Asian Paints Ltd:Annual Report 2023-24 Analysis

Asian Paints Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History #

Asian Paints was founded in 1942 in Mumbai, India, by Champaklal H. Choksey, Chimanlal S. Choksey, Suryakant C. Dani, and Arvind R. Vakil. The company was started in a garage with meager resources, aiming to provide affordable paints during World War II when imported paints were restricted.

Headquarters Location and Global Presence #

Asian Paints is headquartered in Mumbai, Maharashtra, India. The company has a significant global presence, operating in 15 countries across Asia, the Middle East, Africa, and the South Pacific through its subsidiaries and joint ventures.

Company Vision and Mission #

• Vision: “To be among the top five decorative coatings companies worldwide by leveraging our expertise in the paint industry.”
• Mission: “To deliver innovative solutions that meet the diverse needs of our customers, while creating value for our stakeholders, and contributing to a sustainable future.”

Key Milestones in Their Growth Journey #

• 1942: Incorporation of Asian Paints.
• 1954: Introduction of the brand’s mascot, “Gattu,” by R.K. Laxman, which played a pivotal role in brand recognition.
• 1967: Became the leading paint company in India.
• 1990s: Expansion into international markets and diversification into other related businesses.
• 2002: Launched the “Colour World” concept, revolutionizing the retail experience.
• 2014: Acquired Essar Paints Ltd.
• Present: Continues to innovate and expand its product portfolio and global footprint.

Stock Exchange Listing Details and Market Capitalization #

Asian Paints is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India. As of October 26, 2023, the company’s market capitalization is approximately ₹3.24 Trillion (INR).

Recent Financial Performance Highlights #

In FY23-24, Asian Paints reported a consolidated revenue from operations of ₹34,785 crore. The company continues to focus on volume growth and margin improvement through strategic pricing and cost optimization.

Management Team and Leadership Structure #

• Chairman: R Seshasayee
• Managing Director & CEO: Amit Syngle
• The company has a well-defined leadership structure comprising experienced professionals managing various aspects of the business, including sales, marketing, operations, and finance.

Notable Awards or Recognitions #

Asian Paints has received numerous awards and recognitions over the years for its performance, innovation, and sustainability initiatives. These include awards for being one of India’s best companies to work for, recognition for its CSR initiatives, and awards for its innovative products and marketing campaigns.

Their Products #

Complete Product Portfolio with Categories #

Asian Paints offers a comprehensive range of products categorized as follows:

• Decorative Paints: Interior Wall Finishes, Exterior Wall Finishes, Enamels, Wood Finishes, Metal Finishes.
• Industrial Coatings: Protective Coatings, Automotive Coatings, Powder Coatings, Floor Coatings.
• Automotive Coatings: Paints and coatings for the automotive industry, including OEM and aftermarket segments.
• Home Improvement & Décor: Waterproofing Solutions, Adhesives, Construction Chemicals, Wallpapers, Bathroom Fittings, Kitchen Solutions, Furniture.

Flagship or Signature Product Lines #

• Apcolite: An economy range of paints that provide good value for money.
• Tractor Emulsion: A popular interior wall finish known for its durability and smooth finish.
• Apex: A weather-resistant exterior paint suitable for all climates.
• Royale: Premium interior emulsions known for their luxurious finish and advanced features.

Key Technological Innovations or Patents #

Asian Paints invests significantly in research and development, leading to innovations like:

• Dirt Pick-up Resistance Technology: Incorporated in exterior paints to prevent dust accumulation.
• Anti-Bacterial Paints: Formulations designed to inhibit bacterial growth on surfaces.
• Color Ideas Technology: Digital tools and applications to help customers visualize color schemes.
• Ezycolour: An AI based tool for color selection and visualization.

Manufacturing Facilities and Production Capacity #

Asian Paints has a network of manufacturing facilities across India and in international locations. The company’s production capacity is substantial, allowing it to meet the demand from domestic and international markets. Specific production capacity figures are proprietary information and not publicly disclosed.

Quality Certifications and Standards #

Asian Paints products adhere to stringent quality certifications and standards, including:

• ISO 9001: Quality Management System
• ISO 14001: Environmental Management System
• OHSAS 18001/ISO 45001: Occupational Health and Safety Management System

Unique Selling Propositions or Technological Advantages #

• Extensive Product Range: Caters to diverse customer needs across different segments.
• Strong Brand Reputation: High brand equity built on trust and quality.
• Innovative Product Development: Continuous investment in R&D leads to cutting-edge products.
• Wide Distribution Network: Ensures availability and accessibility across markets.
• Color Expertise: Leadership in color technology and solutions.

Recent Product Launches or R&D Initiatives #

• New Interior Emulsions with Advanced Features: Focus on healthier living and improved durability.
• Waterproofing Solutions: Expanding portfolio to cater to the growing demand for waterproofing.
• Focus on Sustainable Coatings: Development of eco-friendly paints with low VOC emissions.

Primary Customers #

Target Industries and Sectors #

• Residential: Homeowners, contractors, and interior designers.
• Commercial: Builders, architects, and property developers.
• Industrial: Manufacturing plants, infrastructure projects, and automotive companies.

Geographic Markets (Domestic vs. International) #

• Domestic: India is the primary market, contributing the majority of revenue.
• International: Asia, the Middle East, Africa, and the South Pacific.

Major Client Segments (Agricultural, Industrial, Residential, etc.) #

• Residential: Largest segment, driven by individual homeowners.
• Commercial: Growing segment due to increasing construction activity.
• Industrial: Steady demand from various industries requiring protective coatings.

Distribution Network and Sales Channels #

• Extensive Retail Network: Thousands of dealers and retailers across India and international markets.
• Asian Paints Colour World Stores: Exclusive retail outlets providing a unique shopping experience.
• Online Sales: Growing presence through e-commerce platforms.
• Direct Sales: Servicing large industrial clients directly.

Major Competitors #

Direct Competitors in India and Globally #

• India: Berger Paints, Kansai Nerolac Paints, AkzoNobel India (Dulux), Indigo Paints.
• Globally: AkzoNobel, PPG Industries, Sherwin-Williams.

Comparative Market Share Analysis #

Asian Paints holds the leading market share in the Indian decorative paints market. However, the market is competitive, with other players vying for market share. Specific market share figures vary based on the source and year.

