MIRA INFORM REPORT

Report No. :	302919
Report Date :	12.01.2015

IDENTIFICATION DETAILS

Name :	KANSAI NEROLAC PAINTS LIMITED (w.e.f. 11.07.2006)
Formerly Known As :	GOODLASS NEROLAC PAINTS LIMITED
Registered Office :	Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013, Maharashtra
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	02.09.1920
Com. Reg. No.:	11-000825
Capital Investment / Paid-up Capital :	Rs.538.920 Millions
CIN No.: [Company Identification No.]	L24202MH1920PLC000825
IEC No.:	Not Available
TAN No.: [Tax Deduction & Collection Account No.]	MUMG00234D
PAN No.: [Permanent Account No.]	AAACG1376N
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is engaged in manufacturing and selling of decorative and industrial paints.
No. of Employees :	2298 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Aa (80)

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 40000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a well-established and reputed company having fine track. Financial position of the company seems to be strong. The rating also takes into consideration Kansai Nerolac’s market leadership in the industrial paints segment in India marked strong brand appeal in the decorative paints segment. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	AAA (Long Term Rating)
Rating Explanation	Have highest degree of safety and carry lowest credit risk.
Date	31.07.2014

Rating Agency Name	CRISIL
Rating	A1+ (Short Term Rating)
Rating Explanation	Have very strong degree of safety and carry lowest credit risk.
Date	31.07.2014

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2014.

LOCATIONS

Registered Office :

Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India

Tel. No.:

91-22-24934001/ 24992500/ 4992585/ 24992796/ 24992807

Fax No.:

91-22-24919439/ 24973704

E-Mail :

info@nerolac.com

gtqovindaraian@nerolac.com

investor@nerolac.com

Website :

http://www.qoodlassnerolac.com

http://www.nerolac.com

Sales Depot Office :

Melaram Complex, Mandoli, Delhi – 110 093, India

Factory 1 :

B1 , B2, Jainpur Industrial Estate, Kanpur Dehat, Kanpur, Uttar Pradesh, India

Factory 2 :

F/2, MIDC, Lote Parshuram, Taluka Khed, District Ratnagiri, Maharashtra, India

Factory 3 :

Bibi Talav Vatva, Ahmadabad, Gujarat, India

Factory 4 :

142, Tiruporur Road, Perungudi, Chennai, Tamilnadu, India

Factory 5 :

36, Sector-7, HSIDC IGS, Bawal, District Rewari, Haryana, India

Sales Depot :

B-19, Meerut Road, Industrial Area, Meerut Road, Ghaziabad – 201 003, Uttar Pradesh, India

Branch Office :

Located at:

Jammu	Guwahati
Jalandhar	Varanasi
Ludhiana	Jamshedpur
Bhatinda	Kolkata
Patiala	Vishakhapatnam
New Delhi	Vijayawada
Mumbai	Trichy
Parwanoo	Madurai
Chandigarh	Trivandrum
Ambala	Thiruvalla
Dehradun	Cochin
Ghaziabad	Calicut
Sahibabad	Mangalore
Faridabad	Bangalore
Bareilly	Hubli
Agra	Tirupati
Lucknow	Panji
Kanpur	Gulbarga
Patna	Kolhapur
Siligari	Hyderabad
Pune	Chennai
Bhiwandi	Rajkot
Nagpur	Indore
Cuttack	Udaipur
Raipur	Gwalior
Jabalpur	Bhopal
Varanasi	Jaipur
Surat	Jodhpur
Baroda	Narol
Ahmedabad	Aurangabad

