Description of nature and purpose of each reserve :
Capital Reserve -
a. Capital reserve of ? 5000/- was created on merger of ' Pentasia Chemicals Ltd ' with the Company, pursuant to scheme of Rehabilitation-cum-Merger sanctioned by Board of Industrial and Financial Reconstruction in the financial year 1995-96.
b. Capital reserve of ? 44.38 crores was created on merger of Asian Paints (International) Limited, Mauritius, wholly owned subsidiary of the Company, with the Company as per the order passed by the National Company Law Tribunal.
c. Capital reserve of ? 34.29 crores with a debit balance was created on merger of Sleek International Private Limited, wholly owned subsidiary of the Company, with the Company as per the order passed by the National Company Law Tribunal (Refer note 36(A)).
Capital Redemption Reserve - This reserve was created for redemption of preference shares in the financial year 198990. The preference shares were redeemed in the financial year 1990-91.
General Reserve - General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.
Retained earnings - This represents surplus of profit and loss account.
Remeasurement of defined benefit plans - This represents the cumulative gains and losses arising on the remeasurement of defined benefit plans in accordance with Ind AS 19 that have been recognised in other comprehensive income.
Share based payment reserve - This represents the fair value of the stock options granted by the Company under the 2021 Plan accumulated over the vesting period. The reserve will be utilized on exercise of the options.
Treasury shares - This represents cost incurred by the Company to purchase its own equity shares from secondary market through the Company's ESOP trust for issuing the shares to the eligible employees on exercise of stock options
granted under the 2021 Plan.
Trust Reserve - This represents net income of the ESOP trust.
Debt instruments through OCI - This represents the cumulative gains and losses arising on the revaluation of debt instruments measured at FVTOCI that have been recognised in other comprehensive income, net of amounts reclassified to profit or loss when such assets are disposed off and impairment losses on such instruments.
Equity instruments through OCI - This represents the cumulative gains and losses arising on the revaluation of equity instruments measured at FVTOCI, under an irrevocable option, net of amounts reclassified to retained earnings when such assets are disposed off.
(i) The amounts receivable from customers become due after expiry of credit period which on an average is upto 45
days. There is no significant financing component in any transaction with the customers. .
(ii) The Company provides agreed upon performance warranty for selected range of products and services.
(Refer note 17)
(iii) The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a shorter duration and sale of service contracts are measured as per output method.
(iv) The Company has recognised revenue of ? 130.48 crores (31 c March 2024 - ? 88.35 crores) from the amounts
included under advance received from customers at the beginning of the year.
Note 29(C) : Financial Risk Management - Objectives and Policies
The Company's financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, trade receivables and other receivables and financial liabilities comprise mainly of borrowings, trade payables and other payables.
The Company is exposed to Market risk, Credit risk and Liquidity risk. The Board of Directors ('Board') oversee the
management of these financial risks through its Risk Management Committee. The Risk Management Policy of the Company formulated by the Risk Management Committee and approved by the Board, states the Company's approach to address uncertainties in its endeavour to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of the Company's management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate financial risks in order to minimize potential adverse effects on the Company's financial performance. The Board has taken all necessary actions to mitigate the risks identified basis the information and situation present.
The following disclosures summarize the Company's exposure to financial risks and information regarding use of
derivatives employed to manage exposures to such risks. Quantitative sensitivity analyses have been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial position of the Company.
1) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other
price risk. Financial instruments affected by market risk include borrowings, investments, trade payables, trade receivables and derivative financial instruments.
a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal. The Company has not used any interest rate derivatives.
b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to
changes in foreign exchange rates. The Company enters into forward exchange contracts for crystalised foreign exchange and firm commitment exposure falling due in next 90 days in accordance with foreign exchange risk management policy approved by the Board. The Company does not enter into any derivative instruments for trading or speculative purposes.
b) Foreign Currency Risk (Contd.)
The Company is mainly exposed to changes in USD and EUR . The below table demonstrates the sensitivity to a 5% increase or decrease in the USD and EUR as against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management's assessment of reasonably possible change in foreign exchange rate.
c) Other Price Risk
i) Equity / Investment Risk
Equity / Investment risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Equity / Investment risk arises from financial assets such as investments in equity instruments and bonds. The Company is exposed to Equity risk arising mainly from investments in equity instruments recognised at FVTOCI. As at 31st March 2025, the carrying value of such equity instruments recognised at FVTOCI amounts to ? 867.39 crores (Previous year - ? 594.08 crores). The details of such investments in equity instruments are given in Note 5(I)(A)(b).