Competitive Advantages and Disadvantages #

• Advantages: Strong brand equity, wide distribution network, innovative products, extensive product range.
• Disadvantages: Higher price point compared to some competitors, vulnerability to raw material price fluctuations.

How They Differentiate from Competitors #

• Innovation: Continuous investment in R&D to develop advanced products.
• Customer Service: Focus on providing excellent customer service and support.
• Brand Image: Strong and trusted brand image built over decades.
• Color Expertise: Leadership in color technology and solutions.

Industry Challenges and Opportunities #

• Challenges: Raw material price volatility, increasing competition, changing consumer preferences, environmental regulations.
• Opportunities: Growing demand for premium paints, increasing urbanization, rising disposable incomes, expansion into new markets, and consolidation in the industry.

Market Positioning Strategy #

Asian Paints positions itself as a premium brand offering high-quality and innovative products. The company aims to cater to diverse customer needs across different segments, with a focus on innovation and customer service.

Future Outlook #

Expansion Plans or Growth Strategy #

• Geographic Expansion: Focus on expanding its presence in emerging markets in Asia and Africa.
• Product Portfolio Expansion: Diversifying into related businesses like home improvement and décor.
• Strategic Acquisitions: Exploring opportunities for acquisitions to strengthen its market position.

Upcoming Products or Innovations #

• Sustainable Coatings: Development of eco-friendly paints with low VOC emissions.
• Smart Coatings: Exploring opportunities in smart coatings with functional properties.
• Digitalization: Leveraging digital technologies to enhance customer experience and operational efficiency.

Sustainability Initiatives or ESG Commitments #

Asian Paints is committed to sustainability and has implemented various initiatives to reduce its environmental impact, including:

• Water Conservation: Implementing water conservation measures in its manufacturing facilities.
• Energy Efficiency: Reducing energy consumption through energy-efficient technologies.
• Waste Management: Implementing waste management practices to minimize waste generation.
• Community Development: Engaging in community development initiatives to improve the lives of people in the communities where it operates.

Industry Trends Affecting Their Business #

• Increasing Demand for Eco-Friendly Paints: Growing awareness of environmental issues is driving demand for sustainable coatings.
• Digitalization of Retail: E-commerce is becoming an increasingly important sales channel.
• Urbanization and Housing Growth: Increasing urbanization and housing construction are driving demand for paints and coatings.
• Rise of DIY Culture: Growing DIY culture is leading to increased demand for easy-to-use paint products.

Long-Term Vision and Strategic Goals #

Asian Paints’ long-term vision is to be a leading global coatings company, recognized for its innovation, quality, and sustainability. The company aims to achieve this through a combination of organic growth, strategic acquisitions, and a focus on customer satisfaction.

Comprehensive Performance Overview #

3-Year Trend Analysis of Key Financial Metrics (Standalone) #

• Revenue from Sale of Products and Services: Increased from ₹29,953.1 crores (FY 2022-23) to ₹30,727.7 crores (FY 2023-24), a growth of 2.6%.
• EBITDA: Increased from ₹6,338.5 crores (FY 2022-23) to ₹7,855.0 crores (FY 2023-24), reflecting a growth of 23.9%.
• EBITDA Margin: Improved from 21.1% (FY 2022-23) to 25.5% (FY 2023-24).
• Net Profit: Increased from ₹4,100.2 crores (FY 2022-23) to ₹5,321.6 crores (FY 2023-24), demonstrating a growth of 29.8%.
• EPS: Increased from ₹42.8 (FY 2022-23) per share to ₹55.5 per share.
• ROCE: Increased from 38.04% in FY23 to 41.2% in FY24.
• Free Cash Flow: Increased to ₹3,571.0 crores.
• Dividend Payout Ratio Maintained consitent payout ratio of 60%

Business Segment Performance (Consolidated) #

• Decorative & Home Décor Business: Revenue increased from ₹30,327.8 crores (FY 2022-23) to ₹31,205.1 crores (FY 2023-24). This segment represents 88.2% of total revenue from the sale of products and services. A 9% volume growth was achieved.
• International Business: Revenue slightly decreased from ₹3,084.4 crores (FY 2022-23) to ₹3,061.5 crores (FY 2023-24), representing 8.7% of total revenue. Performance was constrained by macroeconomic challenges, inflation, and forex unavailability in key geographies, though growth was seen in the Middle East and parts of Africa.
• Industrial Business: Revenue increased from ₹955.6 crores (FY 2022-23) to ₹1,115.5 crores (FY 2023-24), contributing 3.1% of total revenue (excluding PPG-AP revenues as it is an associate company). Both PPG Asian Paints Pvt. Ltd. (PPG-AP) and Asian Paints PPG Pvt. Ltd. (AP-PPG) registered double-digit revenue growth.
• Home Decor: Contributed 4% of Decorative revenues, with aim to grow it 8-10% of total decorative business in the next 3 years.

Major Strategic Initiatives and Their Progress #

• Backward Integration: Significant progress was made on investments of about ₹8,750 crores announced in FY 2022-23. This includes setting up integrated Vinyl Acetate Ethylene Emulsion (VAE) and Vinyl Acetate Monomer (VAM) manufacturing capabilities, and a white cement plant in the UAE.
• Capacity Expansions: Completed brownfield expansions at Khandala (Maharashtra) and Kasna (Uttar Pradesh), adding 120,000 KL/annum capacity. Brownfield expansions at Ankleshwar (Gujarat) and Mysuru (Karnataka) are underway. A greenfield plant in Madhya Pradesh has been allotted land.
• Home Decor Foray: Continued expansion with new collections, network, and store expansions. Focus on ‘Phygital’ experience and omnichannel presence.
• Innovation: 120+ new products introduced in the past 4 years, with new product contributing 11% of FY24 revenue, 85+ patenets filed, 60 granted and 50% commercialized.

Risk Landscape Changes #

• Increased Competition: The competitive landscape is evolving, demanding continued effort to maintain market leadership.
• Geopolitical Instability: The ongoing conflicts in Ukraine and the Middle East are noted as contributing to global market volatility and supply chain disruptions.
• Inflationary Pressures: While raw material prices moderated, inflation, especially in rural areas, impacted consumer spending and moderated revenue growth trajectory.
• Foreign Exchange Availability: Challenges in key geographies like South Asia and Egypt due to forex unavailability.
• New Business Complexities: Challenges in terms of techinical expertise and managing different sets of raw materials and compliance to new laws and regulations.
• Large Capex Execution Management: Delay in commissioning and safety risks.
• Process and product technology: Technological advancements is seen a a continued disrubtor.

