AsiaPacificPPricingDocumentation.docVIP

Asia Pacific P1 Pricing Documentation Purpose Decribes the guidelines of Supply Chain P1 Price model for Hempel Asia Pacific in alignment with Group Transfer Pricing Policy . Ref: e convention document no. CWIR-6ZRCBD Instruction  Definition of P1 price and functions.  Price formula and component details  Regional P1 Price setting. Responsibility  Production Manager –Computes and compiles P1 price for respective region in accordance to the guidelines provided in this document. Hempel Asia Pacific Regions are namely China and APAC.  Supply Chain – communicates and distributes P1 price to Sales office.  Supply Chain Controller - Review P1 price computation and relevance of current pricing respective to Group transfer pricing profit margin guideline. - Update changes on P1 price model. Description P1 is Hempel internal pricing computed in accordance with Hempel e convention. PU denotes Production unit SU denotes Sale unit Function of P1 pricing a) PU selling price to SU b) PU selling price to Hempel Affiliates (Ex gate sale) c) PU selling price to Hempel joint customers (I.I sale) Frequency of Price revision As advised by Group Procurement P1 formula P1 (exgate) = [{((Raw material + Tinting paste + Can (incl label) )* 2% waste factor + Production overheads + Common allocated costs )* 4% markup } + packing costs ]+ 17%VAT(applicable to China export only) P1 ( I.I.) = P1 (exgate) + local Port surcharge Direct Costs Raw material and Packing material prices are applied in P1 calculation at landed costs based on i) Latest material replenishment price advised by regional procurement. ii) Copper and zinc prices from group procurement (except zinc price for China , it is based on Shanghai exchange prior mth average advised by China procurement) iii) Average tinting cost per litre is only added to products for which tinting paste is used in production. (exception – China : tinting paste is in bulk formula)