Annual Report 2012 Annual Report 2012

Annual Report 2012 Annual Report 2012 Being the absolute leader in the paint industry of Bangladesh, Berger Paints Bangladesh Limited believes in su...
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Annual Report 2012

Annual Report 2012 Being the absolute leader in the paint industry of Bangladesh, Berger Paints Bangladesh Limited believes in sustainable business. We are concerned about the various environmental and social issues of the country to improve the quality of our lives and in respect of that, we have introduced paints that are eco-friendly. This year’s annual report is a reflection of our initiative and responsibility towards the environment.

vision To be the most preferred brand in the industry ensuring consumer delight.

mission We shall increase our turnover by 100 percent in every five years. We shall remain socially committed ethical company.

our spirit

Our customers are our partners Our people are our strength Our shareholders are our foundations We proudly bring inspiration, strength and colour to communities through affiliation with our customers

our corporate objective Our aim is to add value to life, to outperform the peers in terms of longevity, customer service, revenue growth, earnings and cash generation. We will be the employer of choice for all existing and future employees.

our strategy Our strategy is to build long-term partnerships with the customers/consumers. With their support, we aim to maximize the potential of our business- through a combination of enhanced quality of product, service, creative marketing, competitive pricing and cost efficiency.

contents The Company .......................................................................................................... 15 Locations ................................................................................................................ 17 Board of Directors & Executive Management Team........................................................ 19 Biography of the Directors .......................................................................................... 21 Transmittal Letter ...................................................................................................... 25 Notice ..................................................................................................................... 27 Directors’ Report ...................................................................................................... 29 Audit Committee Report ............................................................................................ 43 Certificate on Corporate Governance ............................................................................ 44 Value Added Statement ............................................................................................. 45 Auditors’ Report and Audited Financial Statements ......................................................... 47 kKrYJujJ kwtPhr k´KfPmhj ..................................................................................... 75 KjrLãTPhr k´KfPmhj S KjrLKãf IJKgtT KmmreL ........................................................... 79 Subsidiary Profile ...................................................................................................... 85 Events ..................................................................................................................... 91 Proxy Form & Attendance Slip .................................................................................... 99

The Company Berger is one of the oldest names in the paint industry and the country’s major specialty paints business with products and ingredients dating back more than 250 years. Louis Berger, a German national, founded dye and pigment making business in England in 1760. Louis Berger & Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship, culminating in perfecting the process of making Prussian Blue, a deep blue dye– a color widely used for the uniforms of many European armies. Production of dyes and pigments evolved into production of paints and coatings, which till today, remains the core business of Berger. The company grew rapidly by establishing branches all over the world and through mergers and acquisitions with other leading paint and coating manufacturing companies. Berger has been involved in the paint business in this part of the world since 1950, when paints were first imported from Berger UK and subsequently, from Berger Pakistan. In 1970, Berger Paints Bangladesh Limited (BPBL), erstwhile Jenson & Nicholson, had set up its paint factory in Chittagong. The shareholders were Jenson & Nicholson (J & N), Duncan Macneil & Co. Limited and Dada Group. Duncan Macneil subsequently sold their shares to the majority shareholder J & N Group. The Dada Group’s share was ultimately vested with the Government of the Peoples’ Republic of Bangladesh after the independence of the country in 1971. The name of the company was changed from J & N (Bangladesh) Limited to Berger Paints Bangladesh Limited on January 1, 1980. In August 2000, J & N Investment (Asia) Limited purchased the Government shareholding. In December 2005, the company issued 5% shares to the public and listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE). With the entry of Berger Paints into the Bangladesh market, the country has been able to benefit from more than 250 years of global paint industry experience. Over the decades, Berger has evolved to become the leading paint solutions provider in this country and has diversified into every sphere of the industry– from Decorative Paints to Industrial, Marine and Powder Coatings. Berger has invested more in technology and Research & Development (R&D) than any other manufacturer in this market. It sources raw materials from some of the best known names in the world: MITSUI, MOBIL, DUPONT and BASF, to name a

few. The superior quality of Berger’s products has been possible because of its advanced plants and strict quality controls equal to the best international standards. Investment in technology and plant capacity is even more evident from the establishment of Powder Coating and Emulsion plants at the Dhaka factory. The state-of-the-art Dhaka factory is an addition to Berger’s capacity, making it the paint giant in Bangladesh. With its strong distribution network, Berger has reached almost every corner of Bangladesh. The nationwide dealer network, supported by nine sales depots strategically located at Dhaka, Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Comilla, Mymensingh and Barisal has enabled them to strategically cater to all parts of the country. The product range includes specialized outdoor paints to protect against adverse weather conditions, Color Bank, Superior Marine Paints, Textured Coatings, Heat Resistant Paints, Roofing Compounds, Epoxies and Powder Coatings. In each of these product categories, Berger has been the pioneer. Berger also provides customer support; connecting consumers to technology through specialized Home Decor service; giving free technical advice on surface preparation, color consultancy, special color schemes etc. To bolster customer satisfaction, Berger launched Breathe Easy- the first odourless paint solution in Bangladesh. The company also maintained Innova Wood Coating, PowerBond adhesive and TexBond textile chemicals to cater to the needs of the customers. As part of the company’s endeavor for excellence and better service, Berger has expanded its operations to manufacture coil coatings through its joint venture with Becker Industrial Coatings Holding AB, Sweden named- Berger Becker Bangladesh Limited. Apart from business, being a responsible corporate citizen, Berger Paints Bangladesh Limited has been promoting the young and creative talents of the country through Berger Young Painters’ Art Competition (BYPAC), Berger Award for Excellence in Architecture (BAEA), Berger Awards Programme for Students of Architecture of BUET (BASAB), Khulna University Architecture Department-Berger (KUAD-BERGER) Award etc. Berger Paints has added another dimension to its social responsibilities by contributing to the well being of autistic children in Bangladesh since 2009.

Locations REGISTERED OFFICE Berger House House No. 8, Road No. 2, Sector No. 3 Uttara Model Town, Dhaka-1230 CORPORATE OFFICE Berger House House No. 8, Road No. 2, Sector No. 3 Uttara Model Town, Dhaka-1230 Phone: 02-8953665; Fax: 02-8951350 E-mail: [email protected] Web Site: www.bergerbd.com DHAKA FACTORY 102, Mouja-Taksur, Nabinagar, Savar, Dhaka Phone: +880 (2) 7791964 Fax: +880 (2) 7708091 CHITTAGONG FACTORY 27-D, FIDC Road Kalurghat Heavy Industrial Area Chittagong-4212 Phone: +880 (31) 670472 Fax: +880 (31) 671639 POWDER COATING PLANT 102, Mouja-Taksur, Nabinagar, Savar, Dhaka Phone: +880 (2) 7708450 Fax: +880 (2) 7708091 EMULSION PLANT 102, Mouja-Taksur, Nabinagar, Savar, Dhaka Phone: +880 (2) 7708450 Fax: +880 (2) 7708091 DHAKA SALES OFFICE 272, Tejgaon Industrial Area, Dhaka-1208 Phone: 02-8870233-44 (Hunting) 02-9892708, 02-9897847 Fax: 02-8825770 Email: [email protected] CHITTAGONG SALES OFFICE 43/3, Chatteswari Road GPO Box No. 353, Chittagong-4000 Phone: 031-618807, 615893-4 Fax: 031-620507 SYLHET SALES OFFICE 70, Antarango, Shahi Eidgah (Supply Road) Kazitulla, Sylhet-3100 Phone: 0821-712215 KHULNA SALES OFFICE 2, KDA Approach Road Sonadanga, Khulna-9000 Phone: 041-722262

BOGRA SALES OFFICE 31, Piari Sanker Street Katnar Para Bogra-5800 Phone: 051-62567 COMILLA SALES OFFICE 214, Ashrafpur, EPZ Road Comilla-3500 Phone: 081-63403 RAJSHAHI SALES OFFICE 520, Talaimari Ghoramara, Boalia, Rajshahi Phone: 0721-773512 MYMENSINGH SALES OFFICE 304, Mashkanda Mymensingh Phone: 091-51754 BARISAL SALES OFFICE 2157, South Shagordi Hazi Bari Road, Barisal Phone: 0431-72030, 0431-72031 BERGER HOME DECOR (BANANI) House-24 (1st Floor), Road-11 Block-F, Banani, Dhaka Phone: 9872428 E-mail: [email protected] BERGER HOME DECOR (DHANMONDI) House-39/B (New), Road-16 (New) Dhanmondi, Dhaka-1207 Phone: 8126669 E-mail: [email protected] BERGER HOME DECOR (UTTARA) House-46, Rabindra Sarani, Sector-07 Uttara Model Town, Dhaka-1230 Phone: 8918250 E-mail: [email protected] SUBSIDIARY COMPANY Jenson & Nicholson (Bangladesh) Limited 70, East Nasirabad Industrial Area Baizid Bostami Road Chittagong-4000 Phone: 031-682462 Associate Company Berger Becker Bangladesh Ltd. Building-3, Plot-102, Mouja-Taksur Nabinagar, Savar, Dhaka Phone: +880 (2) 7791964 Fax: +880 (2) 7708091

Board of Directors & Executive Management Team BOARD OF DIRECTORS Mr. Gerald K Adams Ms. Rupali Chowdhury Mr. K. R. Das Mr. Anil Bhalla Mr. Subir Bose Mr. Jean-Claude Loutreuil Mr. M. Azizul Huq Ms. Rishma Kaur Mr. Abdul Khalek

Chairman Managing Director Non-Executive Director Non-Executive Independent Director Non-Executive Director Non-Executive Director Non-Executive Independent Director Non-Executive Director Director

EXECUTIVE MANAGEMENT TEAM Ms. Rupali Chowdhury Mr. Abdul Khalek Mr. Nazimuddin Helali Mr. Md. Mohsin Habib Chowdhury Mr. Mohammad Ahsun Ullah Ms. Humaira Fatema Hamim Mr. H. M. Rakib Ullah Bashar Mr. Rashedul Haque Mr. Sabbir Ahmed Mr. Mohammad Abu Nader Al Mokaddes Mr. A. S. M. Obaidullah Mahmud Mr. Anupam Paul Mr. Muhammad Kawsar Hasan Mr. Abul Kasem Md. Sadeque Nawaj Mr. Syed Salahuddin Abu Naser Mr. Imranul Kabir Mr. Syed Mizanur Rahman Mr. Md. Azizul Hoque Mr. A. M. M. Sajjad Mr. Md. Abdus Sabur Khan Mr. Mohammad Khasru Meah

Managing Director Director Finance GM-Manufacturing GM-Sales & Marketing GM-Treasury & Financial Accounting GM-Human Resource & Administration GM-Financial Planning & Monitoring GM-Supply Chain GM-Business Process, Risk & Compliance GM-Information Technology Head of Research & Development Plant Manager, Dhaka Factory Plant Manager, Chittagong Factory Head of Marketing General Sales Manager (GSM)-Trade GSM-Industrial,Marine & Special Coatings Manager-Human Resource Sales Manager- Projects, Prolinks & Home Décor Manager-Admin & Labor Relations Head-Value Added Tax Head of Cost Accounting

COMPANY SECRETARY Mr. Abdul Khalek

LEGAL ADVISORS

AUDITORS

PRINCIPAL BANKERS

Corporate Counsel Suite # 802, Rahat Tower (7th Floor) 14 Biponon C/A, Link Road West Banglamotor, Dhaka-1000

A. Qasem & Co. Gulshan Pink City, Suites#01-03 Level# 7, Plot# 15, Road#103 Gulshan Avenue, Dhaka-1212

Standard Chartered Bank Citibank N. A. Commercial Bank of Ceylon HSBC

Mr. S. C. Lala, Advocate 18, Gurkha Doctor Lane Patharghata, Chittagong

Biography of the Directors Mr. Gerald K Adams Chairman since 2004 Mr. Adams is a professional company director and also the founder and MD of a consulting company specialising in strategy and business development. His directorships include: Berger Paints Bangladesh Ltd., as Chairman; Berger Paints India Ltd; Bolix SA (Chairman); Sundrop Farms and the Royal Socity for the Protection of Animals, South Australia. His previous directorships include Axiom Energy Ltd and the Joint State of South Australia and Carnegie Mellon University Advisory Board. Prior executive roles include: Managing Director of Orica Consumer Products, the leading paint and handyman products company in Australia and New Zealand; President and CEO of Box USA; Chief Executive of the Australian corrugated box business of Amcor Fibre Packaging, a part of Amcor Limited; Vice President and Director, Business Development, of Kraft Foods, Asia-Pacific; and consultant, the Boston Consulting Group. He was educated at the Harvard Business School (Cambridge, Mass.) from 1977-79, and the University of Washington (Seattle, Washington) from 1971-75. Mr. Adams was born in 1953 in the US and now resides in Australia.

Ms. Rupali Chowdhury Managing Director since 2008 Ms. Rupali Chowdhury was born in 1960. She is an MBA from IBA, University of Dhaka, and completed her Graduation with Honors in Chemistry from the University of Chittagong. She started her career with the multinational pharmaceutical and chemical Company, ‘Ciba Geigy (Bangladesh) Limited’, in 1984 as Senior Officer- Planning, Information and Control and worked there for about six and a half years. She was Brand Manager while leaving Ciba Geigy (Bangladesh) Limited in 1990. Ms. Rupali Chowdhury joined Berger Paints Bangladesh Limited in 1990 as Planning Manager and during her tenure she worked for various departments such as Marketing, Sales, Distribution, Planning and Systems under different supervisory capacities. Ms. Chowdhury was promoted to the position of Managing Director of the Company on 1 January 2008. She is also Managing Director of Jenson & Nicholson (Bangladesh) Limited, a 100% subsidiary of Berger Paints Bangladesh Limited and Director of Berger Becker Bangladesh Limited, a joint venture between Berger Paints Bangladesh Limited and Becker Industrial Coatings Holding AB, Sweden. She is also an Independent Director of Marico Bangladesh Limited since 2009. She is President of Bangladesh Paint Manufacturers’ Association and member of the Executive Committee of Foreign Investors’ Chamber of Commerce & Industries (FICCI). She is a member of the Audit Committee of Berger Paints Bangladesh Limited. She is also rendering services as executive member of Prothom-Alo Trust, a prominent organization working for promoting, funding and supporting educational, philanthropic and socially innovative activities/ programmes for the benefit of the society under the Prothom-Alo’s wider activities (Prothom-Alo is a highly circulated Bengali newspaper).

Mr. K. R. Das Director since 1992 Mr. K.R. Das was born in India in 1931. On completion of his graduation in science with honors, he started his career with Gillanders Arbuthnot & Co. Limited in 1951. He was Head of Pigments Division when he left Gillanders in 1965. He joined Jenson & Nicholson Limited in 1965 and left the company in 1975 as General Sales Manager after a long 10 years of service. He joined Berger Paints India Limited in 1975 and after 20 years of service retired in 1994 as Executive Director. Mr. Das has been working as Management Consultant since 1994. He is a director of Berger Paints India Limited, and Chairman of RDG Systems (Pvt.) Ltd, India. Mr. Das is also the Regional Supervisory Director of Berger Paints Bangladesh Limited, and Chairman of Jenson & Nicholson (Bangladesh) Limited. He is a member of the Audit Committee of Berger Paints Bangladesh Limited.

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Mr. Anil Bhalla Director Since 1994 Mr. Anil Bhalla was born in India in 1946. He graduated in Economics (Hons) from the University of Delhi and is a Fellow Chartered Accountant. He is the managing partner of JC Bhalla & Co., a reputed Chartered Accountants firm of India. He has four decades of experience in professional services in both India and abroad. He has a wide range of experience in auditing, joint venture consultancy, tax consultancy, strategic business consultancy, business valuations, and mergers & acquisitions. He was a Member of the Northern India Regional Council of the Institute of Chartered Accountants of India (ICAI) from 1976 to 1979 and it’s Chairman from 1978 to 1979. He has served ICAI as member of different Committees namely Company Law, Expert advisory and Auditing and Assurance Standards Board. He was an Executive Committee member of the Income Tax Appellate Tribunal Bar Association of Delhi. He was President of the Institute of Internal Auditors, Florida, USA Delhi Chapter. He is also a Director of Berger Paints India Limited and Jenson & Nicholson (Bangladesh) Limited. He is a member of the Audit Committee of Berger Paints Bangladesh Limited.

Mr. Subir Bose Director since 1995 Mr. Subir Bose was born in India in 1949. He is a Chemical Engineer from the Indian Institute of Technology, Kanpur and completed his post graduation in Business Administration from the Indian Institute of Management, Ahmedabad. He started his career with Asian Paints India Limited in 1974. He was the Industrial Sales Manager while leaving Asian Paints India Limited in 1982. Mr. Bose joined Abucon Nigeria Limited, Lagos, Nigeria in 1982 and worked there till June 1984. He returned to India in 1984 and joined Berger Paints India Limited. He was elevated to the position of Managing Director in July 1994 and has retired from the position in 2012. He is now a Director of Berger Paints India Limited. He is a member of the Audit Committee of Berger Paints Bangladesh Limited.

Mr. Jean-Claude Loutreuil Director since 1998 Mr. Jean-Claude Loutreuil was born in 1945 at Saint Laurant Sur Mer in France. He is an MBA from the University of Paris. He graduated from Pharmaceutical and Chemical High School of Anguerny, France. He was Managing Director in Janssen Pharmaçeutica (Flubenol), Belgium and Managing Director(Veterenary sector) of Shering Plough. In 1988 he was in charge of U K Paint France as Director in connection with Russia. He joined U K Paint Russia as Managing Director in Moscow and Krasnodar. He has been working for the last four decades mostly in Pharmaceutical and Chemical sectors as consultant.

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Mr. M. Azizul Huq Non-Executive Independent Director since July 2012 Mr. M Azizul Huq is the Managing Director of GlaxoSmithKline (GSK) Bangladesh Limited, a subsidiary of GSK plc., UK, one of the leading pharmaceutical and healthcare companies of the world. Mr. Huq joined GSK Bangladesh in 1998 and was appointed General Manager- Sales & Marketing in 2000. Mr. Huq was appointed Marketing Director in 2001 and was called to the Board of GSK Bangladesh before being appointed as Managing Director in January 2003. Prior to joining GSK, Mr. Huq worked for Rhone-Poulenc (now known as Sanofi) for almost 9 years in progressively responsible marketing roles. A post graduate in Pharmacy from the University of Dhaka and also an MBA from IBA of the same University, Mr. Huq has almost 24 years’ professional experience in the Pharmaceutical Industry in areas such as Sales, Marketing, Distribution, Business Development and General Management and has been a Board member of GSK Bangladesh for more than 12 years. He is also the Chairman of Burroughs Wellcome & Co. (Bangladesh) Limited. Mr. Huq plays an active role in the business community and is an Executive Committee member of the Foreign Investors’ Chamber of Commerce & Industries (FICCI) and the Metropolitan Chamber of Commerce and Industries (MCCI). He was born in 1963. He is a member of the Audit Committee of Berger Paints Bangladesh Limited.

Mrs. Rishma Kaur Director since March 2013 Mrs. Rishma Kaur holds a Bachelor of Science (Hons) in Business Studies from University of Buckingham, United Kingdom. She was involved with research on sales and new product development for Cementone Beaver Ltd., and SC Johnson in United Kingdom. She was Chairperson of Paints & Allied Products Panel of Chemicals & Allied Products Export Promotion Council (CAPEXIL), India from 1997 to 1999. She was a Director in Berger Paints India Limited from 1997 to 2003. At present she is National Business Development Manager and Alternate Director in Berger Paints India Limited. She was born in 1972.

