IIFL Enterprising India Investor Conference 2012 Mumbai

February 16, 2012

Disclaimer
This presentation may contain statements which reflect Managements current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. Responses can only be given to questions which are not price sensitive.

The Asian Paints Group Today

Indias largest paint company for over four decades

Operates in 17 countries with 24 paint manufacturing facilities

Group revenue of INR 7706 Crores (77.06 Billion) in FY 11

Business Operations Consolidated

Paints India
Decorative Coatings India Industrial Coatings India
APL Industrial APPG APICL
81% 5% 1% APL - Paints Chemicals APPG* + APICL International 13%

Sales Contribution FY 2010-11

Chemicals India International Operations

* 50% of APPG considered since it is a 50:50 JV with PPG Inc.

Decorative Coatings - India

Strong presence throughout the country across all product segments

Introduced many innovative concept in the Indian paint industry like

Small packs Exterior segment Home Solutions (painting solution service) Colour Next (prediction of Colour Trends through in-depth research) Special Effects / Textured paints Signature Store Colour Ideas Samplers

Industrial Coatings - India

Asian Paints participates in the Industrial Coatings segment directly, through a 50:50 JV with PPG Inc. of US as well as through a 100% subsidiary
The Auto segment is catered through our JV (APPG)
Second largest supplier to the auto segment in India Now, the largest player in auto refinish segment, post acquisition of ICI Indias 2k auto refinish business in 2007 Commissioned a 3,200 KL / year plant in Chennai, Tamil Nadu in 2008

Operates in the protective coatings, floor coatings, road marking paints and powder coatings segment through a 100% subsidiary

Industrial Coatings - India

Asian Paints and PPG to expand their existing non-decorative coatings presence in India jointly through their current 50-50 joint venture relationship (APPG), and also by establishing a second 50-50 joint venture
Industrial businesses of both Asian Paints and PPG will be part of this second JV and Asian Paints and APICL plants will toll manufacture for them

Asian Paints to take the lead in the second venture and PPG to take the lead in the existing APPG JV

The arrangement is subject to regularity approvals and is expected to be completed by June 2012

Chemicals
Asian Paints also manufactures Phthalic Anhydride (PAN) and Pentaerythritol
PAN is manufactured in Gujarat and Penta in Tamil Nadu
More than 50% consumed internally

Chemicals business contributes about 1% to the groups consolidated revenue

Its contribution to the groups revenue has been continuously decreasing

International Operations
Contributes 13% to the group turnover Began by establishing presence in Fiji in 1978 Presence in 16 countries spread over 4 regions Middle East Caribbean South Pacific Islands Asia
* Asia includes Sri Lanka, Nepal, Bangladesh and Singapore operations

% sales contribution of each region FY 2011

7.6% 15.9% Middle East Asia 52.2% 24.3% Caribbean South Pacific

Macro Environment

Macro Environment
Volatile global environment has resulted in sharp movements in currencies, making forex management a challenge for corporates
INR depreciated by more than 19% in the current financial year till Dec 2011 Conversely, INR rose by more than 8% in the month of Jan 2012

Domestic macro indicators giving mixed signals, Inflation finally coming down
WPI dropped to 7.47% in Dec-11 after staying above 9% for most part of the year Food Inflation declined to (-3.1%) in the month of December-11 Many industries facing slowdown, however IIP for November came in at 5.9% after a negative 4.7% in Oct 11

RBI maintained key policy rates during the last monetary review leading to expectation of easing policy going into the new year Cooling off being witnessed in global economy, Euro zone uncertainty continues
Global Commodity prices have started stabilizing Crude has remained stable during the financial year at above USD 100 levels

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Presentation structure

Performance: Q3 & 9M FY 2011-12 Review of Business Units Outlook and Risks

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Sales Performance Q3 FY 2011-12

Standalone Sales & operating Income
Gr rate over the same period of LY 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 12M FY11 FY11 FY11 FY11 FY 11 1st Qtr 2nd Qtr 3rd Qtr FY12 FY12 FY12

