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Wednesday, July 22, 2009

Asian Paints - Annual Report - 2008-2009




Dear Members,

Your Directors have pleasure in presenting the 63rd Annual Report of your
Company and the Audited Accounts for the financial year ended 31st March,


(Rs. in Crores)
Asian Paints Limited

2008-09 2007-08 Growth

Sales and Operating Income (Net) 4270 3419 24.9

Operating Profit 621 617 0.8

Less: Interest 10 8

Less: Depreciation 57 44

Profit before Tax and exceptional item 554 565 -1.9

Less: Exceptional item 6

Profit before Tax 548 565 -3.0

Less: Provision for Current, fringe benefit
and deferred Tax 184 188

Profit After Tax 364 377 -3.3

Add/(Less): Prior period items (2) (2)

Net Profit after prior period items 362 375 -3.4

Less: Minority interest

Net Profit attributable to shareholders of
the Company 362 375 -3.4

Add: Balance brought forward from the
previous year 200 150


That the Directors recommend for
appropriation as under:

Dividend - Interim 62 62

- Final 106 101

Tax on Dividend 28 28

Transfer to General Reserve 136 134

Balance carried forward to Balance Sheet 230 200

Asian Paints Limited
Group Consolidated
2008-09 2007-08 Growth

Sales and Operating Income (Net) 5463 4407 24.0

Operating Profit 721 720 0.1

Less: Interest 26 21

Less: Depreciation 74 59

Profit before Tax and exceptional item 620 640 -3.0

Less: Exceptional item 1 7

Profit before Tax 619 633 -2.2

Less: Provision for Current, fringe benefit
and deferred Tax 197 203

Profit After Tax 422 430 -1.8

Add/(Less): Prior period items (3) (2)

Net Profit after prior period items 419 428 -2.0

Less: Minority interest 22 19

Net Profit attributable to shareholders of
the Company 398 409 -2.8

Add: Balance brought forward from the
previous year 200 150


That the Directors recommend for
appropriation as under:

Dividend - Interim 62 62

- Final 106 101

Tax on Dividend 29 28

Transfer to General Reserve 171 168

Balance carried forward to Balance Sheet 230 200

Net sales and operating income for the standalone entity increased to Rs.
4,270 crores from Rs. 3,419 crores in the previous year - a growth of
24.9%. The operating profit (PBDIT) increased by 0.8%, from Rs. 617 crores
to Rs. 621 crores. The profit after tax for the current year is Rs. 362
crores as against Rs. 375 crores in the previous year.

The consolidated sales and operating income net of discounts and excise
duty increased to Rs. 5,463 crores from Rs. 4,407 crores - a growth of 24%.
Net profit after minority interest for the group for the current year is
Rs.398 crores as against Rs. 409 crores in the previous year.


* Paint volume sales growth was good both in India and international

* Significant increase in material costs led to increase in the selling
prices in the first half of the year.

* Profit Before Tax was impacted by high material costs during the first
half of the year. In the third quarter reduction in selling prices to
stimulate demand and consumption of inventories carried at higher cost,
impacted margins.

* An exceptional item of Rs. 5.9 crores has been provided in the current
year, being provision for diminution in the value of long term investment
in the subsidiary in Bangladesh, based on management's assessment of the
fair value of its investment.

* The exceptional item in the previous year pertained to a loss on
disposal of the subsidiary in Australia. The analysis on the performance of
your Company is discussed in the Management Discussion and Analysis report.


Your Company has received a letter from the Ministry of Corporate Affairs
(MCA) granting exemption under Section 212(8) of the Companies Act, 1956
from attaching the financial statements of the subsidiary companies in
India and abroad, both direct and indirect, to the balance sheet of your
Company for the financial year 2008-09. A statement of summarised
financials of all subsidiaries of your Company, pursuant to the approval
under Section 212(8) of the Companies Act, 1956, forms part of this report.
Additional information in respect of the annual report and the financial
statements of the subsidiary companies of your Company will be made
available to members on request. In accordance with the Accounting Standard
(AS 21) issued by the Institute of Chartered Accountants of India,
Consolidated Financial Statements presented by your Company include
financial information of all its subsidiaries.


During the financial year 2008-09, your Company declared and paid an
interim dividend of Rs. 6.50 per equity share in the month of November,
2008. In addition, your Directors recommend payment of Rs. 11/- per equity
share as the final dividend for the financial year ended 31st March, 2009.
If approved, the total dividend (interim and final dividend) for the
financial year 2008-09 will be Rs.17.50 per equity share; Rs.17/- per
equity share was paid as dividend for the previous year.


Your Company proposes to transfer Rs. 135.97 crores to the general reserve.
An amount of Rs. 230 crores is proposed to be retained in the profit and
loss account.


These have been unprecedented times for the global economy. The financial
meltdown caused by several complex forces that created imbalances in fund
flows, asset price bubbles; financial instruments that caused yet other
problems has resulted in the most severe financial crisis since the Great
Depression. While most developed economies are expected to be in recession
in 2009, the vast majority of developing countries are experiencing a sharp
reduction in growth from that seen in the period 2002-2007. Central Banks
have aggressively cut interest rates to pump-prime economies and
governments across the globe have announced large stimulus packages to
revive the jammed financial systems. But the financial strains remain
acute. A sustained economic recovery will be possible only when the
abnormal risk aversion in the financial sector abates and credit begins to
flow into the economies.

The impact of this contagion was felt in India as well. The Services
sector, especially IT, is facing headwinds from low growth rates and the
strong protectionist stance in developed world while export growth has
turned negative since October, 2008. After seeing 7.5% plus growth
consistently for the past five years, increasing distress from the global
crisis along with deteriorating domestic situation has set the stage for a
marked slowdown in growth this year. Job losses have been reported across
sectors with export units, financial services, airlines and infrastructure
taking a major hit. The GDP is estimated to have grown at 6.5% for the
financial year 2008-09.

The first half of 2008-09 saw high inflation on the back of a rapid rise in
crude prices and other base commodities. However, beginning September 2008,
both inflation and growth came down. Inflation at the end of the year was
near 0.26% after touching 13.4% in July, 2008. A combination of falling
commodity prices and domestic tax cuts (excise, customs and service tax)
helped to hasten the decline. The rupee was also extremely volatile and saw
heavy depreciation against major currencies, losing more than 20% against
the US dollar, during the course of the year.

I. Products and Market:


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, your Company has done very well in
the year 2008-09.

Decorative Paints:

Your Company has been the leader in the Decorative paints segment for over
four decades now and this year too, your Company believes it grew faster
than its competitors in this segment. As the environment turned out to be
far more difficult than anticipated, your Company's 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, your Company's entire range of Decorative
products was made free of lead and other heavy metals. This is a step in
making your Company's 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 Company's
leading brands Apex Ultima, Apex and Ace. In both these categories your
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 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, your 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 Decor.

Your 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
your Company's retailers and end consumers. Your 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. Your Company is now
in the process of expanding this network of Colour Ideas' across the

The expansion of the ColourWorld network continues unabated and today your
Company has more than 12,000 ColourWorlds offering a wide range of products
7 Asian Paints Limited Annual Report 2008-2009 and shades to consumers even
in many small towns across the length and breadth of India.

Your Company continued to invest in the area of colour with the launch of
ColourNext 2009. Several Colour Guides and Decor booklets are available to
consumers at retail outlets.

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, your
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 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. Your 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
your Company to do better on profits than would have been the case

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, your
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 Company's 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.