Mr. Abdul Khalek Director since 2004 Mr. Khalek is a Fellow Chartered Accountant, and has his Masters of Commerce in Accounting from the University of Dhaka. He joined ‘Proshika Manobik Unnayan Kendra’, a leading national NGO in 1985 as an Auditor. He was Chief Internal Auditor while leaving Proshika in June 1993. Mr. Khalek joined Berger Paints Bangladesh Limited in 1993 as Management Accountant. Over the period, he served the company under different capacities and is presently holding the position of Director- Finance & Company Secretary. Mr. Khalek is also a member of the Board of Directors of Jenson & Nicholson (Bangladesh) Limited, and Berger Becker Bangladesh Limited. Mr. Khalek has been a member of the Taxation & Corporate Laws Committee of the Institute of Chartered Accountants of Bangladesh for the last 17 years. He is also serving the Foreign Investors’ Chamber of Commerce & Industries as a member of Trade, Tariff, Taxation & Company Affairs Sub-committee for the last 14 years and has served as the convener of its Finance Sub-committee during the year 2006-2007. He is also serving the Metropolitan Chamber of Commerce and Industries as member of Tariff & Taxation Sub-committee for the last 4 years. Apart from his service, he has been one of the faculty members of The Institute of Chartered Accountants of Bangladesh for the last 18 years and has authored a good number of articles on trade and commerce. He is also a member of the Institute of Internal Auditors of Bangladesh. He was born in 1959. He is a member of the Audit Committee of Berger Paints Bangladesh Limited.

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Transmittal Letter April 02, 2013

All Shareholders Bangladesh Securities and Exchange Commission Registrar of Joint Stock Companies & Firms Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. Sub: Annual Report for the year ended 31 December, 2012 Dear Sir(s), We are pleased to enclose a copy of the Annual Report together with the Audited Financial Statements including the Statement of Financial Position, Statement of Comprehensive Income and Statement of Cash Flows for the year ended 31 December, 2012 along with notes thereon for your reference and record.

Yours sincerely,

Abdul Khalek Director & Company Secretary

Notice The 40th Annual General Meeting Notice is hereby given to all Members of Berger Paints Bangladesh Limited that the 40th Annual General Meeting of the Members of the Company will be held on Sunday, April 21, 2013, at 11.00 am at Trust Milonayatan, Dhaka to transact the following businesses:

Agenda 1.

Report and Financial Statements To receive, consider and adopt the Financial Statements and the Reports of the Directors and Auditors of the Company for the year ended 31 December, 2012.

2. Dividends To declare dividend for the year ended December 31, 2012 as recommended by the Board of Directors. 3.

Election of Directors a) To elect Directors in place of those who shall retire in accordance with the provisions of the Articles of Association of the Company and the Director recommended by the Board. b) To approve the appointment of Independent Director.

4.

Appointment of Auditors To appoint Auditors of the Company for the term until the conclusion of the next Annual General Meeting and to fix their remuneration.

5.

To transact any other business with permission of the chair.

Dhaka, April 1, 2013

By order of the Board of Directors



Abdul Khalek Director & Company Secretary

NOTES: a) The Record Date was March 31, 2013. Shareholders whose names appeared in the Register of Members on the Record Date will be eligible to attend the meeting and qualify for Dividend. b) A member eligible to attend and vote at the Annual General Meeting may appoint a proxy to attend and vote on his/her behalf. Proxy form must be affixed with requisite revenue stamp and must be submitted to the Registered Office of the Company not less than 48 hours before the time fixed for the Annual General Meeting. c) Admittance to the meeting venue will be on production of the attendance slip attached with the Annual Report. d) The Notice of the Annual General Meeting, Annual Report 2012 and Proxy Form are available at the Company’s website www.bergerbd.com

Directors’ Report The Directors are pleased to present their 40th report of the Company along with the Audited Financial Statements and Auditors’ Report for the year ended December 31, 2012. 1. Industry Outlook and Possible Future Developments in the Industry Bangladesh Paint Industry had experienced a steady growth until 2010. Since then the industry has been facing several challenges in different frontiers which made the journey difficult. Global economic meltdown, share market debacle, liquidity crisis and dearth of electricity and gas supply has badly hit real estate sector, which consequently affected Paint industry.

In the backdrop of upcoming national election and ongoing political instability, 2013 seems more challenging to us. However, strong foreign remittance and sustainable growth of readymade garments industry are the silver linings which may notch up a better growth with growing consumer confidence.

2. Sales Growth The Company achieved 20.41% growth in 2012 in spite of difficult economic condition. 3. New Products The Company launched a number of new products in 2012 as part of its relentless efforts to fulfill the diversified customer needs and explore new frontiers.

Continuing with the environment friendly range of ‘BreatheEasy’- the first ever odour free and eco-friendly paint in Bangladesh, two more products were launched in 2012. The new products were ‘BreatheEasy Wall Putty’ and ‘BreatheEasy Water Sealer’. The BreatheEasy series is environment friendly since it has low volatile organic compound (VOC). Its ‘stain-free’ and ‘anti-bacterial’ features protect the wall from stains and fungi.



Berger Paints launched ‘Mr. Expert Tile Adhesive,’ which is a ready mixed polymer modified multipurpose adhesive with outstanding adhesion/ tensile strength. ‘Mr. Expert Latex Plus,’ another product in the Mr. Expert series, was launched in 2012. The product is used for high performance applications in waterproofing and repair works at a convenient but effective way.



To protect house from dirt-prone weather of our country, Berger launched WeatherCoat ANTIDIRT in 2012. This exterior wall paint is formulated with Nano additives to offer high resistance against paint agglomeration and exposure under Ultra Violet ray. It also offers superior weather protection against fungus, algae and adverse environmental effects like water penetration and acidic gases.



The Company also launched a good number of high-performance industrial coatings during the year to address the requirements of different industries.

4. Risks and Concerns The major risk factors and concerns for the company are as follows:

Macro economy The level of activity within the general economy is of fundamental importance given its influence on construction and industrial activity levels, which in turn are key market segments for the paint manufacturing industry.



External factors The Company’s results may be affected by factors outside its control such as political unrest, strike, civil commotion and act of terrorism.



Changes in income tax and value added tax Changes in income tax and VAT laws, upward revision in tax rate and sudden unpredictable changes in other business related laws may adversely impact results of operations and cash flows.



Changes in environmental, health and safety laws and regulations In line with global practice, the government has been initiating notable changes in environmental, health and safety laws and regulations. The Company may require additional investment and expenditure to ensure conformity with future changes.



Exchange rate fluctuation Since a large proportion of Berger’s raw materials are imported, changes in currency exchange rates influence the result of the Company’s operations.



Management perception of the risks While many of the risk areas are beyond control of any single company, Berger is closely watching the trends and developments in each of the risk areas and takes the best possible measures to mitigate them through product and market diversification, efficient sourcing of materials, use of latest technology and investment in research and development to gain sustained competitive advantage. Being a strictly compliant company, Berger played pioneer role installing Effluent Treatment Plant and Incinerator of global standard at its plant in conformity with environment related regulation.

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29

5. Financial Performance The Directors take pleasure in reporting the Financial Results of the Company for the year ended December 31, 2012 and recommend the following appropriations: Taka in ‘000 Particulars

2012

2011

Net Sales

7,611,213

6,321,274

Cost of Sales

5,086,852

4,192,032

Gross Profit

2,524,361

2,129,242

Profit Before Tax

1,022,343

894,799

Provision for Tax

(274,000)

(170,000)

4,447

(3,636)

752,790

721,163

Add: Retained Earning brought forward from previous year

1,213,867

910,105

Amount Available for Distribution

1,966,657

1,631,268

Dividend (Proposed/Paid)

(417,401)

(417,401)

Transfer to un-appropriated profit

1,549,256

1,213,867

32.46

31.10

Provision for deferred tax Profit After Tax

Basic Earning Per Share (Taka) Net Operating Cash Flow Per Share (Taka) Net Asset Value Per Share (Taka) Gross Profit Margin (%) Net Profit After Tax Margin (%)

46.48

10.98

100.20

85.74

33.17

33.68 

9.89

11.41

Resulting from substantial improvement in trade working capital the Net Operating Cash Flow Per Share (NOCFPS) of the Company improved significantly in 2012. 6. Dividend The Company has invested a substantial amount for expansion of production capacity as well as diversification of products and businesses. However, the Directors are pleased to recommend a dividend of 180% i.e. Tk. 18 per share of Tk. 10 each for the year 2012. 7. Corporate Social Responsibility Being a responsible corporate citizen, Berger has been contributing to different social causes to bring positive changes in the society.

For the 4th year, Berger continued to provide financial and other material aids to organizations working for the development of autistic and differently challenged children in Bangladesh. This year the company gave such aid to nine organizations. During the year Berger made contribution for the aid of acid victims and severely cold affected people.



Berger Paints organized the 17th event of Berger Young Painters’ Art Competition (BYPAC) in 2012 to encourage young talents. This year, Berger Young Painters’ Art Competition received tremendous response with submission of 563 paintings from all over the country. Berger paints also organized a painting competition for autistic children along with 17th BYPAC.



The 1st and 2nd rounds of Khulna University Architecture Department-Berger (KUAD-BERGER) Award giving ceremony for the students of architecture, Khulna University took place in 2012 in coordination with Department of Architecture, Khulna University.



The Company also facilitates interns of different academic backgrounds to let them gain firsthand knowledge and experience of the corporate world, and thus groom the potential leaders of the society.

8. Contribution to National Exchequer During the year, the Company has contributed around Tk. 1,980,871 thousand to the National Exchequer as Customs Duty, Income Tax, Value Added Tax and Supplementary Duty.

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9. Subsidiary Company The statement of the holding company’s interest in the subsidiary company Jenson & Nicholson (Bangladesh) Limited as specified in sub section 1 of section 186 of The Companies Act 1994 is attached to the Annual Report and Financial Statements of the Company. 10. Election of Directors The Directors retiring by rotation under Article 121 and 122 are Mr. Gerald K. Adams and Mr. Jean-Claude Loutreuil who, being eligible, offered themselves for re-election.

Mr. M. Azizul Huq was appointed Independent Director for three years in the 143rd Board Meeting held on July 30, 2012. In accordance with Bangladesh Securities and Exchange Commission’s notification no. SEC/CMRRCD/2006-158/134/Admin/44 dated August 7, 2012 his appointment is placed before the shareholders at the 40th Annual General Meeting for approval.



In the meeting of the Board of Directors of the Company held on 17.03.2013 Mrs. Rishma Kaur, nominee of J&N Investment (Asia) Limited, was appointed as an additional Director in pursuance of the power conferred upon the Board by Article 111 of the Articles of Association of the Company. As required by section 91(1)(b) of the Companies Act 1994 the name of Mrs. Rishma Kaur, nominee of J&N Investment (Asia) Limited, is proposed as a candidate for election as a Director. As required by section 93 of the Companies Act 1994 Mrs. Rishma Kaur has given her consent to act as a Director of the Company. Mrs. Rishma Kaur, being the nominee of J&N Investment (Asia) Limited, which is holding 95% shares in the Company, may be elected as a Director.



The Board of Directors recommends the above re-elections/election and appointment.

11. Appointment of Auditors The auditors, Messrs A. Qasem & Co., Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting and being eligible under section 210 of the Companies Act 1994 read with Bangladesh Securities and Exchange Commission’s order no. SEC/ CMRRCD/2009-193/104/Admin/ dated July 27, 2011, offered themselves for reappointment. 12. Corporate Governance The Status Report along with relevant disclosures and declarations required to be presented by the Company in pursuance of the notification no. SEC/CMRRCD/2006-158/134/Admin/44 of August 7, 2012 issued by Bangladesh Securities and Exchange Commission is attached as Annexure 1, 2, 3, 4 and 5 of this report. 13. Human Resource As in the past, the Company continued to experience industrial peace and harmony throughout the year. The Company pursues policy for training and development program both locally and abroad to enhance and update the skills and knowledge of its human resources. The Board wishes to put on record its deep appreciation for the co-operation and efforts of all employees for the betterment of the organization. 14. Management Appreciation The members of the Board of Directors would like to take this opportunity to express their heartfelt thanks to all stakeholders like Employees, Customers, Banks, Insurance Companies, Government Authorities, Auditors, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Limited, Chittagong Stock Exchange Limited, Central Depository Bangladesh Limited, utility providers and finally the Shareholders for their immense support and contribution towards the success of the Company. On behalf of the Board,

Gerald K. Adams Chairman March 17, 2013

BERGER ANNUAL REPORT 2012

31

Annexure 1 The Directors also report that: a) The Financial Statements prepared by the management of the company present fairly its state of affairs, the result of its operations, cash flows and changes in equity. b) Proper books of accounts as required by law have been maintained. c) Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment. d) International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed. e) The system of internal control is sound in design and has been effectively implemented and monitored. f) There are no significant doubts upon the company’s ability to continue as a going concern. g) The company does not have significant deviations from the last year’s operating results. h) Segment-wise performance during the year is presented in note 2.25 of the Audited Financial Statements. i) Details of related party transactions have been presented in note 36 of the Audired Financial Statements. j) The company did not have any extraordinary gain or loss during the period in consideration. k) The company did not make any public issue during the year. The proceeds of IPO in 2005 were utilized in the manner specified in the prospectus. The financial results of the company did not deteriorate after the company went for IPO. l) There was no significant variance between Quarterly Financial Performance and Annual Financial Statements during the year. m) The remuneration to the directors including independent directors have been disclosed in note 34 of the Audited Financial Statements. n) Key operating and financial data of preceding 5 (five) years have been summarized in Annexure 3. o) The number of Board meetings held during the year and attendance by each director has been disclosed in Annexure 4. p) The pattern of shareholding as required by the BSEC notification SEC/CMRRCD/2006-158/134/Admin/44 dated August 7, 2012 has been disclosed in Annexure 5. q) Required information about director being appointed/re-appointed has been presented in ‘Biography of Directors’ section of the Annual Report.

32 BERGER ANNUAL REPORT 2012

Annexure 2 Status of compliance with the conditions imposed by the Commission’s Notification No. SEC/CMRRCD/2006-158/129/Admin/44 dated 07 August 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969: (Report under Condition No. 7.00)

Condition No.

Title

Compliance Status (Put √ in the appropriate column) Complied

1

Board of Directors:



1.1

Board’s Size: Board members should not be less than 5 (five) and more than 20 (twenty)



1.2

Independent Directors:



1.2 (i)

At least 1/5th



1.2 (ii) a)

Does not hold any or holds less than 1% shares



1.2 (ii) b)

Is not connected with the company’s any sponsor, director or shareholder who holds 1% or more shares.



1.2 (ii) c)

Does not have any other relationship, whether pecuniary or otherwise with the company or its subsidiary/associated companies.



1.2 (ii) d)

Not a member, director or officer of any stock exchange



1.2 (ii) e)

Not a member, director or officer of any member of stock exchange or an intermediary of the capital market.



1.2 (ii) f)

Who is not and was not a partner or an executive during the preceding 3 years of any statutory audit firm.



1.2 (ii) g)

Is not an independent director in more than 3 listed companies



1.2 (ii) h)

Has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a Non-Bank Financial Institution.



1.2 (ii) i)

Has not been convicted for criminal offence involving moral turpitude.



1.2 (iii)

Nominated by the board of directors and approved by the shareholders in the AGM



1.2 (iv)

The post does not remain vacant for more than 90 days.



1.2 (v)

The board shall lay down a code of conduct of all board members and annual compliance of the code to be recorded.



1.2 (vi)

The tenure of office of an independent director shall be for a period of 3 years, which may be extended for 1 term only.



1.3

Qualification of Independent Director (ID):



1.3 (i)

Independent Director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business.



Not complied

Remarks (if any)

BERGER ANNUAL REPORT 2012

33

Condition No.

Title

Compliance Status (Put √ in the appropriate column) Complied

1.3 (ii)

The person should be a Business Leader/Corporate Leader/ Bureaucrat/University Teacher with Economics or Business Studies or Law background/ Professionals like Chartered Accountants, Cost & Management Accountants, Chartered Secretaries. The independent director must have at least 12 years of corporate management/professional experiences.



1.3 (iii)

In special cases the above qualifications may be relaxed subject to prior approval of the Commission.



1.4

Chairman of the Board and Chief Executive Officer: The positions of the Chairman of the Board and the Chief Executive Officer of the companies shall be filled by different individuals. The Chairman of the company shall be elected from among the directors of the company. The Board of Directors shall clearly define respective roles and responsibilities of the Chairman and the Chief Executive Officer.



1.5

The Directors’ Report to Shareholders:



1.5 (i)

Industry outlook and possible future developments in the industry



1.5 (ii)

Segment-wise or product-wise performance.



1.5 (iii)

Risks and concerns.



1.5 (iv)

A discussion on Cost of Goods Sold, Gross Profit Margin and Net Profit Margin.



1.5 (v)

Discussion on continuity of any Extra-Ordinary gain or loss.



1.5 (vi)

Basis for related party transactions



1.5 (vii)

Utilization of proceeds from public issues, rights issues and/or through any others instruments.



1.5 (viii)

An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.



1.5 (ix)

If significant variance occurs between Quarterly Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.



1.5 (x)

Remuneration to directors including independent directors.



1.5 (xi)

The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.



1.5 (xii)

Proper books of account of the issuer company have been maintained



1.5 (xiii)

Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment.



34 BERGER ANNUAL REPORT 2012

Not complied

Remarks (if any)

Condition No.

Title

Compliance Status (Put √ in the appropriate column) Complied

1.5 (xiv)

International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.



1.5 (xv)

The system of internal control is sound in design and has been effectively implemented and monitored.



1.5 (xvi)

There are no significant doubts upon the issuer company’s ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed.



1.5 (xvii)

Significant deviations from the last year’s operating results of the issuer company shall be highlighted and the reasons thereof should be explained.



1.5 (xviii)

Key operating and financial data of at least preceding 5 (five) years shall be summarized.



1.5 (xix)

If the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given.



1.5 (xx)

The number of Board meetings held during the year and attendance by each director shall be disclosed.



1.5 (xxi)

The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by:



1.5 (xxi) a)

Parent/Subsidiary/Associated Companies and other related parties (name wise details)



1.5 (xxi) b)

Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details);



1.5 (xxi) c)

Executives;



1.5 (xxi) d)

Shareholders holding ten percent (10%) or more voting interest in the company (name wise details)



1.5 (xxii)

In case of the appointment/re-appointment of a director the company shall disclose the following information to the shareholders:-



1.5 (xxii) a)

a brief resume of the director



1.5 (xxii) b)

nature of his/her expertise in specific functional areas



1.5 (xxii) c)

names of companies in which the person also holds the directorship and the membership of committees of the board



2

Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS):



Not complied

Remarks (if any)

BERGER ANNUAL REPORT 2012

35

Condition No.

Title

Compliance Status (Put √ in the appropriate column) Complied

2.1

Appointment: The company shall appoint a Chief Financial Officer (CFO), a Head of Internal Audit (Internal Control and Compliance) and a Company Secretary (CS). The Board of Directors should clearly define respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the CS.



