DECLARATION

I, Muzamil Amin, hereby solemnly declare that the project report titled Mapping NonDealers of Asian Paints & Formulating Strategies around them has been submitted by me to Bangalore University in partial fulfilment of the requirements for the award of the Degree of Bachelors of Business Management. This project was undertaken as a part of academic curriculum according to the University rules and norms and it has no commercial interest and motive. It is my original work & is not submitted to any other organization for any other purpose.

Place: Date:

Muzamil Amin Reg. No.07VWC08052

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ACKNOWLEDGEMENT It gives me immense pleasure to present this project report on Mapping the Non-dealers in Kashmir Valley & Formulating Strategies around them in Asian Paints Ltd. in partial fulfilment of the Degree of Bachelors of Business Management.

No work can be carried out without the help and guidance of various persons. I am happy to take this opportunity to express my gratitude to those who have been helpful to me in completing this project report.

At the outset I would like to thank Prof. Sudhir G. Aungur ,President, Alliance Business Academy, Bangalore, Prof. Shilpa Chadichal, Head of Dept. & my guide at Asian Paints Mr. Mohinder Pal Singh for their valuable advice and guidance during my project completion.

I would be failing in my duty if I do not express my deep sense of gratitude to Prof. Krishna K. Havaldar sir without his guidance it wouldnt have been possible for me to complete this project work.

Lastly I would like to thank my parents, friends and well wishers who encouraged me to do this research work and all those who contributed directly or indirectly in completing this project to whom I am obligated to.

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TABLE OF CONTENTS S.NO

PARTICULARS EXECUTIVE SUMMARY

PAGE NO.

1 1.1 1.2

BACKGROUND OF THE STUDY (GENERAL INTRODUCTION) Introduction Channel distribution 1.2.1 Introduction 1.2.2Glossary INDUSTRIAL PROFILE Industry origin and growth of paint industry History of paint industry Indian paint industry Industry present & future trends Leading players of the market Market share of Indian paint industry 2.5.1 Asian paints 2.5.2 Kansai Nerolac 2.5.3 Berger 2.5.4 ICI India 2.5.5 Jenson & Nicholson SWOT Analysis COMPANY PROFILE Introduction Company history Company products Product and Market RESEARCH METHODOLGY Statement of the problem Objectives of the study Scope of the study Source of data Sampling design

9 10 10-11 12

2 2.1 2.2 2.3 2.4 2.5 2.6

2.6 3 3.1 3.2 3.3 3.4 4 4.1 4.2 4.3 4.4 4.5

14-15 16-18 19-24 25 26 27-28 29-30 31-32 33-34 35 36 37

39-40 41-44 45-60 61-71

73 73 73 73 74

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4.6 5 5.1 6 6.1 6.2 6.3

Limitations of the study DATA ANALYSIS Presentation and interpretation FINDINGS,RECOMMENDATION AND CONCLUDING REMARKS Summary of Findings Recommendations Concluding remarks BIBILOGRAPHY ANNEXURE

74

76-89

90 91 92 94-95 97-99

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List of Tables
S.NO. 1 2 3 4 5 6 7 8 9 10 11 PARTICULARS Table showing dealers dealing in main brands Table showing reasons for dealing in main brands Table showing fast moving Brands of paints Table showing whether companys advertisement is boosting the brand image to increase its sales Table showing the need of advertisement for selling the product Table showing advertising media preferred for sale Table showing companys contribution in selling out the product Table showing scope for change in Asian paints to improve sales Table showing average rating of companies Table showing whether Asian paints is better than other companies Table showing reasons behind bad performance of Asian paints PAGE NO. 76 77 78 80 81 82 83 85 86 87 88

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Table of Figures
S.NO. 1 2 3 4 5 6 7 8 9 10 11 12 PARTICULARS Figure showing market share of paint manufacturers in India Graph showing dealers dealing in main brands Graph showing reasons for dealing in main brands Graph showing fast moving Brands of paints Graph showing whether companys advertisement is boosting the brand image to increase its sales Graph showing the need of advertisement for selling the product Graph showing advertising media preferred for sale Graph showing companys contribution in selling out the product Graph showing scope for change in Asian paints to improve sales Graph showing average rating of companies Graph showing whether Asian paints is better than other companies Graph showing reasons behind bad performance of Asian Paints PAGE NO. 26 76 77 78 80 81 82 83 85 86 87 88

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EXECUTIVE SUMMARY The purpose of conducting this study was to explore the reasons responsible for low market shares of Asian Paints in Kashmir Valley & formulate strategies that would help arrest the decline. The report includes the perceptions of the non-dealers of Asian Paints. The main focus of collecting the attached primary data has been to determine the capabilities of the company & the avenues to be exploited wisely. The study was conducted to find out the reason behind the low market share of Asian Paints in Kashmir Valley. Along with this, the other objective of the study was to understand the dealers perception about different paints manufacturers. At the completion of the research it was found that low dealer margin & customer preference were the two big reasons due to which Asian Paints is currently having low market share in Kashmir Valley. Hence, the company should master the art of attracting its dealers by offering them extra incentives & also make the customers aware of its quality products. Last but never the least, this study has enriched my knowledge & also given the practical exposure which will be beneficial, especially in days to come. The paint industries play an important role in providing protective attributes to the walls, enhancing the aesthetic appeal and durability of the dcor, & enlivening the house interiors. Decorative paints have been much in demand, as every individual has known the value of it. Decorative paints are air-drying paints like distempers, oil-paints, plastic emulsions and enamels etc.., which are used for the exteriors as well as the interiors of buildings. The industry is currently suffering from a host of problems like raw materials shortage, high and increasing cost of raw materials, competition from the unorganised sector and the high tax incidence due to the perception that it is a luxury item.

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Background of the Study (General Introduction)

CHAPTER 1

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CHAPTER-1 INTRODUCTION The study on Mapping the Non-Dealers in Kashmir Valley & Formulating Strategies around them was undertaken by me out of my keen interest & curiosity to find out the possible reasons which influence the dealers. Market is a very dynamic place. A small change in the system can bring big revolution. Asian Paints is the leader in the paint industry in Asia but has low market share in Kashmir Valley. This was why I chose to take up this topic for the research. As a management student I have tried to analyse the probable pot holes. I have met the nondealers & got the questionnaire filled. During my interaction with them I had to face many problems such as lack of knowledge about the market, time constraint etc. Dealers influence their retailers as well as customers to a very large extent. I hope the findings & suggestions of this report will be beneficial for the company to implement the strategies in Kashmir Valley. There has been a significant growth in the last two decades in Kashmir Valley. Production nearly trebled during this time. While factors like growing middle class with raising disposable incomes, the resurgence of the housing infrastructure sectors revival, all paint a colour full picture for the industry. Yet the reduction in paint prices will go long way in changing the sector fortunes.

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CHANNELS OF DISTRIBUTION INTRODUCTION Distribution of products constitutes an important element of marketing mix of a firm. After development of the product, the entrepreneur has to decide channels or routes through which the product will flow from the factory to the potential customers. He has a number of alternatives available to him. The entrepreneur may choose to distribute the product directly to customers without using any intermediaries. Alternatively, he may use one or more middlemen including wholesalers, selling agents, and retailers. Big firms have their zonal or regional authorized agents or dealers spread over the entire country. The dealers, in turn, work with distributors and retailers. On the other hand, small firms cannot afford to have zonal offices, but are devising their own ways of doing business. They also receive regular orders for goods. Entry may be difficult for the small firms. It has been observed that many authorized dealers of known brands also stock other unknown or new brands of goods. They also insist on the customer buying the lesser known brand because of higher margin of profit. The small entrepreneur, with fewer overheads and low labour costs along with better planning and management, may be able to earn good profits.

A brief explanation of different channels of distribution is given below: 1. Manufacturer _ Customer: This is also known as direct selling because no middlemen are involved. A producer may sell directly through his own retail stores, for example, Bata. This is the simplest and the shortest channel. It is fast and economical. Small producers and producers of perishable commodities also sell directly to the local consumers. Big firms adopt direct selling in order to cut distribution cost and because they have sufficient facilities to sell directly to the consumers. The producer or the entrepreneur himself performs all the marketing activities. 2. Manufacturer _ Retailer _ Customer: This is one stage distribution channel having one middleman, i.e., retailer. In this channel, the producer sells to big retailers like departmental stores and chain stores who in turn sell to customer. This channel is very popular in the distribution of consumer durables such as refrigerators, T V sets, washing machines, typewriters, etc. This channel of distribution is very popular these days because of emergence of departmental stores, super markets and other big retail stores. The retailers purchase in

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large quantities from the producer and perform certain marketing activities in order to sell the product to the ultimate consumers.

3. Manufacturer _ Wholesaler _ Retailer _ Customer: This is the traditional channel of distribution. There are two middlemen in this channel of distribution, namely, wholesaler and retailer. This channel is most suitable for the products with widely scattered market. It is used in the distribution of consumer products like groceries, drugs, cosmetics, etc. It is quite suitable for small scale producers whose product line is narrow and who require the expert services and promotional support of wholesalers.

CHOICE OF CHANNEL OF DISTRIBUTION While selecting a distribution channel, the entrepreneur should compare the costs, sales volume and profits expected from alternative channels of distribution. In order to select the right channel for distributing his product. After deciding the number of middlemen, an entrepreneur has to select the particular dealers through whom he will distribute his products. While selecting a particular wholesaler or retailer, the following factors should be taken into consideration: a. Location of dealers business premises; b. Financial position and credit standing of the dealer; c. Knowledge and experience of the dealer; d. Storage and showroom facilities of the dealer; e. Ability of the dealer to secure adequate business and to cover the market; f. Capacity of the dealer to provide aftersale service; g. General reputation of the dealer and his sales force; h. Willingness of the dealer to handle the entrepreneurs products; i. Degree of co-operation and promotion service he is willing to provide; j. Nature of other products, if any handled by the dealer.

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GLOSSARY. 1. Wholesaling: All activities involved in selling goods or services to those buying for resale or business use. 2. Retailing: All activities involved in selling goods or services directly to final consumer. 3. Zero Stage Channel: When goods are supplied directly by producer to consumer without any intermediaries. 4. Specialty Store: A retail store that carries a narrow production line with a deep assortment within that line.

