i. Appointment of Directors
Independent Directors
The Board of Directors at their meetings held on 25th July
2023, 26th October 2023, and 28th March 2024, based on the
recommendations of the Nomination and Remuneration Committee, inter alia, approved
the following appointments, respectively, to the Board of Directors of the Company,
subject to the approval of the shareholders of the Company:
a. Appointment of Mrs. Ireena Vittal (DIN: 05195656) as an Additional
and Independent Director of the Company for a period of five years with effect
from 25th July 2023 to 24th July 2028.
b. Appointment of Mr. Soumitra Bhattacharya (DIN: 02783243) as an
Additional and Independent Director of the Company for a period of five years with effect
from
26th October 2023 to 25th October 2028.
c. Appointment of Dr. Copichand Katragadda (DIN: 02475721) as an
Additional and Independent Director of the Company for a period of five years with effect
from 1st April 2024 to 315t March 2029.
In the opinion of the Board, Mrs. Ireena Vittal,
Mr. Soumitra Bhattacharya, and Dr. Copichand Katragadda bring on board
the required experience, integrity, expertise, and relevant proficiency which will add
tremendous value to the Board in exercising their role effectively.
The requisite declarations and eligibility confirmations under the
provisions of the Act and SEBI Regulations were received from Mrs. Ireena Vittal, Mr.
Soumitra Bhattacharya, and Dr. Copichand Katragadda for considering their appointment as
Independent Directors.
The brief profiles of Mrs. Ireena Vittal, Mr. Soumitra Bhattacharya,
and Dr. Copichand Katragadda are given in the Governance section forming part of this
Integrated Annual Report and is also available on the Company's website at
https://www.asianpaints.com/ GovernanceStructure.html.
The appointment of Mrs. Ireena Vittal, Mr. Soumitra Bhattacharya, and
Dr. Gopichand Katragadda as the Independent Directors of the Company for the term as
mentioned above was subsequently approved by the shareholders of the Company through
special resolutions passed with the requisite majority by way of postal ballot via remote
e-voting on 15th September 2023, 22nd December 2023, and 8th
May 2024, respectively. Details of the same are provided in the Report of Corporate
Governance, forming part of this Integrated Annual Report.
Non-Executive Director
The Board of Directors at their meeting held on 9th May
2024, based on the recommendation of the Nomination and Remuneration Committee, inter
alia, approved the appointment of Ms. Nehal Vakil (DIN: 00165627) as a Non-Executive
Director of the Company with effect from the date of the ensuing ACM of the Company,
subject to approval of the shareholders, in terms of Sections 152 and 161 of the Act,
liable to retire by rotation.
Ms. Nehal Vakil was appointed as a Non-Executive Director by the Board
of Directors of the Company at their meeting held on 1st March 2022 with effect
from the said date, based on the recommendation of the Nomination and Remuneration
Committee, to fill the casual vacancy created on the Board on account of the sad demise of
Mr. Abhay Vakil, erstwhile Non-Executive Director. The shareholders thereafter approved
the said appointment of Ms. Nehal Vakil to hold office up to the date that late Mr. Abhay
Vakil would have held office i.e. up to the date of the ensuing ACM, through ordinary
resolution passed with the requisite majority by way of postal ballot via remote e-voting
on 20th April 2022.
The brief profile of Ms. Nehal Vakil is given in the Governance section
forming part of this Integrated Annual Report and is also available on the Company's
website at https://www.asianpaints.com/ GovernanceStructure.html.
The appropriate resolution for the appointment of Ms. Nehal Vakil as a
Non-Executive Director is being placed for the approval of the shareholders of the Company
at the ensuing ACM. Details with respect to her experience, attributes, skills, disclosure
of relationship between directors inter-se, directorships held in other companies and
committee memberships, etc., as stipulated under Regulation 36 of the Listing Regulations
and Secretarial Standard on General Meetings issued by the Institute of Company
Secretaries of India ("ICSI"), have been disclosed in the Annexure to the Notice
of the ACM.
ii. Retirement of Independent Directors
In terms of Section 149(11) of the Act, the following Independent
Directors have retired during the year:
a. Mr. Deepak Satwalekar (DIN: 00009627) retired with effect from the
dose of business hours on 30th September 2023, upon completion of his second
term of appointment as an Independent Director. He joined the Board in the year 2000.
He was the Chairman of the Board & the Company and a Member of the
Corporate Social Responsibility Committee & Investment Committee.
b. Mrs. Vibha Paul Rishi (DIN: 05180796) retired with effect from the
dose of business hours on 31st March 2024, upon completion of her second term.
She joined the Board in the year 2014. She was the Chairperson of the Risk Management
Committee & Stakeholders Relationship Committee and a Member of the Audit Committee
& Corporate Social Responsibility Committee.
c. Mr. Suresh Narayanan (DIN: 07246738) retired with effect from the
dose of business hours on 31st March 2024, upon completion of his first term of
five years. He joined the Board in the year 2019. He was the Chairman of the Nomination
and Remuneration Committee and a Member of the Investment Committee.
d. Mrs. Pallavi Shroff (DIN: 00013580) retired with effect from the
dose of business hours on
31st March 2024, upon completion of her first term of five
years. She joined the Board in the year 2019. She was a Member of the Audit Committee and
Risk Management Committee.
