interest rate of housing loan, increase of urbanization and
change in thinking of the people all this is helpful for the industry consideration,
also the change in technology, production process, distribution channel and
more use of tinting machine that help for better shading of color.

POLITICAL Factors

 India, the largest democratic country in the world.

 The political situation is more or less stable in nature.
 Export oriented economy.

ECONOMICAL Factors

 Market based economy.

 Second fastest growing economy in the world.
 India is the third largest in term of purchasing power.
 Introduction of FDI in paint sectors.

SOCIAL Factors

 India is the second largest populated economy in the world.

 Rise in price of raw material.
  Import of raw material.

TECHNOLOGICAL Factors

 Emerging of IT sector.
 Modernization of paint like (waterproof paints, Teflon coating, creating
colors shops etc).
 Lead free paints.

ENVIRONMENTAL Factors

 Impact of volatile organic compounds (VOCs).

 Lead free paints.
 Season and climate changes.

LEGAL Factors

 Pollution control law.

 Health and Safety law.
 Environmental law.

Porter’s 5 Force Model

Threat of New Entrants

 Paint market in India is dominated by few players, making it difficult for

anyone newly entering the industry to compete.
 It is estimated that18-20% of the total raw materials used in the industry
are imported.
 Working capital needed is high-causes difficulty to local players & big
firms enjoy economies of scale.
  Big players have high brand image & quality products & good
promotional activities to attract customers.

Threat of new entrants is Low.

Threat of substitutes

 In rural areas lime wash is used as substitute.

 Another alternative for decorative wall paints available today is
wallpaper.
 Availability of paint varieties are there.
 Buyer propensity to substitute is low.
 Relative price performance of decorative walls is high.
Availability of substitutes is Low.

Bargaining power of Suppliers

 Raw material intensive production-over 300 raw materials make the final
product.
 Raw material-pigments, binders, additives, solvents, etc.
 Titanium Dioxide is one of the key pigment used in the production of
paint and is facing a global supply shortage. Thus supplier of this material
has solid bargaining power.
 Other raw materials-crude derivatives have high price fluctuations
affecting industry profits.
Bargaining power of suppliers is Medium.

Bargaining power of Buyers

 Households and Industrial users are the main customers of this industry.
 For housing requirements, the buyers are building contractors who buy in
bulk and end people who paint their house. Customers are more price
sensitive because for them number of options are available and decisions
 are made based on quality, price and differentiating factors like weather
protection, environment friendly paints.
 Industrial segment is low margin high revenue business and buyers of
these segments are knowledgeable about their needs. Therefore, price
comparison is done effectively by the customers. However, the leading
Industrial paint suppliers have their expertise in their favour, which limits
the bargaining power of buyers.

Bargaining power of buyers as a whole is Medium.

Competitive Rivalry

 About 80% of organized sector contributed by top 3 players.

 Current market growth rate can provide sample room of opportunity for
all the players of the industry to flourish.
 Presence of unorganized sector-can cause competition.
Competitive rivalry is Low.

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 CHAPTER 4

COMPETITOR ANALYSIS
Green features of Deco Paint Products
A home is more than just an existence within walls. And breathing life into it is
what we do best. It gives you first-of-its-kind painting experience where you are
assured of innate healthiness, superior smoothness, a glossy look and a creamy
finish.

Our major Decorative product range is low VOC (Volatile Organic

Compounds) and lead free. ‘Fresh paint smell’ is nothing but VOC emissions
from volatile chemicals like diethyl phthalate and dibutyl. VOC’s (Volatile
Organic Compounds) are chemical substances that are emitted as gases from
freshly painted walls. They vaporize at room temperature, leading to various
health hazards.

Below mentioned premium products have been certified to be used in GRIHA

(Green Rating for Integrated Habitat Assessment) and SVAGRIHA projects.