Your 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. Your Company believes that this along
with continuous investment in marketing activities will enable your Company
to expand its business and meet the challenge from the leading
international paint companies who are now in India. Simultaneously, your
Company is continually investing in building manufacturing and distribution
resources which would help maintain and improve services to its customers.

Industrial Coatings:

Automotive Coatings: Asian PPG Industries Limited

Your 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 your 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
buildup. 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-a-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.

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.

APPG's first manufacturing facility was commissioned in March 2008. The
installed capacity is 3,200 KL per annum. Your Company is confident that
this facility will help provide better service to its customers.

Notwithstanding the subdued market conditions and the intensified
competition, your Company believes that the year ahead is a year of great
opportunity for APPG. While there may be a temporary slowdown, APPG's
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 APPG's share of the market and meet
expectations of its stakeholders.

Non-Auto Industrial Coatings:

Your 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. Your Company was able to record value growth in this
segment last year inspite of the adverse economic situation.

Your 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 secondhalf of the year

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


Your Company's other business comprises of plants manufacturing Phthalic
Anhydride and Pentaerythritol, located at Ankleshwar (Gujarat) and
Cuddalore (Tamil Nadu), respectively. These products are used in the
manufacture of alkyd resins as well as several products in other
industries. Approximately 50% of the production in the case of both
chemicals is used for captive consumption by other plants of your Company
and the balance is sold to various customers.

The Phthalic Anhydride business experienced a slump in demand in the third
quarter. The businesses of several customers were severely affected by the
slowdown in domestic as well as export-led demand. The improvement in
demand in the last quarter and careful management of inventories and costs
ensured that the business remained profitable during the year 2008-09,
though the profits were below expectations.

Demand for Pentaerythritol was up to expectations in the first half of the
year. The product-mix produced mitigated the impact of the overall
difficult period for business in the third and fourth quarters. Profits
from the business were better than those in the previous year, while the
growth in profits is attributable mainly to the performance in the earlier
part of the year 2008-09.

Technical Instruments Manufacturers (India) Limited

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

International Business Unit:

The group operates in five regions across the world as given herebelow:

Region Countries

Caribbean Barbados, Jamaica, Trinidad & Tobago

Middle East Egypt, Oman, Bahrain & UAE

South Asia Bangladesh, Nepal & Sri Lanka

East Asia and China, Malaysia, Singapore,
South East Asia Thailand & Hongkong

South Pacific Fiji, Solomon Islands, Samoa,
Tonga & Vanuatu

During the year under review, the focus continued to be on introduction of
new products, increasing the number of dealer tinting systems in the
market, increasing the product range offered through these systems,
expanding the dealer network, increasing exports, sharper focus on the
protective and industrial coating segments as well as improving service
level to minimize loss of sale due to stock outs.

During the year under review, the volume of paint sold increased by 19.6%
to 138,970 KL and the revenue from paint sales increased by 29.5% to Rs.
906 crores. New product sale in volume terms constituted approximately 6.5%
of total paint sales of overseas subsidiaries and over 1143 dealer tinting
systems have been installed so far in various subsidiaries.

Material prices during the year were volatile. While the first half of the
year saw high inflation on the back of a rapid rise in prices of crude oil
and other commodities, beginning September, 2008, the world economy took a
downturn with inflation coming off. The impact of price increases was
neutralized to a large extent by formulation engineering, global sourcing
and economies of scale in purchasing and reduction in material losses in

Profit after tax for the overseas operations of the group during the year
is Rs 48.0 crores as compared to Rs. 36.7 crores during the previous year.

During the year, Asian Paints (International) Limited, your Company's
direct subsidiary, has purchased the balance 49% stake in Asian Paints
(Tonga) Limited for a consideration of TOP 646,800 (approx. USD 314,000)
making it a wholly owned subsidiary.

Your Company has made a provision of Rs. 5.9 crores towards diminution in
value of its long term investment in Asian Paints (International) Limited,
a wholly owned subsidiary of your Company, based on the management's
assessment of the fair value of its investment in Asian Paints (Bangladesh)
Limited. This item has been treated as an exceptional item. Your Company
will continue to evaluate its portfolio at the end of every year to test
for impairment. The management will continue to take all feasible steps as
necessary to enhance the performance and the net worth of its overseas

The revenue from paint sales of Berger International Limited, subsidiary
listed on the Singapore Stock Exchange has increased by 10.2% to S$ 156
million (equivalent to Rs. 483 crores). BIL has earned a profit after tax
of S$ 2.8 million (equivalent to Rs 8.7 crores) as compared to S$ 2.2
million (equivalent to Rs. 5.9 crores) during the previous year.

The region wise performance is detailed below:

Caribbean Region:

During the year under review, the volume of paint sold in the region has
decreased by 3.6 % to 9,256 KL. The global economic meltdown took its toll
on the Caribbean economies and also impacted our operations in the region.
The revenue from paint sales has increased by 8.7% to Rs. 163.3 crores.
PBIT (Profit Before Interest and Tax) for the region has decreased by 19.3%
to Rs. 5.7 crores. The subsidiary in Trinidad has made profit as against a
loss in the previous year. Steps have been taken to improve the
profitability of the unit in Jamaica. The subsidiary in Barbados has
performed satisfactorily.

Middle East Region:

During the year under review, the volume of paint sold in the region has
increased by 24.8% to 100,062 KL and the revenue from paint sales has
increased by 45.6% to Rs. 465.1 crores. PBIT has increased by 33.0% to
Rs.56 crores.

The Middle East region is the largest operating region for the group
outside India. The region now contributes 51.1% of the sales from overseas
operations. All the subsidiaries in the region have performed well. Sales
of Egypt, Oman, UAE and Bahrain subsidiaries have grown by 36.4%, 51.3%,
41.1% and 20.4% respectively in local currency. The subsidiaries in
Bahrain, Oman and UAE have registered good increase in profit, while the
subsidiary in Egypt continues to be the biggest profit contributor in the

South Asia Region:

During the year under review, the volume of paint sold in the region has
increased by 24.0% to 18,047 KL and revenue from paint sales has increased
by 38.5% to Rs. 114.8 crores. PBIT for the region has increased by 43.4% to
Rs. 8.6 crores.

All subsidiaries in the region have performed well. The Sri Lanka,
Bangladesh and Nepal subsidiaries have registered sales growth of 23.3%,
50.6% and 26.8%, respectively in local currency. Expansion of the
ColorWorld dealer network and increased influencer interactions through
painter-dealer meets has helped all the subsidiaries to achieve healthy
sales growth. The subsidiaries in Sri Lanka and Nepal have reported profits
while the Bangladesh unit has sharply reduced its losses.

East Asia and South East Asia Region:

During the year under review, the economies in the region were severely
impacted by the global meltdown. The volume of paint sold in the region has
marginally increased by 0.3% to 9,001 KL. However, the revenue from paint
sales has increased by 19.3% to Rs. 105.8 crores. Loss before interest and
tax has increased to Rs. 6.3 crores from Rs. 3.6 crores during the previous

The subsidiary in Singapore has performed satisfactorily and has been
profitable. The losses are higher in the subsidiaries in Malaysia, Thailand
& Hongkong and lower in China compared to the previous year.

South Pacific Region

During the year under review, the volume of paint sold in the region
(adjusted for sales of the Australian subsidiary which was divested during
the previous year) increased by 4.4 % to 3,070 KL and revenue from paint
sales increased by 13.2% to Rs. 62.0 crores. PBIT for the region (excluding
Australia) has decreased by 6.2% to Rs 5.4 crores.