The Board places on record sincere appreciation for their outstanding
contribution towards the success of the Company, during their tenure as Independent
Directors on the Board of the Company.
iii. Retirement by rotation and subsequent re-appointment
In accordance with the provisions of Section 152 and other applicable
provisions, if any, of the Act and the Articles of Association of the Company, Mr. Jigish
Choksi (DIN: 08093304), Non-Executive Director of the Company, is liable to retire by
rotation at the ensuing ACM and being eligible has offered himself for re-appointment.
Based on performance evaluation and recommendation of the Nomination
and Remuneration Committee, the Board of Directors recommends his re-appointment as a
Non-Executive Director of the Company, liable to retire by rotation.
The brief profile of Mr. Jigish Choksi is given in the Governance
section forming part of this Integrated Annual Report and is also available on the
Company's website at https://www.asianDaints.com/ Governances tructure.html
The appropriate resolution for the re-appointment of Mr. Jigish Choksi
is being placed for the approval of the shareholders of the Company at the ensuing ACM.
Details with respect to his experience, attributes, skills, disclosure of relationship
between directors inter-se, directorships held in other companies and committee
memberships, etc., as stipulated under Regulation 36 of the Listing Regulations and
Secretarial Standard on General Meetings issued by ICSI, have been disclosed in the
Annexure to the Notice of the ACM.
The Managing Director & CEO and Independent Directors of the
Company are not liable to retire by rotation.
During the year under review, no Director of the Company has resigned.
Further, none of the Director of the Company is a director on the Board of the
subsidiaries as of 315t March 2024.
Key Managerial Personnel
Mr. Amit Syngle, Managing Director & CEO, and Mr. R J Jeyamurugan,
CFO & Company Secretary, are the Key Managerial Personnel ("KMP") of the
Company in accordance with the provision of Sections 2(51) and 203 of the Act read with
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
During the year under review, there were no changes to the KMP of the
Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act (including any statutory
modification(s) and/or re-enactment(s) thereof for the time being in force), the Directors
of the Company state that:
a. in the preparation of the annual accounts for the financial year
ended 315t March 2024, the applicable Accounting Standards have been followed
and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as at 315t
March 2024 and of the profits of the Company for the financial year ended 315t
March 2024;
c. proper and sufficient care has been taken for the maintenance of
adeguate accounting records
in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts have been prepared on a 'going concern' basis;
e. proper internal financial controls laid down by the Directors are
followed by the Company and that such internal financial controls are adeguate and
operating effectively; and
f. proper systems to ensure compliance with the provisions of all
applicable laws were in place and that such systems are adeguate and operating
effectively.
The aforesaid statement has also been reviewed and confirmed by the
Audit Committee of the Board of Directors of the Company.
Declaration from Directors
The Company has, inter alia, received the following declarations
from all the Independent Directors confirming that:
a. they meet the criteria of independence as prescribed under the
provisions of the Act, read with Schedule IV and Rules issued thereunder, and the Listing
Regulations. There has been no change in the circumstances affecting their status as
Independent Directors of the Company;
b. they have complied with the Code for Independent Directors
prescribed under Schedule IV to the Act; and
c. they have registered themselves with the Independent Director's
Database maintained by the Indian Institute of Corporate Affairs and have qualified the
online proficiency self-assessment test or are exempted from passing the test as reguired
in terms of
Section 150 of the Act read with Rule 6 of the Companies (Appointment
and Qualifications of Directors) Rules, 2014.
The Board of Directors of the Company has taken on record the
declaration and confirmation submitted by the Independent Directors after undertaking due
assessment of the veracity of the same.
None of the Director of the Company are disqualified from being
appointed as Directors as specified under Section 164(1) and 164(2) of the Act read with
Rule 14(1) of the Companies (Appointment and Qualifications of Directors) Rules, 2014
(including any statutory modification(s) and/or re-enactment(s) thereof for the time being
in force) or are debarred or disqualified by the Securities and Exchange Board of India
("SEBI"), Ministry of Corporate Affairs ("MCA") or any other such
statutory authority.
All members of the Board and Senior Management have affirmed compliance
with the Code of Conduct for Board and Senior Management for the financial year 2023-24.
The Company had sought the following certificates from independent and
reputed Practising Company Secretaries confirming that:
a. none of the Director on the Board of the Company has been debarred
or disqualified from being appointed and/or continuing as Directors by the SEBI/MCA or any
other such statutory authority.
b. independence of the Directors of the Company in terms of the
provisions of the Act, read with Schedule IV and Rules issued thereunder and the Listing
Regulations.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, 8 meetings of the Board of Directors were
held. The details of the meetings of the Board of Directors of the Company held and
attended by the Directors during the financial year 2023-24 are given in the Report of
Corporate Governance forming part of this Integrated Annual Report.
The maximum interval between any two meetings did not exceed 120 days,
as prescribed by the Act and the Listing Regulations.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
All Independent Directors are familiarised with the operations and
functioning of the Company at the time of their appointment and on an ongoing basis.
The details of the training and familiarisation programme are given in
the Report of Corporate Governance forming part of this Integrated Annual Report and are
also available on the Company's website at https://www.asianpaints.
com/FamiliarisationProaramme.html.
COMMITTEES
As of 315t March 2024, the Board has 6 Committees:
Audit Committee, Nomination and Remuneration Committee, Corporate
Social Responsibility Committee, Risk Management Committee, Stakeholders Relationship
Committee, and Investment Committee.