The Company is also exposed to Investment risk arising from investments in bonds and debentures
recognised at FVTOCI. As at 31st March 2025, the carrying value of such instruments recognised at FVTOCI amounts to ? 216.41 crores (Previous year - ? 420.81 crores). These being debt instruments, the exposure to
risk of changes in market rates is minimal. The details of such investments in bonds and debentures are given in Note 5(I)(C) & 5(II)(A).
The Company is mainly exposed to change in market rates of its investments in equity investments
recognised at FVTOCI. A sensitivity analysis demonstrating the impact of change in market prices of these instruments from the prices existing as at the reporting date is given below :
If the equity prices had been higher/lower by 10% from the market prices existing as at 31st March 2025, Other Comprehensive Income for the year ended 31st March 2025 would increase by ? 74.33 crores (Previous year - ? 52.61 crores) and decrease by ? 74.33 crores (Previous year - ? 52.61 crores) respectively with a
corresponding increase/decrease in Total Equity of the Company as at 31st March 2025. 10% represents management's assessment of reasonably possible change in equity prices.
ii) Commodity rate risk
Material cost is the largest cost component for the Company, thus exposing it to the risk of price Auctions
based on the supply and demand conditions of those materials. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. The Company has put in place a mix of long-term and short-term mitigation plans. During the year ended 31st March 2025 and 31st March 2024, the Company had not entered into any derivative contracts to hedge exposure to fluctuations in commodity prices.
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks and other receivables. The Company's exposure to credit risk is disclosed in note 5 (except equity shares, bonds and debentures) 6, 10,11A and 11B.
The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating. The Company's exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.
Credit risk arising from investment in mutual funds, derivative financial instruments, term deposits and other
balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.
The average credit period is upto 45 days on sales of products. Credit risk arising from trade receivables is managed in accordance with the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified. The concentration of credit risk is limited due to the fact that the
customer base is large. There is no customer representing more than 5% of the total balance of trade receivables.
For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. The provision matrix followed is given below.
3) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated
with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company's exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
The Company believes that its liquidity position (? 4478.65 crores as at 31st March 2025 (Previous Year- ? 5091.46
Crores)), anticipated future internally generated funds from operations, and its fully available revolving undrawn credit facility will enable it to meet its future known obligations in the ordinary course of business. However, if
liquidity needs were to arise, the Company believes it has access to financing arrangements, value of unencumbered assets, which should enable it to meet its ongoing capital, operating, and other liquidity requirements.
The liquidity position of the Company mentioned above, includes :
i) Cash and cash equivalents and Other Balances with Banks (excluding earmarked balances)
ii) Current/ Non-Current term deposits as disclosed in Other Financial Assets
iii) Investments in debentures or bonds (including interest accured on the same) and mutual funds
The Company's liquidity management process as monitored by the Management, includes -
- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met;
- Maintaining rolling forecasts of the Company's liquidity position on the basis of expected cash flows;
- Maintaining diversified credit lines.
The table below analyses financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Note 29(D) : Capital Management
For the purpose of the Company's capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.
As at 31st March 2025 and 31st March 2024, the Company has only one class of equity shares and has low debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.
Note 34 : Employee Benefits
(1) Post-employment benefits* :
(a) Defined benefit gratuity plan (Funded)
The Company has defined benefit gratuity plan for its employees, which requires contribution to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. Under the Act, all employees who have completed five years of service are entitled to specific benefit. The level of benefits provided depends
on the member's length of service and salary at retirement age. There is no separate contribution by the employee in the fund. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India.
(1) Post-employment benefits* (Contd.):
(a) Defined benefit gratuity plan (Funded) (Contd.)
Each year, the Board of Trustees and the Company review the level of funding in the Trust. Such a review
includes the asset-liability matching strategy and assessment of the investment risk. The Company (employer) contributes to the fund based on the results of this annual review and ensures that the trust is adequately funded. Generally, it aims to have a portfolio mix of sovereign debt instruments, debt instruments of Corporates
and equity instruments. The Company aims to keep annual contributions relatively stable at a level such that no significant plan deficits (based on valuation performed) will arise.