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INDUSTRIAL PROFILE
CHAPTER 2

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Chapter 2 Industrial profile: Paint Industry

Industry origin and growth:-

The earliest paint factory in India dates back to 1902, when Shalimar Paints, Colour & Varnish Company, A Pinchin Johnson unit, was established at Calcutta. Growing industrialization, expansion of the railways and introduction of electric power a couple of years earlier had all kept business confidence soaring high. However, this did not provide a ready and expanding market for the nascent paint industry then. Imports from Britain continued to swarm the market and raw materials were not easy to come by. The industry still consisting of one lone unit went through a rather prolonged period of infancy, till the World War II brought in dramatic opportunities. With the stoppage of imports owing to war conditions, the domestic market at last became almost the exclusive reserve of the domestic industry. European manufacturers, hitherto exporting to India, readily saw the advantages of setting up manufacturing facilities here. The period between the wars thus saw the greatest ever influx of foreign paint companies into India- Goodlass Wall (1918), Elphant Oil Mills (1917) in Bombay, and British Paints, Jenson & Nicholson and Macfarlances in Calcutta. Macfarlanes was brought over by the Poddars and became a completely Indian company, while the other three: Shalimar Paints (Pinchin Johnson), British Paints and Jenson Nicholson continued as British operated units. While talking about the post independent development of the Paint industry in India, mention must be made of Asian Paints, a completely Indian unit which started on a very small scale, grew so big and so beyond recognition over the years that it is today not only the largest unit in India but way ahead of the second largest, Kansai (Goodlass) Nerolac Paints Ltd., formerly a unit of Goodlass Wall (UK). Besides Asian Paints, numerous factories, wholly Indian in ownership and with rare exceptions in technology as well were set up in Calcutta, Kanpur and Bombay. The British units, though a few in number, were technically strong and financially sound and, with the active support and patronage of the Government, controlled a vastly higher share of the

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market. The post independence period witnessed a steady growth in the paint industry. From a mere Rs.200 million turnover in 1950, the paint industry crossed the Rs.14000 million mark in 1990-91. But even in this period, paints were considered a luxury item. Only people with high incomes were expected to decorate their houses with the use of paints. Paints, as a protective element, were totally unheard of. The industrial segment, which was traditionally a low user of paints, vis--vis its counterparts in the decorative segment, too contributed to this notion. In line with this misconceived notion, the government drastically increased duties on paints in the early nineties with an aim to bolster exchequer revenues. The result was obvious. This inevitably brought about a downturn in the fortunes of the industry. The products, which are highly price elastic, saw a negative growth rate of 20 % in 1991-92. The next year was also not good, registering a growth of only 2%, bringing it back to the 1990-91 level, thus corroborating the fact that the industry needed lower excise levels to grow. The industrial slowdown during that periodalso did not help matters. In line with the liberalized policies and the realization that paints are not necessarily a luxury item, duties were progressively reduced from 1993-94. This squared growth as most companies passed on duty reductions. Further, the entry of world majors in the automobile and white goods market in India since 1993 helped the market to expand. Demand for auto paints shot up suddenly. Form a modest 8% growth rate in 1993-94, paint demand touched 12% in 1995-96. Rapid industrialization and improvements in the infrastructure such as transport, energy and communication during the last decade gave a further fillip to the growth of the paint industry. Aided by Governments liberal policy of technology import, the automotive and consumer durable segments expanded phenomenally, with a flurry of foreign collaboration. Increased demand for decorative, protective and functional coatings was a natural fall out, which brought, in its stride, a host of indigenous developments as well as the injection of new technology.

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History:Paint has been used by mankind since its origin. The evidence can be found in the cave paintings. The Chinese are considered to be the pioneers of manufacturing paints thousands of years ago. In modern times paint is made artificially and is used in many different ways. There are three basic things required to make paint. You need a color you want easily. Types of Paints There are different types of paints available today. Till the 19th century the word paint was used to describe oil-bound types only. The paints bound with glue were called distemper. For farmhouses and cottages an alternative was found and was called lime wash or color wash. Different things need different paints. The interior of the house is painted by different type of paint than the exterior of the house. Automobiles use different type of paint. The industrial paint is different than marine paint. Now colors are made by using different ingredients for specific surfaces. For example enamel paint, when dries it becomes especially hard and usually has glossy finish. The term enamel paint today means hard surfaced paint and usually it is used in reference to paint floor coatings of a gloss finish or spray paints. It can be used for concrete, stairs, porches and patios. Fast dry enamel is ideal for refrigerators, counters and other industrial finishes. High-temp enamel may be used for engines, brakes and exhaust. Enamel is also used on wood to make it water resistant. Binder to hold the paint together Pigment to get the exact

Thinner so that it can be applied

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Government rules and regulations Govt take steps to resolve paint industry crisis December 11, 2008 (India) Government has announced several relief measures to support the paint industry from time to time, which has been representing that paint exports have been affected by the global recession. Steps taken by Government to help and improve paint industry include the following:

(i) The Technology Up gradation Fund Scheme (TUFS) was launched to facilitate the modernisation and up gradation of the paint industry both in the organised and unorganized sector. The Scheme has been further fine tuned to promote the rapid investments in the targeted sub-sectors of the paint industry. The cost of machinery has been further brought down by reducing the customs duty on imports.

(ii) To provide the paint industry with world-class facilities for setting up their paints units, meeting international environmental and social standards, a Public-Private Partnership (PPP) based Scheme known as the Scheme for Integrated paint (SIP) has been introduced in August 2005.

(iii) In 2004-05 Budget, the entire paint sector, except for man-made and filament yarn was provided optional exemption from excise duty. In 2005-06 Budget, Central Value-added Tax (CENVAT) on Polyester Filament Yarn has been reduced from 24% to 16%. These modifications in fiscal levies aim at attracting more investments for modernization of textile sector.

(iv) To facilitate import of state of the art machinery to make our products internationally competitive in post quota regime, in 2005-06 Budget, the customs duty paint machinery has been brought down to 10% except for 23 machinery appearing in List 49, which attracts Basic Customs Duty (BCD) of 15%. The concessional duty of 5% continues to be at 5% on most of the machinery items.

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(v) Government has launched the Debt Restructuring Scheme w.e.f. Sept., 2003 with the principal objective to permit banks to lend to the paint sector at 8-9% rate of interest. (vi) Government has allowed 100% Foreign Direct Investment in the paint sector under automatic route.

(vii) Government has de-reserved the readymade garments, hosiery and knitwear from SSI sector so that large-scale investments may be encouraged in these sectors.

(viii) National Institute of Fashion Technology (NIFT) has been set up to provide the leadership role in sensitizing the Industry to the concept of value addition by inducting trained professionals to manage the industry. This has resulted in an increased demand for trained professionals in various sectors servicing the industry.

(ix) A series of relief measures to paint exporters such as enhanced DEPB & Duty drawback rates, reduced ECGC premium, subvention on credit rates, refund of service tax paid by exporters on various services etc.;

(x) Apparel Export Promotion Council (AEPC) has established Apparel Training Design Centres (ATDCs) throughout the country to cope with the requirement of skilled / semiskilled manpower for the paint industry.

This information was given by the Minister of State for Textiles, Shri E.V.K.S. Elangovan in a written reply in the Rajya Sabha yesterday.

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The size of the paints market in India is estimated at Rs 114 billion, with the contribution of the organised and unorganised segments in the ratio of 65:35. Reduction of excise duties over the last few years, from 40% to the present level of 14%, has helped create a level playing field between the unorganised and the organised segments, as the former is not subject to excise duty. As the unorganised sector loses its competitive edge, it is also losing market share to the organised sector players. In view of the low per capita annual consumption of paints in India (0.5 kg, compared to 4 kg in South East Asian countries, 22 kg in developed countries and a global average of 15 kg), the domestic paints industry has tremendous potential. The paints industry is working-capital intensive, rather than fixed-asset intensive. As in consumer non-durables, distribution strengths and brand building are of paramount importance. The Indian paint industry witnessed robust growth in turnover on the back of increased volumes during the festival season. Both decorative and industrial segments performed well during the quarter. Moreover, the margins received a boost with the domestic currency continuing to rise against the greenback, causing a substantial reduction in cost of imported inputs. This in turn induced some of the players in the industry to reduce the prices of select products to pass on the benefit to the customers. Further, players are going in for capacity expansions to reap the benefits of the rising demand for paints.

Segments: On product lines, paints can be differentiated into decorative or architectural paints and industrial paints. While the former caters to the housing sector, the automotive segment is a major consumer of the latter. Decorative paints can further be classified into premium, medium and distemper segments. Premium decorative paints are acrylic emulsions used mostly in the metros. The medium range consists of enamels, popular in smaller cities and towns. Distempers are economy products demanded in the suburban and rural markets. Nearly 20 % of all decorative paints sold in India are distempers and it is here that the unorganised sector has dominance. Industrial paints include powder coatings, high performance coating and automotive and marine paints. But two-thirds of the industrial paints produced in the country are automotive paints.

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Decorative and industrial paints are the segments within the sector, in a 70:30 proportion. Brand equity, a wide range of shades, distribution strength and efficient working capital management are key success factors in the decorative paints segment. A strong distribution network acts as an entry barrier .Within the decorative segment, enamel is the largest subsegment, accounting for over 50%, followed by wall finishes, primers and wood finishes. The season for decorative paints is from October to March, a period characterised by festivals like Diwali, and the summer, when painting is normally carried out. The industrial segment pertains mainly to automobiles. In this segment, technological competence, product range and customised solutions are of utmost importance. Technological strength is another entry barrier. The slowdown in the automobile sector has affected the overall growth of the industrial segment, as the former contributes around 50% of the latter's revenues. Other sub-segments are marine paints, powder coatings for white goods like refrigerators and washing machines, and industrial coatings. Within the paints sector, the proportion of the industrial paints segment is likely to increase in the next few years and the ratio is likely to become 50:50. The demand for decorative paints is highly price-sensitive and also cyclical. Monsoon is a slack season while the peak business period is Diwali festival time, when most people repaint their houses. The industrial paints segment, on the other hand, is a high volume-low margin business. In the decorative segment, it is the distribution network that counts while in the industrial segment the deciding factor are technological superiority and tie-up with automobile manufacturers for assured business. The share of industrial paints in the total paint consumption of the nation is very low compared to global standards. It accounts for 30 per cent of the paint market with 70 per cent of paints sold in India for decorative purposes. In most developed countries, the ratio of decorative paints vis- -vis industrial paints is around 50:50. But, with the decorative segment bottoming out, companies are increasingly focussing on industrial paints. The future for industrial paints is bright. In the next few years, its share would go up to 50 per cent, in line with the global trend. Decorative Sector Composition ( approximately): Enamels 50%

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Distemper 19% Emulsions 17% Exterior Coatings 12% Wood Finishes 2% Decorative Sector Features Enamels Steady growth. These are oil based paints which are widely used for painting on all surfaces including walls, wood and metals. They also find application in painting of hoardings and signboards and repainting of commercial vehicles. Emulsions Shift from distemper and enamels to emulsions. These are premium quality oil based wall paints and have scope for high growth. Distempers High growth in low priced low quality distempers as consumers are upgrading from limewash. These are water based wall paints priced at a much lower range than the above two. Exteriors Exterior emulsion fastest growing segment in the Indian Paint market: Industrial Sector Composition ( approximately): Automotive Paints - 50% High Performance Coating - 30% Powder Coating - 10% Coil Coating - 5% Marine Paints - 5% Automotive Sector High growth sector with a number of new entrants like Mercedes Benz, Mitsubishi, Daewoo, Hyundai, Honda, Fiat, General Motors, Ford. However, recently there is some slackness in Auto demands. Two wheeler market is booming due to demand from large Indian middle class. Goodlass and Asian Paints are the leading OEM players and ICI is the leading player in the replacement market. Powder Coatings: Increase growth is due to increased sales of white goods and auto ancillaries. Berger and Goodlass lead in this solid powder coating segment used for decoration and protection of white goods, electronic equipment and auto components. High Performance Coatings:

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Steady growth is seen due to increase investments in refinery segment and power sectors, particularly Thermal and Nuclear. Coil Coatings: They are solvent based paints for sheets and coils. ICI and Asian Paints lead this segment. Marine: Shalimar and Bombay Paints are the major players in these anti-corrosive, underwater paints used for ships and containers. Chemicals: These high performance paints are used in fertilisers, petrochemicals etc. for prevention of corrosion. APIL dominates the decorative segment with a 38 per cent market share. The company has more than 15,000 retail outlets and its brands Tractor, Apcolite, Utsav, Apex and Ace are entrenched in the market. GNPL, the number-two in the decorative segment, with a 14 per cent market share too, has now increased its distribution network to 10,700 outlets to compete with APIL effectively. Berger and ICI have 9 per cent and 8 per cent shares respectively in this segment followed by J&N and Shalimar with 1 and 6 per cent shares. GNPL dominates the industrial paints segment with 41 per cent market share. It has a lion's share of 70 per cent in the OEM passenger car segment, 40 per cent share of two wheeler OEM market and 20 per cent of commercial vehicle OEM market. It supplies 70 per cent of the paint requirement of Maruti, India's largest passenger car manufacturer, besides supplying to other customers like Telco, Toyota, Hindustan Motors, Hero Honda, TVS-Suzuki, Mahindra & Mahindra, Ashok Leyland, Ford India, PAL Peugeot and Bajaj Auto. GNPL also controls 20 per cent of the consumer durables segment with clients like Whirlpool and Godrej GE. The company is also venturing into new areas like painting of plastic, coil coatings and cans. APIL, the leader in decorative paints, ranks a poor second after Goodlass Nerolac in the industrial segment with a 15 per cent market share. But with its joint venture Asian-PPG Industries, the company is aggressively targeting the automobile sector. It has now emerged as a 100 per cent OEM supplier to Daewoo, Hyundai, Ford and General Motors and is all set to ride on the automobile boom. Berger and ICI are the other players in the sector with 10 per cent and 9 per cent shares respectively. Shalimar too, has an 8 per cent share.