During the year under review, the Board of Directors of the Company
have delegated the authority to approve the transmission, dematerialisation of shares,
etc. to a Managing Committee comprising the Managing Director & CEO and CFO &
Company Secretary of the Company. A summary of approved transmissions, dematerialisation
of shares, etc. is placed before the Board of Directors from time to time as per the
Listing Regulations.
During the year, all recommendations of the Committees of the Board
which were mandatorily required have been accepted by the Board.
A detailed note on the composition of the Board and its Committees,
governance of committees including its terms of reference, number of committee meetings
held during the financial year 2023-24, and attendance of the members, is provided in the
Report of Corporate Governance forming part of this Integrated Annual Report. The
composition and terms of reference of all the Committees of the Board of Directors of the
Company are in line with the provisions of the Act and the Listing Regulations.
AUDITORS AND AUDITOR'S REPORT Statutory Auditors
Deloitte Haskins &. Sells LLP ("DHS"), Chartered
Accountants (Firm's Registration No. 1 17366W/W-100018), were re-appointed as the
Statutory Auditors of the Company at the 75th ACM held on 29th June
2021, to hold office till the conclusion of the 80th ACM for the financial year
2025-26.
DHS has confirmed that they are not disqualified from continuing as
Statutory Auditors of the Company and satisfy the independence criteria. The profile of
the Statutory Auditors is available on the Company's website at https://www.
asianDaints.com/Auditors.html.
The Company's Policy on engagement of Statutory Auditors of the Company
is available on the Company's website at https://www.asianpaints.com/
AuditorsEnQaaementPolicv.html.
The Statutory Auditors have issued an unmodified opinion on the
financial statements for the financial year 2023-24 and the Statutory Auditor's Report
forms part of this Integrated Annual Report.
Secretarial Auditors
The Board of Directors of the Company, on the recommendation made by
the Audit Committee, has re-appointed Dr. K. R. Chandratre, Practising Company Secretary
(Certificate of Practice No. 5144), as the Secretarial Auditors to conduct an audit of the
secretarial records for the financial year 2024-25, based on the confirmation of the
eligibility and consent received from Dr. K. R. Chandratre. The Secretarial Auditor has
confirmed that he is not disqualified to be appointed as such.
The profile of the Secretarial Auditors is available on the Company's
website at https://www.asianDaints.com/ Auditors.html.
The Secretarial Audit Report received from Dr. K. R. Chandratre, for
the financial year 2023-24 under Section 204 of the Act read with Rules made thereunder
and Regulation 24A of the Listing Regulations, is set out in Annexure (A-1) to this
Report.
The Secretarial Compliance Report received from Dr. K. R. Chandratre,
for the financial year 2023-24, in relation to compliance with all applicable SEBI
Regulations/ Circulars/Cuidelines issued thereunder, Secretarial Standards issued by ICSI,
pursuant to requirement of Regulation 24A of the Listing Regulations, is set out in
Annexure (A-2) to this Report. The Secretarial Compliance Report has been voluntarily
enclosed as good disclosure practice.
As required by Schedule V of the Listing Regulations, the Auditor's
Certificate on Corporate Governance received from Dr. K. R. Chandratre is annexed to the
Report on Corporate Governance forming part of this Integrated Annual Report.
The Secretarial Audit Report and Secretarial Compliance Report for the
financial year 2023-24, does not contain any qualification, reservation, or adverse
remark.
Cost Auditors
The Board of Directors of the Company, on the recommendation made by
the Audit Committee, appointed Joshi Apte & Associates, Cost Accountants (Firm
Registration No. 000240), as the Cost Auditors of the Company for the financial year
2023-24 at a remuneration ofRs 9,00,000 plus applicable taxes and reimbursement of
out-of-pocket expenses at actuals. Joshi Apte & Associates, being eligible, consented
to act as the Cost Auditors of the Company for the financial year 2023-24. Joshi Apte
& Associates were appointed in place of RA & Co.,
Cost Accountants (Firm Registration No. 000242), who had incurred a
disqualification to continue as the Cost Auditors of the Company under Section 141(3) read
with Section 148 of the Act and consequently vacated their office as the Cost Auditors of
the Company with effect from 19th March 2024.
The shareholders of the Company ratified the proposed remuneration
payable to Joshi Apte &
Associates to audit the cost records of the Company for the financial
year ending 315t March 2024, byway of an ordinary resolution passed with the
requisite majority byway of postal ballot via remote e-voting on 8th May 2024,
details of which are given in the Report of Corporate Governance forming part of this
Integrated Annual Report.
The profile of the Cost Auditors is available on the Company's website
at https://www.asianDaints.com/ Auditors.html.
The Company has maintained cost records for certain products as
specified by the Central Government under Section 148(1) of the Act. Joshi Apte &
Associates, the Cost Auditors, are in the process of carrying out the cost audit for
applicable products during the financial year 2023-24.
Further, the Board of Directors of the Company, on the recommendation
made by the Audit Committee, re-appointed Joshi Apte & Associates, as the Cost
Auditors of the Company to conduct the audit of cost records of applicable products for
the financial year 2024-25 at a remuneration of Rs 9,00,000 plus applicable taxes and
reimbursement of out-of-pocket expenses at actuals.
Joshi Apte & Associates, being eligible, have consented to act as
the Cost Auditors of the Company for the financial year 2024-25 and have confirmed that
they are not disqualified to be appointed as such.
Appropriate resolution for ratification of the proposed remuneration
payable to Joshi Apte & Associates to audit the cost records of the Company for the
financial year ending 315t March 2025, is being placed for the approval of the
shareholders of the Company at the ensuing ACM.