DIRECTORS

AS ON 31.03.2014

Name :	Dr. Jamshed Jiji Irani
Designation :	Chairman
Address :	221, A-Wing, NCPA Apartment, Nariman Point, Mumbai – 400 021, Maharashtra, India
Date of Birth/Age :	02.06.1936
Date of Appointment :	29.10.2002
Name :	Mr. Devendra Motilal Kothari
Designation :	Vice Chairman
Address :	8-4, Seaface Park Co-Operative Housing Society, Bhulabhai Desai Road, Mumbai – 400 026, Maharashtra, India
Date of Birth/Age :	30.03.1930
Date of Appointment :	01.04.1973
Name :	Mr. Harishchandra M. Bharuka
Designation :	Managing Director
Address :	A-ll, Twin Towers Premises Co-Operative Housing Society Limited, Off V S Marg, Mumbai – 400 025, Maharashtra, India
Date of Birth/Age :	22.06.1960
Date of Appointment :	01.04.1999
Name :	Mr. Pradip P. Shah
Designation :	Director
Address :	72-A, Embassy Apartment, 7th Floor, 46 Nepeansea Road, Mumbai – 400 036, Maharashtra, India
Date of Birth/Age :	07.01.1953
Date of Appointment :	30.01.2007
Name :	Mr. Noel Naval Tata
Designation :	Director
Address :	Windmere - 55, Cuffe Parade, Mumbai – 400 005, Maharashtra, India
Date of Birth/Age :	12.11.1956
Date of Appointment :	27.10.2007
Name :	Mr. Pravin D. Chaudhari
Designation :	Whole Time Director
Address :	12, Juhu Goldmist, JUPD Scheme, Mumbai – 400 049, Maharashtra, India
Date of Birth/Age :	17.05.1968
Date of Appointment :	30.04.2008
Name :	Mr. Yoshikazu Takahashi
Designation :	Director
Address :	7-Chome 6-1-4, Okamoto Higashinada - KU, Kobe, Hyogo, Japan
Date of Birth/Age :	11.01.1953
Date of Appointment :	26.03.2010
Name :	Mr. Hitoshi Nishibayashi
Designation :	Director
Address :	7-Chome 6-1-4, Okamoto Higashinada - KU, Kobe, Hyogo 6580072, Japan
Date of Birth/Age :	31.05.1963
Date of Appointment :	30.07.2010
Name :	Mr. M. Tanaka
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Gomatam Thirumalai Govindarajan
Designation :	Company Secretary
Address :	F-203, Lloyds Estate, VIT College Marg, Wadala (East), Mumbai – 400 037, Maharashtra, India
Date of Birth :	16.11.1964
Date of Appointment :	01.10.1993

SHAREHOLDING PATTERN

AS ON 30.09.2014

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of Total No. of Shares
		As a % of (A+B)
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
Bodies Corporate	37329760	69.27
Sub Total	37329760	69.27
Total shareholding of Promoter and Promoter Group (A)	37329760	69.27
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	831075	1.54
Financial Institutions / Banks	2429	0.00
Insurance Companies	1687226	3.13
Foreign Institutional Investors	6313883	11.72
Sub Total	8834613	16.39
(2) Non-Institutions
Bodies Corporate	3380421	6.27
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Millions	3383309	6.28
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions	856952	1.59
Any Others (Specify)	106917	0.20
Non Resident Indians	69049	0.13
Trusts	5517	0.01
Unclaimed Suspense A/c	32351	0.06
Sub Total	7727599	14.34
Total Public shareholding (B)	16562212	30.73
Total (A)+(B)	53891972	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	53891972	0.00

BUSINESS DETAILS

Line of Business :

Subject is engaged in manufacturing and selling of decorative and industrial paints.

Products :

Products Description	Item Code No.
Paints	320890.03

Brand Names :

Not Available

Agencies Held :

Not Available

Exports :

Not Available

Imports :

Not Available

Terms :

Selling :

Not Available

Purchasing :

Not Available

PRODUCTION STATUS: Not Available

GENERAL INFORMATION

Suppliers :

Reference :	Not Available
Name of the Person :	Not Available
Contact No.:	Not Available
Since How Long Known :	Not Available
Experience :	Not Available
Maximum Limit Dealt :	Not Available

Customers :

Reference :	Not Available
Name of the Person :	Not Available
Contact No.:	Not Available
Since How Long Known :	Not Available
Experience :	Not Available
Maximum Limit Dealt :	Not Available