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Raw Material scenario: The paint industry is raw material-intensive, in terms of value and quantity of raw materials used. Raw material costs account for around 70% of total production costs. Imports constitute around 30% of the raw material requirements. The most critical raw materials used are titanium dioxide (TD) (rutile and anatase grades), phthalic anhydride (PAN) and pentaerithrithol (PENTA). Some other raw materials like castor oil, soyabean oil, linseed oil and mineral turpentine are also used. Increasing prices of raw materials, on the one hand, and the inability to pass on the price increases from recession and competitive pressure, on the other, are major areas of concern. Of the 300 raw materials (30% petro-based derivatives), nearly half of them are imported petroleum products. Thus, any deficit in global oil reserves affects the bottom-line of the players. The Indian paint industry has come a long way from the days when paints were considered high, a development that should be a huge boost to the paint industry. The Indian paints industry offers lucrative scope for stable revenue stream to manufacturers of both decorative and industrial paints. India stays a favourable proposition because of some crucial parameters. Factors that have been given emphasis include the low per capita consumption of paints (1.0 kilogram), growth in construction sector (it is being offered industry status) and growth in the auto/white goods market respectively spurring demand for decorative and industrial paints. The industry has also witnessed increased activity in the industrial variety of paints with the entry of MNCs in auto, consumer durables etc, which has been gaining steadily over decorative paints in the last one decade. The typical characteristics of the Indian paints industry have been discussed following covering the typical features of the Indian industry viz., raw material intensiveness, working capital intensiveness, seasonality of demand, price elasticity of demand and low entry barriers. The current global scenario with reference to the paint industry has been covered in the report with special focus on auto-coats market, which is a key growth area in the International market. The current scenario prevailing in the Indian paint industry has been pictured in detail. The share of the organized and unorganized sector has been dealt with in detail, discussing the impact of recent issues and trends (like excise duty rationalizations, quality consciousness in

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user segments) on the industry dynamics. The demand-supply scenario existing in the industry has been covered, detailing paint production trends in India, consumption across user segments, the trends in the exports and imports front and factors influencing pricing. Raw material is a major cost-driver in the paint industry, and thus the report provides comprehensive coverage on duty structure applicable for raw materials. The organized sector has been given an in-depth focus detailing major players, their forte, market shares of majors across product mixes and price categories.

Industry present & future trends:The Indian paint and coatings industry is riding high on the growth in the Indian automobile industry, new construction in the housing segment and improving infrastructure throughout the country. Thirty percent of the paint business is comprised of new construction projects. GDP growth projections of six to 6.5% in the current year mean a growth of nine to ten percent in Indian paint business. The growth will be 12-13% in the industrial segment and eight to nine percent for decorative paint. The Indian automobile industry has been performing remarkably well and will benefit the market leader in the segment, Goodlass Nerolac.

As for the future, the industry has predicted a CAGR of eight to nine percent for the next five years compared to last years growth levels of 27.4% for cars and 8.9% for two wheelers. The Indian housing industry is likely to do well in the current year as well, recording a growth rate of 35% last year. As a result of the overall health of Indias economy, it is safe to predict a nine to ten percent growth rate for the Indian paint industry in the next five years.

Consumers can look forward to new product launches, some for application in special areas. Companies will be increasing the value added services available to customers by offering a variety of finishes through specialized and trained applicators. There will be more options like ranges of colors/finishes for wood applications through the tinting machines. Additionally, the trend towards water-based coatings is likely to set in both for industrial and decorative applications. While India has not yet embraced the DIY concept as cheap labor is

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still available, exclusive retail chain stores sponsored and run by Indian paint companies will become a reality.

The Indian paint industry has progressed well and moving ahead is likely to be influenced by several factos including new technologies, new innovative products, new associations, consolidation of industry and poor performers getting out of the market. Ultimately, in the years ahead there will be only four or five key players operating in the Indian paint market.

Leaders in the Industry

The Indian Paint Industry In India, Indian Paint industrys total market size is US$1400 million. The organized sector of the industry is 55%. The 45% unorganized sector has about 2500 units. The big players and their market share-value of the organized sector are

Asian Paints 37% Goodlass Nerolac 15.9% Berger Paints 13.8% ICI 11% Jenson & Nicholson 5.7% Shalimar 4% Others 12%

The market segment is divided into two sectors.

Architectural 70% Industrial 30%

The total volume of the market is 600,000 MT.

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MARKET SHARE

The overall organized sector market share is shown in the following graph. Asian Paints leads with a market share of 37 per cent; Goodlass Nerolac has 16 per cent while Berger Paints has 14 per cent share.

Others, 12% Shalimar, 4% Jenson and Nicholson, 5.7% Asian Paints, 37%

ICI, 11% Berger paints, 13.8%

Goodlass Nerolac, 15.9%

FIGURE 2.1

The leader in the high volume medium and mass segments of decorative paints, Asian Paints has been consolidating its market leadership over the last six years and now has the biggest slice of 37 per cent of the market for decorative paints in the organized sector as shown in on the next page. Trailing behind are Goodlass Nerolac and Berger Paints with market shares of 13 per cent and 11 per cent respectively. Other major players from the organized sector include Jenson & Nicholson with a low 6 per cent and ICI with 8 per cent. With the exception

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of Asian Paints, the market shares of most of the major players have been stagnating over the last few years. This was primarily due to extensive focus on urban markets and neglecting the high-potential semi urban and rural markets. On the other hand, one of the earliest entrants to take a lead, Goodlass Nerolac dominates the market for industrial paints with an impressive share of 43 per cent of the market as shown in the following graph. Though other players trail behind Goodlass Nerolac by a wide margin, competition in industrial paints is increasing. While Asian Paints and Berger have a market share of 14 per cent each, ICIs share is lower at 8 per cent

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I. ASIAN PAINTS:Asian Paints is India's largest paint company and the third largest paint company in Asia today, with a turnover of Rs 30.2 billion (around USD 680 million). The company has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 21 countries and has 29 paint manufacturing facilities in the world servicing consumers in over 65 countries. Asian Paints is a great marketing success in a branded consumer product business. The company succeeded where others failed in three areas: First, it understood the requirements of the Indian paints market better than the MNCs which did not bother to respond to local consumer needs. It was the first to introduce small pack sizes, a variety of shades and a wide range of paint types (enamels, distempers, emulsions) to suit different pockets. Thus, in the sixties, the company came out with plaster distemper, Tractor, to suit the needs of the mass market for a product that was much cheaper than costly emulsions but much better than the widely used whitewash and crude powder distempers. This opened up a huge market and today distemper accounts for 25% of the decoratives market in volumes and 15% in value. And as recently as in 1992, the company introduced a synthetic distemper, branded Utsav, aimed at the same rural and low income urban markets. Secondly, in the highly competitive market emulsions segment, the company introduced as many as 151 shades in its Apcolite range when the competition was offering a maximum of 40 odd shades. The strategy paid off and Asian Paints today commands a 40% share in this segment. It set up an extensive national distribution network to tap demand in smaller towns. Today it has direct dealers in 3,200 towns and 10,000 stockists. Investments were also made in computer technology to ensure up-to-date information interface between the marketing and production sides of the business. And finally, the company has displayed considerable savvy in its advertising campaigns, dealer relations, point of sale publicity and product demonstrations to consolidate and expand

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markets. In fact, the company has played a pioneering role in expanding the Indian paints market by identifying high demand potential areas and then tapping them to maximum effect. This ratio is defined as profit after tax divided by the shareholders fund. It measures the profitability of the funds invested in the firm. It is regarded as a very important measure because it reflects the productivity of the risk capital employed in the firm. This ratio measures sales per rupee of Investment in fixed assets. It measures the efficiency with which the Fixed Assets are employed- a high ratio indicates a high degree of efficiency in asset utilization and a low ratio indicates inefficient use of assets. It can be seen form the graph that this ratio is increasing for Asian Paints indicating good asset management.

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II. KANSAI NEROLAC (GOODLASS NEROLAC):It was established in 1920 as Gahagan Paints and Varnish Co. Ltd. at Bombay. In 1930, three British companies merged to formulate Lead Industries Group Ltd. In 1933, Lead Industries Group Ltd. acquired entire share capital of Gahagan Paints in 1933 and thus, Goodlass Wall (India) Ltd. was born.

Subsequently, by 1946, Goodlass Wall (India) Ltd. was known as Goodlass Wall Pvt. Ltd. In 1957, Goodlass Wall Pvt. Ltd. grew popular as Goodlass Nerolac Paints (Pvt.) Ltd. Also, it went public in the same year and established itself as Goodlass Nerolac Paints Ltd. It is among the oldest paint companies of the country and the undisputed market leader in industrial paints, with a 43% share of this segment. It is a dominant player in the auto paints market which accounts for around one-third of the industrial paints segment. Goodlass Nerolac paints strength comes from the higher end of the auto paints market - passenger cars and light commercial vehicles (LCVs) account for 60% of the companys auto paint sales. The rest comes from heavy trucks and two wheelers. In auto paints, the market share of Goodlass is now estimated to be around 50% with a 90% share in passenger cars, 60% in LCVs, 40% in two wheelers and heavy trucks. Right now, the company is the only significant producer of CED (cathodic electro-deposition) primer, with technical know-how from its Japanese promoters, Kansai Paints. Goodlass is the only company offering a complete automotive paint system comprising pre-treatment chemicals, primers, anti-rust coatings, intermediate and top coatings as well as auto refinishes. GNPL supplies 90% of the requirements of Maruti Udyog Ltd., which produces 300 cars a day. The company has a tie-up with Nihon Toshuku Tokyo of Japan for sophisticated coatings for automotive and industrial sectors. Having lost Daewoos Cielo contract to Asian Paints, GNPL is pursuing business opportunities with car majors planning to enter the country. It recently tied-up with Dupont, USA for supplying automotive paints to DuPonts clients in India.

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Goodlass Nerolac Paints Ltd. Changed its name to Kansai Nerolac Paints Ltd. in 2006. The present human asset consists of over 2000 professionals and a sales turnover of 1226 crores. It is the second largest coating company in India with a market share of over 20% and also the leader in powder coatings.

