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Business Overview Statutory Reports Financial Statements

Board’s Report

Board’s Report
Dear Members,

The Directors have pleasure in presenting the 71st Annual Report of Asian Paints Limited for the financial year ended 31st March, 2017.

FINANCIAL RESULTS
(` in crores)
Standalone Consolidated
Year ended Year ended Growth Year ended Year ended Growth
31.03.2017 31.03.2016 (%) 31.03.2017 31.03.2016 (%)
Revenue from Operations 14,360.43 13,332.18 7.7 17,084.76 15,841.69 7.8
Earnings Before Interest, Taxes, Depreciation 2,972.34 2,726.36 9.0 3,284.03 2,982.54 10.1
and Amortization
Less : Finance Costs 18.86 23.40 30.58 40.66
Less : Depreciation and Amortisation expense 295.43 234.51 338.84 275.58
Profit Before Exceptional Item & Tax 2,658.05 2,468.45 7.7 2,914.61 2,666.30 9.3
Exceptional Item - 65.35 - 52.45
Profit Before Tax 2,658.05 2,403.10 10.6 2,914.61 2,613.85 11.5
Less : Tax Expense 854.95 780.29 947.98 844.49
1SPmU"GUFS5BY 1,803.10 1,622.81 11.1 1,966.63 1,769.36 11.1
Share of profit of Associate 49.61 33.42
1SPmU"GUFS5BYJODMVEJOHTIBSFPG"TTPDJBUF 1,803.10 1,622.81 11.1 2,016.24 1,802.78 11.8
Attributable to:
Shareholders of the Company 1,803.10 1,622.81 11.1 1,939.42 1,745.16 11.1
Non-Controlling Interest 76.82 57.62
Other Comprehensive Income (net of tax) 139.04 (17.26) 7.68 (23.49)
Total Comprehensive Income 1,942.14 1,605.55 21.0 2,023.92 1,779.29 13.7
Attributable to:
Shareholders of the Company 1,942.14 1,605.55 21.0 1,998.40 1,726.97 15.7
Non-Controlling Interest 25.52 52.32
Opening balance in Retained Earnings 2,181.55 1,839.64 2,141.50 1,807.76
AMOUNT AVAILABLE FOR APPROPRIATION 3,990.03 3,464.17 4,090.25 3,552.90
Dividend - Interim - FY 2016-17 254.19 - 254.19 -
Interim - FY 2015-16 - 211.03 - 211.03
- Final - FY 2015-16 508.37 - 508.37 -
Final - FY 2014-15 - 412.45 - 412.45
Tax on Dividend 154.33 126.24 154.33 126.24
Transfer to General Reserve 500.00 532.90 500.00 660.82
Transfer to Other Reserve - - 0.61 0.86
Closing Balance in Retained Earnings 2,573.14 2,181.55 2,672.75 2,141.50
COMPANY’S PERFORMANCE
The Company has adopted Indian Accounting Standards During the financial year 2016-17, revenue from operations on
(Ind AS) with effect from 1st April, 2016, pursuant to the standalone basis increased to ` 14,360.43 crores as against
notification of Companies (Indian Accounting Standard) Rules, ` 13,332.18 crores in the previous year – a growth of 7.7%.
2015 issued by the Ministry of Corporate Affairs. Previous years’
figures have been restated and audited by the Joint Statutory Cost of goods sold as a percentage to revenue from operations
Auditors of the Company, namely, M/s. BSR & Co. LLP, Chartered decreased to 59.8% as against 60.7% in the previous year.
Accountants (Firm Registration No. 101248W/W-100022) Employee cost as a percentage to revenue from operations
and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants increased to 5.2% (` 742.83 crores) against 5% (` 666.83 crores)
(Firm Registration No. 117366W/W-100018). in the previous year.