No. of Employees :

2298 (Approximately)

Bankers :

· Union Bank of India

· Standard Chartered Bank

· HDFC Bank Limited

· BNP Paribas

Facilities :

Secured Loans	31.03.2014	31.03.2013
	(Rs. In Millions)
LONG TERM BORROWING
Secured Sales Tax Deferral Loan (Secured by a charge on the fixed assets of the factory at Jainpur)	9.000	9.000
Total	9.000	9.000
Notes: Package Scheme of Incentive allowed the Company to accumulate the sales tax collected from its customers in respect of goods produced at Jainpur factory. Sales tax collected each year is repayable after five years from the year of collection. Outstanding amount is repayable in two annual instalments from the reporting date. Sales Tax Deferral Loan is interest-free. [Current maturity of Sales Tax Deferral Loan of Rs. Nil (2012-2013 Rs.20.640 millions) is disclosed under ‘Other Current Liabilities'.

Auditors :
Name :	BSR and Company LLP Chartered Accountants
Address :	1^st Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalakshmi, Mumbai – 400 011, Maharashtra, India
Tel. No.:	91-22-39896000
Fax No.:	91-22-30902511
Memberships :	Not Available
Collaborators :	Not Available
Solicitors :
Name :	Kanga and Company
Address :	Mumbai, Maharashtra, India
Holding Company :	Kansai Paint Company Limited, Japan
Subsidiary Company :	Kansai Paints Nepal Private Limited (w.e.f. 01.10.2012)
Fellow Subsidiary Companies :	· Kansai Paint Philippines Inc. · Kansai Coatings Malaysia SDN. BHD. · Kansai Paints Europe Limited

CAPITAL STRUCTURE

AS ON 31.03.2014

Authorised Capital:

No. of Shares	Type	Value	Amount
60000000	Equity Shares	Rs.10/- each	Rs.600.000 millions

Issued, Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
53891972	Equity Shares	Rs.10/- each	Rs.538.920 millions

Details of Shareholders holding more than 5% of shares:

Particulars	31.03.2014
	%	No. of Shares
Holding Company:
Kansai Paint Company Limited, Japan	69.27	37329760
Others:
Aberdeen Asset Management Asia Limited	7.90	4255338

Particulars	31.03.2014
	No. of Shares
Aggregate number of bonus shares issued during the period of five years immediately preceding the reporting date by capitalisation of security premium reserve	26945986

The Company has issued one class of shares, i.e. equity shares, which enjoys similar rights in respect of voting, payment of dividend and repayment of capital. On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportionate number of equity shares held.

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period:

Particulars	31.03.2014
	No. of Shares
Number of shares at the beginning of the year	53891972
Issued during the year	--
Number of shares at the end of the year	53891972

FINANCIAL DATA

[All figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2014	31.03.2013	31.03.2012
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	538.920	538.920	538.920
(b) Reserves & Surplus	13693.030	12320.880	10092.620
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1)+(2)	14231.950	12859.800	10631.540
(3) Non-Current Liabilities
(a) Long-term borrowings	517.100	604.850	689.760
(b) Deferred tax liabilities (Net)	658.440	430.630	0.000
(c) Other long term liabilities	0.000	0.000	0.000
(d) Long-term provisions	287.880	385.240	432.120
Total Non-current Liabilities (3)	1463.420	1420.720	1121.880
(4) Current Liabilities
(a) Short term borrowings	0.000	0.000	0.000
(b) Trade payables	4407.400	3893.420	2682.550
(c) Other current liabilities	1663.360	1648.290	1813.540
(d) Short-term provisions	785.140	800.040	731.690
Total Current Liabilities (4)	6855.900	6341.750	5227.780
TOTAL	22551.270	20622.270	16981.200
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	9048.780	7725.690	3930.550
(ii) Intangible Assets	47.010	19.040	32.680
(iii) Capital work-in-progress	481.550	1234.900	1614.870
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	330.980	480.980	439.130
(c) Deferred tax assets (net)	0.000	0.000	102.210
(d) Long-term Loan and Advances	401.450	442.350	435.730
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	10309.770	9902.960	6555.170
(2) Current assets
(a) Current investments	233.760	125.040	1395.920
(b) Inventories	6456.610	5340.730	4537.100
(c) Trade receivables	4548.360	4199.890	3588.340
(d) Cash and cash equivalents	548.740	600.660	591.770
(e) Short-term loans and advances	255.170	192.980	128.090
(f) Other current assets	198.860	260.010	184.810
Total Current Assets	12241.500	10719.310	10426.030
TOTAL	22551.270	20622.270	16981.200