The Cost Audit Report for the financial year 2022-23 does not contain
any qualification, reservation, or adverse remark. The Cost Audit Report for the financial
year 2023-24 will be submitted within the prescribed timelines.
Internal Auditors
The Company has in place a robust Internal Audit function, which is led
by Mr. Alok Agrawal, Chief Internal Auditor, and ably supported by a team of chartered
accountants, certified internal auditors, ISO-certified audit professionals, and an
electrical engineer. The Internal Audit function also partners with professional firms in
the area of fraud investigation, market intelligence, IT audits, and with other firms
having expertise in certain specific areas. The audit conducted by the Internal Audit team
is based on an internal audit plan, which is reviewed each year by the Audit Committee.
These audits are based on risk and control-based methodology and, inter alia,
involve the review of internal controls and governance processes, adherence to management
policies, and review of statutory compliances.
The Chief Internal Auditor reports functionally to the Audit Committee
and administratively to the Managing Director & CEO of the Company. He participates in
the meetings of the Audit Committee and Risk Management Committee. The Audit Committee met
the Internal Auditor without the presence of the other members of the management during
the year under review.
The Internal Audit team use cutting edge technology to conduct audits,
data analysis, fraud focused analysis, managing audits, etc. The Chief Internal Auditor
shares his findings on financial, safety, information security, compliance, reporting
risks and other critical risks on a periodic basis with the Audit Committee along with the
corrective and preventive action plan.
The Company has well established Internal Audit Charter, inter alia,
to further enhance the governance mechanism, elaborate the scope of work of the internal
audit function, specify the reporting structure of the Chief Internal Auditor, elaborate
the authority and responsibilities of the Chief Internal Auditor. The abridged version of
the Internal Audit Charter is available on the Company's website at https://www.
asianDaints.com/AbridaedlACharter.html.
Report from an independent firm
During the year under review, the Company engaged a firm of accountants
to conduct guality assurance review and maturity assessment for Internal Audit function.
It was affirmed that the current state of the Internal Audit function is in conformance
with the approved Internal Audit framework and current industry practices as per the
internal audit standards issued by the Institute of Internal Auditors ("IIA").
Reporting of Frauds by Auditors
None of the Auditors of the Company has identified and reported any
fraud as specified under the second proviso of Section 143(12) of the Act.
RELATED PARTY TRANSACTIONS
Related party transactions at Asian Paints
The Company has been entering into transactions with related parties,
including entities directly and/or indirectly controlled by members of the Promoter(s)
& Promoter(s) Croup, for its business purposes for more than three decades. These
transactions primarily include transactions relating to the purchase of raw materials,
packing materials, intermediaries, and such other transactions permissible and provided
for under the provisions of the Act, the Listing Regulations, and the Income-Tax laws.
The related parties with which the Company contracts:
a. primarily supply their products to the Company;
b. bring in advanced and innovative technology for the benefit of the
Company;
c. customise their products to suit the Company's specific
reguirements;
d. help in enhancing the Company's purchase cycles and assure just in
time supply with resultant benefits - notably on working capital.
All of the aforementioned benefits provide the Company a competitive
and cost advantage in the market, without compromising on the quality/service levels and
based on sound commercialjudgement.
The Company follows robust internal processes before entering into
transactions with related parties and the considerations which govern the transactions
with related parties are the same as those applicable for other vendors of the Company.
All the transactions are undertaken for the benefit of the Company and in compliance with
the applicable laws.
In order to ensure transparency and arm's length pricing for such
supplies by related parties, the Company seeks multiple quotes from related parties and
unrelated parties of equal standing and appoints a related party only if such party offers
competitive terms, including pricing, as compared to unrelated parties. Along with
pricing, manufacturing capabilities to effectively serve the Company's requirements and
quality parameters are primary factors taken into consideration.
As a part of the Company's annual planning process, before the
beginning of a financial year, details of all the transactions proposed to be executed
with related parties, including the estimated amount of transactions to be executed,
manner of determination of pricing and commercial terms, etc. are presented to the Audit
Committee for its consideration and approval. The details of said transactions are also
placed before the Board of Directors for their information. The Director, if interested in
a transaction, does not participate in the discussion of the item relating to that
transaction.
Further approval is sought during the year for any new
transaction/modification to the previously approved limits/ terms of contracts with the
related parties. This is followed by a guarterly review of the related party transactions
by the Audit Committee.
Policy
The Company's Policy on dealing with and materiality of related party
transactions is available on its website at https://www.asianDaints.conn/RPTPolicv.htnnl.
During the year under review, the Audit Committee approved revisions to
the Framework for transactions with related parties of the Company, to further enhance the
governance mechanism.
Review
All transactions with related parties were reviewed and approved by the
Audit Committee and were in accordance with the Policy on dealing with and materiality of
related party transactions.
There are no materially significant related party transactions that may
have potential conflict with the interest of the Company at large.
All contracts/arrangements/transactions entered into by the Company
during the year under review with related parties were in the ordinary course of business
and on arm's length basis in terms of the provisions of the Act. Further, there are no
contracts or arrangements entered into under Section 188(1) of the Act, hence no
justification has been separately provided in that regard.
Statutory Disclosures
The details of the related party transactions as per Ind AS-24 on
Related Party Disclosures are set out in Note no. 37 to the standalone financial
statements of the Company.