Annual Report 2016-17 | 33


Other expenses as a percentage to revenue from operations During the year under review,
increased to 16.5% (` 2,364.44 crores) as against 15.8%
(` 2,101.70 crores) in the previous year. ‡ In order to consolidate, the Company’s investments in
overseas subsidiary companies, Asian Paints (International)
The Profit After Tax for the current year is ` 1,803.10 crores Limited, Mauritius (APIL), wholly owned subsidiary of the
as against ` 1,622.81 crores in the previous year – a growth Company, has transferred holdings in its operational
of ` 11.1%. The growth in profit is mainly driven by increase in subsidiary companies to Berger International Private
revenue from operations and softening of input material prices Limited, Singapore (BIPL), indirect subsidiary of the
during the year. Company.

On a consolidated basis, the group achieved revenue of ‡ The Board of Directors of the Company, at their meeting
` 17,084.76 crores as against ` 15,841.69 crores – a growth of held on 25th October, 2016, approved the Scheme of
7.8%. Net profit after non controlling interest for the group for the Amalgamation of APIL into the Company (“Scheme”). The
current year is ` 1,939.42 crores as against ` 1,745.16 crores in Company has also received approval from SEBI in the form
the previous year – a growth of ` 11.1%. of ‘No adverse Observation letters’ regarding the Scheme,
from the BSE Limited and the National Stock Exchange
There are no material changes and commitments affecting the of India Limited, in accordance with the provisions of the
financial position of the Company which have occurred between Companies Act, 2013 and the Listing Regulations. During
the end of the financial year 2016-17 and the date of this report. the financial year 2016-17, the Ministry of Corporate Affairs
notified Section 230 to 234 of the Companies Act, 2013
CONSOLIDATED FINANCIAL STATEMENTS and the Companies (Compromises, Arrangements and
As per Regulation 33 of the Securities and Exchange Board of India Amalgamations) Amendment Rules, 2017, pursuant to
(Listing Obligations and Disclosure Requirements) Regulations, which any foreign company which is proposed to merge
2015 (hereinafter referred to as “Listing Regulations”) and with an Indian company requires prior approval of the
applicable provisions of the Companies Act, 2013 read with the Reserve Bank of India (“RBI”). Accordingly, the Company
Rules issued thereunder, the Consolidated Financial Statements has made an application to the RBI and post receiving
of the Company for the financial year 2016-17 have been approval from RBI would file necessary applications with
prepared in compliance with applicable Accounting Standards the National Company Law Tribunal for obtaining sanction
and on the basis of audited financial statements of the Company, to the Scheme.
its subsidiaries and associate companies, as approved by the
respective Board of Directors. On 3rd April, 2017, BIPL acquired 100% controlling stake
in Causeway Paints Lanka (Private) Limited (“CPLPL”),
The Consolidated Financial Statements together with the Sri Lanka, for a consideration of ` 386.75 crores (approx.)
Auditors’ Report form part of this Annual Report. in cash. The aforesaid transaction was entered into with
an objective of enhancing the group’s presence in the
SUBSIDIARIES Sri Lankan market where the Company through its indirect
A separate statement containing the salient features of subsidiary Company, Asian Paints (Lanka) Limited, already
financial statements of all subsidiaries of the Company forms has operations. CPLPL is a key player in the Sri Lankan
a part of consolidated financial statements in compliance with coatings market, operating for more than 2 (two) decades and
Section 129 and other applicable provisions, if any, of the supplies mainly decorative paints (including wood finishes) and
Companies Act, 2013. In accordance with Section 136 of the automotive paints.
Companies Act, 2013, the financial statements of the subsidiary
and associate companies are available for inspection by the A statement containing the financial performance of each of
members at the Registered Office of the Company during the subsidiaries and joint venture companies included in the
business hours on all days except Saturdays, Sundays and public consolidated financial statements of the Company is set out
holidays upto the date of the Annual General Meeting (‘AGM’). in the Annexure [A] to this Report. Additional details of the
Any member desirous of obtaining a copy of the said financial performance and operations of the subsidiaries and joint venture
statements may write to the Company Secretary at the Registered companies along with details of the restructuring and investments
Office of the Company. The financial statements including made by the Company are set out in the Management Discussion
the consolidated financial statements, financial statements of and Analysis which also forms a part of this report.
subsidiaries and all other documents required to be attached to
this report have been uploaded on the website of the Company TRANSFER TO GENERAL RESERVE
(www.asianpaints.com). The Company has formulated a policy
The Company proposes to transfer ` 500 crores to the General
for determining material subsidiaries. The policy may be
Reserve. An amount of ` 2,573.14 crores is proposed to be
accessed on the website of the Company (www.asianpaints.com)
retained in the Retained Earnings.

