Boston Properties
Annual Report 2001

Plain-text annual report

Annual Report 2001 BEXIMCO PHARMA BEXIMCO PHARMACEUTICALS LTD. Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens and our shareholders. Board of Directors A S F Rahman Salman F Rahman Iqbal Ahmed M.A. Qasem O.K. Chowdhury Dr. Abdul Alim Khan A.B. Siddiqur Rahman Dr. Farida Huq C. H. Rahman Chairman Vice Chairman Director Director Director Director Director Director Director Management Committee Nadim Shafiqullah C. H. Rahman Dr. Farida Huq Nazmul Hassan Chief Executive Officer Finance Director Medical Director Director, Marketing & Commercial Company Secretary Md. Asad Ullah Contents Board and Management Chronology of Progress : How we marched forward Beximco Pharma : The leading healthcare company in Bangladesh The Profile People : No limits to the human imagination Products : Simply make the difference Diversification : Small Volume Parenteral (SVP) products New products : Wheel of profit generation R & D : Inventing tomorrow Training : Getting the best from our people Overseas Business : Striving for excellence Blockbuster Products : Top 5 products in 2001 Fine Chemicals : Committed to supply quality products Technology : Keeping pace with the advanced world BPL’s New Inhaler Plant : Bringing world-standard facilities Quality : We try to achieve zero defect Environment Health and Safety : Commitment to care The New Formulation Plant : Investing into the future Beximco Pharma Annual Report : Awarded as the best Twenty-Fifth Annual General Meeting Annual Sales Conference 2001 Value Added Statement Growth in 2001 5 Years Statistics Beyond 2001: Launching of New Products Management Development Training Products List Notice of the 26th AGM Chairman’s Statement Statement on Corporate Governance Report of the Directors to the Shareholders Auditors’Report to the Shareholders Balance Sheet Income Statement Statement of Changes in Equity Cash Flow Statement Accounting Policies and Explanatory Notes Proxy Form 3 4 6 7 8 10 11 12 14 16 18 20 22 24 25 26 27 28 29 30 30 31 32 33 34 35 36 38 39 46 47 48 49 50 51 52 53-71 2 ANNUAL REPORT 2001 BEXIMCO PHARMA 3 ANNUAL REPORT 2001 BEXIMCO PHARMA Chronology of Progress How we marched forward 1976 : Registration of the company 1980 : Started manufacturing and marketing of licensee products of Bayer AG of Germany and Upjohn Inc. of USA 1985 : Listing in the Dhaka Stock Exchange (DSE) as a Public Limited Company (PLC) 1990 : Commissioning of Basic Chemical unit 1992 : Started export operation with Active Pharmaceutical Ingredients (APIs) 1993 : First export market operation with finished pharmaceutical products 1994-95 : Achievement of National Export Trophy (Gold) as the first pharmaceutical company of the country Introduction of 20 new products 1996 : Introduction of Sustained Release dosage form in the market Introduction of 12 new products 1997 : Commissioning of Metered Dose Inhaler (MDI) plant and introduction of Suppository dosage form Introduction of 15 new products 1998 : Introduction of Metered Dose Nasal Spray Introduction of 13 new products 1999 : UNICEF approval of BPL as an enlisted supplier Introduction of 6 new products 2000 : Contract manufacturing agreement of Metered Dose Inhaler (MDI) with Glaxo SmithKline Introduction of 11 new products 2001 : Introduction of small volume parenteral products (Injectables) Establishment of Analgesic-Antiinflammatory plant Introduction of 26 new products 4 ANNUAL REPORT 2001 BEXIMCO PHARMA 5 ANNUAL REPORT 2001 BEXIMCO PHARMA Beximco Pharma The leading healthcare company in Bangladesh Beximco Pharmaceuticals Ltd. is the leading pharmaceutical company of Bangladesh. Founded in 1976, Beximco Pharmaceuticals Ltd. has been producing world class pharmaceutical products following current Good Manufacturing Practice (cGMP) as required by the World Health Organization (WHO) in order to improve health, happiness and quality of life. Beximco Pharmaceuticals Ltd. has products of different therapeutic classes, each of which, occupies a prominent position in the market and the heart of our customers and shareholders. Beximco Pharmaceuticals Ltd. is always committed to improve the lives of people through the development and commercialization of high quality and cost-effective medicines. Noted for our market driven approach, BPL is also known for constructive endeavor to innovation that is usually the result of very extensive product testing and market research. As a market oriented organization, we develop a culture, that is fully committed to the continuous creation of superior customer value. We strongly believe that quality makes the difference between life and death. After successful venturing in the local market, we have now taken the challenge to replicate the journey into the international arena. Corporate Headquarters Operational Headquarter 17 Dhanmondi R/A, Road No. 2 Dhaka 1205, Bangladesh 19 Dhanmondi R/A, Road No. 7 Dhaka 1205, Bangladesh Factory Auspara, Tongi, Gazipur Year of Establishment Commercial Production 1976 1980 Status Public Limited Company Business Lines Manufacturing and marketing of pharmaceutical finished products and Active Pharmaceutical Ingredients (APIs) Overseas Offices and Associates UK, USA, Pakistan, Myanmar, Singapore, Kenya, Yemen. Export Outlets Bhutan, Georgia, Germany, Hong Kong, Iran, Iraq, Kenya, Malaysia, Myanmar, Nepal, Pakistan, Russia, Singapore, South Korea, Taiwan, Thailand, Ukraine, Vietnam and Yemen. Authorized Capital in Taka 1,000 million Paid-up Capital in Taka 442.5 million Turnover (net) in Taka of 2001 2,401 million Number of Shareholders 50,367 Stock Exchange Listings Dhaka, Chittagong Number of Employees 1,151 6 ANNUAL REPORT 2001 BEXIMCO PHARMA 7 ANNUAL REPORT 2001 BEXIMCO PHARMA People No limits to the human imagination People make a company. Our success is based on attracting, developing and retaining talented and motivated employees. They share both our desire to excel and our commitment to improving the lives of the people. The employees of BPL believe in collaborative spirit. They appreciate that working as a team multiplies the strength of the individuals involved as well as the impact of the results. Skill acquisition and development for all staff is key to a company's growth through innovation. In this regard, we are always on the look out to identify training needs of our employees in order to enable them to carry out the entrusted responsibilities. Training programs undertaken, not only address skills relating to the specialty of the individuals concerned, but also improving leadership, management and project coordination abilities. Our purpose is not simply to explore the potential of today’s new technologies but to unleash the creativity in every person engaged with the company. Because we believe the real measure of our success is not the power of technology but the power it unleashes in people. We have highly educated white-collar employees comprising of approximately 76% of total BPL’s workforce. Among them are: Ph. D. Engineers Pharmacists CMA CA MBA Chemists Biochemists Microbiologists Physicians Others (Graduate) 6 23 73 5 1 12 80 10 2 11 651 It is our people who make us different from our competitors. The secret of our success story lies in our people 8 ANNUAL REPORT 2001 BEXIMCO PHARMA 9 ANNUAL REPORT 2001 BEXIMCO PHARMA Products Simply make the difference Diversification Small Volume Parenteral (SVP) products Being a responsible leader we take everything quite seriously. We don’t simply believe in introducing new molecules; we also believe in creating the difference in the marketplace by offering impeccable quality. BPL stands on the heritage of bringing innovative medicine to people. One of our key guiding principles is to operate through "customer channels". We put the customer at the center of all our activities. Commitment to our customers is one of the hallmarks of BPL. Our products are all intended to help people to live healthy lives. BPL’s portfolio features a range of high-quality, effective products, some are the first of their kind and many are ranked number one in their therapeutic area. A team of highly qualified people sets our product features and attributes. Arts and science are blended together inside our products. Our products are designed and engineered in such a manner that their overall presentation, size, shape, color, flavor, viscosity, coating etc. are completely different from those of the competitors. Formula E is formulated with an excellent chocolate taste. Ascobex and Carocet are the best tasting drugs in their respective categories. Aristovit B and Aristovit M are the most elegant drugs in their categories in the country. Whatever may be the dosage form or packaging – blister, strip, bottle, cartons, labels etc., BPL’s presentations are widely recognized for their best aesthetic look among all competitive brands. The strength of Beximco Pharmaceuticals Ltd. lies in its diversified products and dosage forms. BPL has been producing solid products like tablets and capsules and liquid products like syrup, suspension and solution, as well as semisolid products like cream and ointment. We are the pioneer company to manufacture and market nasal sprays, inhalation aerosols and suppositories in Bangladesh. In 2001, Beximco Pharmaceuticals Ltd. stepped into a new path--bringing Small Volume Parenteral (SVP) or injectable dosage form. Arixon is our first small volume injectable product. It is a preparation of Ceftriaxone, which is considered as a breakthrough antibiotic in the history of medicine, particularly because it is safe to be used in children as well as adults. Arixon is also the first injection in Bangladesh to offer four-layer protection against counterfeit--flip- off cap, aluminum seal with imprinted brand name, blister pack and security seal on commercial pack. In 2002, Arixon is predicted to be one of our leading brands in terms of sales revenue. As the second step, we introduced Intracef injection, a preparation of Cephradine. Intracef is a renowned brand and already available as capsule, suspension and pediatric drops. Launching of Intracef injection further strengthens the brand and offers an opportunity to promote the different dosage forms in one promotional exposure. Arixon and Intracef injection are our first SVP products and we will introduce other exciting products in the future. 10 ANNUAL REPORT 2001 BEXIMCO PHARMA 11 ANNUAL REPORT 2001 BEXIMCO PHARMA New products Wheel of profit generation In the year 2001, BPL added 26 new products of different therapeutic classes in its portfolio and these products are highly appreciated by the health professionals. Most important of them are Triocim, Arixon, Prosan, Recox, Atova etc. Introduction of these new products enriched our product portfolio and is contributing to our sales significantly. Increasing trends in product offerings… ….reflects our relentless effort to provide better health care services to our valued customers. Year 1983 1984 1985 1986 1987 1988 1989 1991 1993 1994 1995 1996 1997 Major revenue earning products No. of products introduced 6 5 7 3 8 4 4 2 9 10 10 12 15 Napa, Lactameal Tycil, Spanil Cephalen, Filmet, Gentosep Neoceptin R Tynisol, Ascobex, Clobex Bronkolax, Aristofol-Fe Ultrafen, Etrocin, Aristovit-B Neofloxin Tofen, Keolax, Cardopril, Aristoplex, Proceptin Omastin, Aristovit-M Diactin, Amdocal Azithrocin, Rostil Pedeamin, Intracef, Enaril, Azmasol Bexitrol, Atrizin 1998 13 Neosten, Nazolin, Hefolin SR, Formula-E, 1999 2000 2001 6 11 26 Decomit, Carocet Tripec, Avastin Diapro, Cox-B Triocim, Arixon, Prosan, Recox, Atova 12 ANNUAL REPORT 2001 BEXIMCO PHARMA 13 ANNUAL REPORT 2001 BEXIMCO PHARMA R & D Inventing tomorrow B P L is a company that is continuously searching for the next treatment advancements. BPL’s portfolio features a range of high-quality, effective products. This product portfolio, combined with the steady stream of promising new products in development, is one of the many reasons BPL is among the nation's leading pharmaceutical companies. We have introduced 26 new products in 2001. Around 70 new products are in our development pipeline. They will obviously enrich our portfolio to a great extent. R & D team We are continuously thriving to support our valued customers with advanced and latest medicines. To materialize the same, R & D has been divided into two teams. Team-I is responsible for the improvement of existing formulations the in and development of new formulations. is engaged team-II 14 ANNUAL REPORT 2001 BEXIMCO PHARMA 15 ANNUAL REPORT 2001 BEXIMCO PHARMA Training Getting the best from our people One of the agenda of the Human Resources Department is continuous development of the employees so that they can cope with the rapidly changing business environment. Innovation is a major priority that we want to promote. Accordingly, training programs are regularly undertaken for the staff to seek opportunities for skills improvement. In 2001, employees of BPL have participated in various training programs both external and internal. There were 6 (six) induction training for the field force, 4 (four) in-house training and 2 (two) external training for employees of the Head Office during this period. Factory personnel also attended in-house training programs of a total 206 hours duration. Major in-house and external training programs Title of the training Managerial style Personal values questionnaire Learning style inventory Learning skills profile Management workshop for women executive Sales management Training on GMP, Process validation, SOPs and documentation Audio visual training on GMP for MDI plant Total Quality Management (TQM) Integrated material management Occupational health & safety Course leaders courses Experts from inside and outside the organization worked as our resource personnel for the training programs. All of these training programs were found highly effective in developing our peoples’ knowledge, skill and abilities to perform their assigned jobs in a better way. 16 ANNUAL REPORT 2001 BEXIMCO PHARMA 17 ANNUAL REPORT 2001 BEXIMCO PHARMA Overseas Business Striving for excellence Overseas business has always been one of the top priorities of Beximco Pharma. By making the best use of our competency & edge in manufacturing technology and marketing skills, BPL has been able to establish a very successful international marketing network in Asia, Middle East and Africa. So far, Beximco Pharma has marked its presence in 16 countries and in last few years, BPL has been putting its best efforts to continue this process. In the year 2001, BPL’s major emphasis in overseas markets was basically directed towards achieving a critical mass in these markets and to build brand equity of our products. In fact, last year was another very successful year for us in terms of achieving our objectives in the overseas markets. In 2001, we have signed an agreement with one of the leading distributors of Singapore with an objective to consolidate our presence in Singapore market. BPL’s specialized products like Inhalers, Nasal Sprays and Suppositories as well as solid dosage forms have already gained remarkable brand equity in Singapore. In Pakistan, we came into an agreement with one of the leading local companies to manufacture BPL brands locally and to market the same in Pakistan market. Local manufacturing of BPL brands is expected to give us substantial headway and edge in terms of overcoming competition in Pakistan. Apart from all these, we have intensified and consolidated our marketing efforts in other overseas markets, like Myanmar, Kenya, Yemen and Vietnam. To capitalize immense opportunities in these overseas markets, we are bringing in more new and exciting brands in these markets. Last year, BPL donated one ‘Medical Information K i o s k ’ the Myanmar Medical Association of Mandalay which gained enormous attention and acceptance in the minds of the medical community of M y a n m a r. In Kenya, number of sales people has been increased to best exploit its huge market potentials. All these efforts are already bringing in desired results. to into new horizons and Entering establishing new overseas markets will remain our top most priority in 2002 also. Russia, Ukraine, Sri Lanka, Cambodia, Nepal will be on the list. We are confident that our process of globalization will continue with a more and more accelerated speed in the coming days. 18 ANNUAL REPORT 2001 BEXIMCO PHARMA 19 ANNUAL REPORT 2001 BEXIMCO PHARMA Blockbuster Products Top 5 products in 2001 Napa: #1 brand in pain and fever since 1990. Neoceptin R: The leader in the antiulcerant market for the last 5 years. Neofloxin: Very powerful weapon against difficult to treat infections. Tycil : A trusted name among amoxycillin preparations. Aristovit M: Aesthetically the most beautiful multivitamin & mineral preparation in Bangladesh. Successful blending of our scientific knowledge with innovative marketing approaches have positioned these blockbuster drugs as the engine of our drive for the success. 