Mission 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. Annual Report 2002 BEXIMCO PHARMA BEXIMCO PHARMACEUTICALS LTD. Contents 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 29 31 32 33 34 35 36 37 38 Board and Management History: Key milestones The Profile Beximco Pharmaceuticals Ltd.: Trendsetter in Bangladesh pharma market People: BPL’s key success factor Quality: Committed to making a difference Top Ranking Products: Yielding the glory as well as the value R & D: Carrying innovation forward New Products: Securing our future Training & Development: Investment for future International Marketing: Strive at becoming global Specialized Products: Our endless endeavor Environment: Caring concern of BPL Creating a Virtual Future: Facing challenges of globalization Annual Sales Conference 2002 Starting 2003: Holding greater promises Twenty-Sixth Annual General Meeting Value Added Statement 2002 at a glance 5 Years’ Statistics Notice of The Twenty - Seventh Annual General Meeting Chairman’s Statement Statement on Corporate Governance Directors’ Report Auditors’ Report Balance Sheet Profit and Loss Account Statement of Changes in Equity Cash Flow Statement Index to Notes to the Financial Statements Notes to the Financial Statements Proxy Form 2 Board and Management Board of Directors Chairman Vice Chairman Director Director Director Director Director Director Director 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 Management Committee Chief Executive Officer Finance Director Medical Director Director, Marketing & Commercial Nadim Shafiqullah C. H. Rahman Dr. Farida Huq Nazmul Hassan Company Secretary Md. Asad Ullah Board and Management 3 History Key milestones 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 : The first pharmaceutical company in the country to receive ‘National Export Trophy (Gold)’ 1996 : Introduction of Sustained Release dosage form in the market 1997 : Commissioning of Metered Dose Inhaler (MDI) plant and introduction of Suppository dosage form 1998 : Introduction of Metered Dose Nasal Spray 1999 : UNICEF approval of BPL as an enlisted supplier 2000 : Contract manufacturing agreement of Metered Dose Inhaler (MDI) with Glaxo SmithKline 2001 : Introduction of small volume parenteral products (Injectables) Establishment of Analgesic-Antiinflammatory bulk-drug plant 2002 : The first Bangladeshi company to supply pharmaceuticals to Raffles Hospital of Singapore 4 History: Key milestones The Profile 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 2002 2,523 million Number of Shareholders 49,960 Stock Exchange Listings Dhaka, Chittagong Number of Employees 1,218 The Profile 5 Beximco Pharmaceuticals Ltd. Trendsetter in Bangladesh pharma market BPL has been the trendsetter in Bangladesh Pharmaceutical Market since its inception in 1979. Over the last decade BPL actually rose to a new standard – moving beyond manufacturing quality medicines to win mind share of patients, physicians, shareholders, business partners, and communities where we work and live. Our dedication to add more value to the common wealth of the society compounded by innovative strategies for growth and diversification, pioneering role in bringing new technology and implementing new ideas, and commitment for total quality management distills the glory of our success. Today BPL is not merely a market leader. Most of the products that it actively markets enjoy leadership position demonstrating incomparable trust of the healthcare professionals. This is the reward for the outstanding quality of our products- at BPL we never compromise with the quality of our products so that our fellow citizens can live long, happy and better. BPL is the pioneer in introducing medical service activities: publishing a full-fledged medical newsletter regularly, conducting clinical seminars and symposiums to have better understanding of various diseases and their management. BPL is the first national company who dared to diversify its business into manufacturing bulk drugs to integrate itself backwards as well as develop the nation’s pharma industry. While it would have been relatively easy to diversify the business into consumer products, BPL chose the harder path with a long-term vision. Today BPL is ready to face the challenge of scarce sourcing of Active Pharmaceutical Ingredients (API) in the post-WTO era, with its advanced API manufacturing capability. 6 Beximco Pharmaceuticals Ltd.: Trendsetter in Bangladesh pharma market BPL is one of the first companies to have an extensively computerized and automated working environment connecting every corner of the country to the centre. Productivity through connectivity is one of our heritage of progress. BPL is the first company to go beyond the national boundary, exporting its quality products in overseas markets in Asia, Africa, and Europe. More than that, BPL has probably fulfilled a national aspiration of turning a once import dependent country into an exporter of quality medicines. We believe, with our technological and managerial know-how and ability to take on challenges, we will be able to progress much faster towards our objective of becoming the nation’s most visionary company. Beximco Pharmaceuticals Ltd.: Trendsetter in Bangladesh pharma market 7 People BPL’s key success factor An organization is as good as its human resources. Based on this very basic fundamental philosophy, Beximco Pharma believes that human beings are its most valuable assets and prime movers. BPL also believes that the potential of human resource is limited only to the extent to what one can put to use. Realizing this, BPL makes considerable investments in attracting and developing talented and dynamic professionals, not only to do their job f l a w l e s s l y, but also innovation and entrepreneurship. The extent of empowerment that is enjoyed by our people at various levels of the organization enables each employee, from the very bottom to the top, to contribute to the overall momentum of the company. The employees of Beximco Pharma are differentiated not just on the strength of their professional competence, but also on the basis of individual resilience of character and the spirit of enterprise. them an environment which to give fosters In the face of today’s competitive business environment, BPL develops and retains high achievers and a motivated workforce. We create an excellent working environment for them that reflects and promotes a high level of loyalty and commitment, both to our employees and from our employees. At BPL, good work is always expected and rewarded. Over the years, the company has been successful in providing an environment and culture that nurtures individual growth and development, and allows people to attain personal fulfillment as well as achieve company objectives. It is our competent workforce that provides us with every reason to be optimistic about the future. 