ESG Initiatives and Metrics #

• Environmental:
  • Reduction of absolute Scope 1 and 2 GHG emissions by 45% from the FY 2013-14 baseline.
  • Renewable electricity constitutes 65.8% of total electricity consumed across paint manufacturing factories.
  • 36% reduction in specific electricity consumption compared with the FY 2013-14 baseline.
  • Water replenishment at 387% of freshwater consumption.
  • Product stewardship achived through GHG footprint reduction through formulation of 50,803 tCO2e, surpassing 2030 goals.
• Social:
  • Trained 680,000+ participants at Asian Paints Colour Academy.
  • Impacted 353,000+ beneficiaries through healthcare initiatives.
  • Achieved a Net Promoter Score (NPS) of 73.
• Governance:
  • 54% Independent Directors on the Board.
  • 42.5% of the time spent by the Board of Directors on matters of strategic importance.
  • Maintained an AA ESG Rating by MSCI.

Management Outlook #

• The macroeconomic environment is expected to remain volatile in the medium term with concerns over political transitions.
• Strong economic growth expected in India due to public investments, which is anticipated to positively impact the domestic paint industry.
• Focus will remain on expanding the per capita consumption of paint and widening the industry.
• Focus on premiumization with price moderation.
• Focus on Home Decor, with expectation that business will grow and form a larger part of overall revenue mix.

Detailed Analysis #

Financial Position Analysis #

3-Year Comparative Analysis of Assets, Liabilities, and Equity (Consolidated) #

Significant Changes in Major Line Items (>10% YoY) (Consolidated) #

• Property, Plant and Equipment: Increased by ₹300.55 crores (7.25%) mainly in manufacturing facilities and technological advancement, a sizable portion of increase is attributed to new greenfield project and expansions at the existing plant.
• Right-of-Use Assets: Increased by ₹647.35 crores (53.54%) , because the Company has significant lease arrangements, it added new leases.
• Capital work-in-progress: Increased by ₹1,678.78 crores (164.65%), because of the substantial portion of capital expenditure plan towards setting up manufacturing capabilites for Vinyl Acetate Ethylene Emulsion(VAM) and Vinyl Acetate Monomer(VAM).
• Goodwill: Increased by ₹190.71 crores (83.48%) reflecting new acquisitions, mainly Harind Chemicals and Pharmaceutical Private Limited.
• Other Intangible Assets: Increased by ₹237.55 crores (126.72%), reflecting acquisitions.
• Other Financial Assets (Non-Current): Increased by 243.33 crores (67%)
• Inventories: Decreased by ₹287.23 crores (-4.63%).
• Other Balances with Banks: Decreased by ₹66.05 crores (-20.60%).
• Other Financial liabilities (Current): Increased by ₹239.42 crores (11.60%)
• Other current liabilities: Increased by ₹25.44 crores (11.92%).
• Non-controlling interest: Increased by ₹241.72 crores (53.28%)

Working Capital Trends #

• Current Assets: Increased by ₹1,001.90 crores (6.06%).
• Current Liabilities: Increased by ₹605.03 crores (7.66%).

Asset Quality Metrics #

• Allowance for Doubtful Debts: Increased from ₹127.83 crores to ₹212.27 crores on a standalone basis, suggesting a potential increase in credit risk within trade receivables.
• Impairment Loss on Goodwill: No impairment loss was recognized during FY 2023-24, but an impairment loss of ₹24.66 crores was recognized in FY 2022-23 related to Causeway Paints Lanka (Pvt) Ltd.

Debt Structure and Maturity Profile (Consolidated) #

• Debt-Equity Ratio (Standalone): 0.005 (FY 2023-24) and 0.006 (FY 2022-23), indicating very low leverage.
• The borrowings are from various sources including State of Haryana, State of Karnataka, loans from banks, and cash credits/overdrafts, indicating a diversified funding structure.

Off-Balance Sheet Items #

• Contingent Liabilities: Increased to ₹695.82 crores as of March 31, 2024, from ₹529.52 crores as of March 31, 2023. The major contributors are tax disputes and other claims.
• Capital commitment includes ₹1,383.72 crores towards Property, Plant and Equipment, ₹ 18.12 crores towards intangible assets, ₹545.17 crores towards Right-of-use assets.
• Guarantees: The Company has provided bank guarantees, but the amount is not specified as a separate off-balance sheet item.

Segment-Wise Financial Analysis of Asian Paints: FY 2023-24 #

Revenue Breakdown by Segment/Geography with Growth Rates #

• Decorative Business (India): ₹31,205.1 crores in FY 2023-24 (88.2% of total revenue from the sale of products and services), with a growth rate of 2.6%. Includes Obgenix Software Private Limited (‘White Teak’) revenues from the date it became a subsidiary.
• Home Décor Business: Approximately 4% of revenue within Decorative. Target to increase to 8-10% within the next 3 years.
• Industrial Business (India): ₹1,115.5 Crores in FY 2023-24 (3.1% of total revenue, excluding PPG-AP revenues). Double-digit growth.
• International Business: ₹3,061.5 crores in FY 2023-24 (8.7% of total revenue), with a slight decrease of 0.7% year-over-year. Growth in the Middle East and parts of Africa, but constraints in South Asia and Egypt.

Cost Structure Analysis #

• Cost of Goods Sold (COGS): Decreased to 55.8% of revenue from operations (standalone) in FY 2023-24 from 60.9% in FY 2022-23.
• Employee Cost: Increased to 5.7% of revenue in FY 2023-24 from 5.0% in the previous year.
• Other Expenses: Increased to 15.7% of revenue from 14.7% the prior year.

Margin Analysis #

• Operating Profit Margin: Increased to 25.5% (standalone) from 21.1% in the previous financial year.
• EBITDA Margin: Increased to 23.9% in FY 2023-24 (standalone).
• Net Profit Margin: Increased to 17.2% in FY 2023-24 from 13.6% in the previous year, due to declining raw material prices.

Non-Recurring Items #

• No exceptional items for consolidated financials in FY 2023-24. In FY 2022-23, there was an exceptional item of ₹48.87 crores related to impairment provision towards goodwill recognized on acquisition of Causeway Paints Lanka (Pvt) Limited and exchange loss.