20 ANNUAL REPORT 2001 BEXIMCO PHARMA 21 ANNUAL REPORT 2001 BEXIMCO PHARMA Fine Chemicals Committed to supply quality products BPL has a commitment to the society to supply world class Active Pharmaceutical Ingredients (APIs). Therefore, BPL is not only engaged in formulations but also in fine chemicals business with a view to supplying cost effective quality materials to other local companies as well as for captive consumption. As one of the most important profit centres of Beximco Pharmaceuticals Ltd., Fine Chemicals department is involved in producing and marketing of A c t i v e Pharmaceutical Ingredients (APIs) to the local market. It caters to almost 60% of the demand of Amoxycillin bulk in Bangladesh. The major products of Fine Chemicals are Amoxycillin and Ampicillin. An entirely new bulk drug facility is being set up to produce high value and exciting new drugs. Beximco Pharmaceuticals Ltd. has already developed some Active Pharmaceutical Ingredients (APIs) in antibiotics, antifungal, analgesic, antihistamine, anti- i n f l a m m a t o r y, antihypertensive and other therapeutic classes in a separate multipurpose plant to meet its own requirement and also to meet the local demand of other pharmaceutical manufacturers. The company has acquired an outstanding ability of transforming technological know-how into commercially viable products through in-house expertise and use of international consultants. BPL’s first venture into export markets started with the export of fine chemicals in 1990. Since then it has exported to a number of countries like Vietnam, Singapore, Germany, Russia, Hongkong, Iran, South Korea etc. The company firmly believes that, introduction of more new molecules will enable it to expand and further strengthen its presence in local as well as international markets thereby contributing significantly to the growth of the company’s profit. 1990 1996 2001 : : : In this year, Basic Chemical plant was established and on September 01, 1990 commercial production of Amoxycillin and Ampicillin was started. In October 1996, Multipurpose Plant was established. In March 2001, Cox Block plant was established. 22 ANNUAL REPORT 2001 BEXIMCO PHARMA 23 ANNUAL REPORT 2001 BEXIMCO PHARMA Technology Keeping pace with the advanced world Technology carries the promise of tomorrow. The benefits of technology belong to all of us -benefits that create new opportunities and open doors to a better life. For example, the new inhaler plant of BPL has been designed in a way to ensure highest-possible quality at every stage of manufacturing and quality control. World-class facilities are being employed in each and every step including mixing, filling, testing, labelling, batch printing and other procedures to ensure manufacturing of world class products. BPL’s New Inhaler Plant Bringing world-standard facilities BPL enjoys about 40% of the total inhalation aerosol market of the country. Four inhalation aerosols are being manufactured currently in this state-of-the-art plant (Azmasol, Bexitrol, Decomit-100 & Decomit-250). This makes inhaler therapy much affordable to all asthma patients of the country. Patients are now using BPL’s inhalers that have significantly reduced their dependence on imported inhaler products. This in turn also contributes to the foreign currency savings drive of the country. Recently BPL started export of its inhalers to Singapore, Myanmar and Vietnam. Export of BPL inhalers to other countries including Pakistan, Kenya, Yemen and Sri lanka is underway. The main reason behind the success of BPL inhalers both at home and abroad is its ‘consistent and highest-possible quality’. The world-class facilities at the new inhaler plant of BPL made this revolutionary achievement possible. 24 ANNUAL REPORT 2001 BEXIMCO PHARMA 25 ANNUAL REPORT 2001 BEXIMCO PHARMA Environment Health and Safety Commitment to care We are continuously thriving to protect the environment and ensure the safety and health of our employees and communities where we operate. At BPL, we work to enhance protection of the environment, and the safety and health of our neighbours, our customers and our employees. It is always monitored that concerned people wear appropriate and designated dresses like gowns, aprons, masks, helmets etc. this, BPL is very careful in discharging the wastes that are generated from any of its regular operation. To ensure environmental monitoring of emissions is being carried out. BPL is continuously striving to minimize adverse impacts on environment and total environmental protection by minimizing waste generation and improving the monitoring system. to ensure Quality We try to achieve zero defect At BPL, total quality control refers to the process of producing a perfect product by a series of measures. This requires an organized effort by the entire company to prevent or eliminate errors at every stage in production. It is supported by a team effort. Our quality assurance establishes control or checkpoint to finally ensure the quality of the products during production and upon completion of the manufacturing. It starts with raw materials and component testing and includes in- process, packaging, labelling and finished product testing as well as batch auditing and stability monitoring. A highly dedicated academically sound and professionally competent team comprising of pharmacists, chemists, biochemists, microbiologists, engineers & others is making relentless efforts to offer the best in terms of product quality. In every step, from the procurement of raw materials to the manufacturing of finished products, the latest World Health Organization (WHO) approved current Good Manufacturing Practices (cGMP) are being followed. There are written Standard Operating Procedures (SOPs) for every process and step involved which are being closely monitored to ensure that all concerned personnel are complying with these procedures. BPL’s Q.C. lab is well equipped with most modern and sophisticated equipment like, High Performance Liquid Chromatography (HPLC), Infrared (IR) Spectrophotometer, Ultraviolet (UV) Spectrophotometer, Homogenizer, In-vitro Bioavailability Tester, Lung Simulator, Disintegrator, Dissolution Tester & many other latest computer aided instruments & accessories to ensure the highest quality products. 26 ANNUAL REPORT 2001 BEXIMCO PHARMA 27 ANNUAL REPORT 2001 BEXIMCO PHARMA The New Formulation Plant Investing into the future Beximco Pharma Annual Report Awarded as the best Beximco Pharmaceuticals Ltd. has been preparing itself for the post-WTO open market competition. It has all the courage to compete with world leaders in pharmaceuticals business when the tariff and non-tariff barriers will be withdrawn. BPL has placed itself in the virtual future, extending several years beyond today. That is why, a multi-million dollar pharmaceutical formulation plant is being built. BPL Management decided to construct a new manufacturing plant according to USFDA standard. This world class facility is structured and erected in line with International Guidelines for cGMP and with particular regard to the FDA (Food and Drug Administration Authority) of the USA. It incorporates modern technological advancements in materials storage, handling, transfer and movement. To meet specific cGMP requirements for the USA & European markets, all walls within the facility are made of preformed powder coated Sandwich Panels giving a smooth and easily cleanable surface free of cracks or crevices. The ceiling is constructed of the same material and has been designed as a "Walk-on" ceiling. The wall and ceiling joints are finished with powder coated aluminium coves. All floors throughout the facility are of Self-Levelling Epoxy (SLE) providing a hard impact and chemical resistant floor. All corners between the floor and walls are finished with coves made from special epoxy coving material. The huge & extensive civil & electrical work of the plant has already been completed. Installation of some of the world’s most advanced and sophisticated machineries is underway. The new USFDA standard plant is planned to be operational in early 2003. Once completed, this will be one of the finest facilities to be available anywhere in the globe. B P L won the first prize of Institute of Chartered Accountants of Bangladesh(ICAB) National Awards 2000 in Non-Financial Sector Category for the "Best Published Accounts and Reports" for its 2000 Annual Report. In the process of evaluation and selection of awards the concerned committee of the institute considered some standard criteria, encompassing Corporate Objectives, Chairman / CEO’s Report, Standard Disclosures, Stakeholders’ Information, Presentation of the Reports, Timeliness of Accounts and AGM, and Status of Corporate Governance. Honorable Minister for Finance Mr. Saifur Rahman, MP handed over the winning trophy to Mr. A. S. F. Rahman, Chairman of Beximco Group in a ceremonial presentation at Pan Pacific Sonargaon Hotel, Dhaka on November 26, 2001. This award is yet another landmark recognition of BPL’s total commitment to excellence. 28 ANNUAL REPORT 2001 BEXIMCO PHARMA 29 ANNUAL REPORT 2001 BEXIMCO PHARMA Twenty-Fifth Annual General Meeting Value Added Statement The 25th Annual General Meeting of shareholders of BPL was held on 24th June, 2001. Around 15,000 shareholders attended the meeting. Mr. A S F Rahman, Chairman of the Board of Directors of BPL presided over the meeting. The Chairman thanked the shareholders for their interest and confidence upon the company. The shareholders were informed about the excellent sales achievement and growth in 2000. The 2001 strategies and future vision of the company were also briefed in the AGM. The meeting approved 20% dividend for its shareholders for the year 2000. Annual Sales Conference 2001 The Annual Sales Conference 2001 was held at Hotel Sonargaon on January 3, 2002. Mr. Nadim Shafiqullah, Chief Executive Officer of the company chaired the meeting. Mr. Nazmul Hassan, Director, Marketing and Commercial, other managers and more than 400 marketing and sales people from all over the country attended the conference. In the day session of the conference achievements of 2001 and strategies for 2002 were discussed. In the evening session Mr. Nadim Shafiqullah distributed prizes and crests among the top sales achievers. The prize distribution ceremony was followed by a grand gala dinner and cultural show. Turnover & Other Income Less : Materials Cost & Expenses Value Added Applications Retained by the Company Salaries and Benefits paid to Employees Interest paid to Lenders Dividend to Shareholders Duties & Taxes paid to Government Exchequer Figures in Taka 2001 2,743,551,749 1,443,320,343 1,300,231,406 447,414,003 202,817,441 179,520,085 44,250,000 426,229,877 % 34.41 15.60 13.81 3.40 32.78 2000 2,826,647,290 1,560,731,740 1,265,915,550 406,939,199 186,803,962 159,943,284 88,500,000 423,729,105 % 32.15 14.76 12.63 6.99 33.47 Total 1,300,231,406 100.00 1,265,915,550 100.00 32.78% 13.81% 3.40% 34.41% 15.60% Retained by the Company Salaries and Benefits paid to Employees Interest paid to Lenders Dividend to Shareholders Duties & Taxes paid to Government Exchequer 2001 Retained by the Company Salaries and Benefits paid to Employees Interest paid to Lenders Dividend to Shareholders Duties & Taxes paid to Government Exchequer 33.47% 12.63% 6.99% 32.15% 14.76% 2000 30 ANNUAL REPORT 2001 BEXIMCO PHARMA 31 ANNUAL REPORT 2001 BEXIMCO PHARMA Growth in 2001 5 Years Statistics Figures in thousand Taka Growth 2001 2000 Amount % Income & Profitability Turnover (Net) Net Profit Earnings per share 2,401,241 401,780 9.08 2,452,524 398,295 9.00 (51,283) 3,485 0.08 (2.09) 0.87 0.89 At a glance: Turnover (net) down (2.09 %) Net profit up 0.87 % Earnings per share up 0.89 % 2001 2000 1999 1998 1997 2,401 2,453 2,399 2,310 2,251 Turnover - Net (in million Taka) 2001 2000 1999 1998 1997 430 423 413 399 396 2001 2000 1999 1998 1997 4,166 3,764 3,454 3,156 2,848 Profit Before Tax (in million Taka) Shareholders’ Equity (in million Taka) 32 ANNUAL REPORT 2001 BEXIMCO PHARMA Particulars 2001 2000 1999 1998 1997 Figures in thousand Taka Authorized Capital Paid up Capital Turnover(Net) Turnover(Export) Gross Margin Profit Before Tax Net Profit Tangible Assets(Gross) Shareholders' Equity Dividend Return on Paid up Capital Shareholders' Equity Per Share Earnings Per Share Market Price Per Share Price Earnings Ratio (Time) Number of shareholders General Public Foreign Investors ICB & Investors Account Human Resources Number of employees Officers Staff 1,000,000 442,500 2,310,362 38,721 729,932 398,788 374,211 3,349,420 3,156,141 15% 90% 71 8.46 51.83 6.13 49,453 37,989 44 11,420 1,004 530 474 1,000,000 442,500 2,251,280 9,180 698,408 396,021 365,146 3,151,419 2,848,305 30% 89% 64 8.25 80.23 9.72 44,592 34,483 40 10,069 980 528 452 1,000,000 442,500 2,401,241 47,325 942,133 430,420 401,780 5,141,780 4,165,791 10% 97% 94 9.08 49.50 5.45 50,367 37,568 43 12,756 1,151 695 456 1,000,000 442,500 2,452,524 44,268 895,783 422,644 398,295 4,062,660 3,764,011 20% 96% 85 9.00 66.90 7.43 50,618 38,447 43 12,128 1,047 581 466 1,000,000 442,500 2,398,985 35,846 816,089 413,312 386,576 3,759,880 3,454,217 20% 93% 78 8.74 32.31 3.70 50,733 38,426 43 12,264 1,010 544 466 402 398 387 374 365 1997 1998 1999 2000 2001 Net Profit (in million Taka) 33 ANNUAL REPORT 2001 BEXIMCO PHARMA Beyond 2001 Launching of New Products In 2002, we have continued to improve the performance. Nine new products in thirteen dosage forms namely Premil 0.5 mg, Premil 1 mg, Premil 2 mg, Cosmotrin Cream, Intracef 250 Injection, Intracef 500 Injection, Neofloxin 750 mg Tablet, Sibulin Tablet, Odrel Tablet, Triocim Suspension, Flubex 500 Capsule, Flubex Suspension, Lucidol Capsule have been introduced in the first five months of 2002. Management Development Training The continuous training program of Beximco Pharmaceuticals Ltd. has been strengthened in 2002. In-house courses and participation in external workshops, both within Bangladesh and abroad, have been intensified in 2002. A dedicated training room is available at both the head office and the factory premises for imparting general and technical training. Managers have also participated in a series of management development program at the Hyderabad campus of the Indian School of Business (ISB) whose faculty includes faculty members from Kellogg University in USA and the London School of Business. An active, round the year human resources development will be aggressively pursued by the company to raise its intellectual capital constantly. 