Exterior paints – Excel Total white and Excel Anti peel

Interior Paints – Impression Eco clean and Impressions 24 carat

Industrial Paint Products

Automotive Coatings
General Industrial Coatings
High Performance Coatings
Powder Coatings

Automotive Coatings
 Heavy metal free automotive products
 Electrodeposition (ED) technology
 3C-1B(3 Coat 1 Bake)/2C-1B System
 Intermediate coats/Primer surfacers
 Top Coats
 Scratch resistant clear Coats
 High solid basecoats
 DTM (Direct to Metal) coatings
 Multimetal coatings
 Touch up paint & Auto refinish
 Heat Resistant Paints
 Underbody Paints and PVC sealants
 Rapguard transit protection film
 Interior coating for automobile

General Industrial Coating

 Barrel Coating
 Bus Body System
 Containers
 Fan Coatings
 Gas Cylinder Coating
 Glass Coatings
 Hacksaw blades
Helmets
Material Handling equipment
TV Cabinets etc
Floor Coating

Powder Coating
 Epoxy Polyester Powder
 Epoxy Powder
 Pure Polyester Powder

High Performance Coating

Chlorinated Rubber coatings
Conventional Coatings
Epoxy Coating
Polyurethane Coating

Automotive Market
Being leader in Automotive coatings, we extend our products to automotive
customers located across India through our strategically located manufacturing
facilities. Adjacent map shows automotive manufacturing clusters across India
which constitutes major market for us.

Product Responsibility
In case of decorative products, KNPL has been promoting health impacts of
paint in market to make customers aware of precautionary measures to be taken
while choosing and applying paint. KNPL has pioneered “Healthy Home
Paints” concept. It has voluntarily removed heavy metals like lead from its
formulation to make products eco friendly. Since last few years, KNPL products
have been recognized as low VOC paints in market.
For product information and labeling we are complying with legal Metrology
(Packaging) Rules, 2011. Other than the basic requirements stipulated in these
rules, we also provide following product related information to our customers.
• Content, with regard to substances that might produce an environmental/Social
impacts
• Safe use of Product
• Environmental/ Social impact of product
In case of Industrial products, Material Safety Data sheets are provided to all
Industrial paint customers. These MSDS (Material Safety Data sheet) meet
REACH (Registration, Evaluation, Authorisation and restriction of Chemicals)
guidelines and other regulatory norms. It includes sufficient information on safe
handling of materials and steps to be followed in case of emergency situations.
All finished products are appropriately labeled with health and safety
precautionary information and its disposal methods as per applicable norms.
To track customer satisfaction, KNPL conducts customer feedback survey to
measure customer satisfaction. Customer survey results helps to understand
customer needs and expectations. Customer survey is conducted by a
professional agency.
There have not been any incidents of non compliance with regulations and
voluntary codes concerning product and service information and labeling.
KNPL is in strict compliance with legislations related to product formulations
and sale of banned products. No fines or penalties are incurred considering
KNPL compliance with all legislation related to products and services. In last
financial year, there have not been any complaints regarding breach of customer
privacy and losses of customer data.
KNPL follows guidelines provided by “The Advertising Standard Council of
India” for its marketing communications voluntarily.

Risk Management
In KNPL, through the Risk Management framework, system and process are set
to identify, gauge and mitigate any potential risk promptly and efficiently in
order to manage and control them effectively. Our approach to risk management
includes identification of various risks at a functional level which have a
significant material impact on the company either at the Strategic, Operational,
People, Financial and legal & Compliance level. Based on risk impact and
materiality for organization; risk profiling is put in place for all the areas of
operations and well integrated in the business cycle. Major identified risk
categories are as below: -
 Strategic risk
 Operational risk
 legal & Compliance Risk
 Financial risk
 People risk
The Company has identified department wise risk areas in its operations along
with its probability and severity. All the identified risks are evaluated and risk
prioritization for each identified risk element is set based on internal discussions
and deliberations. For every risk element, company has identified a mitigation
strategy along with a monitoring mechanism.
A Risk Register containing comprehensive details of various risk areas and
events concerning the Company is maintained. Risk mitigation plans form a part
of the Risk Register.
Roles in Risk Management Process
Board of Directors  Decide strategic goals and risk appetite of
the Company.
 Review the risk appetite and risk policies at
regular intervals.
Audit Committee  Guide and provide oversight to the
Company’s Risk Management
 Review effectiveness of the Risk
Management process
 Preparation of company-wide framework for
risk management
 Allocate roles and responsibilities in the
process
 Determination of criteria for major and
Risk Management minor risks.
Committee  Draw action plan for risks and allocate
resources as per plan
 Determine strategies for escalated major risk
areas and update company-wide risk register.
 Preparation of MIS for audit committee
review
  Preparation of risk management framework
for their respective function
Functional Heads  Monitor effectiveness of risk management
framework
 Escalation of major risk events to the Risk
Management Committee
Chief Risk Officer Escalation of major risk events to the
Functional heads/Risk Management
Committee.  Give directions to the Risk
officers in their respective functions.
 Implementation of risk management system
Risk Officer in their function
 Communication of objectives and
procedures to all employees in their function
 Implementation of directions as given by
Risk officers
Staff  Prompt communication on risk areas and
major variation in control factors to Functional
head and Chief Risk Officer