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Revenue from Operations	31543.540	28566.190	26005.720
		Other Income	103.310	163.170	242.660
		TOTAL (A)	31646.850	28729.360	26248.380
Less	EXPENSES
		Cost of Materials Consumed	20851.160	18985.740	16968.980
		Purchases of Stock-in-Trade	1295.260	1022.830	917.500
		Changes in Inventories of Finished Goods, Work-in-progress and Stock-in-trade	(806.970)	(582.400)	(482.350)
		Employee Benefits Expense	1358.770	1181.430	1069.440
		Other Expenses	5224.450	4597.610	4159.140
		Reversal of excess depreciation in respect of earlier years	0.000	(1149.250)	0.000
		TOTAL (B)	27922.670	24055.960	22632.710
Less	PROFIT/(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3724.180	4673.400	3615.670
Less	FINANCIAL EXPENSES (D)		4.510	0.160	0.860
	PROFIT/(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		3719.670	4673.240	3614.810
Less/ Add	DEPRECIATION/ AMORTISATION (F)		649.760	471.070	563.530
	PROFIT/(LOSS) BEFORE TAX (E-F) (G)		3069.910	4202.170	3051.280
Less	TAX (H)		1004.200	1280.350	892.430
	PROFIT/(LOSS) AFTER TAX (G-H) (I)		2065.710	2921.820	2158.850
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		8149.650	6213.570	4959.587
Less	APPROPRIATIONS
		Proposed Dividend	592.810	592.810	592.810
		Tax on Proposed Dividend	100.750	100.750	96.170
		Transfer to General Reserve	206.570	292.180	215.890
	BALANCE CARRIED TO THE B/S		9315.230	8149.650	6213.570
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	12.930	5.940	11.050
		Recovery of Freight, Insurance and Other Charges on Exports	0.550	0.250	0.560
	TOTAL EARNINGS		13.480	6.190	11.610
	IMPORTS
		Raw Materials	6061.780	4914.890	4757.560
		Components and Spare Parts	19.820	11.940	9.820
		Finished Products	250.010	249.590	285.970
		Capital Goods	159.230	108.030	69.060
	TOTAL IMPORTS		6490.840	5284.450	5122.410
	Earnings Per Share (Rs.)		38.33	54.22	40.06

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	Jun 2014	Sep 2014
Net Sales	9237.000	9232.100
Total Expenditure	8067.100	8028.100
PBIDT (Excl Ol)	1169.900	1204.000
Other Income	78.100	43.500
Operating Profit	1248.000	1247.500
Interest	0.000	0.100
Exceptional Items	0.000	0.000
PBDT	1248.000	1247.400
Depreciation	164.600	173.800
Profit Before Tax	1083.400	1073.600
Tax	353.600	347.000
Provisions and contingencies	0.000	0.000
Profit After Tax	729.800	726.600
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	729.800	726.600

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
PAT / Total Income	(%)	6.53	10.17	8.22
Net Profit Margin (PBT/Sales)	(%)	9.73	14.71	11.73
Return on Total Assets (PBT/Total Assets}	(%)	14.12	22.23	20.58
Return on Investment (ROI) (PBT/Networth)		0.22	0.33	0.29
Debt Equity Ratio (Total Debt/Networth)		0.04	0.05	0.06
Current Ratio (Current Asset/Current Liability)		1.79	1.69	1.99