34 ANNUAL REPORT 2001 BEXIMCO PHARMA 35 ANNUAL REPORT 2001 BEXIMCO PHARMA Brand name Dosage form Generic name & strength Brand name Dosage form Generic name & strength Brand name Dosage form Generic name & strength Brand name Dosage form Generic name & strength Analgesic/Antipyretic Capsule Lucidol Napa Tablet Syrup Suppository Antacid & Antiflatulent Flatameal-DS Tablet Suspension Tramadol HCl 50 mg Paracetamol 500 mg Paracetamol 120 mg/5 ml Paracetamol 125 mg Paracetamol 250 mg Al Hydroxide 400 mg, Mg Hydroxide 400 mg, Simethicone 30 mg Al Oxide 200 mg, Mg Hydroxide 400 mg, Simethicone 30 mg Lactameal Tablet Suspension Al Hydroxide 250 mg, Mg Hydroxide 400 mg Al Oxide 175 mg, Mg Hydroxide 250 mg Anthelmintic Alphin DS Melphin Anti-acne Cosmotrin Tablet Albendazole 400 mg Tablet Suspension Pyrantel Pamoate 125 mg Pyrantel Pamoate 50 mg/ml Cream Tretinoin 0.025% Antiamoebic Filmet Tablet Suspension Metronidazole 200 mg Metronidazole 400 mg Metronidazole 200 mg/5 ml Anti-Androgen Prosfin Tablet Finasteride 5 mg Anti-Anginal Monate Neocard Tablet Tablet Anti-Arrhythmic Pacet Tablet Antibacterial Arixon 1g IM Arixon 1g IV Arixon 250 mg IM Arixon 250 mg IV Arixon 500 mg IM Arixon 500 mg IV Azithrocin Cephalen Clobex Decacycline Etrocin Flubex Injection Injection Injection Injection Injection Injection Capsule Tablet Suspension Capsule Suspension Capsule Syrup Capsule Tablet Suspension Capsule Capsule Suspension Intracef Capsule Suspension Drop Injection Injection Tablet Capsule Isofloxin Megadox Isosorbide Mononitrate 20 mg Diltiazem 30 mg Diltiazem 60 mg Amiodarone Hydrochloride 100 mg Amiodarone Hydrochloride 200 mg Ceftriaxone 1g Ceftriaxone 1g Ceftriaxone 250 mg Ceftriaxone 250 mg Ceftriaxone 500 mg Ceftriaxone 500 mg Azithromycin 250 mg Azithromycin 500 mg Azithromycin 200 mg/5 ml Cephalexin 250 mg Cephalexin 500 mg Cephalexin 125 mg/5 ml Cloxacillin 500 mg Cloxacillin 125 mg/5 ml Tetracycline 250 mg Erythromycin 250 mg Erythromycin 500 mg Erythromycin 125 mg/5 ml Flucloxacillin 250 mg Flucloxacillin 500 mg Flucloxacillin 125 mg/5 ml Cephradine 250 mg Cephradine 500 mg Cephradine 125 mg/5 ml Cephradine 125 mg/1.25 ml Cephradine 250 mg Cephradine 500 mg Pefloxacin 400 mg Doxycycline 100 mg Megatrim DS Tablet Suspension Trimethoprim 160 mg & Sulphamethoxazole 800 mg Each 5 ml contains Trimethoprim 40 mg & Sulphamethoxazole 200 mg Nebactil Neofloxin Tablet Suspension Nalidixic acid 300 mg/5 ml Rolacin Tablet Suspension Ciprofloxacin 250 mg Ciprofloxacin 500 mg Ciprofloxacin 750 mg Clarithromycin 250 mg Clarithromycin 500 mg Clarithromycin 125 mg/5 ml Sparlin Triocim Tablet Sparfloxacin 200 mg Capsule Suspension Cefixime 200 mg Cefixime 100 mg/5 ml Tycil Capsule Suspension Drop Amoxycillin 250 mg Amoxycillin 500 mg Amoxycillin 125 mg/5 ml Amoxycillin 125 mg/1.25 ml Antibaldness Recur Tablet Finasteride 1 mg Antidepressant Apresin Tablet Fluphenazine 0.5 mg+Nortriptyline 10 mg Modipran Capsule Fluoxetine 20 mg Antidiabetic Diactin Diaglit Diapro Premil Tablet Tablet Tablet Tablet Glipizide 5 mg Pioglitazone 15 mg Pioglitazone 30 mg Gliclazide 80 mg Repaglinide 0.5 mg Repaglinide 1 mg Repaglinide 2 mg Antiemetic Inarzin Antifungal Fungistin Tablet Cinnarizine 15 mg Oral Susp. Nystatin 100,000 units/ml Omastin Capsule Suspension Fluconazole 50 mg Fluconazole 150 mg Fluconazole 50 mg/5 ml Anti-epileptic Epilep Tablet Carbamazepine 200 mg Epilep CR Controlled Carbamazepine 200 mg Release Tablet Antihaemorrhoidal Anustat Ointment Each gram contains Cinchocaine 5 mg, Hydrocortisone 5 mg , Neomycin 10 mg & Esculin 10 mg Antihistamine Atrizin Bexidal Pedeamin Pretin Tablet Syrup Tablet Syrup Tablet Cetirizine Hydrochloride 10 mg Cetirizine Hydrochloride 5 mg/5 ml Mebhydrolin 50 mg Diphenhydramine 10 mg/5 ml Loratadine 10 mg Antihypertensive Amdocal Tablet Cardopril Tablet Enaril Neopril Prosan Tablet Tablet Tablet Amlodipine (as besylate) 5 mg Amlodipine (as besylate) 10 mg Captopril 25 mg Captopril 50 mg Enalapril 5 mg Lisinopril 5 mg Lisinopril 10 mg Losartan Potassium 25 mg Losartan Potassium 50 mg Antiobesity Sibulin Capsule Sibutramine 5 mg Laxative Serelose Syrup Lactulose 3.35 gm/5 ml Antiosteoporotic Alendon Tablet Alendronate Sodium 10 mg Antiplatelet Odrel Antipsychotic Sensipin Antispasmodic Rostil Spanil Antiulcerant Gastalfet Neoceptin R Neo Kit Proceptin Yamadin Tablet Clopidogrel 75 mg Tablet Clozapine 25 mg Tablet Tablet Tablet Tablet Mebeverine Hydrochloride 135 mg Hyoscine Butylbromide 10 mg Sucralfate 500 mg Ranitidine 150 mg Ranitidine 300 mg Tablet Capsule Tablet Clarithromycin 500 mg Omeprazole 20 mg Metronidazole 400 mg Capsule Omeprazole 20 mg Tablet Famotidine 20 mg Famotidine 40 mg Asthma Prophylactic Inhaler Decomit Tofen Zukast Bronchodilator Azmasol Bexitrol Bronkolax Tablet Syrup Tablet Inhaler Inhaler Tablet Syrup Calcium Supplement Aristocal Tablet Cough Expectorant Tripec Syrup Cough Suppressant Syrup Dextromethorphan COX-2 Inhibitor Cox B Capsule Recox Tablet Digestive Enzyme Zymet Tablet Gastroprokinetic Deflux Tablet Suspension Drop Beclomethasone Dipropionate 100 m g/actuation Beclomethasone Dipropionate 250 m g/actuation Ketotifen 1 mg Ketotifen 1 mg/5 ml Zafirlukast 20 mg Salbutamol 100 m g/actuation Salmeterol 25 m g/actuation Salbutamol 2 mg Salbutamol 2 mg/5 ml Calcium 500 mg Guaifenesin 100 mg, Pseudoephedrine Hydrochloride 30 mg & Triprolidine Hydrochloride 1.25 mg/5 ml Dextromethorphan 10 mg/5 ml Tranquilizer Keolax Vitamin Aristoplex Celecoxib 100 mg Celecoxib 200 mg Rofecoxib 12.5 mg Rofecoxib 25 mg Pancreatin 325 mg Domperidone 10 mg Domperidone 5 mg/5 ml Domperidone 5 mg/ml Hypnotic Eplon Capsule Zaleplon 5 mg Zaleplon 10 mg Iron Supplement Aristoferon Syrup Aristofol-Fe Hefolin SR Tablet Ferrous Sulphate 200 mg /5 ml Ferrous Fumarate 308 mg & Folic Acid 350 m g Dried Ferrous Sulphate 150 mg equivalent to Sustained Release Capsule Iron 47 mg & Folic Acid 500 m g Lipid Lowering Agent Tablet Atova Avastin Tablet Nasal Anti-Inflammatory Decomit Nasal Spray Spray Nasal Decongestant Nazolin Nasal Spray Spray Atorvastatin 10 mg Atorvastatin 20 mg Simvastatin 10 mg Beclomethasone Dipropionate 50 m g per actuation Oxymetazoline 25 m g per actuation Non-Steroidal Anti-Inflammatory Drug Nuprafen Tablet Naproxen 250 mg Naproxen 500 mg Reumafen Tablet Ultrafen Tablet Suppository Ibuprofen 200 mg Ibuprofen 400 mg Diclofenac Sodium 25 mg Diclofenac Sodium 50 mg Diclofenac Sodium 12.5 mg Diclofenac Sodium 50 mg Ultrafen SR Sustained Release Tablet Diclofenac Sodium 100 mg Ultrafen Gel Gel Diclofenac Sodium 1% Xynofen 100 SR Sustained Release Capsule Ketoprofen 100 mg Topical Antibiotic Furasep Cream Fusidic Plus Ointment Nitrofurazone 0.2% Sodium Fusidate 2%, Hydrocortisone Acetate 1% Gentosep Cream Gentamicin 3 mg/gm Topical Antifungal Neosten Cream Clotrimazole 0.1% Neosten VT Vaginal Tablet Clotrimazole 0.2 gm Tablet Clobazam 10 mg Syrup Vitamin B1 5 mg, Vitamin B2 2 mg , Vitamin B6 2 mg & Nicotinamide 20 mg/5 ml Aristovit-B Tablet Aristovit-M Ascobex Bemin Carocet Formula-E Tynisol Tablet Tablet Tablet Tablet Tablet Drop Vitamin B1 5 mg, Vitamin B2 2 mg, Vitamin B6 2 mg & Nicotinamide 20 mg 11 Vitamins, 5 Minerals & Iron. Ascorbic Acid 250 mg Thiamine Hydrochloride 100 mg b -Carotene 6 mg, Vitamin-C 200 mg and Vitamin-E 50 mg Vitamin-E 200 mg Vitamin A 4000 I.U., Vitamin D 400 I.U., Ascorbic acid 50 mg, Thiamine HCl 1 mg,Riboflavin 0.685 mg, Pyridoxin HCl 1 mg, Nicotinamide 5 mg & Pantothenate 3 mg 36 ANNUAL REPORT 2001 BEXIMCO PHARMA 37 ANNUAL REPORT 2001 BEXIMCO PHARMA Beximco Pharmaceuticals Limited 17 Dhanmondi R/A, Road No. 2, Dhaka 1205 §Y~JroqJPjr k«KfPmhj Notice of The Twenty - Sixth Annual General Meeting Notice is hereby given that the TWENTY-SIXTH ANNUAL GENERAL MEETING of the Shareholders of Beximco Pharmaceuticals Limited will be held on Saturday, the 29th June, 2002 at 10:30 a.m. at 1, Shahbagh C/A, Dhaka to transact the following business : A G E N D A 1. 2. 3. 4. 5. 6. To confirm the proceedings of the Twenty-Fifth Annual General Meeting of the Company held on 24th June, 2001. To receive, consider and adopt the Audited Accounts as of 31st December, 2001 together with reports of the Auditors and the Directors thereon. To elect Directors. To declare dividend @10%. To appoint Auditors for the year 2002 and to fix their remuneration. To transact any other business of the Company with the permission of the Chair. By order of the Board Sd/- ( MD. ASAD ULLAH ) Company Secretary Dated : May 06, 2002 NOTES : (1) The Register of Members and Share Transfer Book of the Company will remain closed from 5th June, 2002 to 29th June, 2002 (both days inclusive). During that period no share transfer will be effected. The Shareholders whose names will appear in the Share Register of the Company at the close of business on 4th June, 2002 will be entitled to the dividend. (2) A member entitled to attend and vote at the General Meeting may appoint a proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meeting. (3) Members are requested to notify change of address, if any, to the Company. 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IJoJPhr k«iJj KmKjP~JV US FDA oJj x˛j(cid:156) k«TPÆr kJvJkJKv IJoJPhrPT keq VPmweJ S Cj(cid:156)~j, k(cid:231)Jh x(cid:128)PpJV C(cid:210)kJhj xMKmiJ xOK(cid:238), mftoJj C(cid:210)kJhj xMKmiJr Cj(cid:156)~j AfqJKh UJPfS KmKjP~JV TrPf yP(cid:152)(cid:130) KmVf hMA-Kfj m(cid:210)xPr IJoJPhr jf(cid:135)j kPeqr x(cid:128)UqJS CPu(cid:138)UPpJVqnJPm mOK› §kP~PZ(cid:130) (cid:230)iMoJ' 2001 xJPuA IJorJ 26Ka jf(cid:135)j keq x(cid:128)PpJ\j TPrKZ(cid:130) IJrS k«J~ 70Ka keq kJAk uJAPj rP~PZ(cid:130) IJkjJrJ y~f \JPjj FTKa jf(cid:135)j keq x(cid:128)PpJ\j S Fr KmkePj KmkMu jVh KmKjP~JPVr k«P~J\j kPz(cid:130) k«KfKa jf(cid:135)j kPeqr \Pjq YuKf oNuiPjr YJKyhJS CPu(cid:138)UPpJVq kKroJPe mOK› kJ~(cid:130) 1999 xJPur kr §gPT IJoJPhr YuKf oNuij Ee xLoJr §TJj mOK› WPa jJA pKhS F xoP~ IJJoPhr mqmxJP~r mqJkT k«mOK› WPaPZ(cid:130) F §k«K(cid:139)Pf, IJkjJPhr kKrYJuTo⁄uL Vf m(cid:210)xPrr 20% Fr f(cid:135)ujJ~ YuKf m(cid:210)xPr 10% unqJ(cid:128)v §WJweJ TrJ xoLKYj oPj TPrPZ(cid:130) \JfL~ §TJwJVJPr ImhJj §mK(cid:142)oPTJ lJotJKxCKaTqJux KuKoPac 2001 xJPu IJohJjL x˛O(cid:134) Tr, oNuq x(cid:128)PpJ\j Tr Fm(cid:128) IJ~Tr mJmh 426 KoKu~j aJTJ \JfL~ §TJwJVJPr k«hJj TPrPZ(cid:130) kKrPmv xMœ kKrPmv x(cid:128)r(cid:139)Pe IJoJPhr k«PY(cid:238)J xmt(cid:253)LT(cid:146)f(cid:130) kKrPmvPT hNweoM(cid:134) rJUJr mqJkJPr IJoJPhr TJpt(cid:137)o ImqJyf rP~PZ(cid:130) IJorJ kKrPmv mJ…m k«pMK(cid:134) mqmyJr TKr Fm(cid:128) kKrPmv x(cid:128)(cid:137)J¶ IJAj-TJjMj §oPj YKu pJr lPu kKrPmPvr Ckr C(cid:210)kJhj TJptJmuLr k«nJm V«yePpJVq oJ'J~ rJUJ x(cid:214)m yP~PZ(cid:130) ToLtPhr kKrPmv x(cid:128)(cid:137)J¶ xPYfjfJ mOK›r uP(cid:139)q Kv(cid:139)J Fm(cid:128) k«Kv(cid:139)e TotxNYL KmKkFu- F FTKa iJrJmJKyT k«K(cid:137)~J(cid:130) xJoJK\T k«Kfvs˘Kf KmVf m(cid:210)xPrr of §mK(cid:142)oPTJ lJotJKxCKaTqJux 2001 xJPuS KmKnj(cid:156) xJoJK\T xPYfjfJ mOK›oNuT TotTJP⁄ xK(cid:137)~nJPm I(cid:128)vV«ye TPrPZ(cid:130) KmKkFu S §mK(cid:142)oPTJ AjKlCvjx& §pRgnJPm Kmv(cid:155)(cid:253)Jœq Khmx, Kmv(cid:155) oJf(cid:146)hM(cid:144) Khmx AfqJKh CkuP(cid:139)q VOyLf KmKnj(cid:156) TotTJP⁄ xyJ~fJ k«hJj TPrPZ(cid:130) FZJzJ §TJ˛JjL (cid:253)Jœq xPYfjfJ mOK›oNuT KmwP~ \JfL~ (cid:228)hKjTxoNPy §(cid:137)Jzk' k«TJPvS kO(cid:239)PkJwTfJ TPrPZ(cid:130) (cid:253)LT(cid:146)Kf IJoJPhr mqJ(cid:128)TJr, xrmrJyTJrL, V«JyT, Kj~„T x(cid:128)œJxoNy, KmKnj(cid:156) xrTJrL k«Kf(cid:239)JPjr xJPg x(cid:128)Kv(cid:138)(cid:238) mqK(cid:134)xoNy Fm(cid:128) IJoJPhr mqmxJ TJpt(cid:137)Por xJPg x(cid:128)Kv(cid:138)(cid:238) xTPur xogtj Fm(cid:128) xyPpJKVfJr TgJ IJKo T(cid:146)f(cid:157)fJr xJPg (cid:254)re TrKZ Fm(cid:128) fJPhr ijqmJh \JjJK(cid:152)(cid:130) IJoJPhr x(cid:216)JKjf §v~JrPyJ(cid:223)JrVe IJoJPhr Ckr §p Kmv(cid:155)Jx §rPUPZj Fm(cid:128) IJoJKhVPT oNuqmJj xogtj KhP~PZj, §x\jq fJPhr k«Kf IJKo IJ¶KrTnJPm T(cid:146)f(cid:157)(cid:130) kKrYJuTo⁄uLr k(cid:139) §gPT IJKo IJkjJPhr xTuPT ijqmJh \JjJA Fm(cid:128) kNPmtr jqJ~ nKmwqPfS IJkjJPhr ImqJyf xogtj Fm(cid:128) xyPpJKVfJ TJojJ TKr(cid:130) F Fx Fl ryoJj §Y~JroqJj dJTJ FKk«u 29, 2002 40 ANNUAL REPORT 2001 BEXIMCO PHARMA 41 ANNUAL REPORT 2001 BEXIMCO PHARMA Chairman’s Statement Dear Shareholders, It is indeed my pleasure to welcome you all to the 26th Annual General Meeting of your company. I take this opportunity to lay before you a brief resume of the affairs of the company for the year 2001 and its future plan. 2001 Performance During the year, the company attained net sales of Tk. 2,401.24 million as against Tk. 2,452.52 million of 2000. I am pleased to inform that sales of the formulation products - our core business, continued to grow in 2001 as well. During the year local sales of formulation products increased by 3.68% in Taka. Our export sales for the year also grew by 6.91%. The overall slight decline in sales is