Dear Members,
The Board of Directors hereby present their 69th report on the business and
operations of your Company along with the audited financial statements for the financial
year ended 31 March 2023.
Financial Statements
The financial statements include:
1. Standalone financial statements of the Company, Akzo Nobel India Limited; and
2. Consolidated financial statements of the Group including the operational results of
ICI India Research & Technology Centre, on which the Company exercises effective
control.
The highlights of the performance during the year are:
(H million)
|
Standalone |
|
Consolidated |
|
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Revenue from Operations |
38,021 |
31,486 |
38,021 |
31,486 |
Operating Profit (EBITDA)* |
5,251 |
4,324 |
5,251 |
4,325 |
Depreciation |
(825) |
(759) |
(825) |
(759) |
Other Income net of finance costs |
133 |
82 |
133 |
82 |
Exceptional items |
- |
20 |
- |
20 |
Profit before tax |
4,559 |
3,667 |
4,559 |
3,668 |
Tax |
(1,208) |
(767) |
(1,208) |
(767) |
Profit after tax |
3,351 |
2,900 |
3,351 |
2,901 |
Key financial ratios |
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Debtors Turnover |
7.3 |
6.9 |
7.3 |
6.9 |
Inventory Turnover |
3.6 |
3.3 |
3.6 |
3.3 |
Interest Coverage |
37.3 |
29.9 |
37.3 |
29.9 |
Current Ratio |
1.5 |
1.5 |
1.5 |
1.5 |
Operating Profit Margin (%) |
13.8 |
13.7 |
13.8 |
13.7 |
Net Profit Margin (%) |
8.8 |
9.2 |
8.8 |
9.2 |
Return on Net Worth (%) |
26.0 |
22.8 |
26.0 |
22.8 |
Debt/ Equity |
5.3 |
5.6 |
5.3 |
5.6 |
There is no significant change (i.e. change of 25% or more as compared to the
immediately preceding financial year) in the key financial ratios except for Interest
Coverage ratio, which has improved on account of increase in Operating Profit and lower
Finance Cost.
In the financial year 2022-23, Company achieved remarkable performance, surpassing all
previous records and showcasing robust growth across all key metrics. Despite facing
challenges arising from cost inflation and currency fluctuations, we successfully
delivered double-digit revenue growth (21%) and sustained profitability for the fourth
consecutive year. This outstanding performance is a testament to our resilient business
model.
The Decorative Paints segment witnessed notable growth driven by strategic product
launches, strong traction in urban markets, and a thriving projects business. Our focus on
understanding consumer preferences and delivering innovative solutions contributed to this
success. Furthermore, the Coatings business experienced robust demand in key sectors such
as infrastructure, power, mining, and automotive industries, enabling growth and market
share expansion.
To maintain our competitive edge, we continue to leverage global R&D and
technologies, ensuring a steady stream of innovative products tailored specifically for
the Indian market. Our commitment to innovation remains unwavering as we strive to bring
differentiated and value-added solutions to meet the evolving needs of our consumers.
Dividend
The Company is following a Dividend Distribution Policy as approved by the Board while
distributing profits to its shareholders. In compliance with the requirements under
Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Dividend
Distribution Policy has been uploaded on the Company's website and can be accessed from
https:// akzonobel.co.in/pdf/policy/Dividend-Distribution-Policy.pdf.
The Board of Directors at its meeting held on 9 February 2023, approved payment of
interim dividend of H25 per equity share. This dividend was paid on 6 March 2023 to those
shareholders whose names were appearing in the Register of Members as on 21 February 2023,
being the Record Date. Your Directors are pleased to recommend a Final Dividend of H40 per
equity share for the year ended 31 March 2023 in addition to the interim dividend paid
during the financial year 2022-2023. The Final Dividend, subject to the approval of
Members at the Annual General Meeting scheduled on 3 August 2023, will be paid to those
Members whose names appear in the Register of Members, as on 27 July 2023 (Record Date).
The total dividend for the financial year, including the proposed Final Dividend, amounts
to H65 per equity share.
Pursuant to the provisions of the Income-tax Act 1961, dividend income is taxable in
the hands of the Shareholders and the Company is required to deduct tax at source from
such dividend at the prescribed rates. A communication providing detailed information and
instructions with respect to tax on the Final Dividend for the financial year ended 31
March 2023 is being sent separately to the Shareholders. Company shall, accordingly,
deduct tax, as applicable, before making dividend payments.
Transfer to Reserves
During the financial year, there was no amount transferred to the Reserves.
Business Environment & Outlook
The Paints & Coatings industry's prospects are intricately connected to the overall
growth of the country's economy, which is influenced by several factors including income
levels, industrial production, and infrastructure development. While the industry faces
potential risks stemming from fluctuating crude prices, macro-economic environment, and
inflationary pressures, the overall outlook remains promising. This optimism is fuelled by
India's projected medium-term growth rate of 6-7%, which sets a favorable backdrop for the
industry's expansion and development. By focusing on innovation, customer-centric
strategies, and leveraging its strengths, the Company is well-positioned to capitalize on
the anticipated growth opportunities and overcome potential challenges.
Subsidiary
Pursuant to section 129(3) of the Act read with rule 5 of the Companies (Accounts)
Rules, 2014, and other applicable provisions, if any, of the Companies Act 2013 (the
Act'), a statement containing salient features of the financial statement of the
subsidiary of the Company viz. ICI India Research & Technology Centre, viz. Form AOC-1
forms part of this Annual Report. The consolidated financial statements presented in this
annual report include financial results of the subsidiary pursuant to Rule 8(1) of the
Companies (Accounts) Rules, 2014.
In accordance with section 136 of the Act, the financial statements of the subsidiary
are available for inspection by the members at the registered office of the Company during
business hours on all days up to the date of the Annual General Meeting (AGM').
Members are requested to email a request for obtaining a copy of the said financial
statements at investor.india@ akzonobel.com so that necessary arrangements can be made at
the registered office of the Company. The financial statements including the Consolidated
Financial Statement and all other documents required to be attached to this report have
been uploaded on the website of the Company at www.akzonobel.co.in.
Share Capital
The paid-up share capital of the Company as on 31 March 2023 was Rs.455.40 million
comprising 45.54 million equity shares of Rs.10 each (Previous year Rs.455.40 million
comprising
45.54 million equity shares of Rs.10 each).