2.2

Requirement to attend the Board Meetings: The CFO and the Company Secretary shall attend the meetings of the Board of Directors, provided that the CFO and/or the Company Secretary shall not attend such part of a meeting of the Board of Directors which involves consideration of an agenda item relating to their personal matters.



3

Audit Committee:



3 (i)

The company shall have an Audit Committee as a sub-committee of the Board of Directors



3 (ii)

The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business.



3 (iii)

The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing



3.1

Constitution of the Audit Committee:



3.1 (i)

The Audit Committee shall be composed of at least 3 (three) members



3.1 (ii)

The Board of Directors shall appoint members of the Audit Committee who shall be directors of the company and shall include at least 1 (one) independent director.



3.1 (iii)

All members of the audit committee should be “financially literate” and at least 1 (one) member shall have accounting or related financial management experience



3.1 (iv)

When the term of service of the Committee members expires or there is any circumstance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board of Directors shall appoint the new Committee member(s) to fill up the vacancy (ies) immediately or not later than 1 (one) month from the date of vacancy (ies) in the Committee to ensure continuity of the performance of work of the Audit Committee.



3.1 (v)

The company secretary shall act as the secretary of the Committee



3.1 (vi)

The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director.



36 BERGER ANNUAL REPORT 2012

Not complied

Remarks (if any)

Condition No.

Title

Compliance Status (Put √ in the appropriate column) Complied

3.2

Chairman of the Audit Committee:



3.2 (i)

The Board of Directors shall select 1 (one) member of the Audit Committee to be Chairman of the Audit Committee, who shall be an independent director.



3.2 (ii)

Chairman of the audit committee shall remain present in the Annual General Meeting (AGM)



3.3

Role of Audit Committee:



3.3 (i)

Oversee the financial reporting process.



3.3 (ii)

Monitor choice of accounting policies and principles



3.3 (iii)

Monitor Internal Control Risk management process



3.3 (iv)

Oversee hiring and performance of external auditors



3.3 (v)

Review along with the management, the annual financial statements before submission to the board for approval



3.3 (vi)

Review along with the management, the quarterly and half yearly financial statements before submission to the board for approval



3.3 (vii)

Review the adequacy of internal audit function



3.3 (viii)

Review statement of significant related party transactions submitted by the management



3.3 (ix)

Review Management Letters/Letter of Internal Control weakness issued by statutory auditors



3.3 (x)

When money is raised through Initial Public Offering (IPO)/Repeat Public Offering (RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/applications of funds by major category (capital expenditure, sales and marketing expenses, working capital, etc), on a quarterly basis, as a part of their quarterly declaration of financial results. Further, on an annual basis, the company shall prepare a statement of funds utilized for the purposes other than those stated in the offer document/ prospectus



3.4

Reporting of the Audit Committee:



3.4.1

Reporting to the Board of Directors:



3.4.1 (i)

The Audit Committee shall report on its activities to the Board of Directors



3.4.1 (ii)

The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:



3.4.1 (ii) a)

report on conflicts of interests;



3.4.1 (ii) b)

suspected or presumed fraud or irregularity or material defect in the internal control system;



Not complied

Remarks (if any)

BERGER ANNUAL REPORT 2012

37

Condition No.

Title

Compliance Status (Put √ in the appropriate column) Complied

3.4.1 (ii) c)

suspected infringement of laws, including securities related laws, rules and regulations



3.4.1 (ii) d)

Any other matter which shall be disclosed to the Board of Directors immediately.



3.4.2

Reporting to the Authorities: If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board of Directors and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board of Directors for three times or completion of a period of 6 (six) months from the date of first reporting to the Board of Directors, whichever is earlier.



3.5

Reporting to the Shareholders and General Investors: Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under condition 3.4.1 (ii) above during the year, shall be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company



4

External/Statutory Auditors:



4 (i)

The issuer company should not engage its external/statutory auditors to perform the following services of the company; namely:Appraisal or valuation services or fairness opinions.



4 (ii)

Financial information systems design and implementation



4 (iii)

Book-keeping or other services related to the accounting records or financial statements



4 (iv)

Broker-dealer services



4 (v)

Actuarial services



4 (vi)

Internal audit services



4 (vii)

Any other service that the Audit Committee determines



4 (viii)

No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company



5

Subsidiary Company:



5 (i)

Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company



5 (ii)

At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company



38 BERGER ANNUAL REPORT 2012

Not complied

Remarks (if any)

Condition No.

Title

Compliance Status (Put √ in the appropriate column) Complied

5 (iii)

The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company



5 (iv)

The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also



5 (v)

The Audit Committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company



6

Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO):



6 (i)

The CEO and CFO shall certify to the Board that:- They have reviewed financial statements for the year and that to the best of their knowledge and belief:



6 (i) a)

these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.



6 (i) b)

these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws.



6 (ii)

There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct.



7

Reporting and Compliance of Corporate Governance:



7 (i)

The company shall obtain a certificate from a Professional Accountant/Secretary (Chartered Accountant/Cost & Management Accountant/Chartered Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.



The directors of the company shall state, in accordance with the



7 (ii)

Not complied

Remarks (if any)

Annexure attached, in the directors’ report whether the company has complied with these conditions.

BERGER ANNUAL REPORT 2012

39

Annexure 3 Berger Paints Bangladesh Limited Performance in last five years Taka in ‘000 Particulars

2012

2011

2010

2009

2008

2007

Turnover (Net of VAT & SD)

7,611,213

6,321,274

5,483,619

4,595,904

3,881,775

3,047,672

Gross Profit

2,524,361

2,129,242

2,087,964

1,881,063

1,349,966

1,138,528

Profit Before Tax

1,022,343

894,799

905,555

779,772

540,867

466,557

752,790

721,163

704,636

579,681

400,660

339,351

Profit After Tax Shareholders’ Equity

2,323,615

1,988,226

1,684,464

1,327,662

910,304

880,667

Total Assets

3,568,101

3,424,689

3,055,465

2,428,256

1,734,193

1,640,406

Total Current Assets

2,291,222

2,264,647

2,011,724

1,592,419

1,059,892

955,112

Total Current Liabilities

1,146,112

1,333,642

1,271,816

1,014,828

753,214

691,271

2.00

1.70

1.58

1.57

1.41

1.38

Current Ratio (Time)

40 BERGER ANNUAL REPORT 2012

Annexure 4 Attendance at Board Meetings The number of Board Meetings and the attendance of Directors during the year 2012 were as follows: Name of Director

Meetings held

Attended

Mr. Gerald K Adams Non-executive Chairman

6

4

Ms. Rupali Chowdhury Managing Director

6

6

Mr. K. R. Das Non-executive Director

6

4

Mr. Anil Bhalla Non-executive Independent Director

6

5

Mr. Subir Bose Non-executive Director

6

2

Mr. Jean-Claude Loutreuil Non-executive Director

6

1

Mr. Ashfaque ur Rahman Non-executive Independent Director

4

3

Mr. M. Azizul Huq Non-executive Independent Director

2

1

Mr. Abdul Khalek 6 6 Executive Director Non-executive Independent Director Mr. Ashfaque ur Rahman resigned form the position with effect from 01.07.2012 and Mr. M. Azizul Huq was appointed as Non-executive Independent Director with effect from 30.07.2012. Annexure 5 Pattern of Shareholding on December 31, 2012 Categories

Name

Shares

Shareholders holding 10% or more shares

J & N Investment (Asia) Ltd., UK

22,029,370

Chairman

Mr. Gerald K Adams

Nil

Managing Director

Ms. Rupali Chowdhury

10

Director and Company Secretary

Mr. Abdul Khalek

10

Nominee Director

Mr. K.R. Das

10

Independent Director

Mr. Anil Bhalla

10

Nominee Director

Mr. Subir Bose

10

Nominee Director

Mr. Jean-Claude Loutreuil

Nil

Independent Director

Mr. M. Azizul Huq

Nil

Head of Internal Audit

Mr. Sabbir Ahmed

Nil

Executive

Mr. Nazimuddin Helali

Nil

Executive

Mr. Md. Mohsin Habib chowdhury

Nil

Executive

Ms. Humaira Fatema Hamim

Nil

Executive

Mr. Mohammad Ahsun Ullah

Nil

Executive

Mr. H. M. Rakib Ullah Bashar

Nil

The spouses and minor children of above Directors and Executives did not hold any share of the Company on December 31, 2012.

BERGER ANNUAL REPORT 2012

41

Classification of share holders by holding on 31 December 2012 Holdings Number of holders Shares % Less than 500 shares Nominee 6 70 Less than 500 shares G. Public& Inst 1,749 144,850 0.6 501 to 5,000 shares G. Public& Inst 124 189,450 0.8 5,001 to 10,000 shares G. Public& Inst 18 136,800 0.6 10,001 to 20,000 shares G. Public& Inst 9 117,950 0.5 20,001 to 30,000 shares Institution 1 27,050 0.1 30,001 to 40,000 shares Institution 3 93,600 0.4 40,001 to 50,000 shares Institution 3 133,050 0.6 50,001 to 100,000 shares - - - 100,001 to 1,000,000 shares Institution 1 316,750 1.4 Over 1,000,000 shares Group 1 22,029,370 95.0 1,915 23,188,940 100.0 Audit Committee The Audit Committee comprises of 1. 2. 3. 4. 5. 6.

Mr. M. Azizul Huq (Chairman) Mr. Anil Bhalla (Member) Mr. K. R. Das (Member) Ms. Rupali Chowdhury (Member) Mr. Subir Bose (Member) Mr. Abdul Khalek (Member Secretary)

Mr. M. Azizul Huq and Mr. Subir Bose were appointed member of the Audit Committee with effect from January 1, 2013. The number of Audit Committee Meetings and the attendance of Directors during the year 2012 were as follows: Name of Director

Meeting Dates & Attendance 29.01.2012

27.05.2012

14.10.2012

Mr. Anil Bhalla







Mr. K. R. Das







Ms. Rupali Chowdhury







Mr. Abdul Khalek







Risk Committee 1. Ms. Rupali Chowdhury (Chairman) 2. Mr. Abdul Khalek (Member ) 3. Mr. Sabbir Ahmed (Member) 4. Mr. Nazimuddin Helali (Member Secretary) Remuneration Committee 1. Mr. K. R. Das (Chairman) 2. Ms. Rupali Chowdhury (Member) 3. Ms. Humaira Fatema Hamim (Member Secretary) Capital Purchase Committee 1. Mr. Abdul Khalek (Chairman) 2. Mr. Nazimuddin Helali (Member) 3. Mr. Rashedul Haque (Member Secretary)

42 BERGER ANNUAL REPORT 2012

Executive Committee 1. Ms. Rupali Chowdhury (Chairman) 2. Mr. Abdul Khalek (Member) 3. Mr. Nazimuddin Helali (Member) 4. Mr. Md. Mohsin Habib Chowdhury (Member) 5. Mr. Mohammad Ahsun Ullah (Member) 6. Mr. H. M. Rakib Ullah Bashar (Member) 7. Mr. Rashedul Haque (Member) 8. Mr. Sabbir Ahmed (Member) 9. Mr. Mohammad Abu Nader Al Mokaddes (Member) 10. Ms. Humaira Fatema Hamim (Member Secretary)

Audit Committee Report for the Year 2012 The Audit Committee of Berger Paints Bangladesh Limited is pleased to confirm that the following activities have been carried out during the year 2012: l

Enhance good practices in financial reporting and risk management

l

Ensure establishment of adequate internal controls and compliance with laws and regulations

l

Ensure that the preparation, presentation and submission of financial statements have been made in accordance with the prevailing laws, standards and regulations.

In pursuance with Corporate Governance Guidelines 2012, the Audit Committee also reviewed the internal audit reports, the periodical and annual financial statements and the financial performance of Berger Paints Bangladesh Limited as well as its subsidiary company Jenson & Nicholson (Bangladesh) Limited for the year ended December 31, 2012. The Committee found adequate arrangement to present a true and fair view of the financial status of the company and did not find any material deviation, discrepancies or any adverse finding/observation in the areas of reporting. On behalf of the Audit Committee,

Anil Bhalla March 17, 2013

BERGER ANNUAL REPORT 2012

43

Certificate on Corporate Governance of Berger Paints Bangladesh Limited and its subsidiary We have examined the compliance of conditions of Corporate Governance by Berger Paints Bangladesh Limited and its subsidiary, for the year ended 31 December 2012, as per the guidelines set by Bangladesh Securities and Exchange Commission (BSEC) by the notification SEC/ CMRRCD/2006-158/129/Admin/43 dated 7 August 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the company and its subsidiary for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company and its subsidiary. In our opinion and to the best of our information and according to the explanations given to us, we certify that the company and its subsidiary have complied with the conditions of Corporate Governance as stipulated in the above-mentioned Notification. We further state that such compliance is neither an assurance as to the future viability of the company and its subsidiary nor the efficiency or effectiveness with which the management has conducted the affairs of the company and its subsidiary.

Dhaka, 17 March 2013

44 BERGER ANNUAL REPORT 2012

A. Qasem & Co. Chartered Accountants

Value Added Statement For the year ended 31 December 2012

Taka in ‘000 2012 Amount

2011 %

Amount

%

Turnover

9,069,818

7,681,060

Less: Purchase of materials & service

5,723,048

4,708,234

Value added

3,346,770

100

2,972,826

100

1,980,871

59.19

1,800,772

60.57

Employees salaries, wages & other benefits

559,497

16.72

450,891

15.17

Shareholders dividend

417,401

12.47

417,401

14.04

Applications: National Exchequer

Reserve & surplus

389,001

11.62

303,762

10.22

3,346,770

100.00

2,972,826

100.00

BERGER ANNUAL REPORT 2012

45

Auditors’ Report to the Shareholders of Berger Paints Bangladesh Limited

We have audited the accompanying Financial Statements of Berger Paints Bangladesh Limited which comprise the Statement of Financial Position as at 31 December, 2012, the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRS), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Berger Paints Bangladesh Limited as at 31 December 2012 and its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRS), and comply with applicable sections of the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. We also report that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof. (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books. (c) The statement of financial position, and statement of comprehensive income dealt with by the report are in agreement with the books of account and returns. (d) The expenditure incurred was for the purposes of the Company’s business.

Dhaka, March 17, 2013

A. Qasem & Co. Chartered Accountants

BERGER ANNUAL REPORT 2012

47

Audited Financial Statements Statement of Financial Position

As at 31 December 2012

Taka in '000 Note 31-Dec-12 31-Dec-11

Applications of Funds Non - Current Assets Property, plant and equipment 3.1 1,001,521 1,013,948 4 125,556 14,086 Capital work-in-progress Intangible assets 5 23,121 34,311 1,150,198 1,062,345

Term deposit 10.1 87,381 58,397 6.1 39,300 39,300 Investments - at cost 126,681 97,697 1,276,879 1,160,042

Current Assets 7 1,190,049 1,346,988 Stocks Book debts 8 499,686 472,468 Advances, deposits and prepayments 9 147,167 153,202 Cash and bank balances 10.2 364,040 265,362 Inter-company receivables 11 90,280 26,627 2,291,222 2,264,647

Current Liabilities and Provisions Operational overdraft (OD) 12 (33,171) (317,423) Creditors and accruals 13 (848,473) (758,445) Provision for royalty 14 (168,773) (188,614) Provision for tax 15 (83,490) (56,684) Employees' retirement gratuity 16 (5,172) (6,127) (6,886) (6,196) Unclaimed dividend - local Liability for unclaimed IPO application money 17 (147) (153) (1,146,112) (1,333,642) Net Current Assets 1,145,110 931,005 2,421,989 2,091,047 Capital Employed

Sources of Funds Shareholders' Funds Share capital 18.2 231,890 231,890 Reserves and surplus General reserve 10,000 10,000 Share premium 19 115,068 115,068 20 1,966,657 1,631,268 Unappropriated profit 2,091,725 1,756,336 Deferred Liabilities Deferred tax 21 98,374 102,821 2,421,989 2,091,047 22

Contingent liabilities & assets

860,966

484,099

These financial statements should be read in conjunction with the annexed notes

Director & Company Secretary

Director

Managing Director

Auditors' Report to the Shareholders See annexed report Dhaka, 17 March 2013

48 BERGER ANNUAL REPORT 2012

A. Qasem & Co. Chartered Accountants

Statement of Comprehensive Income For the year ended 31 December 2012

Taka in '000 Note 2012 2011

Sales - net 23 7,611,213 6,321,274 Cost of sales 24 (5,086,852) (4,192,032) Gross profit 2,524,361 2,129,242 Expenses Warehousing, distribution & selling 25 (1,282,451) (1,046,280) Administrative 26 (223,197) (190,001) (1,505,648) (1,236,281) Trading profit 1,018,713 892,961 Other operating charges Royalty 14 (59,639) (47,497) 27 (2,430) (2,700) Training and consultancy fee (62,069) (50,197) Financial expenses (Borrowing costs) 2.17 (17,866) (43,661) 28.1 125,727 126,594 Other operating income Net other income 45,792 32,736 Gross operating profit 1,064,505 925,697 Contribution @ 5% of gross operating profit to workers’ profits participation & welfare funds 13.1 (53,225) (46,285) Net operating profit 1,011,280 879,412 Dividend income from J&N (B) L 10,000 10,000 Other non-operating income 28.2 1,063 5,387 Profit before tax 1,022,343 894,799 2.14 & 15 (274,000) (170,000) Provision for current tax Provision for deferred tax 2.14.1 & 21 4,447 (3,636) (269,553) (173,636) Profit after tax 752,790 721,163 Basic earnings per share 35 32.46 31.10 These financial statements should be read in conjunction with the annexed notes

Director & Company Secretary

Director

Managing Director

Auditors' Report to the Shareholders See annexed report Dhaka, 17 March 2013

A. Qasem & Co. Chartered Accountants

BERGER ANNUAL REPORT 2012

49

Statement of Cash Flows For the year ended 31 December 2012

Taka in '000 Note 2012 2011 Cash Flows from Operating Activities (A) Cash received from customers 7,586,575 6,199,237 Cash received from other operating income 123,146 129,856 Dividend income from JNBL 10,000 10,000 Cash paid to suppliers and employees (6,376,858) (5,818,915) Payment of interest 2.17 (17,866) (43,661) Income tax paid 15 (247,194) (221,955) Net cash from operating activities 35 1,077,803 254,562 Cash Flows from Investing Activities (B) Capital expenditures 3.1, 4 & 5 (250,686) (216,864) Investment in Berger Becker Bangladesh Limited 6.1 - (39,200) 10.1 (28,984) (7,934) Investment in Non-current assets (FDRs) 3.4 1,513 5,391 Proceeds from sale of assets Net cash used in investing activities (278,157) (258,607) Cash Flows from Financing Activities (C) Repayment of IPO application money 17 (6) (416,710) (416,183) Dividend paid Net cash used in financing activities (416,716) (416,183) Increase/(Decrease) in cash and bank balance (D) = (A+B+C) 382,930 (420,228) Opening cash in hand and at bank (E) 10.2 & 12 (52,061) 368,167 10.2 & 12 330,869 (52,061) Closing cash in hand and at bank (D+E) These financial statements should be read in conjunction with the annexed notes

Director & Company Secretary

Director

Managing Director

Auditors' Report to the Shareholders See annexed report Dhaka, 17 March 2013

50 BERGER ANNUAL REPORT 2012

A. Qasem & Co. Chartered Accountants

Statement of Changes in Equity For the year ended 31 December 2012

Taka in '000 Share Capital

Particulars

Balance at 1 January 2011

General Reserve

Share Premium

Unappropriated Profit

Total Equity

231,890

10,000

115,068

1,327,506

1,684,464

Distribution of dividend

-

-

-

(417,401)

(417,401)

Unappropriated profit for the year

-

-

-

721,163

721,163

Balance at 31 December 2011

231,890

10,000

115,068

1,631,268

1,988,226

Balance at 1 January 2012

231,890

10,000

115,068

1,631,268

1,988,226

Distribution of dividend

-

-

-

(417,401)

(417,401)

Unappropriated profit for the year

-

-

-

752,790

752,790

231,890

10,000

115,068

1,966,657

2,323,615

19

20

Balance at 31 December 2012 Notes

18.2

These financial statements should be read in conjunction with the annexed notes

Director & Company Secretary

Director

Managing Director

Auditors' Report to the Shareholders See annexed report Dhaka, 17 March 2013

A. Qasem & Co. Chartered Accountants

BERGER ANNUAL REPORT 2012

51

Notes to the Financial Statements For the year ended 31 December 2012 1.