however, mainly due to the decline in the sales of our basic chemicals products. Our major basic chemical products-Amoxicillin and Ampicillin are matured products. Because of emergence of several other manufacturers and increase in the cost due to consecutive devaluation, the profit margin of these products have squeezed substantially. Considering this, we are now in the process of introducing a few high-value high-margin products in the basic chemical’s portfolio to reverse the sales decline. Your company earned a pre-tax profit of Tk. 430.42 million as against 422.64 million of 2000. As you know almost 72% of our raw materials are imported. After several devaluation of taka against dollar, these materials have become costlier. But due to our committed drive for containment of cost, we have succeeded in neutralizing the adverse effect of devaluation. Our gross profit increased by 5.17% and pre-tax profit by 1.84% over last year in absolute terms. This by any standard is an appreciable achievement. Products Consistent to our committed efforts to cater to the health care needs of the country, 26 new products have been added to the existing product portfolio during the year under review. The products have got wide acceptance from the medical community. As a result Triocim, Prosan, Recox, Atova, etc. have already placed themselves in good positions in the market within a short period of time. Another milestone achievement was the launching of injectable products. For the first time we entered into small volume parental products’ market with Arixon. Our blockbuster product Napa continued to retain the number one position since 1990. In Antiulcerants category, Neoceptin R succeeded in remaining the market leader in 2001 as well. New Inhaler Plant I feel proud to announce that BPL’s Inhaler plant with world class manufacturing facilities has commenced commercial operation in 2001. This State of the Art Plant has already drawn interest from different quarters for its high technical standards. Successful implementation of such a high standard manufacturing facility is yet another landmark contribution from BPL in the healthcare system of the country. Cost effective improved quality medicines at affordable prices are now available to replace the more expensive and imported ones. Expansion Program The works of the expansion project is in progress. The planned target of opening of LC for the Machinery and Equipment was slightly impaired due to time escalation in releasing the Consortium Loan. Additionally, before entering into any contract we also wanted to ensure that the sources of supply we are considering are fully capable to deliver equipments complying to the US FDA standard. In this regard we sought the support and assistance of relevant international consultants. Every thing is now on track and we expect to go into commercial operation of the new plant by early 2003. In addition to the manufacturing and physical infrastructure facilities we are upgrading ourselves equally in other areas including development of human resources, training on cGMP Standards, etc. Looking Ahead With the implementation of WTO provisions the global business particularly the pharmaceutical business of the developing countries are going to face a new challenge. We are mindful of the challenges but at the same time confident of our ability to succeed. Our drive for both short and long run revenue and earning growth will continue in the future as well. Profitable product lines will be strengthened. Investment in introducing new products, molecules and dosage forms will be further enhanced. Recognising the needs of today’s healthcare market place, our marketing strategy will continue to focus on value added but cost effective medicines. Along with expanding our share in the domestic market, we will continue to aggressively pursue our search for new avenues in the international marketplace also, in the days ahead. Our achievements so far have paved the way in this direction. 42 ANNUAL REPORT 2001 BEXIMCO PHARMA 43 ANNUAL REPORT 2001 BEXIMCO PHARMA Dividend As you all know the WTO agreement is changing the global business environment. The pharmaceuticals business is becoming more complex and competitive particularly due to the WTO-TRIPs agreement. Changes in the international patent law are going to make the local manufacture of patented drugs very difficult and very costly. To face the new challenges we are making investment keeping in view the long term objectives of sustainable development and growth in revenue and profits in the difficult years ahead. This has compelled us to make more investments in areas like product research and development, creation of backward linkage facility, development of existing production facilities, etc. in addition to our major investment in the US FDA standard plant. Over the last two to three years the number of our new products has also increased substantially. In 2001 alone we have introduced 26 new products. Moroever, 70 new products are in pipeline. As you may be aware, introduction of a new product and its initial marketing requires a substantial amount of cash investment. Besides, addition of new products in the product line raises the working capital needs quite significantly. Our working capital credit limits have not been extended since 1999 although our business has substantially grown over these years. In this backdrop your board of directors have found it prudent to propose a dividend @ 10% this year instead of the 20% of the previous year. Contribution to National Exchequer During year 2001 Beximco Pharmaceuticals Limited has contributed Tk. 426 million to the national exchequer in the form of import related taxes, Value Added Tax and Income Tax. Environment Our commitment for eco-friendly environment is recognized. We continued to put our best efforts to keep our environment free from pollution. We use environment friendly technologies and comply fully with the environmental codes to keep the environmental effect of our manufacturing activities to the acceptable level. Education and training for raising the environmental awareness levels of our employees is a continuous process within BPL. Social Commitments As in the past, BPL actively participated in various social awareness building programs in 2001 as well. BPL jointly with Beximco Infusions limited provided support in various activities undertaken on occasions like World Health Day, World Breast Feeding Day, etc. The company also sponsored supplements in the national dailies on health care awareness development issues. Acknowledgement On this occasion, I would like to recall with appreciation and thanks the support and co- operation we have received from our bankers, our suppliers, our customers, the regulatory bodies, the persons concerned in the various government agencies and various people with whom we have interacted in the conduct of our business. I am highly appreciative of our valued shareholders for the confidence they have placed on us and the invaluable support they have extended to us. I on behalf of your board of directors express my sincere thanks to all of you and look forward for your continued support and co-operation in future. A S F Rahman Chairman Dhaka April 29, 2002 44 ANNUAL REPORT 2001 BEXIMCO PHARMA 45 ANNUAL REPORT 2001 BEXIMCO PHARMA Statement on Corporate Governance Good corporate governance is an issue of key focus to the management and board of Beximco Pharmaceuticals Limited. We place greatest emphasis on maintaining the highest standard of corporate governance. The statement below describes how the principles of good governance is applied in BPL. Board and Its Composition The board of directors is the highest level of authority in the organization structure of BPL. The board is responsible for the overall direction and is ultimately accountable to the shareholders for the activities, strategies and performance of the company. Currently, the board of directors of BPL comprises of nine members with Mr. A S F Rahman as Chairman and Mr. Salman F Rahman as Vice Chairman. Board’s Functioning Process The board meets frequently to deal with issues that require board’s approval and/or direction. To enable the board to function effectively and allow directors to discharge their responsibilities efficiently, full and timely information is made available to them by the professional managers of each of the business segments. Management Committee The responsibility to implement the board’s policies and strategic directives lies with the four member management committee headed by the Chief Executive Officer. The company has a group of professional managers drawn from diversified fields to carry out the day to day business operations. Internal Control BPL employs a sound system of internal control including internal financial control to ensure compliance of its activities with the desired objectives. The effectiveness of the control mechanism already in place is periodically reviewed. There are systems for careful monitoring of the activities to make sure that the standard and procedures set out for each business function is being effectively complied with. Management Structure Over the years we have successfully implemented a well designed corporate management structure with clearly defined responsibility, delegation of authority and proper accountability. BPL has an appropriate organization structure manned with qualified professionals for properly carrying out planning, executing, controlling and monitoring functions of each of the business subunits. Internal Audit The company has a specially assigned team to carry out internal financial audits of the different segments of the business. The team is headed by a manager who reports to the CEO. After appropriate review of the reports necessary corrective actions are undertaken. Reporting and Communication Reviews of the short and long term strategic business plans are carried out at periodic intervals. Each of the business units makes periodic financial projections and evaluations. There is a system for periodic financial reporting for each of the business segments. The operational units are required to prepare annual budgets and actual performance against the budget is actively monitored throughout the year at the business unit and the central management level. Going Concern After making appropriate enquires at the time of approving the financial statements the directors are convinced that the company has adequate resources to carry out its operational existence for the foreseeable future and that it is therefore appropriate to adopt going concern basis in preparing the financial statements. Report of the Directors to the Shareholders For the year ended 31st December 2001 The Directors have the pleasure in presenting their report and the audited accounts for the year ended 31st December, 2001 together with the Auditors’ Report thereon. Financial Results and Profit Appropriations Net Profit before providing Income Tax Less : Provision for Income Tax Net Profit after Tax Add : Un-appropriated profit from previous year Profit available for appropriation Recommended for appropriations : Transfer to Tax-holiday reserve Proposed Dividend (Tk. 1/- Per Share) Un-appropriated Profit Carried Forward 2001 430,421 (28,641) 401,780 1,067,085 1,468,865 (108,490) (44,250) (152,740) 1,316,125 Figure in ‘000 Taka 2000 422,644 (24,349) 398,295 862,310 1,260,605 (105,020) (88,500) (193,520) 1,067,085 Dividend The Board of Directors have recommended a dividend of Taka 1.00 per share of Tk. 10/- each fully paid up for your approval for the year ended 31st December, 2001. While paying the dividend, deduction of income tax shall be made as per Income Tax Law. Directors Mr. Salman F. Rahman and Dr. Farida Haque, Directors of the Company retire by rotation as per Articles 126 and 127 of the Articles of Association of the Company and being eligible offer themselves for re-election. Mr. C. H. Rahman nominee of Bangladesh Export Import Co. Ltd. retires as per Articles 126 and 127 of the Articles of Association of the Company and being eligible offers himself for re-election. Auditors The Directors hereby report that the existing Auditors, M/S M.J. Abedin & Co., Chartered Accountants, National Plaza (6th Floor), 1/G Free School Street, Sonargaon Road, Dhaka-1205 who were appointed as Auditors of the Company in the Twenty-Fifth Annual General Meeting of the Company has carried out the audit for the year ended December 31, 2001. M/S M.J. Abedin & Co. Chartered Accountants, National Plaza (6th Floor), 1/G Free School Street, Sonargaon Road, Dhaka-1205 the Auditors of the Company retire at this meeting and have expressed their willingness to continue in office for the year 2002. On behalf of the Board A S F Rhaman Chairman Dhaka. 29 April, 2002 46 ANNUAL REPORT 2001 BEXIMCO PHARMA 47 ANNUAL REPORT 2001 BEXIMCO PHARMA Auditors’ Report to The Shareholders of Beximco Pharmaceuticals Limited We have audited the accompanying financial statements of Beximco Pharmaceuticals Limited, set out on pages 49 to 71, comprise of Balance Sheet at 31 December 2001 and the Income Statement, Statement of Changes in Equity, and Cash Flow Statement year to that date and the related notes. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS The Company’s directors are responsible for preparing the annual report. This includes responsibility for preparing the financial statements, which give a true and fair view, in accordance with the Companies Act 1994, the Securities and Exchange Rules 1987 and the International Accounting Standards adopted by the Institute of Chartered Accountants of Bangladesh (ICAB). Our responsibility is to express an independent opinion based on our audit on those statements and to report our opinion to you. This responsibility is established in Bangladesh by the Companies Act 1994 and International Standards on Auditing adopted by the ICAB. BASIS OF AUDIT OPINION We conducted our audit in accordance with International Standards on Auditing adopted by the ICAB. