3:5 bonus from Asian Paints

The board of directors of Asian Paints has announced the issue of bonus shares in the ratio of three shares for every five shares held on the back of a 26.6 per cent rise in net profit at Rs. 97.34 crores for the year ended March 31, 2000. The company's equity capital would increase to Rs. 66.86 crores from the present Rs. 40.12 crores as a result of the bonus issue, according to the Vice-Chairman and Managing Director, Mr. Ashwin

It had last declared a bonus issue in the ratio of 1:1 in 1993- 94, he said, adding, the company had already distributed a 100 per cent dividend (Rs. 10 per equity share) for the year.

It has reported an 18.9 per cent increase in gross sales at Rs. 1,341.64 crores and a 19.2 per cent rise in net sales at Rs. 1,066.17 crores for 1999-2000.The profit before depreciation, interest and tax rose by 37.7 per cent to Rs. 191.22 crores. Interest charges declined by nine per cent to Rs. 20.29 crores while the provision for depreciation was up by 22.7 per cent to Rs. 27.84 crores.

The provision for taxation rose by a steep 91 per cent to Rs. 45.75 crores as there was no substantial addition to fixed assets against which the company could claim depreciation, Mr. Dani explained.

The volume growth of 23 per cent in paints business was the highest the company has recorded in the last 20 years and in value terms the growth was 18.1 per cent, he said.

He pointed out that the value growth was less than the volume growth on account of the benefit of lower excise duty (16 per cent) being passed on to the consumer, reduction in selling prices in March 1999 and absorption of a part of the rise in raw material cost.

Mr. Dani observed that the growth in business was propelled by the 950 'colourworld' installations across the country.

The decorative paints segment, which accounts for about 93 per cent of Asian Paints' total production, was expected to grow at 13 to 14 per cent and it was aiming to better this market average by increasing its focus on the exterior paints category, Mr. P. M. Murty, president (decoratives) said.

Mahindra & Mahindra

Mahindra & Mahindra (M&M) has announced a net profit of Rs. 263.48 crores for the year 1999-2000 against a figure of Rs. 228.58 crores in the previous year, an increase of 15.27 per cent. The directors had already declared an interim dividend of 55 per cent for the year (previous year 55 per cent) and this will be treated as the final dividend for the year. Gross sales for the year was at Rs. 4,342.44 crores (Rs. 4,116.99 crores) and net sales at Rs. 3,569.2 crores (Rs. 3,463.35 crores).

The profit before interest, depreciation and tax was at Rs. 611.62 crores (Rs. 543.91 crores). The company provided Rs. 141.44 crores (Rs. 151.86 crores) for interest, Rs. 123.27 crores (Rs. 111.97 crores) for depreciation, Rs. 3.57 crores (nil) for extraordinary items and Rs. 87 crores (Rs. 51.5 crores) for tax. Extraordinary items include profit of Rs. 6.37 crore earned on transfer of business of a division and loss of Rs. 2.79 crores on business of another division transferred to subsidiaries.

Commenting on the performance, Mr. Anand Mahindra, managing director, said, ``We have outperformed the industry in both our core businesses. I believe this success is due to our emergence as a market-driven organisation and our speed of response to the rapidly changing external environment. Massive efforts are on to develop and introduce new generation utility vehicles and tractors, which I firmly believe would further consolidate our position in the highly competitive markets.''In the automotive sector, the domestic sale of utility vehicles increased by 9.6 per cent compared to the industry growth of 7.4 per cent resulting in an improved market share of 58.2 per cent (57 per cent). The company sold 76,436 vehicles (including exports and light commercial vehicles) as against 70,548 sold in the previous year. During the year the company introduced new models including Quadro, Rakshak and Mahindra CNG. The company also introduced new variants for the export market.

In the Farm Equipment Sector, M&M's market share showed a marginal growth to 27.4 per cent from 27.2 per cent. It sold 70,571 tractors (69,362). During the year the company introduced new models including Sarpanch, Mahindra Cane Samrat, Ergo 5005-DI and Rice Planter. During the last quarter of the year, the operations of the sector were affected on account of a flash strike by the workmen at the Kandivli Tractor plant for about a month.

During the year, the company successfully supplied 3,423 vehicles to the Indian Army at short notice. It also commenced export of XD3P Peugeot engines to a Turkish company that had earlier sourced these from Automobiles Peugeot, France. The first satellite plant was inaugurated at Rudrapur in UP to cater to the needs of the small farmers in Northern India. The plant is linked to the parent plants at Kandivli and Nagpur through SAP.

During the period April 1, 2000 to May 29, 2000, 10,616 vehicles were produced (11,491) and 9,817 vehicles were dispatched as against 11,157 vehicles in the previous year.

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