BERGER 17VINASIN TPT Ello] seem: lale) 8Manufacture and source quality coatings and allied products and deliver to customers in a way that will surpass expectations all the time while remainin; anactive and responsible corporate member o business community. We employ creative and highly motivated people supported by modern technology to spearhead product and process innovations, achieve market dominance and maximize shareholder value; while contributing to Nigeria's economic and social development. OUR VISION Our vision is to become the dominant marketing company in the coatings and allied business industry. OUR SHARED VALUES ustomer Response «Team Work «Integrity «DisciplineANNUAL REPORT & ACCOUNTSDIRECTORS, PROFESSIONAL ADVISERS, ETC Directors: Oladimeji Alo, PhD Clement A. Olowokande Balram D. Datwani Abi Ayida Musa Danjuma Olawale O. Akinpelu Raymond C. Obieri Raj Mangtani Nelson C. Nweke OluwoleO. Abegunde Kunle Olowokande Patrick Buruche Sanjay Datwani Tor Nygard Peter Folikwe - Chairman - Chairman (retired 17 July 2014) -(Indian) Non-Executive Director (retired 17 July 2014) - Non Executive Director - Non Executive Director - Non Executive Director (retired 17 July 2014) -Non Executive Director (retired 17 July 2014) - (Indian) Formerly alternate to B.D. Datwani, now Non Executive Director — (Appointed 17 July 2014) - Non Executive & Independent Director - Non Executive Director - Non Executive Director (Appointed 17 July 2014) - Non Executive Director (Appointed 17 July 2014) - (British) Non Executive Director (Appointed 11 December 2014) - (Norwegian) Managing Director (Disengaged 31 January 2015) - Managing Director (Appointed 10 March 2015) Company Secretary: Pheola Caulcrick & Co. Registered Office: 102, Oba Akran Avenue, Ikeja, Industrial Estate P.M.B. 21052, Ikeja, Lagos. Tel: -234(01)2805167, 28095169 Mobile: +234 8102164585-6 O700BERGERPAINTS [0700237437724687, Email: customercare@bergerpaintnig.com Website: www.bergerpaintsnig.com RegistrationNo: RC: 1837 2014 Annual 03) Report & Accountsw@ Directors, Professional Advisers, Etc cont'd Regional Offices: Registrars: Auditors: Principal Bankers: Abuja Plot 784, Alexandria Crescent, Wuse II, Abuja, FCT. Tel: 08102164849 Benin 134, Murtala Mohammed Way, Benin City, Edo State. Tel: 08102164840 Port Harcourt 70, Trans Amadi Estate, Port Harcourt, Rivers State. Tel: 08102164859 Meristem Registrars Limited 213, Herbert Macaulay Way, Adekunle, Yaba, Lagos P.O. Box 51585, Falomo, Ikoyi, Lagos. Tel: 07006374734, 01-2809250-3 Email: info@meristemregistrars.com Website: www.meristemregistrars.com KPMG Professional Services KPMG Tower Bishop Aboyade Cole Street Victoria Island, Lagos +234 1 2694660-4 www.kpmg.com Guaranty Trust Bank Plc First Bank of Nigeria Plc Diamond Bank Plc Skye Bank PlcFINANCIAL HIGHLIGHTS For The Year Ended 31st December 2014 PES 2013 ay INTs Cees COCs rite eta as Profit Share capital aoe Dene cries Basic earnings per share (kobo) Decca Net assets Pern n i eed current year results only Pea Noe ec iad Stock Exchange Information Stock exchange quotation at RIN ec en Cea Iepeme el Patees ETc eg ae) Pre ee RN ea Me RCM NT eat Mee MM ect ae a declared during the current year. **The directors propose a dividend of 75 kobo (2013: 70 kobo) per share on the issued Puce UPPER CURIE CEP RRC Neem cca) the approval by the shareholders atthe Annual General Meeting.& CORPORATE PROFILE Berger Paints Nigeria Plc, which commenced operation in Nigeria on the 9 January 1959, isa leader in the Coating and Allied industry in Nigeria -a legacy inherited from Lewis Berger, the German colour chemist who founded the Berger Paints’ dynasty in London, in 1760. With a manufacturing plant and main distribution centre in Lagos, the most notable contribution to our success has been the Company's on-going commitment to the development and manufacture of paints and allied coatings which are technologically correct, environmentally friendly and formulated to withstand harsh tropical conditions. Berger Paints Nigeria Plc operates in 5 business segments; Decorative/Architectural finishes, Marine & Protecton coatings including Berger/KCC Heavy Duty Coating, Automotive/Vehicle refinishes, Industrial Coatings and Wood finishes and Preservers. With 16 depots, Colour World centres and a countrywide distribution network of dealers and mega dealers in strategic locations spread throughout the country, Berger Paints is well placed to serve the growing requirements of the Nigeria market The company has a reputation for being the first in setting standards in the paints industry in Nigeria. It has pioneered a wide range of specialty products that are much sought after in this dynamic and ever-changing market. Berger Fire Retardant Texcole, a textured finish first introduced into the Nigeria market by us has been very successful in capturing the imagination of many consumers. Berger Fire Retardant Texcote has now been adopted as the generic term for textured paint in Nigeria. Berger Rufhide, a wall putty with superior adhesive strength over conventional P.O.P and other screeding materials, first of its kind in the Nigeria market was also pioneered by Berger Paints. Our other well known brands such as Luxol (Clinstay), Super Star, Classic, etc continue to have their loyal clientele and enjoy extreme popularity across Nigeria today. Berger Paints is also the preferred company of choice when it comes to major corporate and government projects, Examples include the supply of paints to GTB, Skye Bank and FCMB branches nationwide, Tejuosho Ultra Modern Market, Belema Flow Station through Shell Petroleum Development Company (SPDC), amongst many others in the year under review. With products that are designed to meet the specific needs of customers, Berger Paints has remained a top of the mind brand over the years. Berger Paints has also enhanced its offerings to customers through the numerous COLOURWORLD outlets opened in strategic locations pan-Nigeria. Thousands of colours are made available to customers at these centres. The Colourworld outlets also offer a wide range of products, information and colour development through our unique and advance Automated Tinting Systems and colour softwares. Besides, the Colourworld centres are storehouses of the wide range of our company’s products, paint tools and other services that can aid the customers in making decisions on paints and paints applications. Indeed, Berger ‘aCorporate Profile Cont'd Ey can produce any colour which may be required. In 2012, Berger Paints Nigeria Plc entered into a partnership arrangement with the biggest Heavy Duty Coating manufacturer company in South Korea, KCC Corporation to jointly serve the Nigerian Paint and Coating market. This partnership affords our customers the quality and durability that marine and protective market have found synonymous with the KCC marine and heavy duty brands. Berger Paints Nigeria Plc with the corporate signature, "enduring beauty and protection" has always placed innovation, integrity, quality of products & services and the provision of avast product range at the top ofits priorities which has made ita “one-stop” solution for all painting needs. Our Products Berger Paints Nigeria Ple is the only paint company in Nigeria operating in the five (5) key segments: + Decorative/Architectural Finishes + Marine & Protecton Coatings including KCC Heavy Duty Coating + Automotive/Vehicle Refinishes + Industrial Coatings + Wood Finishes and Preservers Decorative Paints The Decorative range covers the architectural and building maintenance coatings of high and medium quality, which are used by leading contractors as well as craftsmen. The brands which are household names in the Nigerian Paints market are TEXCOTE, LUXOL and SUPER STAR, and these are available in unlimited range of colours, possessing both beauty and protective abilities against all the elements of the weather. CLINSTAY is a unique brand of washable water based emulsion paint, suitable for the internal part of the home and high traffic areas susceptible to dirt which can be washed with foam, mild soap and water. RUFHIDE is a specially formulated paint that covers cracks and wall imperfections. Industrial Coatings These are protective paints used as coatings for virtually all categories of manufacturing, equipment and machines. The paints protect the items from rusting and make them resistant to scratching. The coatings are available to suit most forms of application technologies ranging from brushing, conventional spraying, dipping, curtain coating, roller coating, can and coil coatings, tumbling and electro-static method. The product range includes Stoving Enamels, Coil Coatings, Curtain Coatings, and Quick Drying O° 2014 Annual Report & Accountswe Corporate Profile Cont'd Enamels amongst others. Marine and Protecton The Berger Paints range of protective coatings has, over 30years, successfully met the comprehensive and specialized anti-corrosive demands of the structures and equipment of the marine industry in Nigeria. The Marine Paints/Heavy Duty Coatings, Bituminous Coatings, a wide range of Primers and Protective Systems for Steelworks, Marine Primers, Bottom Compositions including anti-fouling and coatings for Boot topping and Topsides. All the major petroleum oil drilling companies and main ship maintenance companies in Nigeria use the products. Automotive/Vechicle Refinishes Paints The company is also expanding the frontier of vehicle refinishes range of paints. The top quality automotive range of products includes topcoats for Vehicle Assembly plants as well as Car Refinishes with the brand name AUTOLUX. It is compatible with all makes of vehicles. AUTOLUX is available as a single pack or twin-pack in a wide range of colours giving high gloss with excellent hardness and durability. AUTOLUX is the ideal all-purpose refinishes enamel, which can be air dried or low, baked. The company also supplies 2Pack auto-refinishes products to major industries in Nigeria. The Autolux Range includes the Solid and Metallic Paints, Primers, Varnish, and NC Putty. The Autobase range includes the Base and Acryl, Primers and Fillers, Clear and Hardeners, Slow and Hard Thinners in addition to other accessories. Wood Preservers and Finishes These are BERGERNOL Wood Preservatives and LIGNOLAC Wood Finishes respectively. BERGERNOL is noted for high quality performance in wood preservation, while LIGNOLAC is available to a wide variety of wood industries, from the roadside carpenters to corporate organizations, from simple to top of the line furniture and doors. This range incorporates Sanding Sealer, Lacquer Gloss, Satin and Matt, as well as Wood Stains. These brands are market leaders and they are known and popular in the trade and among the various customer groups. AFuture Assured Berger Paints will continue to pay special attention to the acquisition of technologically advanced production machines and embark on human capital development in order to cope with the changing and sophisticated taste of customers. + Berger Colour World: As a means of moving closer to the door steps of our consumers to deliver excellent customers services, Berger Colour world is opened in strategic locations across the country. Berger Colour world offers endless colour possibilitiesCorporate Profile Cont'd where customers can dream their choice of colours and have them produced instantly. + Technical Collaboration: Along the line of technical update and innovation drive, Berger Paints Nigeria Plc will continue to collaborate with experienced technical partners and world leaders in paint and coatings solutions. + Environment