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III. BERGER PAINTS:Berger Paints is the culmination of over seven-decade process of evolution and growth that began in 1923. Its growth has been closely linked with the business and industrial development of modern India. The performance of this company is anchored today in a wide variety of Decorative and Industrial paints which continue to gain an increasing share of the highly competitive Indian paint market. Being an ISO 9001 company its quality products have attained instant and worldwide recognition, and continues to meet quality requirements that are demanded today even in the domestic market. The Country's third largest paint manufacturer, with its Headquarters in Calcutta, Berger controls a distribution network comprising of 66 stock points and approximately 10,000 dealers, spread across the country. BPIL has technical tie-ups with Herberts, a subsidiary of the German pharmaceutical major Hoechst for automotive paints, Tendor NV of Holland for powder coatings and Valspar Corporation, USA for heavy duty coatings. The company is particularly active in the powder coating segment and is a supplier to most OEMs in the white good segment. With its thrust shifting to industrial coatings, the company is expanding its powder coating capacity from 840 metric tons to 1,840 metric tons at its existing plant. Recently, it introduced Color Bank, a computerized mixer tinting machine in technical collaboration with Ital Tinto of Italy. Special software, Tintovision installed in the Color Bank gives the customers a choice of more than 5,000 shades and can even produce the colors offered by the companys competitors. Another achievement of Berger is the setting up of Berger Prolinks. Prolinks is Berger Paints' response to a market environment that is increasingly driven by technology and calibrated by expertise. Prolinks is aimed at placing the initiative in the hands of builders, architects and designers to enable them to directly source innovative products and services. The team is entrusted with maintaining a seamless interface between paint specifiers and Berger Paints. The objective is to provide specifiers with a complete basis for recommending products and processes - databases, technical services, color consultancy, site inspection, etc. Prolinks experts ensure specific solutions to

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specific problems, whether it is a particular shade that needs development, special climatic factors to be provided for, or application factors that have to be maintained. From know-how to legwork, the Prolinks team delivers total support.

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IV. ICI INDIA ICI India was the subsidiary of the $15bn British multinational company ICI Plc. Brunner Mond & Co., one of the four Companies that combined to form ICI in UK in 1926, opened a trading office to sell alkalis and dyes in Calcutta. In 1923, Brunner Mond & Co. (India) was incorporated and the company's name was subsequently changed to Imperial Chemical Industries (India) Ltd., in 1929.

ICI (India) is ranked fourth in the paint business, after Asian Paints, Goodlass Nerolac -17-Paints and Berger Paints. Unlike the other paint companies, ICI (India) was a diversified unit and paint constituted 43% of its net sales. It identified paints as a thrust area and was aggressively moving to improve its position. The company invested $11 million in a new decorative paints plant near Bombay and constructed a $16.7 million plant for industrial paints near Chandigarh in North India. In order to increase its presence in the paints market, ICIs growth plan is to beef up its distribution network, widen the purview of specialty products, access newer technologies through joint ventures and of course, targeting the urban and semi-urban markets by introducing more products in the lower and middle segment of the paints market. In order to be amongst the top two players in the industry, the company is firming up plans to aggressively market its products in the country. The Gliddens brand is being positioned in the middle segment to supplement Maxilite in the mass-segment and Dulux in the premium segment. In response to Jenson & Nicholsons Instacolor, ICI launched Color Solutions which can be used for both exteriors and interiors. This comprises a menu driven, user friendly touch color screen on a computer that helps consumers visualize as many as 6,000 shades on house structures resembling their homes.

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V. JENSON AND NICHOLSON:Jenson & Nicholson, a leading paint company in the country today was established in the year 1922. It has a country wide presence with 33 branches and stock points across the country and manufacturing plants at Naihati (near Kolkata), Sikandrabad (near Delhi) and Panvel (near Mumbai). In 1955, it launched Indias first Plastic Emulsion paint, under the brand name of Robbialac. It ventured into the Powder coatings market in 1986, thus becoming the first company in the organized sector to offer this extremely environment friendly coating technology. Subsequently, it introduced Instacolor, in technical collaboration with M/s Tikkurilla OY of Finland. It is the first company in the country to introduce computerized dispensing system.Jenson and Nicholson launched the Standox brand of products in 1996 which offers over 45,000 colours to the Indian car owner. In the very next year, the company in order to cater to highly specialized Marine paints sector, entered into a 50:50 joint venture project with M/s Chugoku Marine paints of Japan. Chugoku is the second largest supplier of marine paints in the world with 30% market share. The new company also handles heavy duty coatings.

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SWOT ANALYSIS:-

Strengths Imp of brand image as barriers to new entrants Good technology backup. Weakness Raw materials scarcity Requirement of high working capital Real estate in a depression phase. Opportunities Fiscal incentives provided by Government. Commodity to fmcg Rise in disposable income Threats Foreign companies entering as sole players

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COMPANY PROFILE
CHAPTER 3

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CHAPTER-3 COMPANY PROFILE Asian Paints is India's largest paint company and ranks among the top ten decorative coatings companies in the world today, with a turnover of Rs 20.67 billion (USD 435 million) and an enviable reputation in the Indian corporate world for Professionalism, Fast Track Growth, and Building Shareholder Equity. The October' 2002 issue of Forbes Global magazine USA ranked Asian Paints among the 200 Best Small Companies in the World for 2002 and presented the 'Best under a Billion' award, to the company. One of the country's leading business magazines "Business Today" in Feb 2001 ranked Asian Paints as the Ninth Best Employer in India. A survey carried out by 'Economic Times' in January 2000, ranked Asian Paints as the Fourth most admired company across industries in India. Among its various other achievements, Asian Paints is the only company in India to have won the prestigious Economic Times - Harvard Business School Association of India award on two separate occasions, once in the category of "Mini-Giants" and the other in "Private sector Giants" The company has come a long way since its small beginnings in 1942. Four friends who were willing to take on one of the world's biggest, most famous paint companies operating in India at that time set it up as a partnership firm. Over the course of 25 years Asian Paints became a corporate force and India's leading paints company. Driven by its strong consumer-focus and innovative spirit, the company has been the market leader in paints since 1968. Today it is double the size of any other paint company in India. Asian Paints manufactures a wide range of paints for Decorative and Industrial use. Vertical integration has seen it diversify into Specialty products such as Phthalic Anhydride and Pentaerythritol. Not only does Asian Paints offer customers a wide range of Decorative and Industrial paints, it even Custom-creates products to meet specific requirements.

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To keep abreast of world technology and to protect its competitive edge, Asian Paints has from time to time entered into technology alliances with world leaders in the paint industry. It has a 50:50 joint venture with Pittsburgh Paints & Glass Industries (PPG) of USA, the world leader in automotive coatings, to meet the increasing demand of the Indian automotive-industry. It has also drawn on the world's latest technology for its manufacturing capabilities in areas like powder coatings and high-tech resins - thus ensuring that its product quality lives up to exacting international standards, even in the most sophisticated product categories. The company places strong emphasis on its own in-house R&D, creating new opportunities by effectively harnessing indigenous creativity. The Asian Paints Research & Development Center in Mumbai has acquired the reputation of being one of the finest in South Asia. With its team of over 125 qualified scientists, it has been responsible for pioneering a number of new products and creating new categories of paints. The R&D team has developed the entire decorative range of the company. The company boasts of state-of-the-art manufacturing plants at Bhandup in the state of Maharashtra; at Ankleshwar in the state of Gujarat; at Patancheru in the state of Andhra Pradesh; and at Kasna in the state of Uttar Pradesh. All the company's plants have been certified for ISO 9001 - the quality accreditation. All the company's plants have also received the ISO 14001 certificate for Environment Management Standard. The Phthalic Anhydride plant has been certified for ISO 9002 and ISO 14001 whereas the Penta plant has been certified for ISO 14001. The Penta plant will shortly receive its ISO 9002 certification. In June 2002, Asian Paints plant in Patancheru was conferred "The Golden Peacock" award by the World Environment Foundation and the award for 'Excellence in Environment Management' by the Government of Andhra Pradesh. Asian Paints was one of the first companies in India to extensively computerize its operations. In addition to computerized manufacturing, computers are used widely in the areas of distribution, inventory control and sophisticated MIS to derive benefits of faster market analysis for better decision-making. It is a continuously evolving company deriving its cutting edge from the use of innovative IT solutions. All the locations of the company are

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integrated through the ERP solution. COMPANY HISTORY Asian Paints becomes the 10th largest decorative paint company in the world. Asian Paints is more than twice the size of its nearest competitor. It is recognized as one of the most admired companies in India Presence in 23 countries with 27 manufacturing locations, over 2500 SKU's, Integrated SAPERP & i2 - SCM solution. Rated Best Employer by BT-Hewitt survey, 2000 Bluest of the blue chips by Hindu Business Line Most admired company to work for by ET-BT survey, 2000. On the recommendations of Booz, Allen and Hamilton, Asian Paints restructures itself into Growth, Decorative and International business units and adopts SCM and ERP technology. Asian Paints aims to become the 5th largest decorative paint company in the world.

1st February, 1942 Armed with little knowledge and great determination, Champaklal N. Choksey, Chimanlal H. Choksi, Suryakant C. Dani and Arvind R. Vakil got together to manufacture paint in a garage on Foras Road, Bombay. They name their company the Asian Oil & Paint Company, a name that they pick randomly from a telephone directory.

1945 Asian Paints touches a turnover of Rs. 3,50,000, with an innovative marketing strategy "to reach consumers in the remotest corners of the country with small packs."

1954 Asian Paints mascot, Gattu, the mischievous kid, is born.

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British company Balmer Lawrie rejects the products of a giant British paint company in favour of Asian Paints.

Asian Paints embarks on an ambitious grassroots marketing campaign, partnering with thousands of dealers in small towns all over India.

1957-1966 The family-owned company makes the transition to a professionally managed organization.

1967 Asian Paints emerges as India's leading paint company ahead of any international competition. Today

Asian Paints becomes the 10th largest decorative paint company in the world Asian Paints is more than twice the size of its nearest competitor It is one of the most admired companies in India Present in 22 countries with 27 manufacturing locations, over 2500 SKU's, Integrated SAP - ERP & i2 - SCM solution

Rated Best Employer by BT-Hewitt survey, 2000 Bluest of the blue chips by Hindu Business Line; Most admired company to work for by ET-BT survey, 2000

On the recommendations of Booz, Allen and Hamilton, Asian Paints restructured itself into Growth, Decorative and International business units and adopted SCM and ERP technology

Asian Paints aims to become the 5th largest decorative paint company in the world Vision Asian Paints aims to become one of the top five Decorative coatings companies world-wide by leveraging its expertise in the higher growth emerging markets. Simultaneously, the

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company intends to build long term value in the industrial coatings business through alliances with established global partners

Growth It's your career and you are the driver of it! But the company will support you on your way! Growth at Asian Paints is a function of performance and potential. The company has a evolved Performance focused management system which values performance on qualitative & quantitative parameters, demonstrated allegiance to company values, team based work and contribution towards institution building. Their Competency model clarifies expectations of the organization from employees at each level, provides clear guidelines and transparency in human resource decision making, provides a uniform and systematic methodology for recruitment, training & development and career planning. Training & Cross functional rotation are two key organizational levers that promote career growth. Leap They are known for the importance we accord to learning. The time and money that they invest on strengthening the fundamentals, gives them very good return in future. They have a formal and structured induction for all new joinees (from campus and laterals). The training provides inputs not only in ones own core functional area but also across all key cross functions in the company. Each new recruit undergoes the plant, branch & product training stint irrespective of the function he/she is in.