Every two years an Asset-Liability-Matching study is performed in which the consequences of the investments
are analysed in terms of risk and return profiles. The Board of Trustees, based on the study, take appropriate decisions on the duration of instruments in which investments are done. As per the latest study, there is no
Asset-Liability-Mismatch. There has been no change in the process used by the Company to manage its risks from prior periods.
As the plan assets include significant investments in quoted debt and equity instruments, the Company is
exposed to the risk of impacts arising from fluctuation in interest rates and risks associated with equity market.
Fair value of the Company's own transferable financial instruments held as plan assets : NIL
(b) Defined benefit pension plan (Unfunded)
The Company operates a defined benefit pension plan for certain specified employees and is payable upon the employee satisfying certain conditions, as approved by the board of directors.
(c) Defined benefit post-retirement medical benefit plan (Unfunded)
The Company operates a defined post retirement medical benefit plan for certain specified employees and payable upon the employee satisfying certain conditions.
Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present
value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the Balance Sheet.
The Company expects to make a contribution of ? 28.79 crores (Previous year - ? 24.56 crores) to the defined
benefit plans during the next financial year for Gratuity trust.
(d) Provident Fund
The Provident Fund assets and liabilities are managed by 'Asian Paints Office Provident Fund' and 'Asian Paints Factory Employees Provident Fund' in line with The Employees' Provident Fund and Miscellaneous Provisions
Act, 1952.
The plan guarantees minimum interest at the rate notified by the Provident Fund Authorities. The contribution
by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of the services by the employee. In terms of the guidance note issued by the Institute of Actuaries
of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumptions provided below, there is no shortfall as at 31st March 2025.
Participation by all employees in provident funds plans is mandatory. Contribution to Provident Fund is made
@ 12% of salary (computed in accordance with the prevalent regulations) by the employee. Similarly, the Company also contributes to the Provident Fund specified percentage of salary as per the prevalent regulations. Employees have the option to voluntarily contribute a higher amount.
The Company contributed ? 29.17 crores (Previous Year - ? 25.42 crores) towards Asian Paints Office Provident Fund during the year ended 31st March 2025. The Company contributed ? 15.37 crores (Previous Year - ? 13.82
crores) towards Asian Paints Factory Employees Provident Fund during the year ended 31st March 2025.
(3) Employee share based payment plans
During the year ended 31st March 2021, the Company implemented Asian Paints Employee Stock Option Plan 2021 ("2021 Plan"). The plan was approved by the shareholders in the Company's 75th AGM held on 29th June 2021. The 2021 Plan enables grant of stock options to the eligible employees of the Company and its subsidiaries not exceeding 25,00,000 Shares, which is 0.26 % of the paid up equity share capital of the Company as on 12th May 2021. Further, the stock options to any single employee under the Plan shall not exceed 5,00,000 Shares of the Company during the tenure of the Plan, subject to compliance with Applicable Law.
The options granted under 2021 Plan have a maximum vesting period of 4 years. The options granted are based on the performance of the employees during the year of the grant and their continuing to remain in service over the next 3 years. The process for determining the eligibility of employees for the grant of stock options under the 2021 Plan shall be determined by the Nomination and Remuneration Committee (Administrator of the 2021
Plan) in consultation with Managing Director & CEO and based on employee's grade, performance rating and such other criteria as may be considered appropriate. The employees shall be entitled to receive one equity share of the Company on exercise of each stock option, subject to performance of the employees and continuation of
employment over the vesting period. The exercise price for stock options granted are at a discount of 50% to the Reference Share Price (the average of the daily high and low of the volume weighted average prices of the Shares quoted on a recognised stock exchange during the 22 trading days preceding the day on which the grant is made) of the shares of the Company as defined under 2021 Plan.
Further, the 2021 Plan replaced the existing Deferred Incentive Scheme (which provided for deferred cash pay-outs
based on performance of the employees and satisfaction of vesting conditions). Pursuant to launch of 2021 Plan, the eligible employees were given option to convert existing deferred incentive benefit for FY 2020-21 into ESOPs. Accordingly, stock options were granted to those employees opting for ESOPs.