The Company in terms of Regulation 23 of the Listing Regulations
submits on the date of publication of its standalone and consolidated financial results
for the half year, disclosures of related party transactions, in the format specified by
the SEBI. The said disclosures are available on the Company's website at
https://www.asianDaints.conn/StatutorvFilincis.htnnL
Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2)
of the Companies (Accounts) Rules, 2014, is set out in Annexure (B) to this Report.
INTERNAL CONTROLS
The Company has in place well-established and robust internal control
systems which are commensurate with the nature of its business, size & scale and
complexity of its operations and are implemented across all processes, units and
functions. Internal control systems comprising of policies and procedures are designed to
ensure sound management of the Company's operations, safekeeping of its assets, optimal
utilisation of resources, reliability of its financial information and compliance. Systems
and procedures are periodically reviewed to keep pace with the growing size and complexity
of the Company's operations. The Audit Committee also periodically reviews the adeguacy
and effectiveness of internal control systems and provides guidance for further
strengthening them.
During the year under review, no material observation has been made by
the Internal Auditor or Statutory Auditors of the Company in relation to the efficiency
and effectiveness of such controls.
INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
The Company has designed and implemented a comprehensive Internal
Financial Controls System over financial reporting to ensure that all transactions are
authorised, recorded and reported correctly in a timely manner. The Company's Internal
Financial Controls over financial reporting provide reasonable assurance over the
integrity and reliability of the financial statements of the Company.
The Company has detailed work instructions, Standard Operating
Procedures, policies, processes and manuals that lays down roles, responsibilities, and
actions reguired. Functional heads are responsible for ensuring compliance with all laws
and regulations and also with the policies and procedures laid down by the management.
The Company's Enterprise Resource Planning ("ERP") system of
SAP S/4 HANA is well leveraged and implemented towards day-to-day transaction accounting
and financial reporting. The Company's ERP along with allied information technology
solutions provides a strong technology architecture for financial reporting controls.
The Company's investment in an advanced automation system to enable
automated accounting and financial closing procedures in various areas has resulted in
better accuracy and faster financial reporting with fewer manual interventions. The
financial statement preparation has been automated to ensure end-to-end system-driven
reporting across the Croup reducing the scope of manual errors.
The Company's Shared Services Center has taken ahead the digitalisation
journey and delivered aggressive targets for on-time payment processing with near zero
errors. The efforts towards digital processing, touchless processing, use of a virtual
assistant, on-the-fly intelligence tools, use of optical character reader technology,
mobile apps for employee reimbursements, car hire, hotel and travel booking, have created
strong delight to stakeholders with related efficiencies in the process. The Company is
continuously investing in new technology to enable smoother and error-proof processes.
The Company actively tracks all changes in Accounting Standards, the
Act, and other applicable regulations and makes changes to the underlying systems,
processes, and financial controls to ensure adherence to the same. With increased business
complexities, detailed accounting and financial treatment are decided for dealing with
newer products, services, assets, commitments, contracts, and arrangements. All resultant
changes to the policy and impact on financials are disclosed after due validation with the
Statutory Auditors, to the Audit Committee.
The Company has refreshed the Risk Assessment and Control Matrix for
all processes involved in financial reporting and periodically tested them for design and
operating effectiveness. The results of these tests are reported to the Audit Committee.
The Company gets its standalone financial results audited every quarter
by its Statutory Auditors.
The policies ensuring uniform accounting treatment are followed by the
subsidiary companies as well. International subsidiaries provide the information required
for the consolidation of accounts in the format prescribed by the Company. The accounts of
the subsidiary and joint venture companies are audited and certified by their respective
Statutory Auditors for consolidation. The Company has implemented audit trail on the books
of accounts.
190 Asian Paints I imiterl
VIGIL MECHANISM
The Company promotes ethical behaviour in all its business activities
and is in line with the best governance practices. The Company has a robust vigil
mechanism through its Whistle Blower Policy approved and adopted by the Board of Directors
of the Company in compliance with the provisions of Section 177(10) of the Act and
Regulation 22 of the Listing Regulations.
The Company has engaged an agency to manage the "Ethics
Hotline" which can be used to, inter alia, report any instances of financial
irregularities, breach of code of conduct, abuse of authority, disclosure of financial/
unpublished price sensitive information other than for legitimate purposes,
unethical/unfair actions concerning Company vendors/suppliers, malafide manipulation of
Company records, discrimination to the Code of Conduct in an anonymous manner.
The Policy also provides adequate protection to all its stakeholders
who report unethical practices and irregularities.
Any incidents that are reported are investigated and suitable action is
taken in line with the Company's Whistle Blower Policy. No person is denied access to the
Audit Committee.
The Whistle Blower Policy aims to:
a. allow and encourage stakeholders to bring to the management's notice
concerns about unethical behaviour;
b. provide protection against victimisation;
c. ensure timely and consistent organisational response; and
d. build and strengthen a culture of transparency and trust.
The Whistle Blower Policy has been appropriately communicated within
the Company and its Croup and is also available on the Company's website at
https://www.asianDaints.conn/WBPolicv.htnnl.
COMPLIANCE MANAGEMENT
The Company has in place a comprehensive and robust legal compliance
management digital tool, which is devised to ensure compliance with all applicable laws
which impact the Company's business. Automated alerts are sent to compliance owners to
ensure compliance within stipulated timelines. The portal has a dedicated license module
wherein all the licenses applicable to various locations of the Company are updated and
tracked for renewal. Alerts for renewal of licenses is sent at the frequency set in the
portal based on regulatory requirements.