The company and its operations 1.1 Legal form of the Company

The Company was incorporated on 6 June 1973 as a ‘Private’ company limited by shares registered under the Companies Act. Subsequently the Company has been converted to ‘Public’ company limited by shares vide extra ordinary general meeting held on 21 June 2005 and was listed with both Dhaka and Chittagong Stock Exchanges of Bangladesh.

1.2.1 Address of the registered and corporate office

The registered and corporate offices of the Company are located at Berger House, House 8, Road 2, Sector 3, Uttara Model Town, Dhaka.

1.2.2 Nature of business activities

The principal activities of the Company throughout the year continued to be manufacturing and marketing of liquid and non-liquid paints & varnishes, emulsion and coating.



Berger Paints Bangladesh Ltd. owns 100% shares of Jenson & Nicholson (Bangladesh) Limited - J&N (B) L. The principal activities of J&N (B) L until 12 August 1995 were trading and indenting. It started production and marketing of tin containers and printing of tin sheets from 12 August 1995 and 1 September 1997 respectively in its factory at 70, East Nasirabad Industrial Area, Chittagong.



Berger Paints Bangladesh Limited also owns 49% shares of Berger Becker Bangladesh Limited - BBBL. BBBL was incorporated in Bangladesh on 20 December 2011 as a Joint Venture of Becker Industrial Coating Holding AB, Sweden and Berger Paints Bangladesh Limited. The principal activities of the company are manufacturing and marketing of coil coatings. Summary of significant accounting principles

2.

2.1

Basis of preparation and presentation of the financial statements



The financial statements have been prepared and the disclosures of information are made in accordance with the requirements of the Companies Act 1994, The Securities and Exchange Rules 1987, International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as much as practicable. The statement of financial position and statement of comprehensive income have been prepared according to IAS 1 Presentation of Financial Statements on accrual basis of accounting following going concern assumption under generally accepted accounting principles and practices in Bangladesh and statement of cash flows is prepared according to IAS 7 Statement of Cash Flows.

2.2

Accounting convention and assumption



The financial statements are prepared under the historical cost convention.

2.3

Principal accounting policies



The specific accounting policies have been selected and applied by the Company’s management for significant transactions and events that have a material effect within the framework for preparation and presentation of financial statements. Financial statements have been prepared and presented in compliance with IAS 1 Presentation of Financial Statements. The previous year’s figures were re-arranged according to the same accounting principles. Compared to the previous year, there were no significant changes in the accounting and valuation policies affecting the financial position and performance of the Company. However, changes made to the presentation are explained in the note for each respective item.



Accounting and valuation methods are disclosed for reasons of clarity. The Company classified the expenses using the function of expenses method as per IAS 1.

52 BERGER ANNUAL REPORT 2012

2.4

Application of standards



The following IASs and IFRSs are applicable for the financial statements for the year under review.



IAS

1

Presentation of Financial Statements

IAS

2

Inventories



IAS

7

Statement of Cash Flows



IAS

8

Accounting policies, Changes in Accounting Estimates and Errors



IAS

10

Events after the Reporting Period



IAS

12

Income Taxes



IFRS

8

Operating Segments



IAS

16

Property, Plant and Equipment

IAS

17

Leases

IAS

18

Revenue



IAS

19

Employee Benefits



IAS

21

The Effects of Changes in Foreign Exchange Rates



IFRS

3

Business Combinations



IAS

23

Borrowing Costs



IAS

24

Related Party Disclosures



IAS

26

Accounting and reporting by retirement benefit plans



IAS

27

Consolidated and Separate Financial Statements



IAS

28

Investments in Associates



IAS

33

Earnings Per Share



IAS

37

Provisions, Contingent Liabilities and Contingent Assets



IAS

38

Intangible Assets

2.5

Property, plant and equipment



Tangible fixed assets are accounted for according to IAS 16 Property, Plant and Equipment at historical cost less cumulative depreciation and the capital work-in-progress is stated at cost.



The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized as non-operating income and reflected in the statement of comprehensive income.

2.5.1 Depreciation of the fixed assets

Tangible assets are depreciated according to the straight-line depreciation method.



Consistently, depreciation is provided on straight-line method on the cost at which the asset is carried in the books of account.



Depreciation continues to be provided until such time as the written down value is reduced to Taka one.



Depreciation on acquisition is made from the month following acquisition and charging of depreciation on item ceases from the month in which the deletion thereof takes place.

BERGER ANNUAL REPORT 2012

53



The depreciation rate(s) are as follows:



Category of fixed assets



Long leasehold land:

Rate %



Chittagong factory

2



Corporate Office - Dhaka

1



Buildings – on freehold and leasehold lands

2



Buildings – Other Construction

10



Plant & Machinery

10



Factory & Laboratory equipment

20



Other machinery & equipment



Office equipment



Furniture, fixtures & fittings



Computer

20 (till 1996: 15)



Vehicles – Car, Jeep and Micro

25

– Delivery Van

20



12.5 15 12.5

Loose tools

50

2.6

Intangible assets



Intangible assets are measured at cost less accumulated amortization and recognized when all the conditions for recognition as per IAS 38 Intangible Assets are met. Subsequent expenditure is capitalized only when it is probable that the future economic benefits embodied therewith will flow to the Company and its cost can be measured reliably.

2.6.1 Amortization of the intangible assets

Intangible assets are amortized according to the straight-line depreciation method.



The amortization rate(s) are as follows: Category of intangible assets



Rate %

Software

20



10

Trade marks 2.7

Consolidation of financial statements



The Company has not consolidated the financial statements of its subsidiary (Jenson & Nicholson Bangladesh Limited - JNBL) and associate (Berger Becker Bangladesh Limited - BBBL) but has taken the investment therein at cost.

2.8

Valuation of stocks Inventories are stated at the lower of cost or net realizable value in compliance to the requirements of para 21 and 25 of IAS 2.

Category of stocks Raw and packing materials Semi finished goods Finished goods in Chittagong & Dhaka Factory at warehouses and depots Stores and consumable items Promotional items

Basis of valuation : At weighted average cost : At standard cost : At standard cost : At standard cost : At weighted average cost : At weighted average cost

Standard cost comprises value of materials, standard activity cost and overheads.

54 BERGER ANNUAL REPORT 2012

2.8.1 Stock write off/down

It includes the cost of written off or written down values of redundant, damaged or obsolete stocks which are dumped and/or old stocks. However, “slow-moving” items are considered to be not material and capable of being used and/or disposed of at least at their carrying book value.

2.9

Book debts



Book debts are carried at original invoice amount less an estimate made for doubtful debts based on a review of all outstanding amounts at the period-end.

2.10

Cash and cash equivalents



Cash and cash equivalents include cash in hand, cash at banks and term deposits which are available for use by the Company without any restrictions. There is an insignificant risk of change in value of the same.

2.11

Foreign currency transactions



Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates. Foreign currency transactions are translated at the exchange rate ruling on the date of transaction. Exchange differences at the balance sheet date are charged/credited to the statement of comprehensive income.

2.12

Creditors and accrued expenses

2.12.1 Trade and other payables

Liabilities are recorded at the amount payable for settlement in respect of goods and services received by the Company.

2.12.2 Provision

The preparation of financial statements in conformity with IAS 37 Provisions, Contingent Liabilities and Contingent Assets requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses, assets and liabilities, and the disclosure requirements for contingent assets and liabilities during and at the date of the financial statements.



In accordance with the guidelines as prescribed by IAS 37 provisions were recognized in the following situations: When the Company has a present obligation as a result of past event; When it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and l Reliable estimates can be made of the amount of the obligation. l l



We have shown the provisions in the statement of financial position at an appropriate level with regard to an adequate provision for risks and uncertainties. An amount recorded as a provision represents the best estimate of the probable expenditure required to fulfill the current obligation on the date of statement of financial position.



Other provisions are valued in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and, if required, in accordance with IAS 19 Employee Benefits. Other provisions comprise all recognizable risks from uncertain liabilities and anticipated losses from pending transactions.

2.13

Employee benefits

2.13.1 Employees’ retirement gratuity fund The Company established Gratuity Fund vide Board of Directors resolution # 2(a) of 21st June 2005. The Fund was recognized by the National Board of Revenue vide order # 6(12)/KAMAPRO/2006/601 of 19th October 2006. During the year 2012 provision was made equivalent to 1.7 times of one month basic salary (2011, 2010, 2009 & 2008 - 1.7 times, 2007 & 2006 - 1 time and till 2005 - 2 times) of all permanent employees on the payroll of the Company. The year end balance of gratuity account amounting to Tk 5,172 thousand has been transferred on 28th January 2013.

The Company introduced gratuity scheme in 1978 (effective from 6 June 1973). In terms of the scheme, on completion of a minimum five years of uninterrupted service with the Company, all permanent employees were entitled to gratuity equivalent to two months basic (latest) pay for each completed year or major part of a year of their respective services subject to a maximum of twenty five years. The Fund replaced the scheme and enacted similar benefits for employees in its Rules duly approved by the National Board of Revenue. The Actuary has evaluated the Fund and found the same sufficient to meet potential liabilities.

BERGER ANNUAL REPORT 2012

55

2.13.2 Staff provident fund The Company, through the trustees, has been maintaining a recognized contributory provident fund for all eligible permanent employees. 2.13.3 Workers’ profit participation and welfare fund Provision for workers’ profit participation and welfare fund has been made @ 5% of gross operating profit as per provision of the Bangladesh Labour Law 2006 and payable to the Fund. 2.14 Taxation Provision is made at the effective rate of 24.75%, considering 10% as tax rebate (for declaring more than 20% dividend) on ruling rate of 27.5% of tax, applied on ‘estimated’ taxable profit as a “Publicly Traded Company”.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted till the date of statement of financial position.

2.14.1 Deferred Tax Provision is made at the effective tax rate (24.75%) applied on the amount of temporary difference between accounting and fiscal written down value of fixed assets. 2.15

Contingent liabilities and assets Contingent liabilities and assets are current or possible obligations or assets, arising from past events and whose existence is due to the occurrence or non-occurrence of one or more uncertain future events which are not within the control of the Company. In accordance with IAS 37 Provision, Contingent Liabilities and Contingent Assets those are disclosed in the notes to the financial statements.

2.16

Revenue recognition In compliance with the requirements of IAS 18 Revenue, revenue is recognized only when: a. in case of sales - the products are invoiced and dispatched to the customers; and b. in case of interest and color bank income - on accrual basis.

2.17

Borrowing costs In compliance with the requirements of IAS 23 Borrowing Costs, borrowing costs of operational period on short term loan and overdraft facilities from Standard Chartered Bank, Hong Kong Shanghai Banking Corporation, Citibank N.A. and Commercial Bank of Ceylon were charged off as revenue expenditure as they were incurred.

2.18

Lease arrangements The Company has twelve operating lease arrangements with IDLC Finance Limited and United Leasing Company Limited for the motor vehicles.

2.18.1 Measurement of lease payments Lease payments (excluding cost for services such as insurance and maintenance) are recognized as expense in the statement of comprehensive income on a straight-line basis. 2.19

Research, development and experimental costs In compliance with the requirements of IAS 38 Intangible Assets, these are usually absorbed as revenue charges as and when incurred, as being not that material in the Company’s and/or local context.

2.20

Repairs, upkeep and maintenance charges



These are usually charged out as revenue expenditure in the period in which these are incurred.

2.21

Bad and doubtful debts



This item takes into account both actual bad debts written off and movements in the provision for doubtful debts.

2.22

Advertising and promotional expenses



All costs associated with advertising and promotional activities are charged out in the year incurred.

56 BERGER ANNUAL REPORT 2012

2.23

Statement of cash flows



Statement of cash flows is prepared principally in accordance with IAS 7 Statement of Cash Flows and has been presented under direct method as required by the Securities and Exchange Rules 1987.

2.24

Earnings per share



The Company calculates Earnings Per Share (EPS) in accordance with IAS 33 Earning Per Share which has been shown on the face of statement of comprehensive income.

2.24.1 Basic earnings

This represents earnings for the year attributable to the ordinary shareholders. As there was no preference dividend, minority interest or extra ordinary items, the net profit after tax for the year has been considered as fully attributable to ordinary shareholders.

2.24.2 Weighted average number of ordinary shares outstanding during the year

Computation of weighted average number of ordinary shares is not required as number of shares outstanding has not changed during the year under review.

2.24.3 Basic earnings per share

This has been calculated by dividing the basic earnings by number of ordinary shares outstanding during the year.

2.24.4 Diluted earnings per share

No diluted EPS is required to be calculated for the year as there was no scope for dilution during the year under review.

2.25

Information about segments



A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. Segment result for the year ended 31 December 2012 and segment assets and liabilities on that date are as follows:



(Taka in ’000) Particulars

Paints

Others

Total

Net sales

7,496,126

115,087

7,611,213

Gross profit

2,486,191

38,170

2,524,361

Less : expenses

1,482,881

22,767

1,505,648

Profit before tax

1,006,884

15,459

1,022,343

Segment assets

3,514,149

53,952

3,568,101

Segment liabilities

1,128,782

17,330

1,146,112

BERGER ANNUAL REPORT 2012

57

3

Property, Plant and Equipment 3.1

The make-up - notes 2.5, 2.5.1, 3.2 & 3.4 Taka in ‘000 Tangible assets Particulars

Land & Building

Plant & Machinery

Equipment Incl Computer

Furniture & Fixtures

Motor Vehicles

Tota Tan. Assets

Opening balance at 1 January

563,739

559,378

530,623

41,051

7,941

791 1,703,523

30,259

59,031

41,761

5,277

2,220

461

139,009

-

(2,533)

(167)

(109)

(1,863)

(19)

(4,691)

593,998

615,876

572,217

46,219

8,298

115,449

357,839

182,409

25,205

7,930

743

689,575

Charged during the year - note 3.2

13,281

84,607

46,871

6,006

10

211

150,986

Deletion during the year - note 3.4

-

(2,144)

(116)

(99)

(1,863)

(19)

(4,241)

Closing balance at 31 December

128,730

440,302

229,164

31,112

6,077

935

836,320

Carrying amount at 31 December 2012

465,268

175,574

343,053

15,107

2,221

298 1,001,521

Carrying amount at 31 December 2011

448,290

201,539

348,214

15,846

11

48 1,013,948

Loose Tools

Cost Addition during the year Deletion / adjustment during the year - note 3.4 Closing balance at 31 December

1,233 1,837,841

Accumulated depreciation Opening balance at 1 January

Taka in ‘000

3.2 The make-up of depreciation / amortization - notes 2.5.1, 3.1 & 5 Opening balance Charge for the year Manufacturing overhead - note 24.3 Warehousing, distribution & selling expenses - note 25 Administrative expenses - note 26 Amortization during the year - note 5 Administrative expenses - note 26 Selling expenses - note 25 Withdrawn (on deletion) during the year - note 3.4 Closing balance 3.3

Fully depreciated items - cost thereof

58 BERGER ANNUAL REPORT 2012

2012

2011

712,746

567,852

93,287 42,443 15,256 150,986

83,565 39,640 13,092 136,297

11,358 11,357 39 39 11,397 11,396 162,383 147,693 875,129 715,545 (4,241) (2,799) 870,888 712,746 317,657 269,902

3.4

Following items were deleted during the year Particulars

Cost (Note 3.1)

Acc. Dep (Note 3.2)

Book value

Sale Proceeds

Mode of Sales

Motor vehicles

1,863

1,863

-

1,338

Building, Plant & Machinery

2,533

2,144

389

56

Quot & Demo

276

215

61

119

Quotation

19

19

-

-

Demolition

Equipments & Furniture & Fixtures Loose Tools Balance at 31 December 2012

4,691

4,241

450

1,513

Balance at 31 December 2011

2,803

2,799

4

5,391

Quotation

Taka in ‘000 2012 4

Capital work-in-progress - note 2.5 Opening balance at 1 January

5

2011

14,086

10,980

Addition during the year

188,087

150,294

Adjustment during the year

(76,617)

(147,188)

Closing balance at 31 December

125,556

14,086

Intangible assets - notes 2.6 & 2.6.1 Particulars

Taka in ‘000 Trade Marks Note 25

SAP Software

Total Intan. Assets

Cost Opening balance at 1 January

57,091

391

57,482

Addition during the year

-

207

207

Deletion / adjustment during the year

-

-

-

57,091

598

57,689

Opening balance at 1 January

22,849

322

23,171

Charged during the year - note 3.2

11,358

39

11,397

-

-

-

Closing balance at 31 December

34,207

361

34,568

Carrying amount at 31 December 2012

22,884

237

23,121

Carrying amount at 31 December 2011

34,242

69

34,311

Closing balance at 31 December Accumulated amortization

Deletion during the year

BERGER ANNUAL REPORT 2012

59

Taka in ‘000 2012 6

2011

Investments - at cost - note 2.7 6.1 Make-up: Jenson & Nicholson (Bangladesh) Limited - note 6.2 Berger Becker Bangladesh Limited - note 6.3

100 100 39,200 39,200 39,300 39,300

6.2

The Company owns 100% paid-up ordinary share capital of Tk 100 thousand (1,000 shares of Tk 100 each) of J&N (B) L, Chittagong, which is a wholly owned and managed subsidiary of the Company - Berger Paints Bangladesh Limited and this subsidiary has a carry forwarded retained earnings’ figure of Tk 130,500 thousand as of the balance sheet date. BPBL received Tk 2,000 thousand from J&N (B) L as management charges. Other pertinent transactions with and interest in J&N (B) L are noted in notes 6.1, 11, 24.3, 26, 28.1 & 36.