8 People: BPL’s key success factor Quality Committed to making a difference BPL is committed to cater to the healthcare needs of the nation. This commitment demands immense social responsibility of ensuring quality in terms of quantity, purity, stability, safety, efficacy and presentation of the product. At every stage of the production, a stringent control mechanism involving raw material testing, in-process quality control, packaging, labeling, finished product testing as well as stability monitoring and documentation is maintained to ensure the highest quality product consistently. Standard Operating Procedures (SOPs) developed according to the cGMP guidelines of WHO and EU are being strictly followed in every steps to ensure full compliance with the process parameters. Well equipped with most modern and sophisticated equipment like High Performance Liquid Chromatography (HPLC), Gas Chromatography (GC), Infrared (IR) Spectrophotometer, Ultraviolet (UV) Spectrophotometer, Homogenizer, In-vitro Bioavailabilty tester, Lung simulator, Disintegrator, Dissolution tester, & many other latest computer-aided quality control instruments & accessories, BPL ensures the highest quality products. This is how BPL has succeeded in gaining uncompromising trust and confidence of doctors and patients all over the country. BPL's priority is to build a healthier tomorrow for the nation. Quality: Committed to making a difference 9 Top Ranking Products Yielding the glory as well as the value Neoceptin R Neoceptin R is the highest selling product by value in Bangladesh Pharmaceutical market (Source: Information the Medical Statistics, Fourth Quarter, 2002) and also undisputed brand leader in the antiulcerant market. Napa Napa is the highest selling product by unit sales in Bangladesh Pharmaceutical market (Source: Information Medical Statistics, Fourth Quarter, 2002). Napa is now a popular household brand among all classes of people because of its unique efficacy and safety profile in pain and fever. Apart from Neoceptin R and Napa, BPL has maintained its leadership position in many in in Multivitamin-Minerals, Amdocal therapeutic categories Cardiovascular, Omastin in Antifungal, and Tofen in Asthma Prophylactic market etc. like Aristovit M 10 Top Ranking Products: Yielding the glory as well as the value R & D Carrying innovation forward Beximco Pharmaceuticals Ltd. employs a significant part of its resources in its R&D with a view to retaining its leadership position in the Bangladesh Pharmaceutical market through introduction of innovative products. The R&D team comprises of academically sound & professionally competent diversified professionals who have firm commitment to new product development. R&D team of Beximco Pharmaceuticals Ltd. is consistently striving towards - developing new formulations - simplifying manufacturing processes - bringing cost efficiency The untiring effort of the R&D team has enabled the company to introduce twelve new products with 23 presentation forms and strengths in 2002 while a good number of products are in the pipeline. In the wake of the highly competitive scenario, our R&D is focusing on innovations of some high-value, high-margin new products. We believe our continuous efforts in R&D will give us a competitive edge in the years to come. R & D: Carrying innov ation forward 11 New Products Securing our future To keep pace with the ever-changing global market scenario and to cater to the unmet healthcare needs of the nation, BPL always concentrates its efforts in introducing new products. In 2002, BPL introduced twelve new products with 23 presentation forms and strengths, which has already gained significant brand equity in the market. Some of the newly introduced products are: Sibulin To meet the increasing social consciousness about the health hazards of obesity, the anti-obesity drug Sibulin was introduced by BPL in 2002. Extensive consumer promotion, in addition to promotion to the healthcare providers, built a solid base to meet the changing social needs. Pacet Pacet is a first-time-in-Bangladesh product designed to capitalize a niche market—the anti-arrhythmic market. Intracef Injection To capitalize market potential of one of the fastest growing antibiotic generics, Intracef injection completes the brand extension of Intracef in all dosage forms. Intracef is now available as capsule, suspension, pediatric drops and injection. Premil Designed to serve the growing number of diabetic patient of Bangladesh, Premil is a new approach to control diabetes- the tablet has to be taken before meal or pre- meal. Cosmotrin Cosmotrin is an anti-acne cream, designed to address the true cause of acne. It cures acne in a scientific way, and works where the anti-acne cosmetics fail. 12 New Products: Securing our future Training & Development Investment for future The ever-changing market place has fuelled BPL’s determination to keep up with the changing times by constantly strengthening the information base, exploring new lines of business and expanding domestic as well as its overseas marketing network. This prompted the company to undertake infrastructural development to build competitive advantage in order to retain its position as a leading pharmaceutical company. BPL is committed to developing individual human, technical and conceptual skills through various educational and a wide range of internal and external human resource development and job related training programs each and every year. At BPL, a well planned and structurally designed in-house training activity involving sales, marketing, manufacturing, QC, QA etc. is conducted throughout the calendar year. These training programs are