By

INVICTUS

Short-Term
Financing
of

Objectives

01

To understand STF from a practical point

02
03

To know about the general instruments o

To know about the company profile of BP

To know about the STF instruments used b

04

05

To analyze the changes in STF in the last

Methodolo
gy
No Primary Data
Secondary Data Annual Reports, Websites

Short-Term Financing
refers to any investment or
financial plan lasting for one year or
less.
It generally means the borrowing or
lending of funds.

Sources of STF
1.
2.
3.
4.
5.
6.
7.

Trade Creditors
Customers Advances
Commercial Banks
Finance Companies
Commercial Paper House
Personal Loan Companies
Governmental Institutions

8.
Factors or Brokers
9. Co-operative credit society
10. Loan Mortgage Banks
11. Money Lender
12. Bank Overdraft
13. Bank Guarantees
14. Financial Commitments to LC

Advantages of STF
Easier to Obtain
Lower cost
Flexibility
No Sharing of control
Availability
Tax Savings
Convenience
Extension of credit

Disadvant
ages
Frequent Maturity
High Cost
Perception of
Poor Financial
Health
Negative
Credit Risk
Assessment
Insufficient
s
for LongTerm Goals

Company
Overview
In 1970, Berger Paints Bangladesh Limited (BPBL)
erstwhile Jenson & Nicholson had set up its paint factory in
Chittagong at an estimated investment of TK.4 million.
The name of the company was changed from J& N (Bangladesh)
Limited to Berger Paints Bangladesh Limited on 1st January
1980.
Over the decades, Berger has evolved to becoming the leading
paint solution provider in this country and has diversified into
every sphere of the industry from Decorative Paints to
Industrial Coatings, from Marine Coatings to Powder Coating
and what not.

Company
Overview
Vision:
The vision of the company is to remain as
the benchmark in the Paint industry being
an innovative and technology driven
Company consistently delivering worldclass products ensuring best consumer
satisfaction through continuous value
added services provided by highly
professional and committed team.

Trade Credit
Bank
Overdraft
Bank Guarantees

STF of
BPBL
Short-term
Loan

Financial Commitments to LC

Trade Credit in the Last Five years

010, BPBL had Trade Credit with only two parties:

So, in total, BPBL had Trade Credit (receivables) of BDT

81241000 for the purpose of Packaging container purchase &
Technology. There was no Trade Credit payable in this year.

Trade Credit in the Last Five years

2011, BPBL had Trade Credit with only three parties:

So, in total, BPBL had Trade Credit (payables) of BDT 26627000

for the purpose of Packaging container purchase and a Joint
Venture. Total Trade Credit receivables were BDT 181503000. It
seems that there was an increase of BDT 100262000 in Trade
Credit receivables from year 2010 to year 2011. Furthermore,

Trade Credit in the Last Five years

012, BPBL had Trade Credit with only three parties:

So, in total, BPBL had Trade Credit (payables) of BDT 90280000

for the purpose of Packaging container purchase and a Joint
Venture. Total Trade Credit receivables were BDT 162429000. It
seems that there was a decrease of BDT 19074000 in Trade
Credit receivables from year 2010 to year 2011. And in Payables,

Trade Credit in the Last Five years

2013, BPBL had Trade Credit with only three parties:

So, in total, BPBL had Trade Credit (payables) of BDT

120362000 for the purpose of Technology Provider. Total
Trade Credit receivables were BDT 67330000. It seems
that there was a decrease of BDT 95099000 in Trade

Trade Credit in the Last Five years

2014, BPBL had Trade Credit with only three parties:

So, in total, BPBL had Trade Credit (payables) of BDT

142515000 for the purpose of Technology Provider. Total
Trade Credit receivables were BDT 125451000. It seems
that there was an increase of BDT 64121000 in Trade

Trade Credit in the Last Five years

Receivables

Payables

142515000
90280000

26627000
120362000

181503000
162429000

125451000

81214000
0
67330000

Y2010

Y2011

Y2012

Y2013

Y2014

Bank Overdraft in the Last Five years

In 2010, BPBL took overdraft from SCB. In comparison with
2009, a larger overdraft is seen from SCB.

Another mentionable thing in 2010 is that,

previously the limit for BO at SCB was BDT
92000000 which later became BDT 120000000.

Bank Overdraft in the Last Five years

In 2011, BPBL took BO from only two banks: SCB & Commercial Bank of
Ceylon. No changes in limit this year.

Bank Overdraft in the Last Five years

In 2012, BPBL took BO from only three banks: SCB, HSBC & Commercial
bank of Ceylon. No changes in limit this year.

Bank Overdraft in the Last Five years

In 2013, BPBL took BO from only two banks: SCB & Citibank.
Commercial Bank of Ceylon lowered their limit for BO from BDT
210000000 to BDT 200000000.

Bank Overdraft in the Last Five years

In 2014, BPBL took BO from only two banks: SCB & Commercial
Bank of Ceylon. Citibank increased their limit for BO from BDT
50000000 to BDT 160000000.

STL in the Last Five years

Although short-term loan is listed as a facility
for short-term financing in the annual reports, it
seems that they did not use it over the years.
Only the limits changes a few times. No other
changes were noticed.

STL in the Last Five years

STL in the Last Five years

STL in the Last Five years

STL in the Last Five years

Bank Guarantees in the Last Five years

Although Bank Guarantees is listed as a facility for short-term financing in the
annual reports, it seems that they did not use it much over the years. The
limits changed a few times over the years. No other changes were noticed.
Bank Guarantees
Bank Guarantees

1702000

1502000

1514000

1514000

Y2013

Y2014

1502000

Y2010

Y2011

Y2012

FC to LC in the Last Five years

Although Financial Commitments to LC is listed as a facility for short-term
financing in the annual reports, it seems that they did not use it much over
the years. The limits changed a few times over the years. No other changes
Financial Commitments to LC
were noticed.
Financial Commitments to LC

781639000

400004000

185740000

73500000
Y2010

Y2011

Y2012

Y2013

73500000
Y2014

Conclusion
In conclusion, it can be said that BPBL relies heavily
on Trade Credit & Bank Overdraft although they
have listed other means of STF. In the last five
years they did not change their method of STF.
They used five means: Trade Credit, Bank
Overdraft,
Short-Term
Loans, and
Bank
Guarantees
Another
mentionable
thing
here
is not using STL
& Financial
Commitments
to
LC.
completely over the last five years. Bank
Guarantees & Financial Commitments to LC were
used for Contingent Liabilities.
Overall, they have a sound Short-term

THANK YOU