EPS Analysis #

• Basic EPS (Standalone): ₹55.5 in FY 2023-24, up from ₹42.8 in FY 2022-23.
• Diluted EPS (Standalone): ₹55.49 in FY 2023-24, up from ₹42.76 in FY 2022-23.

Cash Management: Financial Analysis #

Cash Flow Analysis (Standalone) #

• OCF (Operating Cash Flow): Increased to ₹5,737.84 crores in FY2023-24 from ₹4,221.65 crores in FY2022-23, driven by higher profit before tax and favorable changes in working capital, specifically related to decreases in other financial assets and inventory.
• ICF (Investing Cash Flow): Net cash used in investing activities was ₹2,263.19 crores in FY2023-24, up from ₹1,396.88 crores in FY2022-23. This was primarily due to increased capital expenditure and investments in subsidiaries.
• FCF (Financing Cash Flow): The net cash used in financing activities was ₹2,974.48 crores in FY2023-24, an increase from ₹2,184.87 crores in the prior year. This indicates more cash was used for financing activities, mostly driven by higher dividends and interest paid.

Working Capital Management Efficiency #

• Debtors Turnover Ratio: Decreased to 8.7 in FY2023-24 from 9.4 in FY2022-23, which means a slight decrease in the effectiveness of collecting receivables.
• Inventory Turnover Ratio: Decreased slightly to 3.3 in FY2023-24 from 3.5 in the prior year, indicating lower inventory turnover efficiency.

Capex Analysis by Segment #

• Decorative Coatings: Expansion projects were completed in Khandala (Maharashtra) and Kasna (Uttar Pradesh) and will continue shortly in Ankleshwar (Gujarat) and Mysuru (Karnataka).
• Chemicals: Cuddalore (Tamil Nadu)
• Industrial Coatings: Sarigam, (Gujarat) ,Taloja (Maharashtra)
• Sleek: Pune, Maharashtra, Wada, Maharashtra
• Bath Business: Wada, Maharashtra
• VAM/VAE: (Upcoming)
• Weatherseal: Rewari, Haryana

Dividend Trends #

• Dividend: The total dividend (interim and proposed final) for FY2023-24 is ₹33.30 per share, amounting to a total outflow of ₹3,194.14 crores. The dividend payout ratio was maintained at 60%.

Debt Service Coverage #

• The standalone interest coverage ratio is 184.9, indicating a very strong capacity to meet interest obligations.

Liquidity Position #

• Current Ratio (Standalone): 2.3 as of March 31, 2024, slightly down from 2.4 as of March 31, 2023.
• Cash and Bank Balance, investments: Increased from ₹4,269.98 crores to ₹5,077.83 crores

Free Cash Flow Yield #

• Free Cash Flow (FCF): ₹3,571.0 crores

Financial Analysis: Key Performance Indicators (KPIs) #

Profitability Ratios (3-Year Trends) #

Return on Equity (ROE) #

• FY2023-24: Standalone: 31.3%, Consolidated: 31.0%
• FY2022-23: Standalone: 28.3%, Consolidated: 27.4%
• FY2021-22: Consolidated: Not directly available, but prior 10 year average was >30%.
• ROE has shown a consistent upward trend over the last reported years, at both standalone and consolidated level, suggesting improving profitability relative to shareholders’ equity.

Return on Capital Employed (ROCE) #

• FY23-24: Standalone: 41.2%
• FY 22-23: Standalone: 38.04%
• ROCE has consistently improved, suggesting increasing efficiency of capital.

Net Profit Margin #

• FY2023-24: Standalone: 17.2%, Consolidated: 15.7%
• FY2022-23: Standalone: 13.6%, Consolidated: 12.2%
• Net profit margins improved significantly year-over-year.

EBITDA Margin #

• FY23-24: Standalone: 25.5%, Consolidated: 23.3%
• FY 22-23: Standalone: 21.1%, Consolidated: 19.3%
• Both standalone and consolidated EBITDA margins saw improvement.

Liquidity Metrics #

Current Ratio #

• FY2023-24: Standalone: 2.3, Consolidated: 2.1
• FY2022-23: Standalone: 2.4, Consolidated: 2.1
• The current ratio has slightly decreased, suggesting the company’s ability to meet its short term obligations is very robust.

Efficiency Ratios #

Inventory Turnover Ratio #

• FY2023-24: Standalone: 3.3, Consolidated: 3.3
• FY2022-23: Standalone: 3.5, Consolidated: 3.4
• Slight decrease in the ratio from the last financial years indicates a marginal reduction in inventory management efficiency.

Debtors Turnover Ratio #

• FY2023-24: Standalone: 8.7, Consolidated: 7.4
• FY2022-23: Standalone: 9.4, Consolidated: 8.1
• A reduction in the debtors’ turnover ratio suggests a possible lengthening of the collection period.

Asset Turnover Ratio #

• FY2023-24: Standalone: 1.19
• FY2022-23: Standalone: 1.33
• There is a reduction in asset turnover ratio.

Leverage Metrics #

Debt-to-Equity Ratio #

• FY2023-24: Standalone: 0.005, Consolidated: 0.059
• FY2022-23: Standalone: 0.006, Consolidated: 0.062
• The debt-to-equity ratio is very low, showcasing a very solid and conservative capital structure with minimal reliance on debt.

Interest Coverage Ratio #

• FY2023-24: Standalone: 184.9, Consolidated: 63.4
• FY2022-23: Standalone: 158, Consolidated: 72.0
• High interest coverage ratio indicates a strong ability to meet interest obligations, though it decreased on a consolidated basis.

Business Segments: Asian Paints Financial Analysis FY 2023-24 #

Revenue and Profitability #

• Decorative Business (India): FY 2023-24 revenue ₹31,205.1 crores, value growth of 3%, volume growth of 9%.
• Home Décor Business: ~4% of Decorative revenues, target of 8-10% in 3 years.
• Industrial Business (India): Double-digit revenue growth, improved profit margins. Non-automotive industrial coatings business doubled in 3 years.
• International Business: FY 2023-24 revenue ₹3,061.5 crores (slight decrease from ₹3,084.4 crores). Growth constrained by macroeconomic challenges, inflation, and forex unavailability (South Asia, Egypt). Middle East market grew well.
• PPG Asian Paints Pvt. Ltd. (PPG-AP): Revenue contribution (excluding PPG-AP): 3.1%.
• Industrial Business: Revenue of ₹1,115.5 Crore, excluding PPG-AP.
• Overall Company:
  • Revenue from products and services: grew by 2.6% to ₹30,727.7 crores.
  • EBITDA increased by 23.9% to ₹7,855.0 crores.
  • Free cash flow 18.5%.
  • Net profit grew by 29.8% to ₹5,321.6 crores.