6.3

The Company owns 49% paid-up ordinary share capital of Tk 39,200 thousand (3,920,000 shares of Tk 10 each) of Berger Becker Bangladesh Limited (BBBL), which is a joint venture of Becker Industrial Coatings Holding AB, Sweden and Berger Paints Bangladesh Limited (BPBL). BPBL receives Tk 2,500 thousand from BBBL as management charges per anum. Other pertinent transactions with and interest in BBBL are noted in notes 6.1, 11, 24.3, 25, 26 & 36. Taka in ‘000

7

8

2012 2011 Stocks - notes 2.8 & 38 On hand Raw materials 587,925 855,618 Semi - finished products 84,127 70,068 672,052 925,686 34,444 26,220 Packing materials Note 24.1 706,496 951,906 Finished goods - notes 24 & 24.4 Own manufactured products 341,781 276,608 Imported products 56,012 27,484 397,793 304,092 Stocks in transit (GIT) 67,225 68,873 Store, consumables & promotional items - note 2.8 18,535 22,117 1,190,049 1,346,988 Book debts - notes 2.9 & 38 8.1 Trade debtors Unsecured 501,179 475,183 General provision for bad and doubtful debts - notes 2.9 & 2.21 (4,413) (3,055) Considered to be good 496,766 472,128 Other debtors 2,920 340 499,686 472,468 8.2

Outstanding for a period exceeding six months

8.3

Other debtors include interest accrued on investments

8.4

Other debtors include items realizable or adjustable after twelve months from the date of balance sheet

60 BERGER ANNUAL REPORT 2012

15,704 32,950 2,920 340

- -

Taka in ‘000 2012 9

9.1 The make-up Advances Employees House building loans - notes 28.1 & 9.3 Other Goods and services Rental Deposits Value added tax-VAT Supplimentary Duty Security deposits Prepaid expenses Other - Insurance Premium

10

35,682 37,538 8,467 5,195 4,354 6,476 48,503 49,209 5,527 9,908 147,167 153,202

These include dues realizable/adjustable after one year from the balance sheet date

17,771 25,438

9.3

Advance recoverable in cash - note 9.1

18,122

19,984

Cash and bank balances - note 2.10

10.2 Current: Term deposit accounts - note 28.1 Twelve months Three months Current and collection accounts Short term deposit accounts ( STD) - note 28.1 Operational account Dividend account IPO account Foreign currency current accounts - note 2.11 Operational account IPO account In hand - cash

12

18,122 19,984 9,665 6,943 27,787 26,927 48,971 56,176 16,379 10,982 93,137 94,085

9.2

10.1 Non - Current: Term deposit accounts - note 28.1 Four years against countervailing lease agreement

11

2011

Advances, deposits and prepayments

Inter- company receivables - notes 6 & 36 Due from / (to) J&N (B) L Due from / (to) BBBL Operational Overdraft / Revolving OD - notes 2.10 & 38 Current accounts

87,381 58,397

- 69,155 69,155 278,497

19,155 19,155 230,593

2,718 2,323 7,306 6,961 278 271 10,302 9,555 270 483 60 61 330 544 5,756 5,515 364,040 265,362 75,221 26,211 15,059 416 90,280 26,627 (33,171) (317,423)

BERGER ANNUAL REPORT 2012

61

Taka in ‘000 2012 13

14

Creditors and accruals - note 2.12 13.1 The make-up For revenue expenses - note 13.2 For trading supplies For other finance - note 13.3 For capital expenditure Workers’ profits participation & welfare funds - note 2.13.3 13.2 Creditors for revenue expenses - note 13.1 Accrued charges Provision for trade rebate Training and consultancy fee - note 27 13.3 Creditors for other finance - note 13.1 Clearing account Security deposits Tax deduction at source Staff income tax Others

2011

481,504 409,301 229,124 172,807 80,784 121,665 3,836 8,387 795,248 712,160 53,225 46,285 848,473 758,445 367,594 272,349 107,089 127,636 6,821 9,316 481,504 409,301 59,138 95,707 9,395 8,988 6,172 4,219 (342) (1,232) 6,421 13,983 80,784 121,665

Provision for royalty Payable for five years from 1 January 2012 to J & N Investment (Asia) Limited - UK, based on an agreement @ 1.25% (1 January 2007 to 31 December 2011 - 1.5%) on net sales of the products under the technical categories Robbialac, Colorizer, Apexior and Protecton and for emulsion unit payable @ IRS 1 for each KG of Texbond, Power Bond and any other products to be manufactured with the formulation and technical support of Plasticizer & Polymer Products wef 1 January 2010 for three years. 188,614 141,117 79,838 108,776 141,117 59,639 59,524 168,415 200,641 (358) 12,027 168,773 188,614

Opening balance Remitted during the year Charged for the year - note 31.1 Additional provision (made) / written back Closing balance The service provider-wise break down of current charge is as follows: Name of the technology provider J&N Investment (Asia) Limited - note 36

Name of the product Robbialac, Colorizer Apexior 1 & 3, Protecton

Plasticizer & Polymer Products Emulsion Provision for tax - note 2.14 15 Opening balance Provided for the year Tax deducted at source and paid in advance Closing balance

62 BERGER ANNUAL REPORT 2012

56,216

56,599

3,423 2,925 59,639 59,524

56,684 108,639 274,000 170,000 330,684 278,639 247,194 221,955 83,490 56,684

Taka in ‘000 2012 16

Employees’ retirement gratuity - note 2.13.1 Opening balance Provided for the year Transferred to gratuity fund

6,127 4,461 6,737 6,127 12,864 10,588 (7,692) (4,461) 5,172 6,127

Thereof likely to be discharged / transferred in the following year 17

5,172

Liability for unclaimed IPO application money Opening balance Refunded during the year Closing balance

18

2011

6,127

153 153 6 147 153

Share capital 18.1 Authorized 40,000,000 shares of Tk 10 each

400,000 400,000

18.2 Issued, subscribed and fully paid-up 23,188,940 23,188,940 231,890 231,890



Number of shares Subscribed capital



The Company converted the face value of its share from Tk 100 to Tk 10 each vide a special resolution passed on 21 June 2005. The Company issued 11,59,500 ordinary shares of Tk 10 each through initial public offering (IPO), vide the consent letter of Securities and Exchange Commission ref SEC/CI/IPO-71/2005/168 dated 10 October 2005 - note 19.

18.3 The position of share holding Foreign shareholders J & N Investment (Asia) Limited - Group Nominee of J & N Investment (Asia) Limited Institutions (financial & others) Bangladeshi shareholders Nominee of J & N Investment (Asia) Limited Institutions (financial & others) General public

Number 22,029,370 30 55,500

2012 2011 % Number 95.00 0.00 0.24

22,029,370 30 14,800

% 95.00 0.00 0.06

40 0.00 40 0.00 820,053 3.55 833,305 3.59 283,947 1.22 311,395 1.34 23,188,940 100.00 23,188,940 100.00 Note 35 35

18.4 Classification of share holders by holding 2012 2011 Number of Number of Holdings holders Shares % holders Less than 500 shares Nominee 6 70 0.0 6 Less than 500 shares G. Public& Inst 1,749 144,850 0.6 1,948 501 to 5,000 shares G. Public& Inst 124 189,450 0.8 170 5,001 to 10,000 shares G. Public& Inst 18 136,800 0.6 16 10,001 to 20,000 shares G. Public& Inst 9 117,950 0.5 10 20,001 to 30,000 shares Institution 1 27,050 0.1 1 30,001 to 40,000 shares Institution 3 93,600 0.4 3 40,001 to 50,000 shares Institution 3 133,050 0.6 2 50,001 to 100,000 shares Institution - - - 100,001 to 1,000,000 shares Institution 1 316,750 1.4 1 Over 1,000,000 shares Group 1 22,029,370 95.0 1 1,915 23,188,940 100.0 2,158

BERGER ANNUAL REPORT 2012

63

In Taka Last Trade 18.5 Market Price per share Dhaka Stock Exchange Chittagong Stock Exchange

27.12.2012 24.12.2012

2012

2011

530.77 530.00

550.00 525.00

18.6 Number of shares held by the members of the Company’s Executive (Nominee of Group) In Number Name Ms. Rupali Chowdhury Mr. Masih Ul Karim Mr. Abdul Khalek

Designation Managing Director Former Advisor & Board Member Director & Company Secretary

2012

2011

10 20 10

10 20 10

Taka in ‘000 2012

2011

19

Share premium Opening balance Premium received from Initial public offering (IPO) - note 18.2 Adjustment of share issue expenses Closing balance



The Company received an amount of Tk 127,545 thousand as premium (11,59,500 ordinary shares of Tk 110 each) at the time of IPO. In accordance with provisions of Companies Act 1994, Tk 12,477 thousand was adjusted as share issue expenses.

20 Unappropriated Profit Opening balance Balance of profit for the year - brought forward Payment / Distribution of dividend Closing balance 21

Deferred tax - note 2.14.1 Opening balance Provided for the year Closing balance

22

Contingent liabilities and assets - note 2.15 22.1 Bank guarantees issued by the Company’s banker on counter indemnities given by the Company there against and secured - as indicated in note 38 22.2 Financial commitments by confirmed irrevocable letters of credit which are secure against usual shipping documents & as indicated in note 38 22.3 Capital expenditure commitments Contracted for but not taken into account Authorized but not contracted for 22.4 Future aggregate minimum lease payments under operating lease - note 2.18 Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years

64 BERGER ANNUAL REPORT 2012

115,068 115,068 - - 115,068 115,068

1,631,268 1,327,506 752,790 721,163 2,384,058 2,048,669 (417,401) (417,401) 1,966,657 1,631,268 102,821 99,185 (4,447) 3,636 98,374 102,821

1,702

1,502

781,639

400,004

- -

-

32,861 44,764 -

26,012 56,581 -

Taka in ‘000 2012 22.5 There was no claim against and/or favoring the Company - not acknowledged as debts payable and/or receivable

23

2011 -

22.6 There are contingent liabilities in respect of certain legal claims made against the Company. However, these are all vigorously defended and the Directors do not consider it necessary to make provision in respect of any of these claims. Sales - notes 2.16 & 24.4 The make-up of sales is as follows

-

- 860,966 484,099

Taka in ‘000 2012

2011

Unit Quantity Taka Quantity Taka Paints KL 38,423.1 8,053,919 35,329.7 6,879,375 Liquid Non-liquid MT 11,063.0 996,926 9,478.2 789,273 9,050,845 7,668,648 Other items (Trading) KL 26.7 31,312 47.3 33,750 Liquid Non-liquid / Brush MT / Pcs 206.6 107,645 118.4 95,771 138,957 129,521 Note 24.4 9,189,802 7,798,169 Less: Trade rebate (119,884) (117,109) Value Added Tax - VAT (1,196,977) (1,021,524) Supplementary Duty - SD (261,728) (338,262) (1,578,589) (1,476,895) 7,611,213 ** 6,321,274 * Thereof, exports amounted to - note 31.2

26,412

11,380

** As per para 8 of IAS 18 Revenue, amounts collected on behalf of third parties such as Value Added Tax (VAT) and Supplementary Duty (SD) are excluded from revenue. Taka in ‘000 2012 24

Cost of sales Finished goods Opening stock - notes 7 & 24.4 Purchases - imported - note 24.4

Cost of production Material consumed - notes 24.1, 24.5 & 24.6 Labour and overheads - note 24.3 Cost of finished goods available Finished goods Closing stock - notes 7 & 24.4 Provision for stock loss Cost of sales

2011

304,092 300,792 138,165 99,319 442,257 400,111 4,678,632 3,796,593 367,511 299,420 5,046,143 4,096,013 5,488,400 4,496,124 (397,793) (304,092) (3,755) (401,548) (304,092) 5,086,852 4,192,032

BERGER ANNUAL REPORT 2012

65

Taka in ‘000 2012 24.1 Materials consumed Opening stock - note 7 Raw materials Semi - finished products Packing materials Purchases - note 24.2 Raw materials Packing materials Closing stock - note 7 Raw materials Semi - finished products Packing materials

2011

855,618 526,165 70,068 56,443 26,220 22,735 951,906 605,343

3,638,809 3,461,442 794,413 681,714 4,433,222 4,143,156 5,385,128 4,748,499 (587,925) (855,618) (84,127) (70,068) (34,444) (26,220) (706,496) (951,906) Notes - 24, 24.5 & 24.6 4,678,632 3,796,593

24.2 Materials purchase - cost & direct charges - note 24.1 Raw materials Imported 2,772,090 2,803,859 866,719 657,583 Indigenous 3,638,809 3,461,442 Packing materials - indigenous 794,413 681,714 4,433,222 4,143,156 24.3 Labour and overheads - note 24 Personnel cost - notes 2.13, 33 & 34 Salary, wages & welfare 192,022 * 153,803 Depreciation - note 3.2 93,287 83,565 Fuel, water and power 27,346 17,152 Repairs and maintenance - note 2.20 26,331 17,390 Stores & spares consumed - note 24.6 5,845 9,298 Insurance 3,813 2,977 Other overhead 9,363 7,741 Traveling & conveyance 3,411 825 Reserch, development and experimental costs - note 2.19 2,564 2,542 Rent, rates & other taxes 3,085 2,871 L/C & Bank charges 444 1,256 367,511 299,420 * The amount has been arrived after crediting Tk 800 thousand from JNBL and Tk 750 thousand from BBBL being realisation of management charges - notes 6.2 & 6.3.

66 BERGER ANNUAL REPORT 2012

24.4 Particulars in respect of stocks, sales and purchases of finished goods Figures in ‘000 Opening Stock Unit



Qty

Taka

Closing Stock Qty

Sales

Taka

Qty

Purchase Taka

Qty

Taka Paints Liquid Ltr 2,305 247,069 2,429 298,163 38,423 8,053,919 - Non-Liquid KG 565 29,539 719 43,496 11,063 996,926 - Other Items Liquid Ltr 9 8,645 28 23,903 27 31,312 - Non-Liquid KG 17 3,198 36 10,361 207 58,512 - 138,165 Brush Pcs 15,641 21,869 - 49,133 - 2012 Taka 304,092 397,792 9,189,802 138,165 2011 Taka 300,792 304,092 7,798,169 99,319 Notes 24 & 7 24 & 7 23 24 24.5 Analysis of materials consumed Figures in ‘000 2012 Qty - KG i)

Raw materials Resin Pigments Extenders & white cements Solvents & oils Additives & chemicals

2011 Taka

Qty - KG

Taka

733 178,930 690 156,256 4,156 1,125,414 4,010 893,960 23,239 412,371 20,730 336,045 9,484 838,273 8,529 621,132 7,666 1,337,455 6,868 1,110,971 45,278 3,892,443 40,827 3,118,364

ii) Packing materials Notes 24, 24.1 & 24.6

786,189 678,229 4,678,632 3,796,593

24.6 Consumption of imported and indigenous materials and stores & spares and the percentage of each to the total consumption Taka in ‘000 2012 Taka

2011 %

Taka

%

Imports Indigenous Note 24.5 Check - consumption Raw materials Packing materials Notes 24, 24.1 & 24.5 Stores & spares - note 24.3

3,024,270 65 2,454,956 1,654,362 35 1,341,637 4,678,632 100 3,796,593

65 35 100

3,892,443 83 3,118,364 786,189 17 678,229 4,678,632 100 3,796,593 5,845 9,298 4,684,477 3,805,891

82 18 100

BERGER ANNUAL REPORT 2012

67

Taka in ‘000 2012 25

Warehousing, distribution & selling expenses Advertising expenses - note 2.22 Personnel cost - notes 2.13, 33 & 34 Salary, wages & welfare

2011

362,094

304,910

233,354

193,995

*



Warehousing and distribution expenses Transportation and handling charges Repair & maintenance - others - note 2.20 Rent Electricity, water and gas Insurance Selling expenses Sales promotional expenses - note 2.22 Sales traveling Rent Bad debts - notes 2.9 & 2.21 Color Bank operational expenses Illusion expense Amortization of trade marks - notes 3.2 & 5 Depreciation - note 3.2 Cost of free issue *

74,025 ** 10,375 11,128 4,852 681 101,061

57,331 4,568 10,459 3,220 569 76,147

389,275 295,073 94,467 77,781 17,785 15,608 1,425 1,715 10,831 14,254 25,923 24,136 39 39 539,745 428,606 42,443 39,640 3,754 2,982 1,282,451 1,046,280

The amount has been arrived after crediting Tk 125 thousand from BBBL being realization of management charges - note 6.3.

** This has been arrived at after netting recoveries from carrying contractor as loss in transit.

68 BERGER ANNUAL REPORT 2012

633

506

Taka in ‘000 2012 Administrative expenses Personnel cost - notes 2.13,33 & 34 Salary, wages & welfare Postage and telecommunication Depreciation & amortization - notes 3.2 & 5 Traveling, haultage and passage Repair & maintenance - others - note 2.20 AGM expense Bank charges Vehicle expenses Electricity, fuel and water Printing and stationery Rent, rates & fees Subscription and donation CSR activity Entertainment Corporate affairs department’s expenses Insurance Legal and professional charges Auditors’ remuneration Audit fee Taxation service fee Others Newspaper & periodicals Directors fee Guest house expenses

2011

26

*

134,121 * 103,093 6,086 4,910 26,614 24,449 3,943 3,662 12,469 15,286 3,272 3,610 3,898 5,056 13,120 10,477 3,952 2,577 2,253 2,272 459 600 488 1,993 2,404 3,342 1,663 1,654 308 606 804 800 5,453 4,027 329 329 80 80 211 162 620 571 266 355 180 72 824 589 223,197 190,001

The amount has been arrived after crediting Tk 1,200 thousand from JNBL and Tk 1625 thousand from BBBL being realization of management charges - notes 6.2 & 6.3.

27

Training and consultancy fee



Training and consultancy fee is payable to Berger Paints India Limited (BPIL) based on an agreement with the Company - notes 2.12.2, 13.2 & 31.1.