34 | Asian Paints Limited


Business Overview Statutory Reports Financial Statements
Board’s Report

DIVIDEND Appointment of Mr. R. Seshasayee:


During the financial year 2016-17, the Company declared During the financial year 2016-17, the Board of Directors
and paid to the shareholders, an interim dividend of ` 2.65 at their meeting held on 23rd January, 2017, had appointed
(Rupees two and paise sixty five only) per equity share of the face Mr. R. Seshasayee as an Additional Director (Independent
value of ` 1 (Rupee one) each in the month of October, 2016. Director) of the Company. Appropriate resolution for the
For celebrating 75 years of Excellence at Asian Paints, the Board appointment of Mr. R. Seshasayee as an Independent Director of
of Directors of the Company have recommended payment of the Company is being placed for the approval of the shareholders
one-time special dividend of ` 2 (Rupees two only) per equity of the Company at the ensuing AGM for a period of 5 (five) years
share of the face value of ` 1 (Rupee one) each in addition to from the date of his appointment. The Board of Directors of
final dividend of ` 5.65 (Rupees five and paise sixty five only) the Company recommend his appointment as an Independent
per equity share of the face value of ` 1 (Rupee one) each, for Director of the Company.
approval of the shareholders at the ensuing AGM. If approved,
Retirement by rotation and subsequent re-appointment:
the total dividend (interim dividend, one-time special dividend
and final dividend) for the financial year 2016-17 will be ` 10.30 Mr. Abhay Vakil and Ms. Amrita Vakil, Non-Executive Directors,
(Rupees ten and paise thirty only) per equity share of the face are liable to retire by rotation at the ensuing AGM, pursuant
value of ` 1 (Rupee one) each as against the total dividend of to Section 152 and other applicable provisions, if any, of the
` 7.50 (Rupees seven and paise fifty only) per equity share of Companies Act, 2013, read with the Companies (Appointment
the face value of ` 1 (Rupee one) paid for the previous financial and Qualification of Directors) Rules, 2014 (including any
year 2015-16. statutory modification(s) or re-enactment(s) thereof for the
time being in force), the Articles of Association of the Company
In accordance with Regulation 43A of the Listing Regulations, and being eligible have offered themselves for re-appointment.
the Company has formulated a ‘Dividend Distribution Policy’ Appropriate resolutions for their re-appointment are being
and details of the same have been uploaded on the Company’s placed for the approval of the shareholders of the Company at
website (www.asianpaints.com). the ensuing AGM. The brief resume of the Directors and other
related information has been detailed in the Notice convening
the 71st AGM of the Company. The Directors recommend their
REGISTRAR AND TRANSFER AGENT OF THE
re-appointment as Non-Executive Directors of the Company.
COMPANY
As mentioned in the last year’s Annual Report, the Company In accordance with the provisions of the Companies Act,
had during the financial year 2015-16, discovered certain 2013 read with the Rules issued thereunder and the Listing
irregularities with regard to the share related and dividend Regulations, the Independent Directors of the Company (other
encashment activities carried out by M/s. Sharepro Services than Mr. R. Seshasayee) shall hold office upto 31st March, 2019
(India) Private Limited (hereinafter referred to as “Sharepro”), and are not liable to retire by rotation.
Company’s erstwhile Registrar & Transfer Agent. The Board
of Directors of the Company, at their meeting held on Re-appointment of Managing Director & CEO:
14th March, 2016, had approved the appointment of The Board of Directors at their meeting held on 11th May, 2017,
M/s. TSR Darashaw Limited, as the Registrar and Transfer Agent subject to the approval of the shareholders at the ensuing
with effect from 1st April, 2016. Further, SEBI, vide its Interim AGM, considered and approved the re-appointment of
Order dated 22nd March, 2016, has restrained Sharepro from Mr. K.B.S. Anand as the Managing Director & CEO of the
conducting Registrar & Transfer Agent activities. Company for a further period of 2 (two) years commencing from
1st April, 2018.
The Company has taken necessary legal steps and action against
Mr. K.B.S. Anand, Managing Director & CEO and Mr. Jayesh
Sharepro and some of its employees.
Merchant, CFO & Company Secretary, President - Industrial JVs,
DIRECTORS AND KEY MANAGERIAL PERSONNEL are Key Managerial Personnel of the Company in accordance
with the provisions of Sections 2(51), 203 of the Companies Act,
Resignation of Mr. Dipankar Basu: 2013 read with Companies (Appointment and Remuneration
Mr. Dipankar Basu, Independent Director, stepped down from the of Managerial Personnel) Rules, 2014 (including any statutory
Board of Directors of the Company w.e.f. 1st January, 2017, due modification(s) or re-enactment(s) thereof for the time being in
to his advancing age. force).