conducted by in-house resource persons on a regular basis and as per schedule. BPL employees also received training from faculties of Kellog Business School, USA and London School of Business, UK on the following topics: Strategies for excellence in manufacturing management, Supply chain management, Negotiation and decision making, Finance for senior managers, Competing in a global economy, Leadership skills for top management, Strategic brand management, Marketing strategies in a competitive environment. Apart from these, BPL employees also participated in a month-long training program on TQM in Japan. Training & Development: Investment for future 13 International Marketing Strive at becoming global In BPL we are proactive in our approach to aggressively search for new avenues in the international market place: Beximco Pharma is the pioneer in entering the CIS countries. BPL is the first pharmaceutical company in Bangladesh to receive NATIONAL EXPORT TROPHY GOLD in 1998. In Pakistan, BPL took proactive measures in launching its products with Multimedia CD-ROM replacing the age-old printed promotional materials. In Myanmar, BPL further consolidated its position by donating Medical Information Kiosks to the Myanmar Medical Association. Beximco Pharma is the only Bangladeshi pharmaceutical company operating in Singapore market- one of t h e most stringent and regulated markets in Asia. Beximco Pharma was the first company from Bangladesh to enter the African Market. We are delighted and proud of our pioneering achievements. More than that, we have probably fulfilled a national aspiration of turning an import dependent country into an exporter of quality medicines. Despite the fact that there is no incentive for pharmaceutical export in Bangladesh, till today, we have not deviated from our proactive and pioneering role in international marketing. Our endeavor that began amidst many obstacles has expanded to more than sixteen countries. In 2002, BPL’s major emphasis in international marketing was to consolidate and grow in all its existing overseas markets by ensuring sustainable competitive advantage over our competitors and competitive brands. In 2002, we were awarded a tender order for our Neoceptin R for the whole year’s consumption of Raffles Hospital- the most expensive and prestigious hospital in Singapore. In order to expand our product portfolio in Myanmar, we have launched liquid/ bottle items by organizing a huge scientific seminar. In Kenya, we have started supplying to MEDS – the largest institution and Kenyatta Hospital –the largest hospital in Kenya. While consolidating in all our existing overseas markets, we are determined to continue deploying our efforts and resources to develop new overseas markets in Asia, Africa, and Europe. As a part of our ongoing new market exploration activities, in 2002 we participated in all major exhibitions held in Russia, Ukraine, Afghanistan and Nepal. For evaluating business opportunities in new overseas markets, we conducted market research in various markets in Asia and Europe. 14 International Marketing: Strive at becoming global Specialized Products Our endless endeavor Manufacturing specialized products so that our people can live happier and better is BPL’s heritage of progress. At BPL, we see the specialized products through the eyes of the people. Once people of our country were fully dependent on multinational companies for high- tech dosage forms such as metered dose inhalers, nasal sprays, suppositories etc. despite their high price. These dosage forms were considered very sophisticated requiring extraordinary technical know-how as well as highly expensive machinery possessed by multinational giants only in the developed countries. Our continued endeavor to be the pioneer in introducing hi-tech products for better patient care, made it possible to manufacture inhalation aerosols, suppositories, nasal sprays for the first time in Bangladesh. The world-class facilities at the new inhaler plant of BPL are now producing Azmasol inhaler, Decomit-100 and Decomit-250 inhaler, and Bexitrol inhaler, ensuring the highest possible quality at every stage of manufacturing and quality control. We believe, it is the need of the people which is our prime concern and that leads us to undertake pioneering works and reach greater heights. Specialized Products: Our endless endeavor 15 Environment Caring concern of BPL B P L is highly concerned about environmental safety. We are continuously striving to minimize the environmental impact through our operational excellence. BPL is committed to an eco-friendly environment its facilities are carefully designed and and operated to prevent all forms of pollution. One of the primary concerns of the company is to contribute in keeping the earth clean. BPL is aware of its responsibility of caring for the environment and the importance of reducing the environmental effects of manufacturing activities to a practical minimum. 16 Environment: Caring concern of BPL Creating a Virtual Future Facing challenges of globalization We are living in a time that promises a future that is anything but certain. Market globalization after 2005 can lead to unprecedented threats or opportunities. The future technological breakthrough may reshape the way we work, think or communicate. At Beximco Pharma, we do not wait to react to changes, we create a "virtual future" so that when the future arrives, we will be ready to face it. Beximco Pharma is one of the first companies to have an extensively computerized and automated work environment. The state-of-the-art Management Information System (MIS) forms a the organization so that common information platform for everything—from the production floor to the sales people working in a rural area, from the quality assurance department to the distribution operation of thirteen depots located throughout the country—is interconnected. In BPL, information technology is used as a decision support system and coordination tool to facilitate human and machine performance and fast communication. Our commitment to create a virtual future is reflected in our activities. We are the leading pharmaceutical company in promoting products and providing medical information on CD-ROM, and through Kiosk and Internet Websites. With a vision into the new millennium, BPL has taken proactive actions to face the challenges posed by a fast changing world economy and the advent of the information age by assimilating it into the work culture. Creating a Virtual Future: Facing challenges of globalization 17 Annual Sales Conference 2002 The Annual Sales Conference 2002 was held at the Hotel Sonargaon on January 9, 2003. 