Market Share and Competitive Position #

• #1 paint company in India, #1 integrated home décor player.
• #3 paint company in Asia, #8 paint company globally.
• Home Decor: #1 in Decorative lighting and integrated Kitchens brand. Among the leading players in the wallpapers, textures, fabrics and furnishings business.
• Projects and Institutional business maintained a leadership position.
• Widening competitive landscape necessitates excellence.

Key Products/Services Performance #

• Decorative Business: Luxury range performed well, Premium range slower growth, Economy range good demand. New products: Neo Bharat Latex, Apex Ultima Protek Duralife Basecoat, SmartCare Damp Sheath Interior Waterproofing Primer.
• Home Décor: New collections, network, and store expansions. Kitchen and Bath segments growth was challenging. New product categories: Royale range of wardrobes and fitted furniture collection.
• Industrial Business: Automotive OEM, Refinish, and Protective and Powder Coatings segments experienced good growth.
• Services: Beautiful home painting services used by 140,000+ customers.

Geographic Distribution and Market Penetration #

• India: 27 in-house paint manufacturing facilities, 160,000+ retail touchpoints. Presence in ~650 cities with Beautiful Homes Painting Services.
• International: Operations in 14 countries outside India (Asia, Middle East, Africa, South Pacific). Middle East showed strong growth. Bangladesh and Nepal faced macroeconomic challenges, Sri Lanka showed recovery.

Segment-wise CAPEX and ROIC #

• Return on Capital Employed (RoCE): 41.2% (standalone).
• Investments of ~₹8,750 crores (FY 2022-23): backward integration, technology, capacity expansions.
• Brownfield expansions: Khandala (Maharashtra) and Kasna (Uttar Pradesh) completed, adding 120,000 KL/annum capacity.
• Greenfield plant in Madhya Pradesh is in progress.
• Significant progress on VAE and VAM manufacturing facilities.
• Backward integration project in white cement in UAE is also moving as per schedule.

Operational Efficiency Metrics #

• Standalone: Energy intensity: 0.98 GJ/KL. Specific electricity consumption: 74.2 KWh/KL (36% reduction from FY 2013-14 baseline).
• Standalone: Specific non-process water consumption: 0.44 KL/KL (54% reduction from FY 2013-14 baseline). Water replenishment: 387% of freshwater consumption.
• Specific hazardous waste disposal and specific non-hazardous waste reduced by 77% and 47% respectively.
• Standalone: Specific trade effluent generation (80% reduction).

Growth Initiatives and Challenges #

• Growth Initiatives:

  • Expansion of the home décor segment, aiming for it to reach 8-10% of Decorative business revenue in 3 years.
  • Continued focus on innovation, with 120+ new products introduced in the last 4 years.
  • Expansion of the distribution network and retail touchpoints, including Beautiful Homes stores.
  • Emphasis on digital marketing and customer engagement initiatives (e.g., “Mera Wala Mood” campaign).
  • Backward integration projects (VAE, VAM, and white cement) to enhance product offerings and reduce reliance on external suppliers.
  • Launch of ‘Cartisan’, car detailing and decor business.

• Challenges:

  • Geopolitical instability and global economic uncertainty (Ukraine, Middle East conflicts).
  • Moderating raw material prices provided a healthy cushion to margins.
  • Inflationary pressures, particularly impacting rural markets and consumption demand.
  • Increased competition in the paints and home décor industry.
  • Forex unavailability in key international markets (South Asia and Egypt).

Risk Framework #

Strategic Risks #

Shifting Consumer Preferences #

• Severity: High
• Likelihood: Medium
• Trend: Increasing, with a focus on greener products and integrated solutions.
• Mitigation Strategies: Expanding into the home décor segment, launching “Beautiful Homes” stores, developing eco-friendly products (e.g., Neo Bharat Latex, Nilaya Naturals), and investing in digital customer engagement.
• Control Effectiveness: Partially effective, as indicated by 9% volume growth, but with revenue growth at only 3% and moderated premium product range, suggesting challenges.
• Potential Financial Impact: Variable, depending on product mix. Noted slower growth in premium product categories in 2023-24 due to consumer downtrading.

Competition #

• Severity: High
• Likelihood: High
• Trend: Increasing, with new entrants and an evolving competitive landscape.
• Mitigation Strategies: Product differentiation (e.g., Neo Bharat Latex, WoodTech Flash), network expansion (160,000+ retail touchpoints), and strengthening relationships with dealers and contractors.
• Control Effectiveness: Moderate. Maintaining market leadership but acknowledges increased competitive pressure.
• Potential Financial Impact: Loss of market share.

Operational Risks #

Climate Change (Physical and Transition Risks) #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing. Extreme weather events and policy changes.
• Mitigation Strategies: Climate risk assessment aligned with TCFD, focus on renewable energy (65.8% of electricity from renewables in paint manufacturing), water neutrality (387% replenishment), and sustainable supply chain program (“Samaveta”). Investments in VAE and VAM manufacturing capabilities.
• Control Effectiveness: Progressing, with a 75% reduction in specific Scope 1 and 2 emissions intensity, ahead of the 2025 target.
• Potential Financial Impact: Not Quantifiable, but climate events (cyclones, floods) cited as operational risk factors.

Process and Product Technology #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing, driven by digital economy disruptions.
• Mitigation Strategies: Investment in R&D (₹120.3 crores), filing for 85+ patents (60 granted), and launching new products (120+ in the last 4 years). Focus on automation and digitalization.
• Control Effectiveness: Positive, 11% of revenue from new products.
• Potential Financial Impact: Not Quantifiable.

Counterfeit Products #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable.
• Mitigation Strategies: Collaborating with agencies and authorities to conduct raids, implementing anti-counterfeit measures in packaging.
• Control Effectiveness: Not quantified.
• Potential Financial Impact: Decrease in Revenue.