During his long association with the Company, his contribution Disclosure Relating to Remuneration of Directors, Key
to the Audit Committee as the Chairman as well as to the Board Managerial Personnel and particulars of Employees:
and the Nomination and Remuneration Committee has been The remuneration paid to the Directors is in accordance with the
immensely valuable. The Board places on record, its appreciation Nomination and Remuneration Policy formulated in accordance
for his inspiring guidance and his outstanding contribution to with Section 178 of the Companies Act, 2013 and Regulation 19
improve the overall functioning of the Company. of the Listing Regulations (including any statutory modification(s)

Annual Report 2016-17 | 35


or re-enactment(s) thereof for the time being in force). The Companies Act, 2013 read with the Schedules and Rules issued
salient aspects covered in the Nomination and Remuneration thereunder as well as Regulation 16 of Listing Regulations
Policy have been outlined in the Corporate Governance Report (including any statutory modification(s) or re-enactment(s)
which forms a part of this report. thereof for the time being in force).

The Managing Director & CEO of the Company does not receive PERFORMANCE EVALUATION
remuneration from any of the subsidiaries of the Company. Pursuant to the provisions of the Companies Act, 2013 read
with the Rules issued thereunder, Regulation 17(10) of the
The information required under Section 197 of the Companies Listing Regulations and the circular issued by SEBI dated
Act, 2013 read with Companies (Appointment and Remuneration 5th January, 2017 with respect to Guidance Note on Board
of Managerial Personnel) Rules, 2014 (including any statutory Evaluation, the evaluation of the annual performance of
modification(s) or re-enactment(s) thereof for the time being in the Directors/Board/Committees was carried out for the
force) in respect of Directors/employees of the Company is set financial year 2016-17.
out in the Annexure [B] to this report and is also available on the
website of the Company (www.asianpaints.com). The details of the evaluation process are set out in the Corporate
Governance Report which forms a part of this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013 (including NOMINATION AND REMUNERATION POLICY
any statutory modification(s) or re-enactment(s) thereof for the The Company has formulated and adopted the Nomination
time being in force), the Directors of the Company confirm that: and Remuneration Policy in accordance with the provisions of
Companies Act, 2013 read with the Rules issued thereunder
a. in the preparation of the annual accounts for the financial and the Listing Regulations. The details of the Nomination and
year ended 31st March, 2017, the applicable Accounting Remuneration Policy are set out in the Corporate Governance
Standards and Schedule III of the Companies Act, 2013, Report which forms a part of this report.
have been followed and there are no material departures
from the same; The Nomination and Remuneration Policy of the Company
provides that the Nomination and Remuneration Committee
b. the Directors have selected such accounting policies and shall formulate the criteria for appointment of Executive,
applied them consistently and made judgements and Non-Executive and Independent Directors on the Board of
estimates that are reasonable and prudent so as to give a Directors of the Company and persons in the Senior Management
true and fair view of the state of affairs of the Company as at of the Company, their remuneration including determination of
31st March, 2017 and of the profit and loss of the Company qualifications, positive attributes, independence of Directors and
for the financial year ended 31st March, 2017; other matters as provided under sub-section (3) of Section 178 of
the Companies Act, 2013 (including any statutory modification(s)
c. proper and sufficient care has been taken for the or re-enactment(s) thereof for the time being in force).
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 2013 for The Nomination and Remuneration Policy can be accessed on
safeguarding the assets of the Company and for preventing the website of the Company (www.asianpaints.com).
and detecting fraud and other irregularities;
NUMBER OF MEETINGS OF THE BOARD AND ITS
d. the annual accounts have been prepared on a ‘going
COMMITTEES
concern’ basis;
The details of the meetings of the Board of Directors and its
e. proper internal financial controls laid down by the Directors Committees, convened during the financial year 2016-17 are
were followed by the Company and that such internal given in the Corporate Governance Report which forms a part
financial controls are adequate and operating effectively; of this report.
and
MANAGEMENT DISCUSSION AND ANALYSIS
f. proper systems to ensure compliance with the provisions of Management Discussion and Analysis forms an integral part
all applicable laws were in place and that such systems are of this report and gives details of the overall industry structure,
adequate and operating effectively. economic developments, performance and state of affairs of
the Company’s various businesses viz., the decorative business,
DECLARATION OF INDEPENDENCE
international operations, industrial and home improvement
The Company has received declarations from all the business, internal controls and their adequacy, risk management
Independent Directors confirming that they meet the criteria systems and other material developments during the financial
of independence as prescribed under the provisions of the year 2016-17.