The Administrator approved secondary purchase of shares equivalent to the options granted in August, 2021 through Asian Paints Employees Stock Ownership Trust ("ESOP Trust" or "Trust") which is shown as treasury shares in
the Statement of Changes in Equity.
NOTE 36(A) : Amalgamation of Sleek International Private Limited and Maxbhumi Developers Limited
The Hon'ble National Company Law Tribunal, Mumbai ('NCLT') approved the Scheme of Amalgamation ('the Scheme') of Maxbhumi Developers Limited (MDL) and Sleek International Private Limited (Sleek), wholly owned subsidiaries of
Asian Paints Limited (the Company) with the Company vide order dated 24th January 2025. The Scheme came into effect from 1st March 2025. The appointed date of the Scheme is 1st April 2024. The comparative periods have been restated in accordance with Ind AS 103 - Busi ness Combinations.
Note 35(A) : Disclosure As Per Regulation 34(3) Of The SEBI (Listing Obligations And Disclosure Requirements) Regulations
There are no loans and advances in the nature of loans given to subsidiaries, associates and others and investment in shares of the Company by such parties as at 31st March 2025 and 31st March 2024.
Note 35(B) : Disclosure As Per Section 186 of The Companies Act, 2013
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows :
(i) Details of Investments made are given in Note 5.
(ii) There are no guarantees issued or loans given by the Company as at 31st March 2025 and 31st March 2024.
NOTE 36(B) : Derivative Contract towards future purchase of stake in subsidiary companies:
The Company has entered into agreements for future purchase of stake in subsidiary companies viz., Obgenix Software Private Limited, Weatherseal Fenestration Private Limited and Harind Chemicals and Pharmaceuticals Private Limited. Accordingly, the Company has recognised derivative asset/ (liability) towards these forward contracts. The fair value of such derivative asset / (liability) as on 31st March 2025 and the impact of changes in fair valuation reccognised in the Statement of Profit or Loss is detailed below:
Note 38 : Segment Reporting
The Company is primarily engaged in the business of 'Paints and Home Decor'. There is no separate reportable segment as per Ind AS 108 - Operating Segments.
a) The Company has made an assessment of the recoverable value of investment in its subsidiaries taking into account the past business performance, prevailing business conditions and revised expectations of the future performance.
i. The recoverable value of investment in Obgenix Software Private Limited is the value in use determined as per discounted cash flow method. The discount rate used is 15.1%. Accordingly, an impairment provision of ? 188.88
crores was recognized in the Statement of Profit and loss.
ii. The recoverable value of investment in Weatherseal Fenestration Private Limited is the value in use determined as per discounted cash flow method. The discount rate used is 19.9%. Accordingly, an impairment provision of
? 12.96 crores was recognized in the Statement of Profit and loss.
b) Consequently, the Company has recognized fair valuation loss on derivative contract for future stake purchase in White teak and Weatherseal of ? 167.76 crores and ? 10.03 crores respectively in the Statement of Profit and loss. (Refer Note 36(B)).
Note 41: Additional regulatory information required by Schedule III to the Companies Act, 2013
(i) Details of struck off companies with whom the Company has transaction during the year or outstanding balance as on Balance Sheet date :
(ii) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(iii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
(iv) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
(v) Utilisation of borrowed funds and share premium
I The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall :
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
II The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries
(vi) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax
Act, 1961 (such as search or survey), that has not been recorded in the books of account.
(vii) The Company has not traded or invested in crypto currency or virtual currency during the year.
(viii) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.
Note 42 :
A competitor of the Company had filed a complaint with the Competition Commission of India (CCI) alleging the Company to be hindering its entry in the decorative paints market by virtue of unfair use of the Company's position of dominance
in the market. The CCI had passed a prima facie Order dated 14th January 2020 directing the Director General ("DG") to conduct an investigation against the Company under the provisions of the Competition Act, 2002. The DG submitted a
detailed report to the CCI. Based on the findings of the DG's report and after hearing both the parties, the CCI passed a favourable order on 8th September 2022 dismissing the allegations relating to abuse of dominance and anti-competitive agreements made by the competitor. The competitor has now filed an appeal against CCI's order before the National Company Law Appellate Tribunal. The said appeal is pending for part heard.
Note 43 :
The Financial Statements are reviewed and recommended by the Audit Committee on 7th May 2025 and subsequently approved by the Board of Directors at their meeting held on 8th May 2025.
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