Sound Base for Expansion

Sound Base for Expansion Hansavivek ASIAN PAINTS (INDIA), the largest paint manufacturer in the country, has fared so well during 1984 that the board has recommended a three-for-five bonus issue besides stepping up dividend by 5 points to 30 per cent. What is more, the company has planned expansion and diversification of activities to accelerate future growth. On a turnover up from the previous year's Rs 69.38 crore to Rs 91.24 crore, the company has earned a gross profit of Rs 12.08 crore against Rs 9.68 crore. These figures reflect a small contraction of profit margins. But this performance looks all the more encouraging when viewed against the background of critical availability of input materials and the inflationary trend in prices of ail raw materials and containers and packaging goods. The company was able to achieve export sales of Rs 2.25 crore, almost double last year's figure. Net profit amounted to Rs 5.36 crore (Rs 3.69 crore) and the earnings cover for the enhanced distribution increased from 2.80 times to 3.40 times. The company's liquidity position continued to be comfortable and income earned through investment of short term surplus funds amounted to Rs 1.11 crore. In the company's overseas operations, the Fiji subsidiary, Asian Paints (South Pacific), could maintain dividend at 12.5 cents per share of Fiji S one in view of the Counter Inflation (Dividends) (Control) Order, 1984. The demand for paints in the market returned to its normal level after the heavy demand witnessed during the previous year arising from reconstruction activities following hurricane 'Oscar'. Introduction of two new product lines, namely, marine paints and automotive paints enabled the company to restrict the shortfall to the minimum. The subsidiary in Tonga, Asian Paints-(Tonga) has announced a dividend of 20 cents per share of Tonga $ one following higher sales and profits. The company's proposal to set up a joint venture unit with an installed capacity of 400 KL of paints and enamels in the Dominion of Solomon Islands in South Pacific received final approval of the Government of India in October last. The building construction work has commenced and is expected to be completed by October this year. The company's proposal to set up a joint venture unit for the manufacture of 750 KL of paints, enamels and varnishes in the Kingdom of Nepal also received final approval of the Central government. The building construction work has been completed and the equipment is under installation. The plant is expected to be commissioned shortly.