37.3% 28.0% 24.0% 23.4% 28.9% 25.5% 20.3%

6.0%

Standalone
Net Sales at Rs. 2109.5 crores; grew by 20.3% during the quarter Sales growth is to be seen in the light of last year (Q3-FY11) which was 37% more than that of the earlier year (Q3-FY10) and that itself was 27% higher than that of the year before that (Q3FY-09). The Industrial business of APL was transferred to AP Coatings Ltd (A 100% subsidiary of APL) w.e.f. 1st June 2011

Consolidated
13 Net Sales at Rs. 2560.53 crores; grew by 22% during the quarter

Profit performance Q3 FY 2011-12

Standalone Paint Segm ent EBIT Margins
25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
1 Qtr 2nd Qtr 3rd Qtr 4th Qtr st FY1 1 FY1 1 FY1 1 FY1 1 1 2M FY 1 1 1 Qtr 2nd Qtr 3rd Qtr st FY1 2 FY1 2 FY1 2

20.2% 19.9% 17.3% 16.0%

18.0%

18.9%

16.6%

18.5%

Standalone:
PAT at Rs. 250.5 crores; grew by 21.2% EBIT at Rs. 363.4 crores; grew by 21.7% Margins maintained at last year levels despite pressure on the cost front

Consolidated:
PAT after Minority Interest at Rs. 256.86 crores; growth by 16.6 % EBIT at Rs. 389.21 crores; growth by 16% 14

Sales Performance 9M FY 2011-12

Standalone
Net Sales at Rs. 5875.2 crores; grew by 24.6% during the period

Consolidated
Net Sales at Rs. 7071.68 crores; grew by 23.2% during the period

International Operations continue to be impacted by political events and macro economic uncertainty
Net Sales at Rs. 861.75 crores compared to Rs. 765.8 crores in previous year

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Profit Performance 9M FY 2011-12

Standalone
PAT at Rs. 713.8 crores; grew by 18.2% EBIT at Rs. 1034.2 crores; grew by 17.1%

Consolidated
PAT after Minority Interest at Rs. 729.25 crores; grew by 11% EBIT at Rs. 1104.97 crores; grew by 10.3%

Profitability impacted due to:

Significant increase in RM prices compared to previous year Price increase does not fully recover increase Unexpected depreciation of Rupee against the USD Impact of Rs. 30 crores for 9M-FY12 (Rs. 15 crores in Q3-FY12)

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Presentation structure

Performance : Q3 & 9M FY 2011-12 Review of Business Units Outlook and Risks

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Review of Business Units

Decorative Business - India Industrial Operations - India International Operations

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Decoratives Business - India

Demand Conditions
Good demand for decorative coatings across the country Growth in smaller towns continue to be faster than the larger cities Interior and exterior emulsions continue to lead growth

Inflationary Impact
Material inflation significantly high compared to previous year Consumption average for 9M FY12 stood at 117.44 as against base of 100 of previous year Consumption Average Q1 114.05 Q2 116.99 Q3 121.59

Cumulative price increase of 10.53% during the year

Price increase of 2.17% w.e.f. 1st December, 2011

Overall availability of Titanium Dioxide was comfortable although high prices remain a concern
Prices have leveled off for the time being

The high price of crude did not allow the prices of various raw materials to soften
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Decoratives Business - India

Retailing Initiatives
The total number of Colour Worlds have crossed 20,500 Delhi signature store opened in September to excellent response Tremendous response to the Happy Painting Guide campaign Colour Idea stores continue to receive a very good response 28 Colour Ideas stores in operation

Expansion Plans
Khandala project construction progressing well Phase I 3,00,000 KL to be commissioned in Q4 of FY 2012-13 Rohtak Phase-II expansion initiated Phase II capacity addition of 50,000 KL by Q1 of FY 2012-13 Capital expenditure of Rs. 150 crores

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Review of Business Units

Decorative Business - India Industrial Operations - India International Operations

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Industrial Operations
Business Environment
Industrial business, including Auto, continued to face challenging conditions High pressure on margins due to increasing material cost