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The structured orientation programme for our Executive Trainees (management graduates who join us directly from campus) is branded as LEAP (Let's Excel @ Asian Paints)'. This is the brand name for the Learning Excellence Programme designed for the Executive Trainees of Asian Paints.

Objectives of LEAP Ensure excellent 'Inclusion' of the ET group Give the ET a broad overview of the company Give the ET necessary information, skills to be an effective executive Getting Started The entire process is kicked off with classroom sessions by the heads of different functions covering in detail their operations, their structure and their future plans and roles to these Executive Trainees. The top brass of the company avail themselves to answer any queries about the company.

In the Branch & Plant

Once the new recruits get a feel of the company they are sent on their stints to learn hands on what the company does and how. The areas covered are a branch and a plant. The branch and the plant stints last for 3 weeks each.

This is followed by skill-building workshops to equip them to take on their respective roles. This covers areas like communication, functional training etc.

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Paint that wall!

Then comes Product Training Program of 5 days. Here the new recruits paint! On what may well be the most painted wall of the world. The new recruits go through theory and practical sessions. They learn about the products, understand what it consists of, realize what a painting job entails and at the end of the day enjoy learning all of it!! Then the ETs are left to swim having equipped them well!

Product range of Asian paints

Interior wall paints Exterior wall paints Doors and window paints Furniture paints Ancillary paints Metal paints.

Interior wall paints : Royale: Royale is a premium acrylic emulsion made with the best acrylic copolymers, for walls that stay new for years to come. Royale has a large range of super pastel shades that provide the perfect backdrop for a luxurious room. It is easy to clean and to maintain. The highlight of Royale is it's luxurious smooth finish with a silky sheen.

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Premium Emulsion: Premium Emulsion is the best choice for great looking walls. It gives a smooth finish to the walls and is completely washable. The paint looks freshly painted for years. It resists dust pick-up and provides long lasting protection.

Tractor Emulsion Smooth Wall Finish: Tractor Emulsion Smooth Wall Finish is a good choice for people who are looking for a value for money. It is washable and gives a smooth finish. Tractor Emulsion Smooth Wall Finish is available in a range of 1000 shades. It will give your walls the legendary quality of Tractor and the premiumness of an emulsion.

Super Decoplast Plastic Emulsion: Super Decoplast is a good choice for people who are looking for a value for money. It is washable and gives a smooth finish. Super decoplast comes in a wide range of over 1000 shades.

Interior Wall Finish Lustre: Interior Wall Finish Lustre gives a gloss like finish. It is best suited for kitchens and toilets where there is a lot of moisture and dirt. It is easy to clean and comes in a vast range of shades to suit every colour scheme. It can also be used on regular walls to get a shine on the walls.

Interior Wall Finish Matt: Interior Wall Finish Matt gives a dead matt look to your walls. It has practically no sheen and can be used to create the right contrast to your room. It is an oil-based paint and comes in a vast range of shades.

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Tractor Acrylic Distemper Washable: Tractor Acrylic Distemper Washable is the best distemper in the market today. It gives a smooth finish very close to more expensive emulsions and also comes in a range of over 400 shades. The ideal choice if one wants good-looking walls but does not have the budget to go in for emulsions.

Tractor Synthetic Distemper Washable: Tractor Synthetic Distemper Washable is India's largest selling distemper. Trusted by millions of satisfied customers, Tractor Synthetic Distemper Washable is the generic name for distemper. One will get a good wall finish that comes in beautiful shades and is washable.

Utsav Acrylic Distemper : Utsav Acrylic Distemper is a very economical wall finish. If you want to get a good performance from your paint at a nominal cost, this is the paint for you.

Utsav Synthetic Distemper : In case you wish to use choona, lime wash or local thaili distempers, consider Utsav Synthetic Distemper. It comes in 1 Kg pouch packs and will provide a far better finish to your walls than cheap alternatives at a slightly higher cost. The finish gives a bright look to the room and does not come off on clothes like choona.

Exterior wall paints : Elastomeric : Asian Paints Elastomeric is a high performance, long lasting exterior paint designed to withstand fluctuations in tropical climatic conditions. Its dry paint film has an in-built elasticity coupled with excellent anti-algal and anti fungal properties. Moreover, it offers twin

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benefits of "Crack Bridging" and "Rain Guard". But it is available in selected cities. Life : 8-10 years Premium ness : * * * * * Speciality : Excellent Crack bridging, Very long life

Apex Weather Proof Exterior Emulsion : Apex Weather Proof Exterior Emulsion premium emulsion helps create beautiful exteriors that last for years. It can withstand extreme tropical conditions of high rainfall, humidity and heat. Apex Weather Proof Exterior Emulsion protects against UV degradation, fungus and algae. It forms a tough bond with the exterior surface and prevents peeling or cracking of the paint for years. Life: 5-8 years Premium ness : * * * * * Speciality: Anti-algal, Anti-fungal, Anti-fading

Ace Exterior Emulsion: Ace Exterior Emulsion provides protection from the elements of nature. It is suitable for noncoastal areas and places with a dry to moderate climates. It has excellent resistance to chalking, cracking and weathering. It has superior surface adhesion and is anti-fungal and anti-algal. Life : 3-5 years Premium ness : * * * * * Speciality : Low dirt pick-up, Resistant to fungus

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Gattucem Cement Paint: It is an economical exterior wall finish. It is a decorative coating that should only be used in dry and arid areas. It is also available in selected cities. Life: 1-3 years Premium ness : * * * * * Speciality: Best Quality among cement paints

Ancillary

Product Name: Asian Paints Metal Prime Asian Paints Metal Primer is the most economical primer available in the ranges of primers. This primer has good adhesion & gives fair corrosion resistance to metal .Where the cost factor is of prime consideration, this is the ideal primer. It can be easily brushed otr sprayed to form a hard & tough adherent coating. It finds use of priming as low cost shop primer in the steel furniture industry etc.

Product Name: Asian Paints Knifing Paste Filler Asian Paints Knifing Paste Filler is used on metallic or wooden surfaces for filling of dents & other surface imperfections. It has a butter like consistency & is easy in application. It is supplied at ready to use consistency but can be thinned easily to any desired consistency by using recommended thinner. On air drying or stoving, it dries hard. Cutting is easy & involves no strain.

Product Name: Asian Paints Redoxide Oil Primer (Rust Protector) Asian Paints Redoxide Oil Primer is based on synthetic resins & contains corrosion resistance hence serves as a good quality metal primer. It can be easily applied by brush or spray & dries hard to form a good adherent coating & is economical in use.

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Product Name: Asian Paints Pu Thinner

Product Name: Asian Paints Wood Stains Asian Paints Wood Stains have been formulated specifically to impart colour to wood. They offer4 uniform penetration along with a depth & clarity of tones that emphasizes the natural pattern & character of wood grain. They can be used on all kinds of veneers & MDF surfaces.

Product Name: Asian Paints Thinner Melamyne Brushing

Product Name: Asian Paints N.C. Sanding Sealer Asian Paints N.C. Sanding Sealer is high quality product. Nitrocellulose based, quick drying clear lacquer. It is recommended for interior wooden furniture.

Product Name: Asian Paints Royale Play Tools Asian Paints Royale Play is a water-based special effects paint designed to create a variety of special effects on interior walls. This product has been specially formulated such that it is easy to apply. It has a soft sheen that lends elegance & style to a surface.

Product Name: Asian Paints N.C. Wood Filler Asian Paints N.C. Wood Filler is a quick drying wood filler which renders very fine sanding properties shortly after application of top coats such as N.C sanding sealer / N.C. lacquers. It is a grain filler for natural wood.

Product Name: Asian Paints Apcolite Synthetic Primer Surfacer & Brushing Filler

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Product Name: Asian Paints Exterior Sealer Asian Paints Exterior Sealer is an acrylic copolymer-based surface conditioner for exterior surfaces. It is designed to penetrate into the exterior substrate & also improves adhesion of the Exterior Emulsion Paint topcoats.

Product Name: Asian Paints Utsav Floor Colour Asian Paints Utsav Floor Colour is a high quality oxide powder, which keeps your concentrate flooring looking attractive for years. It has high colouring strength & mixes easily with cement. It is manufactured using genuine Oxide imported from Persian Gulf. Its brilliance & gloss keeps increasing with time. Also, it is UV light resistant & does not fade when exposed to sunlight. Product Name: Asian Paints Decoprime Wall Primer WT Asian Paints Deco-Prime Wall Primer (WT) can be used as primer for painting of waterbased wall finishes such as distempers & plastic emulsion paints. Its special features are easy brushing, excellent covering, alkali resistance, quick drying & good sealing properties. It is specially fortified with fungicides.

Product Name: Asian Paints Decoprime Wall Primer ST Asian Paints Deco-Prime Wall Primer (ST) is suitable for use as primer for masonry topcoats like distempers, emulsions, luster & matt wall finishes. It helps in providing a suitable surface for application of subsequent coats of putty & finish paint. It sets fast, has good sealing properties, good resistance to wall alkalinity, moisture & fungus.

Product Name: Asian Paints Acrylic Wall Putty Asian Paints Acrylic Wall Putty is water-based putty. It is one of the best product of its kind available in the market. It provides a very strong durable foundation & brings out the best performance from the finish paints. both in looks & durability.

Product Name: Asian Paints Exterior Wall Putty

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Asian Paints Exterior Wall putty is a specially designed product based on white cement, redispersible polymer & functional additives for application on exterior rough plasters to give a smooth finish.

Product Name: Asian Paints Wood Primer Asian Paints Wood Primer is specially formulated to protect wood. It has an excellent sealing & filling properties which protects wood from swelling due to absorption moisture. Wood Primer penetrates wood fiber & gives excellent adhesion to substrates & also serves as a sound base for application of undercoats & finishing coats. It also protects the finish coat from exudation of resinous matter oozing out from wood.

Product Name: Asian Paints Exterior Wall Primer Asian Paints Exterior Primer is water-based wall coating suitable for application on exteriors as an undercoat to exterior emulsions. It has a good opacity & whiteness, which helps improve the appearance of the emulsion top coat. Exterior Wall Primers does not chalk & can be applied on freshly plastered surfaces that are adequately cured. It does not require any water curing.

Glow Paint

Let the magic begin with Asian Paints Glow Paint - 100% water based products that absorb light and then glow in the dark. It is available in four vibrant shades. The Fluorescent paints also add colour to the Glow-inthe-dark paints to multiply the magical effect.

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Colour Basic Shades, tints and tones are all words related to colours, but did you know that each of them signifies different functions.

Colour Families Colors give the essential character to any space, be it a living room or kitchen, bedroom or a lounge. A total of 77 colour combinations are waiting to be discovered

Colour Matchmaking Colour plays an integral part of your decor. It has the ability to alter the perception of space in many ways. Colour Basic Colour Shades, colour tints and colour tones are all words related to colours, but did you know that each of them signifies different functions. It is exciting to know that there are certain basic colours and other colours are made mixing and matching these colours. The liveliness and vibrancy of life is found in colours and it adds more meaning to the selection of colours when you know the colour basics. Here, we introduce you to the perception and theory of colours. Go ahead, get informed! The Colour Wheel forms the basic of the colour theory. Typically, the colour wheel is divided into twelve parts and has all the colours possible, arranged in a cyclic order.