36 | Asian Paints Limited


Business Overview Statutory Reports Financial Statements
Board’s Report

CORPORATE GOVERNANCE REPORT 31st March, 2017, there has been no delay in depositing
In compliance with Regulation 34 of the Listing Regulations, a amounts required to be transferred to the Investor Education
separate report on Corporate Governance along with a certificate and Protection Fund (IEPF), other than one instance of delay
from the Auditors on its compliance, forms an integral part of in transferring the unclaimed final dividend for the financial
this report. year 2008-09 to the IEPF which has been explained in detail in
Note 46 to the Standalone Financial Statements of the Company.
BUSINESS RESPONSIBILITY REPORT
Cost Auditor:
A Business Responsibility Report as per Regulation 34 of the
Listing Regulations, detailing the various initiatives taken by the The Board of Directors of the Company, on the recommendations
Company on the environmental, social and governance front made by the Audit Committee, at their meeting held on
forms an integral part of this report. 11th May, 2017, has approved the appointment of
M/s. RA & Co., Cost Accountants, (Firm Registration No. 000242)
AUDITORS AND AUDITORS’ REPORT as the Cost Auditor of the Company to conduct the audit of
Statutory Auditor(s): cost records for the financial year 2017-18. The remuneration
At the 70th AGM of the Company held on 28th June, 2016, proposed to be paid to the Cost Auditor, subject to ratification by
the shareholders had approved the appointment of the shareholders of the Company at the ensuing 71st AGM, would
M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration not exceed ` 5.50 lakhs (Rupees five lakhs and fifty thousand
No. 101248W/W-100022) jointly with M/s. Deloitte Haskins only) excluding taxes and out of pocket expenses, if any.
& Sells LLP, Chartered Accountants (Firm Registration No.
117366W/W-100018) as the Joint Statutory Auditors to hold The Company has received consent from M/s. RA & Co., Cost
office till the conclusion of the 71st AGM. Accountants, to act as the Cost Auditor for conducting audit
of the cost records for the financial year 2017-18 along with
M/s. B S R & Co. LLP, Chartered Accountants, have been the a certificate confirming their independence and arm’s length
Statutory Auditors of the Company since the financial year relationship.
2007-08 and their tenure as the Joint Statutory Auditors of the
Company will expire with the conclusion of this ensuing AGM, in Secretarial Auditor:
accordance with Section 139 and other applicable provisions, if
In terms of Section 204 of the Companies Act, 2013, the
any, of the Companies Act, 2013 read with the Companies (Audit
Board of Directors of the Company at their meeting held on
and Auditors) Rules, 2014 (including any statutory modification(s)
11th May, 2017 has appointed Dr. K. R. Chandratre, Practicing
or re-enactment(s) thereof for the time being in force).
Company Secretary (Certificate of Practice No. 5144), as the
The Board places on record, its appreciation for the contribution Secretarial Auditor to conduct an audit of the secretarial records,
of M/s. B S R & Co. LLP, Chartered Accountants, during their for the financial year 2017-18.
tenure as the Statutory Auditors of the Company.
The Company has received consent from Dr. K. R. Chandratre to
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, act as the auditor for conducting audit of the Secretarial records
were appointed as Statutory Auditors of the Company at the for the financial year ending 31st March, 2018.
70th AGM held on 28th June, 2016 till the conclusion of the
75th AGM, subject to ratification of their appointment by the The Secretarial Audit Report for the financial year ended
shareholders of the Company at every AGM held thereafter. 31st March, 2017 is set out in the Annexure [C] to this report.
The Secretarial Audit Report does not contain any qualification,
The Company has received written consent(s) and certificate(s) reservation or adverse remark.
of eligibility in accordance with Sections 139, 141 and other
applicable provisions of the Companies Act, 2013 and Rules None of the Auditors of the Company have reported any fraud
issued thereunder (including any statutory modification(s) as specified under the second proviso of Section 143 (12) of the
or re-enactment(s) thereof for the time being in force) from Companies Act, 2013 (including any statutory modification(s) or
M/s. Deloitte Haskins & Sells LLP. Further, M/s. Deloitte Haskins re-enactment(s) thereof for the time being in force).
& Sells LLP, Chartered Accountants, have confirmed that they
hold a valid certificate issued by the Peer Review Board of the POLICIES OF THE COMPANY
Institute of Chartered Accountants of India as required under the
The Company is committed to good corporate governance
Listing Regulations.
and has consistently maintained its organizational culture as a
The Auditors’ Report for the financial year ended remarkable confluence of high standards of professionalism and
31st March, 2017 on the financial statements of the Company building shareholder equity with principles of fairness, integrity
is a part of this Annual Report. During the financial year ended and ethics.