FINANCIAL ANALYSIS

[All figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(INR in Mlns.)	(INR in Mlns.)	(INR in Mlns.)
Share Capital	538.920	538.920	538.920
Reserves & Surplus	10092.620	12320.880	13693.030
Share Application money pending allotment	0.000	0.000	0.000
Net worth	10631.540	12859.800	14231.950
long-term borrowings	689.760	604.850	517.100
Short term borrowings	0.000	0.000	0.000
Total borrowings	689.760	604.850	517.100
Debt/Equity ratio	0.065	0.047	0.036

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2012	31.03.2013	31.03.2014
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	26005.720	28566.190	31543.540
		9.846	10.423

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	26005.720	28566.190	31543.540
Profit	2158.850	2921.820	2065.710
	8.30%	10.23%	6.55%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	-----
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	-----
22]	Litigations that the firm / promoter involved in	Yes
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	-----
26]	Buyer visit details	-----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

LITIGATION DETAILS:

Bench:- Bombay
Lodging No:-	ITXAL/1018/2013	Failing Date:-		08/07/2013	Reg. No.:-		ITXA/1733/2013	Reg. Date:-	07/09/2013
Petitioner:-	COMMISSIONER OF INCOME TAX 6			Respondent:-	KANSAI NEROLAC PAINTS LTD.
Petn.Adv:-	ARVIND PINTO
District:-	MUMBAI
Bench:-	DIVISION			Category:-	Tax Appeal
Status:-	Pre-Admission			Stage:-
Next Date:-	10/02/2014
Coram:-	ACCORDING TO SITTING LIST ACCORDING TO SITTING LIST
Act:-	Order Act		Under Section :-			260A

INDEX OF CHARGES:

S. No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	90188781	25/08/1999	57,500,000.00	PUNJAB NATIONAL BANK	OM SHIVA E NUMH, BOMBAY, Maharashtra - 400018, INDIA	-
2	90188733	30/06/1998	15,000,000.00	PUNJAB NATIONAL BANK	P N B HOUSE, SIR P M ROAD, BOMBAY, Maharashtra -  400001, INDIA	-
3	90187681	29/06/1995	57,500,000.00	STANDARD CHARTERED BANK	23-25 MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400001, INDIA	-
4	90188454	17/08/1993 *	7,500,000.00	BANK OF TOKYO LTD	JEEVAN PRAKASH, SIR P M ROAD, BOMBAY, Maharashtra  - 400001, INDIA	-
5	90185790	05/02/1992	40,000,000.00	INDUSTRIAL DEVELOPMENT BANK OF INDIA	IDBI TOWER, CUFFE PARADE, BOMBAY, Maharashtra - 400005, INDIA	-
6	90185086	08/07/1986	3,400,000.00	STANDARD CHARTERED BANK	23-25 MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400001, INDIA	-
7	90188176	20/02/1985	2,500,000.00	STAWLARD CENTRAL BANK	MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400004,  INDIA	-
8	80064451	08/12/2011 *	900,000,000.00	UNION BANK OF INDIA LIMITED	Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point,, Mumbai, Maharashtra - 400021, INDIA	B30282248

* Date of charge modification

UNSECURED LOANS

Particular	As on 31.03.2014	As on 31.03.2013
Unsecured Sales Tax Deferral Loan	508.100	595.850
Total	508.100	595.850

NOTES:

Package Scheme of Incentive allowed the Company to accumulate the sales tax collected from its customers in respect of goods produced at Lote factory. Sales tax collected each year is repayable in five equal yearly installments after ten years from the year of collection. Outstanding amount is repayable in eight annual installments from the reporting date.

Sales Tax Deferral Loan is interest-free. [Current maturity of Sales Tax Deferral Loan of Rs.50.920 millions (2012-2013 Rs.64.280 millions) is disclosed under ‘Other Current Liabilities’.

MANAGEMENT DISCUSSION AND ANALYSIS

INTRODUCTION

Subject a subsidiary of Kansai Paint Company Limited, Japan, started as Gahagan Paints and Varnishes Company Limited in the year 1920. Having completed 94 years, Kansai Nerolac has been known as a strong player in the paint industry with high reputation for quality, innovation and brand identity.