The Fiji, Vanuatu and Solomon Islands subsidiaries have registered sales
growth of 10%, 18% and 13%, respectively. There is a marginal decline in
the sales of the subsidiary in Tonga which has, however, made profit during
the year as against a loss in the previous year.


Your 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.

Your 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 your 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 2008-09.


The thrust area for your 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 your Company in developing managers as coaches. A batch of thirty-five
managers has now received certification in coaching.

A series of programs were held at all levels in Technology function to
promote the work culture of innovation and 11 Asian Paints Limited Annual
Report 2008-2009 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.


Your Company continues its initiatives in Corporate Social Responsibility
through its three core areas: Water Conservation, Care of the Aged and
Education. Your 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.

Your Company has endeavored 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 your Company.

Your 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.


During the financial year 2008-09, your 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. Your 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 your 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 your Company's data and protect its information
assets. In the current year your 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.


Your Company is executing an integrated strategy for technology development
and deployment. The technology function is supporting your Company's
strategy around four missions: technology development, development of
substantially new products, productivity improvement, and cost reduction.
The focus for your 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. Your 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 by redirecting resources towards the
core R&D activities and by increasing the productivity of the individual

In keeping with environmental legislation in the developed world, your
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, your 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.

Your Company has also developed contacts with research organizations with
whom 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 Center established at Turbhe, Navi Mumbai.


Your Company has deployed an appropriate mix of automated and manual
internal control systems to ensure propriety in the utilization of funds,
safeguarding of assets against unauthorized use or disposition, true and
fair reporting and compliance with all the applicable regulatory laws and
company policies. A state-of-the-art ERP system with tight integration to
other applications are designed to adopt best practices and provide real
time information for effective decision making, monitoring and control.
Your Company has a clearly defined authority manual defining sanctioning
limits at each level in the hierarchy for various kinds of expenses. Tight
and periodic budgetary control and review mechanisms supplement the
preventive controls designed in the system.

Your Company has an in-house internal audit department. To maintain
independence, the internal audit function reports directly to the Audit
Committee and to the Manging Director & CEO of the Company. The audit plans
for the year are approved by the Audit Committee. The internal audit
function verifies the adequacy and effectiveness of internal controls from
operation, financial and statutory compliance point of view through a blend
of process and transactional audits. A summary of significant observations
along with any action plan identified by the management is placed
periodically before the Audit Committee for review and guidance.


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

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

However, your Company's 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. Your Company also expects the rural
economy to perform well and support paint demand. The market for industrial
coatings is expected to be challenging and will depend on performance of
sectors like automobiles, consumer durables and the general industrial
activity. Some tentative signs of recovery already seem underway and this
augurs well for the industry in the coming year.


Statements in this Management Discussion and Analysis describing the
Company's 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.


A separate report on Corporate Governance forms part of the Annual Report,
pursuant to Clause 49(VII) of the Listing Agreement. Your 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 as stipulated
under Clause 49 of the Listing Agreement is attached to this report.


Your Company has not accepted any fixed deposits during the year 2008-09
and there are no outstanding fixed deposits from the public as on 31st
March, 2009.


Your Company continues to avail sales tax deferment benefit for the
expanded capacity at Kasna plant for which eligibility certificate for Rs.
38.2 crores has been received. A sum of Rs 4.1 crores has been availed
during the year 2008-09 and with this, the total amount of deferment
availed upto 31st March, 2009 is Rs. 27.1 crores.


All the insurable interests of your Company including inventories,
buildings, plant and machinery and liabilities under legislative enactments
are adequately insured.


Particulars in respect of conservation of energy and technology absorption
by the Company as per Section 217(1)(e) of the Companies Act, 1956, are
given as Annexure to this report in Form A' and B', respectively.


Details of expenditure and earnings in foreign currencies are given under
Schedule M' to the financial statements.


In terms of the provisions of Section 217(2A) of the Companies Act, 1956
and the Companies (Particulars of Employees) Rules, 1975, names and other
particulars of the employees are required to be set out in the annexure to
this report. However, as per the provisions of Section 219(1)(b)(iv) of the
Companies Act, 1956, the Report and Annual Accounts of the Company sent to
the shareholders do not contain the said annexure. Any shareholder desirous
of obtaining a copy of the said annexure may write to the Company Secretary
at the Registered Office of the Company.


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

* 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.


During the financial year ended 31st March, 2009, the term of Mr. Ashwin
Choksi as Executive Chairman, Mr. Ashwin Dani as Executive Vice-Chairman
and Managing Director and Mr. Abhay Vakil as Managing Director expired on
31st March, 2009. The Board of Directors at their meeting held on 5th
March, 2009, appointed Mr. P. M. Murty as an Additional Director and Whole-
time Director of the Company with effect from 5th March, 2009 and as the
Managing Director & CEO with effect from 1st April, 2009. Mr. Ashwin
Choksi, Mr. Ashwin Dani and Mr. Abhay Vakil, were appointed as Additional
Directors and as Non-Executive Chairman, Non-Executive Vice-Chairman and
Non-Executive Director, respectively, with effect from 1st April, 2009.

Mr. Ashwin Choksi and Mr. Ashwin Dani joined the Board in 1970 and Mr.
Abhay Vakil in 1983. They have had an immense played a crucial in
transforming your company into a world class organization, without
compromising on the core values and ethics laid down by the founding
fathers. Your Company has grown by leaps and bounds in the last decade
under their stewardship. The Board of Directors place on record their
appreciation of the immense contribution to the growth and well being of
the Company, by Mr. Ashwin Choksi, Mr. Ashwin Dani and Mr. Abhay Vakil
during their long tenure with the Company.

Mr. Amar Vakil, Mr. R.A. Shah and Dr. S. Sivaram are due to retire by
rotation at the conclusion of the forthcoming Annual General Meeting and
being eligible offer themselves for re-appointment. Appropriate resolutions
for their re-appointment are being placed before you for your approval at
the ensuing Annual General Meeting. The brief resume of the aforesaid
Directors and other information have been detailed in the Corporate
Governance Section of this report. Your Directors recommend their re-
appointment as Directors of your Company.


M/s. Shah & Co., Chartered Accountants and M/s. B S R & Associates,
Chartered Accountants, Joint Auditors of the Company are due for retirement
at the ensuing Annual General Meeting and are eligible for reappointment.
Your Directors recommend their reappointment for the ensuing year.


The Company has received the approval of the Central Government for
appointment of Mr. Damji Keshavji Visariya as Cost Auditor to conduct the
audit of the cost records of your Company for the financial year 2008-09.


Your Directors wish to place on record their appreciation of the
contribution made by employees at all levels to the continued growth and
prosperity of your Company. Your Directors also wish to place on record
their appreciation of banks and other financial institutions, shareholders,
dealers and consumers for their continued support.

For and on behalf of the Board
Ashwin Choksi

Place: Mumbai
Date : 12th May, 2009.