2,430

2,700

BERGER ANNUAL REPORT 2012

69

Taka in ‘000 2012 28

2011

Other income 28.1 Operating income Interest earned on - note 2.16 Term deposits (FDR) - notes 10.1 & 10.2 Short term deposit account (STD) - note 10.2 Operational and other accounts Jenson & Nicholson (Bangladesh) Limited - note 6.2 Service charges from house building loans - note 9.1 Scrap sales and sundry recoveries Color bank operational income Insurance claim and other realizations Income from illusion Rental income from BBBL Auto refinish operational income Income from guest house Exchange gain - notes 2.11 & 10.2 *

14,336

14,645

533 502 14,869 * 15,147 1,385 673 16,254 15,820 228 186 23,881 25,869 38,747 42,787 1,196 3,276 42,502 37,149 1,766 576 861 483 314 94 332 125,727 126,594

Income tax deducted at source

28.2 Non-operating income - note 3.4 Profit on disposal of fixed assets

1,487

1,515

1,063

5,387

Capacity & production

29

29.1 Own manufacture Figures in ‘000 Installed capacity single shift

Actual Production Multiple shifts as applicable



Line of Business

Paints: Liquid Non-liquid

Unit LT KG

2012 41,303 15,757

2011

2012

41,303 15,757

38,593 11,442

2011 34,949 9,503

29.2 Licensed capacity is no more applicable and the regulatory authority does not exercise any direct control over the procurement, production or sale. Taka in ‘000 2012 30 Value of imports - at CIF basis Raw materials Capital goods Stores & spares

70 BERGER ANNUAL REPORT 2012

2011

2,504,875 2,515,751 72,849 72,303 2,517 2,269 2,580,241 2,590,323

Taka in ‘000 2012 31

32

Transactions in equivalent foreign currency 31.1 Expense Royalty - note 14 Training & consultancy fee - note 27 Foreign travel for Company’s business 31.2 Realization Export sales - note 23

2011

59,639 59,524 2,430 2,700 6,833 4,388 68,902 66,612 26,412 11,380

Dividend remitted in terms of foreign currency to J & N Investment (Asia) Limited - Net of TDS

356,876 356,876 In Number 2012

33

Expenditure incurred on employees - note 34



Salaries, wages and benefits - notes 24.3, 25 & 26 **

a. Employment through out the year in receipt of remuneration aggregating Tk 36,000 or more per annum

365

351

59

54

b. Employment for a part of the year and in receipt of remuneration aggregating Tk 3,000 or more per month c. Rest

2011

- 424 405

** Includes all types of benefits paid and provided both in cash and kind other than the re-imbursement of expenses incurred for the Company’s business. 34

Remuneration of Directors, Executives, Managers & Officers - notes 24.3, 25, 26 & 33 Taka in ‘000 2012 Directors

Managers & Officers

2011 Total

Directors

Managers & Officers

Total

34.1 Managerial Remuneration Salary & bonus 18,455 180,842 199,297 16,534 153,214 169,748 Housing Rental 2,580 66,990 69,570 2,340 56,687 59,027 888 21,057 21,945 804 16,515 17,319 Utility & Maintenance 3,468 88,047 91,515 3,144 73,202 76,346 Gratuity provision 723 5,320 6,043 661 4,875 5,536 Leave passage 1,135 - 1,135 1,025 - 1,025 Provident fund - note 2.13.2 510 3,648 4,158 467 3,331 3,798 Medical 1,481 7,232 8,713 632 5,383 6,015 Others 995 30,590 31,585 804 22,005 22,809 Taka 26,767 315,679 342,446 23,267 262,010 285,277

Number

2 262 264

2 245 247

BERGER ANNUAL REPORT 2012

71

34.2 Managing director, executive director, managers and officers, based upon respective employment terms having specified limits, are provided following benefits: a. Rental: Cash allowances. b. Residential telephone mainly for the Company’s business. c. Transportation: Company’s car with chauffeur or cash allowance for chauffeur. 34.3 Board meeting fee Directors are entitled to Tk 2,500 as board meeting fee for attending each board meeting. 2012

2011

35

Earnings per share (EPS) - Basic - note 2.24.3 The computation of EPS is given below



Earning (PAT) attributable to the ordinary shareholders - Taka in ‘000

752,790 721,163



Net cash inflow from operating activities (NOCF) - Taka in ‘000

1,077,803 254,562



Number of ordinary shares outstanding during the year - notes 18.2 & 18.3

23,188,940 23,188,940



EPS - Basic

Taka

32.46



Net operating cash flow per share (NOCFPS)

Taka

46.48 10.98

36

Related party transactions - notes 6, 11, 14 & 31.1 During the year under review, the Company carried out a number of transactions with related parties in the normal course of business and on arms’ length basis. The names of the related parties, nature of these transactions and their value have been set out below in accordance with the provision of IAS 24 Related Party Disclosures.

31.10

Taka in’000 Name of the related party

Nature of transaction

Payable at 31 Dec. 2012

Jenson & Nicholson (Bangladesh) Ltd

Packing container purchase

(75,221)

J&N Investment (Asia) Limited

Technology Provider

162,429

Berger Becker Bangladesh Limited

Joint Venture

(15,059)

37

Events after the reporting period Subsequent to the Statement of Financial Position date, the Board of Directors recommended the dividend @ Tk. 18 per share out of accumulated unappropriated profit. The payment is subject to the approval of the shareholders in the Annual General Meeting to be held on 21 April 2013.



The proposed dividend is not recognized at the statement of financial position in accordance with para 11 of IAS 10 Events After the Reporting Period.

72 BERGER ANNUAL REPORT 2012

38

Bank facilities Limits of various facilities extended by Banks are as follows: Taka in ‘000 2012 Name of facility

Bank

Limit

Standard Chartered Bank Bank overdraft *

HSBC Commercial Bank of Ceylon Citibank NA

Short term loan (STL)

Bank guarantees - note 22.1

Financial commitments for LC - note 22.2

2011

Bal at 31 Dec.

Limit

Bal at 31 Dec.

120,000

(14,532)

120,000

(188,282)

50,000

(2,515)

50,000

-

210,000

(16,124)

210,000

(129,141)

10,000

-

10,000

-

Standard Chartered Bank

100,000

-

100,000

-

HSBC

150,000

-

50,000

-

Commercial Bank of Ceylon

210,000

-

210,000

-

Citibank NA

350,000

-

350,000

-

Standard Chartered Bank

500,000

-

500,000

-

HSBC

50,000

-

16,000

-

Commercial Bank of Ceylon

50,000

-

50,000

-

Citibank NA

20,000

-

20,000

-

Standard Chartered Bank

500,000

-

500,000

-

HSBC

450,000

-

290,000

-

Commercial Bank of Ceylon

350,000

-

350,000

-

Citibank NA

350,000

-

350,000

-

* Interest to be calculated on daily draw-down basis, but charged on quarterly rest. The facilities are secured against hypothecation over stock and book debts - notes 2.17, 7, 8 & 12. 39 General 39.1 Wherever considered necessary, previous year’s figures and phrases have been re-arranged to conform to this year’s presentation. 39.2 The amounts shown in these financial statements are presented in Bangladesh currency (Taka), which have been rounded off to the nearest thousand Taka except where indicated otherwise.

Director & Company Secretary

Director

Managing Director

BERGER ANNUAL REPORT 2012

73

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F mZr mJ\tJr ßkA≤x& ÈKo: FékJat aJAu IqJcPyKxn' k´Yuj TPr pJ Có IÅJbJu S K˙Kf˙JkT vKÜxŒjú kKuoJr ßoJKclJAc IqJcPyKxnÇ FZJzJS ÈKo: FékJat' KxKrP\r jfáj IJr FTKa keq ÈKo: FékJat uqJPaé käJx' k´Yuj TrJ y~Ç FKa KmKnjú irPjr kJKjPrJiT S ßorJof TJP\ mqmyJrPpJVq FTKa xy\ KT∂á TJptTr mqm˙JÇ



mJKz-WrPT ßrJh-mOKÓ-^z-^JkaJr of Kmr‡k IJmyJS~J ßgPT xMrãJ KhPf F mZr mJ\tJr k´Yuj TPrPZ ÈSP~hJrPTJa FK≤cJat'Ç FKa jqJPjJ IqJKcKan xoO≠, pJ ßh~JPur rX \ôPu pJS~J FmÄ xNPptr IKfPmèKj rKvìr k´nJPmr Kmr∆P≠ k´KfPrJi VPz ßfJPuÇ FKa Z©JT, ‰vmJu S k´KfTëu IJmyJS~J ßpoj- kJKj YÅáAP~ kzJ S ãKfTr VqJx ßgPT xMrãJ ßh~Ç



FZJzJS FA mZPr ßTJŒJKj IJrS ßmv KTZá Cjúf A¥JKˆs~Ju ßTJKaÄ k´Yuj TPrÇ

4.

^MÅKTxoNy ßTJŒJKjr xJPg xÄKväÓ ^MÅKTxoNy Kjoúr‡k:



xJoKV´T IgtjLKf xJoKV´T IgtjLKfr TotTJ¥ ßTJŒJKjr \jq Ifq∂ èr∆fôkNet TJre Fr ÆJrJ KjotJeKv· S Kv·J~j k´nJKmf y~ pJ rX C“kJhj-KvP·r oNu mJ\JrÇ



mJKyqT Kmw~JmuL rJ\QjKfT IK˙rfJ, iotWa, VeIJPªJuj S xπJxL TotTJP¥r of KmwP~r TJrPe ßTJŒJKjr luJlu k´nJKmf y~Ç



IJ~Tr S oNuq xÄPpJ\j TPr kKrmftj IJ~Tr S oNuq xÄPpJ\j Tr IJAPj kKrmftj, TPrr yJr mOK≠ FmÄ mJKe\q Kmw~T IJAPj IJTK˛T kKrmftPjr TJrPe ßTJŒJKjr oMjJlJ S Igt k´mJPyr Ckr Kmr‡k k´nJm kzPf kJPrÇ



kKrPmv, ˝J˙q S KjrJk•J xÄâJ∂ IJAPj kKrmftj IJ∂\tJKfT kKro¥Pur xJPg fJu ßrPU xrTJr KmKnjú xoP~ kKrPmv, ˝J˙q S KjrJk•J xÄâJ∂ IJAj S KmKiPf kKrmftj FPj gJPT pJr kKrkJuj KjKÁf TrPf ßTJŒJKjPT IKfKrÜ KmKjP~JV S mq~ TrPf yPf kJPrÇ



oMhsJr KmKjo~ yJPr kKrmftj ßpPyfá mJ\tJPrr TÅJYJoJPur mz IÄvA IJohJKj Kjntr, ‰mPhKvT oMhsJr KmKjo~ yJPrr kKrmftPjr TJrPe ßTJŒJKjr oMjJlJ k´nJKmf y~Ç

BERGER ANNUAL REPORT 2012

75



^MÅKT KmwP~ mqm˙JkjJ TfOtkPãr oNuqJ~j pKhS ßmKvrnJV ^MÅKT ßTJŒJKj KmPvPwr IJ~P•r mJAPr, Fr‡k k´PfqT ^MÅKTr KmwP~ mJ\tJr ßkA≤x& xmthJ xfTt hOKÓ rJPU FmÄ keq S mJ\Jr mÉoMULTre, hãnJPm TÅJYJoJu xÄV´y, xmtJiMKjT k´pMKÜ mqmyJr FmÄ VPmweJ TJptâPo KmKjP~JPVr oJiqPo FxTu ^MÅKTr ßoJTJPmuJ S ßTJŒJKjr k´KfPpJKVfJoNuT Im˙Jj I\tj TPrÇ kKrPmv KmKioJuJr FTKjÔ IjMxJrL KyPxPm mJ\tJr ßkA≤x& IJ∂\tJKfToJPjr AlîáP~≤ KasaPo≤ käJ≤ FmÄ AjKxjJPrar ˙Jkj TPr FPãP© kgk´hvtPTr nëKoTJ kJuj TPrPZÇ

5.

@KgtT luJlu kKrYJuTVe IJjPªr xJPg 31 KcPx’r, 2012 fJKrPU xoJ¬ mZPrr @KgtT k´KfPmhj ßkv TrPZj FmÄ KjoúKuKUf k≠KfPf oMjJlJ mµPjr xMkJKrv TrPZj: '000 aJTJ Kmmre Kja Kmâ~ KmKâf kPeqr mq~ ßoJa uJn Tr-kNmt oMjJlJ Tr xKûKf KmuK’f Tr xKûKf Tr-krmftL oMjJlJ ßpJV: kNmtmftL mZPrr ImK≤f oMjJlJ KmfrPer \jq k´J¬ unqJÄv unqJÄv (k´˜JKmf/KmfreTíf) ImK≤f oMjJlJ ßoRKuT ßv~Jr k´Kf IJ~ (aJTJ) ßv~Jr k´Kf jLa kKrYJuj Igt k´mJy (aJTJ) ßv~Jr k´Kf jLa xŒPhr oNuq (aJTJ) ßoJa uJPnr oJ©J (%) jLa Tr-krmftL oMjJlJr oJ©J (%)

2012

2011

7,611,213 5,086,852 2,524,361 1,022,343 (274,000) 4,447 752,790 1,213,867 1,966,657 (417,401) 1,549,256

6,321,274 4,192,032 2,129,242 894,799 (170,000) (3,636) 721,163 910,105 1,631,268 (417,401) 1,213,867

32.46 46.48 100.20 33.17 9.89

31.10 10.98 85.74 33.68  11.41



kKrYJuj oNuij mqm˙JkjJ~ CPuäUPpJVq CjúKfr lPu 2012 xJPu ßv~Jr k´Kf jLa kKrYJuj Igtk´mJy uãeL~nJPm mOK≠ kJ~Ç

6.

unqJÄv ßTJŒJKj C“kJhj ãofJ mOK≠ FmÄ keq S mqmxJ mÉoMULTrPer CP¨Pvq k´Yár Igt KmKjP~JV TPrPZÇ fgJKk, kKrYJujJ kwth 2012 xJPur \jq 180% IgtJ“ 10 aJTJ oNPuqr k´KfKa ßv~JPr 18 aJTJ jVh unqJÄv ßWJweJr xMkJKrv TrPZÇ

7.

xJoJK\T hJ~m≠fJ hJK~fôvLu xJoJK\T k´KfÔJj KyxJPm mJ\tJr KmKnjú xJoJK\T TotTJP§r IjMTëu Cjú~Pjr \jq ImhJj ßrPU YPuPZÇ xJoJK\T hJ~m≠fJr IÄv KyxJPm mJÄuJPhPv IKaKˆT S vJrLKrT k´KfmºL KvÊPhr KjP~ TJ\ TPr Foj k´KfÔJjPT Yfágt mZPrr of mJ\tJr KmKnjúnJPm xyPpJKVfJ KhP~ IJxPZÇ FA mZr Fr‡k j~Ka k´KfÔJjPT FA xyPpJKVfJ ßhS~J y~Ç FZJzJS ßTJŒJKj FmZr FKxc hê S vLfJft oJjMwPT xyJ~fJ k´hJj TPrÇ jmLj Kv·LPhr xO\jvLu TotTJP§ C“xJy ßh~Jr uPãq 17fo mJ\tJr A~JÄ ßkA≤Jxt IJat TKŒKavj 2012 IJP~J\j TrJ y~Ç FA mZr xoV´ ßhv ßgPT ßoJa 563Ka KY©Tot \oJr oJiqPo k´nNf xJzJ uãq TrJ pJ~Ç kJvJkJKv mJ\tJr ßkA≤x& IKaKˆT KvÊPhr \jq FTKa KY©JÄTj k´KfPpJKVfJr IJP~J\j TPrÇ UMujJ KmvõKmhqJuP~r ˙Jkfq KmnJPVr xJPg mJ\tJr-Fr ßpRg CPhqJPV kMrÛJr KmfreL IjMÔJPjr 1o S 2~ kptJ~ FmZr IjMKÔf y~Ç





KmKnjú k´KfÔJPjr KvãJgtLPhrPT mJ˜m ùJj uJPn xyPpJKVfJr CP¨Pvq mJ\tJr ßkA≤x& A≤JjtKvk-Fr xMPpJV KhP~ gJPTÇ Fr lPu, fJrJ mqmxJK~T kKro§u xŒPTt mJ˜m ùJj uJPnr kJvJkJKv nKmwq“ ßjfOfô V´yPer CkpMÜ yP~ CPbÇ

76 BERGER ANNUAL REPORT 2012

8.

\JfL~ ßTJwJVJPr ImhJj @mVJrL Ê‹, IJ~Tr, oNuq xÄPpJ\j Tr FmÄ xŒNrT Ê‹ mJmh F mZr ßTJŒJKj \JfL~ ßTJwJVJPr k´J~ 1,980,871 yJ\Jr aJTJ \oJ KhP~PZÇ

9.

xJmKxKc~JKr ßTJŒJKj ßTJŒJKj @APjr 186 iJrJr 1 CkiJrJ IjMxJPr F ßTJŒJKjr xJmKxKc~JKr ßTJŒJKj ß\jxj IqJ¥ KjPTJuxj (mJÄuJPhv) KuKoPaPcr @KgtT KmmreL FA k´KfPmhPjr xJPg xÄpMÜ TrJ yPuJÇ

10. kKrYJuT KjmtJYj xÄWKmKir 121 S 122 IjMPòh IjMxJPr \jJm ß\rJfl ßT FqJcJox& FmÄ \jJm \ÅJ-Tîh uM©A Imxr V´ye TPrPZj FmÄ ßpJVq KmiJ~ kMj”KjmtJKYf yS~Jr AòJ k´TJv TPrPZjÇ

\jJm Fo. IJK\\Mu yT, \MuJA 30, 2012 fJKrPU IjMKÔf kKrYJuT kwtPhr 143fo xnJ~ ÈAK¥PkP¥≤ KcPrÖr' KyPxPm 3 mZr ßo~JPhr \jq KjP~JVk´J¬ yjÇ mJÄuJPhv KxKTCKrKa\ F¥ FéPY† TKovPjr 7 IJVˆ, 2012 fJKrPUr FxAKx/[email protected]@rKxKc/2006-158/134/ IqJcKoj/44 ßjJKaKlPTvj IjMxJPr fJr KjP~JV 40fo xJiJre xnJ~ xhxqPhr IjMPoJhPjr \jq ßkv TrJ yPuJÇ



IJKatPTu Il FPxJKxP~vPjr 111 iJrJ~ k´h• ãofJmPu ß\ F¥ Fj AjPnˆPo≤ (FKv~J) KuKoPac TfítT oPjJjLf KoPxx KrvoJ TJCr, ßTJŒJKjr kKrYJujJ kwtPhr 17 oJYt 2013 fJKrPU IjMKÔf xnJ~ IKfKrÜ kKrYJuT KjpMÜ yP~PZjÇ ßTJŒJKj IJAj 1994-Fr 91 (1) (Km) iJrJr KmiJj oPf ß\ F¥ Fj AjPnˆPo≤ (FKv~J) KuKoPac TfítT oPjJjLf KoPxx KrvoJ TJCr-Fr jJo kKrYJuT khk´JgLt KyPxPm KjmtJYPjr \jq k´˜Jm TrJ yPòÇ ßTJŒJKj IJAj 1994-Fr 93 iJrJ IjMpJ~L KoPxx KrvoJ TJCr ßTJŒJKjr kKrYJuT KyPxPm hJK~fô kJuPj xÿKf ùJkj TPrPZjÇ ßTJŒJKjr 95% ßv~Jr iJrT ß\ F¥ Fj AjPnˆPo≤ (FKv~J) KuKoPac TfítT oPjJjLf KoPxx KrvoJ TJCrPT kKrYJuT kPh KjmtJKYf TrJ ßpPf kJPrÇ



kKrYJujJ kwth CÜ kMj:KjmtJYj/KjmtJYj S KjP~JV IjMPoJhPjr xMkJKrv TPrjÇ

11. KjrLãT KjP~JV ßTJŒJKjr KjrLãT ßoxJxt F. TJPvo F¥ ßTJÄ, YJatJct IqJTJC≤qJ≤x& IJxjú mJKwtT xJiJre xnJ~ Imxr V´ye TrPmj FmÄ ßTJŒJKj IJAPjr 2010 iJrJ S mJÄuJPhv KxKTCKrKa\ IqJ¥ FéPY† TKovPjr @Phv jÄ- FxAKx/KxFoIJrIJrKxKc/2009-193/104/IqJcKoj fJKrU 27 \MuJA 2011 IjMxJPr kMj”KjP~JV k´JK¬r ßpJVq KmiJ~ kMj:KjP~JPV IJV´y k´TJv TPrPZjÇ 12. TPktJPra xMvJxj mJÄuJPhv KxKTCKrKa\ IqJ¥ FéPY† TKovPjr ßjJKaKlPTvj jÄ- FxAKx/[email protected]@rKxKc/2006-158/134/IqJcKoj/44 fJKrU 7 IJVˆ 2012 IjMxJPr k´P~J\jL~ k´KfPmhjxoNy xÄpMKÜ 1, 2, 3, 4 S 5 IJTJPr F k´KfPmhPjr xJPg xÄpMÜ yPuJÇ 13. oJjm xŒh kNPmtr mZrèPuJr oPfJ mZrmqJkL FmJrS ßTJŒJKjPf kNet vJK∂ S vO⁄uJ m\J~ KZuÇ oJjmxŒPhr hãfJ Cjú~Pjr \jq ßTJŒJKj ßhPv-KmPhPv @jMÔJKjT S IjJjMÔJKjT k´KvãPer @P~J\j TPr @xPZÇ kwth FA ßTJŒJKjr Cjú~Pj Fr xTu TotTftJ-TotYJrLr k´PYÓJ S xyPpJKVfJPT TífùKYP• ˛re TrPZÇ 14. mqm˙JkjJ TftOkPãr ˝LTíKf kKrYJujJ kwth ßTJŒJKjr xJlPuq ImhJj rJUJr \jq xTu TotTfJt-TotYJrL, ßâfJ, mqJÄT, mLoJ ßTJŒJKj, xrTJKr xÄ˙JxoNy, KjrLãT, mJÄuJPhv KxKTCKrKa\ IqJ¥ FéPY† TKovj, dJTJ ˆT FéPY†, Y¢V´Jo ˆT FéPY†, ßx≤sJu KcPkJK\arL mJÄuJPhv KuKoPac, ßxmJhJfJ FmÄ xPmJtkKr ßv~JrPyJflJrVePT @∂KrT ijqmJh \JjJPòjÇ kKrYJujJ kwtPhr kã ßgPT, ß\rJfl ßT FqJcJox& xnJkKf 17 oJYt, 2013