Industrial Paints Business

Figures are not comparable as industrial business including powder coating was transferred to AP Coatings w.e.f 1st June,2011 Demand for project and maintenance was buoyant in Q3

Powder Business
Impacted due to slowdown in manufacturing industry Demand seems to remain subdued and challenging for the rest of the year as well

Asian PPG Industries (50:50 JV for Automotive Coatings)

Sales growth of 17% to Rs. 252.8 crores for the Nine Months period ending Dec 2011
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Industrial Operations
Proposed Joint Venture with PPG
On Jan 24, 2011, Asian Paints had announced about its proposed new 50:50 JV with PPG for its industrial business in India The composite scheme for Merger and Demerger was filed with the Honble High Court in Sept-11. However, as PPG Industries Inc. USA is restructuring its operations in India, the scheme has been withdrawn Revised composite scheme for Merger and Demerger, encompassing all businesses of companies as originally envisaged, will be filed shortly with the Honble High Court of Mumbai The entire process is expected to be completed by June 2012
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Penta Plant
In Dec 2011, Due to the severe cyclonic storm 'Thane' in Tamil Nadu, some equipment and materials at the Company's Penterythritol Plant at Cuddalore in Tamil Nadu had been damaged As a result of it, the plant was temporarily shut down for some days and has now been restarted The repair and reconstruction work to set right the damage caused at the plant is in progress and the same is not expected to hamper production All Assets have been fully insured by us

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Review of Business Units

Decorative Business - India Industrial Operations - India International Operations

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International Operations
Net S ales ( R s C r)

Oman, Nepal, and Sri Lanka have registered good growth Markets in Middle East have still not bounced back from the political unrest and recessionary conditions Inflationary pressures continue to impact the profitability of international operations too

R eg ions C aribbean Middle E as t As ia S outh P acific T otal

2012 134.10 438.21 237.33 66.61 876.25

2011 +/- L Y 122.76 9% 406.39 8% 190.04 25% 56.94 17% 776.14 13%

PBIT (Rs Cr)

R eg ions C aribbean Middle E as t As ia S outh P acific T otal

2012 8.05 49.92 13.18 8.33 79.47

2011 +/- L Y 11.42 -30% 57.25 -13% 17.79 -26% 11.73 -29% 98.18 -19%

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Presentation structure

Performance : Q3 & 9M FY 2011-12 Review of Business Units Outlook and Risks

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Outlook and Risks

Two Key Events to shape the outlook for the next year
State Elections Annual Budget

Elections in multiple states during the 4th Quarter

Would impact the policies of the Central government going forward. Good show by the ruling party might impact policies on Oil prices, Coal prices and FDI

Inflation showing signs of easing, expected to come down further

Annual Budget would be a closely watched affair after the recent concerns on policy paralysis and growth

Rural Demand expected to stay robust

Introduction of Food security Bill expected to route spending to consumer goods

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Outlook and Risks

Overall fall in GDP growth rate might impact demand in India
Weak consumer sentiments may lead to slowdown in discretionary spending in urban areas Slackening of demand being seen across many industries

Raw material inflation is a global phenomena and continues to be a cause of concern

Lot of volatility due to supply-demand equations; some materials like Rutile continue to rise; some crude derivatives show softening Depreciation of the Rupee has impacted adversely; else softening may have been more beneficial Availability of Ti02 has eased but high prices remain a concern

Internationally, World Bank has slashed Global growth outlook to 2.5% for 2012 leading to concerns of slowing growth
Political uncertainty might add to the already recessionary conditions being witnessed in the Middle East market

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Thank you...

