During the year ended 31st March, 2008, the net sales of the Company grew by 15% and catapulted the Company into the second largest position among the paint companies in India. Profit before tax grew even faster at the rate of 16%.

Sales during the year were Rs 1522 crores compared to Rs 1322 crores in the previous year. Profit before tax was Rs 119 crores compared to Rs 102 crores in 2006-07. Profit after tax was Rs 92 crores, compared to Rs.83 crores in the previous year. Consolidated sales in 2007-08 moved to Rs 1586 crores from Rs 1384 crores in 2006-07.

The Company was able to deliver steady top line growth in spite of a lower GDP growth and slow down in the automotive sector. The Company continued to focus on improving product mix, introducing new products and services, tackling costs at all levels and improving services to customers so as to retain its competitive edge. Architectural products launched during the year include Illusions Sealer, Illusions Metallica and Kidz Glitter & Glow.

The Company has embarked upon a growth plan, both organic and inorganic, comprising:

• Capacity expansion of the solvent plant at Goa to 62,000 MTPA. This is over and the plant is likely to be commissioned soon.
• The capacity of the Jammu powder plant has also been expanded during the year by 1,200 MTPA.
• Preliminary work has started for expansion of water based paint and resin manufacturing capacity in the Company’s existing plant at Rishra in West Bengal and installation of a resin manufacturing plant in Goa.
• Work on setting up of a state-of-the-art automobile paint manufacturing plant with a combined capacity of 24,000 MTPA at the Jejuri Industrial Estate, Pune is progressing in full swing. The Company has received environment clearance from the Ministry of Environment and Forests for the purpose.
• The Company’s subsidiary, Beepee Coatings Private Limited is expanding its capacity in Gujarat
• The Company is in the process of acquisition of Bolix, S.A. of Poland, which manufactures and sells External Insulation and Finishing Systems. It also exports to other countries such as Ukraine, Latvia, Lithuania, Estonia and Russia. The products and the services of Bolix complement those of Berger and they will be useful in India from the point of view of energy savings, environment, durability and aesthetics.
• In addition to the initiatives specifically mentioned above, the Company is actively exploring other interesting opportunities.

Berger Paints Overseas Limited has commenced production at its modern plant in the Southern part of Russia.

Considering the expenditure involved in the aforesaid growth plans, the Board recommends a dividend of 25% on the equity shares of the Company.

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