The extent of the reduction in its share capital would be decided according to the amendment in Section 77 of the Companies Act. Berger is seeking its shareholders' approval now for a suitable alteration in the company's Articles of Association so that it does not lose any time after the law allowing buyback is made. For increasing its operations, the company will also ask its shareholders to approve a resolution augmenting its authorised share capital from Rs 20 crore to Rs 40 crore.

The company, which reported a 28 per cent rise in net profit to Rs 18.2 crore for 1997-98, also recommended a 1:1 bonus issue. For this, Berger would capitalise Rs 11.72 crore from its share premium account raisingthe paid-up capital to Rs 23.44 crore. Its expanded manufacturing base has already boosted volumes by almost 14 per cent to 51,000 tonnes in 1997-98. This has been possible with new formulations such as the Weather Coat exterior finish and the colour-tinting system. According to a senior official of Berger Paints, the company was also planning to introduce a number of brands across all segments, particularly distempers.

Berger has also entered the southern markets to take on market leader Asian Paints in the decorative segment. Apart from Kerala, where Berger has been traditionally strong, the other southern markets are mainly serviced by Asian Paints, which has a major marketshare in the decorative segment.

Berger's plan for a larger penetration in the south Indian markets, especially in the decorative enamels segment, relies on low distribution costs from its new production centre at Pondicherry. It will also seek approval from its shareholders to increase the working capital limit from Rs 15 crore toRs 18 crore from Sidbi under its bill discounting scheme.