This proactive measure heips keep everyone on track and avoid any
penaities or other iegai issues that couid arise From non-compliance. The compliance
owners certify the compliance status which is reviewed by compliance approvers and a
consolidated dashboard is presented to the respective Functional heads and Compliance
OFFicer.
A certiFicate oF compliance with ail applicable laws and regulations
along with the corrective and preventive action, iF any, is placed beFore the Audit
Committee and Board oF Directors on a quarterly basis.
Additionally, the Company has also implemented a centralised automated
tool designed to streamline the monitoring and management oF show cause notices/
inspection reports/visit reports/other communication ("notices") received from
the statutory authorities. It automatically sends alerts to Central Functions and Business
Heads when a notice is uploaded and allows them to suggest modiFications to responses to
the notices prepared by the team. This tool enables the Company to eFFiciently track the
status oF notices received across all locations and link related notices From the same
authority. It also supports the generation oF customised reports and dashboards, providing
a clear view oF the notices received and their status, thereby Facilitating a seamless
review process.
NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy oF the Company, inter alia,
provides that the Nomination and Remuneration Committee shall: (i) formulate the criteria
For Board membership, including the appropriate mix oF Executive & Non-Executive
Directors; (ii) lay down the criteria For appointment in Senior Management positions;
(iii) approve and recommend compensation packages and policies For Directors and Senior
Management; (iv) lay down the process for the effective manner of performance evaluation
of the Board, its Committees and the Directors; and (v) play the role of Compensation
Committee in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 and administer the Asian Paints Employee Stock Option Plan 2021.
During the year under review, the Nomination and Remuneration Policy
was amended to, inter alia, include the revised definition of senior management to
reflect the intent of the law in letter and spirit.
The salient Features of the Nomination and Remuneration Policy of the
Company are outlined in the Report of Corporate Governance Forming part of this Integrated
Annual Report. The Policy is also available on the Company's website at
https://www.asianpaints.com/NRCPolicv.html.
REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR
MANAGEMENT
The remuneration paid to the Directors, Key Managerial Personnel and
senior management is in accordance with the Nomination and Remuneration Policy Formulated
in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the
Listing Regulations.
Further details on the same are given in the Report of Corporate
Governance Forming part of this Integrated Annual Report.
Mr. Amit Syngle, Managing Director & CEO of the Company, has not
received any remuneration or commission From any of the subsidiary companies. Further, the
Company does not have any holding company, hence, a circumstance of any remuneration or
commission From a holding company does not arise.
The information required under Section 197 of the Act read with
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in
respect of Directors and employees of the Company is set out in Annexure (C) to this
Report.
BOARD EVALUATION
The Nomination and Remuneration Policy of the Company empowers the
Nomination and Remuneration Committee to Formulate a process For effective evaluation of
the performance of the Directors, Committees of the Board, and the Board as a whole.
During the year under review, the Nomination and Remuneration Committee engaged Egon
Zehnder, external consultant, to conduct the evaluation of the Board, Committees thereof,
and the Directors.
The criteria For the evaluation and the outcomes thereto are set out in
the Report of Corporate Governance Forming part of this Integrated Annual Report.
ASIAN PAINTS EMPLOYEE STOCK OPTION PLAN 2021 ("2021 PLAN")
The shareholders of the Company at their 75th ACM held on 29th
June 2021, have authorised the Board to offer, issue, and provide stock options to the
eligible employees of the Company and its subsidiaries under the 2021 Plan.
The 2021 Plan was introduced to incentivise, retain, and attract key
talent through a performance-based stock option grant program and consequently enhance
shareholder value.
The 2021 Plan aims to create a sense of ownership among the eligible
employees and to align their medium and long- term compensation with the Company's
performance.
The vesting criteria are primarily based on the achievement of annual
performance parameters by the eligible employees, number of years of service, and such
other criteria as may be prescribed by the Nomination and Remuneration Committee i.e., the
Administrator, from time to time. The exercise price for stock options granted to eligible
employees is at 50% of the "Reference Share Price" of the Company (as defined
under the 2021 Plan).
The equity shares transferred under the 2021 Plan pursuant to exercise
ranks pari-passuwith the existing equity shares of the Company.
The details of the stock options granted under the 2021 Plan and the
disclosures in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 ("SEBI SBEB Regulations") are set out in Annexure (D) and are
available on the Company's website at https://www.asianpaints.com/AnnualReports.html.
The 2021 Plan is being implemented in accordance with the provisions of
the Act and the SEBI SBEB Regulations.
The certificate from the Secretarial Auditor on the implementation of
the 2021 Plan in accordance with Regulation 13 of the SEBI SBEB Regulations, has been
uploaded on the Company's website at https://www.asianDaints.conn/AnnualReDorts.htnnl. The
certificate will also be available for electronic inspection by the members during the ACM
of the Company.
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
During the financial year 2023-24, the Company has spent Rs 91.26
crores towards CSR expenditure, including set-off of excess CSR spends of Rs 0.22 crore
made by the Company in the previous financial years, in terms of the CSR annual action
plan approved by the CSR Committee and the Board of Directors, from time to time. The CSR
initiatives of the Company were under the thrust area of health & hygiene, enhancing
vocational skills, water stewardship, and disaster management.