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. During the day session of the conference achievements of 2002 and strategies for 2003 were discussed. In the evening session Mr. Nadim Shafiqullah distributed prizes and crests among the top achievers. The prize distribution ceremony was followed by a dinner and cultural show. 18 Annual Sales Conference 2002 Starting 2003 Holding greater promises Year 2003 holds new promises for BPL. In the first 4 months of 2003, we introduced 9 new include Napa drops- products. Those launched first ever in Bangladesh for pain and fever of neonates; Neo Kit – a 7 day anti-ulcer therapy for millions of ulcer patients; Diaglit 15 and Diaglit 30- helping diabetes patients live better; Eplon 5 and Eplon 10- offering world’s best selling hypnotic; and Alendon 70- once weekly therapy of osteoporosis, a silent disease; Terbex- a superior antifungal; and Protolan- a different treatment for acid pepsin disorder. At present our research and development team are working with several drugs for either preparing better formulations so that people introducing new can be benefited, or innovative dosage forms for chronic diseases which would offer better hope to millions of people suffering from various ailments. Starting 2003: Holding greater promises 19 Twenty-Sixth Annual General Meeting The 26th Annual General Meeting of the shareholders of BPLwas held on 29th June 2002. Around 9,000 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 performance of the company in 2001. Strategies and future vision of the company were also briefed at the AGM. The meeting approved 15% dividend for its shareholders for the year 2001. 20 Twenty-Sixth Annual General Meeting Value Added Statement Figures in Taka 2002 % 2001 % 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 2,928,398,454 1,617,629,993 1,310,768,461 341,192,723 221,178,053 170,994,495 88,500,000 488,903,190 26.03 16.87 13.05 6.75 37.30 2,743,551,749 1,443,320,343 1,300,231,406 425,289,003 202,817,441 179,520,085 66,375,000 426,229,877 32.71 15.60 13.81 5.10 32.78 Total 1,310,768,461 100.00 1,300,231,406 100.00 37.30% 13.05% 6.75% 26.03% 16.87% Retained by the Company Salaries and Benefits paid to Employees Interest paid to Lenders Dividend to Shareholders Duties & Taxes paid to Government Exchequer 2002 32.78% 13.81% 5.10% 32.71% 15.60% 2001 Value Added Statement 21 2002 at a Glance Figures in thousand Taka Growth 2002 2001 Amount % Income & Profitability Turnover (Net) Net Profit Earnings per share 2,522,943 341,680 7.72 2,401,241 401,780 9.08 121,702 (60,100) (1.36) 5.07 (14.96) (14.98) Net Turnover 2,523 2,453 2,399 2,401 2,310 1998 1999 2000 Year 2001 2002 Profit Before Tax 399 413 423 430 362 1998 1999 2000 Year 2001 2002 Shareholders’ Equity 4,166 4,441 3,156 3,454 1998 1999 3,764 2000 Year 2001 2002 22 2002 at a Glance 5 Years’ Statistics Particulars 2002 2001 2000 1999 1998 Figures in thousand Taka Authorized Capital Paid up Capital Total Turnover Export Turnover Gross Margin Profit Before Tax Net Profit Tangible Fixed Assets at cost 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 & Sponsors Foreign Investors ICB & Investors’Account Human Resources Number of Employees Officers Staff 1,000,000 442,500 2,522,943 50,284 902,449 362,232 341,680 5,422,598 4,441,096 20% 82% 100 7.72 41.83 5.42 49,960 37,317 43 12,600 1,218 747 471 1,000,000 442,500 2,401,241 47,325 942,133 430,420 401,780 5,141,780 4,165,791 15% 97% 94 9.08 49.50 5.45 50,367 37,568 43 12,756 1,151 695 456 Net Profit 387 398 402 374 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 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 2,452,524 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 1,047 581 466 342 1998 1999 2000 2001 2002 Year 5 Years’Statistics 23 Beximco Pharmaceuticals Limited 17 Dhanmondi R/A, Road No. 2, Dhaka 1205 Notice of The Twenty - Seventh Annual General Meeting Notice is hereby given that the TWENTY-SEVENTH ANNUAL GENERAL MEETING of the Shareholders of Beximco Pharmaceuticals Limited will be held on Tuesday, the 24th June, 2003 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-Sixth Annual General Meeting of the Company held on 29th June, 2002. To receive, consider and adopt the Audited Accounts as of 31st December, 2002 together with reports of the Auditors and the Directors thereon. To elect Directors. To declare 5% cash dividend and 15% stock dividend (Bonus Share). To appoint Auditors for the year 2003 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, FICS ) Company Secretary Dated : April 29, 2003 NOTES : (1) (2) (3) (4) The Register of Members and Share Transfer Book of the Company will remain closed from 2nd June, 2003 to 24th June, 2003 (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 1st June, 2003 will be entitled to the cash dividend and stock dividend. 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. Members are requested to notify change of address, if any, to the Company. Admission to the meeting room will be strictly on production of the attendance slip sent with the Notice. 