Annexure to Directors' report

Form A

Disclosure of particulars with respect to conservation of energy:

2008-09 2007-08

A. Power and fuel consumption

1. Electricity

(a) Purchased
Units (000 KWH) 30,076 29,574
Total Amt. (Rs. in Crores) 14.08 13.10
Rate per unit 4.68 4.43

(b) Own Generation
Through diesel Generator
Units (000 KWH) 7,734 2,759
Units per ltr. of diesel oil 3.36 3.40
Cost/unit (Rs.) 10.14 9.43

Natural Gas
Units (000 KWH) 5,801 7,466
Units per nm3 3.34 3.29
Cost/unit(Rs.) 3.87 3.66

2. Coal

Quantity (in MTs) 14,783 16,345
Rs. in Crores 6.76 5.31
Average rate/MT (Rs.) 4576 3249

3. Diesel
Quantity (in KL) 1,651 1,016
Rs. in Crores 6.06 3.33
Average rate/KL (Rs.) 36.72 32.80

4. Furnace Oil
Quantity (in MTs) 883 1,170
Rs. in Crores 2.47 2.64
Average rate 27.94 22.53

5. Natural Gas
Quantity (in 000 cubic m.) 2,553 2,917
Total Amt ( Crores) 2.97 3.15
Average rate 11.62 10.81

B. Consumption per unit of production

Electricity Furnace oil Natural Gas
08-09 07-08 08-09 07-08 08-09 07-08

Paints 87 89 39 74 71 52
Phthalic 113 16 - - 55 51
Penta 966 921 0 13 - -

Coal Diesel
08-09 07-08 08-09 07-08

Paints - - 51 44
Phthalic - - - -
Penta 3 3 - -

Fore B

Disclosure of particulars with respect to technology


Research and Development (R&D)

1. Specific area in which R&D is carried out by the Company.

The R&D Unit of your Company is carrying out the following activities to
support the business goals of your Company:

* Development of new products and processes related to surface coatings and

* Value engineering through formulation re-engineering and identification
of new and alternate raw materials.

* Upgradation of existing product and processes.

* Technology support to all overseas units.

* Optimization of products and processes to minimize waste generation and
reduce environmental and safety concerns.

* Development of new application techniques for various substrates.

* Import substitution and identification of new raw material for

* Development of new analytical test methods, characterization techniques.

* Collaborative development with vendors, academia and institutes.

* Development of domain expertise to expedite product development.

* Research on new functional polymers, emulsions and nano technology.

2. Benefits derived as a result of above R&D:

* Antialgal/antifungal efficacy of interior and exterior wall finishes

* Introduced newer colourant and bases in DTS for expanding shade range
offer with improved shade fidelity.

* Recycling/reuse of process waste and wash water to reduce waste
generation and disposal load.

* Cycle time of processing enamels, colourant, primers and emulsion brought

* Energy efficient processing techniques introduced for colourants, enamels
and primers.

* Development of ultima metallic coating with high durability and shade

* Development of Royale Shyne - top end exterior product with rich look and
film performance.

* Developed machine tintable 2K Pigmented PU metallic finishes for
interior/exterior of wood.

* Six new application effects developed for Royale Play.

* Development of hot melt thermoplastic road marking meeting AASHTO

* Development of industrial synthetic enamel free from heavy metals like
lead, chromium and mercury.

* Development of several Protective Coatings for meeting specific customer
requirements and for significantly broadening the Company's range of such

3. Further plan of action:

Your Company considers the development of technical capabilities to sustain
its competitive position in the market place of primary importance. In
order to address the needs of the customers in a rapidly changing market
place, the Company will continue to strengthen its technical programs and
the skills of its technical personnel. It had started to develop advanced
technical capabilities and technology platforms to support its product
plans, improve its manufacturing and open new applications. These
activities are beginning to pay off.

4. Expenditure on R & D during the year is as follows:

(Rs. in Crores)
2008-09 2007-08

Capital 25.90 34.19
Recurring 27.46 17.66
Total 53.36 51.85
Total R&D expenditure as
a percentage of Net Sales
& operating income 1.25% 1.52%

Technology absorption, adaptation and innovation:

All developments were done indigenously.

Foreign exchange earnings and outgo:

Your Company's exports primarily consist of Di-pentaerythritol and
Monopentaerythritol to US and Europe. The Di-pentaerythritol is used mainly
as an additive in the manufacture of aviation fuel and the
Monopentaerythritol is mainly used in the manufacture of explosives. The
demand for your Company's products from these markets were stable during
the year. During the year your Company has also supplied small lots of
these products to consumers in Taiwan and Japan.

Your Company also exports items to its overseas units and licensees.
Machine tinting colorants and resins form the bulk of material exported.
Specific products or special products which are of low volume for domestic
manufacture by the overseas units are also produced and exported to the
units from India. Support is extended to overseas units through export of
marketing materials and machinery parts. Export queries received in India
from countries where your Company has operations is routed through
respective overseas units.

For and on behalf of the Board
Ashwin Choksi
Place: Mumbai
Date : 12th May, 2009.

Grey Market - NHPC, Raj Oil Mills, Excel Infoways, Adani Power

Excel Infoways Ltd. 80 to 85

5 to 6

Raj Oil Mills Ltd. 100 to 120


Adani Power 90 to 100

8 to 10

NHPC 30 to 35

10 to 12

Reliance Communications

Reliance Communications

Allahabad Bank

Allahabad Bank

Yes Bank

Yes Bank

Suzlon Energy Ltd

Suzlon Energy

Turnover jumps

RIL July 2009 futures at premium

Nifty July 2009 futures were at 4413.15, at a premium of 14.25 points as compared to the spot closing of 4398.90. Turnover in NSE's futures & options (F&O) segment spurted to Rs 91,641.08 crore from Rs 65,459.06 crore on Tuesday, 21 July 2009.

Reliance Industries (RIL) July 2009 futures were at premium at 1981.10 compared to the spot closing of 1975.70.

Suzlon Energy July 2009 futures were near spot price at 91.55 compared to the spot closing of 91.25.

JSW Steel July 2009 futures were at discount at 590.80 compared to the spot closing of 594.80.

In the cash market, the S&P CNX Nifty lost 70.20 points or 1.57% at 4398.90.

Market Review - July 22 2009

Market Review - July 22 2009





Futures and Options - July 22 2009

Futures and Options - July 22 2009

Asian markets end mixed

Tentative signs of correction as risk appetite wanes, Yen surges

Asian markets witnessed some selling pressure at elevated levels as risk aversion took effect and the recent enthusiasm waned. The market participants failed to buy in the prospects of the US Fed keeping the interest rates too low for too long, as quoted by the Fed Chairman Ben Bernanke yesterday. Though China, Malaysia and New Zealand ended with decent gains, the sentiments seemed to have turned from modestly upbeat to intensely cautious, with the DOWJONES futures showing moderate selling pressure.

Yesterday, Federal Reserve chairman presented the bank's semi-annual monetary policy report to Congress. Bernanke noted that pace of the economic decline in the United States has slowed down significantly, signifying that that the worst of the financial crisis may be behind us. “The final demand of production has shown tentative signs of stabilization,” he said but added that the labour market continues to weaken. “Job insecurities together with declines on the home values and tight credit is likely to limit gains in consumer spending,” Bernanke said. “The possibility that recent stabilization in household spending will prove transient is an important downside risk to the outlook.”

However, Bernanke failed to account for the fact that the rising mortgage rates, which typically track the movements in the long term treasury yields, have all the essential ingredients of a becoming a recipe to undone the fragile housing market recovery.

Asian markets started on a broadly optimistic note following this background. Bank Of Japan deputy governor noted today that economic conditions in Japan have recently begun to stop worsening. However, the central bank expects the upward pressure to outweigh the downward, leading the economy to start recovering from the latter half of fiscal 2009. The Nikkei 225 average ended up 0.74% on the day.

China ended with strong gains with blue chips coming back in the fore after yesterday's debacle. Chinese equities slipped Tuesday after hitting a 13-month high Monday, posting the biggest one-day decline since June 12. However, the latest rebound offers credence to the view that the world's fastest growing economy is slowly entering into a safe territory, visible nonchalant to the customary gyrations in the world environment. In other markets, Malaysia and New Zealand ended with gains of around 1%.