It has been the vision of Kansai Nerolac to leverage global technology and serve the customer with superior coating systems and world class solutions.

The Company has 4 manufacturing facilities – at Lote in Maharashtra, Bawal in Haryana, Jainpur in U.P. and the latest state-of-the-art plant at Hosur in Tamil Nadu. The geographical set up of the plants has been advantageous in providing high service levels and supply chain efficiency, thus leading to customer satisfaction. During the year, the Company also inaugurated its new emulsion plant at Jainpur and new polyester resin plant at Lote.

Kansai Nerolac as a Company has always aimed to work in congruence to the customer’s needs and demands.

In line with its vision, the Company strives to provide customer delight. Towards this end the Company has over the years developed a variety of products in order to meet customer demand in the Decorative, Automotive, Auto Refinish, performance Coating and Powder Coating segments of the market.

The Company regularly benchmarks itself against the best in class companies in various sectors across the globe to identify good practices and emerging thought leadership which will add long term value to the various stakeholders. The Company’s strategic investments are guided by its vision, to drive long term superior value for all stakeholders.

The Company is recognized as a pioneer of the environment friendly products and in line with its chosen platform of Healthy Home Paints, it shall continue to spread awareness and also develop new environment friendly products with superior quality.

The Company is a leader in Industrial Paints. Complete system capability with advanced technological products introduced over the years has been instrumental in sustaining the leadership for industrial business segment. Subject has always launched products for customers across various market segments which are innovative and technologically superior.

The Company views investment in IT as strategic and believes in using IT as a tool for competitive differentiation.

Over the years it has made significant investments in IT which have enabled successful integration of IT with all its operations. This year the Company has invested in HANA from SAP which is likely to yield benefits in the years to come.

In line with their vision of delighting the customers, this year, the focus was on engaging the customers and thus enhancing the value proposition. The Company undertook many initiatives in this regard and built strong relationship with the customers; hence the theme of Customer Engagement.

The organisation has been felicitated with several awards which indicate that company has been appreciated by the entire value chain.

INDUSTRY PROGRESS

The financial year 2013-14 has been challenging. Economic growth declined across all the sectors due to a variety of domestic and external factors. High inflation, fiscal deficit, unfavourable domestic savings and investment rates are some of the factors which have been witnessed during the year. A prolonged period of high interest rates, rising inflation along with a host of unfavourable factors have contributed to a dip in consumer demand.

In this tough operating environment the Company has continued on its path of making strategic investments which will enable the Company to emerge stronger in the times ahead. A number of strategic initiatives were taken focussing on Technology, Brand, product, IT, Supply chain, Processes and people development. These initiatives should lead to sustainable long term benefits.

As on March 2014, the size of the paint industry is estimated at around Rs.316500.000 Millions. The Decorative paint segment is expected to be around Rs.224500.000 Millions; whereas the Industrial segment is expected to be around Rs.92000.000 Millions. In the long term paint industry is expected to grow roughly at 1.5 to 2.0 times the GDP.

AWARDS AND RECOGNITION

AWARDS BY EXTERNAL AGENCIES:

· Subject, Lote was awarded with “Certificate of Merit” from National Safety Council (NSC) Maharashtra chapter, for achieving Zero Accident Frequency Rate in the year 2012.

· Subject was awarded with “SAP Solution Manager Excellence Awards” in Application and Business Process Operations category by Indus Group.

· SAP awarded subject with a “SAP ACE AWARD” for building best In-house team for enabling processes and system improvements derived from “SAP Enterprise Support Services.”

· Jainpur plant had been felicitated by Mr. Shivprakash Jaiswal, Union minister of Coal, Government of India, for “Best Safety Practices.”

· Subject Bawal won the silver category Greentech Environment Award 2013 for outstanding achievement in Environment Management from Greentech Foundation.