Friendly Products: Berger Paints would continue to embark on research and development activities that would facilitate introduction of environment friendly products which help in preserving the earth. Berger Paints Score Card + Firstpaints manufacturer to be established in Nigeria + First paints company to be quoted on The Nigerian Stock Exchange + First paints researcher to introduce textured coating named Texcote to the Nigeria market + First to develop, manufacture and supply coil-coating paint to Aluminum factories in Nigeria + First paints manufacturer to win NIS Award from SON for premi decorative products + First paints company to win The Nigerian Stock Exchange Merit Award + Firstto develop and supply Thermo Setting Acrylic paints to local industries + First to win National Merit for local raw materials utilization in the paints industry + First to develop troplicalised and environment friendly paint products to the Nigerian market + Firstto Introduce full process tamper-proof colour paint containers to the Nigeria market mm and market quality Quality Assurance Asa confirmation of our oath to clients; that we will exchange value and service for every Naira they part with, all Berger Paints containers come with tamper-proof hologram cover. Customers are strongly advised to watch out for this as a sign of our quality assurance. Marketing and Distribution The company’s marketing approach is guided by the principle that no matter how good or innovative its products are, they require capable people to professionally present them in a way that is devotedly customer-focused. This principle has successfully guided the company in hiring, training and developing its sales force to meet set objectives. Since most of the products are customer specific, the company keeps upgrading its production machinery, research and development and uses top quality raw materials. We distribute our products through a nationwide network of 16 depots and appointed agents (mini depots) spread across the country. oo 2014 Annual Report & AccountsCorporate Profile Cont'd LIST OF DEPOTS & COLOUR WORLD by fore a Aba 137, Aba/Owerti Rd., Umugasi — Aba, Abia State, 08102164868 Abuja Plot 748, Alexandria Crescent, Wuse, Abuja. FCT 08102164848 Akure Morrims House, opposite ‘A’ division police station, Oba__| 08102164870 ‘Adesida Road, Akure, Ondo State Benin 134, Murtala Mohammed Way, Benin City, Fdo State. 08102164840 Calabar | 14, Murtala Muhammed Way, Calabar, Cross River State. 08102164866 Ibadan | 1,Azeez Aina Street, Olusanya Bus Stop, Ring Road, Ibadan, | 08102164846 yo Siate. Horin Ajase.Ipo Road, Offa Garage, llorin, Kwara State. 08102164856 Jos 1A Constitution Road, Opposite Pirelli Tyres, Jos, Plateau | 08102164864 Kaduna | 1440, Kachia Road, Kaduna State 07033061176 kano 4, Ajasa Street, Off Civic Centre, Kano State. 08102164852 Yaba 4, Ojuelegba Road, Yaba, Lagos, Lagos State. 08102164811 Maiduguri] 105, Baga Road, Opposite Ashaka Cement Area Office, 08102164858 Maiduguri, Borno State Onitsha | 104, Awka Road, Onitsha, Anambra State. 08102164838 Per art 70, Trans Amadi Estate, Port Harcourt, Rivers State. 08102164859 Sokoto | 13, Ahmadu Bello Way, Sokoto, Sokoto State. 08102164854 Warri 89, Warti Eifurun Road, Warri, Delta State. 08102164842 BERGER COLOUR WORLD Abuja Corporate Office Plot 748, Alexandria Crescent, Wuse Il, Abuja Telephone: 08033097496 Berger Paints Premises 102 Oba Akran Avenue, Ikeja Industrial Estate, Ikeja., Lagos State. Telephone: 01 ~ 2805167/01-2805169 Lekki Customer care: +234 8102164585-6 O7OOBERGERPAINTS [0700237437724687 E-mail: customercare@bergerpaininig.com Website : www.bergerpaintsnig.com ‘entre Garent Plaza, KM 17/18 Lekki-Epe Expressway Igbo-Efon Bus Stop, Lekki, Lagos 08141374155, 08141374156 Registered Office Berger Paints Nigeria Plc 102, Oba Akran Avenue, Ikeja Industrial Estate PM.B. 21052, Ikeja, Lagos State, Nigeria BERGER Sy Contact Lines: 08102164562, 08102164806, 08102164848, Tel: 01-2805167, 01-2805169 O700BERGERPAINTS [07002374377246871 E-mail: customercare@bergerpaintnig.com Website: www.bergerpaintsnig.comBOARD PROFILE 1. DR. OLADIMEJI ALO, FCIPM, FCIArb- CHAIRMAN Dr. Alo, who holds a PhD degree in Industrial Sociology from University of Ife (Now Obafemi Awolowo University), is a scholar, a management consultant and a corporate governance enthusiast. His career in academics saw him serving as lecturer/visiting lecturer at the University of Ife, University of Benin and University of California, Los Angeles, USA. Dr. Alo has had a distinguished career as a University Lecturer, a Management Consultant and a Corporate Executive. He started his consulting career with Price Waterhouse Associates in 1985, from where he moved on to Coopers & Lybrand Associates in 1987. He rose through the ranks to become an Executive Director ofthat firm in 1990. Dr. Alo became the Managing Director/Chief Executive Officer of Financial Institutions Training Centre, a leading training and consulting firm owned by Nigeria banks in 1996, where he contributed actively to the series of reforms in the Nigerian banking sector over a period of thirteen years. He is a fellow of the Chartered Institute of Personnel Management of Nigeria (CIPMN).. He is currently, the Managing Director/CEO of Excel Professional Services Limited, a foremost management consulting firm in Nigeria; and a non-executive director of ARM Life Plc. He joined the board on the 11 December 2012 and was appointed the Chairman on 17 July 2014. 2. ABIALLISON AYIDA~NON EXECUTIVE DIRECTOR Mr Ayida holds a Bachelors’ degree in Economics from the University of Minnesota, USA and a Masters’ degree in Economics from Pennsylvania State University, USA. He has over 25 years experience in the Banking, Insurance, Manufacturing and Professional Consulting Industries in the United Kingdom, United States and Nigeria. He is currently the Managing Partner for Vail Woodward Associates, International Business development and Public-Private Partnership Consultants. He was appointed a Non Executive Director on 14 December 1999. 3. CHIEF MUSADANJUMA~—NON EXECUTIVE DIRECTOR Chief Danjuma is an articulate lawyer and a corporate icon with great wealth of experience in business management and administration. Chief Danjuma holds a Bachelors degree in Law from Ahmadu Bello. University, Zaria.He is currently the Executive Chairman, NAL/COMET Shipping group which comprises of Five Star Logistics Limited, Comet Shipping Agencies Nigeria Limited, Best Trade Nigeria Limited and Nigeria America Line Limited. He is a pioneer of the Chief Executive Programme at Lagos Business School. He was appointed as a Non Executive Director on 14 September 2000. 4, NELSON .C. NWEKE-NON EXECUTIVE DIRECTOR Mr Nweke is a fellow of the Chartered Institute of Bankers of Nigeria {CIBN) and an Associate of Chartered Institute of StockBrokers of Nigeria. He was an executive director at Intercontinental Bank Plc (Now Access Bank Plc). He is anon executive director for Premium, Pension Limited and Intercontinental Homes, Savings and Loan. He is currently the Managing Director, Neville Nigeria Limited. Mr Nweke holds a Bachelor degree in Political Science and MSc in Industrial Relations from University of Ibadan. He was appointed as a non executive director/independent director on 11 December 2012. 5, OLUWOLE.O. ABEGUNDE- NON EXECUTIVE DIRECTOR Mr Abegunde holds a Bachelor degree in Agricultural Economics from University of Ibadan and MBA from University of llorin. He is a distinguished and respected authority in Stock Broking. He is a fellow ofthe Chartered Institute of Stockbrokers and an Authorized Dealing Clerk on the Nigerian Stock Exchange. Mr Abegunde is the Group Managing Director/Chief Executive Officer of Meristem Securities Limited and he is a director on the boards of FTN Cocoa Processors Plc, E-Transact International Plc and Integrated Diaries Limited. He was appointed a National Council member of the Nigerian Stock Exchange in 2014. He was appointed asanon executive director on 20 March 2014. 6. RAJ S.MANGTANI (Indian) - NON EXECUTIVE DIRECTOR MrMangtani is an astute businessman and holds a Bachelor degree in Commerce from University of Bombay. He isa member of the Nigeria Institute of Management and Indian Professionals Association of Nigeria. Raj is the Managing Director of Emychem Limited, a leading chemical marketing company. He also serves on the board of notable manufacturing companies as Metcem Limited and Zaika Foods 3 2014 Annual 3.) Report & Accountsw& BOARD PROFILE Cont'd Ingredient Limited as non-executive director He joined the board as a non executive director on 10 September, 2002 as an Alternate director, and was appointed a non executive director on 17 July 2014 inhis own right. 7. ADEKUNLE OLOWOKANDE~NON EXECUTIVE DIRECTOR Mr. Olowokande is a Chartered Accountant. He holds an MBA in International Finance from London Metropolitan University. He had served as Management Accountant to leading professional services firm in the United Kingdom and for a couple of years he functioned as the Head, Strategy and Risk Management for Berger Paints Nigeria Plc. He was appointed as non executive director on 17 July 2014. 8. PATRICK NNAMDI BURUCHE- NON EXECUTIVE DIRECTOR. Engr. Buruche is a graduate of Civil Engineering from Nnamdi Azikiwe University, Awka, He served in various capacities with ‘Anambra State Water Corporation. He is a member of the Nigeria Society of Engineers (NSE) and a registered Engineer with the Council for the Regulation of Engineering in Nigeria (COREN). Engr. Buruche is currently the Managing Director of PANGOC Global Services Limited, a construction company which has successfully ‘executed many projects in the South Eastern part of Nigeria. He was appointed as non executive director on 17 July 2014. 9. SANJAY DATWANI (British) NON EXECUTIVE DIRECTOR, Mr Sanjay Datwani graduated from Boston University, Massachusetts, USA with a Bachelor degree in Business Administration. He has over 18 years experience in International Trade, Finance and Banking. He is the Managing Director of Clayton Finance Limited, a company which specializes in the export of raw materials for industries to the West African region. He also works as a property consultant and developer in the United Kingdom. Mr Datwani was appointed as a non executive director on 11December 2014.TOR NYGARD (Norwegian) -EXECUTIVE DIRECTOR ‘Mr. Nygard is a consummate professional with 30 years experience spanning Manufacturing and Oil & Gas sectors in the United State of ‘America, Europe and Africa. He holds Bachelor degree and MBA in Electrical Engineering, University of South Dakota, USA. He joined the company on 2 November 2009 as the Deputy Managing Director (Designate) and was appointed an executive director of the company on 14 December 2010 and later appointed asthe Managing Director on 24 January 2013 He was disengaged on 31 January 2015. 10. PETER FOLIKWE - EXECUTIVE DIRECTOR Mr. Folikwe holds a Bachelor of Science (Hons) degree in Marketing from the University of Nigeria, Nsukka, and Masters in Business Administration (MBA) from the University of Benin. He has garnered 24 years of experience in Marketing, Sales/Distribution and General Management; having worked in a number of top rated companies in Nigeria across a number of sectors in varied capacities. He brings to the board a great depth of knowledge and experience in manufacturing, telecommunications and FMCG environments. He is a Fellow of the Institute of Direct Marketing, a Member of the Nigeria Institute of Marketing, Alumnus of Lagos Business School and ‘Alumnus of Cranfield University Bedford, UK. He was appointed on 10 March 2015 and resumed on 7 April 2015. 