Safety #

• Severity: High
• Likelihood: Medium
• Trend: Stable, with a focus on improvement.
• Mitigation Strategies: Comprehensive OHS system, ISO 45001 certification, British Safety Council five-star certification at multiple plants, behavioral-based safety programs, and technology integration (e.g., AutoBeacon app, IoT for process safety).
• Control Effectiveness: Moderate. TRFR of 1.39, with a target of </=0.98. Three fatalities reported in FY 2023-24, indicating a critical area of concern. TSR of 231.09 (target </=150).
• Potential Financial Impact: Increased number of incidents occurred.

New Business Complexities #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing.
• Mitigation Strategies: Engagement of External advisors.
• Control Effectiveness: Not Quantifiable.
• Potential Financial Impact: Financial loss, delayed commencement.

Large Capex Execution #

• Severity: High
• Likelihood: Medium
• Trend: Increasing.
• Mitigation Strategies: Project outcome and timeline identification, Periodic progress reports.
• Control Effectiveness: Moderate
• Potential Financial Impact: Cost overrun and delay.

Financial Risks #

Fraud #

• Severity: High
• Likelihood: Low
• Trend: Stable, but ongoing vigilance is required.
• Mitigation Strategies: Awareness sessions, Whistle Blower Policy, investigations, and strengthening fraud detection mechanisms.
• Control Effectiveness: Appears effective.
• Potential Financial Impact: Financial loss, reputational damage.

Information/Cyber Security #

• Severity: High
• Likelihood: Medium
• Trend: Increasing, due to growing reliance on digital systems.
• Mitigation Strategies: 5-level security architecture, vulnerability assessments, investment in IT tools (firewall, VPN), and periodic audits. Cybersecurity awareness training.
• Control Effectiveness: Positive, with no major observations in ISO 27001 audits.
• Potential Financial Impact: Leakage of information, reputational damage.

Compliance/Regulatory Risks #

Evolving Regulatory Landscape #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable, but requires continuous monitoring.
• Mitigation Strategies: Prioritizing compliance, regular reviews by senior management and the Board, and engagement with policymakers.
• Control Effectiveness: Appears effective, as no major non-compliance issues were reported.
• Potential Financial Impact: Penalties.

Emerging Risks #

Supply Chain Disruptions (due to political/geographical issues) #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing, due to geopolitical instability (Ukraine, Middle East).
• Mitigation Strategies: Proactive measures (not fully detailed in the provided document).
• Control Effectiveness: Not quantified.
• Potential Financial Impact: Volatility in raw material prices and availability.

Market Risks Associated with E-Commerce #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing.
• Mitigation Strategies: Proactive measures being implemented.
• Control Effectiveness: Not quantified.
• Potential Financial Impact: Not stated in document.

Strategic and Management Analysis #

Long-Term Strategic Goals and Progress #

• Home Décor: Asian Paints aims to increase revenue contribution from home décor to 8-10% of overall decorative business within the next 3 years, up from the current 4%.
• Resource Efficiency: The company is exceeding its 2030 commitment for GHG emission reduction through formulation optimization and efficiency enhancement, achieving a cumulative reduction of 50,803 tCO2e since FY 2022-23. Renewable electricity constitutes 65.8% of total consumption at decorative paint manufacturing facilities, nearing the 2025 target of 75%. Water replenishment was 387% of freshwater consumption, close to its 2025 target.
• ESG Targets: Asian Paints set and published ESG targets through 2030, focusing on resource efficiency.

Competitive Advantages and Market Positioning #

• Market Leadership: Asian Paints is the leading paint company in India and the top integrated home décor player. It ranks #1 in Decorative lighting and is the #2 player in Fabric and Furnishing.
• Extensive Distribution: The company boasts the largest distribution and retail network in the Indian paints industry, with over 160,000 retail touchpoints and substantial Colour World tinting machines.
• “Phygital” Experience: Beautiful Homes stores offers a combination of online and offline presence.
• International Business: Growth was lead by middle East and parts of Africa.

Innovation Initiatives and R&D Effectiveness #

• Product Innovation: Over the last 4 years, Asian Paints introduced 120+ new products with unique chemistries and features. 85+ patents filed with 60 granted.
• New Product Contribution: New products contributed to over 11% of revenue in FY 2023-24.
• R&D Investment: R&D spend was ₹120.3 crores, with over 240 scientists driving innovation, focusing on nanotechnology, new resin chemistries, and sustainable technologies.
• Project Anveshan: Focus on breakthrough projects, including cost optimization.
• Process improvement: using automation, including data democratisation.

M&A Strategy and Execution #

• Acquisitions: Asian Paints acquired an additional 11% stake in Obgenix Software Private Limited (‘White Teak’), bringing its total stake to 60% and making it a subsidiary. Acquisition of a 51% stake in Harind Chemicals.
• Amalgamation: The Board approved the amalgamation of Sleek International Pvt Ltd with Asian Paints Limited to gain from further integration with our Beautiful Homes network
• Strategic Partnerships: The company is growing established partnerships with White Teak and Weatherseal, leveraging synergies with its dealer network.

Management’s Track Record in Execution #

• Volume Growth: The company delivered near double-digit volume growth despite revenue growth moderation to low single digits.
• Margin Improvement: Improved profit margins in the Industrial business, supported by technology-driven product solutions.
• Capex Management: Brownfield expansions at Khandala and Kasna have been completed. Greenfield plant in Madhya Pradesh is progressing, and backward integration projects (VAE, VAM, white cement) are on schedule.

Capital Allocation Strategy #

• Dividend Payout: Maintained a 60% dividend payout ratio, in line with the company’s policy of 55% to 65% of standalone Profit After Tax.
• Capital Expenditure: Invested ₹1,968.33 crores in FY 2023-24, including expansions, technology upgrades, backward integration, and ESG improvements.
• Backward intergration: Focus on an integrated Vinyl Acetate Ethylene Emulsion (VAE) and VAM (Vinyl Acetate Monomer) manufacturing capabilities.

Organizational Changes and Their Impact #

• Board Leadership: R Seshasayee appointed Chairman of the Board, succeeding Deepak Satwalekar. Three Independent Directors completed their tenures, and three new Independent Directors were appointed. These changes are presented as adding value and enhancing business growth capabilities.
• Employee Stock Option Plan (ESOP): ESOP plan in place to motivate, retain, and attract key employees.
• Customer Quotient Initiative: To promote customer-centricity, an inititive that allowed employees to receive direct feedback from customers.