Key Impacts, Risks and Opportunities

Foreign currency risk is one of the major risks considering a significant amount
of KNPL raw materials are imported. KNPL team continuously keeps track of
market fluctuations through various online resources and work on mitigation
measures like forward contracts, effective price forecasting system etc. It has
developed elaborate policies and procedures to minimize impacts of price
volatility.
Other financial risks addressed by risk management committee are account
receivable risks, slow moving and non moving inventory risks, investment
related risks. These risks are addressed by specific mitigation measures.
KNPL has defined credit policies and customer evaluation procedure for new as
well as existing customers. Return on investment is monitored periodically to
mitigate investment related risks. KNPL has centralized payments and CapEx
sanctions to reduce any mismanagement of fund.
In today’s world, dependence on systems has increased greatly and availability
and control of these systems take a high priority. The Company constantly
monitors processes in place to mitigate this type of risk.
In addition to this, internal audits, code of conduct, sound ethical value system
and effective whistle blower policy also help to address this risk. All assets and
stocks are insured through insurance policies against applicable types of risks.
Climate change related risks and opportunities are important consideration for
sustainable development agenda. In an Indian context, water and energy scarcity
are pressing issues. KNPL is exigent in its approach to address challenges
posed by climate change and adopt strategy for long term eco-friendly growth.
Company continued to pursue its agenda on energy efficiency and renewable
energy with vigor. KNPL has proactively taken measures such as third party
energy audit, solar energy procurement, low carbon energy installation,
adoption of biodiesel etc.
India is facing water crisis in many regions and it is believed that regulations
with respect to water will become stricter over next few years. Water Balance
module of SAP EHS facilitates water consumption monitoring. All our major
manufacturing facilities are zero discharge facility and KNPL has taken Reduce,
Reuse and recycle initiatives to reduce water consumption over the years.
Applicable legal compliances are monitored with the help of IT portal to
mitigate legal risks.
KNPL voluntarily participates in corporate reporting standards like CDP, GRI
etc. and accounting of GHG footprints of value chain impacts. KNPL being
leader in Automotive and Industrial paints, our customers, as a part of due
diligence of Supply Chain, are taking cautious steps towards purchase of
environment friendly products and services. KNPL has taken it as an
opportunity to gain competitive advantage through development of eco friendly
products as well as technologies. KNPL has developed 3 C 1B technologies to
reduce wastage in coating process and benefited its customers. KNPL R&D
team strives to develop substitute for hazardous constituents and imported raw
materials to address this challenge.
Companies while contributing to economy need to act in a socially responsible
way to sustain social license to operate. We acknowledge this as an imperative
to carry out business in current scenario. KNPL has embarked upon corporate
social responsibility as a conscious way of existence. Focus areas of KNPL for
CSR activities are Health, Education, Community development and
Environment preservation. Nerolac has imbibed coexistence with the
community around it and believes that the saying ‘what we give to society, it
gives back to us’, really holds true. Investments have been made in establishing
health centers, organizing health camps, financial donation to educational
institutions for creating infrastructure with respect to technology, books, and
periodicals, working with NGOs for upliftment of the poor and needy, setting
up basic amenities for regions around our establishments, besides taking
measures for safeguarding the environment.