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations, which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for our opinion. OPINION In our opinion, the financial statements give a true and fair view of the state of the affairs of the Company at 31 December 2001 and of the profit and cash flows year to that date and have been properly prepared in accordance with the Companies Act 1994, the Securities and Exchange Rules 1987 and the International Accounting Standards adopted by the ICAB. WE ALSO REPORT THAT (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof ; (b) (c) (d) in our opinion, proper books of accounts as required by law have been kept by the company so far as it appeared from our examination of those books; the Company’s Balance Sheet and Income Statement dealt with by this report are in agreement with the books of accounts ; and the expenditures incurred were for the purpose of the Company’s business. Beximco Pharmaceuticals Limited Balance Sheet As At 31 December 2001 ASSETS Non-Current Assets Property, Plant and Equipment - Net Book Value Cost Accumulated Depreciation Pre-Production Expenses Investment in Shares of Padma Textile Mills Ltd. Current Assets Inventories Trade Debtors Loans, Advances and Deposits Current Account with Related Parties Cash and Cash Equivalents Notes 2001 2000 9 10 11 12 13 14 15 16 4,576,093,546 4,454,495,125 5,141,779,706 (687,284,581) 81,054,671 40,543,750 1,784,174,322 1,144,320,036 333,884,395 167,044,720 95,903,770 43,021,401 3,572,873,764 3,462,814,359 4,062,659,866 (599,845,507) 69,515,655 40,543,750 1,837,871,677 1,173,573,503 308,800,577 217,364,220 106,367,972 31,765,405 Tk. 6,360,267,868 5,410,745,440 EQUITYAND LIABILITIES Shareholders' Fund Issued Share Capital Share Premium Reserve and Surplus Tax-Holiday Reserve Retained Earnings - As per Statement of Changes in Equity Total Shareholders’ Equity Non-Current Liabilities Long Term Borrowing (Secured) Deferred Liability - Provision for Gratuity Current Liabilities and Provisions Customs Debentures Short Term Borrowing from Banks Creditors and Other Payables Accrued Expenses Dividend Payable Provision for Income Tax 17 18 19 20 21 22 23 24 25 26 Tk. 1,932,250,000 442,500,000 1,489,750,000 2,233,541,144 873,166,091 1,360,375,053 4,165,791,144 704,155,151 656,646,364 47,508,787 1,490,321,573 1,758,387 1,081,904,675 250,693,220 115,690,840 2,880,935 37,393,516 6,360,267,868 1,932,250,000 442,500,000 1,489,750,000 1,831,761,336 764,676,274 1,067,085,062 3,764,011,336 40,308,478 - 40,308,478 1,606,425,627 1,758,387 1,067,707,765 329,154,184 133,381,157 1,510,146 72,913,988 5,410,745,440 Contingent Liabilities and Commitments (Notes-48 & 49). See accompanying notes. Approved by the board on 29 April 2002 and signed on its behalf by : M. J. Abedin & Co. Chartered Accountants Dhaka. 29 April 2002 Hasan Mahmood, FCA Partner National Plaza (6th Floor) 1/G Free School Street Sonargaon Road Dhaka-1205 C. H. Rahman Director Dhaka 29 April 2002 Auditors’report is setout alongwith. Iqbal Ahmed Director Md. Asad Ullah Company Secretary 48 ANNUAL REPORT 2001 BEXIMCO PHARMA 49 ANNUAL REPORT 2001 BEXIMCO PHARMA Beximco Pharmaceuticals Limited Income Statement Year to 31 December 2001 Beximco Pharmaceuticals Limited Statement of Changes in Equity Year to 31 December 2001 Notes 2001 2000 Revenue (Turnover) from Net Sales Cost of Goods Sold Gross Profit Operating Expenses : Administrative Expenses Selling & Distribution Expenses Profit from Operation Other Income (Net) Finance Cost Contribution to Workers’Participation / Welfare Funds Net Profit Before Tax Income Tax Expense Net Profit After Tax 27 28 33 34 35 36 37 38 39 Tk. Earnings Per Share (Par value Tk. 10/-) Number of Shares used to Compute EPS 40 Tk. 2,401,241,111 2,452,524,212 (1,459,108,308) (1,556,741,208) 942,132,803 895,783,004 (322,483,320) (76,595,834) (245,887,486) (303,176,313) (75,589,853) (227,586,460) 619,649,483 592,606,691 11,812,076 (179,520,085) 451,941,474 (21,521,023) 430,420,451 (28,640,643) 401,779,808 9.08 44,250,000 11,113,013 (159,943,284) 443,776,420 (21,132,211) 422,644,209 (24,349,536) 398,294,673 9.00 44,250,000 See accompanying notes. Approved by the board on 29 April 2002 and signed on its behalf by : C. H. Rahman Director Dhaka 29 April 2002 Auditors’report is setout alongwith. Iqbal Ahmed Director Md. Asad Ullah Company Secretary Share Capital Share Premium Tax Holiday Reserve Retained Earnings Total At the begining of year 442,500,000 1,489,750,000 764,676,274 1,067,085,062 3,764,011,336 Net Profit after Tax for 2001 Transfer to Tax Holiday Reserve (Note-41) - - - - - 401,779,808 401,779,808 108,489,817 (108,489,817) - At the end of year Tk. 442,500,000 1,489,750,000 873,166,091 1,360,375,053 4,165,791,144 See accompanying note. Approved by the board on 29 April 2002 and signed on its behalf by : C. H. Rahman Director Dhaka 29 April 2002 Auditors’report is setout alongwith. Iqbal Ahmed Director Md. Asad Ullah Company Secretary 50 ANNUAL REPORT 2001 BEXIMCO PHARMA 51 ANNUAL REPORT 2001 BEXIMCO PHARMA Beximco Pharmaceuticals Limited Cash Flow Statement Year to 31 December 2001 Beximco Pharmaceuticals Limited Accounting Policies and Explanatory Notes Year to 31 December 2001 The accounting policies and explanatory notes to the financial statements have been set out below in the manner as prescribed by the IAS 1 "Presentation of Financial Statements". 2001 2000 1. Corporate Information – Organization and Business Note 42 Cash Flows from Operating Activities : Cash Receipts from Customers and Others Cash Paid to Suppliers and Employees Cash Generated from Operations Interest Paid Income Tax Paid & Deducted at Source Net Cash Generated From Operating Activities Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment Disposal of Property, Plant and Equipment Payments for Pre-Production Expenses Net Cash used in Investing Activities Cash Flows from Financing Activities : Decrease in Current Account with Related Parties Proceeds from Long Term Borrowing Cash Credit & other Short Term Loan Received Dividend Paid Net Cash Generated / (Used) in Financing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Begining of Year Cash and Cash Equivalents at End of Year Tk. See accompanying note. Approved by the board on 29 April 2002 and signed on its behalf by : 2,387,968,293 (1,681,791,740) 706,176,553 (171,404,878) (24,591,042) 510,180,633 (1,082,771,667) 1,207,782 (11,539,017) (1,093,102,902) 10,464,202 656,646,364 14,196,910 (87,129,211) 594,178,265 11,255,996 31,765,405 43,021,401 2,408,366,414 (1,841,168,472) 567,197,942 (154,363,646) (21,097,878) 391,736,418 (314,464,334) 4,254,087 (10,575,596) (320,785,843) 3,263,924 - 82,054,419 (153,364,854) (68,046,511) 2,904,064 28,861,341 31,765,405 C. H. Rahman Director Dhaka 29 April 2002 Auditors’report is setout alongwith. Iqbal Ahmed Director Md. Asad Ullah Company Secretary 52 ANNUAL REPORT 2001 BEXIMCO PHARMA The Beximco Pharmaceuticals Ltd. (the "Company"), a member of BEXIMCO Group, was incorporated in Bangladesh as a public limited company on 17 March 1976. It commenced commercial operation in 1980 and went for public issue of shares in 1985. The shares of the Company are listed in the Dhaka and Chittagong stock exchanges of Bangladesh. The registered office of the Company is located at House No.17, Road No.2, Dhanmondi Residential Area, Dhaka. The industrial Units are located at Kathaldia, Auspara, Tongi of Gazipur. During the year, the principal activities of the company were manufacturing of pharmaceuticals drugs and medicines and also basic chemical products and sales thereof. The company employed 1,151 (2000: 1,047), employees as of 31 December 2001. 2. Accounting Pronouncements (Standards) The financial statements of the company have been prepared in accordance with the International Accounting Standards-IASs adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), which are basically based on the International Accounting Standards – IASs issued by the International Accounting Standards Committee–IASC (now replaced by International Accounting Standards Board - IASB and International Accounting Standards Committee Foundation) and also based on the interpretations issued by the Standing Interpretations Committee – SIC (now International Financial Reporting Interpretations Committee – IFRIC). It is noted that, as per the resolution passed by the IASB, all the standards to be issued by IASB shall be designated as International Financial Reporting Standards – IFRS and, all the existing IASs issued by IASC continue to be applicable and be designated as IASs unless and until they are amended or withdrawn. 3. Accounting Convention (Measurement Basis) The financial statements are prepared under the historical cost convention and therefore, do not take into consideration the effect of inflation. 4. Basis of Preparation and Presentation of the Financial Statements and The Responsibility Thereto The board of directors is responsible for the preparation and presentation of financial statements. The financial statements have been prepared and the disclosures of information have been made in accordance with the requirements of the Companies Act 1994, the Securities and Exchange Rules 1987, the Listing Rules of Dhaka and Chittagong Stock Exchanges, and the accounting standards referred to in Note 2. 5. Principal Accounting Policies The specific accounting policies selected and applied by the Company’s directors for significant transactions and events that have material effect within the framework of IAS 1 "Presentation of Financial Statements", in preparation and presentation of financial statements have been consistently applied throughout the year and were also consistent with those used in earlier years. For a proper understanding of the financial statements, these accounting policies are set out below in one place as prescribed by the IAS 1 " Presentation of Financial Statements". 53 ANNUAL REPORT 2001 BEXIMCO PHARMA Revenue Recognition Revenue represents invoiced value of pharmaceuticals drugs, medicine and basic chemical products net off VAT. Sale of pharmaceuticals drugs, medicine and basic chemical products are recognized when invoices are made. Invoices were made after satisfying the following conditions as prescribed by IAS 18 "Revenue" : (a) the significant risks and rewards of ownership of the product sold has been transferred to the buyer; (b) the amount of revenue was measured reliably; (c) it was probable that the economic benefits relating to the transactions will flow to the enterprise; (d) neither continuing managerial involvement nor effective control usually associated with ownership of the product sold was retained by the Company; and (e) cost relating to the transactions was measured reliably. Recognition of Tangible Fixed Assets These are capitalized at cost of acquisition and subsequently stated at cost less accumulated depreciation in compliance with the benchmark treatment of IAS 16 "Property, Plant and Equipment". The Cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes. In respect of major projects involving construction, related pre-operational expenses form part of the value of asset capitalized. Expenses Capitalized also includes applicable borrowing cost considering the requirement of IAS 23 "Borrowing Costs". Expenditure incurred after the assets have been put into operation, such as repairs & maintenance is normally charged off as revenue expenditure in the period in which it is incurred. In situation where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefit expected to be obtained from the use of the fixed assets, the expenditure is capitalized as an additional cost of the assets. Software and all upgradation /enhancement are generally charged off as revenue expenditure unless they bring similar significant additional benefits. Fixed Assets do not include any assets held under lease. On retirement or otherwise disposal of fixed assets, the cost and accumulated depreciation are eliminated and any gain or loss on such disposal is reflected in the Income Statement which is determined with reference to the net book value of the assets and the net sales proceeds. Depreciation of Tangible Fixed Assets Land is held on a freehold basis and is not depreciated considering the unlimited life. In respect of all other fixed assets, depreciation is provided to amortize the cost of the assets after commissioning, over their expected useful economic lives, in accordance with the provisions of IAS 16 "Property, Plant & Equipment". Depreciation is computed using the reducing balance method. Full year’s depreciation is charged on additions and no depreciation is provided on retirement, irrespective of date of addition or retirement respectively. Financial Instruments and Derivatives Primary Financial Instruments (Financial Assets and Liabilities) The disclosure of primary financial instruments carried at the balance sheet date alongwith the recognition methods and risks involved are summarized in Note 44 in accordance with the provisions of IAS 32 " Financial Instruments: Disclosure and Presentation." Derivative Financial Instruments The Company is not a party to any derivative contract at the balance sheet date, such as forward exchange contract, currency swap agreement or interest rate option contract to hedge currency exposure related to import of raw material and others or principal and interest obligations of foreign currency loans. Inventories In compliance with the requirement of IAS 2 "Inventories", inventories including work-in-process are stated at the lower of cost and net realizable value. The cost is calculated on weighted average method consistently. Costs comprise expenditure incurred in the normal course of business in bringing such inventories to its location and conditions. Where necessary, provision is made for obsolete, slow moving and defective inventories (if any) identified at the time of physical verification of inventories. Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale. Trade Debtors These are carried at original invoice amount. This is considered good and collectible, and therefore, no amount was written off as bad debt and no debt was considered doubtful to provide for. Cost of Post Employment Benefits The Company operates a recognized contributory provident fund, unfunded gratuity scheme and a group insurance scheme for its permanent employees. Assets of Provident fund are held in a separate trustee administrated fund as per the relevant rules and is funded by payments from employees and by the Company at pre-determined rates. Employees are entitled to gratuity benefit after completion of minimum five years of service in the company. The gratuity is calculated on the last basic pay and is payable at the rate of one month basic pay for every completed year of service. The company’s contributions to the provident fund, gratuity and group insurance are charged off as revenue expenditure in the period to which the contributions relate. Leases Classification of Lease The lease is classified as an operating lease as it does not transfer substantially all the risks and rewards incident to ownership consistent with the view laid down in IAS 17 "Leases". The annual depreciation rates applicable to the principal categories are: Measurement of Lease Building and Other Construction……..........................………............…….………....................10% Plant and Machinery ..................................................................…………………………….......15% Furniture & Fixtures ………..……………………....................................