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Company Information

Home » Market » Company Information

Asian Paints Ltd.

Sep 24
3443.60 +123.50 (+ 3.72 %)
 
VOLUME : 107465
Prev. Close 3320.10
Open Price 3350.00
TODAY'S LOW / HIGH
3325.15
 
 
 
3504.05
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
1908.30
 
 
 
3504.05
Sep 24
3448.60 +127.95 (+ 3.85 %)
 
VOLUME : 2775975
Prev. Close 3320.65
Open Price 3330.00
TODAY'S LOW / HIGH
3320.85
 
 
 
3505.00
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
1907.75
 
 
 
3505.00
Company Information Menu

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Market Cap. ( ₹ ) 330788.95 Cr. P/BV 25.83 Book Value ( ₹ ) 133.51
52 Week High/Low ( ₹ ) 3505/1908 FV/ML 1/1 P/E(X) 105.37
Bookclosure 11/06/2021 TTM EPS ( ₹ ) 36.38 Div Yield (%) 0.52
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2021-03 

Contingent Liabilities

These provisions represent estimates made mainly for probable claims arising out of litigations/disputes pending with authorities under various statutes (Excise duty, Sales tax). The probability and the timing of the outflow with regard to these matters depend on the final outcome of the litigations/disputes. Hence, the Company is not able to reasonably ascertain the timing of the outflow.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

a) Exposure in foreign currency - Hedged

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

There are no guarantees issued by the Company in accordance with section 186 of the Companies Act, 2013 read with rules issued thereunder.

1) Post-employment benefits :

The Company has the following post-employment benefit plans:

a) Defined benefit gratuity plan (Funded)

The Company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India.

Each year, the Board of Trustees and the Company review the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and assessment of the investment risk. The Company decides its contribution based on the results of this annual review. Generally, it aims to have a portfolio mix of sovereign debt instruments, debt instruments of Corporates and equity instruments. The Company aims to keep annual contributions relatively stable at a level such that no significant plan deficits (based on valuation performed) will arise.

Every two years an Asset-Liability-Matching study is performed in which the consequences of the investments are analysed in terms of risk and return profiles. The Board of Trustees, based on the study, takes appropriate decisions on the duration of instruments in which investments are done. As per the latest study, there is no Asset-Liability- Mismatch. There has been no change in the process used by the Company to manage its risks from prior periods. As the plan assets include significant investments in quoted debt and equity instruments, the Company is exposed to the risk of impacts arising from fluctuation in interest rates and risks associated with equity market.

Fair value of the Company’s own transferable financial instruments held as plan assets: NIL

b) Defined benefit pension plan (Unfunded)

The Company operates a defined benefit pension plan for certain specified employees and is payable upon the employee satisfying certain conditions, as approved by the board of directors.

c) Defined benefit post-retirement medical benefit plan (Unfunded)

The Company operates a defined post retirement medical benefit plan for certain specified employees and payable upon the employee satisfying certain conditions.

Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk

These Plans invest in long term debt instruments such as Government securities and highly rated corporate bonds. The valuation of which is inversely proportionate to the interest rate movements. There is risk of volatility in asset values due to market fluctuations and impairment of assets due to credit losses.

Interest Risk

The present value of the defined benefit liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on Government securities. A decrease in yields will increase the fund liabilities and vice-versa

Longevity Risk

The present value of the defined benefit liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary Risk

The present value of the defined benefit liability is calculated by reference to the future salaries of plan participants. As such, an increase in salary of the plan participants will increase the plan’s liability.

The most recent actuarial valuation of the plan assets and the present value of defined obligation were carried out as at 31st March, 2021 by M/s Transvalue Consultants. The present value of the defined benefit obligation and the related current service cost were measured using the projected unit credit method.

The sensitivity analyses presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the Balance Sheet.

The average duration of the defined benefit plan obligation at the end of the reporting period is 10.48 years (Previous year -10.59 years).

The Company expects to make a contribution of Rs. 41.65 crores (Previous year - Rs. 24.31 crores) to the defined benefit plans during the next financial years.

Provident Fund

The Provident Fund assets and liabilities are managed by ‘Asian Paints Office Provident Fund’ and ‘Asian Paints Factory Employees Provident Fund’ in line with The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees minimum interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of the services by the employee. In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumptions provided below, there is no shortfall as at 31st March 2021.

The Company contributed Rs. 15.35 crores (Previous Year - Rs. 13.63 crores) towards Asian Paints Office Provident Fund during the year ended 31st March 2021. The Company contributed Rs. 9.65 crores (Previous Year - Rs. 9.56 crores) towards Asian Paints Factory Employees Provident Fund during the year ended 31st March, 2021.