11, PHEOLACAULCRICK & CO - COMPANY SECRETARY Mrs. Caulcrick, the principal partner of the firm, holds Bachelor degree in Law from Ahmadu Bello University, Zaria and two Masters degrees in Law and International Law and Diplomacy from University of Lagos. She has over 30 year's cognate experience as a Solicitor and Advocate of the Supreme Court of Nigeria. She is a company secretary of repute and passionate about corporate governance. Pheola Caulcrick & Co was appointed as the outsourced Company Secretary to the company on 30 June 2005. The firm has given notice to disengage from the company after 10 years of meritorious service, effective 30 June 2015. is 2014 Annual 5.) Report & AccountsDistinguished Shareholders, Fellow Directors, Ladies and Gentlemen. Introduction Itis with great pleasure that | welcome you all to the 55" Annual General Meeting of our great Company, Berger Paints Nigeria Ple. This occasion affords me an opportunity to present to you the Annual Reports and Financial Statements of our dear company for the year ended 31 December 2014. To place this report in proper perspective, permit me to briefly review some macro and micro BERGER Sy CHAIRMAN’S STATEMENT economic developments of the past year, which defined and influenced the environment within which we operated The International Scene The growth of the global economy was rather slow in 2014. Itgrew by 2.6%, only 0.1% over to the growth record of 2.5% for 2013. Across the major economic blocks, the trends were divergent. The economies of the US and the United Kingdom continued their slow recovery from recession, while Japan and a number of countries in the Euro area struggled, contributing majorly to the downward revision of the growth forecast for that year. China’s record growth rate prior to 2014 also slowed down last year. This trend is expected to continue for the next couple of years. Interestingly, a number of low-income- earning countries achieved impressive GDP growth rate of about 6% in 2014. This occurred on the back of rising public investment, strong capital inflows, good harvest, and improving security conditions in anumber of conflict countries. The Nigerian Business Environment Nigeria rebased its GDP in April 2014, That exercise and its outcome projected Nigeria to the world as the county with the largest economy in Africa. The announcement brought major psychological boost which reflected in the renewed interest shown by foreign investors in the economy by way of direct foreign investment (DF). In spite of this positive development, the country continued to struggle with the challenges of high cost of credit, erratic power supply, insecurity in the North-Eastern part of the country and major infrastructural deficiencies. All of these forces hampered productivity and consumer spendChi acrossall sectors in the year under reference. Despite those challenges, the economy kept pace with projections on some fundamental indicators like inflation and GDP growth in 2014. Inflation stood between the 7.7% and 8.5% threshold throughout the year, while Gross Domestic Product (GDP) growth rate hovered around the projected threshold of 6.5%. In the last quarter of 2014, the economy experienced shocks arising from developments in the global economy. These shocks exerted negative impact on key macroeconomic indicators. External reserves which opened the year at $43.5billion, closed at less than $35billion. Exchange rate opened the year at the official window at ¥155 to a dollar and closed at 8167 to the dollar by year end, The economy is currently experiencing a major shock from sustained drop. in international oil prices from $114/barrel in January 2014 to $60 at the end of the year. This led to an adjustment of the country’s official oil price benchmark to $53 per barrel from $77.5 per barrel originally proposed for the 2015 Federal Government Budget. The insurgency in the North Eastern part of Nigeria continued unabated, causing severe disruptions to social and economic activities in the area. Similarly, incidents of oil pipeline vandalism and theft of crude oil had been on the increase, thereby denying the country revenue that it sorely needs. It is our expectation that the government would continue to focus on job creation and other developmental activities that would shift the attention of those involved in these criminal activities to more productive ventures. These would, in turn, improve the disposable income of the average consumer and grow the economy. Manufacturing Sector Itwas a mixed grill for the manufacturing sector in 2014. The sector became the major driver of economic growth in Nigeria, as capacity utilization increased from 46.3% recorded in the first half of 2014 to 52.7% in the 2nd half of 2014. The sector also recorded 22 per cent growth in 2014, as against the 14 per cent it recorded in 2013. Itis important to note that the growth recorded by the manufacturing sector, within the period under review, accounted for one third of the total growth in the economy for that year, Paints Industry In line with the growth of the construction industry, the International Paints and Printing Ink Council predicted a 7.4% growth rate for demand for Paints and Coatings between 2013 and 2014. The Chemical and Paints sector is expected to further ride on the back of the growth of the economy and the building and construction industry to record better performance in the years to come. Company Performance In spite of the national economic challenges detailed above, our Company managed to achieve modest growth, driven by our resolve and determination to overcome the constraints, within the operating environment. 1 am pleased to inform you that our sales revenue grew from N2.708 billion in 2013 to N3.083 billion in 2014, representing a 13.8% increase. By contrast, our Profit Before Tax declined from N356 million in 2013 to N249 million in 2014. This development arose from two major sources. First, some extra-ordinary items which boosted our income by 8200 million in 2013 were not available in 2014. Secondly, we incurred some one-off corporate expenses in 2014, which raised our 2014 Annual Report & Accountsexpenditure profile that year, which was relirement package to the four retired directors approved by the AGM, The Board is confident that some of the major structural changes and initiatives taken in the last fifteen months would begin to bear fruits and show positive impact on our performance beginning from 2015. Major Ini resin 2014 | must state that the Board devoted a considerable amount of its time in 2014 working with Management on the following initiatives: 1. Strengthening managerial capacity, while implementing the recommendations of a major organizational structure review and manpower audit commissioned by the Board. A total of ten new managers were recruited, 2. Major Re-Structuring of the Sales and Marketing functions: Our Route to Market (RTM) is now led by three new teams of competent professionals organized into (a) Institutional Sales & Projects (b) Channel Sales and (c) Marketing — to better engage the different segments of our markets and deliver on our value propositions. 3. Diligent Pursuit of the Plant Modemization Project: We are on track to deliver to Berger Paints the first automated paint manufacturing plant in Sub-Sahara Africa. We are doing all that is possible to commission the new plant this year. When operational, the new plant will reduce our production costs, reduce response time, and improve our product quality. Chairman's Statement Cont'd 4. Product Quality Improvement: We invested in up-grading our laboratories and boosted the human capacity of our technical team ~ all with a view to boosting the quality of our products. 5. Development of a robust risk management framework: A new Enterprise Management Framework is now in place in Berger Paints. A comprehensive risk management manual was approved by the Board and is now being implemented by Management religiously. We expect this to improve operational efficiency, effectiveness and control going forward BOARD CHANGES The year 2014 could rightly be described as a watershed in the life of our great Company. It was the year that four of our outstanding leaders completed their terms of service on the Board and were replaced by some other distinguished professionals and business leaders. | am pleased to present to you five new Directors who joined the Board recently. They are: RAJ S. MANGTANI (Indian) — Non-Exect Director Mr. Mangtani is an astute businessman with vast experience in the marketing and manufacturing of chemicals and allied products in Nigeria. His depth of experience in the chemicals sector has been, and will continue to be beneficial to the company. e ADEKUNLE OLOWOKANDE - Non- Executive Director Mr. Olowokande is a Chartered Accountant. He holds an MBA in International Finance from London Metropolitan University. His experience in Strategy and Risk Management,Chairman’s Statement Cont'd as well as Management Accounting will add immense value to the board PATRICK NNAMDI Executive Director Engr. Buruche is a member of the Nigeria Society of Engineers (NSE) and a registered Engineer with the Council for the Regulation of Engineering in Nigeria (COREN).He brings on board his vast experience in Construction and Project Management. BURUCHE — Non- SANJAY DATWANI (British) - Non-Executive Director Mr Sanjay Datwani brings on board over 18 years experience in International Trade, Finance and Banking, as well as international experience in export of raw materials for Industry to West African region and property development. PETER BABABUNMI FOLIKWE ~ Managing Director Mr. Folikwe brings on board about 24 years experience garnered in Marketing, Sales/Distribution and General Management; having worked in a number of top rated companies in Nigeria across a number of sectors in varied capacities. He brings with him, a great depth of knowledge and experience in manufacturing, telecommunications and FMCG environments. DIVIDEND As a demonstration of the confidence it has in the future of the Company and to reward shareholders for their investment, the Board is recommending for your approval the sum of 217, 367, 585.25 to be paid out as dividend. This works out at 75 kobo per share and represents a 7.1% increase over the 70 kobo that had been paid in the last four years. This gesture is meant to sign-post the improvement we foresee in the horizon and to challenge all stakeholders to raise the bar to make that future areality. CLOSING In concluding my remarks, | would like to place on record my deep appreciation to our Immediate Past Chairman, Mr. Clement Olowokande, who steered the ship of this great company for 13 years as Chairman and who has continued to be a great mentor. Equally, | would like to thank Dr. Raymond Obieri, Engr. Olawale Akinpelu, Mr. Balram Datwani, all of whom worked on the Board with Mr. Clement Olowokande to create the legacy we are all proud of today. I also thank my colleagues on the Board, whose commitment and support had made my first year as Chairman a fruitful one. | am confident that, working together, we shall deliver on the promise which the new Berger Paints Nigeria Plc represents. Finally, | would like to thank our shareholders, our distributors, our suppliers, our technical partners and especially our customers. for keeping faith with us in and out of season. Special thanks must also go to the Management and staff of our great Company, whose hard work, commitment and willingness to sacrifice for the good of the Company