….…………................10% Transport & Vehicle ………….....………………….....……………………………………..............20% Office Equipment ….......………………….....……………….........................................10% to 50% 54 ANNUAL REPORT 2001 BEXIMCO PHARMA Leases payments (excluding cost for services such as insurance and maintenance) are recognized as expenses in the income statement on a straight line basis. Cash and Cash Equivalents For the purpose of Balance Sheet and Cash Flow Statement, Cash in hand and Bank balances represent cash and cash equivalents considering the IAS 1 "Presentation of Financial Statements" and IAS 7 "Cash Flow Statement", which provide, that cash and cash equivalents are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value and are not restricted as to use. 55 ANNUAL REPORT 2001 BEXIMCO PHARMA Creditors and Accrued Expenses Liabilities are recognized for amounts to be paid in the future for goods and services received, whether or not billed by the supplier. Income Tax The company is a Publicly Traded Company as per the Income Tax Ordinance 1984 and therefore, provision for income tax has been made during the year under review in respect of business income (net profit excluding dividend income) of taxable units (Dry-1, Dry-2, Dry-3, Dry-4, Dry-5 (Dec), Wet-1, Wet-2, Basic Chemical-1 and Basic Chemical-2) at the existing rate of 35% prescribed in the Finance Act, 2001. In respect of dividend income, 15% tax has been provided. The short/excess provision for tax shall be accounted in the year of finalization of assessment. Considering the practices generally followed in Bangladesh as well as the Company’s previous practice, no deferred tax assets or deferred tax liabilities have been accounted for in accordance with IAS 12 "Income Tax". Tax Holiday Reserve This represents 30% of net profit of tax holiday units (Dry-5 (Jan-Nov), Dry-6, Dry-7, MDI, Wet- 3, and Basic Chemical-3) and is being created to invest in the same undertaking or in any new industrial undertaking or in stocks and shares of listed companies or in government bonds or securities or for other purposes as specified in the Income Tax Ordinance 1984. Proposed Dividend The board of directors has proposed a dividend of Tk. 1/- per share of Tk. 10/- each fully paid up for the approval of the shareholders for the year ended 31 December 2001. The said proposed dividend is not recognised as a liability in the balance sheet in accordance with the IAS 10 "Events After the Balance Sheet Date" . IAS 1 " Presentation of Financial Statements" also requires the dividend proposed after the balance sheet date but before the financial statements are authorized for issue, be disclosed either on the face of the balance sheet as a separate component of equity or in the notes to the financial statements. Accordingly, the Company is disclosing its proposed dividend in the Note-39 and 57. The provision of the Companies Act 1994 requires that the dividends stated to be in respect of the period covered by the financial statements and that are proposed or declared after the balance sheet date but before approval of the financial statements should be either adjusted or disclosed. Considering the above stated requirements of IAS 10 and Companies Act 1994, the amount of proposed dividend have only been disclosed in notes without any adjustment in the accounts. Share Premium The Share Premium shall be utilized in accordance with provisions of the Companies Act 1994 and as directed by the Securities and Exchange Commission in this respect. The Section 57 of the Companies Act 1994 provides that the share premium account may be applied by the company: (a) in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares; (b) in writing off the preliminary expenses of the company; (c) in writing off the expenses or the commission paid or discount allowed on any issue of shares or debentures of the company; and (d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debenture of the company. 56 ANNUAL REPORT 2001 BEXIMCO PHARMA In this respect, a statuary notification was issued in 1992 by the Controller of Capital Issues (now the Securities and Exchange Commission), allowing the above stated utilization of share premium including one additional purpose in adjusting or amortizing of intangible assets, subject to prior approval. The said notification also provides that the fund of the premium account is to be utilized in order of priority. Earnings Per Share (EPS) The Company calculates Earnings Per Share (EPS) in accordance with IAS 33 "Earnings per Share" which has been shown on the face of Income Statement and, the computation of EPS is stated in Note 40. Basic Earnings This represents earnings for the year attributable to ordinary shareholders. As there was no preference dividend, minority interest or extra ordinary items, the net profit after tax for the year has been considered as fully attributable to the ordinary shareholders. Weighted Average Number Of Ordinary Shares Outstanding During The Year This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time-weighting factor. The time- weighting factor is the number of days the specific shares are outstanding as a proportion of the total number of days in the period. Basic Earnings Per Share This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. Diluted Earnings Per Share No diluted EPS is required to be calculated for the year as there was no scope for dilution during the year under review. Cash Flow Statement Cash Flow Statement is prepared principally in accordance with IAS 7 "Cash Flow Statement" and the cash flow from the operating activities have been presented under direct method as required by the Securities and Exchange Rules 1987 and considering the provisions of Paragraph 19 of IAS 7 which provides that "Enterprises are Encouraged to Report Cash Flow From Operating Activities Using the Direct Method". Cash generated from operation under indirect method, however, has also been given in Note 42 as additional information. Foreign Currencies The financial records of the company are maintained and financial statements are stated in Bangladesh Taka. Foreign Currency transactions are recorded at the applicable rates of exchange ruling at the transaction date in accordance with IAS 21 "The Effects of Changes in Foreign Currency Rates". Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange ruling at that date. Exchange differences are dealt with in the income statement. The rate of relevant foreign exchange at year end is: 2001 1 U S Dollar ($) = Tk. 57.6450 2000 54.2500 Risk and Uncertainties for Use of Estimates (Provisions) The preparation of financial statements in conformity with international accounting standards requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses, assets and liabilities, and the disclosure requirements for contingent assets and liabilities during and the date of the financial statements. Due to the inherent uncertainty 57 ANNUAL REPORT 2001 BEXIMCO PHARMA involved in making estimates, actual result reported could differ from those estimates. In accordance with the guidelines as prescribed by IAS 37 "Provisions, Contingent Liabilities and Contingent Assets", provisions were recognized in the following situations: (a) when the Company has a present obligation as a result of past event; (b) when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) reliable estimates can be made of the amount of the obligation. 6. Segmental Analysis – Business and Geographical Segments All the company’s turnover and operating profit is generated from sale of pharmaceuticals drugs, medicine and basic chemical products. The location of customers are within Bangladesh. However, there were some exports to Pkaistan, Myanmar, Kenya, Yemen, Vietnam and Singapore, which is not material. Therefore, disclosure of information in respect of turnover, profit, assets and liabilities regarding business segments and geographical segments as required by IAS 14 "Segment Reporting" are not relevant and applicable for the Company. 9. Property, Plant and Equipment - Tk. 4,454,495,125 The movement of Property, Plant & Equipment is as follows : Particulars Cost Freehold Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Capital Work in Progress Total At 31 December, 2000 347,923,610 395,423,734 718,329,646 22,213,412 33,842,349 81,625,479 2,463,301,636 4,062,659,866 Additions in 2001 Disposal in 2001 60,296,245 39,698,984 25,697,145 6,175,210 2,537,630 5,172,067 943,194,386 1,082,771,667 - - - (344,016) (2,944,665) (363,146) - (3,651,827) At 31 December, 2001 408,219,855 435,122,718 744,026,791 28,044,606 33,435,314 86,434,400 3,406,496,022 5,141,779,706 Depreciation At 31 December, 2000 For 2001 Adjustment on disposal At 31 December, 2001 Net Book Value - - - - 163,863,859 343,185,169 10,604,317 24,197,231 57,994,931 24,709,956 57,141,358 1,548,017 2,292,359 - - (87,105) (2,223,716) 4,192,505 (134,300) 188,573,815 400,326,527 12,065,229 24,265,874 62,053,136 - - - - 599,845,507 89,884,195 (2,445,121) 687,284,581 7. Statement of Total Recognized Gains and Losses Year to 31 December 2001 Net Book Value 31 December, 2001 Tk. 408,219,855 246,548,903 343,700,264 15,979,377 9,169,440 24,381,264 3,406,496,022 4,454,495,125 During the year under review, no gain or loss was directly dealt with through the shareholders’ equity without being recognized in the income statement including currency translation (exchange) differences, surplus/deficit on revaluation of property, plant and equipment and investment, or any other undistributable reserve. Therefore, net profit after tax for the year of Tk. 401,779,808 recognized in the income statement is the total recognized gains and therefore, the Statement of Changes in Equity does not reflect any profit not recognized in the Income Statement. 8. Note of Historical Cost Profits and Losses Year to 31 December 2001 There was no difference in profit on ordinary activities before taxation and the net profit before tax as there was no extra ordinary item. Further more, as there was no revaluation of fixed assets in previous years and during the year under review, there was no factor like the differences between historical cost depreciation and depreciation on revalued amount, realization of revenue surplus on retirement or disposal of assets etc. Therefore, no separate note of historical cost profit and loss has been presented. 31 December, 2000 Tk. 347,923,610 231,559,875 375,144,477 11,609,095 9,645,118 23,630,548 2,463,301,636 3,462,814,359 10. Pre-Production Expenses - Tk. 81,054,671 This is in respect of the expansion project and represents : Salary and Allowances Medical Expenses Utilities Bonus Foreign Travel House Rent Insurance Premium Entertainment Conveyance Other Expenses 2001 2000 41,217,017 38,078,840 660,017 3,931,514 4,690,506 5,335,661 3,962,401 315,345 1,686,806 542,727 18,712,677 81,054,671 Tk. 479,334 2,603,106 3,878,641 3,555,774 2,837,916 217,238 1,359,189 373,228 16,132,389 69,515,655 11. Investment in Shares of Padma Textile Mills Ltd. - Tk. 40,543,750 This represents investment in 2,632,500 ordinary shares having face value of Tk. 10/- each of the Padma Textile Mills Ltd., an associated undertaking and a listed company with foreign collaboration. This consists of : 1,625,000 Shares of Tk. 10/- each 568,750 Right Shares of Tk. 35/- each including premium of Tk. 25/- each 438,750 Bonus Shares of Tk. 10/- each 2,632,500 16,250,000 19,906,250 4,387,500 40,543,750 Tk. 16,250,000 19,906,250 4,387,500 40,543,750 The shares of the Padma Textile Mills Ltd. are listed in the Dhaka and Chittagong Stock Exchanges. The market value of each share of Padma Textile Mills Ltd. as on 31st December, 2001 was Tk. 19.06 (on 31-12-00 Tk. 23.26) in the Dhaka Stock Exchange Ltd. and Tk. 19.35 (on 31-12-00 Tk. 24.90) in the Chittagong Stock Exchange Ltd. The par value of shares of Padma Textile Mills Ltd. of Tk. 100/- each, primarily issued, has been split off at Tk. 10/- each in accordance with the resolution of the shareholders in its Extraordinary General Meeting held on 14th June, 2001. Accordingly, for the comparison purposes, number of shares held on the year 2000 have been rearranged considering the par value of shares of Tk. 10/- each. The investment in 2,632,500 shares represents 6.25% of total 42,120,000 shares of issued, subscribed and paid-up shares of Padma Textile Mills Ltd. 58 ANNUAL REPORT 2001 BEXIMCO PHARMA 59 ANNUAL REPORT 2001 BEXIMCO PHARMA 12. Inventories - Tk. 1,144,320,036 15. Current Account with Related Parties - Tk. 95,903,770 This consists of as follows : 2001 2000 This is unsecured but considered good and bears interest @ 10% to 15% p.a. Finished Goods Work in Process Raw Material Packing Material Laboratory Chemical Literature & Promotional Material Physician Sample Raw and Packing Material in Transit Stock of Stationery Spares & Accessories 368,956,089 71,803,128 487,421,624 104,502,699 449,162 6,428,970 3,035,875 46,082,254 1,718,424 53,921,811 219,959,153 69,175,003 681,283,898 81,117,431 412,569 6,196,415 1,876,945 62,026,289 1,365,976 50,159,824 Tk. 1,144,320,036 1,173,573,503 13. Trade Debtors - Tk. 333,884,395 This is unsecured, considered good and is falling due within one year. 16. Cash and Cash Equivalents - Tk. 43,021,401 This consists of as follows : (a) Cash in Hand (b) Cash at Banks : (i) In Current Accounts (ii) In S.T.D. Accounts (iii) In F.C. Accounts (US$ 16,109.60) (on 31-12-2000 US$ 59,542.68) (iv) In FDR Tk. 17. Issued Share Capital - Tk. 442,500,000 2001 495,387 10,773,762 2,621 928,638 30,820,993 42,526,014 43,021,401 2000 330,282 1,446,973 4,488 3,230,190 26,753,472 31,435,123 31,765,405 This includes receivable against export sales of Tk. 21,797,784 equivalent to US $ 398,494.84 (on 31-12-2000 Tk. 18,721,149 equivalent to US $ 345,090). This represents : Authorised : This also includes Tk. 292,661,848 (on 31-12-2000 Tk. 270,336,894) due from I & I Services Ltd., the sole distributor of the pharmaceutical products of the company and a "related party". The maximum amount due from that company during the year was Tk. 292,661,848 on 31-12-2001 (on 31-12-2000 Tk. 270,336,894). No amount was due by the directors, managing agent, managers and other officers of the company and any of them severally or jointly with any other person. 