BERGER ANNUAL REPORT 2012

77

ßv~JrPyJflJrPhr k´Kf KjrLãTPhr k´KfPmhj IJorJ, mJ\tJr ßkA≤x& mJÄuJPhv KuKoPac-Fr 31 KcPx’r, 2012 fJKrPUr K˙Kfk© FmÄ CÜ fJKrPU xoJ¬ mZPrr uJn-ßuJTxJj KyxJm, jVh Igtk´mJy k´KfPmhj, CPuäUPpJVq KyxJmrãe jLKf, mqJUqJ S k´JxKñT aLTJxoNPyr KjrLãJ xŒjú TPrKZÇ IJKgtT KmmreLr KmwP~ ßTJŒJKj mqm˙JkjJ TfítkPãr hJK~fô ßTJŒJKj mqm˙JkjJ TfítkPãr hJK~fô yPò IJKgtT KmmreL k´˜áf TrJ, ßpj fJ mJÄuJPhv lJAjJK¿~Ju KrPkJKatÄ ˆqJ¥Jctx& (KmFlIJrFx) Fr xJPg xJo†xq ßrPU ßTJŒJKjr k´Tíf IJKgtT Im˙J fáPu iPr FmÄ Kjnátu S pgJpg IJKgtT KmmreL k´˜áPfr \jq k´P~J\jL~ IJnq∂rLe Kj~πe mqm˙J k´KfÔJ TrJÇ KjrLãPTr hJK~fô IJoJPhr hJK~fô yPò FxTu IJKgtT KmmreLxoNy KjrLãJ TPr Fr Ckr ofJof k´TJv TrJÇ IJorJ mJÄuJPhv ˆqJ¥Jctx& Ij IKcKaÄ (KmFxF) IjMxJPr F KjrLãJ xŒjú TPrKZÇ náuÃJK∂oMÜ IJKgtT k´KfPmhj KjKÁf TrPf CPuäKUf oJjhP§ KjPhtKvf k∫J~ IJorJ ‰jKfTfJr xJPg KjrLãJ kKrT·jJ k´e~j S mJ˜mJ~j TPr IJoJPhr Ckr IKktf hJK~fô kJuj TPrKZÇ KjrLãJTJPu xÄKväÓ IJKgtT k´KfPmhPj CPuäKUf KmKnjú xÄUqJ S fgq xŒPTt k´oJeJKh xÄV´y TrJ y~Ç FA CP¨Pvq TL k´Kâ~J IjMxre TrJ yPm, fJ náu\Kjf ãKfr kKroJPer KmYJPr KjrLãPTr Kmù KmPmYjJr Ckr Kjntr TPrÇ F TJP\ KjrLãT ßTJŒJKjr IJKgtT k´KfPmhj k´˜áPfr xJPg xŒKTtf Inq∂rLe Kj~πe mqm˙JPT KmPmYjJ~ IJPjj, KT∂á Fr luk´xNfJ xŒPTt ofJof k´hJj TPrj jJÇ FZJzJS, ßTJŒJKjr IjMxOf KyxJmrãe jLKfoJuJ S KmKnjú IjMoJPjr CkpMÜfJ FmÄ IJKgtT k´KfPmhPjr Ck˙JkjJr xJKmtT oNuqJ~jS KjrLãJr I∂nMtÜÇ IJorJ oPj TKr, IJoJPhr xÄVOyLf k´oJeJKh KjrLãJ ofJof k´hJPjr \jq pPgÓ S CkpMÜÇ ofJof IJoJPhr oPf, mJÄuJPhv lJAjJK¿~Ju KrPkJKaÄ ˆqJ¥Jctx& IjMpJ~L k´˜áfTíf F IJKgtT k´KfPmhjxoNPy 31 KcPx’r, 2012 fJKrPU k´KfÔJPjr IJKgtT Im˙J FmÄ SA fJKrPU xoJ¬ mZPrr IK\tf oMjJlJ FmÄ jVh k´mJy xKbTnJPm k´KflKuf yP~PZÇ FPf ßTJŒJKj IJAj 1994, KxKTCKrKa\ F¥ FéPY† r∆ux& 1987 FmÄ IjqJjq k´PpJ\q KmKiKmiJjxoNy k´KfkJKuf yP~PZÇ IJorJ IJPrJ k´fq~j TrKZ ßp, 1. KyxJm KjrLãJr \jq IJoJPhr KmvõJx S \JjJ oPf k´P~J\jL~ fgqJKh S mqJUqJKh IJorJ ßkP~KZ FmÄ ßxèPuJ pgJpg pJYJA TPrKZÇ 2. IJAj IjMpJ~L KyxJmrãe TJPpt mqmÂf ßp xo˜ k´P~J\jL~ mAk©xoNy ßTJŒJKjPf gJTJ IJmvqT, IJoJPhr krLãJ~ kKruKãf yP~PZ ßp, ßxèPuJ k´KfÔJPj rP~PZÇ 3. FA k´KfPmhPjr xJPg xÄPpJK\f K˙Kfk© FmÄ uJn-ßuJTxJj KyxJm ßTJŒJKj TfítT rKãf KyxJmkP©r xJPg xñKfkNet FmÄ 4. ßp xm UrY KyxJmnMÜ yP~PZ, fJ ßTJŒJKjr mqmxJP~r k´P~J\Pj TrJ yP~PZÇ

dJTJ, 17 oJYt 2013

F. TJPvo F¥ ßTJÄ YJatJct IqJTJC≤qJ≤x&

BERGER ANNUAL REPORT 2012

79

KjrLKãf IJKgtT KmmreL K˙Kfk©

31 KcPx’r, 2012 aLTJ

'000 aJTJ 31 KcPx’r, 2012 31 KcPx’r, 2011

IPgtr mqmyJr ˙J~L xŒh xŒK•, TJrUJjJ S pπkJKf k´Kâ~JiLj oNuij I¸vtjL~ xŒh

3.1 4 5

1,001,521 125,556 23,121 1,150,198

1,013,948 14,086 34,311 1,062,345

ßo~JhL \oJ KmKjP~JV∏â~oNPuq

10.1 6.1

87,381 39,300 126,681 1,276,879

58,397 39,300 97,697 1,160,042

YuKf xŒh o\Mh ßhjJhJr IKV´o, \JoJjf S @VJo k´hJj jVh FmÄ mqJÄPT \oJ Igt @∂:ßTJŒJKj k´Jkq

7 8 9 10.2 11

1,190,049 499,686 147,167 364,040 90,280 2,291,222

1,346,988 472,468 153,202 265,362 26,627 2,264,647

12 13 14 15 16

(33,171) (848,473) (168,773) (83,490) (5,172) (6,886) (147) (1,146,112) 1,145,110 2,421,989

(317,423) (758,445) (188,614) (56,684) (6,127) (6,196) (153) (1,333,642) 931,005 2,091,047

231,890

231,890

10,000 115,068 1,966,657 2,091,725

10,000 115,068 1,631,268 1,756,336

21

98,374 2,421,989

102,821 2,091,047

22

860,966

484,099

YuKf hJ~ S xKûKf IkJPrvjJu SnJrcsJla (OD) kJSjJhJr S mPT~J r~qJuKa xKûKf Tr xKûKf TotYJrLPhr Imxr VsJYáqAKa IhJKmTíf KcKnPc¥∏˙JjL~ IhJKmTíf ßv~Jr @PmhPjr \jq hJ~

17

Kja YuKf xŒh KjP~JK\f oNuij IPgtr C“x ßv~JrPyJflJrPhr fyKmu ßv~Jr oNuij âokM†LnNf oMjJlJ S IKfKrÜ fyKmu xJiJre fyKmu ßv~Jr Kk´Ko~Jo ImKµf oMjJlJ  KmuK’f hJ~ KmuK’f Tr 

18.2 19 20

WajJxJPkã hJ~ S k´Kfv´∆KfxoNy

FA @KgtT KmmreLxoNy xÄpMÜ aLTJxoNPyr xJPg kzPf yPm kKrYJuT S ßTJŒJKj xKYm

kKrYJuT xÄpMÜ ßv~JrPyJflJrPhr k´Kf KjrLãTPhr k´KfPmhj ßhUMj

dJTJ, 17 oJYt 2013

80 BERGER ANNUAL REPORT 2012

mqm˙JkjJ kKrYJuT F. TJPvo F¥ ßTJÄ YJatJct IqJTJC≤qJ≤x

uJn-ßuJTxJj KyxJm

31 KcPx’r, 2012 fJKrPU xoJ¬ mZPrr \jq '000 aJTJ aLTJ

Kja Kmâ~ KmKâf kPeqr mq~ ßoJa uJn mq~xoNy xÄrãe, Kmfre S Kmâ~ UrY k´xJvKjT mq~ mq~xJK~T oMjJlJ IjqJjq kKrYJuj mq~ r~qJuKa k´Kvãe S krJovt Kl Ee-\Kjf mq~ IjqJjq kKrYJuj IJ~ jLa IjqJjq IJ~ ßoJa kKrYJuj oMjJlJ ßoJa kKrYJuj oMjJlJr 5% yJPr v´KoTPhr oMjJlJ IÄvLhJKrfô S TuqJe fyKmPu k´hJj jLa kKrYJuj oMjJlJ ß\ F¥ Fj (Km) Fu yPf k´J¬ KcKnPc¥ IJ~ kKrYJujmKytnëf IJ~ Tr-kNmt oMjJlJ YuKf Tr xKûKf KmuK’f Tr xKûKf

2011

23 24

7,611,213 (5,086,852) 2,524,361

6,321,274 (4,192,032) 2,129,242

25 26

(1,282,451) (223,197) (1,505,648) 1,018,713

(1,046,280) (190,001) (1,236,281) 892,961

14 27

(59,639) (2,430) (62,069) (17,866) 125,727 45,792 1,064,505

(47,497) (2,700) (50,197) (43,661) 126,594 32,736 925,697

(53,225) 1,011,280 10,000 1,063 1,022,343 (274,000) 4,447 (269,553) 752,790

(46,285) 879,412 10,000 5,387 894,799 (170,000) (3,636) (173,636) 721,163

32.46

31.10

2.17 28.1

13.1

28.2 2.14 S 15 2.14.1 S 21

Tr-krmftL oMjJlJ 35

ßv~Jr k´Kf IJ~

2012

FA @KgtT KmmreLxoNy xÄpMÜ aLTJxoNPyr xJPg kzPf yPm kKrYJuT S ßTJŒJKj xKYm

kKrYJuT xÄpMÜ ßv~JrPyJflJrPhr k´Kf KjrLãTPhr k´KfPmhj ßhUMj

dJTJ, 17 oJYt 2013

mqm˙JkjJ kKrYJuT F. TJPvo F¥ ßTJÄ YJatJct IqJTJC≤qJ≤x

BERGER ANNUAL REPORT 2012

81

jVh Igtk´mJy k´KfPmhj 31 KcPx’r, 2012 fJKrPU xoJ¬ mZPrr \jq

'000 aJTJ aLTJ

kKrYJuj TJptâo UJPf jVh Igtk´mJy (T) ßâfJPhr ßgPT k´J¬ Igt IjqJjq kKrYJuj TJpt ßgPT k´J¬ jVh Igt unqJÄv IJ~ xrmrJyTJrL S TotYJrLPhr k´h• jVh Igt xMh k´hJj IJ~Tr k´hJj kKrYJuj TJpt UJPf jLa jVh Igtk´mJy

IJKgtT TJptâo UJPf jVh Igtk´mJy (V) ßv~Jr IJPmhPjr aJTJ ßlrf k´hJj unqJÄv k´hJj IJKgtT TJptâo UJPf jLa jVh Igtk´mJy

6,199,237 129,856 10,000 (5,818,915) (43,661) (221,955) 254,562

3.1, 4 S 5 6.1 10.1 3.4

(250,686) (28,984) 1,513 (278,157)

(216,864) (39,200) (7,934) 5,391 (258,607)

17

(6) (416,710) (416,716)

(416,183) (416,183)

382,930

(420,228)

(52,061) 330,869

368,167 (52,061)

jVh Igt S mqJÄPT \oJr mOK≠/(y∑Jx) (W) = (T+U+V) mZPrr k´JrK÷T jVh Igt S mqJÄT \oJ (X) mZrJP∂ jVh Igt S mqJÄT \oJ (W+X)

2011

7,586,575 123,146 10,000 (6,376,858) (17,866) (247,194) 1,077,803

2.17 15 35

KmKjP~JV TJptâo UJPf jVh Igtk´mJy (U) ˙J~L xŒh â~ mJ\tJr ßmTJr mJÄuJPhv KuKoPac-F KmKjP~JV FlKcIJr-F KmKjP~JV ˙J~L xŒPhr Kmâ~u… Igt KmKjP~JV TJptâo UJPf jLa jVh Igtk´mJy

2012

10.2 S 12 10.2 S 12 FA @KgtT KmmreLxoNy xÄpMÜ aLTJxoNPyr xJPg kzPf yPm

kKrYJuT S ßTJŒJKj xKYm

kKrYJuT xÄpMÜ ßv~JrPyJflJrPhr k´Kf KjrLãTPhr k´KfPmhj ßhUMj

dJTJ, 17 oJYt 2013

82 BERGER ANNUAL REPORT 2012

mqm˙JkjJ kKrYJuT F. TJPvo F¥ ßTJÄ YJatJct IqJTJC≤qJ≤x

ßv~JrPyJflJrPhr oJKuTJjJ˝Pfôr kKrmftj KmmreL

31 KcPx’r, 2012 fJKrPU xoJ¬ mZPrr \jq

ßvJ~Jr oNuij

xJiJre fyKmu

'000 aJTJ ßv~Jr Kk´Ko~Jo

ImK≤f oMjJlJ

231,890

10,000

115,068

1,327,506

1,684,464

unqJÄv Kmfre YuKf mZPrr ImK≤f oMjJlJ

-

-

-

(417,401) 721,163

(417,401) 721,163

31 KcPx’r, 2011-F K˙Kf

231,890

10,000

115,068

1,631,268

1,988,226

1 \JjM~JKr, 2012-F K˙Kf

231,890

10,000

115,068

1,631,268

1,988,226

unqJÄv Kmfre YuKf mZPrr ImK≤f oMjJlJ

-

-

-

(417,401) 752,790

(417,401) 752,790

31 KcPx’r, 2012-F K˙Kf

231,890

10,000

115,068

1,966,657

2,323,615

19

20

Kmmre

1 \JjM~JKr, 2011-F K˙Kf

aLTJ

18.2

ßoJa

FA @KgtT KmmreLxoNy xÄpMÜ aLTJxoNPyr xJPg kzPf yPm kKrYJuT S ßTJŒJKj xKYm

kKrYJuT xÄpMÜ ßv~JrPyJflJrPhr k´Kf KjrLãTPhr k´KfPmhj ßhUMj

dJTJ, 17 oJYt 2013

mqm˙JkjJ kKrYJuT F. TJPvo F¥ ßTJÄ YJatJct IqJTJC≤qJ≤x

BERGER ANNUAL REPORT 2012

83

Subsidiary Profile

Jenson & Nicholson (Bangladesh) Limited Directors’ Report The Directors of Jenson & Nicholson (Bangladesh) Limited are pleased to present their 23rd report for the year ended December 31, 2012 along with the Audited Financial Statements and the Auditors’ Report thereon. The Profit Before Tax of the company was Tk. 52,363 thousand against Tk. 51,629 thousand of the previous year. The Board of Directors has the pleasure to recommend 10,000% dividend to Berger Paints Bangladesh Limited i.e., Tk 10,000.00 per share of Tk. 100.00 each for the year ended December 31, 2012. The dividend will be paid during the year 2013 and the Board recommends the same for the approval of the members. The Director retiring by rotation under Article 32 is Mr. Abdul Khalek who, being eligible, offered himself for re-election. The Board of Directors recommends his re-election. Our existing Auditor Messrs Hoda Vasi Chowdhury & Co., Chartered Accountants retire at the ensuing Annual General Meeting and, being eligible, offered themselves for reappointment. Your Directors wish to acknowledge the continued assistance from the management of Berger Paints Bangladesh Limited to make Jenson & Nicholson (Bangladesh) Limited successful.

On behalf of the Board,

Anil Bhalla

Director March 17, 2013

BERGER ANNUAL REPORT 2012

85

Auditors’ Report to the Shareholders of Jenson & Nicholson (Bangladesh) Limited

We have audited the accompanying financial statements of Jenson & Nicholson (Bangladesh) Limited, which comprises the Statement of Financial Position as at 31 December 2012 and the related Statement of Comprehensive Income and Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting Standards (BASs), Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994 and other applicable laws and regulations. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the Financial Statements prepared in accordance with Bangladesh Financial Reporting Standards, give a true and fair view of the state of the company’s affairs as at 31 December 2012 and of the results of its operations and its cash flows for the year then ended and comply with the Companies Act 1994 and other applicable laws and regulations. Further to our opinion in the above paragraph, we state that: (i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; (ii) In our opinion, proper books of account as required by law have been kept by Jenson & Nicholson (Bangladesh) Limited so far as it appeared from our examination of those books; (iii) The company’s Statement of Financial Position, Statement of Comprehensive Income and Statement of Cash Flows dealt with by the report are in agreement with the books of account and returns.