24 Notice of The Twenty - Seventh Annual General Meeting §Y~JroqJPjr k«KfPmhj x(cid:216)JKjf §v~JrPyJ(cid:223)JrVe, §TJ˛JjLr 27fo mJKwtT xJiJre xnJ~ IJkjJPhr xTuPT xJhr IJo„j \JjJK(cid:152)(cid:130) kKrYJuTo·uLr §Y~JroqJj KyxJPm §TJ˛JjLr 2002 xJPur xJoKV«T TJpt(cid:137)o Fm(cid:128) nKmwqf kKrTÆjJr FTKa x(cid:128)K(cid:139)´ KY' IJkjJPhr xJoPj CkœJkj TrPf §kPr IJKo IJjK»f §mJi TrKZ(cid:130) mqmxJK~T TJpt(cid:137)o 2002 xJPuS IJkjJPhr §TJ˛JjLr Km(cid:137)~ k«mOK› ImqJyf rP~PZ(cid:130) IJPuJYq m(cid:210)xPr §TJ˛JjLr §oJa Km(cid:137)P~r kKroJj 2,522.94 KoKu~j aJTJ pJ 2001 xJPur §oJa Km(cid:137)~ 2,401.24 KoKu~j aJTJ IPk(cid:139)J 5.07% §mvL(cid:130) IJoJPhr oNu mqmxJ lroMPuvj kPeqr Km(cid:137)~ k«mOK› yP~PZ 12.33%, pJ k«v(cid:128)xJr hJmLhJr(cid:130) IJ¶\tJKfT IgtjLKfPf IKœKfvLufJ xP¥(cid:153)S IJorJ r´JjL mJ\Jr iPr rJUPf xogt yP~KZ(cid:130) 2001 xJPur 47.32 KoKu~j aJTJ r´JjLr KmkrLPf 2002 xJPu r´JjL IJ~ yP~PZ 50.28 KoKu~j aJTJ(cid:130) fPm IJoJPhr TrkNmt oMjJlJ f(cid:135)ujJoNuTnJPm y•Jx §kP~PZ(cid:130) 2002 xJPu TrkNmt oMjJlJr kKroJj 362.23 KoKu~j aJTJ pJ kNmtmfLt m(cid:210)xPr KZu 430.42 KoKu~j aJTJ(cid:130) IJkjJrJ ImVf IJPZj §p, IJoJPhr mqm(cid:229)f TJ(cid:129)YJoJPur vfTrJ 71 nJVA IJohJjLT(cid:146)f TJ(cid:129)YJoJu(cid:130) cuJPrr KmkrLPf 2002 xJPu aJTJr ImoNuqJ~j Fm(cid:128) 2001 xJPur FTJKiT ImoNuqJ~Pjr kMK(cid:160)n(cid:145)f k«nJPm IJohJjLT(cid:146)f TJ(cid:129)YJoJPur oNuq mOK› kJS~J~ IJoJPhr §oJa oMjJlJ y•Jx §kP~PZ(cid:130) FZJzJ §mKxT §TKoTqJu mJ\JPr IPjT jf(cid:135)j k«KfPpJVLr IJKmnJtm WPaPZ(cid:130) (cid:143)Ka TP~T keq KjP~ IJoJPhr §mKxT §TKoTqJu mJ\Jr IJr F xo(cid:247) kPeqr YJKyhJ mOK›r ImTJvS To(cid:130) KmVf mJKwtT k«KfPmhPj IJKo F KmwP~ IJkjJPhrPT ImKyf TPrKZ(cid:130) FPyj mJ\Jr ImœJ~ T(cid:129)JYJoJPur C–tVKf S jf(cid:135)j k«KfPpJVLr IJKmntJm F hMP~ KoPu §mKxT §TKoTqJux& Fr Km(cid:137)~ Fm(cid:128) oMjJlJ Cn~A §mv x(cid:128)T(cid:135)KYf yP~PZ(cid:130) jf(cid:135)j keq IfLPfr of 2002 xJPuS IJorJ IJoJPhr keq fJKuTJ~ CPu(cid:138)UPpJVq x(cid:128)UqT jf(cid:135)j keq x(cid:128)PpJ\j TPrKZ(cid:130) \jVPjr Cj(cid:156)ffr (cid:253)JœqPxmJ k«hJPjr uP(cid:139)q Cj(cid:156)foJPjr keq CflJmPjr iJrJmJKyT k«PY(cid:238)J~ IJPuJYq m(cid:210)xPr IJorJ 23Ka §cJP\ 12Ka jf(cid:135)j keq mJ\Jr\Jf TPrKZ(cid:130) 2002 xJPu x(cid:128)PpJK\f keqxoNPyr msqJ· jJo(cid:143)PuJ yP(cid:152) - KxmMKuj, F\oJxu KrKlu, PkPxa, Kk«Kou, IcPru, cJ~JKV(cid:138)a, FKkPuk, uMKxcu, KrPujaJx, aJrPm(cid:142) (cid:137)Lo, KluPoa KcFx aqJmPua Fm(cid:128) TxPoJKasj (cid:137)Lo(cid:130) F xTu jf(cid:135)j keq KYKT(cid:210)xT oyPu mqJkT V«yjPpJVqfJ Fm(cid:128) xMjJo I\tj TPrPZ(cid:130) §Y~JroqJPjr k«KfPmhj 25 x˛sxJre k«TÆ KmVf TP~T oJx iPr IJ¶\tJKfT IgtjLKfPf mqJkT kKrmftPjr lPu IJorJ IJoJPhr x˛sxJre k«TÆ KjP~ jf(cid:135)j TPr nJmPf mJiq yP~KZ(cid:130) kKrmKftf §k«(cid:139)JkPar TJrPe IJ¶\tJKfT IgtjLKf x˛Netª§k KœKfvLu jJ yS~J kpt¶ jf(cid:135)j p„kJKf (cid:137)~ Fm(cid:128) k«TÆ xoJke KmuK(cid:213)fTre xoLKYj mPu oPj TrKZ(cid:130) fPm k«TPÆr kNrTot Fm(cid:128) IjqJjq IJjMwK(cid:150)T TJpJtmuL kKrTÆjJ IjMpJ~L mJ(cid:247)mJK~f yP~PZ(cid:130) nKmwqf kKrTÆjJ IJkjJrJ \JPjj xJrJ KmPv(cid:155)rof mJ(cid:128)uJPhPvS Hwi mqmxJ Ifq¶ k«KfPpJKVfJoNuT(cid:130) 2005 xJPu WTO YMK(cid:134) mJ(cid:247)mJK~f yPu FA k«KfPpJVLfJ IJrS fLmsfr yPm(cid:130) KmPvw TPr Cj(cid:156)~jvLu Fm(cid:128) (cid:253)PÆJj(cid:156)f §hvxoNPyr §(cid:139)P' FTgJ IJrS §mvL k«PpJ\q(cid:130) IJKo IJjP»r xJPg \JjJK(cid:152) §p, IJkjJPhr §TJ˛JjL nKmwqf YqJPu(cid:160) x˛PTt xmthJ xPYfj Fm(cid:128) FTA xJPg F §gPT C¥rPjr xJogtq x˛PTt IJœJvLu(cid:130) k«KfPpJKVfJ~ KaPT gJTJr \jq FTKhPT IJorJ IJoJPhr KnK¥PT §poj xMhO| TrKZ, IjqKhPT jf(cid:135)j IJ¶\tJKfT oM(cid:134) IgtjLKfr xMPpJV S x(cid:214)JmjJPT TJP\ uJVJPjJr \jq IJoJPhr k«PY(cid:238)J ImqJyf §rPUKZ(cid:130) IJnq¶rLj mJ\JPr IJoJPhr ImœJj iPr rJUJ Fm(cid:128) Fr C¥PrJ¥r mOK›r §TRvu IfLPfr of nKmwqPfS m\J~ gJTPm(cid:130) IJoJPhr KnK¥PT IJrS xMhO| TrJr \jq jf(cid:135)j keq Fm(cid:128) mJ\Jr Cj(cid:156)~Pj IJoJPhr KmKjP~JV ImqJyf gJTPm(cid:130) IJorJ §mKxT §TKoTqJu keqfJKuTJ IJrS xoO› TrJr kKrTÆjJ V«ye TPrKZ(cid:130) jf(cid:135)j keq CflJmPjr \jq VPmweJ Fm(cid:128) Cj(cid:156)~j TJpt(cid:137)o IJrS §\JrhJr TrKZ(cid:130) §hPv IJoJPhr mJ\Jr mOK›r kJvJkJKv r´JjL k«mOK›r \jq ImqJyf k«PY(cid:238)J YJKuP~ pJm(cid:130) FA uP(cid:139)q IJoJPhr PTRvu yP(cid:152) mftoJj IJ¶t\JKfT mJ\Jr iPr rJUJr kJvJkJKv jf(cid:135)j mJ\Jr IPj(cid:155)we TrJ(cid:130) \JfL~ §TJwJVJPr ImhJj §mK(cid:142)oPTJ lJoJtKxCKaTqJux& 2002 xJPu IJohJjLx˛O(cid:134) Tr, oNuq x(cid:128)PpJ\j Tr Fm(cid:128) IJ~Tr mJmh 488.90 KoKu~j aJTJ \JfL~ §TJwJVJPr k«hJj TPrPZ(cid:130) kKrPmv kKrPmvPT hNweoM(cid:134) rJUPf IJoJPhr hJK~f(cid:153) x˛PTt IJorJ xhJ xPYfj(cid:130) IJ¶\tJKfT oJjx˛j(cid:156) §TJ˛JjL KyxJPm hNweoM(cid:134) kKrPmv m\J~ rJUJPT §mK(cid:142)oPTJ lJoJtKxCKaTqJux& xmthJA IkKrxLo (cid:143)¸f(cid:153) KhP~ gJPT(cid:130) IJorJ kKrPmvmJ…m k«pMK(cid:134) mqmyJr TKr Fm(cid:128) kKrPmv x(cid:128)(cid:137)J¶ Kj~ojLKf TPbJrnJPm §oPj YKu(cid:130) TJrUJjJ yPf KjVtf m\tqJKh kKrPvJij TrJr pPgJkpM(cid:134) mqmœJKh IJorJ V«ye TPrKZ, lPu kKrPmPvr Ckr C(cid:210)kJhj TJpt(cid:137)Por k«nJm V«yePpJVq oJ'J~ rJUPf x(cid:139)o yP~KZ(cid:130) IJoJPhr xTu C(cid:210)kJhj TJptœu kKrPmv IKih´r Tft OT IjMPoJKhf(cid:130) xJoJK\T k«Kfvs˘Kf §mK(cid:142)oPTJ lJoJt fJr xJoJK\T hJK~f(cid:153) x˛PTt Ifq¶ xPYfj Fm(cid:128) Kmv(cid:155)(cid:247)fJr xJPg F hJK~f(cid:153) kJuj TPr pJP(cid:152)(cid:130) KmKnj(cid:156) \jKyfTr S xJoJK\T Cj(cid:156)~joNuT TotTJP· IJorJ k«fq(cid:139) mJ kPrJ(cid:139)nJPm xJrJ mZr iPrA \Kzf KZuJo(cid:130) FZJzJS xJ(cid:128)(cid:243)(cid:146)KfT x(cid:128)Vbj, §kvJ\LKm x(cid:128)Vbj S IjqJjq xJoJK\T x(cid:128)œJPT xyJ~fJ k«hJj 2002 xJPuS ImqJyf KZu(cid:130) T(cid:146)f(cid:157)fJ IJoJPhr §(cid:137)fJ, mqJ(cid:128)TJr, xrmrJyTJrL, xrTJrL KmnJV, Kj~„eTJrL x(cid:128)œJxoNy Fm(cid:128) IJoJPhr mqmxJK~T TJpt(cid:137)Por xJPg x˛O(cid:134) xTuPT IJoJr IJ¶KrT ijqmJh \JjJK(cid:152)(cid:130) §kvJVfnJPm KjPmKhf, x(cid:210) S IJ¶KrT TotLmJKyjL IJoJPhr oNu YJKuTJ vK(cid:134)(cid:130) IJKo T(cid:146)f(cid:157)fJr xJPg fJPhr ImhJj (cid:254)re TrKZ(cid:130) IJoJPhr x(cid:216)JKjf §v~JrPyJ(cid:223)JrVPjr oNuqmJj xyPpJKVfJ Fm(cid:128) xogtPj §TJ˛JjL IJ\PTr ImœJPj §kR(cid:129)ZJPf x(cid:139)o yP~PZ(cid:130) F \Pjq IJorJ fJPhr xTPur KjTa VnLrnJPm T(cid:146)f(cid:157)(cid:130) F kpt¶ IJoJPhr §p xJluq fJ xTPur xK(cid:216)Kuf k«PY(cid:238)Jr lxu(cid:130) kKrPvPw, IJKo kMjrJ~ IJkjJPhr xTuPT IJ¶KrT ijqmJh \JjJK(cid:152) Fm(cid:128) nKmwqPfS IJkjJPhr xK(cid:137)~ xogtj Fm(cid:128) xyPpJKVfJ TJojJ TrKZ(cid:130) F Fx Fl ryoJj §Y~JroqJj dJTJ(cid:130) FKk«u 29, 2003 26 §Y~JroqJPjr k«KfPmhj Chairman’s Statement It is my pleasure to welcome you all to the 27th Annual General Meeting of your company. As chairman of the board of directors of the company, I am privileged to present before you, a brief resume of the affairs of the company for the year 2002 and its future plan. Operations I am pleased to inform you that sales of your company continued to grow in 2002 as well. During the year, the company attained net sales of Tk. 2,522.94 million as against Tk. 2,401.24 million of prior year. This represents a modest 5.07% overall