Annual Report 2016-17 | 37


The Board of Directors of the Company have from time to Prior omnibus approvals are granted by the Audit Committee for
time framed and approved various Policies as required by the related party transactions which are of repetitive nature, entered
Companies Act, 2013 read with the Rules issued thereunder and in the ordinary course of business and are on arm’s length basis
the Listing Regulations. These Policies and Codes are reviewed in accordance with the provisions of Companies Act, 2013 read
by the Board and are updated, if required. with the Rules issued thereunder and the Listing Regulations.

Some of the key policies adopted by the Company are as follows: The details of the related party transactions as per Indian
Accounting Standards (Ind AS) - 24 are set out in Note 43 to the
Sr. Name of the Policy Standalone Financial Statements of the Company.
No.
1. Dividend Distribution Policy The Form AOC - 2 pursuant to Section 134 (3) (h) of the
2. Policy on Determination of materiality of events/ Companies Act, 2013 read with Rule 8(2) of the Companies
information (Accounts) Rules, 2014 is set out in the Annexure [E] to this
3. Code of Conduct for Board Members and Senior report.
Management Personnel
LOANS AND INVESTMENTS
4. Policy on Archival of Information
Details of loans, guarantees and investments under the
5. Code of Conduct for Employees
provisions of Section 186 of the Companies Act, 2013 read with
6. Code of Practices and Procedures for Fair Disclosure of the Companies (Meetings of Board and its Powers) Rules, 2014,
Unpublished Price Sensitive Information as on 31st March, 2017, are set out in Note 38 to the Standalone
7. Code of Conduct to Regulate, Monitor and Report trading Financial Statements of the Company.
by Insiders
8. Policy on Related Party Transactions RISK MANAGEMENT
9. Policy on Materiality of Subsidiaries The Company has a well defined process to ensure risks are
10. Whistle Blower Policy identified and steps to treat them are put in place at the right level
11. Corporate Social Responsibility Policy in the management. The operating managers are responsible for
identifying and putting in place mitigation plan for operational
12. Nomination and Remuneration Policy
and process risks. Key strategic and business risks are identified
The above mentioned policies and code are also available on the and managed by the senior leadership team in the organization.
website of the Company (www.asianpaints.com).
The risks identified are updated along with the mitigation plans
EXTRACT OF ANNUAL RETURN as part of the annual planning cycle. The mitigation plans are
then woven into the plans/initiatives for each function and are
The details forming part of the extract of the Annual Return
monitored accordingly. The senior leadership team reviews the
as on 31st March, 2017 in Form MGT - 9 in accordance with
status of the initiatives as part of business review meetings.
Section 92 (3) of the Companies Act, 2013 read with Companies
(Management and Administration) Rules, 2014, are set out in the The key strategic and business risks which are significant in
Annexure [D] to this report. terms of their impact to the overall objectives of the Company
along with status of the mitigation plans are periodically
RELATED PARTY TRANSACTIONS presented and discussed at the Risk Management Committee
During the financial year 2016-17, the Company entered into meetings. Inputs from the Committee are duly incorporated in
transactions with related parties as defined under Section 2 (76) the action plans. During these meetings, brief synopsis of risks
of the Companies Act, 2013 read with Companies (Specification with low to medium impact on the objectives of the Company
of Definitions Details) Rules, 2014, all of which were in the are also shared for the perusal of the Committee. The details of
ordinary course of business and on arm’s length basis and in the Committee are set out in the Corporate Governance Report.
accordance with the provisions of the Companies Act, 2013 read There are no risks which in the opinion of the Board threaten the
with the Rules issued thereunder and the Listing Regulations. existence of the Company. However, some of the risks which may
Further, there were no transactions with related parties which pose challenges are set out in the Management Discussion and
qualify as material transactions under the Listing Regulations. Analysis which forms a part of this report.