Other Long term employee benefits:

Annual Leave and Sick Leave assumptions

The liability towards compensated absences (annual leave and sick leave) for the year ended 31st March, 2021 based on actuarial valuation carried out by using Projected Accrued Benefit Method resulted in increase in liability by Rs. 27.90 crores. (Previous Year- increased by `19.70 crores)

A competitor of the Company had filed a complaint with the Competition Commission of India (CCI) alleging the Company to be hindering its entry in the decorative paints market by virtue of unfair use of the Company’s position of dominance in the market. On 14th January 2020, the CCI passed a prima facie Order under the provisions of the Competition Act, 2002 directing the Director General (DG) to conduct an investigation into the matter. The Company has received notices from the office of the DG seeking certain information and the Company has been providing the same from time to time.

The Board of Directors of the Company and of Reno Chemicals Pharmaceuticals and Cosmetics Private Limited (‘Reno’), a wholly owned subsidiary of the Company at their meetings held on 22nd January 2020 and 20th January 2020 respectively, had approved the Scheme of Amalgamation of Reno with the Company, subject to necessary statutory and regulatory approvals, including approval of the National Company Law Tribunal (NCLT) under Sections 230 to 232 and other applicable provisions of Companies Act, 2013. The final hearing of the petition for approval of the Scheme of amalgamation is pending before NCLT. Pending the approval of the Scheme of Amalgamation by NCLT, no effect has been given for the scheme in the Financial Statements.

INFORMATION ON RELATED PARTY TRANSACTIONS AS REQUIRED BY IND AS 24 - ‘RELATED PARTY DISCLO SURES’ FO R THE YEAR ENDED 31ST MARCH, 2021

a) Associates:

PPG Asian Paints Private Limited

Wholly owned subsidiaries of PPG Asian Paints Private Limited:

a) Revocoat India Private Limited

b) PPG Asian Paints Lanka Private Limited*

* The Company has ceased its business operations during the year.

Other entities where significant influence exist:

i) Post employment-benefit plan entity:

Asian Paints (India) Limited Employees’ Gratuity Fund

ii) Other :

Asian Paints Office Provident Fund (Employee benefit plan)

Asian Paints Factory Employees’ Provident Fund (Employee benefit plan)

Asian Paints Management Cadres’ Superannuation Scheme (Employee benefit plan)

Terms and conditions of transactions with related parties

1. The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured, interest free and will be settled in cash. There have been no guarantees received or provided for any related party receivables or payables.

2. Trade and other receivables are unsecured, interest free and will be settled in cash. During the year ended 31st March, 2021, the Company has recorded an amount of Rs. 0.17 crores from Asian Paints (Bangladesh) Ltd (Previous year - Rs. 0.30 crores) and Rs. 5.44 crores from Kadisco Paints and Adhesive Industry Share Company (Previous year- NIL) as provision for doubtful receivables in Statement of Profit and Loss. As at 31st March, 2021, the provision for doubtful receivables is Rs. 1.44 crores for Asian Paints (Bangladesh) Ltd (Previous year - Rs. 1.27 crores) and Rs. 5.44 crores for Kadisco Paints and Adhesive Industry Share Company (Previous year - NIL)

During the year ended 31st March, 2021, the Company has not written off any amount against doubtful receivables (Previous year - Rs. 0.03 crores).

The assessment of receivables is undertaken each financial year through examining the financial position of related parties, the market and regulatory environment in which related party operate and the accounting policy of the Company.

3. During the year ended 31st March 2021, the Company has provided an additional loan Rs. 1.85 crores ( Previous year - Rs. 6.25 crores) to its wholly owned subsidiary, Reno Chemicals Pharmaceuticals & Cosmetics Private Limited for its business activities. The loan is unsecured and repayable within a period of one year. The interest rate is in line with the prevailing yield of one year Government Security and the same is quarterly revised.

Basis of Segmentation:

Factors used to identify the reportable segments:

The Company has following business segments, which are its reportable segments. These segments offer different products and services, and are managed separately because they require different technology and production processes. Operating segment disclosures are consistent with the information provided to and reviewed by the chief operating decision maker.

The measurement principles of segments are consistent with those used in Significant Accounting Policies. There are no inter segment transfer.

All non-current assets of the Company are located in India.

There is no transactions with single external customer which amounts to 10% or more of the Company’s revenue.

During the previous year ended 31st March, 2020, the Company had made an assessment of the recoverable value of investment in its subsidiaries taking into account the past business performance, prevailing business conditions and revised expectations of the future performance.

a. The recoverable value of investment in Sleek International Private Limited was the value in use determined as per discounted cash flow method. The discount rate used was 12.25%.

b. Maxbhumi Developers Limited (MBL) is an asset holding Company having land held for sale. It had entered into a Memorandum of Understanding (MoU) with a buyer for sale of the land. The recoverable value of land from the proposed sale transaction less estimated incidental expenses is used to determine the value of investment in the subsidiary (Level 2 hierarchy of fair value measurement).

Total cash flows for leases including variable lease payments is Rs. 326.07 crores (Previous year - Rs. 315.81 crores) which includes finance cost on lease liability of Rs. 49.47 crores (Previous year - Rs. 55.70 crores).

The Financial Statements are approved for issue by the Audit Committee and the Board of Directors at their respective meetings conducted on 12th May, 2021.