The CSR annual action plan of the Company for the financial years
2023-24 and 2024-25 is available on the Company's website at
https://www.asianpaints.com/about-us.html.
The CSR Committee confirms that the implementation and monitoring of
the CSR Policy was done in compliance with the CSR objectives and policy of the Company.
The Company's CSR Policy statement and annual report on the CSR
activities undertaken during the financial year ended 315t March 2024, in
accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility
Policy) Rules, 2014 ("CSR Rules") is set out in Annexure (E) to this Report.
During the year, no revision was made to the CSR Policy of the Company.
A synopsis of the report of the independent agency for the CSR
projects, to which impact assessment is applicable in terms of the provisions of Section
135 of the Act read with the CSR Rules, has been provided as part of the said annual
report on CSR. The detailed report is available on the Company's website at
https://www.asianpaints.com/about-us.html.
RISK MANAGEMENT
The Company recognises that risk is an integral and inevitable part of
business and it is fully committed to managing the risks proactively and efficiently. Our
success as an organisation depends on our ability to identify and leverage the
opportunities while managing the risks. The Company has a disciplined process for
continuously assessing risks, in the internal and external environment along with
minimising the impact of risks. The Company incorporates the risk mitigation steps in its
strategy and operating plans.
The objective of the Risk Management process in the Company is to
enable value creation in an uncertain environment, promote good governance, address
stakeholder expectations proactively, and improve organisational resilience and
sustainable growth.
The Company has in place a Risk Management Policy which articulates the
approach to address the uncertainties in its endeavour to achieve its stated and implicit
objectives. The Risk Management Committee of the Company has been entrusted by the Board
with the responsibility of reviewing the risk management process in the Company and to
ensure that all short-term and long-term implications of key strategic and business risks
are identified and addressed by the management. The Audit Committee takes the mantle of
reviewing the risk management systems of the Company.
During the year, the Company has also reviewed its Risk Management
Policy and no revision was made in the said Policy. The Company regularly identifies
uncertainties and after assessing them, devises short- term and long-term actions to
mitigate any risk which could materially impact the Company's long-term plans. Mitigation
plans for significant risks are well integrated with business plans and are reviewed on a
regular basis by the senior leadership.
The Company periodically reviews and improves the adequacy and
effectiveness of its risk management systems considering the rapidly changing business
environment and evolving complexities. The Company, through the risk management process,
aims to contain the risk within the risk appetite.
There are no risks which in the opinion of the Board threaten the
existence of the Company. Further, some of the risks that may pose challenges are set out
in the Governance section forming part of this Integrated Annual Report.
The Risk Management Policy of the Company is available on the Company's
website at https://www.asianDaints.conn/RMPolicv.htnnl.
INTEGRATED ANNUAL REPORT
The Company continues with its integrated reporting journey in the
current financial year, aligning with its purpose of bringing joy to people's lives. This
is the fourth year of publication of the Integrated Annual Report of the Company in line
with the <IR> framework published by the International Financial Reporting Standards
Foundation (IFRS).
The Global Reporting Initiative reported in this Integrated Annual
Report have been subject to Reasonable/
Limited Assurance. The Assurance Report issued by Price Waterhouse
Chartered Accountants LLP has been annexed to this Integrated Annual Report.
The Integrated Annual Report comprises both financial and non-financial
information to illustrate how different 'capitals' are deployed to enable the creation of
value, thereby enabling the members to make well-informed decisions and have a better
understanding of the Company's long-term perspective and value creation for all the
stakeholders.
The Integrated Annual Report, this year, is structured around
Environmental, Social and Governance ("ESG") commitments and how they are
integrated into the Company's business strategy. The Company's focus on creating
sustainable operations, supported by empowered people and world-class governance, helps to
build and grow the Company's business seamlessly.
The key initiatives taken by the Company, inter alia, with
respect to the stakeholder engagement, ESG, Health & Safety of employees/workers, and
progress against ESG commitments have been provided separately under various sections of
this Integrated Annual Report.
The Board acknowledges its responsibility for the integrity of the
report and the information contained therein.
Corporate Governance Report
In compliance with Regulation 34(3) of the Listing Regulations, a
separate report on the Corporate Governance, as stipulated under the Listing Regulations
is presented in a separate section forming part of this Integrated Annual Report.
Business Responsibility and Sustainability Report
In compliance with Regulation 34(2)(f) of the Listing Regulations, the
Business Responsibility and Sustainability Report ("BRSR") on the environmental,
social, and governance disclosures, including BRSR Core consisting of Key Performance
Indicators as stipulated under the Listing Regulations is presented in a separate section
forming part of this Integrated Annual Report.
ANNUAL RETURN
In accordance with Section 92(3) read with Section 134(3)(a) of the Act
and the Companies (Management and Administration) Rules, 2014, the Annual Return of the
Company as of 315t March 2024 in Form MGT-7, is available on the Company's
website at https://www.asianDaints.conn/AnnualReDorts.htnnl.
The Annual Return will be submitted to the Registrar of Companies
within the timelines prescribed under the Act.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirements of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 ("the Prevention of Sexual
Harassment Act"), the Company has formulated a Policy on Prevention of Sexual
Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at
workplace and an Internal Complaints Committee has also been set up to redress any such
complaints received.
The Company is committed to providing a safe and conducive work
environment to all of its employees and associates. Further, the Policy also gives shelter
to contract workers, probationers, temporary employees, trainees, apprentices of the
Company and any person visiting the Company at its office.