100,000,000 Ordinary Shares of Tk. 10/- each Issued, Subscribed and Paid-up : 23,600,000 Ordinary Shares of Tk. 10/- each fully paid-up in cash 20,650,000 Bonus Shares of Tk. 10/- each 44,250,000 Shares Tk. 1,000,000,000 1,000,000,000 236,000,000 206,500,000 442,500,000 Tk. 236,000,000 206,500,000 442,500,000 14. Loans, Advances and Deposits - Tk. 167,044,720 This is unsecured, considered good and consists of as follows : Loans and advances : Clearing & Forwarding Office Rent Officers Income Tax Staffs House Rent Motor Cycle Raw & Packing Material Imprest Cash Foreign Travel Prepaid Insurance Premium Others Deposits : VAT Claim Receivable Security Deposit Lease Deposit Earnest Money Bank Guarantee Margin 9,109,237 1,019,900 5,353,168 20,591,042 1,775,746 24,441,894 2,673,713 685,272 6,018,587 - 7,515,974 79,184,533 51,606,145 8,419,342 7,555,574 18,850,070 1,395,511 33,545 87,860,187 Tk. 167,044,720 25,156,192 3,414,029 6,206,593 60,161,116 1,504,410 13,801,953 1,654,430 633,472 5,501,892 990,000 9,839,254 128,863,341 56,146,936 8,419,475 5,083,918 17,345,392 1,271,513 233,645 88,500,879 217,364,220 (a) The maximum amount due from the officers during the year was Tk. 6,206,593 on 01-01-2001 (on 31-12-2000 Tk. 6,206,593). (b) No amount was due by the directors, managing agent, managers and other officers of the company and any of them severally or jointly with any other person, except as stated above. (c) No amount was due by any Related Party. (a) Composition of Shareholding : Sponsors Foreign Investors General Public (b) Distribution Schedule : 2001 2000 No. of shares % No. of shares % 11,922,631 1,788,971 30,538,398 44,250,000 26.94 4.04 69.02 100.00 11,922,631 2,159,916 30,167,453 44,250,000 26.94 4.88 68.18 100.00 The distribution schedule showing the number of shareholders and their shareholdings in percentage has been disclosed below as a requirement of the “Listing Regulations” of Dhaka and Chittagong Stock Exchanges : Range of Holdings No. of Shareholders % of Shareholders No. of Shares % of Share Capital In number of shares 1 to 499 500 to 5,000 5,001 to 10,000 10,001 to 20,000 20,001 to 30,000 30,001 to 40,000 40,001 to 50,000 50,001 to 100,000 100,001 to 1,000,000 Over 1,000,000 2001 41,055 8,730 355 142 30 16 9 15 9 6 2000 41,101 8,996 307 137 26 8 7 18 12 6 2001 81.51% 17.33% 0.71% 0.28% 0.06% 0.03% 0.02% 0.03% 0.02% 0.01% 2000 81.20% 17.77% 0.61% 0.27% 0.05% 0.02% 0.01% 0.04% 0.02% 0.01% Total 50,367 50,618 100.00% 100.00% 2001 2000 5,982,885 11,073,916 2,505,178 1,985,145 726,664 559,403 415,080 1,133,852 1,929,817 17,938,060 44,250,000 6,131,256 11,263,581 2,212,486 1,882,002 626,717 274,668 319,897 1,405,196 2,750,792 17,383,405 44,250,000 2001 13.52% 25.03% 5.66% 4.49% 1.64% 1.26% 0.94% 2.56% 4.36% 2000 13.86% 25.45% 5.00% 4.25% 1.42% 0.62% 0.72% 3.18% 6.22% 40.54% 100.00% 39.28% 100.00% (c) Market Price : The shares are listed in the Dhaka and Chittagong Stock Exchanges, on 31-12-2001 each share was quoted at Tk. 49.50 (on 31-12-00 Tk. 66.90) in the Dhaka Stock Exchange Ltd. and Tk. 49.47 (on 31-12-00 Tk. 66.86) in the Chittagong Stock Exchange Ltd. (d) Option on Unissued Shares : There is no option regarding authorised capital not yet issued but can be used to increase the issued, subscribed and paid-up capital through the issuance of new shares against cash contribution and bonus. 60 ANNUAL REPORT 2001 BEXIMCO PHARMA 61 ANNUAL REPORT 2001 BEXIMCO PHARMA 18. Share Premium - Tk. 1,489,750,000 This is as per last account and made-up as follows : 2001 2000 (a) 590,000 shares issued in 1992 at the premium of Tk. 325/- per share (b) 1,180,000 shares issued in 1994 at the premium of Tk. 1,100/- per share 191,750,000 1,298,000,000 1,489,750,000 Tk. 191,750,000 1,298,000,000 1,489,750,000 19. Tax-Holiday Reserve - Tk. 873,166,091 This has been provided for as per provisions of the Income Tax Ordinance, 1984 which is arrived at as follows : Opening Balance Add: Provided during the year (Note - 41) 764,676,274 108,489,817 873,166,091 Tk. 659,656,614 105,019,660 764,676,274 20. long Term Borrowing (Secured) - Tk. 656,646,364 This represents the civil component of the consortium project loan alongwith interest thereto which has been availed during the year 2001. This loan was sanctioned under the consortium arrangement of Janata Bank, Sonali Bank, Agrani Bank, Rupail Bank Ltd. and United Commercial Bank Ltd. Janata bank was the lead bank to the consourtium. The loan was provided for the expansion (BMRE) project of the company. Nature of Security : This loan is secured against: (a) First (registered mortgage) charge on paripassu basis with the participating banks on 1,112.84 decimals of land alongwith the building and other construction to be built thereon at Kathaldia and Aushpara of Gazipur; and (b) First paripassu charge by way of hypothecation on all assets of the company both present and future. Terms of repayment : The total loan period is eight years and six months including grace periods of eighteen months. The loan alongwith 13% interest shall be repayable in 14 half yearly installments from the twenty four months after the first day of loan disbursement.The interest during construction period (IDCP) shall be payable with simple interest in five yearly installments. Rate of interest : 13% p.a. 21. Deferred Liability (Provision for Gratuity) - Tk. 47,508,787 This is payable to the permanent employees at the time of separation from the company which is arrived at as follows : Opening Balance Add : Provided during the year Less : Paid during the year 40,308,478 9,137,495 49,445,973 (1,937,186) 47,508,787 Tk. 34,364,081 7,233,525 41,597,606 (1,289,128) 40,308,478 22. Customs Debentures - Tk. 1,758,387 This is as per last account and represents : Installment due Interest due 62 ANNUAL REPORT 2001 BEXIMCO PHARMA 265,854 1,492,533 1,758,387 Tk. 265,854 1,492,533 1,758,387 23. Short Term Borrowing From Banks - Tk. 1,081,904,675 This represents : (a) Janata Bank : Cash Credit-Pledge Cash Credit-Hypothecation LIM (b) Citibank N.A. (c) Credit Agricole Indosuez (d) Standard Chartered Grindlays 2001 2000 155,337,898 625,133,177 43,695,796 76,015,905 51,521,670 130,200,229 1,081,904,675 Tk. 155,965,760 597,268,061 - 77,547,254 116,361,562 120,565,128 1,067,707,765 24. Creditors and Other Payables - Tk. 250,693,220 These are unsecured, and falling due within one year. This consists of : Suppliers Payable to RAJUK - Land Proposed Dividend Loan from Workers' Participation/Welfare Funds 25. Accrued Expenses - Tk. 115,690,840 This is falling due within one year. This consists of as follows: For Expenses-Unsecured Workers’Particepation/Welfare Funds Provident Fund 26. Provision For Income Tax - Tk. 37,393,516 This is arrived at as follows : Opening Balance Add : Tax provided in 2001(Note - 38) Less : Tax paid during the year Less : Advance tax adjusted Tk. Tk. Tk. 178,236,892 9,423,531 - 63,032,797 250,693,220 176,131,001 9,423,531 88,500,000 55,099,652 329,154,184 70,277,976 21,521,023 23,891,841 115,690,840 93,747,279 21,132,210 18,501,668 133,381,157 72,913,988 28,640,644 101,554,632 (4,000,000) 97,554,632 (60,161,116) 37,393,516 51,277,897 24,349,536 75,627,433 (2,713,445) 72,913,988 - 72,913,988 27. Revenue (Turnover) from Net Sales - Tk. 2,401,241,1 11 This is made-up as follows : Local Sales Export Sales - US$ 842,652 (in 2000 US$ 848,925) Sales Represents : Tablet & Capsules Bottle & Tubes Basic Chemicals Pcs Pcs Kg 2,353,916,337 47,324,774 2,401,241,111 Tk. 2,408,256,521 44,267,691 2,452,524,212 1,320,438,707 21,474,310 101,890 1,629,668,723 21,070,149 125,950 63 ANNUAL REPORT 2001 BEXIMCO PHARMA Notes 29 30 31 32 Unit Pcs Pcs Kg Pcs Pcs Kg 2001 2000 69,175,003 1,168,189,896 234,078,428 4,119,057 1,475,562,384 (71,803,128) 1,403,759,256 213,326,017 1,617,085,273 219,959,153 1,837,044,426 (368,956,089) 1,468,088,337 (8,980,029) 1,459,108,308 Tk. 48,214,306 1,150,785,452 221,563,689 3,735,738 1,424,299,185 (69,175,003) 1,355,124,182 209,813,876 1,564,938,058 220,388,544 1,785,326,602 (219,959,153) 1,565,367,449 (8,626,241) 1,556,741,208 Quantity Value 165,699,674 2,776,793 19,200 366,587,102 3,066,408 9,527 160,678,564 24,454,224 34,826,365 219,959,153 245,282,899 67,551,432 56,121,758 368,956,089 Tk. Tk. 28. Cost of Goods Sold - Tk. 1,459,108,308 This is made-up as follows : Work-in-Process (Opening) Raw Material Consumed Packing Material Consumed Laboratory Chemical Consumed Work-in-Process (Closing) TOTALCONSUMPTION Factory Overhead COSTOF PRODUCTION Finished Goods (Opening) Finished Goods Available Finished Goods (Closing) Cost of Physician Sample 2001 2000 28. Cost of Goods Sold - Tk. 1,459,108,308 Notes 29 30 31 32 69,175,003 1,168,189,896 234,078,428 4,119,057 1,475,562,384 (71,803,128) 1,403,759,256 213,326,017 1,617,085,273 219,959,153 1,837,044,426 (368,956,089) 1,468,088,337 (8,980,029) 1,459,108,308 Tk. 48,214,306 1,150,785,452 221,563,689 3,735,738 1,424,299,185 (69,175,003) 1,355,124,182 209,813,876 1,564,938,058 220,388,544 1,785,326,602 (219,959,153) 1,565,367,449 (8,626,241) 1,556,741,208 This is made-up as follows : Work-in-Process (Opening) Raw Material Consumed Packing Material Consumed Laboratory Chemical Consumed Work-in-Process (Closing) TOTALCONSUMPTION Factory Overhead COSTOF PRODUCTION Finished Goods (Opening) Finished Goods Available Finished Goods (Closing) Cost of Physician Sample Itemwise quantity and value of Finished Goods Stock are as follows : Itemwise quantity and value of Finished Goods Stock are as follows : Item Stock as on 01-01-2001 Tablet & Capsules Bottle & Tubes Basic Chemicals Stock as on 31-12-2001 Tablet & Capsules Bottle & Tubes Basic Chemicals 29. Raw Material Consumed - Tk. 1,168,189,896 This is made-up as follows : Opening Stock Purchase Closing Stock Itemwise quantity and value : Opening Stock (Consists of 354 items) Add : Purchase (Consists of 378 items) Less : Closing Stock (Consists of 381 items) Consumption (Consists of 389 items) Kg Ltr. Unit Kg Ltr. Unit Kg Ltr. Unit Kg Ltr. Unit SOLID 837,717 892 46,020,933 1,402,741 4,160 117,551,950 604,342 2,243 75,841,354 LIQUID 552,901 - - 718,390 - - 232,713 - - 1,636,116 2,809 87,731,529 1,038,578 - - Raw material consumed is 72% imported. 64 ANNUAL REPORT 2001 BEXIMCO PHARMA Unit Pcs Pcs Kg Pcs Pcs Kg Tk. BASIC 402,726 - - 559,620 - - 309,377 - - 652,969 - - Quantity Value Item 165,699,674 2,776,793 19,200 366,587,102 3,066,408 9,527 160,678,564 24,454,224 34,826,365 219,959,153 245,282,899 67,551,432 56,121,758 368,956,089 Tk. Tk. Stock as on 01-01-2001 Tablet & Capsules Bottle & Tubes Basic Chemicals Stock as on 31-12-2001 Tablet & Capsules Bottle & Tubes Basic Chemicals 29. Raw Material Consumed - Tk. 1,168,189,896 This is made-up as follows : 2001 2000 2001 2000 681,283,898 974,327,622 (487,421,624) 1,168,189,896 TOTAL(Qnty) 1,793,344 892 46,020,933 2,680,751 4,160 117,551,950 1,146,432 2,243 75,841,354 3,327,663 2,809 87,731,529 622,105,498 1,209,963,853 (681,283,898) 1,150,785,452 TOTAL(Value) 672,571,340 278,050 8,434,508 681,283,898 955,604,308 260,794 18,462,520 974,327,622 476,036,158 115,383 11,270,083 487,421,624 1,152,139,490 423,461 15,626,945 Tk. 1,168,189,896 Opening Stock Purchase Closing Stock Itemwise quantity and value : Opening Stock (Consists of 354 items) Add : Purchase (Consists of 378 items) Less : Closing Stock (Consists of 381 items) Consumption (Consists of 389 items) 681,283,898 974,327,622 (487,421,624) 1,168,189,896 TOTAL(Qnty) 1,793,344 892 46,020,933 2,680,751 4,160 117,551,950 1,146,432 2,243 75,841,354 3,327,663 2,809 87,731,529 Tk. BASIC 402,726 - - 559,620 - - 309,377 - - 652,969 - - Kg Ltr. Unit Kg Ltr. Unit Kg Ltr. Unit Kg Ltr. Unit SOLID 837,717 892 46,020,933 1,402,741 4,160 117,551,950 604,342 2,243 75,841,354 LIQUID 552,901 - - 718,390 - - 232,713 - - 1,636,116 2,809 87,731,529 1,038,578 - - Raw material consumed is 72% imported. 65 ANNUAL REPORT 2001 BEXIMCO PHARMA 622,105,498 1,209,963,853 (681,283,898) 1,150,785,452 TOTAL(Value) 672,571,340 278,050 8,434,508 681,283,898 955,604,308 260,794 18,462,520 974,327,622 476,036,158 115,383 11,270,083 487,421,624 1,152,139,490 423,461 15,626,945 Tk. 1,168,189,896 33. Administrative Expenses -Tk. 76,595,834 This consists of as follows : 2001 2000 This is arrived at as follows : 35. Other Income / (Loss) (Net) -Tk. 11,812,076 Note 2001 2000 Salary & Allowances (including welfare expenses and retrial benefit) Rent Expenses Repairs & Maintenance (including car maintenance) Donation & Subscription Travelling & Conveyance Entertainment Printing & Stationery Auditors’Remuneration Postage & Telephone Software Devolopement Expenses Electricity, Gas & Water Legal & Consultancy Fee AGM Expenses Other Expenses Lease Rental 20,171,116 2,255,160 4,416,812 222,928 596,790 285,640 571,578 150,000 2,014,732 3,200,000 1,228,752 163,200 6,108,937 796,349 34,413,840 76,595,834 Tk. 18,252,021 1,193,641 3,846,402 77,165 494,456 392,679 442,913 150,000 1,685,511 7,200,000 995,530 109,999 5,844,964 490,733 34,413,839 75,589,853 (a) Salary and allowances include provident fund contribution of Tk. 639,595 (in 2000 Tk. 495,934). (b) In 2001, all the 95 employees of Head Office (excluding employees relating to selling and distribution) received annual salary and allowances of Tk. 36,000 and above. (c) Auditors remuneration represents audit fee for auditing the accounts for the year 2001. In addition, an aggregate amount of Tk. 72,000 (in 2000 Tk. 63,000) was paid to auditors for income tax consultancy and other services as included in legal and consultancy fee stated above. 34. Selling and Distribution Expenses - Tk. 245,887,486 This consists of as follows : Salary & Allowances (including welfare expenses and retrial benefit) Rent Expenses Repairs & Maintenance (including car maintenance) Travelling & Conveyance Entertainment Printing & Stationery Postage & Telephone Electricity, Gas & Water Market Research & New Products Training & Conference Sample Expenses Advertisement Literature/News Letter Special Discount Export Expenses Distribution Commission Other Expenses Tk. 91,549,196 11,154,708 9,034,726 29,369,733 1,092,674 2,762,430 6,114,850 3,076,382 3,033,965 5,467,473 10,175,291 11,803,028 6,802,522 12,458,295 2,476,049 30,732,376 8,783,788 245,887,486 84,004,633 3,843,923 8,444,945 28,304,240 912,103 2,064,395 4,288,817 2,322,622 2,650,930 5,224,621 8,633,753 10,104,971 4,513,368 11,020,062 2,166,961 42,132,951 6,953,165 227,586,460 (a) Salary and allowances include provident fund contribution of Tk. 2,580,967 (in 2000 Tk. 2,371,674). (b) In 2001, all the 631 employees relating to selling and distribution received annual salary and allowances of Tk. 36,000 and above. (c) Distribution commission represents 1.5% (2% in 2000) of net sales other than export sales and Basic chemical products sale which has been paid to the I & I Services Ltd., the sole distributor of the company and an associated undertaking. Interest Income Dividend income received on investment in shares of Padma Textile Mills Ltd. Technical assistance fee (US$ 50,000) (in 2000 US$ 50,000) Exchange gain on retention quota (F.C.) accounts Profit/(Loss) on sale of Fixed Assets 45 Tk. 4,835,807 3,948,750 2,862,500 163,943 1,076 11,812,076 4,667,938 5,265,000 2,712,500 145,735 (1,678,160) 11,113,013 36. Finance Cost - Tk. 179,520,085 This is made-up as follows : Interest on Cash Credit Interest on IDLC A/C Interest on loan from PF & WPP & Welfare Fund 170,260,171 1,144,707 8,115,207 179,520,085 Tk. 152,977,057 - 6,966,227 159,943,284 37. Contribution to Workers’ Profit Participation / Welfare Funds - Tk. 21,521,023 This represents 5% of net profit before tax after charging the contribution as per provisions of the Companies Profit (Workers’Participation) Act, 1968 and is payable to workers as defined in the said Act. 38. Income Tax Expense - Tk. 28,640,643 This represents : (a) (i) Estimated Tax liability of the year 2001 : 35% tax on the net profit of taxable units Dry -1, Dry -2, Dry -3, Dry -4, Dry-5 (DEC), Wet-1, Wet-2, Basic Chemical -1 and Basic Chemical -2 (ii) 15% tax on dividend income (b) Short provision of income tax Tk. 39. Appropriation during the year 22,693,641 592,313 23,285,954 5,354,689 28,640,643 23,559,786 789,750 24,349,536 - 24,349,536 In accordance with IAS 1 “Presentation of Financial Statements”, the appropriations for the year have been reflected in the statement of changes in equity. During the year under review, an amount of Tk. 108,489,817 has been transferred to Tax holiday reserve being 30% of year’s net profit of tax holiday units as per section 45 of the Income Tax Ordinance 1984. A part of the balance of net profit though carried forward in the balance sheet will be applied for payment of this year’s dividend proposed by the board of directors @ 10% and will be recognised as liabily in the accounts as and when approved by the shareholders in the annual general meeting. The total amount of proposed dividend for the year 2001 is Tk. 44,250,000. 