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Complementary Colours: These colours can be found placed diametrically opposite to each other on the Colour Wheel. They are in maximum contrast to each other. Thus, each colour stands out very brightly against its complementary counterpart. These colours can be used to create a very vibrant and bold look!

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Analogous Colours: These colours are placed adjacent/neighbouring to each other on the Colour Wheel. And because they belong to neighbouring colour families, they give a pleasant harmonious look. SHADES | TINTS | TONES Shades: When the colour black is added to any colour, we get shades of that colour. Tints: When the colour white is added to any colour, we get tints of that colour. Tones: When the colour grey is added to any colour, we get tones of that colour.

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Decor Ideas Set the mood, live healthy and feel good. Colours give the essential character to any space. Be it the living room or kitchen, bedroom or lounge. In this section, we'll help you achieve striking effects using the right colour combinations. We'll help you understand colours and how you can use them to create a home that resonates with your personality.

Glam Decor Timeless, eternal shades that infuse glamour. Traditionally, they have been a part of our culture in fabrics, jewellery, furnishings and accessories. Make a statement of elegance and sophistication in a bold, luxurious ambience.

Cool Decor Tranquil, open and full of optimism, cool is nurturing and soothing. Curtains and bedspreads create an ambience of wide spaces that comforts the senses. In this life of constant stress, such a dcor offers a much-needed retreat.

Vibrant Decor Refined or lively, hot and trendy, vibrant dcor adds a dash of spice to everyday life. It can be a radical statement or a classical symphony. Either way a vibrant outlook adds a spirit of youth, revelry and fun!

Neutral Dcor

Neutral is elegance. It's the modernity of steel and the calmness of winter. Sombre and placid and yet a dignified presence in your home, neutral colours offer a balance to every excess.

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Colour Shoppe Colour Next 2009 the latest colour trends for 2009. Colour Next 09 is a celebration of colours born out of imagination and research. It's the outcome of a comprehensive trend mapping exercise conducted by Asian Paints across India, taking into account a variety of factors like international trends, consumer insights and expert opinions. Information from all these sources are then analysed to forecast design themes & colour palettes for the year ahead. The Colour Next 2009 Trend Book gives you all the information you need about Colour Next 2009 with actual colour swatches. Start your day with a dash of colour with the Colour Next 2009 Planner.

Home Book Colour Next 09 Colour Next 2009 the latest colour trends for 2009. Colour Next 09 is a celebration of colours born out of imagination and research. It's the outcome of a comprehensive trend mapping exercise conducted by Asian Paints across India, taking into account a variety of factors like international trends, consumer insights and expert opinions. Information from all these sources are then analysed to forecast design themes & colour palettes for the year ahead. The Colour Next 2009 Homebook depicts actual roomshots, suggested colour combinations and theme walls for each trend.

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Imagine Wall Fashion Imagine Wall Fashion dramatic, stylish wall themes that transform your home, even if you alter nothing else in it. A string of bells turn a room Indian, abstract patterns make it modern, a spray of flowers make it dreamy, and ornate designs give it a sophisticated feel. Along with the themes, our designers have picked accessories and chosen the kind of lighting that would create the perfect ambience.

Imagine Exteriors: Exterior Colour Guide

Our choices of exterior colours for homes, are really an expression of our personalities. We at Asian Paints are always looking at making this process of creating more beautiful exteriors more interesting and simpler for you. The Imagine Exteriors book showcases a number of new and exciting colour combinations that you can use for your home. Just pick your favourite colour combination and flip to that section to see the different possible combinations. These have been carefully selected by architects and designers to ensure that they suit different architectural styles of homes across the country.

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Interior Colour Guide & Exterior Colour Guide Combo

Colours give the essential character to any space. Choosing colours for your home and making the right combination without the right guides can be a long confusing process. Here is a great combination of guides from Asian Paints, for interiors and exteriors of your house. The Interior Colour Guide helps you zero in on the right colours through an easy-to-navigate structure based on basic colour families. Here's where you'll find 7 unique combinations for each colour family to choose from. You can compare and see how the same room setting looks distinctly different with deeper, medium or lighter tones of the same colour family. A total of 77 colour combinations are waiting to be discovered, in this book. The Exterior Colour Guide: Imagine Exteriors book showcases a number of new and exciting colour combinations that you can use for your home. Just pick your favourite colour combination and flip to that section to see the different possible combinations. These have been carefully selected by architects and designers to ensure that they suit different architectural styles of homes across the country.

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Products and Market Paints The year 2008-09 was a very difficult year for the paint industry. A combination of soaring raw material prices and a sharp fall in demand in the third quarter of the year affected the industry. The market for all paints produced by companies in India both big and small is estimated to have grown by about 17 to 18% by value over the previous year, but by less than 10% by volume. The growth for decorative paints would be above 20% by value and industrial paints substantially lower. The volume growth for the industry would be the lowest over the last five years at about 9%. The year was marked by exceptional growth in the first six months followed by a much slower growth in sales during the rest of the year. The third quarter volume growth was negative, but volumes recovered substantially in the fourth quarter. Given the circumstances, the Company has done very well in the year 2008-09.

Decorative Paints The Company has been the leader in the Decorative paints segment for over four decades now and this year too, it believes it grew faster than its competitors in this segment. As the environment turned out to be far more difficult than anticipated, its response was twofold; continue to invest in the business to build long term strengths and simultaneously, respond proactively to the rapidly changing environment to ensure that growth is strong in the near term. Effective 1st April 2008, the Companys entire range of Decorative products was made free of lead and other heavy metals. This is a step in making Companys products fully conform to contemporary standards. Growth in turnover was ahead of volume on account of price increases as well as changes in the product mix. Emulsion paints for interiors have been growing much faster than distempers over the last decade. This trend continued in the financial year 2008-09. Exterior emulsions too continue to grow much faster than the overall paint demand powered by the Companys leading brands Apex Ultima, Apex and Ace. In both these categories Company introduced a range of new products which did very well. In Exteriors, the Duracast range of textured finishes, Ultima Metallics and Apex Tile Guard all had successful launches. In

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interiors, the Royale Play metallics and Stucco, the kids range of Chalkboard, Fluorescent and Glow and Royale Shyne had successful launches and are doing very well. During the later part of the year, the Company tied up with Dupont USA to co-brand the Royale range of Emulsions with Teflon, the product synonymous with toughness and durability. The year marked another first for the Company. In May, it opened its Signature Store Colour at Bandra in Mumbai. A unique experience centre, it was opened to build confidence through education about colour and to de-mystify and remove the hassle from the decorating process. In essence its purpose was To provide inspiration to families while they are in the process of designing their dream home by fuelling their spirit of experimentation. The store is the first of its kind in the world in the Paint category and the response from the end consumer has been phenomenal. Over 17,000 consumers have visited the store in the last ten months and the level of customer delight achieved has been exceptional. Regular weekend training programs have been run for consumers on Colour and Dcor. The Company continued with its efforts in upgrading the shop ambience of its leading retailers and providing services to their customers and training to their shop personnel. These have been well appreciated by both our Companys retailers and end consumers. The Company has also commenced introducing a new chain of Colour ideas where retail outlets have been modified to offer a slice of the Signature Store thereby providing the same inspiration to consumers in process of designing their homes. The first two stores have been inaugurated at Hyderabad and Chennai and have met with a very enthusiastic response from consumers. The Company is now in the process of expanding this network of Colour Ideas across the country. The expansion of the Colour World network continues unabated and today the Company has more than 12,000 Colour Worlds offering a wide range of products and shades to consumers even in many small towns across the length and breadth of India. The Company continued to invest in the area of colour with the launch of ColourNext 2009. Several Colours Prices of raw materials increased sharply in the first six months of the year. The impact of rising crude prices as well as the depreciating rupee affected price especially of solvent based products. As a result, the Company increased prices six times till 1st October, 2008. Due to good demand and increase in trade inventories, growth in the first half of the year 2008-09

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was excellent. In the last five months of the year, raw material prices fell sharply due to the world wide slowdown. The third quarter was weak and there was poor purchasing by dealers as they responded to low demand and reduced inventory. The Company responded by lowering prices in November, 2008, December, 2008 and February, 2009. This did affect short term profits due to the consumption of higher priced inventory carried by the Company but helped revive growth. This was reflected in the last quarter performance which was a welcome change after the poor showing in the third quarter. Growth in the paint sale in the fourth quarter was 27.63%. The volume growth achieved would have been considered good in a normal year. The excellent annual performance in the top-line has enabled the Company to do better on profits than would have been the case otherwise. The capacity of the Sriperumbudur Plant has been raised to 100,000 KL per annum. The Distribution Centres at Kasna Plant and Ankleshwar Plant have been commissioned. With the completion of two additional centres at Sriperumbudur Plant and Patancheru Plant over the next fifteen months, the Company would have modernised its vast distribution system, making it possible to service its 25,000 strong distribution base more effectively with lower levels of inventory. The work on the erection of the Companys Sixth Decorative Paint plant at Rohtak, Haryana is on schedule with its first phase of 150,000 KL per annum scheduled for commissioning in the first quarter of 2010-11. The Company is committed to continually improving its products, expanding its product range and offering its consumers a wide range of products and services at every value proposition. The Company believes that this along with continuous investment in marketing activities will enable it to expand its business and meet the challenge from the leading international paint companies who are now in India. Simultaneously, the Company is continually investing in building manufacturing and distribution resources which would help maintain and improve services to its customers.

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Industrial Coatings Automotive Coatings: Asian PPG Industries Limited The Company is engaged in manufacturing of Automotive, Original Equipment Manufacturers (OEM), Refinish and certain other Industrial Coatings through, Asian PPG Industries Limited (APPG), a 50:50 Joint Venture Company between the Company and PPG Industries Inc., USA which was formed in 1997. During the financial year 2008-09, passenger car sales growth was flat in India. The domestic sales of vehicles fell drastically in the festive season from October to December 2008, due to slowdown in the domestic economic growth, high interest rates and tight liquidity situation. During the year under review, many automobile companies had started to cut production by shutting plants for a few days, in order to avoid inventory build-up. However, most OEMs posted fair growth in the last quarter of the year 2008-09. This growth was aided by the 4% CENVAT reduction in December, 2008 and another 2% in February, 2009, discounts, cheaper financing and higher disbursements by public sector banks. The year saw a sharp rise in price of raw materials due to the twin impact of rising crude oil prices and appreciation of the US Dollar vis--vis the Indian Rupee. Simultaneously, continuing efforts by customers to cut costs limited the scope for improving price realization. This posed a serious challenge to the ability of coating suppliers to sustain margins and manage earnings growth. Cost reduction, better cash management, quality improvement and reduction in development time for new products were the major points of focus for APPG during the year. These initiatives helped APPG arrest the slide in sales and profitability. Total sales fell to Rs. 420.94 crores from Rs. 436.16 crores in the previous year. The Profit After Tax declined to Rs. 15.78 crores for the year ended 31st March, 2009, from Rs. 32.94 crores for the previous year. 8 Faaber Paints Private Limited, a wholly owned subsidiary of APPG, reported Profit Before Tax of Rs. 0.28 crore this year as compared to Rs. 0.83 crore for the financial year ended 31st March, 2008. The sales remained flat at Rs. 11.05 crores (Rs. 10.98 crores in 2007-08) due to poor market conditions in the second half of the year 2008-09. APPGs first manufacturing facility was commissioned in March 2008. The installed capacity is 3,200 KL per annum. The Company is confident that this facility will help provide better service to its customers. Notwithstanding the subdued market conditions and the intensified competition, the Company believes that the year ahead is a year of great opportunity for

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APPG. While there may be a temporary slowdown, APPGs strategy of offering better value to its customers by providing superior products and service through upgraded service standards and improved delivery capabilities will help grow APPGs share of the market and meet expectations of its stakeholders.