ESG Framework #

ESG and Sustainability Analysis #

Environmental Metrics and Targets #

• Energy Conservation: Asian Paints reduced absolute Scope 1 and 2 GHG emissions by 45% from the FY 2013-14 baseline. Specific electricity consumption decreased by 36% from the baseline. The company targets 75% renewable electricity share by 2025 and 100% by 2030.
• Renewable Energy makes up 65.8 of electrcity consumed across paint manufacturing.
• Water Neutrality: The company achieved 387% water replenishment of freshwater consumption. Specific non-process water consumption was reduced by 54% from the FY 2013-14 baseline, exceeding the 2030 target of 0.24 KL/KL with a performance of 0.44 KL/KL.
• Product Stewardship: Since FY2020-21 100% of their architectural products are free from lead and added heavy metal. Cumulative GHG footprint reduction through formulation optimization reached 50,803 tCO2e since FY 2022-23, surpassing the 2030 target.
• Nature Positive: Specific hazardous waste disposal decreased by 77% from the FY 2013-14 baseline. Specific effluent generation was reduced by 80% from the baseline.

Social Responsibility Programs #

• Community Ownership: Trained over 680,000 participants at the Asian Paints Colour Academy, exceeding the 2025 target of 600,000. Over 353,000 beneficiaries were impacted through healthcare initiatives.
• Customer Celebrations: Maintained a Net Promoter Score (NPS) of 73.
• Water Stewardship: Created 217% of water harvesting potential against annual freshwater consumption
• Workplace: The employee engagement score was 79%, with a target of 80% for both 2025 and 2030. The Total Recordable Frequency Rate (TRFR) was 1.39.

Governance Structure and Effectiveness #

• Board Composition: 54% of the Board consists of Independent Directors. 5 out of 6 Board Committees are chaired by Independent Directors.
• Board Expertise: The Board possesses diverse skills, including sales and marketing (84.6%), international business (61.5%), general management (92.3%), financial and risk management (61.5%), and technical/professional knowledge (100%).
• ESG Oversight: The Board of Directors developed the ESG framework, and the Stakeholders Relationship Committee provides oversight on ESG strategy execution.
• Ethics and Transparency: The company emphasizes ethical practices, with 91.8% of employees completing Code of Conduct training in FY 2023-24.

Sustainability Investments and ROI #

• CAPEX Investment: ₹60.4 crores was invested in CAPEX to improve the ESG impact of products and processes.
• Renewable Energy: Investments in solar and wind electricity projects resulted in an installed capacity of 48.9 MW at decorative paint manufacturing plants.

ESG Ratings and Peer Comparison #

• MSCI ESG Rating: Maintained an ‘AA’ ESG rating (Leader) for three consecutive years.
• CDP Climate Change Score: Upgraded to ‘Leadership (A-)’ from ‘Management (B)’.
• S&P Global Sustainability Yearbook 2024: Ranked as an ‘Industry Mover,’ #2 in Chemical industries in India, and among the top 30 companies globally.
• ISS Scorecard: Achieved a ‘Leadership’ score (1) in the Institutional Shareholder Services scorecard.

Regulatory Compliance and Future Preparations #

• Compliance: The Company ensures adherence to all applicable laws, regulations and internal policies.
• Tax Transparency: Disclosed taxes paid of ₹4,193.2 Crores.
• Future Preparations: The company is investing in backward integration projects, like VAE and VAM manufacturing capabilities, to develop more environmentally friendly products.

Future Projections and Guidance #

Management Guidance and Assumptions #

• Management guides for strong double-digit volume growth for the year.
• Management considers ESG as core to all business objectives and operations. Resource efficiency is the key theme for 2030 ESG targets.
• Home Décor: Management guides for the evolution from ‘share of surface’ to ‘share of space’, making Asian Paints a key partner in customers’ home décor journey.
• Home Decor: Management aims the segment to grow exponentially in the next 3 years to represent approximately 8 to 10% of the overall Decorative business.
• Industrial Business: Management guides for collaboration between Decorative and Industrial business teams, aiming for double-digit revenue growth and improved profit margins.
• International Business: Management aims at enhancing brand presence in these markets through waterproofing and painting services.
• Governance: Commits to achieving best-in-class governance as rated by investors and third-party governance firms.
• Material Topics: Management’s approach to material topics influences ESG strategy, ESG commitments and influences short-term (one year), medium-term (two to three years), and long-term (five years or more) time horizions.

Market Growth Forecasts #

• Global: Global growth is projected to remain stable, with India as a strong source of growth.
• India: Rapid digital transformation, boost in Indian economy and position as a key player in the future of the digital economy. Investments in infrastructure and connectivity are key drivers.
• India: The domestic paint industry will continue to grow well given the strong correlation with economic growth.
• Consumption Demand: Moderation in consumption demand was observed due to the lingering impact of retail inflation, particularly in rural markets.

Planned Strategic Initiatives #

• Decorative Business:
  • Continue to focus on consumer requirements across varied price points.
  • Expand the organized market and strengthen the foray into the bottom-of-the-pyramid segment.
  • Continue network strength with supply chain capabilities.
  • Further expansion of distribution footprint to over 1.6 Lakhs retail touchpoints.
• Beautiful Homes:
  • Further integration of Sleek International Pvt Ltd (modular kitchens, wardrobes, and fitted furniture business) with Asian Paints Limited.
  • Leverage synergies with White Teak (decorative and designer lighting) and Weatherseal (uPVC windows and door systems).
  • Expand the fabrics and furnishing portfolio.
• Industrial Business:
  • Launch ‘Cartisan’ premium car detailing and décor business.
  • Push sales of differentiated and technology-driven product solutions, making inroads in key sectors.
• Innovation:
  • Filed for 85+ patents of which 60 have been granted and 50% are commercialised.
• International Business:
  • Strengthen waterproofing and painting services.

Capital Expenditure Plans #

• Overall: Investments of approximately ₹8,750 Crores across key areas of backward integration, futuristic technology, and capacity expansions (greenfield and brownfield projects).
• Specific Projects:
  • Completed: Khandala (Maharashtra) and Kasna (Uttar Pradesh) brownfield expansions (120,000 KL/annum capacity increase).
  • Ongoing: Brownfield expansions at Ankleshwar (Gujarat) and Mysuru (Karnataka).
  • Planned: Greenfield plant in Madhya Pradesh (Pithampur) with a capacity of 400,000 KL/annum.
  • Backward Integration: Setting up integrated Vinyl Acetate Ethylene Emulsion (VAE) and VAM (Vinyl Acetate Monomer) manufacturing capabilities, and a white cement manufacturing facility in the UAE.