All transactions with related parties were reviewed and approved VIGIL MECHANISM
by the Audit Committee and are in accordance with the Policy The Board of Directors has formulated a Whistle Blower Policy
on Related Party Transactions formulated in accordance with the which is in compliance with the provisions of Section 177 (10)
provisions of Companies Act, 2013 read with the Rules issued of the Companies Act, 2013 and Regulation 22 of the Listing
thereunder and the Listing Regulations. Regulations.

38 | Asian Paints Limited


Business Overview Statutory Reports Financial Statements
Board’s Report

As a part of the Policy, the Company has engaged a third party for The Company’s CSR Policy statement and annual report on
managing an ’Ethics Hotline’ which can be used by employees the CSR activities undertaken during the financial year ended
and business associates of the Company to, inter alia, report 31st March, 2017, in accordance with Section 135 of the
any violations, fraud, unfair trade practices, discrimination to the Companies Act, 2013 and Companies (Corporate Social
Code of Conduct in an anonymous manner. Responsibility Policy) Rules, 2014 (including any statutory
modification(s) or re-enactment(s) thereof for the time being in
In line with the commitment of the Company to open force) is set out in the Annexure [F] to this report.
communications, the Policy provides protection to the
employees and business associates reporting unethical practices DETAILS ON INTERNAL FINANCIAL CONTROLS
and irregularities and also encourages employees and business RELATED TO FINANCIAL STATEMENTS
associates to report incidences of fraud. The Company has put in place adequate internal financial
controls over financial reporting. These are reviewed periodically
Any incidents that are reported are investigated and suitable and made part of work instructions or processes in the Company.
action is taken in line with the whistle blower policy. The Company continuously tries to automate these controls to
increase its reliability.
POLICY ON PREVENTION OF SEXUAL
HARASSMENT AT WORKPLACE The Company has adopted accounting policies which are
in line with the Indian Accounting Standards notified under
The Company has in place a Policy on Prevention of Sexual
Section 133 of the Companies Act, 2013 read together with the
Harassment at Workplace in line with the requirements of
Companies (Indian Accounting Standards) Rules, 2015. These
the Sexual Harassment of Women at Workplace (Prevention,
are in accordance with Generally Accepted Accounting Principles
Prohibition and Redressal) Act, 2013 (“Prevention of Sexual
in India. Changes in policies, if any, are approved by the Audit
Harassment of Women at Workplace Act”) and Rules framed
Committee in consultation with the Statutory Auditors.
thereunder and an Internal Complaints Committee has also
been set up to redress complaints received regarding sexual The Company has identified inherent reporting risks for each
harassment. major element in the financial statements and put in place
controls to mitigate the same. These risks and the mitigation
The Company has ensured organisation wide dissemination of controls are revisited periodically in the light of changes in
the Policy and the provisions of Prevention of Sexual Harassment business, IT systems, regulations and internal policies. Corporate
of Women at Workplace Act by conducting sessions throughout accounts function is involved in designing large process changes
the Company. as well as validating changes to IT systems that have a bearing
on the books of account.
During the financial year 2016-17, 4 (four) complaints were
received by the Company and the same were investigated in International subsidiaries provide information required for
accordance with the procedure prescribed and adequate steps consolidation of accounts in the format prescribed by the
were taken to resolve them. Company. These are certified by the respective statutory auditors
for being compliant with the group accounting policies for the