continues to give us great hope for the future. Ours is a Company built to last. Together, we shall make all the difference in Nigeria's industrial landscape. thank you for your kind attention. Oladimeji Alo, PhD Chairman 2014 Annual Report & Accountsey NOTICE OF MEETING NOTICE IS HEREBY GIVEN that the Fifty-Fifth Annual General Meeting of Berger Paints Nigeria Ple will be held at NECA Hall, Plot A2 Hakeem Balogun Street, Central Business District, Alausa, Ikeja, Lagos on Tuesday, 21 July 2015 at 11:00 a.m for the following purposes: 1. To lay before the meeting the Audited Financial Statements for the year ended 31 December 2014, the reports of the Directors, the Auditors and the Audit Committee thereon. To declare a dividend To re-elect Directors To authorize the Directors to fix the remuneration of the Auditors. To elect shareholders representatives to the Audit Committee. OREN Special Business 6. Toapprove the remuneration of the Directors Notes ()) Proxies ‘A member of the company entitled to attend and vote at the meeting is entitled to appoint a proxy on his or her behalf. A proxy need not also be a member of the company. A form of proxy is attached to the Annual Report and Accounts and if itis to be valid for the purpose of the meeting, it must be completed and deposited with the Registrars, Meristem Registrars Limited at 213, Herbert Macaulay Way, Adekunle, Yaba, Lagos State not less than 48 hours before the time of the meeting. To be effective, the proxy form must be duly stamped and signed. (ii) Closure of Register of Members and Transfer Books The Register of Members and Transfer Books of the Company will be closed from Monday, 15 to Wednesday, 17 June 2015 (both days inclusive) for the purpose of preparing an up-to-date Register. Unclaimed Share Certificates and Dividend Warrants All Shareholders are hereby informed that the Registrars of the Company are holding share certificates and dividend warrants which have been returned by the Post Office as “unclaimed”. Some dividend warrants sent to Shareholders’ registered addresses or their bankers too are yet to be presented for payment or returned to the Registrars of the company for revalidation. (iiiNOTICE OF MEETING Cont'd (iv) Nomination for Audit Committee In accordance with Section 359 (5) of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, 2004, any member may nominate a shareholder as a member of the Audit Committee, by giving notice in writing, of such nomination to reach the Company Secretary at least 21 days before the Annual General Meeting. (V) Dividend The Board of Directors of the Company has recommended a dividend of N217, 367, 585.25 that is 75 kobo per ordinary share of 50 kobo, which is payable less withholding tax. If the recommendation is approved at the forthcoming Annual General Meeting, the warrants will be posted on 23" July, 2015 to shareholders, whose names appear on the Company’s Register of members at close of business on 17 June, 2015. (vi) Notice is hereby given to all shareholders to open bank accounts and CSCS accounts for the faster receipt of dividends. Details of such accounts should be sent to the Registrars of the company. A detachable e-dividend/CSCS form is attached to the Annual Report and Accounts. Dated this 10 March 2015 By Order of the Board we PHEOLACAULCRICK & CO Company Secretary FRC/2013/NBA/00000004527 102 Oba Akran Avenue Ikeja, Lagos State. 2014 Annual Report & Accounts& REPORT OF THE DIRECTORS The Directors present to the distinguished members of the company this Annual Report together with the audited Financial Statements of the Company for the year ended 31 December 2014. 1. LEGALSTATUS The Company was incorporated in Nigeria as a Private Limited Liability Company on 9 January 1959 and was converted to a Public Limited Liability Company in 1973. The ‘Company's shares were quoted on The Nigerian Stock Exchange with effect from 14 March 1974. Its former Subsidiary Company, Robbialac Nigeria Limited, was incorporated in Nigeria as a Private Limited Liability Company in June 1997 and commenced business in October 1997. Robbialac Nigeria Limited has been voluntarily wound up effective 18 December 2013 Anew subsidiary Lewis Berger Paints Ghana Limited was incorporated in Ghana with effect from 22 October 2013 asa private limited liability company but has not commenced business. 2. PRINCIPAL ACTIVITIES The principal activities of the group remained the manufacturing and marketing of paints and allied products. 3. The summary of the group results is as follows: In thousands of naira Revenue 3,082,930 2,710,986 Results from operating activities 266,217 298,064 Profit before income tax 249,258 342,767 Profit for the year 148,808 257,580 Total comprehensive income for the year 181,834 324,185 4. DIVIDEND The Directors are pleased to recommend to shareholders the payment of a dividend of 8217, 367, 585.25 that is, 75kobo per 50kobo share for the 2014 financial year subject to the approval of the Annual General Meeting. The dividend is payable less withholding tax on 23 July 2015. 5. BOARD OF DIRECTORS i) Listof Directors The list of the current Directors of the company is as published in this Annual Report on page3 ii) Directors retiring by rotation The Directors retiring by rotation in accordance with the Company's Memorandum and BERGERiv) vy) REPORT OF THE DIRECTORS Cont'd ed Articles of Association are: 1. DrOladimeji Alo 2. Mr Abi Ayida 3. MrNelson Nweke Who, being eligible offer themselves for re-election The following Directors who are new Directors shall be re-elected at the meeting in accordance with Articles 95 ofthe Company's Article of Association: Mr Raj Mangtani ‘Mr Kunle Olowokande Engr Patrick Buruche Mr Sanjay Datwani MrPeter Folikwe gaeno Board Meetings The Board met 7 times in 2014 Record of Directors’ Attendance at Meetings In compliance with Section 258(2) of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, 2004, the Record of Directors’ attendance at Board meetingsis exhibited for inspection at this meeting. Itis also summarized hereunder: MrR.C. Obien | ~ | _~ v 7 7 = = oF Dr. Oladimei Alo | ¥ |” 7 v 7 7 7 77 pee Chief Musa v |x x v v 7 7 3/7 Mi Nelson Nweke | ¥_| 7 7 7 7 7 7 77 10 | Mr Kunle a = ‘Appointed at] 7 7 27 Tz [Me Tor Nygard | 7 | 7 v v> 7 7 77 3 2014 Annual 23) Report & Accountsvi) Directors’ interest in Shares as at 31 December 2014 The interests of each Director in shares of the company as recorded in the Register of Members and/or notified by the Directors for the purpose of Section 275 of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, 2004, and disclosed in accordance with the Listing Rules of Nigerian Stock Exchange are as follows: REPORT OF THE DIRECTORS Cont'd 1 IMR. OLOWOKANDE CLEMENT Retired] 10,141,804) 9,402,294 |ADEKUNLE {as at July 2014)| 2 __|MR. AYIDA ABI 625,601 625,601 625,601 3_ [CHIEF DANJUMA MUSA 3,442,372 3,442,372 | _ 3,442,372 4 JMR. AKINPELU OLAWALE Retired 198, 173 198,173, lOYETOLA {as at July 2014) 5 JMR. RAYMOND C. OBIERI Retired Nil NIL] {as at July 2014) 6 MR. TOR NYGARD 3,032,586 3,032,586 2,140,268 {as at Jan.2015) 7 JMR. BALRAM D. DATWANI Retired Nil NIL {as at July 2014)} 8 _|DR. OLADIMEJ| ALO 1,500,000 1,500,000 737,638 9_ [MR NELSON NWEKE 734,320 234,320 234,320 10_[MR. OLUWOLE O. ABEGUNDE NIL NIL T1_|MR. RAJ MANGTANI NIL NIL 12) JMR. ADEKUNLE O. 197,965 197,965 JOLOWOKANDE 13_[ENGR- PATRICK BURUCHE 37,350 56,900 14_[MR. SANJAY DATWANI NIL NIL Indirect Interest: BERGER wy 3,031,840 3,031,840 CAFOA NIGERIA LIMITED | (25 at july 2014) | (as at july 2014) | 32031-8409 3,703,426 3,703,426 JCAF BUSINESS EDUCATION | (.. at july 2014) | (as at July 2014) | _3:703426 HARMONY TRUST & INVT. 3,060,906 3,060,906 aene CO. LTD. {as at July 2014) | (as at July 2014)7 REPORT OF THE DIRECTORS Cont'd | Directors’ Interest in Contracts Mr. Raj Mangtani (formerly Alternate to B.D Datwani), now a Non Executive Director through Emychem Nigeria Limited supplied raw materials to the company. Directors’ Responsibil The Directors are responsible for the preparation of Financial Statements which give a true and fair view of the state of affairs of the company, at the end of each financial year and, of the profit or loss for that year, in compliance with the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, 2004. Inso doing, the Directors ensure that: + Proper accounting records are kept which disclose with reasonable accuracy, the financial position of the company and which ensure that Financial Statements comply with the requirements of Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, 2004, + Appropriate internal control procedures are established which, as far as is reasonably possible, safeguard the assets of the company, prevent and detect fraud and, other irregularities. + Applicable accounting standards are followed. + Suitable accounting policies are adopted, consistently applied and supported by reasonable judgments and estimates. + The Financial Statements are prepared on a going concern basis, unless itis presumed that the company will not continue in business PROPERTY PLANT AND EQUIPMENT Information relating to changes in property, plant and equipment during the year under review is disclosed in note 11 on page 71 - 72. In the opinion of the Directors, the fair value of the Company's properties is not substantially less than the value shown in the Financial Statements. CORPORATE GOVERNANCE REPORT Berger Paints is committed to adherence to highest ethical standards and best practices. The Board is actively involved in the running of the Company. The Directors are involved among other things, in keeping proper accounting records which disclose with reasonable accuracy and transparency at anytime, the financial status of the Company and ensure that the accounts comply with the relevant provisions ofthe laws. The Board is also responsible for safeguarding the assets of the Company by taking reasonable steps for the prevention of and detection of fraud and other irregularities. To this end, the company has a code of ethics subscribed to by all Board members, Al Staff, consultants, Audit Committee members and people who do business with the Company. The Board encourages whistle blowing and all reported cases are investigated while the whistle blower is protected Our whistle blowing policy has been framed and is on display in our various offices. Berger Paints Nigeria Plc conducts its business with integrity and diligence and with total 2014 Annual Report & AccountsBERGER Sy REPORT OF THE DIRECTORS Cont'd consideration for the interest of the shareholders and other stakeholders. The Company has a policy on dealings in the Company's Securities which form part of the ‘Company's Code of Conduct and Ethics subscribed to by all Directors, staff, consultants and AuditCommittee Members. SECURITIES (SHARES) TRADING POLICY Objective: The objective of this policy is to prevent insider dealings on the company's securities by th Directors, the Audit Committee, Members of Staff, Consultants and Advisers to the company or persons who may be connected tothem. Itis aimed at protecting investors and the public from abuse arising from the use of yet to be disclosed price sensitive information by those closely connected with the company to trade in the company’s securities to the disadvantage of other investors and the public Policy guidelines: 1. Director, staffor consultants to the company are not allowed to trade in the securities of the company before any price sensitive information is disclosed to the relevant Regulatory authorities and specifically to the Nigerian Stock Exchange and the public. Price sensitive information is information likely to affect the financial position of the company. The following are considered to be connected to the Directors, members of the Audit Committee, managerial staff and Consultants and Advisers of the company: a. Employees b. Business Associates and Partners cc. Family d. Friends Sensitive information includes but is not limited to the following: a. Changes in the Directorate of the Issuer; b. — Thedeath, resignation, dismissal or appointment of a principal officer; ©. Changein the Accounting year end; d. Annual and Interim Results or any recommendation or decision that dividends or scrip issues will orwill not be made. fe. Profitwarnings ora change in the financial forecast or expectation; f. Proposed capital raising or restructuring exercise or changes in the capital structure. 