· Subject received award in Hardware and Consumable category for Outstanding Contribution to Supply Chain Management from Volvo Eicher Commercial Vehicles in the Annual Supplier Conference 2014.

· Their Nerolac Home Painting Service (NHS) was recipient of the Award for developing a portal that was awarded under Business Intelligence (BI)/ Analytics category in the Information Week EDGE function.

· Reader Digest – brand related

AWARDS BY CUSTOMERS:

· Subject Bawal won the green vendor development award for commendable performance, for the second consecutive year from Hero Motor Corp Limited. Tata Motors awarded KNP with a Trophy and Special Citation for Distinction at the recently held Vendor Conference at Macau.

· Subject have received Appreciation Certification from M&M Nashik Plant, for the support extended for availability of Meru Olive Green paint within demanding timelines.

· Subject was awarded with special “Long Association Award” by Escorts Limited–Agri Machinery Group.

FINANCIALS

Sales and operating revenue for the year aggregated to Rs.37390.000 millions reflecting a growth of 10.8 % over the previous year.

During the year India currency further depreciated against the USD resulting in big impact on the material cost.

The Company continued with its initiatives to reduce procurement cost and to reduce operational costs. These initiatives helped the Company in the current year to keep the operational costs under control and improve the bottom line.

Increase in depreciation is due to capitalisation of Hosur plant in the last quarter of the previous year.

Interest cost was slightly higher due to buyer’s credit availed during the year.

Other income was lower at Rs.103 million as compared to Rs.163.000 millions of the previous year due to utilization of funds invested in mutual funds to finance capital expenditure mainly at Hosur.

Profit Before Depreciation, Interest and Tax (PBDIT), excluding Other Income, for the year is higher at Rs.3621.000 millions compared to Rs.3361.000 millions reflecting a growth of 7.7%.

Profit Before Tax (PBT) for the year is Rs.3070.000 millions as compared to Rs.3053.000 millions for the previous year excluding Exceptional Item in the previous year, viz. reversal of excess depreciation in respect of earlier years due to change in the method of depreciation.

CONTINGENT LIABILITIES:

Particulars	31.03.2014 (Rs. in Millions)	31.03.2013 (Rs. in Millions)
Claims against the Company not acknowledged as debt:
Notice from Haryana State Industrial and Infrastructure Development Corporation for enhanced costs for Bawal factory land.	--	39.010
Corporate guarantee given to HDFC Bank for employee loan.	11.160	11.160
Total	11.160	50.170

STATEMENT OF STANDALONE UNAUDITED RESULTS FOR THE QUARTER SIX MONTHS ENDED 30^TH SEPTEMBER 2014

(Rs. in Millions)