growth. The sales of our formulation products-our core business, however, grew by an impressive 12.33%. Despite turbulence in the global economy, we have been successful in maintaining our exports sales. Our exports reached Tk. 50.28 million in 2002 as against Tk. 47.32 million in 2001. The pre-tax profit however, declined on comparable basis. The net profit before tax in 2002 was at Tk. 362.23 million down from Tk. 430.42 million of 2001. As you know imports constitutes approximately 71% of our total raw material cost. The depreciation of Taka against the dollar in the year 2002 fuelled by the cumulative effect of consecutive devaluations in 2001, have raised the material cost and hence effected the profitability. Dear Shareholders, In addition, as we noted in our last AGM, emergence of new competitors in the basic chemical market having only a few matured products in the portfolio, coupled with rising material cost have squeezed both sales and profitability of this business segment. This has pulled down the overall profitability. As a bailout to such a situation we are planning to introduce some high value high margin products in the basic chemical portfolio. New products As in the past, during 2002 also we added a good number of products to our existing portfolio. Consequent to our consistent drive to innovate quality products to better serve the health care needs of the people, we have introduced 12 new products with 23 presentation forms and strength, during the year. The brand name of the products introduced in 2002 are: Sibulin, Azmasol Refill, Pacet, Premil, Odrel, Diaglit, Epilep, Lucidol, Relentus, Terbex Cream, Filmet DS Tablet & Cosmotrin Cream. I am pleased to inform that, these new products have got wide acceptance and appreciation from the medical community. Expansion Program Major changes in the global economic scenario over past few months have forced us to re-visit the total project. In view of the new global context, we have found it prudent to defer procurement of plant and machinery and completion of the project till such time as the depressed economic scenario in the developed countries undergo sustainable improvement. However, civil and other hard and soft tasks of the project progressed as per plan during the year. Future Plan As you know, pharmaceuticals business in Bangladesh, as in the world, is highly competitive. In the post-WTO regime, it is going to be further intensely competitive. This is particularly true for the developing and least developed countries. I am pleased to announce that your company is quite mindful of the challenges ahead and confident of its capabilities to face them. While reinforcing our base to survive competition, we at the same time are putting our best effort to take advantage of the potential avenues that the new global economic order is going to bring about. As in the past, retaining and expanding the domestic market share will continue to be the main focus of our Chairman’s Statement 27 marketing strategy. Our investment for new product and increased market share will continue to consolidate the base. We plan to further strengthen the basic chemicals portfolio. Increased focus will also be on R & D activities to develop new products and dosage forms. Alongside with growing in the domestic market, BPL will aggressively pursue to secure significant growth in export sales. In this direction, our strategy is to expand the already explored international markets and further intensify our search for potential new geographic locations. Contribution to National Exchequer During 2002 Beximco Pharmaceuticals Limited has contributed Tk. 488.90 million to the national exchequer in the form of import related taxes, VAT and income tax. Environment We are aware of our responsibilities to keep our earth clean. As a company of international repute and excellence, Beximco Pharmaceuticals Limited places high importance on maintaining a sustainable eco- friendly environment. We use technologies that are friendly to the environment and comply with the environmental codes. We have created adequate facilities and employed appropriate process that can naturally recycle the effluent coming out of the manufacturing plant and keep the environmental effects of the manufacturing activities to acceptable minimum levels. All our manufacturing facilities have certification from the Department of Environment. Social Commitments In BPL, we believe in our responsibilities towards the society we operate in. All our activities are therefore directed to the well being of the society in general. Recognizing our responsibilities, Beximco Pharmaceuticals Limited actively takes part in different philanthropic and social activities that have a direct implication on the well being of the people. As part of its social commitments, the company sponsored news supplements on important occasions. We also provided active co-operation and support to different socio-cultural organizations and professional institutions in their healthcare awareness development programs. Acknowledgement I take this opportunity to express my sincere thanks to our customers, bankers, suppliers, government agencies, regulatory bodies and everyone the company interacted with in conducting its business. Our main strength is our professionally dedicated and sincere human resources. I thankfully acknowledge their contribution to the company. We are grateful to our shareholders for extending, at all times, their invaluable support and cooperation to bring the company to the level it has reached today. The success we have achieved so far was only possible because of the collective efforts of all concerned. Once again, I convey my heartiest thanks to all our stakeholders and look forward to their continued support and cooperation in the future as well. A S F Rahman Chairman Dhaka April 29, 2003 28 Chairman’s Statement Statement on Corporate Governance The board of directors of Beximco Pharmaceuticals Limited is committed to promote the highest standards of corporate governance within the Company. Driven by such commitment, management of BPL places utmost importance on proper accountability and transparency in every sphere of its activities. While a statement on corporate governance and its compliance is not a mandatory requirement