26Corporate Profile Cont'd eI & Giving or receiving a notice of intention to make a takeover or mergers, or acquisitions ‘ortender offers or divestments; h. Any proposed change in the business model or general character or nature of the business ofthe company or of the group; 1. Major new developments in the issuer’s sphere of activities including major new products, contract awards and expansion plans. j. Any change in voting control or in beneficial ownership of the securities carrying voting control k. Items of unusual ornon-recurrent nature I. Any proposed alteration of the Memorandum or Articles of Association; m. Any other information necessary to enable shareholders to appraise the position of the ‘company and to avoid the establishment of a false market in the shares of the company. v. To achieve the aims and objective of this policy, the company shall enter into a confidentiality Agreement with its consultants and Advisers not to disclose or use any price sensitive information that has not been made available to the public in trading with the company's securities during the closed period. vi. The Director's, Staff, Consultants and adviser are made aware of the existence of this policy. a. Closed Period for the purpose of this policy is 21 days before the Board meeting where any of the price sensitive information would be discussed. ‘b. _ Closed Period is defined as the period when persons covered by this policy are precluded from trading in the securities of the company. vii, a, Openperiod forthe purpose of this is 3 days after the meeting where the price sensitive information has been made available to the Nigerian Stock Exchange and the public. ‘b. Open period is defined as the period when persons covered by this policy are free totradein the securities of the Company ix. The Directors have a duty to disclose to the Nigerian Stock Exchange their dealings in the ‘company’s securities. The Directors shall inform the company secretary of any such dealing on the company’s securities and send details of the transactions to the company secretary for onward transmission to the Nigerian Stock Exchange whenever required by the Exchange. x. The policy forms part of the Company's Code of Conduct and Ethics and was approved by the Board of Directors on the 10" of March 2015. Signed: Dr. Oladimeji Alo, Ph.D Chairman, Board of Directors We hereby confirm that no Director tradled in the securities of the company within the closed period 2014 Annual Report & Accounts) i REPORT OF THE DIRECTORS Cont'd COMPOSITION OF THE BOARD During the year under review, the company was managed by a Board of thirteen Directors, consisting of twelve Non-Executive Directors which included the Chairman and one Executive Director. Four of the Non Executive Directors retired on 17 July 2014. BOARD COMMITTEES In conformity with the Code of Best Practices in Corporate Governance, the under mentioned Committees exist Members Attendance at Enterprise Risk Management Committee Meetings in 2014 the T | Dr. Oladimeji Alo | Chairman v 7D Committee |) Mir, Abi Ayida Member ase ee Met once | | inthe year | 3) Mr Raj Mangtani | Member v in andes 4 | Mr Nelson Nwoke | Member v TA review Members Attendance at Finance and General Purpose Committee Meetings in 2014 tn T | Mr Abi Ayida Chairman | + 7 7 3 Commitee [2] Chet Masa Danjuma—| Member x 7 7 3 Met 3 times [3] Mar Raj Mangiant Member 7 7 % IB inthe year use" [Be RC. Obier Member 7 x Retired TS ceview [5 Mr Kunle Oowokande | Member} Not yet_] Notyet 7 oe appointed lappointed Nir Wale Abegunde [Member] Sar, | x % uF 7 Mt Neon Nweke | Member x x 7 Ts Members Attendance at Establishment, Governance & Remuneration Committee Meetings In 2014 the 1 [Dr RC Obie Chairman 7 Ez Committee | 2] Dr. Oladimeyi Alo Member 7 7 We met 2 times | 7) Ne OO. Akinpeta Member 7 7] aE in the year 7 —Y cher usa Danjuma | Member 7 7] aE review 5 ‘Mr. Nelson Nweke ‘Member | v v 2/2 BERGER bhREPORT OF THE DIRECTORS Cont'd ' / The Committees were reconstituted in December 2014 after the retirement of some Non Executive Directors. Dr Oladimeji Alo has ceased to be a member of Board Committees since he was appointed Chairman of the Board on 17 July 2014. AUDIT COMMITTEE In accordance with the provisions of section 359(4) Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, 2004, the Audit Committee comprises three Non-Executive Directors and three Shareholders representatives. The Committee met 3 times in 2014. The Committee, in the conduct of its affairs as stipulated in Section 359 (6) of Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, 2004, reviewed the overall risk management and control systems, financial reporting procedures and standards of business conduct of the company. In the performance of their duties, the members have access to both the Internal Audit Department and the External Auditors. Members Attendance at Audit Committee Meetings in 2014 1 | Mr. Chibuzor Eke v v v 33 2__ | Hon. Anthony Odebiyi v v v 38 3 | Mrs. Mary Shofolahan v v v 3B 4_| Mr. 0.0, Akinpelu v Retired july 2014 = 1B 5 | Mr. Abi Ayida v v x 28 6 _| Chief Musa Danjuma x v v 28 7 | Mr. Nelson Nweke ‘Appointed 20 v x 173 March 2014 to the Committee 9. | DONATIONS AND GIFTS. Donations made to charitable societies and other organizations during the year are stated below: 2014 Annual Report & AccountsREPORT OF THE DIRECTORS Cont'd 2014 The Nigeria Police Force Re-decoration | Trans Amadi, Port- 87,006.01 Harcourt, River State ‘Gbagada General Hospital Painting ‘Gbagada, Lagos State_| 144,297.30 Tunji Adebayo Orphanage Cash Donation | Agege, Lagos State 00,000.00 Foundation ‘Augustine University Cash Donation | Epe, Lagos State 700,000.00 Ephraim Consulting Donation Lagos 20,000.00 Nigeria Police Force, Area F” Re-decoration | Ikeja, Lagos 426,243.72 New Era Foundation Youth Ibeju- Lekki, Lagos 110,210.26 Empowerment ‘Old People Home Food items ‘Asaba, Delta State 700,000.00 Donation Lagos Island Maternity Paints donation | Lagos Island, Lagos | 626,771.94 State Toyola College, Ibadan School Tbadan, Oyo State 255,476.77 beautification TOTAL 1,970,000.00 2013 Nigeria Society for the Blind Donation Oshodi, Lagos: 120,843.96 Tagos State Metropolitan Government | Community Development | Mushin, Yaba, Agege, | 1,989,156.24 Slum Beautification Project Bariga, Ajegunle SOS Children Village Donation T5010, Lagos 700,000.00 210,000.20 The Company in compliance with Section 38 (2) of the Companies & Allied Matters Act CAP C.20, Laws of the Federation of Nigeria, 2004, did not make any donations to any Political Party, Political Association or for any political purpose in the year under review. 10. Respect For Law Berger Paints Nigeria Plc ensures that its existence and operations remain within the Law. The Company's employees are required to comply and respect the Laws and Regulations of Nigeria. The company being a listed company strives to comply with post-listing requirements of the Nigerian Stock Exchange and the Rules and Regulations of the Securities and Exchange Commission including the Code of Corporate Governance. BERGERWW. 12. 13. 14, 15. REPORT OF THE DIRECTORS Cont'd Role In The Larger Society Berger Paints Nigeria Plc remains undisputedly, a leading paints manufacturer in this country, and as an integral part of the Nigerian Society, the company plays numerous roles. Apart from being a major employer of labour, Berger Paints is a supplier, a customer, a partner and also a willing and uncompromising taxpayer. In doing all these, the company impacts on the society in no small way. The Company's relationship with the shareholders and stakeholders is cordial and objective. Integrity The Company strives to maintain a very high standard of integrity in its business and policies. Accordingly, we condemn and do not give, receive directly or otherwise, any bribes or gratifications or obtain improper advantages for any business or financial gains. It is our policy to avoid anything that will impact negatively on our operations. Quality Policy & Innovation Berger Paints remains a forward-looking organization, which places premium on quality products, The Company is committed to developing and improving quality through the use of identified processes, which are constantly managed and monitored to meet, approved international and local standards. These carefully monitored processes make it imperative that only high quality paints are produced and marketed by the Company. In recognition of the above and more, the Company was awarded the latest International Standard Certification — ISO 9001-2008. Factory Automation The planned modernization of the Company's factory which is being pursued with vigour will result in improved quality, cost reduction and better response time. Post Balance Sheet Events There are no significant post balance sheet events which have not been provided for in these accounts. Risk Management Policy The objectives of the company’s risk management policy are; To ensure protection of shareholders’ value through the establishment of int Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting all risk To provide clear and strong basis for informed decision making at all levels of the organization. To continually strive towards strengthening the Risk Management System through continuous learning and improvement. | 2014 Annual 31) Report & Accountswe REPORT OF THE DIRECTORS Cont'd 16. 