Efficiency Improvement Targets #

• Energy Conservation:
  • Target 75% renewable electricity across paint manufacturing facilities by 2025, 100% by 2030.
  • Target 48% reduction in specific electricity consumption by 2025, 53% by 2030 (FY 2013-14 baseline).
• Water Neutrality:
  • Target 400% water replenishment by 2025, 600% by 2030.
  • Target 72% reduction in specific non-process water by 2025, 75% by 2030 (FY 2013-14 baseline).
• Product Stewardship:
  • Cumulative GHG footprint reduction of 24,000 tCO2e by 2025, 49,000 tCO2e by 2030 (from FY 2022-23).
  • 100% architectural coatings to be lead and heavy metal-free by 2025.
  • Target 15% (by 2025) and 25% (by 2030) reduction in CMR raw materials.
  • Target 20% (by 2025) and 30% (by 2030) increase in renewable/bio-based raw materials.
• Nature Positive:
  • Target 32.8 (75% reduction) kg CO2e/KL by 2025, 26.2 (80% reduction) by 2030.
  • Target 30% recycled plastic in packaging by 2025, 60% by 2030.
  • Target 100 collection points across 25 towns/cities for plastic collection by 2025, 500 collection points across 100 towns/cities by 2030.
  • Specific hazardous waste reduction target: 0.5 Kg/KL (81% reduction) by 2025, 0.45 Kg/KL (83% reduction) by 2030.
  • Specific Non-hazardous waste reduction target: 6.7 Kg/KL (52% reduction) by 2025, 6.0 Kg/KL (57% reduction) by 2030.
  • Specific effluent generation reduction target: 17.5 L/KL (79% reduction) by 2025, 15.8 L/KL (81% reduction) by 2030.
• Sustainable supply chain management
• Proactive engagement with value chain partners to educate, empower, and align them with ESG commitments.

Potential Challenges and Opportunities #

• Challenges:
  • Continued geopolitical instability (Ukraine, Middle East) causing supply chain disruptions.
  • Volatility in global financial and commodity markets.
  • Continued effect of high inflation, especially in rural areas, impacting consumer demand.
  • Evolving competitive landscape.
  • Macroeconomic challenges, inflation, and forex unavailability in key geographies (South Asia and Egypt) impacting International Business.
• Opportunities:
  • Strong economic growth in India.
  • Public investments in infrastructure and connectivity.
  • Rapid digital transformation.
  • Expanding the per capita consumption of paint and widening the industry.
  • Growth potential in the home décor space.
  • Strong growth in Projects and Institutional business.
  • Leverage cutting-edge technology and innovation.

Scenario Analysis and Sensitivity to Key Assumptions #

• Inflation Impact: Persistent inflation, particularly in rural markets, has already led to a moderation in revenue growth and downtrading to economy products. Sensitivity analysis around raw material price fluctuations indicates a direct impact on margins. Management notes that correcting raw material prices and internal cost optimization support strong profit growth.
• Geopolitical Risk: Further escalation of conflicts in Ukraine and the Middle East could exacerbate supply chain issues and market volatility.
• Competitive Landscape: The widening competitive landscape provides both a challenge (maintaining market share) and an opportunity (industry expansion, benefitting consumers with more choices).
• Renewable Energy Targets: Failure to achieve renewable energy targets could increase operational costs and impact the Company’s ESG rating. The current achievement of 65.8% renewable electricity in decorative paint manufacturing suggests a positive trajectory.
• Water Neutrality Targets: Failure to achieve these could expose the Company to operational and reputational risks, especially in water-stressed regions (although currently, none of the Company’s sites are in water-stressed areas as per CGWB classification).
• Exchange Rate Volatility: The Company has experienced material impact for example the Egyptian Pound continued to be under pressure and depreciated by close to 53% by the end of FY 2023-24 on the back of an almost 66% depreciation in the previous year.

Audit and Compliance Analysis #

Auditor’s Opinion and Qualifications #

• The Statutory Auditors, Deloitte Haskins & Sells LLP, issued an unmodified opinion on the standalone and consolidated financial statements.
• The Secretarial Audit Report and Secretarial Compliance Report for FY 2023-24 contain no qualifications, reservations, or adverse remarks.

Key Accounting Policies and Changes #

• The Company adopted the Companies (Indian Accounting Standards) Amendment Rules, 2023, effective from April 1, 2023.
  • Ind AS 1: Changed to the presentation and disclosure of accounting policy.
  • Ind AS 8: Defined accounting estimate as well as laid down the treatment of accounting estimate.
  • Ind AS 12: Amended the definition of deferred tax assets and liabilities.
• The changes made to accounting policy are not deemed material.

Internal Control Effectiveness #

• The Company maintains adequate internal financial controls with reference to the financial statements, and these controls were operating effectively.
• The Company has a robust system of internal audit.
• A process for evaluating the effectiveness of internal control, is deemed adequate and in accordance with the law.

Regulatory Compliance Status #

• The Company complied with all applicable SEBI Regulations, circulars, and guidelines.
• The Company complied with Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).
• The Company maintains a compliance management system to monitor compliance status.

Legal Proceedings and Their Potential Impact #

• There are pending litigations against the Company.
• The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.
• Management believes that the company position in its legal proceedings will likely be upheld.
• The Competition Commission of India passed a favorable order for the Company, dismissing allegations of abuse of dominance. The competitor filed an appeal which is awaiting outcome.

Related Party Transactions #

• All related party transactions were in the ordinary course of business and on an arm’s length basis.
• The Audit Committee reviewed and approved all related party transactions.

Subsequent Events #

• The Board of Directors approved the Scheme of Amalgamation of Maxbhumi Developers Limited and Sleek International Private Limited with the Company, effective April 1, 2024, subject to regulatory approvals.

Analysis of Accounting Quality and Regulatory Risk Assessment #

• Accounting Quality: The unmodified audit opinions and the adoption of Ind AS, suggest a high level of accounting quality. The detailed disclosures, notes, and adherence to prescribed formats demonstrate transparency.
• Regulatory Risk Assessment: The Company’s proactive measures and monitoring systems demonstrate an adequate management of regulatory risks.
• Overall Risk: Based on available information, overall regulatory risk is deemed low.