as per the existing law of this country, in recognition of the importance, BPL makes a voluntary disclosure on this issue. The paragraphs below reports on how the principles of good governance are applied in BPL. Board of Directors 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. It is the highest level of authority in the organization. The board is responsible to the shareholders for attainment of strategic objectives of the company and stewardship of the company’s resources. The board meets at periodic interval to deal with the issues that require board’s approval and/or directives. The key activities of the business are reviewed and strategic policy directives are given to the management. Full and timely information are provided to enable the directors to give decisions on issues placed before them. Management Committee A four member management committee headed by the chief executive officer is responsible for implementation of the strategic and operating plans of the business as well as the strategic policy directives of the board. The day to day business operations are carried out by a very highly experienced team of professional managers drawn from diversified fields. Internal Control The board of directors has the overall responsibility for the system of internal control of the company. BPL’s internal control including internal financial control is designed to effectively achieve its business objective through best utilization of its resources. There is provision for periodic assessment of the effectiveness of the control framework already in operation. Properly designed management structure, clearly defined responsibility, delegation of authority, establishment of accountability at each segment of the business function and system of periodic reporting and monitoring of performance are the key elements of the internal control framework employed in BPL. The company has a specially assigned team to carry out internal financial audits at periodic intervals. The audit team submits their reports to the CEO along with their findings and suggestion for corrective action, if any, needed. Periodic reporting by each segment of the business is a continuous process at BPL. Each of the operational units has its own business plan and budget. Actual performances are periodically monitored. Statement on Corporate Governance 29 Shareholder Relations The Company has about fifty thousand shareholders. The directors place a high importance on maintaining good relationships with its shareholders and ensure to keep informed of significant company developments. The company reports formally to shareholders twice a year through summarized half yearly report and detailed annual report. Annual general meeting is an important opportunity to meet and communicate with shareholders. Every Shareholder or his duly authorized representative has the right to attend such meeting. It provides the forum for discussion of the business, its future prospects and other matters of interest and concern to the shareholders. In addition, the Company has a full fledged corporate affairs secretarial department who addresses different issues like dividend payment enquiries, share transfer, loss of share certificate/dividend warrants etc. Statement on Directors’ Responsibilities for preparation and presentation of the financial statements The following statement is made to distinguish the responsibilities of the directors and the auditors in relation to the preparation of financial statements. The Companies Act 1994 requires the directors to prepare financial statements for each financial year. In preparing those financial statements directors are required: To select suitable accounting policies and apply those policies consistently; To make reasonable and prudent judgments and estimates where necessary; To state whether all applicable accounting standards have been followed, subject to any material departure disclosed and explained in the notes to the financial statements; To take such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities; To ensure that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the Company and which enable them to ensure that the financial statements comply with the requirements of the Companies Act 1994 and the Securities and Exchange Rules 1987; and To prepare the financial statement on going concern basis unless it is inappropriate to presume that the Company will continue in business; Going Concern Directors are convinced after making appropriate enquires at the time of approving the financial statements that the company has adequate resources to carry out its operational existence for the foreseeable future. It is therefore appropriate to adopt going concern basis in preparing the financial statements. 30 Statement on Corporate Governance Directors’ Report For the year ended 31 December 2002 The Directors are pleased to present their report to the shareholders together with the audited accounts for the year ended 31 December, 2002. Financial Results and Profit Appropriations Net Profit Before Providing Income Tax Less : Provision for Income Tax Net Profit After Tax Add : Profit brought forward from previous year Profit Available for Appropriation Recommended for Appropriation: Transfer to Tax-holiday Reserve Proposed Dividend Transfer to share premium Account Un-appropriated Profit Carried Forward Figure in ‘000 Taka 2002 2001 362,232 (20,552) 341,680 1,294,000 1,635,680 (125,524) (88,500) (599,765) (813,789) 821,891 430,421 (28,641) 401,780 1,067,085 1,468,865 (108,490) (66,375) - (174,865) 1,294,000 Dividend The Board of Directors have recommended 5% cash dividend and 15% stock dividend for your approval for the year ended 31st December, 2002. Against the stock dividend, necessary amount has been transferred to Share Premium Account as per the statutory notification dated September 11, 2001 issued by the Securities and Exchange Commission. While paying the dividend, deduction of income tax shall be made as per Income Tax Law. Directors Mr. A S F Rahman, Director of the company retires by rotation as per Articles 126 and 127 of the Articles of Association of the Company and being eligible, offer himself for re-election. Mr. M. A. Qasem (Nominee of Bangladesh Export Import Company Limited) and Dr. Abdul Alim Khan (Nominee of Beximco Holdings Limited) 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. 