Sr. No.	Particular	For the quarter ended		For the Six months ended
		30.09.2014	30.06.2014	30.09.2014
		(Unaudited)	(Unaudited)	(Unaudited)
	Gross Sales/ Income	10977.300	10950.800	21928.100
1.	Income from operations
	Net Sales/Income from Operations (Net of excise and discounts)	9151.800	9210.700	18362.500
	Other operating income	80.300	26.300	106.600
	Total Income from operations (Net)	9232.100	9237.000	18469.100
2.	Expenditure
	Cost of materials consumed	5958.300	5400.200	11358.500
	Purchase of stock in trade	392.000	387.000	779.000
	Changes in inventories of finished goods, work in progress and stock in trade	(185.100)	422.700	237.600
	Employee benefits expenses	348.600	340.400	689.000
	Depreciation and amortization expenses	173.800	164.600	338.400
	Other expenses	1514.300	1516.800	3031.100
	Total Expenses	8201.900	8231.700	16433.600
3.	Profit/ (Loss) from Operations before Other Income, Finance Cost and Exceptional Items (1-2)	1030.200	1005.300	2035.500
4.	Other Income	43.500	78.100	121.600
5.	Profit/ (Loss) from ordinary activities before finance costs and Exceptional Items (3+4)	1073.700	1083.400	2157.100
6.	Finance Cost (net)	0.100	--	0.100
7.	Profit/ (Loss) from ordinary activities after finance costs and but before Exceptional Items (5-6)	1073.600	1083.400	2157.000
8.	Exceptional Items	--	--	--
9.	Profit/ (Loss) from ordinary activities before tax (7+8)	1073.600	1083.400	2157.000
10.	Tax Expense
	(a) Current Tax	317.300	311.300	628.600
	(b) Deferred Tax	29.700	42.300	72.000
	Total Tax Expense	347.000	353.600	700.600
11.	Profit/ (Loss) from ordinary activities after tax (9-10)	726.600	729.800	1456.400
12.	Extraordinary Items (net of tax expenses)	--	--	--
13	Net Profit/ (Loss) for the period (11-12)	726.600	729.800	1456.400
14.	Paid-up Equity Share Capital (Face Value per share Rs.10 each)	538.900	538.900	538.900
15.	Reserve excluding Revaluation Reserves	--	--	--
16.	Earnings Per Share – (Before Extraordinary Items) (Net of tax) (of Rs.10 each)
	Basic	13.48	13.54	27.02
	Diluted	13.48	13.54	27.02
17.	Earnings Per Share – (After Extraordinary Items) (Net of tax) (of Rs.10 each)
	Basic	13.48	13.54	27.02
	Diluted	13.48	13.54	27.02
A	PARTICULARS OF SHAREHOLDING
1.	Public Shareholding
	-Number of Shares	16562212	16562212	16562212
	- Percentage of Shareholding	30.73	30.73	30.73
2.	Promoters and Promoter Group Shareholding
	a) Pledged/Encumbered
	- Number of Shares	Nil	Nil	Nil
	- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	Nil	Nil	Nil
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	Nil	Nil	Nil
	b) Non Encumbered
	- Number of Shares	37329760	37329760	37329760
	- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	100.00	100.00	100.00
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	69.27	69.27	69.27

Particulars	Quarter Ended 30.09.2014
INVESTOR COMPLAINTS
Pending at the beginning of the quarter	Nil
Received during the quarter	Nil
Disposed of during the quarter	Nil
Remaining unresolved at the end of the quarter	Nil

SOURCES OF FUNDS	30.09.2014
	(Unaudited)
I.              EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	538.900
(b) Reserves & Surplus	15126.400
Total Shareholders’ Funds	15665.300
(3) Non-Current Liabilities
(a) long-term borrowings	415.000
(b) Deferred tax liabilities (Net)	718.600
(c) Long Term Provisions	254.900
Total Non-current Liabilities (3)	1388.500
(4) Current Liabilities
(a) Trade payables	4915.100
(b) Other current liabilities	2538.400
(c) Short-term provisions	266.600
Total Current Liabilities (4)	7720.100
TOTAL	24773.900
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets	9599.100
(b) Non-current Investments	331.000
(c) Long-term Loan and Advances	396.400
Total Non-Current Assets	10326.500
(2) Current assets
(a) Current investments	695.100
(b) Inventories	6283.000
(c) Trade receivables	5881.300
(d) Cash and cash equivalents	769.300
(e) Short-term loans and advances	373.900
(f) Other current assets	444.800
Total Current Assets	14447.400
TOTAL	24773.900

Notes:

The above results have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on October 22, 2014. These results have been subjected to "limited review" by the statutory auditors of the Company.

As the Company's business activity falls within a single segment viz. 'Paints' and the sales substantially being in the domestic market, the disclosure requirements of Accounting Standard-17 "Segment Reporting", notified under the Companies (Accounting Standards) Rules, 2006, are not applicable.

FIXED ASSETS:

Tangible Assets

· Freehold Land

· Leasehold Land

· Buildings

· Plant and Equipment

· Furniture and Fixtures

· Vehicles

· Office Equipment

· Assets for Scientific Research

Intangible Assets

· Computer Software

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 62.39
UK Pound	1	Rs. 94.16
Euro	1	Rs. 73.61

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	TRU

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILITY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		80

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.