The Company is committed to providing a safe and conducive purpose of annual consolidation of accounts.
work environment to all of its employees and associates.
The Company periodically conducts physical verification of
CORPORATE SOCIAL RESPONSIBILITY (CSR) inventory, fixed assets and cash on hand and matches them with
the books of account. Explanations are sought for any variance
The CSR expenditure incurred by the Company during the
noticed from the respective functional heads.
financial year 2016-17 was ` 47.84 crores, which was higher than
the statutory requirement of 2% of the average profit for the last The Company has a robust financial closure self-certification
three financial years. mechanism wherein the line managers certify adherence to
various accounting policies, accounting hygiene and accuracy of
The CSR initiatives of the Company were under the thrust provisions and other estimates.
areas of health & hygiene, education, water management and
enhancement of vocational training. The Company, in preparing its financial statements makes
judgements and estimates based on sound policies and uses
To celebrate 75 years of Excellence at Asian Paints, Kaleidoscope external agencies to verify/validate them as and when appropriate.
was launched to begin a wonderful journey to touch multiple The basis of such judgements and estimates are also approved
lives and inspire even more. The key objective of Kaleidoscope by the Audit Committee of the Board of Directors of the Company
is to provide infrastructure support, development oriented in consultation with the Joint Statutory Auditors of the Company.
activities and events across health and education areas, centered The management periodically compares the actual spends
around schools and communities along with activate employee against the estimates and makes necessary adjustments to the
contribution and participation. same based on changes noticed.

Annual Report 2016-17 | 39


The Company has a Code of Conduct applicable to all its stipulated under Section 134 of the Companies Act, 2013
employees along with a Whistle Blower Policy which requires read with the Companies (Accounts) Rules, 2014, is set out
employees to update accounting information accurately and in in the Annexure [G] to this report;
a timely manner. Any non-compliance noticed is to be reported
and actioned upon in line with the Whistle Blower Policy. d. The Company does not have any scheme or provision of
money for the purchase of its own shares by employees/
The Company gets its Standalone accounts audited every quarter Directors or by trustees for the benefit of employees/
by its Joint Statutory Auditors. Directors; and

e. The Company has not issued equity shares with differential


SIGNIFICANT/MATERIAL ORDERS PASSED BY
rights as to dividend, voting or otherwise.
THE REGULATORS
There are no significant material orders passed by the Regulators APPRECIATION
or Courts or Tribunals impacting the going concern status of the The Board of Directors wish to convey their gratitude and place
Company and its operations in future. on record their appreciation for all the employees at all levels for
their hard work, solidarity, cooperation and dedication during the
OTHER DISCLOSURES year.
a. During the year under review, the Company has not
accepted any deposit within the meaning of Sections 73 and Further, the Board sincerely conveys its appreciation for its
74 of the Companies Act, 2013 read with the Companies customers, shareholders, suppliers as well as vendors, bankers,
(Acceptance of Deposits) Rules, 2014 (including any business associates, regulatory and government authorities for
statutory modification(s) or re-enactment(s) thereof for the their continued support.
time being in force);

b. The Company has complied with Secretarial Standards For and on behalf of the Board
issued by the Institute of Company Secretaries of India on
Board and General Meetings; Ashwin Choksi
Chairman
c. The information on conservation of energy, technology Place: Mumbai
absorption and foreign exchange earnings and outgo as Date:11th May, 2017

40 | Asian Paints Limited