BERGER PAINTS PAKISTAN LIMITED

FINANCIAL STATEMENT ANALYSIS

AND REPORTING

PRESENTED BY:
Aroma Kousar
Danish Faheem
Shiza Amir
 INTRODUCTION

• VISION
Leading paints, associated products
manufacturing and marketing company in
Pakistan ensuring best returns to investors
& highest customer satisfaction.
• MISSION
Innovation
Commitment
Care
CSR
 INDUSTRY/SECTOR STUDY

•Highly competitive – MV Rs. 30 bn

•Decorative paints dominate the Industry
•CAGR: 6-7%
•Organized & Unorganized sector

Major Industry Players

MULTINATIONALS: LOCALS:
• AkzoNobel Pakistan Master Paints
• Berger Paints Diamond Paints
• Nippon Brighto Paints
• Kansai Nelson
 COMPETITOR ANALYSIS
• Top Competition – Private Limited Companies (Nippon, Diamond,
Brighto)
• Diamond claims it is “No. 1 Selling National Brand.”
• Public Limited firm- Buxly Paints Limited
2020 Annual Financials Berger Paints Limited Buxly Paints Limited

Revenues (net) Rs. 4,177.951 Million Rs. 275.216 Million

Profit after Taxation Rs. 74.308 Million Rs. 52 Thousand

Inventory Turnover Ratio 3.84 3.81

Gross Profit Margin 20.98% 19.29%

Return on Equity 3.62% 0.039%

Berger outperforms Buxly in all of the major financials and

important ratios.
 Comment on the Director’s Report

• The comment is on the Director’s report for the fiscal year 2020. The directors report that large
scale manufacturing sector recorded a declining growth of 10.17% in FY2020.
• The pandemic and the downward shift of the economy, resulted in a reduced purchasing power
of the consumers which resulted in stuck up inventories.
• Coming to the financial performance, the company reported a negative growth of about 30% in
profit after taxation, due to the unavoidable circumstances of COVID-19.
• Directors further report that the future outlook is highly uncertain and their future outlook
totally depends on the state of COVID-19’s future outlook.
 Comment on the Auditor’s Report

• The Financial Statements for the year 2020 were audited on October 8th, 2020 by KPMG Taseer Hadi
& Co.
• Overall it was an unqualified view, but they do mention some key audit matters:
 Revenue was recognized revenue without transferring the risks and rewards. No risk associated with this entry so it was not
necessary to mention.
 Trade Debts were not valued in accordance to the standards of IFRS. Berger used the Incurred Loss Method instead of the
Expected Credit Loss Approach.
 Revaluation of Property, Plant, and Equipment involved high level of estimation and estimation may not be accurate which is
why it was recognized as a key audit matter.
 FINANCIAL ANALYSIS

• RATIO ANALYSIS
• DUPONT ANALYSIS
• VERTICAL ANALYSIS
• HORIZONTAL ANALYSIS
(Explanation of important notes to accounts)

- All the working has been done on the excel sheet.

 SWOT ANALYSIS

STRENGTHS WEAKNESSES

• Variety • High dependence

• Up-to-date on one segment
• Brand Name • Price Control
• Growth • Weaker
Distribution
• Barriers to Market
Entry
 SWOT ANALYSIS

OPORTUNITIES THREATS

• New Launches • Inflation

• Room to grow • Local competition
• Untapped Market • Changing gov.
laws
 RECENT NEWS & ANNOUNCEMENTS

• Berger paints marketplace share which had always been on

again pedal, remains lowering in 2020 due to the fact Berger is
rather suffering, that's why holding different ad campaigns are
vital to restoring the paint organization’s sales.
• The business enterprise’s finance costs went from Rs165
million in 2019, to Rs195 million in 2020. According to analysts,
the organization also had to borrow to satisfy operating capital
requirements, due to the falling income.
• In the most current financial statements issued to the Pakistan
Stock Exchange in September, Berger Paints income earlier
than tax stood at Rs114.Five million, which was the second
lowest profit in seven years.
• The paint industry had suffered for the last few years because
of a slowdown in the creation enterprise which has brought on
demand for merchandise to sharply slow down. But in April,
the government of Pakistan introduced an incentive bundle for
the real property and production industry. This will improve
the development enterprise as a whole, and will result in extra
demand for paints.
 GOVT. AND TAX POLICIES

The Government has allowed construction area to open

in a phased manner in 2019. The Company, being part
of this quarter, has currently been capable of resuming
operations. Declining expenses of raw substances, tax
incentives, and relaxations announced with the aid of
the Government and latest charge reduce of 425bps
helps the company to move forward.
Government of Pakistan through Finance Act, 2019 has
made certain amendments in Section 150 of the
Income Tax Ordinance, 2001 whereby different rates
are prescribed for deduction of withholding tax on the
amount of dividend paid by the companies. These tax
rates are as under:
(a) For filers of income tax returns: 15%
(b) For non-filers of income tax returns: 30%
 CONCLUSION

• Financially stable – NP increasing

• Devaluation of currency – adverse affect on profitability
• Covid 19 – uncertain future
• Strong competition
• Pakistan remains its growth trajectory – Paint sector flourishes
THANKYOU!