New Delhi, Nov 25 (PTI) Asian Paints on Thursday said it will respond to a report by proxy advisory firm InGovern alleging related-party transactions (RPTs) on Dhani family, one of its promoters, and also clarify certain factually incorrect information included in it.
InGovern, in its report, has raised the issue of transaction with Paladin Paints and Chemicals (PPCL), a key raw material supplier of the company controlled by Malav Dani, terming it as a conflict of interest. “Promoter directors who ‘control’ entities supplying goods to APL should immediately resign,” InGovern stated.
“The report of InGovern, a proxy advisory firm, quoted by the said news publications, was received by the Company only yesterday, November 24, 2021, and the Company will be suitably responding to the same along with clarifying on certain factually incorrect information included in the report,” Asian Paints said in a regulatory filing.
The report addresses certain transactions with related parties entered into by Asian Paints during FY 2019–20 including PPCL.
It has claimed PPCL formed 7 per cent of the value of goods purchased from promoter-controlled entities, which is “factually incorrect”.
“Out of Rs 553.88 crore of total purchases from related parties during the FY 2019–20, total purchase from Paladin was Rs 1.3 crore (which is lower than 0.2%) of total purchases from related parties,” said Asian Paints.
Asian Paints further said it has already “adequately” responded to all the aspects related to its transactions with PPCL to the regulators.
“The Company had received e-mail enquiries from the Securities Exchange Board of India and the National Stock Exchange of India Limited, seeking details of the said transactions with Paladin, and the Company has provided all necessary details and explanations sought by the said authorities, along with an overview of the processes followed for approval of related party transactions,” it said.
Asian Paints further claimed all transactions involving related parties are undertaken in strict compliance with the provisions of law and necessary disclosures have been made in accordance with the applicable disclosure norms from time to time.
According to the reports, InGovern had stated FY15-16 annual report of Asian Paints lists PPCL as a related party but unlike most other companies, it does not list out the value of RPTs and only aggregate value is given.
“The Indian Accounting Standards – 24 on Related Party Disclosures states that items of a similar nature (i.e. nature of trade) needs to be disclosed at aggregate value as opposed to the statements made in the quoted report,” it said.
The company has been disclosing transactions with each of the related parties where the transaction value is more than 10 per cent of the total transactions of the same type with related parties during the year. PTI KRH MR MR