40. Basic Earnings Per Share (EPS)- Disclosure Under IAS 33 “Earnings Per Share” : The computation of EPS is given below : (a) Earnings attributable to the Ordinary Shareholders (Net Profit after Tax) (b) Weighted average number of Ordinary Shares outstanding during the year (c) Basic EPS Tk. 401,779,808 44,250,000 9.08 398,294,673 44,250,000 9.00 The definition of numerator (Earnings) and denominator (weighted average number of shares) are stated in Note-5. 41. Tax-Holiday Reserve - Tk. 108,489,817 This represents 30% of net profit of the Tax-Holiday units Dry-5 (Jan-Nov), Dry-6, Dry-7, MDI, Wet-3, and Basic Chemical-3. 66 ANNUAL REPORT 2001 BEXIMCO PHARMA 67 ANNUAL REPORT 2001 BEXIMCO PHARMA 42. Cash flow from Operation Under Indirect Method : Net profit after tax for the year Adjustment to reconcile net profit to net cash provided by operating activities : (a) Non-Cash Expenses: Depreciation Gratuity (b) (Profit)/Loss on Sale of Fixed Assets Fund from Operation before Changes in Working Capital (c) Changes in Working Capital Decrease/(Increase) in Inventories Increase in Sundry Debtors Decrease/(increase) in Loans, Advances & Deposits Increase in Creditors Decrease in Accrued Expenses (Decrease)/Increase in Provision for Income Tax 2001 401,779,808 97,084,504 89,884,195 7,200,309 (1,076) 498,863,236 11,317,397 29,253,467 (25,083,818) 50,319,501 10,039,036 (17,690,317) (35,520,472) 2000 398,294,673 103,088,922 97,144,525 5,944,397 1,678,160 503,061,755 (111,325,337) (126,959,659) (56,948,972) (44,972,219) 119,151,882 (23,232,460) 21,636,091 Net Cash Provided by Operating Activities Tk. 510,180,633 391,736,418 43. Related Party Transactions - Disclosure under IAS 24 “Related Party Disclosures” : During the year under rivew, the company carried out a number of transactions with related parties in the normal course of business and on an arms’length basis. The nature of these transactions and their total value have been setout in accordane with the provisions of IAS 24 ‘Related Party Disclosures’. Nature of Transactions (a) Trade Debtors (b) Trade Creditors (c) Current Account Balances (d) Interest Income (e) Distribution Commission (f) Software Development Expenses 2001 292,661,848 13,523,810 95,903,770 2,464,760 30,732,376 3,200,000 2000 270,336,894 5,378,150 106,367,972 2,320,672 42,132,951 7,200,000 44. Financial Instruments and Related Disclosures Under IAS 32 “Financial Instruments : Disclosure and Presentation” Setout below is a year-end balance of carrying amounts (book values) of all financial assets and liabilities (financial instruments) : Financial Assets Investment in Shares Trade Debtors Current Account with Related Parties Cash & Cash Equivalents Financial Liabilities Customs Debentures Short Term Borrowing from Banks Creditors Accrued Expenses Deferred Liability - Provision for Gratuity Long Term Loan Tk. Net Financial Assets/(Liabilities) Tk. Interest Bearing Maturity within one year Maturity after one year Non Interest Bearing Total - - 95,903,770 - 95,903,770 1,758,387 1,081,904,675 - - - - 1,083,663,062 (987,759,292) - - - - - - - - - - 656,646,364 656,646,364 (656,646,364) 40,543,750 333,884,395 - 43,021,401 417,449,546 - - 250,693,220 115,690,840 47,508,787 - 413,892,847 3,556,699 40,543,750 333,884,395 95,903,770 43,021,401 513,353,316 1,758,387 1,081,904,675 250,693,220 115,690,840 47,508,787 656,646,364 2,154,202,273 (1,640,848,957) Carrying Amounts (Book value) The basis of carrying amounts have been stated in accounting policies (Note 5) 68 ANNUAL REPORT 2001 BEXIMCO PHARMA Fair Value Management believe that the fair value of all financial assets and liabilities approximate their carrying value. Market Value The market value of investment in shares has been stated in Note 11. The market value of other financial instruments are not available as these are not traded on organized markets in standardized form. (a) Interest Rate Risk Exposure The company’s short term borrowings are subject to market rate fluctuations which are reviewed with lenders on an ongoing basis. The interest rate of long term borrowing (consortium loan) is 13% p.a. (b) Concentration of Credit Risk The company’s management believe that there was no significant concentration of credit risk in trade debtors,althogh the sole distributor is a related party and a significant amount is receivable from it. The company monitors its exposure to credit risk on an ongoing basis. Trade debtors are evaluated for recoverability. (c) Foreign Currency Risk The company is subject to foreign currency fluctuations as the local currency (Taka) varies with US Dollar and other foreign currencies. 45. Particulars of Disposal of Property, Plant and Equipment : The following assets were disposed off : During the Year Ended 31-12-2001 : PARTICULARS OF ASSETS COST DEP. UPTO 31-12-00 W.D.V. AS ON 31-12-00 SALES PRICE PROFIT/ (LOSS) NAME OF PARTIES MODE OF DISPOSAL Toyota S. Wagon Toyota S. Wagon Toyota S. TX Maruti Maruti Toyota Starlet Toyota Starlet Toyota Corsa Office Equipment Furniture Furniture Furniture 375,301 365,416 485,000 303,850 303,850 370,416 370,416 370,416 363,146 24,500 235,316 84,200 3,651,827 276,918 269,624 357,860 249,686 249,686 273,314 273,314 273,314 134,300 15,720 62,965 8,420 2,445,121 98,383 95,792 127,140 54,164 54,164 97,102 97,102 97,102 228,846 8,780 172,351 75,780 1,206,706 122,001 141,300 198,150 47,100 53,000 122,100 129,000 143,000 - 4,000 172,351 75,780 1,207,782 Tk. 23,618 45,508 71,010 (7,064) (1,164) 24,998 31,898 45,898 (228,846) (4,780) - - 1,076 Mr. Hemayetullah Mr. Antanu Roy Mr. Shantanu Roy Mr.Afsar Hossain Syed Fatema Khan Mr. Abu Mia Mr. Harun-ur-Rashid Mr. Mahbubul Islam Mr. Sayeedur Rahman Mr. Syed Mahbubul Alam Mr. Mushtaq Habib Tender Tender Tender Tender Tender Tender Tender Tender Stolen Negotiation Negotiation Negotiation During the Year Ended 31-12-2000 : PARTICULARS OF ASSETS COST DEP. UPTO 31-12-99 W.D.V. AS ON 31-12-99 SALES PRICE PROFIT/ (LOSS) NAME OF PARTIES MODE OF DISPOSAL Diesel Generator Furniture Furniture Maruti Suzuki-800 CC Car Maruti Suzuki-800 CC Car Diahatsu Mira-800 CC Car Fiat 800 CC Car Toyoto Starlet-1300 CC Car Toyoto Corolla-1300 CC Car Nissan Sunny-1000 CC Car Maruti Suzuki-800 CC Car Toyoto Starlet-1300 CC Car Toyoto Corolla-1300 CC Car Tk. 8,001,907 49,400 76,300 316,500 306,425 419,059 18,240 375,416 350,414 720,960 303,850 370,416 375,416 11,684,303 3,031,543 9,386 20,677 252,622 244,975 295,473 12,861 264,701 247,073 603,951 242,916 261,177 264,701 5,752,056 4,970,364 40,014 55,623 63,878 61,450 123,586 5,379 110,715 103,341 117,009 60,934 109,239 110,715 5,932,247 3,300,000 40,014 55,623 35,000 36,000 28,300 12,150 120,250 115,000 152,500 66,000 141,250 152,000 4,254,087 (1,670,364) - - (28,878) (25,450) (95,286) 6,771 9,535 11,659 35,491 5,066 32,011 41,285 (1,678,160) N.N. International Mrs. Hasneen Muktadir Mr. Sunil Chandra Dolphin Dolphin S.N. Motors S.N. Motors Mr. Asadullah Chowdhury Dolphin Mr. Hamidul Haque Dolphin Mr. Mohsin Mr. Aziz Bhuiyan Tender Negotiation Negotiation Tender Tender Tender Tender Tender Tender Tender Tender Tender Tender 69 ANNUAL REPORT 2001 BEXIMCO PHARMA 46. Payment/Perquisites to Directors and Officers : 54. Dividend Subject to Income Tax Deduction at Source : (a) The aggregate amount paid/provided during the year in respect of officers of the company as defined in the Securities and Exchange Rules 1987 are disclosed below : Managerial Remuneration Gratuity Company's Contribution to Provident Fund Bonus Perquisites : Housing Transport Medical Telephone Electricity, Gas & Water 2001 16,178,004 1,018,722 1,065,036 1,703,690 5,068,742 3,894,501 1,030,680 1,861,330 980,680 32,801,385 Tk. 2000 14,315,004 738,425 886,110 1,476,850 4,661,183 3,709,247 735,410 1,941,822 885,474 29,349,525 (b) No compensation was allowed by the company to the Directors of the company. (c) No amount of money was expended by the company for compensating any member of the board for special services rendered. (d) No board meeting attendance fee was paid to the directors of the company. 47. Production Capacity and Actual Production in 2001 : (Production capacity on single shift basis) Production Capacity 2001 2000 Unit Actual Production 2001 2000 Excess / (Shortfall) 2001 2000 Reason of Excess or Shortfall Solid Section Liquid Section Basic Chemical Tablet & Capsule (in million pcs) Bottle & Tube (in million pcs) Metric ton 1,216 1,216 1,537 1,654 321 438 Due to overtime work for increased demand 20 18 172 165 23 92 21 130 3 3 Due to overtime work for increased demand (80) (35) As per market demand 48. There was no contingent liability as on 31-12-01. 49. Capital Expenditure Commitment : Nature of Shareholders (a) Resident Company (b) Non-resident Company (c) Resident other than Company (d) Non-resident other than Company Amount of Dividend Rate of Tax Deduction at Source Any amount Any amount Amount not exceeding Tk. 40,000/- Amount exceeding Tk. 40,000/- Any amount 15% 15% Nil 10% 25% 55. Foreign Exchange Earned : (a) Export Sales of US$ 842,652 (in 2000 US$ 848,925). (b) Technical Assistance Fee of US$ 50,000 (in 2000 US$ 50,000). (c ) No other income including royalty, technical assistance and professional advisory fee, interest and dividend was earned or received in foreign currency. 56. Commission, Brokerage or Discount against Sales : (a) (b) Distribution commission of Tk. 30,732,376 (in 2000 Tk. 42,132,951) and special discount of Tk. 12,458,295 (in 2000 Tk. 11,020,062) as stated in the Note - 34 were incurred and paid during the year under review. No other commission was incurred or paid to the sales agent/distributor nor any brokerage or discount other than conventional trade discount was incurred or paid against sales except as stated in (a) above. 57. Subsequent Events - Disclosures Under IAS 10 “Events after the Balance Sheet Date” : (a) (b) Subsequent to the balance sheet date, the directors recommended the payment of cash dividend of Tk. 1/- per share. The dividend proposal is subject to shareholders’approval at the forthcoming annual general meeting. Application has been made to the NBR for obtaining Tax-Holiday for the MDI unit which has gone into commercial production on 16th October 2001. 58. Comparative Figures : Certain comparative figures have been reclassified from statements previously presented to conform to the presentation adopted during the year ended 31 December 2001. There was a capital expenditure commitment of Tk. 265 million as on 31-12-01 in respect of import of plant and machinery for the 59. Reporting Currency and Level of Precision : expansion project. 50. There was no claim against the company not acknowledged as debt as on 31-12-01. The figures in the financial statement represent Bangladesh Currency (Taka), which have been rounded off to the nearest Taka except where indicated otherwise. 51. There was no credit facilities available to the company under any contract, other than trade credit available in the ordinary course of 60. Approval of the Financial Statements : business and not availed of as on 31-12-01. 52. Payments Made in Foreign Currency : Import of Machinery Import of Raw & Packing Material and Spares Consultancy Fee for Expansion Project Foreign Currency (US$) 514,249 14,105,310 143,005 Taka 29,376,033 797,655,306 8,086,940 No other expenses including royalty, technical expert and professional advisory fee, interest, etc. was incurred or paid in foreign currencies except as stated above. 53. Dividend Paid to the Non-Resident Shareholders in 2001 : Dividend for 2000 was declared on 30-04-2001 and therefore, payments for the year were made in 2001 to (i) non-resident shareholders. Net dividend of Tk. 2,835,748 relating to the year 2000 was paid to 4 non-resident shareholders against 1,668,087 (ii) shares held by them after deduction of Income Tax at source of Tk. 500,426. (iii) No dividend was remitted in foreign currency but paid in local currency to their local custodian banks. 70 ANNUAL REPORT 2001 BEXIMCO PHARMA These financial statements were authorized for issue in accordance with a resolution of the Company’s board of directors on 29th April 2002. C. H. Rahman Director Dhaka 29 April, 2002 Iqbal Ahmed Director Md. Asad Ullah Company Secretary 71 ANNUAL REPORT 2001 BEXIMCO PHARMA Corporate Headquarters 17 Dhanmondi R/A, Road No. 2 Dhaka 1205, Bangladesh Phone : 880-2-8611891 (5 lines) Fax : 880-2-8613470 Email : beximchq@bol-online.com Website : www.beximco.net Operational Headquarter 19 Dhanmondi R/A, Road No. 7 Dhaka 1205, Bangladesh Phone : 8619151 (5 lines), 8619091 (5 lines) Fax : 880-2-8613888 Email : info@bpl.net Website : www.beximco-pharma.com Factory 126 Auspara Tongi, Gazipur Legal Advisor M/S HUQ & CO. 47/1 Purana Paltan, Dhaka Auditors M/S M. J. ABEDIN & CO. Chartered Accountants National Plaza (6th Floor) 1/G Free School Street Sonargaon Road Dhaka-1205 Bankers Janata Bank Local office 1 Dilkusha C/A, Dhaka-1000 CitiBank N.A. Chamber Building (9th floor) 122-124 Motijheel C/A, Dhaka-1000 Credit Agricole Indosuez 47 Motijheel C/A P.O. Box 3490 Dhaka-1000 Standard Chartered Grindlays Bank Hadi Mansion 2 Dilkusha C/A Dhaka-1000 BEXIMCO PHARMACEUTICALS LTD. BEXIMCO PHARMA 

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