Indian equities were hit hard today with the benchmark BSESENSEX sliding by more than 200 points or 1.50% as investors locked in gains, reflecting that rallies over the magical 15k mark are still being considered as a selling opportunity to cover previous longs. In other major losers, Hang Seng and Jakarta Composite shed 1.30% and 1% respectively.

Commodities were under hammer as crude oil shed more than 1 dollar ahead of the weekly US inventories data. Gold also corrected a bit with some selling emerging after the metal rallied to $950 per ounce mark in the current week. In currencies, Yen continued to appreciate against the US dollar, hitting 93.25- one-week high levels. Dollar itself hold steady against the Euro, consolidating around 1.4200 levels.

BSE Bulk Deals to Watch - July 22 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
22/7/2009 532995 AVON CORP S V ENTERPRISES B 326081 9.55
22/7/2009 531733 BAFNA SPINNI PUKHRAJ HIRACHAND BAFNA S 247970 1.75
22/7/2009 511664 BGIL FL TEC JINESH BHATT S 70989 19.87
22/7/2009 530803 BHAGERI DYEC DHARMESH D VORA B 56648 17.25
22/7/2009 530803 BHAGERI DYEC DEEPAK P VORA S 56648 17.25
22/7/2009 590076 CAMSON BIO ANGEL INFIN PRIVATE LIMITED B 51015 45.40
22/7/2009 590076 CAMSON BIO ANGEL INFIN PRIVATE LIMITED S 132500 45.40
22/7/2009 590076 CAMSON BIO GRAND SLAM INVESTMENT PVT LTD S 50000 45.40
22/7/2009 531162 EMAMI LIMITE ARENA HARIDASAN S 675000 354.00
22/7/2009 502865 FORBES & CO INDIA DISCOVERY FUND LIMITED B 355255 519.96
22/7/2009 530945 GANGOTRI I&S ARISTRO CAPITAL MARKETS PVT. LTD. B 46325 17.70
22/7/2009 530945 GANGOTRI I&S GBK RESOURCES PVT LTD S 61216 17.71
22/7/2009 523676 GOLKU DIAM J NEVERLOOSE PROPERTIES & INVES B 500000 10.65
22/7/2009 523676 GOLKU DIAM J ARVIND KANTIKUMAR DADHA S 125000 10.65
22/7/2009 523676 GOLKU DIAM J KANTIKUMAR DADHA S 125000 10.65
22/7/2009 523676 GOLKU DIAM J ASHISH KANTIKUMAR DADHA S 260000 10.65
22/7/2009 509597 HARDCAS WAUD VOCATION INV & FIN CO PVT LTD B 3265 290.00
22/7/2009 509597 HARDCAS WAUD VOCATION INV & FIN CO PVT LTD S 3265 286.68
22/7/2009 509597 HARDCAS WAUD APT FINANCIAL & CAP. SER. PVT LTD S 4869 288.42
22/7/2009 504336 INDTRADECO L BCB FINANCE PRIVATE LIMITED B 1600000 0.71
22/7/2009 504336 INDTRADECO L PLEASENT TEXTILES LIMITED S 1625000 0.71
22/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 60561 66.11
22/7/2009 516078 JUMBO BAG LT SANJEEV BURMAN JHAVERI S 59500 66.16
22/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 59474 67.20
22/7/2009 524826 JUPITER BIOS MACQUARIE BANK LIMITED S 81800 64.93
22/7/2009 531784 KADAMB CONST SAVITHA JAIN B 20000 41.00
22/7/2009 531784 KADAMB CONST RAMBHABA HLDG. & TRDG. CO. PVT S 15200 41.00
22/7/2009 500233 KAJARIA CERA ALCHEMY CAPITAL ALLTF B 1035064 35.50
22/7/2009 511131 KAMAN HSG ADITI JANMEJAY VYAS S 115532 31.01
22/7/2009 530255 KAY POW PAP SUNIL KUMAR GUPTA B 81699 6.64
22/7/2009 530255 KAY POW PAP SUNDER DASS AGARWAL B 55000 6.69
22/7/2009 530255 KAY POW PAP SUNIL KUMAR GUPTA S 96146 6.23
22/7/2009 515037 MURUEDM JAROLI VINCOM PVT LTD S 184000 26.14
22/7/2009 511766 MUTHOOT CAP GAURAV DEEPAK S 49438 61.37
22/7/2009 590077 RANKLIN SOLU NIBU KRISHNAN S 30304 33.61
22/7/2009 505141 SCOOTERS IND ALPESH ANANTRAI DOSHI B 10330 24.05
22/7/2009 505141 SCOOTERS IND ZAVERCHAND M CHHEDA S 14005 24.05
22/7/2009 512048 SPLASH MEDIA HITESH BABUBHAI DOBARIYA S 10202 99.21
22/7/2009 590037 STEEL EXCH SOHAN RAJUTTAMCHAND B 220000 29.40
22/7/2009 590093 TRIMURTHI DR DHIRAJLAL V SANGHVI HUF S 48839 28.55
22/7/2009 530109 VANTA COR SE BHUPENDRA SHANTILAL SHAH S 20405 15.89
22/7/2009 531874 VENUS VENT AMRUT SECURITIES LTD. B 100000 28.45
22/7/2009 531874 VENUS VENT KANCHAN VIJAYKUMAR THAKKAR S 44800 28.00
22/7/2009 531874 VENUS VENT VIJAY VELJIBHAI PADHARIA S 34500 29.00
22/7/2009 519602 VMF SOFT TEC MIHIR SHAH S 50000 8.00
22/7/2009 517498 WEBEL SL ENE MAVI INVESTMENT FUND LTD. B 142000 222.00
22/7/2009 522108 YUKEN INDIA HEMANT S SHETH B 17161 70.98

NSE Bulk Deals to Watch - July 22 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
22-JUL-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,214678,926.84,-
22-JUL-2009,EMAMILTD,Emami Limited,T.ROWE PRICE INTL A/C NEW ASIA FUND,BUY,483451,354.00,-
22-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,14397619,21.47,-
22-JUL-2009,JBMA,JBM Auto Limited,ZEAL IMPEX & TRADERS PRIVATE LIMITED,BUY,1000000,31.00,-
22-JUL-2009,MAYTASINFR,Maytas Infra Limited,CLSA (MAURITIUS) LIMITED,BUY,662512,76.19,-
22-JUL-2009,MURUDCERA,Murudeshwar Ceram Ltd,IG FINANCIAL SERVICES INDIA PVT LTD,BUY,100000,26.11,-
22-JUL-2009,PVR,PVR Limited,SBI MUTUAL FUND A/C MSFU-EBF - 81,BUY,670000,101.04,-
22-JUL-2009,PVR,PVR Limited,SBI MUTUAL FUND SCHEME - MMCF - 99,BUY,500000,101.04,-
22-JUL-2009,SABERORGAN,Sabero Organics Gujarat ,BP FINTRADE PRIVATE LIMITED,BUY,210869,34.33,-
22-JUL-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,214678,927.43,-
22-JUL-2009,EMAMILTD,Emami Limited,VALUE & WORTH,SELL,400000,354.00,-
22-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,14638359,21.51,-
22-JUL-2009,JBMA,JBM Auto Limited,VALOUR CONSTRUCTION LTD.,SELL,1000000,31.00,-
22-JUL-2009,MAYTASINFR,Maytas Infra Limited,IFCI LTD.,SELL,700000,76.43,-
22-JUL-2009,MURUDCERA,Murudeshwar Ceram Ltd,IG FINANCIAL SERVICES INDIA PVT LTD,SELL,100000,27.33,-
22-JUL-2009,MURUDCERA,Murudeshwar Ceram Ltd,JAROLI VINCOM PVT LTD,SELL,222500,26.15,-
22-JUL-2009,SABERORGAN,Sabero Organics Gujarat ,BP FINTRADE PRIVATE LIMITED,SELL,210869,34.49,-

Post Session Commentary - July 22 2009

Indian market slumped sharply to close on a featureless note due to huge selling pressure led by heavy profit booking after a recent rally. Negative European markets contributed largely to the southward journey. Additionally, lower US index futures also weighed on sentiments. However, market witnessed gain in early trade on positive cues from global markets. In domestic arena, news that the government can bring a good amount this year from divestment also contributed to upward movement in equities. During the trading, stocks exhibited volatility on concern of the progress of India''s annual monsoon. BSE Sensex ended below 14,900 level and NSE Nifty closed around 4,400 mark.