Non-Auto Industrial Coatings The Company operates in the non-auto industrial coatings segment through its Growth Business Unit and a wholly owned subsidiary, Asian Paints Industrial Coatings Limited. Revenues from the segment of non-auto industrial liquid paints showed satisfactory growth in the first half of the year. There was a marked decline in demand in the second half, due to the overall depressed economic conditions and the difficult credit situation. Industrial projects, maintenance activities and production of engineering goods slowed down during this period. The Company was able to record value growth in this segment last year inspite of the adverse economic situation. The Company exercised the required control over operating expenses and prudently managed working capital and material costs during the year, which saw periods of rapid inflation and deflation in prices. The industrial liquid paints plant at Taloja received the ISO 9000 certification at the start of the year. This plant today has the capability to manufacture the entire range of products sold in this segment. Growth in this segment is expected mainly in the second half of the year 2009-10.

Asian Paints Industrial Coatings Limited Asian Paints Industrial Coatings Limited (APICL), a wholly owned subsidiary of the Company, is engaged in the manufacture and sales of Powder Coatings. After several years of high growth, there was a very marginal year-on-year growth in revenue last year. While the first half of the year saw double-digit growth in revenue, slowed down significantly in the third quarter. All major segments of OE manufacturers using Powder Coatings experienced a drastic drop in demand during this period. There has been some improvement in demand towards the end of the last quarter. However, at least in the first few months of the year 2009-10, it is not expected that sales of Powder Coatings will grow substantially. Some improvement in demand and sales is expected from the second

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quarter of the year 2009-10, while prospects for growth will be linked to the overall performance of the economy.

Technical Instruments Manufacturers (India) Limited Technical Instruments Manufacturers (India) Limited (TIM) is a 100% subsidiary of the Company. It owns the building which houses the Companys Corporate Office. It has no income except the rent it receives from the Company. The Board of Directors of the Company at their meeting held on 28th March, 2009, approved the merger of TIM with the Company, for which an application and petition has been filed by TIM with the Honble Bombay High Court.

SAFETY, HEALTH AND ENVIRONMENT The Company continued to focus on improving work place safety and the safety capabilities across all its plants. During the year, all the five decorative paint manufacturing units were audited and certified by the British Safety Council. The Ankleshwar plant of the Company was recognised with a Certificate of Appreciation by the Gujarat Safety Council for one million hours of accident free working. The Company undertook waste minimization initiatives in its efforts to conserve resources and protect the environment. Kasna Plant was awarded the Gold Award in the Chemical Sector for outstanding achievement in environmental management by Greentech Foundation. Resource conservation and waste minimization continued to be the key focus areas for the Company during the 2008-2009. This resulted in reduction in specific generation of effluents and solid waste. Also, specific water consumption was further reduced during the year 200809.

HUMAN RESOURCES The thrust area for the Company during 2008-09 was to promote coaching within the organisation and integrate it in the overall human resources development agenda. The Results Coaching Systems, Australia is partnering with the Company in developing managers as coaches. A batch of thirty-five managers has now received certification in coaching.

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A series of programs were held at all levels in Technology function to promote the work culture of innovation and 11 collaboration and HR processes have been adopted to support this initiative. During 2008-09 the efforts to reach out to all employees were continued. This has received a very favourable response from employees. Performance Management System was operational for a full year after its re-launch last year. It has been implemented well.

CORPORATE SOCIAL RESPONSIBILITY The Company continues its initiatives in Corporate Social Responsibility through its three core areas: Water Conservation, Care of the Aged and Education. The Company installed a rainwater harvesting scheme at its manufacturing facility in Bhandup, Mumbai in 2002. It soon replicated the format at its other plants in Ankleshwar, Kasna, Patancheru and Sriperumbudur. Awareness programs were organized on water conservation and Rain Water harvesting through Total Water Management Centre and also free expert advice was provided to interested parties on implementation of Rain Water Harvesting projects. The Company has endeavoured to work towards the cause of the disadvantaged elderly sections of the communities located in the vicinity of its plants. Camps were organized for cataract surgeries, diabetes detection, dental examination and vaccination and immunization during the year 2008-09. Also, educational tours for the school children from the villages in the vicinity of its plants, providing drinking water to schools, providing walking sticks to the disadvantaged, training teachers on healthcare and hygiene topics and undertaking tree plantation drives were some of the other initiatives undertaken by the Company. The Company has always focused on improving infrastructure facilities of schools in the vicinity of its plants. The Ankleshwar plant has been actively spearheading the renovation works of the Shree Gattu Vidyalaya, which will greatly enhance the infrastructure facilities of the school. The plants at Sriperumbudur, Patancheru and Cuddalore are also providing infrastructure support to schools in their locality.

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INFORMATION TECHNOLOGY During the financial year 2008-09, the Company has upgraded its key Enterprise Resource Planning (ERP), Supply Chain Planning and Customer Relationship Management (CRM) applications to the latest platform. This has provided the Company the ability to adopt the latest innovations in these areas and also implement workflow based processes to improve the overall effectiveness of these applications. The investments made in virtualization technology at the data centre in the previous year were continued in this year. The Company has now completed the migration of all applications to this platform, reducing the requirements of space and power while improving the uptimes and agility of the applications. In 2008-09 IT applications and tools supporting the new distribution warehouses in Kasna and Ankleshwar with real time integration to other IT systems was completed successfully. Over the years the Company has implemented systems to complement and enhance business processes and made them available to employees on the move as well as to business partners. With attacks on information assets increasing dramatically, it was felt necessary to improve the systems to safeguard the integrity of the Companys data and protect its information assets. In the current year the Company has enhanced the security systems and processes to achieve the same at the data centre. The same will be extended to the applications and desktops in the coming year.

RESEARCH & DEVELOPMENT The Company is executing an integrated strategy for technology development and deployment. The technology function is supporting its strategy around four missions: technology development, development of substantially new products, productivity improvement, and cost reduction. The focus for the Company in the financial year 2008-09 had been to develop technology capabilities to meet the mid-term and long term strategic goals of the organization. They were built on the technology trends and the customers requirements. The Company further continues to focus on innovation and collaboration. The strategy of developing platform technologies is beginning to bear fruit. The productivity of the technology function has improved considerably 12 by redirecting resources towards the core R&D activities and by increasing the productivity of the individual scientists.

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In keeping with environmental legislation in the developed world, the Company had removed lead and other heavy metal products from all decorative paints. The knowledge developed is being leveraged to your overseas units as well. Going forward, the Company will be focusing on developing products with low volatile organic contents (VOC) in both the water borne and the solvent based products in decorative and industrial paints. The Company has also developed contacts with research organizations with which it has started collaborating in some areas of research so as to accelerate progress. The Company has been successful in attracting competent and committed scientists to strengthen its internal capabilities. This effort will continue. The Technology personnel are now settled in the new state of art R & D Centre established at Turbhe, Navi Mumbai.

RISK AND OUTLOOK The environment today is fraught with risks and uncertainty more than ever before. Adverse impact of global financial turmoil is expected to weaken demand conditions even in the markets where the group operates. The political conditions in these regions would also have an impact on business performance. Given the linkages with global markets, growth in India will be dependent on how the global scenario unfolds. In tandem with other economies globally, India too has stepped up fiscal efforts to support growth and policy makers have been quite proactive so far with monetary as well as other administrative tools. It would be a big surprise indeed if the massive monetary and fiscal policy support to the economy combined with the measures taken to stabilize the financial system does not to have a significant influence on the course of economic events. It is hoped that the new Central Government to be formed will accelerate the reforms process and provide the necessary impetus to investment especially in power generation, roads, ports and water supply systems. As important would be the development of Human Resources and investment in basic health and sanitary services. The deterioration of the geopolitical situation in the region is another concern that the country faces. The foreign exchange market and the crude oil prices continue to be volatile. Hence, predicting the future accurately in such uncertain times is near impossible.

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However, the Companys Management is optimistic that the Indian economy will recover in the second half of 2009-10 and would be able to achieve a GDP growth of around 5.5% to 6%. The expected growth rate, though lower than what the country has witnessed in the last few years, is still strong enough to sustain consumer demand.

CAUTIONARY STATEMENT Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectation may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

CORPORATE GOVERNANCE A separate report on Corporate Governance forms part of the Annual Report, pursuant to Clause 49(VII) of the Listing Agreement. The Company is compliant with the requirements of the Listing Agreement and necessary disclosures have been made in this regard in the Corporate Governance Report. The Management Discussion and Analysis and the report on Corporate Governance are included as a part of the Directors Report. A certificate from the Joint Statutory Auditors of the Company regarding compliance with the requirements of Corporate Governance is to be attached with the report.

DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that: In preparation of the annual accounts, the applicable accounting standards have been followed. The accounting policies have been selected and applied consistently and the judgments and estimates made, are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period.

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 Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. The annual accounts have been prepared on a going concern basis.

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RESEARCH METHODOLOGY
CHAPTER 4

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CHAPTER 4 Research Methodology

Statement of the Problem: To find out why the market share is low for Asian paints in Kashmir Valley. Objectives of the Study: 1. To find reasons for Low Market Share. 2. To understand dealers perceptions about various paint Manufacturers. 3. To suggest Strategies and actions for improving market share.

Scope of the Study Study is done on behalf of Asian Paints in Kashmir Valley Sources of Data Following sources has collected data: a. Primary Data: Using the questionnaire the data was collected, from a sample of non-dealers of Asian paints to get feedback. In this survey, more importance has been given to the primary data than the secondary data because it is more reliable. b. Secondary Data: The various sources for secondary data include books, internet, magazines, pamphlets and small note sheets from the company. The secondary data was collected after choosing the topic, which is very practical to the research. It was collected from the company brochures and documents. This has been used in the profile of the company.

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Sampling Design: A) Sampling unit: Non-dealers of Asian paints. B) Sample size: 35. C) Sampling method: Non-Probability judgement and Convenience sampling methods. D) Research instrument: The research instrument in this study was the questionnaire that was used to get the information needed. The questionnaire was mostly closed ended with multiple choices. Questionnaire was prepared for Non-dealers of Asian paints. Questionnaire includes both general information and specific information and framed according to the objectives set in the required order.

Limitations of the study 1. Due to time constraint an extensive research could not be undertaken therefore the sample size was 35 respondents. 2. Analysis of the data obtained from questionnaire was done on the assumption that the respondents gave the correct information. The data provided by the respondents is basically from their memory recall. Bias tends to creep due to recall errors. However, enough care has been taken to reduce the bias by adopting a cross checking method. 3. Time has been the major constraint while performing the market study. 4. Some of the dealers were not co-operative due to lack of knowledge

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DATA ANALYSIS- Tabulation,

Presentation & Interpretation
Chapter 5

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Table 5.1: - showing dealers dealing in main brands Brands a) Nerolac b) Berger c) ICI d) Shalimar e) Others Total Frequency 24 8 4 2 2 40 Percentage 60 20 10 5 5 100

percentage
70 60 50 40 30 20 10 0 nerolac berger ICI shalimar others percentage

Graph5.1:- Showing dealers dealing in main brands INTERPRETATION: The above graph shows that 60 % of dealers deal with Nerolac, 20% dealers deal with Berger, 10% deal with ICI and 5% deal with Shalimar and others respectively INFERENCE:- Maximum no. of dealers (60%) deal with Nerolac paints.