30

Annexure

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Consolidated P&L Q3 FY2011-12

(Rs in Crores)

S ales & O p Inc ome Material C os t E mployee C os ts O ther E xpens es D epreciation P rofit from O perations before O ther Inc ome and Interes t O ther Income P B IT Interes t PBT C urr. & D ef. T ax P AT before Minority interes t Minority S hare P AT to parent S hareholders E PS

3M 11-12 2,560.53 1,551.35 131.76 480.06 30.68 366.68 22.54 389.21 9.03 380.18 113.76 266.43 9.57 256.86 26.78

3M 10-11 2,099.60 1,253.46 111.52 389.71 28.64 316.27 19.37 335.64 5.85 329.79 97.42 232.37 12.04 220.33 22.97

Gr % 22.0% 23.8% 18.2% 23.2% 7.1% 15.9% 16.4% 16.0% 54.4% 15.3% 16.8% 14.7% -20.5% 16.6% 16.6%

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Standalone P&L Q3 FY2011-12

Q3 FY'12 Q3 FY'11 Gr % Net Sales and Operating Income Material Cost Employee Remuneration Other Expenditure PBDIT Depreciation Profit from operations before interest Other Income PBIT Interest PBT Curr.& Def. Tax Excess/Short Provision Income Tax PAT EPS 2,109.5 1,253.3 83.2 410.2 362.8 24.9 337.9 25.5 363.4 6.2 357.2 107.1 (0.4) 250.5 26.1 1,754.2 1,044.6 73.8 334.8 301.1 23.8 277.3 21.2 298.5 3.6 294.9 92.4 (4.1) 206.6 21.5 20.3% 20.0% 12.8% 22.5% 20.5% 4.6% 21.9% 20.3% 21.7% 70.6% 21.1% 16.0% 21.3%

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Consolidated P&L9M FY2011-12

(Rs in Crores)

S ales & O p Inc ome Material C os t E mployee C os ts O ther E xpens es D epreciation P rofit from O perations before O ther Inc ome and Interes t O ther Income P B IT Interes t PBT C urr. & D ef T ax P AT before Minority interes t Minority S hare P AT to parent S hareholders E PS

9M 11-12 7,071.68 4,255.69 390.53 1,313.03 89.75 1,022.66 82.31 1,104.97 24.37 1,080.60 324.73 755.87 26.61 729.25 76.03

9M 10-11 5,740.61 3,321.94 339.03 1,056.12 83.97 939.56 62.67 1,002.23 14.63 987.60 297.12 690.48 33.26 657.22 68.52

Gr % 23.2% 28.1% 15.2% 24.3% 6.9% 8.8% 31.3% 10.3% 66.6% 9.4% 9.3% 9.5% -20.0% 11.0% 11.0%

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Standalone P&L 9M FY2011-12

(` in Cr) ` 9M FY'12 9M FY'11 Gr % Net Sales and Operating Income Material Cost Employee Remuneration Other Expenditure PBDIT Depreciation Profit from operations before interest Other Income PBIT Interest PBT Curr.& Def. Tax Excess/Short Provision Income Tax PAT EPS 5,875.2 3,494.0 256.3 1,122.7 1,002.2 74.0 928.2 105.9 1,034.2 17.1 1,017.0 307.2 (4.0) 713.8 74.4 4,714.9 2,700.4 228.0 895.6 890.8 70.5 820.3 62.9 883.3 8.0 875.3 274.4 (2.8) 603.7 62.9 24.6% 29.4% 12.4% 25.4% 12.5% 5.0% 13.2% 68.3% 17.1% 114.7% 16.2% 12.0% 18.2%

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Consolidated Sales breakup : 9M FY2011-12

AP L - P aints C hemicals AP P G * AP IC L /AP C O ** International G roup

9M-F Y '12 5,785.75 89.48 252.82 188.61 861.75 7,071.68

9M-F Y '11 4,659.73 55.11 215.67 53.42 765.80 5,740.61

G rowth 24% 62% 17% 253% 13% 23%

*50% of Asian PPG Industries sales considered **Figures are not comparable as the industrial business including powder coating was transferred to AP Coatings w.e.f. 1st June, 2011
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Key Ratios
Standalone Consolidated 9M FY12 9M FY11 9M FY12 9M FY11 59.5% 57.3% 60.2% 57.9% 17.6% 18.7% 15.7% 17.8% 17.3% 18.6% 15.3% 17.2% 12.1% 12.8% 10.7% 12.0%

% to Sales & Op. Inc. Material Cost/Net Sales PBDIT/Net Sales PBT/Net Sales PAT/Net Sales*

* For Consolidation results, PAT is before Minority Interest

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