Market opened on positive note tracking firm cues from the global markets. Most of the Asian markets opened in green and on Tuesday, the US markets closed higher on the back of good earnings report. The US stocks once again acclimated on the back of solid earnings report from Caterpillar that reported second quarter earnings per share of $0.72, which was $0.50 better than consensus estimates. Domestic investors’ took fresh position on the frontline stocks on growing optimism about the recovery in the world economy that led market to trade in green till mid session. Further, benchmark indices were unable to unable to hold the momentum and slipped on profit taking. The huge selling pressure was mainly led by negative European stocks along with lower US index futures. Market continued to stay in red till end on sustained selling across the board since afternoon trade. From the sectoral front, all indices ended in red. Besides, most of the selling was seen in Capital Goods, Auto, Power, IT, Teck, Metal, Pharma and Bank stocks. Broader market indices also remained out of favour as BSE Mid Cap and BSE Small Cap indices also witnessed selling pressure.

Among the Sensex pack 26 stocks ended in red territory and 4 in green. The market breadth indicating the overall health of the market remained negative as 1374 stocks closed in red while 1231 stocks closed in green and 99 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 219.37 points or (1.46%) at 14,843.12 and NSE Nifty ended down by 70.20 points or (1.57%) at 4,398.90. BSE Mid Caps and Small Caps closed with losses of 50.47 and 20.46 points at 5,174.74 and 5,817.36 respectively. The BSE Sensex touched intraday high of 15,369.42 and intraday low of 14,789.58.

Losers from the BSE Sensex pack are HDFC (4.43%), Hindalco (3.44%), Reliance Infra (3.36%), Grasim Industries (3.32%), Tata Steel (3.27%), JP Associates (2.95%), BHEL (2.89%), TCS Ltd (2.42%), RCom (2.17%), ACC Ltd (2.02%), Reliance (1.99%), Maruti Suzuki (1.83%), Bharti Airtel (1.76%) and Herohonda Motors (1.66%).

Gainers from the BSE Sensex pack are ONGC Ltd (4.60%), Sterlite Industries (0.91%), DLF Ltd (0.79%) and NTPC Ltd (0.44%).

On the global markets front the Asian markets that opened before the Indian market, ended mixed. Hang Seng and Straits Times ended lower by 253.53 and 3.50 points at 19,248.17 and 2,450.83 respectively. However, Shanghai Composite, Nikkei 225 and Seoul Composite gained 83.41, 71.14 and 5.05 points at 19,248.17, 9,723.16 and 1,494.04 respectively.

European markets, which opened after the Indian market, snapped seven-day winning streak and are trading in red. In Frankfurt the DAX index is trading down by 21.94 points at 5,072.03 and in London FTSE 100 is trading lower by 12.86 points at 4,468.31.

The BSE Capital Goods index tumbled (1.87%) or 231.60 points at 12,141.46. Bharat Elect (5.71%), Thermax Limited (5.41%), Punj Lloyd (3.44%), ABB Ltd (3.24%) and Jyoti Struct (3.18%) closed in negative territory.

The BSE Auto index dropped by (1.61%) or 83.16 points at 5,077.90. Scrips that lost are Excide Indus (5.01%), Gammon Indi (4.03%), Ashok Leyland (2.99%), Escorts Ltd (2.10%) and Bajaj Auto (1.92%).

The BSE Power index decreased by (1.60%) or 45.31 points to close at 2,783.87. Main losers are Reliance Infra (3.36%), ABB Ltd (3.24%), BHEL (2.89%), Crompton Greaves (2.26%) and Neyveli LIG (2.09%).

The BSE IT index ended lower by (1.60%) or 59.04 points at 3,634.99. Losers are Tech Mahindra (5.07%), HCL Tech (4.88%), Rolta India (4.73%), NIIT Ltd (3.68%) and Patni Computer (2.73%).

The BSE Teck closed down by (1.54%) or 43.13 points at 2,758.42. are Tech Mahindra (5.07%), HCL Tech (4.88%), Rolta India (4.73%), Adlabs Films (4.40%) and IOL Netcom (4.37%) ended in red territory.

The BSE Metal stocks lost (1.45%) or 166.40 points to close at 11,345.61. Major losers are Ispat Industries (4.40%), Hindalco (3.44%), Stata Steel (3.27%), Steel Authority (3.26%) and Sesa Goa Ltd (2.45%).

Wipro Ltd dropped by 1.52% despite reporting impressive rise of 119.40 per cent in its net profit to Rs 11,979 million for the quarter ended June 30, 2009 as compared to Rs 5,460 million for the quarter ended June 30, 2008.

Infosys Technologies Ltd lost 1.23%. The company has been awarded the eBiz Project by the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India. The eBiz Project is among the 27 Central, State and Integrated Mission Mode Projects (MMPs) under the National E-Governance Plan (NEGP) of the Government of India.

Reliance Communications lost 2.17%. The company and Etisalat DB announced a long-term passive infrastructure sharing agreement, which will accelerate Etisalat DB Telecom''s forthcoming rollout of telecom services in India. As per agreement, Etisalat DB and its subsidiary would outsource their Telecom infrastructure requirements for the 15-telecom circles, encompassing end-to-end tower and transmission infrastructure to Reliance Infratel Limited and Reliance Communications Limited, respectively.

Thermax Limited fell 5.41%. The company and GE Water, USA, have signed agreements to expand the role that both companies will play in meeting India''s growing water quality and availability challenges.

Canara Bank ended down by 2.08%. The bank posted a net profit of Rs 5553.30 million for the quarter ended June 30, 2009 as compared to Rs 1226.80 million for the quarter ended June 30, 2008.

Spice Communications plunged 2.16%. The company posted a net loss of Rs (349.10) million for the quarter ended June 30, 2009 as compared to net loss of Rs (1364.50) million for the quarter ended June 30, 2008.

Brahmaputra Infraproject Limited gained 4.92%. The company has bagged two orders amounting to Rs. 433 crores from Jaiprakash Associates Limited for the construction of Yamuna Expressway connecting Greater Noida to Agra.

ING Vysya Bank Ltd zoomed 8.55% after net profit increased phenomenally 48.3% to Rs. 60.26 crore in Q1 June 2009 as against Q1 June 2008.

Sensex ends below 15k; HDFC plunges 4.43%

The Sensex for the second straight session ended on a weak note. Capital goods, auto, power,IT, metal and banking stocks led the fall. It opened positive with a gain of 62.43 points, at 15,124.92 on Wednesday on good global cues. Wipro`s Q1 earnings beats expectations and came as a good news for market. For the first half of the session, the index traded in the positive, touching a high of 15,369.42. Later, it lost all its firmness and slipped into the negative as profit booking emerged for the second half of the day. It continued its downward trend on aggressive selling pressure seen in frontliners and touched a low of 14,786.58. Even opening of negative European markets also added fuel to the sentiment. Finally, it wrapped the day below 15, 000 mark.