Dhaka, March 17, 2013

86 BERGER ANNUAL REPORT 2012

Chartered Accountants

Audited Financial Statements Statement of Financial Position As at 31 December 2012

Taka in '000 31-Dec-12

31-Dec-11

Applications of Funds Non- Current Assets Property, plant and equipment

96,405

65,932

Capital work-in-progress

31,498

6,842

3,590

3,735

131,493

76,509

93,488

83,627

6,308

4,453

Intangible assets

Current Assets Stocks Advances, deposits and prepayments Cash and bank balances

4,613

683

104,409

88,763

(75,221)

(26,247)

Current Liabilities and Provisions Inter-company balance Bank overdraft Creditors and accruals Provision for tax

-

(5,295)

(10,933)

(8,379)

(1,539)

(6,743)

(4,237)

(2,000)

(91,930)

(48,664)

Net Current Assets

12,479

40,099

Capital Employed

143,972

116,608

100 130,500

100 106,975

130,600

107,075

13,372 143,972

9,533 116,608

Employees’ retirement gratuity

Sources of Funds Shareholders’ Funds Share capital Retained earnings Deferred Liabilities Deferred tax

31,213

Contingent Liabilities and Commitments

Chairman

Managing Director

49,305

Director & Company Secretary

Auditors' Report to the Shareholders See annexed report Dhaka, 17 March 2013

Chartered Accountants

BERGER ANNUAL REPORT 2012

87

Statement of Comprehensive Income For the year ended 31 December 2012 Taka in ‘000 2012 Sales -net

2011

304,259

257,364

Cost of sales

(242,873)

(195,749)

Gross profit

61,386

61,615

(8,811)

(9,065)

Expenses Administrative

(6,772)

(6,767)

(15,583)

(15,832)

45,803

45,783

Service charges

(2,000)

(2,000)

Financial charges

(2,189)

(2,011)

(4,189)

(4,011)

Other operating income

13,505

12,191

Warehouse and distribution Trading profit Other operating charges

Other operating income-net Operating profit

9,316

8,180

55,119

53,963

Provision for workers' profits participation and welfare funds @5% of operating profit

(2,756)

(2,698)

Net Operating profit

52,363

51,266

-

364

52,363

51,629

Provision for current tax

(15,000)

(17,100)

Provision for deferred tax

(3,838)

(9,533)

(18,838)

(26,633)

33,525

24,996

-

-

Other non -operating income Profit before tax

Profit after tax Other comprehensive income Total comprehensive income

33,525

24,996

Retained earnings brought forward

96,975

81,979

130,500

106,975

Retained earnings carried forward

Chairman

Managing Director

Director & Company Secretary

Auditors' Report to the Shareholders See annexed report Dhaka, 17 March 2013

88 BERGER ANNUAL REPORT 2012

Chartered Accountants

Statement of Cash Flows For the year ended 31 December 2012

Taka in ‘000 2012

2011

Cash flows from Operating Activities (A) Cash received from customers Cash received from other operating income Cash paid to suppliers and employees Payment of interest Income tax paid Net cash from operating activities

304,259

257,500

13,505

12,192

(213,461)

(174,364)

(2,189)

(2,011)

(20,204)

(20,931)

81,910

72,386

(62,685)

(32,491)

Cash flows from Investing Activities (B) Capital expenditures

-

481

(62,685)

(32,010)

Dividend paid

(10,000)

(10,000)

Net cash used in financing activities

(10,000)

(10,000)

9,225

30,376

(4,612)

(34,988)

4,613

(4,612)

Proceeds from sale of assets Net cash used in investing activities Cash flows from Financing Activities (C)

(Decrease)/Increase in cash and bank balance (D)= (A+B+C) Opening cash in hand and at bank ( E) Closing cash in hand and at bank ( D+E)

Chairman

Managing Director

Director & Company Secretary

Auditors' Report to the Shareholders See annexed report Dhaka, 17 March 2013

Chartered Accountants

BERGER ANNUAL REPORT 2012

89

events

BERGER ANNUAL REPORT 2012

91

39th Annual General Meeting of Berger Paints The 39th Annual General Meeting of Berger Paints Bangladesh Limited was held on April 29, 2012 at Bashundhara Convention Center, Dhaka. Managing Director Rupali Chowdhury presided over the meeting. Directors Ashfaque Ur Rahman and Abdul Khalek also attended the meeting.

Ms. Chowdhury presented the Directors’ Report, Auditors’ Report and Audited Financial Statements for the year ended 31 December 2011 before the shareholders. She also replied to the shareholders’ queries. Dividend of Tk.18 per ordinary share of Tk.10 was declared in the meeting.

ICMAB Best Corporate Performance Award Berger Paints Bangladesh Limited has been honoured with the ICMAB Best Corporate Performance Award 2012 for its outstanding accomplishment in financial and management excellence. Berger has clinched the first position in the Multinational Companies Category in the ICMAB Award. Commerce Minister, Ghulam Muhammad Quader MP, handed over the award at a ceremony held in the city recently. Mohammad Ahsun Ullah, FCA, General Manager - Treasury & Financial Accounting of Berger Paints, received the award on behalf of the company.

92 BERGER ANNUAL REPORT 2012

Berger Becker Coil Coatings: Launching Ceremony Berger Paints Bangladesh Limited has teamed up with Beckers Group of Sweden to produce innovative coil coatings through a new company Berger Becker Bangladesh Limited (BBBL) for the first time in Bangladesh. On October 4, 2012, the launching ceremony of the Berger Becker’s Coil Coatings was held at a reputed hotel in Dhaka. This new venture will facilitate to save country’s precious foreign currency. Dr. Boris Gorella, CEO of Becker Group; Dr. Karsten Eller, COO of Becker Group; Mr. Paul Ignatius Menezes, President of South Asia-Pacific and Middle East, Beckers Group and MD of BBBL have shared their views on the new JV initiatives, commitment to the market, future business plan & etc. Ms. Rupali Chowdhury, MD of BPBL and Director of BBBL, said, locally produced international standard coil coatings would enable the customers to get the coil coatings at their doorsteps supported by unparallel technical and sales service. Mr. Abdul Khalek, Director, BBBL; Mr. Rajesh Mehrotra, Director, BBL; senior officials of Berger Paints & BBBL, reputed architects, representative of renowned corporate houses, and media personalities were also present in this inaugural ceremony.

Berger Paints teams up with Hempel Berger Paints, the absolute market leader in Bangladesh paint industry, has joined hands with Hempel, a global leader in marine coatings, to offer the most advanced marine solutions in Bangladesh market. The agreement signing ceremony was held on February 13, 2012 in Dhaka. Rupali Chowdhury, Managing Director of Berger Paints and Umesh Singh, Regional Director - South Asia, Hempel, signed the agreement on behalf of the companies. Under the agreement, Berger will exclusively market and distribute Hempel products backed by its sound technical services. With this tie-up, BPBL will have diversified marine paint solutions for ship building industry for export and domestic market, as well as all of our valued customers. Abdul Khalek, FCA, Director - Finance & Company Secretary, Mohsin Habib Chowdhury, GM - Sales & Marketing, A.K.M. Sadeque Nawaj, Head of Marketing, Imranul Kabir, Sales Manager - Industrial & Marine of Berger Paints, Jonas Bruhn, Sales Manager, Key Accounts & International Projects, of Hempel were also present in the occasion along with other high officials of both companies.

BERGER ANNUAL REPORT 2012

93

Launching of Eco Series Paint - Berger Breathe Easy Berger Paints Bangladesh Limited launched ‘Breathe Easy’ - the first ever odor free and ecofriendly paint in Bangladesh last year. Like its slogan ‘Healthy Paint for Your Home’, this premium interior emulsion will give the user a feeling of being one with nature. The paint is environmental friendly since it has low volatile organic compound (VOC). It is worth mentioning that paints with high amounts of VOC can create breathing problems and can also have side-effects such as allergies. Breathe Easy is also ‘odor-free’ which makes it easy for people to stay in a room which has been newly painted. It is also ‘stain-free’ and ‘anti-bacterial’ which protects the wall from stains and fungus. The ‘Breathe Easy’ series now includes Wall Putty, Water Sealer and Interior Emulsion paint and can be found at all major outlets and paint shops.

New Product Launching - WeatherCoat AntiDirt Bangladeshi climate is dirt-prone. Specially, exterior walls show high tendency in dirt pick-up. Hence, while choosing paints for exterior walls, weather protection becomes the prime function of exterior paints. Berger WeatherCoat, being the absolute market leader in exterior paints, now offers WeatherCoat AntiDirt to offer maximum resistance against dirt pick up. This paint is formulated with Nano additives, to offer high resistance against paint agglomeration & exposure under U/V ray. It also offers superior weather protection against fungus, algae and adverse environmental effects like water penetration & acidic gases.

Berger introduces 5 new construction chemicals Berger Paints (BD) Limited has become a household name in Bangladesh through its diversified portfolio of global standard innovative products. BPBL launched two new construction chemicals in its portfolio in 2012 - Mr. Expert Latex Plus and Mr. Expert Tile Adhesive. BPBL also offers Water Barrier, Salt Safe, Crack Filler under Mr. Expert product range. These international standard products ensure effective protection of constructions from water, salinity and cracks.

An effective product to give concrete and masonry surfaces an impeccable coating. It gives protection against dampness caused by water.

Modified Styrene butadiene latex used for high performance applications in waterproofing and repair works.

Prevents cracking of surface by improving flexural strength and reduces drying and aging shrinkages. An alkali resistant primer and can be applied to fresh concrete. This product seals and prepares recommended substrates from damage caused by moisture and salinity.

94 BERGER ANNUAL REPORT 2012

A ready mixed polymer modified multipurpose adhesive with outstanding adhesion / tensile strength. It is a perfect product for fixing all types of tiles on wall or floor, even for swimming pool.

Best Brand Award 2011 Berger Paints Bangladesh Limited has won the prestigious “Best Brand Award 2011” under the paints category for the second time in a row. This accolade is awarded by Bangladesh Brand Forum, and assessed by Nielsen, the internationally acclaimed research agency. We are grateful to our shareholders, customers, dealers, architects, real estate companies and all the well wishers for making this achievement possible.

Berger Paints received top VAT Payer’s Award On 10th July 2012 (VAT DAY) the National Board of Revenue (NBR) of the Government of People’s Republic of Bangladesh has awarded - Certificate of Honour to Berger Paints Bangladesh Limited as the highest Value Added Tax (VAT) payer, both in Dhaka and Chittagong district, in the manufacturing category for the financial year 2010-2011. This is the first time Berger Paints received such an award.

17th Berger Young Painters’ Art Competition Award Giving Ceremony The 17th Berger Young Painters’ Art Competition Award Giving Ceremony was held on December 10, 2012 at Ruposhi Bangla Hotel-Winter Garden with great grandeur. Rupali Chowdhury, Managing Director of Berger Paints Bangladesh Limited graced the event and welcomed everyone. Berger Young Painters’ Art Competition received an impressive 563 paintings this year. The winners from 1st to 6th position respectively are Rasel Kanti Das, Purnima Mitra, Ruhul Amin Tarek, Faisal Ahmed Mahfuz, Ahsan Mahtab and Abdullah Al Bashir. The most esteemed award - Berger Life Time Achievement Award was given to eminent artist, Mr. Abu Taher. Berger Paints also organized painting competition for autistic children for the second time. In this competition the winners of 1st , 2nd and 3rd position respectively are from group “A”, Kazi Inteser Fayed (Sabab), Tamim Ibn Aris and Md. Tamjid Hossain (Nayeef) and from group “B”, Adiba Ibnat (Poshla), Farhan Syed Tanisha (Ananta) and Ahnaf Tahmid Khan Prithvi. In the program, Berger Paints Bangladesh Limited honored five young achievers of our country. Among them were Ms. Nishat Majumder and Mr. M A Mohit who climbed to the peak of Mount Everest. From Bangladesh, Mr. Dhananjoy Biswas, Mr. Sourav Das and Mr. Nur Muhammad Shafiullah had won medals in the 53rd International Mathematical Olympiad 2012; they received accolades from Berger Paints as well. Including the 6 award winning paintings, an exhibition was held of 40 nominated paintings at the Zainul Gallery, Faculty of Fine Arts, University of Dhaka from 11th December to 15th December 2012.

BERGER ANNUAL REPORT 2012

95

KUAD-BERGER Award Giving Ceremony On the September 25, 2012, the award giving ceremony of 1st & 2nd KUAD-Berger Award & inauguration of Resource Corner was arranged in the premise of Architecture Discipline, Khulna University. The winners of 1st KUAD Berger Award Cycle are Md. Samiul Sabbir Islam for 1st year, Ms. Auditi Bridget Biswas for 2nd year, Ms. Shaila Islam for 4th year and Mr ZHM Monjur Murshed for 5th year. And for the 2nd KUAD Berger Award Cycle the winners are Mr. Sheikh Rishad Ahmmad for 2nd year, Md. Raihan Khan for 3rd year and Ms. Sumaiya Rahman PIashi for 5th year. In the award giving ceremony, Professor Dr. Md. Saifuddin Shah, Vice-chancellor, Khulna University was the chief guest. Besides, Professor Dr. Md. Fayek Uzzaman, Pro-VC, Professor Dr. Md. Harunor Rashid Khan, Dean, SET School, Khulna University and Rupali Chowdhury, Managing Director, Berger Paints Bangladesh Ltd. were present as special guests. The Vice Chancellor of Khulna University, Professor Dr. Md. Saifuddin Shah praised Berger Paints Bangladesh Ltd. for taking such an initiative to recognize and accolade the budding talents of architecture discipline of Khulna University. Rupali Chowdhury, Managing Director, Berger Paints Bangladesh Limited mentioned that being a responsible corporate citizen, Berger Paints has taken pride in assisting meritorious students to develop towards their full potential. Reputed architects and distinguish faculty members, Berger high officials and media personalities were present at the ceremony.

Contribution for the Welfare of Autistic Children Berger Paints BD Ltd. extends its support for the welfare of autistic and differently challenged children since 2009. Recently in a ceremony organized at the corporate office of Berger Paints, financial and other material aids were handed over to nine different well-known organizations working for the development of autistic & differently challenged children in Bangladesh. SEID Trust, Scholars Special School, Tauri Foundation, Society for the Welfare of Autistic Children (SWAC), Autism Welfare Foundation (AWF), Concern Services for Disabled (CSD), Community Development Centre, Nowzuan and Alokito Shishu are among the organizations that received contribution from Berger Paints in 2012. Berger Paints provided financial aid for center operations, house rent, teacher appointment, equipments like wheel chair, standing frames, computer, laptop, blankets etc. based on the needs of the organizations. The representatives from these organizations thanked Berger Paints for its noble initiative and emphasized on the importance of such welfare efforts. Berger Paints is committed towards the betterment of differently challenged children. Rupali Chowdhury, Managing Director, Berger Paints Bangladesh Limited, handed over cheques and other materials to the authorities of the welfare organizations. Heads of different departments of Berger Paints and other high officials from Berger and the welfare organizations were present in the ceremony.

96 BERGER ANNUAL REPORT 2012

Barisal Depot Starts as the 9th Berger Sales Depot In Barisal, the 9th sales depot of Berger Paints Bangladesh Ltd has started its journey to ensure more convenient product availability and better service at customers’ doorstep. Managing Director of Berger Paints Bangladesh Ltd Ms. Rupali Chowdhury and Barisal City Corporation Mayor - MD. Showkot Hossain Hiron inaugurated the activities of Barisal depot on June 04, 2012. She stated her expectation that this new initiative would further enhance the customer services of Berger Paints Bangladesh Ltd in this region. Among others, GM - Sales & Marketing, Mohsin Habib Chowdhury, General Sales Manager - Decorative Syed Salahuddin Abu Naser, Regional Sales Manager - Dhaka, Azizul Haque, other high officials of Berger Paints Bangladesh Ltd and estimed dealers were present in the ceremony.

School Activation Program To promote painting and to celebrate the joy of colors, Berger Paints organized an art competition at the European Standard School in Dhanmondi titled “Berger illusions Paint Your Wall Competition” highlighting its designer wall brand “illusions”. Students of different standards participated in two groups. Top 3 paintings of each group were awarded certificate & prize money. The young artists also got the opportunity to meet Mr. Abdus Shaqur Shah, a prominent artist of the country, who was a judge of the event. Students, guardians, judges and Berger Team- all enjoyed the colorful event with different activities.

Celebrating Robbialac Rong Raater Mela To promote painting and to celebrate the joy of colors, Berger Paints organized an art competition at the European Standard School in Dhanmondi titled “Berger illusions Paint Your Wall Competition” highlighting its designer wall brand “illusions”. Students of different standards participated in two groups. Top 3 paintings of each group were awarded certificate & prize money. The young artists also got the opportunity to meet Mr. Abdus Shaqur Shah, a prominent artist of the country, who was a judge of the event. Students, guardians, judges and Berger Team- all enjoyed the colorful event with different activities.

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97

Celebrating World Environment Day Berger Paints Bangladesh Limited arranged a unique activation campaign under its brand “Breathe Easy” on World Environment Day that took place on June 5, 2012. Berger has taken an initiative to protect the environment by offering painting products that are lead-free and low in volatile organic compounds. Berger believes that the time has come for us to tackle environmental issues to make the world a better place for our future generations to live a healthy life. On World Environment Day, Berger brand promoters took to the streets of Dhaka City holding huge banners at 9 different traffic points. Each banner had the message, “Are you doing your part to keep the world green?” Pledge cards and placards were also distributed amid people. The placards read ‘Use minimal water’, ‘Plant trees’, ‘Use gas and electricity in a moderate way’ etc. Berger Paints attempted to make people aware of how we can do our part in saving this world from further deterioration.

Berger Paints at REHAB Summer Fair’12 Berger Paints Bangladesh Ltd. participated in the REHAB Summer Fair 2012, which was held during June 14-17, 2012 at Bangabandhu International Convention Centre (BICC). Berger team set up an attractive stall in the fair, displaying pre-painted panels of Breathe Easy, Illusions, Mr. ExpertConstruction Chemicals etc. People from all walks of life visited the stall and showed interest in Berger’s product range. A total number of 167 companies participated in the REHAB Summer Fair.

98 BERGER ANNUAL REPORT 2012

BERGER PAINTS BANGLADESH LIMITED

Berger House, House # 8, Road # 2, Sector # 3, Uttara Model Town, Dhaka-1230

PROXY FORM l/We ....................................................................................................................................................................................................... of ........................................................................................................................................................................................................... being a member of Berger Paints Bangladesh Limited do hereby appoint Mr/Mrs/Miss ............................................................................................................................................................................................ of ........................................................................................................................................................................................................... as my/our proxy to attend and vote for me/us on my/our behalf at the 40th Annual General Meeting of the Company to be held on Sunday, April 21, 2013 at 11 a.m. at Trust Milonayaton, Dhaka and at any adjournment thereof. Affix taka 20/Revenue Stamp

As witness my hand this day of ......................................... 2013.

(Signature of the Shareholder)

(Signature of the Proxy)

Dated........................ Dated......................... BO ID No:

Note: The proxy form should reach the Corporate Office of the Company not less than 48 hours before the time fixed for the meeting.

Signature Verified



Authorized Signatory Berger Paints Bangladesh Limited

BERGER PAINTS BANGLADESH LIMITED

Berger House, House # 8, Road # 2, Sector # 3, Uttara Model Town, Dhaka-1230

Member’s Attendance Slip I hereby record my attendance at the 40th Annual General Meeting being held on Sunday, April 21, 2013 at 11 a.m. at Trust Milonayaton, Dhaka.

BO ID No:

Name of the Member/Proxy ....................................................................................................................................................................... Signature ................................................................................................................................................................................................ Date ..................................................... 2013 Note: Please present this slip at the Reception Desk

Concept, Design & Production: UNITREND LTD.

BERGER PAINTS BANGLADESH LIMITED Berger House, House # 8, Road # 2, Sector # 3, Uttara Model Town, Dhaka-1230 Phone: 02 8953665 (Hunting), Fax: 880 2 8951350, E-mail: [email protected], Web: www.bergerbd.com