17. BERGER Sy Safety and Environmental Pol Berger Paints Nigeria Plc. ensures the safety of members of staff, contractors and visitors by: Ensuring that plant equipment are adequately maintained to prevent accidents. The use of engineering methods to control hazards inherent in our operations and where this is not adequate, Personal Protective Equipment is provided and usage is enforced. Ensuring that safe work procedures are followed. Ensuring that jobs are awarded only to contractors with laudable safety performance. Ensuring that our working environment is clean, tidy and conducive. Implementation of an effective Emergency Management Program so as to minimize adverse impacton human and the environment, in case of any form of emergency. The continuous training of employees to create safety consciousness. The safety of our employees is the concern of the company. The Company has taken every precaution to provide a safe workplace. There is a zero tolerance policy for workplace violence, Our entire manufacturing operations and installations are regularly inspected and certified by both state and federal regulatory agencies. Accidents are investigated, documented and corrective actions put in place to forestall future occurrence. The company has developed a number of policies to promote safety and minimize accidents in the workplace. Such policies include the "No Smoking Policy’, Violence in the Workplace Prevention Policy and Workplace Safety Rules. Berger Paints also complies with all relevant environmental laws and regulations. We strive to minimize or eliminate environmental impacts associated with our activities by: The use of modern technology and expertise to reduce environmental pollution Conservation of energy and water in a cost effective manner Ensuring that wastes are properly disposed of or recycled The assessment of the adverse impact of our raw materials or new products on both humans and the environment Environmental Assessment Part of the fulfillment of our environmental friendliness policy is to conduct a periodic Environmental Audit to monitor the Significant Environmental Aspects associated with our operation and put in place control measures that will minimize or eliminate their adverse impact on the environment and the community as a whole. ‘Company’s Distributors & Trade Partners The company has numerous distributors including mini-depot operators and trade partners all over the country who have contributed to the recorded turnover and to whom the company remains grateful. The Mini-Depots are manned by professionals such as architects, builders etc. The major distributors and trade partners include but are not limited tothe following:REPORT OF THE DIRECTORS Cont'd ji tagos Faye Adesanya Sons [s8, Aden Adele, Lagos and (08033889166 le [Calemana Enterprises 34, Chit Natfe Suet, Of Babs Animashaun Sues Lagos. 8053131470 5 [Honeywelth Nig. ed Suite 6, Nahco Complex WLM. Alpor. Lagos (08055413140 a ub’ Invests Lid ps, Glover Road, Fbute Meta, Lagos ‘98033084026 a eee 14, Alhaji Ski Otun-Oba Sree, Mararara, Lago (5025183698 le: Te Overs Nigeria Enerries 46, Aden Adele Road, Lagos land, Lag. oao237488 bE Simeare Nig. ud ro, iver See, Clorunsogo, Mashin ‘ouoss94T125 5 [Mien essed 2, Lagos Seat Foute Meta, Lagos (07069592700 be [ALHasfmb Ee 1. Arepo iret, Aor Bus Stop, Abule Fab, Tago 0805814277 ho ystex De Choice Umit 25, Old Oj Road, Ol Bus Sop By Plank Marked OW Radagh | 05026960853 Pepresay agen i ala Commercial En [543,Ashade Maret Agog, Lagos anna 2 Emeco Marine Ast Ue 10, Abaoa Road, Apap, Lagos (08033027752 o I Massari Nigeria Lirited a5 Oweek Ceont, Ado Langa ASI LAS (95035206158) i [Laude Adigun Com. Ventures [98,Ashade Real Markt, Mangoro BSI, Ajeye Lagos anon 10042 hs [Consvin Synergy salami Owolabi Sues, Off Lasu tba Road, Idow-Egba (08023628195 he Sloan Nigeria mite Palm Avene, Mator, Mushin ago oni6s0a7a24 hz [be Royal ventures shox Road, es! Ota, Ogun Sate (7055212605 hs Jaw Oloun Ventures rs, Also Adeoye Stet, Beside AP-Filing tation Avnlesesaje | 08055291575 kts fs spire invention [Garner Hous, LeKAVAlah Express Way Jane Stop r0ara7aNa7 bo joychem Nig. if Oyejola Osho Steet, Agbad, Lagos 08056076205 [or [wen FFs ventures Ng. 102, Oyernckun Road, Akwe, Ondo Sate (98033734208 b> Adiraloye & Sons a Amodu Road, loin, 08033684980 bs serleg Nig. En 1, Olufuniayo Steet Unilrn Road, Kwara Sate (8056509915 a Floramos Ventures Block 8, Pot, Anglican Estate, Akure, Ondo Slate 01037145670 bs unde Tali Nig: Joba Adesida Road, Akane, Ondo Sate (05033585775 lee Vadeboye SA. ig. i 17, Napaderun Sweet, Bashown badan, Ovo Sate ‘07065270588 bs Poa Global Emeriss i Ibadan Road, Beside Diganga Hotel lef, Osun Sate | 08035017656 fos Reliance ventures 23 sw9/738 Olowe Lane, Odo Ona Apa, adn (98029962761 bs soimargie Nigeria ited [Amd Ibokods-Ovtipupa Road, GRA lbokoda, Ondo Sate (08162272000 bs [MotiodEnverpries yin Road, Ado Ek, Ge Sate ‘8023150848 br [Daly Superb Verse 8, Henry Fajerrokun Sees, ao Eat, Ae (5038555658 be [Conbridget nt. foke Bol, tsdan, Oyo Sate on 72601680 bs [Samsamak Nig. Et Joke Ado Market, Badan, Ovo Sate (0909728379 bo rsige Global Concept 2, ayelahowo Complex, Ofa Garage, Horn, Kwara Sate 8060691699 Br Maris Awomobile Visi Gate Opposite Ora She, ibadan, Oyo Sate n037120372 ha Forging Sore Ring Road, Ibadan, Oyo State O51 701680) 37) Midwest [DeYoung jonny 176, Modebe Avenue Onisha, Anambra Sat ‘0805579785 a [Hace Mike Ferien fs, Oromagala Sreet Onisha, Anambra Sate aOR 35 IN. Oman 68, Modebe Avenue Onicha, Anambra State Da03aT OSES 36 Sancotex Panis Sores 17, Ozomagala Sireet Onisha, Anambra Sate ‘Da037244474 37. [Gcheson Nig te 176, Made Avenue Onisha, Anambra Sate aOSIEEII09 38 De Ama Ventures 279, Nnebisi Rood, aba, Deka State (8177518252 39 Bosaghae Nigeria Ee 3, Lagos Seow, Benin, Fo Sate (02036886891 20 IC Anak 1 Agbadl Siret Benn Fo Sate (98052824780 a ‘Anerson Enters 7/30, Agbado Set, Benin, Edo Sale 18033862296 a2 Iredia Nig. 7, Agbado Street, Bonin, Edo Sate (07030754566 a3 Joroh Nigeria Ererpries 4, New Lagos Road, Benin, Edo Sate 16025263745 m7 Onazena Enterprises 51, Murtala Mohammed Way, Benin, Edo Sate 08023547413 2014 Annual Report & AccountsREPORT OF THE DIRECTORS Cont'd 5 [Omonyi & Sons 79, Akpakpava Road, Benin, Edo Stale 07033990719] % IFC Oko Sons 75, Nekpenknepen Steet, Benn, Fo Sate 04034459673) a [Gidson Tading Company |21, Ginuiwa Road, Wari, Deka State 003674134 a noua Enter [du Road, bye Inercontinental Bank, Wari, Dela Sate 08057413877 8 IMC. Orakwe 198, Warr sapete road 9067895055 30 [Mac Padison| 76, Efrain (apele Road, Warr Deka 93182888529 31 Samuel Ochko Nig) Ud. —_[68, Ginuwa Road, Warr, Dea State 07037947560) 52 [Sunny & Sons Enterprises | ision Road, Benin Cy Ed State oH055045116 53 [east [AIM Enterprises 12, Shopping Plaza Old Sladum, Telow Road, Owert 603 5702325 54 [obiaku investment Lined [7 Edinburgh Road, Ogui New LayoutEnuga 1803 6695595 55 [Deco Bass Funiture Company [40, Mce Road, Calabar, Cross River State ‘g03 4084719 56 abros Company 1, Mbong Sweet, Ek. ‘a02 3690149) 7 [Daveem Resourses Company_[38, Nwawuna Stoo, Rumuigbo, Por Harcourt 002 3336862 36 [Azubike Resources [G10 20 Obowr Two Kornkor Oyibo, Rivers Sat 15055147049 38 FG. teh Paints Nig [6b Tans madi in Cayout Rd, Ramuobiakani Paint Make PH 08065428277 A [ipenma Nga [No Okpor Read by 1s Arar, Phe: ‘0S A087 374 5a Home Alone Ud [Toa Vilage Aba Ral Phe aTBT S045 5 [Owen Marines Nig tnd Nod, Egelege Close OF Ola Obasanjo Rd, Dine Ph D378 56 [Eman Davis tres [27 Ota Oduipant Rd Calabar aOES5=79 5 IGF, Uaeghe Enterprises TE Taulks Rd, Aba, Abin Sate 15055480079 38 [-0. Nowa & Sons Nig] Douglas Road, Owerr to Sate aaD TST 5 Iyfepamoorervesiment___]5, Ews By Free Zone Cate Avavia nT Matkat Aba Aba Sate 063622279 oo festaco Caer [Ge Aaa Tl Markt bu Ada Sa DaTaTaSOA? ri kw Oia Sone 5s, Taow Ra, Owen to Sate OHS7OEES? 2 [ete Cons 5: i Biggs Rood, Opolo,Venayos, Sayan Sate ‘07380724 63 invaluable Links Uh 70; Mission Fl Umwatia, Aba Sate 04540863 ee Frongson Motors THT, la Road, Upo Awa Toor Sate OTST a ase ware Resour [5, Eior See, Opp. Founquare Gospel Chueh, Woy PH aesa72 6 lnnoiex Avocare Nig Pier OWLS 0/68 Along ree Zone, Abs, Anambra State 19818295298] @ [Chile ecevises Nigeria [16, Erna Avenue, Off Git Schoo! Eelenwo, PE 0900347785) 8 fon: Mann negated ed. —_|13, Ogu Road, Enugu (pes5129574 a [bakin Enterprises 182, were Read, Diobo, Pon Harcourt, Rivers Sate (057217 70 oir Lite 7, boo Set, Ama ats, Old GRA, Pont Harcourt, Rivers Sat 7 [oa [wal Vertes Limited AV 11 Kano Road, Kaduna 7 Als Musa Maitrae [PAZ1 Mallar dos Rod, Old Panik, Kadina 7 kom Nigeria Frerpraes [Suite C111 Royal laa, Along Kell Road, Maraba, Abs 505 400635 7 Sahara Ndana Nigeria Ld. [Pot 1060, & Durbar Set, use 1, A 09034520020 7a [Gj Nigeria Lite 27, Old Minna Garaye Sul, Nige State ‘6900209 76 Jobiga & Sons 4/45 Dasa Roa, Kana ‘808 5131439 77 [iy Carina C. Ve shop 15, Mannan Vasa Block, Abari Shepning Complex Abas 0806 9817827 78 Pescon En. Ni [AF 20 Lagos Street Kaen, 0803 586566) 73 [Ow Tang Sores [Jos Road Kaduna 10818799298] m [Guage Consiraction Sevices [Plot 748, Alexandka Crescent Wise 2, Abvja 05033087454 oH Righway Vertes [Safa Plaza, Aro 8 Abia 505407085) a Holoweed Ventures 521 Road 52 Crescent Gwatnpa Comenhops, Aba 036085453 as Awa Marking 18 Tanga Road, Minna, Niger Sate (0807850990 a Clea & Sons tnt 6, Retongova Road, Kann 108053915957 as Premium Fils Shop no. 2, Awa Plaza, Wuse Ab (803886068 BERGER SyREPORT OF THE DIRECTORS Cont'd m7 ‘Gaz, WA. Lt ab Plaza, Aven 3 union Abu, FEL oa a7 Sayower 1. Rayfield Roady Vela Junction Buku, fos Plateau Sat (09087171049 ae Enso Coporae iz Ventures _| 3, Pince Fank Avenue, Sula, Naot Sate 062503155 3 _[Nowth [AhajAuda Yau & Sons 6, tbo Rosd Sabon Gavi Kano 108065452053 0 oma Commercial Ervrpses 138 Fance Road Kano 028728605 2 sasm Company Nig.d__[128, Mb Road mea, Vola 08037165112 [Muss Aaj oo Aika Fao Former UTE, Soke 06050055] os Bare Distribution & 8, Hakim Road, Dus gawa Sate 02826208) Marting a oe [Gatskiya General Merchant —|f Opposite Wapa Gnema Kana 35 escon Ener France Road bong Kano 3 Past Nig. [es Opp. Runa Shon, Riyazaki, Along fk Rose Kano 38 [Mentus& Brothers Trading [Kama Ron, Sahar, Sokot = Ruan Nigra En [Abad Silo Way, Mubi Genial, Alama mm ly Yellow Nig. 38 Mohammed Mustapha Way, jet Vola rt [Gasiva General Merchant [Opp Waps, Kano 02 arnsh & Sons 35, Langang See os 0 [wanivos Invested sue 15, OGH & Panners Plaza, Obslen Awolowo Way, Usko Diana ark Abuja 0 200-Lingo & Sons interational 3, Abmadu Bella Way Roundabout, Opp. Peps Dept in Kei oroaearaion| Ket Sate 7 Precious & Co. Eteprtes [8 Ravi Aka Rood, Adjacent io mini f Works, Bin Keb Si Tay enasc0| 18. Suppliers a. Regular purchases are made from the following local suppliers: + Emychem Nigeria Limited + Nycil Limited + Chizzy Nigeria Limited . Feanchant Nigeria Limited + Trisa Nigeria Limited . Mega Plastics Nigeria Limited + Nampak Nigeria Plc + Greif Nigeria Ple + Wahum Packaging Limited + Robinson Nigeria Limited + Metoxide Nigeria Limited b. The bulk of overseas purchases of raw materials are made from: . Lewis Berger International Suppliers Limited + Clayton Finance Limited 19. Employment of The Physically Challenged Berger Paints Nigeria Plc has a continuing commitment to providing employment for people with physical challenges who are able to work. Its therefore the policy tS 2014 Annual Report & AccountsERGER REPORT OF THE DIRECTORS Cont'd ofthe company to consider applications for employment from physically challenged persons. 20. Managing Diversity and Employee Development The Company's policy on managing diversity recognizes that there are differences among employees and that these differences, if properly managed, make for efficiency and effectiveness. We believe that harnessing these differences create a productive environment in which everyone feels valued, their talents fully utilized and organizational goals met. We have also created the necessary enabling environment where new and expansive patterns of thinking are nurtured as a way of developing our employees as agents of change. Our Employee Development Policy and the Management Trainee Scheme are examples of a commitment to continuous development of the skills and abilities of employees in order to maximize their contribution. 21. Health Berger Paints Nigeria Plc has a comprehensive health policy that covers not only members of staff but also their dependants. We have an in-house clinic manned by qualified medical personnel. In compliance with the requirements of the National Health Insurance Act, our employees are given the opportunity to choose a health provider nearest to their residence for health related matters outside the workplace. Our health policy is fully funded by the company under a comprehensive plan with approved Health Management Organisations (HMO). We also have a company policy on HIV/AIDS that encourages interaction with employees diagnosed with HIV. The purpose of our HIV/AIDS policy is to reassure employees that AIDS is not spread through casual contact during normal work practices and to reduce unrealistic fears about contacting the virus at the work place. The Company conducts regular health and wellness talks for employees. 