The Company periodically conducts sessions for employees across the
organisation to build awareness about the Policy and the provisions of the Prevention of
Sexual Harassment Act.
Complaints of sexual harassment received during the financial year
2023-24 by the Company were investigated in accordance with the procedures prescribed and
adequate steps were taken to resolve them. Further details with respect to the complaints
of sexual harassment are provided in the Report on Corporate Governance forming part of
this Integrated Annual Report.
The Company's Policy for prevention of sexual harassment is available
on the Company's website at https://www.asianDaints.conn/POSHPolicv.htnnl.
REGISTRAR AND SHARE TRANSFER AGENT
Pursuant to an Order dated 18th December 2023 passed by the
Mumbai Bench of the National Company Law Tribunal, TSR Consultants Private Limited,
Registrar and Share Transfer Agent of the Company has been amalgamated with Link Intime
India Private Limited ("LIIPL") with effect from 22nd December 2023.
LIIPL is the Registrar and Share Transfer Agent of the Company.
SHARE CAPITAL
During the financial year 2023-24, there was no change in the
authorised, issued, subscribed, and paid-up share capital of the Company.
Confirmations:
a. During the year under review, the Company has not:
i) issued any shares, warrants, debentures, bonds, or any other
convertible or non-convertible securities.
ii) issued equity shares with differential rights as to dividend,
voting or otherwise.
iii) issued any sweat equity shares to its Directors or employees.
iv) made any change in voting rights.
v) reduced its share capital or bought back shares.
vi) changed the capital structure resulting from restructuring.
vii) failed to implement any corporate action.
b. The Company's securities were not suspended for trading during the
year.
c. The disclosure pertaining to the explanation for any deviation or
variation in connection with certain terms of a public issue, rights issue, preferential
issue, etc., is not applicable to the Company.
UNCLAIMED DIVIDEND
I n terms of applicable provisions of the Act read with the Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016 ("IEPF Rules"), unclaimed dividend amounting to Rs 2.51 crores was
transferred by the Company to the Investor Education and Protection Fund
("IEPF"), established by the Government of India, during the year under review.
Further, 8,32,780 shares were transferred to the demat account of the
IEPF Authority during the year under review, in accordance with the IEPF Rules, as the
dividend(s) has not been claimed by the shareholders for 7 consecutive years or more.
The details of unclaimed dividend lying in the unclaimed dividend
accounts of the Company and details of resultant benefits arising out of shares already
transferred to IEPF as on 315t March 2024 is provided in the General
Shareholder Information section forming part of this Integrated Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators
or Courts or Tribunals impacting the going concern status of the Company and its
operations in the future.
The Competition Commission of India ("Commission") had passed
a prima facie Order dated 14th January 2020 directing the Director General
("DC") to conduct an investigation against the Company, under the provisions of
Section 26(1) of the Competition Act, 2002 ("the Competition Act"). Based on
this Order, the DC initiated the investigation against the Company and on 17th
December 2021 submitted its consolidated Investigation Report to the Commission.
The Hon'ble Commission vide its Order dated 8th September
2022 had noted that the Company has not contravened any charging sections i.e., Sections
3(4) and 4 read with Section 3(1) of the Competition Act. The said Order of the Hon'ble
Commission has been appealed in the National Company Law Appellate Tribunal by the
complainants.
LOANS AND INVESTMENTS
Details of loans, guarantees and investments covered under the
provisions of Section 186 of the Act read with the Companies (Meetings of Board and its
Powers) Rules, 2014, as on 315t March 2024, are set out in Note no. 35(B) to
the standalone financial statements of the Company.
DEPOSITS
During the year under review, the Company has not accepted any deposit
within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of
Deposits) Rules, 2014.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with Secretarial Standards issued by ICSI on
Meetings of the Board of Directors, General Meetings, and voluntarily the Secretarial
Standards on Dividend and Report of the Board of Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on the conservation of energy, technology absorption
and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act
read with Rule 8 of the Companies (Accounts) Rules, 2014, is set out in the Annexure (F)
to this Report.
AWARDS AND ACCOLADES
The details of some of the significant accolades earned by the Company
during the financial year 2023-24 have been provided as part of this Integrated Annual
Report.
OTHER DISCLOSURES
During the year under review:
a. No credit rating has been obtained by the Company with respect to
its securities. Further, the details of the credit rating obtained by the Company with
respect to its long-term and short-term borrowings have been provided separately in the
General Shareholder Information section of this Integrated Annual Report.
b. No application has been made under the Insolvency and Bankruptcy
Code, 2016. Hence, the requirement to disclose the details of the application made or any
proceeding pending under the said Code during the year along with their status as at the
end of the financial year is not applicable.
c. The requirement to disclose the details of the difference between
the amount of the valuation done at the time of one-time settlement and the valuation done
while taking a loan from the Banks or Financial Institutions along with the reasons
thereof, is not applicable.
APPRECIATION
The Board of Directors places on record sincere gratitude and
appreciation for all the employees of the Company. Our consistent growth has been possible
through their hard work, solidarity, cooperation, and dedication during the year.
The Board conveys its appreciation for its customers, shareholders,
suppliers as well as vendors, bankers, business associates, regulatory, and government
authorities for their continued support.
| For and on behalf of the Board of Directors |
|
|
RSeshasayee |
|
Chairman |
|
(DIN: 00047985) |
| Place: Mumbai Date: 9th May 2024 |
|