BSE Midcap and Smallcap index declined 0.97% and 0.35% respectively.

Among the sectoral indices, BSE Capital goods dipped 1.87%, BSE IT, Power, Auto, Metal and Bankex down over 1% each.

European stocks slipped after a seven-day rally pushed valuations on the Dow Jones Stoxx 600 Index to the highest in five years, offsetting better-than- estimated earnings from Apple and TomTom. UK`s benchmark index FTSE 100 fell 4.94 points, or 0.11%, to trade at 4,476.23.French benchmark index CAC 40 lost 23.67 points, or 0.72%, to trade at 3,279.22 and Germany`s benchmark index DAX declined 15.54 points, or 0.33% to trade at 5,077.86. (4.14 p.m., IST)

Asian stocks gained as Shin-Etsu Chemical sought to raise prices and BHP Billiton pumped a record amount of crude oil. Japanese benchmark index Nikkei rose 71.14 points, or 0.74%, to end at 9,723.16.Hong Kong`s Hang Seng index fell 253.56 points, or 1.30%, to finish at 19,248.17 and China`s Shanghai Composite climbed 83.41 points, or 2.60% to settle at 3,296.62.

The Sensex ended the day with a loss of 219.37 points, or 1.46% at 14,843.12 after touching a high of 15,369.42 and a low of 14,786.58. The broad-based NSE Nifty fell 70.20 points, or 1.57% at 4,398.90 after hitting a high of 4,557.95 and a low of 4,380.45

Major gainers in the 30-share index were Oil & Natural Gas Corporation (4.60%), Sterlite Industries (India) (0.91%), DLF (0.79%), and NTPC (0.44%).

On the other hand, Housing Development Finance Corporation (4.43%), Hindalco Industries (3.44%), Reliance Energy (3.36%), Grasim Industries (3.32%), Tata Steel (3.27%), and Jaiprakash Associates (2.95%) were the major losers in the Sensex.

Overall market breadth was mixed. Out of the total 2,704 stocks traded at BSE, 1,231 advanced, 1,374 stocks declined while 99 remained unchanged.

Market changes direction after hitting one-month high; Sensex below 15,000

The key benchmark indices dropped, reversing intraday gains of 2%, as investors booked profits after recent sharp gains. The BSE 30-share Sensex was provisionally down 221.86 points or 1.47%, off close to 495 points from the day's high and up close to 55 points from the day's low. Index heavyweight Reliance Industries (RIL) slipped. Capital goods, power, IT stocks fell.

The barometer index BSE Sensex fell below the psychological 15,000 mark. Weak European markets and lower US index futures soured sentiment. The market breadth was negative compared to a strong breadth earlier in the day. Concerns over the progress of India's annual monsoon triggered profit taking after a recent strong rally in share prices.

India's largest power equipment maker by sales Bharat Heavy Electricals and India's largest dedicated housing finance company
by sales, HDFC dropped despite good Q1 results announced during trading hours. India's largest oil exploration firm by revenue ONGC rose ahead of its Q1 June 2009 results tomorrow, 23 July 2009.

The market was volatile. The market surged in early trade tracking firm global stocks. Reports that the government can fetch a large sum from divestment this year also aided the surge in equities. The market extended gains in morning trade with the barometer index BSE Sensex hitting its highest level in more than a month. The market pared gains in early afternoon trade. The Sensex slipped into the red and fell below the psychological 15,000 mark later as lower European stocks and fall in US index futures soured sentiment. The market cut losses in mid-afternoon trade.

The Sensex had lost 128.52 points or 0.85% at 15,062.49 on Tuesday, 21 July 2009 as profit booking emerged after a recent solid surge. Before Tuesday's slide, the market had surged on the back of good initial batch of Q1 June 2009 results. From a low of 13,400.32 on 13 July 2009, the Sensex had risen 1,790.69 points or 13.36% in just five trading sessions to 15,191.01 on Monday, 20 July 2009.

The Q1 June 2009 results announced so far have encouraging, with lower costs helping bottomline growth. The combined net profit of 283 companies rose 52.1% Rs 15,199 crore on 11.7% growth in sales to Rs 1,13,379 crore in Q1 June 2009 over Q1 June 2008.

But news flow on divestment may keep market firm in the coming months. The steel ministry has reportedly initiated steps to sell small stakes in profit-making state-run firms Manganese Ore India (MOIL) and NMDC (formerly National Mineral Development Corporation), which it estimates could fetch up to Rs 25,000 crore. While the ministry has cleared a proposal to divest 10% in unlisted MOIL through an initial public offering (IPO), a proposal to divest 8-20% stake in listed NMDC is under its active consideration, report said.

The Union Budget, presented by finance minister Pranab Mukherjee on 6 July 2009, refrained from making any major commitment and proposed a modest disinvestment target of Rs 1,120 crore for the current financial year, although the government clarified later that there could be more sell-off proposals later in the year.

Weak rains is a cause for concern. The likely emergence of El Nino, the name given to the warming of the Pacific Ocean and which often influences the Indian monsoon adversely, coupled with the failure of the monsoon to gather momentum in the key north-western agricultural belt, has added to the worry. Under the circumstances, the assertion by the India Meteorological Department (IMD) that much of the rain deficit in June will be made up in July (which is mostly over) and August has fetched little results.

More than two-thirds of the people live in villages and 60 % of the farm land depends on the annual rains. While some sense an imminent drought, resulting in a poor kharif harvest, the agriculture ministry still hopes that agricultural production will be in the normal range. The Finance Ministry is worried, as a drought is the last thing it would like to cope with during an economic downturn.

Meanwhile, Junior trade minister Jyotiraditya Scindia said today that India is unlikely to meet $200 billion export target for FY 2010. He said shrinking global demand is affecting textile, leather, gems and jewellery exports.

India's direct tax receipts in Q1 June 2009 rose 3.65% to Rs 59,465 crore. Corporate tax receipts in the same period rose 3.31% to Rs 35,709 crore an official of the Central Board of Direct Taxes said. Income tax receipts were up 4.38 % to Rs 24,564 crore.

European shares fell in choppy trade on Wednesday, ending a seven-day winning run as profit taking emerged after recent surge. Analysts cautioned about earnings expectations. The key benchmark indices in Germany and France were down by between 0.13% to 0.51%. UK's FTSE 100 was flat.

Asian stocks rose today led by material producers and electronics makers, amid mounting speculation a global recovery will boost earnings. Key benchmark indices in China, South Korea, Hong Kong, Japan, and Taiwan rose by between 0.34% to 2.6%. The key benchmark indices in Hong Kong and Singapore were down by between 0.14% to 1.3%.

Trading in the US index futures indicated Dow could fall 41 points at the opening bell today, 22 July 2009.

US markets ended with modest gains after a late rally on Tuesday, 21 July 2009. The Dow gained 67.79 points, or 0.8%, to 8,915.94. The S&P 500 index rose 3.45 points, or 0.4%, to 954.58. The Nasdaq rose 6.91 points, or 0.4%, to 1,916.20. In key corporate earnings after the bell, Apple posted a quarterly profit way past Wall Street forecasts on strong sales of MAC computers and improved margins. The popular search engine, Yahoo's second-quarter profit rose 8% boosted by the company's cost-cutting measures.