22. Employment Equity, Gender Policies and Other Human Resource Policies Berger Paints Nigeria Plc is an equal opportunity employer. We do not permit direct or indirect discrimination against any employee on the grounds of ethnicity, nationality, gender, sexual orientation, disability, religion, marital status or age. The Company encourages equal opportunity as a HR Policy. In dealing with human issues in the Company, we encourage equity, fair play, learning, quality of life, ethical operations among others. Partnership, representation and dialogue are encouraged through staff associations. BERGER23. 24. 25. 26. 27. REPORT OF THE DIRECTORS Cont'd \ / Pension The Company is fully compliant with the provisions of the Pension Reform Act, 2014. Other Welfare Packages Berger Paints Nigeria Plc staff enjoy highly subsidized meals served in a hygienically maintained canteen. The Company believes that productivity springs from a healthy mind ina healthy body. Independent Auditors Messrs KPMG professional Services was appointed auditors on 23 December 2014 and have indicated their willingness to continue in office as external auditors in accordance with section 307 (2) of the companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria, 2014. Compliance with Regulatory Requirements The Company in the year under review did not contravene the rules of any of the Regulatory Authorities and did not receive any warning or sanction. Responsibility for Accuracy Of Information The Directors of Berger Paints pursuant to Article 2.2.4 of the Amended Listing Rules 2014 of the Nigerian Stock Exchange accept responsibility for the accuracy of the information contained in this report. BY ORDER OF THE BOARD we PHEOLACAULCRICK & CO. Company Secretary 10 March 2015, FRC NO. FRC/2013/NBA/000000045 27 = 2014 Annual 37) Report & AccountsREPORT OF THE AUDIT COMMITTEE In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act, CAP. C20 Laws of the Federation of Nigeria, 2004 we, the Members of the Audit Committee of Berger Paints Nigeria Plc, having carried out our statutory functions under the Act, hereby report that: (a) (b) (c) The accounting and reporting policies of the Company are in accordance with legal requirements and agreed ethical practices; The scope and planning of both the external and internal audit programmes for the year ended 31 December, 2014 are satisfactory and reinforce the Company's internal control system. Having reviewed the external auditors’ findings and recommendations on management matters, we are satisfied with management response thereon. Finally, we acknowledge the cooperation of management in the conduct of these duties. Members of the Audit Committee are: Mr. Chibuzor E. Eke - Shareholders Representative/Chairman, Mr Nelson Nweke - Non Executive Director Mr. Abi Ayida - Non Executive Director Chief Musa Danjuma - Non Executive Director Hon. A. AQdebiyi - Shareholders Representative Mrs.MaryShofolahan Shareholders Representative The Company Secretary, Pheola Caulcrick & Co. the Secretary to the Committee. Dated this 6 March 2015 vb Mr. Chibuzor E. Eke FRC/2013/IMN/00000004670STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS, EB For The Year Ended 31December 2014 The directors accept responsibility for the preparation of the annual financial statement set out on page 47 to 108 that give a true and fair view in accordance with the International Financial Reporting Standards (IFRS) and in the manner required by the Companies and Allied Matters Act and the Financial Reporting Council of Nigeria Act, 2011. The directors further accept responsibility for maintaining adequate accounting records as required by the Companies and Allied Matters Act of Nigeria and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. The directors have made an assessment of the Company's ability to continue as a going concern and have no reason to believe the Company will not remain a going concern in the year ahead. SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY wohoswe Oladimeji Alo (FRC/2013/CIPMN/00000004115) Wole Abegunde (FRC/201 4/CISN/00000010043) Chairman Director 10 March 2015, 10 March 2015, 2014 Annual 39 ) Report & AccountsINDEPENDENT AUDITOR’S REPORT To the Members of Berger Paints Nigeria Plc Panna KPMG Professional Servis Telotone 204 (1)271 6055 I cen See Vietonia island Fox 234 (1) 271 0540 rt Ten SERS ok INDEPENDENT AUDITOR'S REPORT ‘To the Members of Berger Paints Nigeria Ple Report on the Financial Statements ‘We have audited the accompanying financial statements of Berger Paints Nigeria Ple (“the Company”), which comprise the statement of financial position as at 31 December 2014, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, a summary of significant accounting policies and other explanatory information, as set out on pages 42 to 101 Directors’ Responsibility for the Financial Statements ‘The directors are responsible forthe preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards and in the manner required by the Companies and Allied Matters ‘Act of Nigeria and the Financial Reporting Council of Nigeria Act, 2011, and for such internal control asthe directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility ‘Our responsibilty is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. 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 aualt involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements, The proceduresselected depend on the auditor’s judgment, including the assessment of the risks of ‘material misstatement of the financial statements, whether du to fraud or error. In making those risk assessments, the auditor considers internal control relevant tothe entity's preparation of financial statements that give a true and fair view 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 the directors, as ‘well as evaluating the overall presentation of the financial statement. We believe that the audit evidence we have obtained is sufficient and eppropriate to provide a basis for our audit opinion, Opinion {In our opinion, these financial statements give a true and fair view of the financial postion of Berger Paints Nigeria Ple (“the Company”) as at 31 December 2014, and of the Company's financial performance and cash flows forthe ‘year then ended in accordance with International Financial Reporting Standards and in the manner required by the ‘Companies and Allied Matters Act of Nigeria and the Financial Reporting Council of Nigeria Act, 2011.INDEPENDENT AUDITOR’S REPORT Cont'd To the Members of Berger Paints Nigeria Plc Fane Comparative Information Without qualifying our opinion, we draw attention to Note 33 to the financial statements which indicates that the comparative information presented as at and forthe year ended 31 December 2013 has been restated. ‘The financial statements of Berger Paints Nigeria Ple (“the Company”) as at and forthe years ended 31 December 2013 and 31 December 2012 (from which the statement of financial position as at | January 2013 has been derived), ‘excluding the adjustments described in Note 33 to the financial statements were audited by another auditor who ‘expressed an unmodified opinion on those financial statements on 28 March 2014, As partof our audit ofthe financial statements as at and forthe year ended 31 December 2014, we audited the adjustments described in Note 33 that were applied to restate the comparative information presented as at and forthe year ended 31 December 2013 and the statement of financial position as at | January 2013, ‘We were not engaged to audit, review, or apply any procedures to the financial statements for the years ended 31 December 2013 or 31 December 2012 (not presented herein) or tothe statement of financial postion as at 1 January 2013, other than with respect to the adjustments described in Note 33 to the financial statements. Accordingly, we do not express an opinion or any other form of assurance on those respective financial statements taken as a whole, However, in our opinion, the adjustments described in Note 33 are appropriate and have been properly applied. Report on Other Legal and Regulatory Requirements ‘Compliance with the requirements of Schedule 6 of the Companies and Allied Matters Act of Nigeria 1In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of those books and the statement of financial postion and the statement of comprehensive income are in agreement with ‘the books of account. woe Oe ‘Oluwatoyin A. Gbagi, FCA FRC/2012/ICAN/00000000565 For: KPMG Professional Services Chartered Accountants ¢ Lagos, Nigeria, 30 March 2015 | Pah 2014 Annual Report & Accounts: STATEMENT OF FINANCIAL POSITION ey as at 31 December 2014 et naira Restated pee) ioe Po ae Assets Property, plant and equipment u 876,309 1,184,380 Investment property 2 559,171 - Investment in subsidiary 25 : 9,750 Available-for-sale investments 3 151,740 135,483 Deferred tax assets te) : 13,828 Total non-current assets 1,587,220 Inventories 4 512,204 537,857 Trade and other receivables 15 302,487 250,207 Deposit for imports 16 - - Prepayments and advances 7 87,310 49,672 Cash and cash equivalents 18 1,138,377 748,661 Total current assets 2,040,378 1,586,397 Total assets 3,627,598 8 Equity Share capital 19a) 144,912 108,684 Share premium 19(b) 635,074 160,201 Fair value reserve 19(¢) 30,283 18,903 Retained earnings 1,665,988 1,467,657 Total equity 2476257 _1,755,485 Liabilities Retirement benefit obligations 261b) 205,114 251,500 Loans and borrowings 2 125,215, : Deferred tax liabilities te) 2 Total non-current liabilities 251,500 Loans and borrowings 2 12,275 6,706 Current tax liabilities 1d) 74,506 112,300 Trade and other payables 20 435,183 604,433, Deferred income 2 78,556 48,729 Dividend payable 24 198,103, Total current labi 798,623 Total liabilities 1,151,341 1,174,393, Total equity and liabilities 3,627,598 8 Approved by the Board of Directors on 10 March 2015 and signed on its behalf by: Atif. ZEA. orssime) No WRC(20IEWMNIDO00ODE1S- ier —AORPRYWWR ssc ateguso r20rseson00n1008)- Drs ~~ Onyebuchi Roberts (FRC/2013/ICAN/00000002108) - Acting Chief Finance Oficer The accompanying notes on pages 46 to 101 form an integral part of these financial statements,STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2014 Revenue Cost of sales Gross profit Other income Selling and distribution expenses Administrative expenses Operating profit Finance income Finance costs Net finance income Profit before taxation Income tax expense Profit for the year Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of defined benefit obligation Related tax. Items that are or may be reclassified to profit or loss Available-for-sale financial assets - net change in fair value Related tax Earnings per share: Basic earnings per share (kobo} 9a) 26{b) 9(b) 13 9b) 10 Pes 31 2,710,986 (1,562,479) T8507 55,785 (144,011) (762,217) 298,064 101,647 (56,944) 44,703 342,767 (85,187) 257,580 73,672 (18,447) 16,257 (4,877) 11,380 66,605 324,185 89 The accompanying notes on pages 46 to 101 form an integral part of these financial statements. 