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Table 5.2:- showing reasons for dealing in main brands reasons a) quality b) customer preference c) price d) dealers margin e) Promotional schemes Total 37 100 Frequency 10 13 4 7 3 Percentage 27 36 11 18 8

percentage
40 35 30 25 20 15 10 5 0 quality customer pref price dealers margin Promotional Schemes percentage

Graph 5.2:- Showing reasons for dealing in main brands INTERPRETATION: According to the graph 27% dealers deal in main brands due to its Quality, 36% deal due to customer preference, 11% deal because of its price, 18% due to dealer margin offered & remaining 8% deal due to the various promotional schemes. INFRERENCE: Majority of dealers (36%) deal in the main brands due to the customer preference.

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Table 5.3:- Showing fast moving Brands of paints Brands Frequency Percentage

a) Berger b) Nerolac c) ICI d) Shalimar e) Others

5 23 7 1 2

13 61 18 3 5

Total

38

100

percentage
70 60 50 40 30 20 10 0 berger nerolac ICI Shalimar others percentage

Graph 5.3:- Showing fast moving Brands of paints

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INTERPRETATION: The above graph shows that 13% dealers believe that berger is fast moving brand, 61% believe Nerolac is fast moving brand, 18% think ici is moving fast at their counter, 3% believe that fast moving brand is Shalimar & 5% constitute other brands

INFERENCE: Maximum dealers (61%) believe that Nerolac is the fast moving brand (EXCLUDING ASIAN PAINTS)

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Table 5.4:- Showing whether companys advertisement is boosting the brand image to increase its sales

Frequency a) YES b) NO TOTAL 27 9 36

Percentage 75 25 100

percentage
80 70 60 50 40 percentage 30 20 10 0

YES

NO

Graph 5.4:- Showing whether companys advertisement is boosting the brand image to increase its sales INTERPRETATION: The graph depicts that 75% dealers think that the companys advertisement is instrumental in boosting the brand image to increase its sale whereas reaming 25% dealers dont agree. INFERENCE: Maximum dealers (75%) agree that the companys advertisement is boosting the brand image to increase its sale performance.

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Table 5.5:- Showing the need of advertisement for selling the product Frequency a) YES b) NO TOTAL 25 9 34 Percentage 74 26 100

percentage
80 70

60
50 40 percentage 30 20 10 0 YES NO

Graph 5.5:- Showing the need of advertisement for selling the product

INTERPRETATION: It can be seen that 74% dealers believe that advertisement is required for selling the product & 26% dealers do not feel the necessity of advertisement

INFERENCE: Maximum dealer (74%) feel that for selling the product, advertisement is necessary.

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Table 5.6:- Showing advertising media preferred for sale Frequency a) b) c) d) Pamphlets TV/Radio Trade fair Any other 9 18 3 1 Percentage 29 58 10 3

TOTAL

31

100

percentage
70 60 50 40

30
20 10 0 paphlets tv/Radio Trade Fair Any other

percentage

Graph 5.6:- Showing advertising media preferred for sale INTERPRETATION: The above representation shows that 29 % dealers feel that Pamphlets are preferred most as advertising media, 58% feel TV/ Radio as good advertising media, 10% think Trade Fair can be good advertising media & 3% choose any other advertising media for selling the product. INFERENCE: Majority of dealers (58%) choose TV/Radio as the most preferred advertising media for sale.

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TABLE 5.7:- Showing companys contribution in selling out the product Frequency a) Advertising the product b) Launching promotional schemes c) Providing attractive trade margin d) Providing financial incentives TOTAL 10 14 Percentage 30 43

3 6 33

9 18 100

Percentage
50 45 40 35 30

25
20 15 10 5 0 advertising promotional scheme attractive trade margin financial incentives Percentage

Graph 5.7:- Showing companys contribution in selling out the product

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INTERPRETATION: The graph shows that 30% dealers think that the company helps in selling the product by advertising it,43% think that by launching promotional schemes company helps in selling the product,9% dealers think that company helps by providing attractive trade margin & remaining 18% feel that company helps by providing financial incentives.

INFERENCE: Maximum dealers (43%) believe that company contributes towards selling the products by launching promotional schemes.

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TABLE 5.8:- Showing scope for change in Asian paints to improve sales

Frequency a) YES b) NO TOTAL 31 4 35

Percentage % 89 11 100

PERCENTAGE
100 90 80 70 60 50

40
30 20 10 0 YES NO

PERCENTAGE

Graph 5.8:- Showing scope for change in Asian paints to improve sales

INTERPRETATION: It can be seen that 89% dealers believe that there is a scope for change in Asian Paints to improve its sales whereas remaining 11% do not agree to this. INFERENCE: Maximum dealers (89%) feel that Asian Paints can improve its sales performance.

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TABLE 5.9:-Showing average rating of companies

Weighted average a) b) c) d) Asian paints Nerolac ICI Berger 288 273 223 233

Rank 1 2 4 3

Average ranking
350 300

250
200 150 100 50 0 Asian pants No.1 Nerolac No.2 ICI No. 4 Berger No. 3

Average ranking

Graph 5.9:- Showing average rating of companies INTERPRETATION: The above graph shows that Asian Paints is on the first rank followed by Nerolac, Berger & ICI.

INFERENCE: Asian Paints is the top ranked paint brand.

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TABLE 5.10:- Showing whether Asian paints is better than other companies Frequency a) YES b) NO 14 20 Percentage 41 59

TOTAL

34

100

PERCENTAGE

YES NO

Graph 5.10:- :- Showing whether Asian paints is better than other companies INTERPRETATION: The above chart shows that 41% dealers believe that Asian Paints is better than other paints brands whereas 59% do not agree to this.

INFERENCE: Maximum dealers (59%) do not agree with the policies of Asian Paints due to certain reasons (as mentioned in table 4.11).

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TABLE 5.11:- Showing reasons behind bad performance of Asian paints

Frequency a) b) c) d) Bad Quality High price Low dealer margin Customer satisfaction 0 8 10 3

Percentage 0 38 48 14

TOTAL

21

100

percentage
60 50 40 30 percentage 20 10 0 Bad Quality High price Low dealer margin customer satisfaction

Graph 5.11:- Showing reasons behind bad performance of Asian Paints

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INTERPRETATION: The above representation shows that high price can be the reason behind the bad performance of Asian Paints, 48% believe that low dealer margin can be the reason & remaining 14% feel customer satisfaction can be the cause for their bad performance.

INFERENCE: Majority of dealers (48%) believe low dealer margin can be the reason behind the bad performance of Asian Paints.

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FINDINGS, RECOMMENDATIONS & CONCLUDING REMARKS

CHAPTER 6

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Chapter-6
FINDINGS: Table 5.1: It is concluded that maximum dealers deal with Nerolac brand. Hence, Nerolac is the main competitor for Asian Paints. Table 5.2: It is concluded herein that the main reason behind dealing in the main brands is the customer preference. So more & more customer should be attracted towards Asian Paints. Table 5.3: It is inferred that Nerolac is the fast moving paint brand. Thus, majority of nondealers sell Nerolac paints. Table 5.4: It is concluded that maximum dealers agree that the advertisement given by the company is boosting the brand image to increase its sales. Table 5.5: It is concluded that there is a strong need for advertisement for selling the product. Table 5.6: It is concluded that TV/Radio is the most preferred advertising media for sale. Table 5.7: It is inferred that the company helps in selling the product by launching the promotional schemes. Table 5.8: It is inferred that Asian Paints has the potential to improve its sales by adopting the necessary strategic measures. Table 5.9: It is concluded that Asian Paints is the top ranked brand of paint. So, it should maintain its position & work upon its short-comings where ever needed. Table 5.10: It is inferred that Asian Paints should modify & incorporate policies that are more lucrative than those of its competitors. Table 5.11: It is concluded that low dealer margin is the biggest reason behind the bad performance of Asian Paints. Hence, more dealers as well as customers should be attracted simultaneously.

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RECOMMENDATIONS: Dealers should get price relaxation to increase profit margin. Extra rewards & incentives should be provided by the company to the potential dealers & customers. Customer preference is the most important factor which can sometimes be the only reason behind the success of a company. Thus, it is essential to make customers aware, attract him through promotional activities & delight him through quality services. After all, a delighted customer will bring many more customers for the company. As Asian Paints was a late entrant than Nerolac in Kashmir Valley, it is therefore very essential to spread awareness among customers to tap the market. Advertisement on the regional channels can prove very helpful but they should be portrayed in the correct manner. So if such measures are undertaken, the sales performance of Asian Paints can improve drastically in the Valley.

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CONCLUSION: During the course of the study I got the golden opportunity to learn about the top players of the paint industry. Although from outside every company seems to offer the same, yet there exists a very thin line of demarcation that differentiates one company from another. I learnt about the number one paint brand Asian Paints. I also got to learn about the entire distribution channel; as it plays a very vital role by bridging the gap between the manufacturers & the customers. Furthermore, the analysis helped me to chalk out few areas which have to be nurtured by implementing the best strategies possible. Following are the final conclusions drawn in relation to the set objectives of the research: The dealers are not very satisfied with the policies of Asian Paints, which can also result in negative comments about the company. Low profit margin is the main reason for the dissatisfaction among the dealers. Increases profit margin & extra incentives/rewards can improve the situation. Premium customers are more quality conscious whereas average customers are more price sensitive. So the pricing policy of the company should target the average customers on the first place followed by the premium customers without compromising on the quality.

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BIBLIOGRAPHY

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BIBILIOGRAPHY

BOOKS:

Marketing Management

PHILIP KOTLER.

Marketing Management

J.C.GANDHI.

Principles of Marketing

P.N.REDDY.

Business Study

B.S.RAMAN.

Strategic management

Hill, W.L Charles

NEWS PAPERS:

Economic Times Times of India Business line

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JOURNALS: Business World Review of theory Frameworks OTHERS:

Company books and brochures Company website: WWW. ASIAN PAINTS.COM

Other Websites: www.wikipedia.org &www.marketingmanagement.com

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ANNEXURE

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Annexure QUESTIONNAIRE
Name of dealer: ........................... Address: .....................................................................

How long you have been in Paints Business? .. What are main brands you are dealing with? a) c) e) Asian Paints Berger Shalimar b) d) f) Nerolac ICI Others

Why do you deal with above kind of brand? a) Quality c) Price e)Schemes d)Dealers margin

b) Customer preference

Which brands of Paints are fast moving at your counter? ............................................................................................................................ Do you think that advertisement given by the company is boosting the brand image or increasing the sale? a) Yes b) No

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Do you have a need of regular advertisement to sale your product? a) Yes b) No

If yes, then How? a) c) Publicity through pamphlets Trade Fair b) d) TV/Radio Any other

How does company help you in selling out the product? a) c) Advertising the product b) Launching promotional scheme providing financial incentives

Providing attractive trade d)

Do you feel any change in Asian Paints to improve the sales? a) Yes b) No

How do you rate (out of 10) the following companies? A) Asian paints . C) ICI B) Nerolac D) Berger..

Do you think that an Asian paint is better than other companies? a) Yes If no, then why? A) Bad Quality B) high price C) low dealer margin b) no

D) Customer satisfaction

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Do you want to give any suggestion to Asian Paints regarding dealing and promotion? ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Thank you

Date : ..................... Place : .................... Signature of Surveyor

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