As per the provisional figures, the BSE 30-share Sensex was down 221.86 points or 1.47% at 14,840.63. At the day's high of 15,369.42, Sensex rose 306.93 points in mid-morning trade, its highest level since 12 June 2009. At the day's low of 14,786.58, the Sensex fell 275.91 points in late trade.

The S&P CNX Nifty was down 66.75 points or 1.49% to 4,402.35 as per the provisional figures.

BSE clocked a turnover of Rs 6,643 crore, higher than Rs 6,215.28 crore on Tuesday, 21 July 2009.

The market breadth, indicating the overall health of the market turned negative compared to a strong breadth earlier in the day. On BSE, 1,171 shares rose as compared with 1410 that fell. A total of 105 shares remained unchanged.

From the 30 shares Sensex pack, 26 fell and rest rose.

The BSE Mid-Cap index was down 0.83% and the BSE Small-Cap index was down 0.15%.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 2.04% to Rs 1,976.40. The stock came off the day's high of Rs 2,056.30. The Supreme Court on Monday, 20 July 2009, asked the energy giant and former group firm Reliance Natural Resources (RNRL) why a gas pact between the two should not be cancelled. The court has scheduled next hearing on the dispute over the gas supply to Reliance Natural Resources (RNRL) on 1 September 2009.

RNRL has asked the Supreme Court to dismiss the government's affidavit on the dispute, even as the petroleum ministry has suggested that the court treats the pact between the two brothers null and void. The dispute concerns supply of natural gas from RIL's field, off the Andhra Pradesh coast, as also the price at which Reliance Natural Gas will get the fuel for power projects within the group.

In reply to the lawsuit filed by Reliance Industries challenging the Bombay High Court order, RNRL has said the government has no role to play in the private gas sharing dispute, and certainly not as a party to the row. The government, however, has said that the country's interest must be taken into consideration first and that cannot be held to ransom by a dispute between two industrialists or a previous, private pact between them.

India's largest oil exploration firm by revenue ONGC rose 4.13% ahead of its Q1 June 2009 results on 23 July 2009. Recent reports suggested Oil & Natural Gas Corporation (ONGC) has hired Citigroup to advise it on a bid for Kosmos Energy's stake in an oil field in Ghana in a deal that could be worth between $3 billion and $5 billion.

India's largest dedicated housing finance company by sales, HDFC fell 5.63% even after company's net profit rose 20.68% to Rs 564.92 crore on 22.86% rise total income to Rs 2,849.07 crore in Q1 June 2009 over Q1 June 2008. The lender announced its result during late trade today.

HDFC has reportedly cut lending rates for new customers by 25-50 basis points. The financial institution has restructured its loan baskets to create a new product where loans up to Rs 15 lakh are available at 8.75% as against 9.25% earlier.

Canara Bank declined 1.47% after the bank's gross non-performing assets rose 87.39% to Rs 2,462.94 crore in Q1 June 2009 over Q1 June 2008.

India's largest electric equipment maker by sales Bharat Heavy Electricals (BHEL) fell 3.38% even as net profit rose 22.41% to Rs 470.59 crore on 27.64% rise in total income to Rs 5,898.51 crore in Q1 June 2009 over Q1 June 2008. Bhel outstanding order book stood at Rs 1,24,000 crore. The company announced the result during market hours today.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 1.78%. The company, last week, stood by its stated outlook of 25% growth in order inflows for the current year even as the first quarter ended with a negative note. At the time of announcing Q1 June 2009 results, L&T had during trading hours on Thursday, 16 July 2009 said its order inflow was down 22 % in Q1 June 2009 over Q1 June 2008. The company's order backlog at the end of the June quarter was Rs 71, 650 crore ($14.7 billion).

Other capital goods stocks, Thermax, Siemens, ABB, Crompton Greaves, fell by between 0.26% to 5.94%.

IT stocks fell on profit taking reversing early gains triggered by better-than-expected Q1 June 2009 result by India's third largest IT exporter by sales Wipro. Wipro fell 1.46%. Wipro's consolidated net profit as per Indian accounting rules rose 0.54% to Rs 1015.50 crore on 2.5% fall in sales to Rs 6289.10 crore in Q1 June 2009 over Q4 March 2009. The company announced the results before trading hours today.

Wipro expects 0.91% to 1.9% growth in consolidated revenue from IT Services at between $1035 million to $1053 million in Q2 September 2009 over Q1 June 2009. The guidance is based on constant currency exchange rates
. Its American depository receipt (ADR) fell 1.17% on Tuesday, 21 July 2009.

India's largest IT exporter by sales TCS fell 2.6%. The company's net profit rose 15.27% to Rs 1276.44 crore on 0.12% fall in sales to Rs 5609.60 crore in Q1 June 2009 over Q4 March 2009. The company announced the result after trading hours on Friday, 17 July 2009.

India's largest IT firm by sales Infosys fell 1.64%. The government has launched a Government-to-Business (G2B) services e-biz project with Infosys as the technology partner. The project is among the 27 Central, State and Integrated Mission Mode Projects (MMPs) under the National E-Governance Plan (NEGP).

Power stocks reversed early gains triggered by strong response to Tata Power Company's global depository receipts. Tata Power Company fell 1.23% to Rs 1,115. The stock was volatile. It hit a high of Rs 1,160 and low of Rs 1,115. Tata Power Company during trading hours today, 22 July 2009, said it has raised $335 million from an issue of global depository receipts (GDR). The company said a strong investor responce enbale the company to raise GDR issue size to $335 million from $250 million.

Other power stocks, Reliance Power, Reliance Infrastructure, Power Grid Corporation of India, fell by between 0.68% to 2.36%.

Hindustan Zinc fell 2.96% after its net profit fell 15.2% to Rs 719 crore in Q1 June 2009 over Q1 June 2008.

NMDC rose 1.59% on reports the steel ministry has initiated steps to sell small stake in the firm.

Piramal HealthCare roe 2.25% after its net profit rose 45.48% to Rs 74.11 crore in Q1 June 2009 over Q1 June 2008.

Daily News Roundup - July 22 2009

Tata Power eyes US$250mn via GDR issue (ET)

HDFC cuts new loan rates by 50bps (ET)

Government to kick-off stake sale in two PSUs, Manganese Ore India and NMDC, which could fetch up to Rs250bn (ET)

SAIL to delay expansion plan by two years; to reach 26.2mtpa of hot metal capacity by 2014 (ET)

Infosys bags government contract to set-up an e-biz platform which will give companies easy access to government information and services (BS)

M&M sings an MOU with State Bank of Travancore for vehicle finance (FE)

Reliance Infra acquires RNRL’s 5% stake in Reliance Cementation (ET)

RIL borrows Rs5bn for working capital (BS)

Pfizer increases its stake in Indian arm to 71% (BS)

Reliance Infra to handle ADAG’s cement business (BL)

Essar Oil ties-up US$920mn to fund the expansion of its Vadinar refinery to 16mn tones (BS)

Ranbaxy gets approval from Canadian health regulator to manufacture and market its cholesterol lowering drug, Ran-Simvastatin (ET)

Reliance Capital may sell stake in insurance arm, float IPO (ET)

Adani Group targets 20,000MW generation capacity by 2020 (FE)

Kingfisher is planning to raise up to Rs5bn through equity issuance (BS)

Shriram Transport to raise Rs10bn via NCDs (BS)

Moser Baer’s solar energy unit defers Chennai plant (BS)

Government raises FY09 food grain output estimate by 4mn tones (BL)

Railways freight revenues up 4.1% during April-June 2009 (BS)