3 2014 Annual Report & Accounts> e e107 aquapeg Je EB 2 oO = me usvzs) pied poping zs sss ons ny a E + 161'c05 ans iy uo unwaig MoS weve smu ans y= sreys eups0 as Ost. ynba wy (ps2up papuosa4 ‘Siaumo yum suonesued 5 Z ‘O2 “ane Twa fon se9(ap 20} ua>u sypsdo> Fe tog 50999 SUSE one 1 ‘awoou ansuayarduon J241 OES ogs'sse ogs'sse wad a4 0) O44 Lee a 9420 024 ansuoyaudo, ° r= oa SPH'Sse'L £999 L £0681 Les we Ta Ze z eer'sez’| Seater s06'81 paved Ajsnownand se) ¢ 107 Arenuef | a2UEIeq 2s S32 5 onwecyt «woos =| _(OE6E ‘loz saquaneg 1¢ ye aoueyeg os (615961) 161961) ‘ioumo ya suonDesued fe}0) B32 £ SE9 “59 = ¥ (paueq aimes) puspiap pawe|pun, Se 5 (928'207) (928200) ve pied puapinig nee Abs wy Aypoup popioas ‘touno yy suon>esuey, 6008 ee OL Pak a4} 10) awoouy ausuayasdino> [e}0, (261 100 w posuioao snonaid sue uo ‘90's 161 awooU! aA 908'ehL 8088 aeak ayy, -eo4 a4) 40} auoou aisuoypado cove wa6S99T BOE ‘loz Arenuef ye aowejeg The accompanying notes on pages 46 to 101 form an integral part ofthese financial statementsSTATEMENT OF CASH FLOWS Soe Attributable to equity owners of the company For the year ended 31 December 2014 Cash flows from operating ai Profit for the year 148,808 257,580 Adjustments for = Depreciation Vea) & 12 126,594 106,771 Finance income 6 (61,74) (101,647) = Finance cost 6 78,733 56,944 - Loss /igain) on sale of property, plants and equipment 7 4923 (1,260) = Fixed assets adjustment " : 2,786 Capital work-in-progress written-off " 8,829 - = Service cost on defined benefit obligation 2610) 29,465 36,403 ~Tax expense 100,450 87 436,028 442,764 Changes in = Inventory a7i7) 25,653 Trade and other receivables ro) (197,695) (62,280) = Deposit for imports (524,236) - = Prepayments and advances, (8,306) 37,638) ~Trade and other payables 2010) 50,102) 422,284) = Deferred income (9,140) 29,827 Cash used in generated from operating activities (695,168) (13,958) Retirement benefits paid 2610) (9,494) 41,554) Tax paid te) (57,674) | _(110,088) Net cash used in operating act (462,336) (165,600) Cash flows from investing activities Purchase of property plant and equipment 1 (113,235) (60,190) Proceeds from sale of property, plants and equipment 6,370 1,260 Finance income 6 60,033 101,647 Proceeds from disposal of available-forsale investments, 13 16,259 Net cash (used in) / generated from investing a Cash flows from financing activities Proceeds from loans and borrowings : 134,632 Repayment of borrowings 2,01 (3,848) Interest paid 6 (77,008) (24,507) Net proceeds from rights issue 19 : 511,101 Dividend paid 24 (168,683) (104,779) Net cash (used in) / from financing activities (223,590) 512,599 Net (decrease) / increase in cash and cash equivalents (716,499) 389,716 Cash and cash equivalents at 1 January 1,138,377 748,661 Cash and cash equivalents at 31 December 8 421,878 “1,138,377 The accompanying notes on pages 46 to 101 form an integral part of these financial statements. - 2014 Annual Report & Accountsys NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2014 CONTENTS PAGE (1 Reporting Entity a 2 Basis of Preparation 47 3. Significant Accounting Policies. == 49 4 Revenue 65 SS LTS 6 Finance income and finance costs 65. 7 Profitbeforetax 6 8 Personnel expense 66 mis 10 Earnings and declared dividend per share m0 | rope pad eipmem TT 12 Investment property a ee eT a 14 Inventories 73 " ar TOOT TTT 16 Deposit for imports 4 27 Repayment 5 18 Cash and cash equivalents a 18 Gplnde 20 Trade and other payables m2 a 22 Loans and borrowings 77 0 er a a 24 Dividend payable © imesmetisitg 26 Employee benefits 7 a 28 Financial instruments — 29 Operating leases 1 Connie 31 Subsequent events 2 Opmangsmens 33. Correction of prior year errorsNOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2014 1 Reporting Entity Berger Paints Nigeria Plc ("the Company") was incorporated in Nigeria as a private limited company in 1959 and was converted to a public liability company in 1973. Its registered office address is at 102, Oba Akran Avenue, Ikeja Industrial Estate, Ikeja, Lagos. The Company is listed on the Nigerian Stock Exchange. The principal activities of the Company continue to be the manufacturing, sale and distribution of paints and allied products throughout the country. Basis of Preparation (a) Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by International Accounting Standards Board (IASB). The financial statements were authorised for issue by the Board of Directors on 10 March 2015. Basis of measurement The financial statements have been prepared on historical cost basis except for the following: - available-for- sale financial assets measured at fair value. - the present value of defined benefit obligation relating to the unfunded defined benefit scheme Functional and presentation currency These financial statements are presented in Naira, which is the Company's functional currency. All financial information presented in Naira has been rounded to the nearest thousand except where otherwise indicated Use of estimates and judgment The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about critical judgments made in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following, 2014 Annual 47) Report & Accounts= NOTES TO THE FINANCIAL STATEMENTS Cont'd For the year ended 31 December 2014 Note 3(O) and 29~ Leases: whetheran arrangement contains a lease Note 3(kK)and4— Recognition and measurement of revenue from rendering of services. Information about assumptions and estimation uncertainties that have most significant effects on the amounts recognised in the financial statements is included in the following notes; Note 3(I) and 26 Measurement of defined benefit obligation: key actuarial assumptions Note 3(G)and30- Recognition and measure of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources Note 2(e) and 28— Determination of fair values Note 3(F) and 15 Impairment test: key assumptions underlying recoverable amounts, Measurement of fair values A number of the Company's accounting policies and disclosures require the determination of fair values, for both financial and non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Company uses observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: Level 1— quoted prices (unadjusted) in active markets for identical assets or liabilities Level2— inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (.e. as prices) or indirectly (i.e. as derived from prices). Level 3— inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. 48NOTES TO THE FINANCIAL STATEMENTS Cont'd 7 For the year ended 31 December 2014 The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in Note 28 - Financial risk management and financial instruments. 3. Significant Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements. Set out below is an index of the significant accounting policies, the details of which are available on the pages that follow. Financial instruments Capital and other reserves Investment property Impairment Provisions Employee benefits Inventory Revenue Income tax Earnings per share Leases Statement of cashflows Operating segment Dividends Deposit for imports Investment in subsidiary Liquidation of subsidiary Related party transactions XEKCHYROQMOZED ATH Tamron se not yet adopted Foreign currency transactions Property, plant and equipment Contingent liabilities and assets Finance income and finance costs Prepayments and advances New standards and interpretations Page 50 50 51 2014 Annual 49.) Report & AccountsNOTES TO THE FINANCIAL STATEMENTS Cont'd t& For the year ended 31 December 2014 Foreign currency transactions Transactions denominated in foreign currencies are translated and recorded in Naira at the actual exchange rates as of the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognised in profit or loss . Non-monetary items that are measured based on historical cost in a foreign currency are translated using the exchange rate at the dates of the transaction Financial instruments i. Non-derivative financial assets The Company initially recognises loans and receivables on the date that they are originated. All other financial assets are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability. Subsequent to initial recognition, non-derivative financial assets are measured as described below: Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and Receivables comprise other receivables and cash & cash equivalents, Available-for-sale financial assets Available-for-sale (AFS) financial assets are non-derivatives that are either designated as AFS or are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair value through profitor loss. Listed equities held by the Company that are traded in an active market are classified as AFS, These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, are recognised in OCI and accumulated in the fair valueNOTES TO THE FINANCIAL STATEMENTS Cont'd For the year ended 31 December 2014 ew reserve. When these assets are derecognized, the gain or loss accumulated in equity is reclassified to profit or loss. Cash and cash equivalents Cash and cash equivalents comprise cash in hand, cash balances with banks, and short term investments with maturities of three months or less from the date of acquisition, which are subject to an insignificant risk of change in value. ii, Non-derivative financial liabilities All financial liabilities are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. The Company has the following non-derivative financial liabilities: Trade & other payables and loans and borrowings. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method. Financial liabilities, for which the Company has an unconditional right to defer settlement of the liability for at least twelve months after the statement of financial position date, are classified as non-current liabilities Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Capital and other reserves i, Sharecapital The Company has only one class of shares, ordinary shares, Ordinary shares are classified as equity. When new shares are issued, they are recorded in share capital at their par value. The excess of the issue price over the par value is recorded as share premium. All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares are entitled to dividends as declared from time time to time and are entitled to one vote per share at general meetings of the Company. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. ii, Sharepremium When the company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on those shares is transferred to the share premium account. Any transaction costs associated with the share issues are - 2014 Annual 1) Report & AccountsNOTES TO THE FINANCIAL STATEMENTS Cont'd For the year ended 31 December 2014 deducted from share premium account, net of any related income tax benefits. The use of the share premium account is governed by $.120 (3) of the Companies and Allied Matters Act (CAMA). Retained earnings Retained earnings represents the Company's accumulated earnings since its inception, less any distributions to shareholders, and net of any prior period adjustments. A negative amount of retained earnings is reported as deficit or accumulated deficit. Fair value reserve Fair value reserve comprises the cumulative net change in available-for-sale financial assets until the assets are derecognized or impaired. Property, plant and equipment Recognition and measurement The cost of an item of property, plant and equipment is recognized as an asset if itis probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of construction recognised includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets. tems of property, plant and equipment under construction are disclosed as capital work-in- progress. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plantand equipment. Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if itis probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Derecognition The carrying amount of an item of property, plant and equipment is derecognised on