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, Sonargoan Road, Dhaka-1205 who were appointed as Auditors of the Company in the Twenty-sixth Annual General Meeting of the Company has carried out the audit for the year ended 31 December 2002. M/S M.J.Abedin & Co., Chartered Accountants, National Plaza (6th Floor), 1/G Free School Street, Sonargoan Road, Dhaka-1205, the Auditors of the Company retire at this meeting and have expressed their willingness to continue in office for the year 2003. On behalf of Board A S F Rahman Chairman Dhaka. 29 April, 2003 Report of the Directors ‘ 31 Auditors' Report To The Shareholders of Beximco Pharmaceuticals Limited We have audited the financial statements of Beximco Pharmaceuticals Limited comprising of Balance Sheet as at 31 December 2002 and the Profit and Loss Account, Statement of Changes in Equity and Cash Flow Statement for the year then ended and the related notes. These financial statements are the responsibility of the Company's directors. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with Auditing Standards adopted by the Institute of Chartered Accountants of Bangladesh (ICAB). An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates and judgments made by the directors, as well as evaluating the overall financial statements presentation. We planned and performed the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present a true and fair view, in all material respects, of the financial position of the Company at 31 December 2002 and the results of its operation and its cash flows for the year then ended in conformity with the Companies Act 1994, the Securities and Exchange Rules 1987 and the 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) 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; (c) the Company's Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts; and (d) the expenditures incurred were for the purpose of the Company's business. National Plaza (6th Floor) 1/G, Sonargaon Road Dhaka - 1205 29 April, 2003. 32 Auditors' Report M. J. Abedin & Co. Chartered Accountants Beximco Pharmaceuticals Limited Balance Sheet As at 31 December 2002 Notes 2002 2001 14 15 16 17 18 19 20 21 4,780,464,825 4,649,544,673 90,376,402 40,543,750 1,982,226,375 1,113,539,289 447,307,967 258,562,676 157,898,170 4,918,273 4,576,093,546 4,454,495,125 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 Tk. 6,762,691,200 6,360,267,868 22 23 24 25 26 27 28 29 30 31 Tk. 4,441,096,192 442,500,000 1,489,750,000 998,690,522 1,510,155,670 812,591,999 757,115,841 55,476,158 1,509,003,009 1,758,387 1,171,975,598 155,928,586 129,682,896 1,750,944 47,906,598 6,762,691,200 4,165,791,144 442,500,000 1,489,750,000 873,166,091 1,360,375,053 704,155,151 656,646,364 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 ASSETS Non-Current Assets Property, Plant and Equipment - Carrying Value Pre-Production Expenses Investment in Shares of Padma Textile Mills Ltd. Current Assets Inventories Accounts Receivable Loans, Advances and Deposits Current Account with Related Parties Cash and Cash Equivalents TOTALASSETS EQUITYAND LIABILITIES Shareholders’ Equity Issued Share Capital Share Premium Tax-Holiday Reserve Retained Earnings 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 TOTAL LIABILITIES AND SHAREHOLDERS’EQUITY Contingent Liabilities and Commitments Accounting Policies The notes are an integral part of the Financial Statements. 53, 54 & 55 5 Approved and authorised for issue by the board of directors on 29 April 2003 and signed for and on behalf of the Board : C. H. Rahman Director Iqbal Ahmed Director Md. Asad Ullah Company Secretary Dhaka 29 April 2003 Per our report of even date. M. J. Abedin & Co. Chartered Accountants Balance Sheet 33 Beximco Pharmaceuticals Limited Profit and Loss Account For the year ended 31 December 2002 Revenue (Turnover) from Net Sales Cost of Goods Sold Gross Profit Operating Expenses : Administrative Expenses Selling and Distribution Expenses Profit from Operations Other Income Finance Cost Net Profit Before Contribution to WPPF Contribution to Workers’ Profit Participation / Welfare Funds Net Profit Before Tax Income Tax Expense Net Profit After Tax Transfer to Tax-Holiday Reserve Surplus for the Year Surplus brought forward Appropriation of Dividend declared for 2001 Available Surplus Carried Forward Earnings Per Share (Par value Tk. 10/-) Number of Shares used to Compute EPS Accounting Policies Figures in brackets indicate deductions. Notes 2002 2001 2,522,942,523 2,401,241,111 (1,620,493,149) (1,459,108,308) 902,449,374 942,132,803 (357,339,989) (79,926,759) (277,413,230) (322,483,320) (76,595,834) (245,887,486) 545,109,385 619,649,483 7,266,435 (170,994,495) 381,381,325 11,812,076 (179,520,085) 451,941,474 (19,148,862) (21,521,023) Tk. 362,232,463 (20,552,415) 341,680,048 (125,524,431) 216,155,617 430,420,451 (28,640,643) 401,779,808 (108,489,817) 293,289,991 1,360,375,053 (66,375,000) 1,067,085,062 - Tk. Tk. 1,510,155,670 1,360,375,053 7.72 9.08 44,250,000 44,250,000 32 33 38 39 40 41 42 43 44 45 5 The notes are an integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 29 April 2003 and signed for and on behalf of the Board: Iqbal Ahmed Director Md. Asad Ullah Company Secretary Per our report of even date. M. J. Abedin & Co. Chartered Accountants C. H. Rahman Director Dhaka 29 April 2003 34 Profit and Loss Account Beximco Pharmaceuticals Limited Statement of Changes in Equity For the year ended 31 December 2002 Net Profit After Tax for the year Net Gains not Recognised in the Profit and Loss Account 2002 2001 341,680,048 - 401,779,808 - Total Recognised Gains for the Year being Net Addition to 341,680,048 401,779,808 Shareholders’Equity Shareholders’Equity at Beginning of the Year Appropriation of Dividend of Previous Year (2001) 4,165,791,144 (66,375,000) 3,764,011,336 - Shareholders’Equity at End of the Year Tk. 4,441,096,192 4,165,791,144 Number of Ordinary Shares Face Value Per Share (Par Value) Shareholders’Equity Per Share 44,250,000 10.00 100.36 44,250,000 10.00 94.14 Tk. A reconciliation of opening and closing balances of each component of shareholders’equity is given in the Note 46 to the Financial Statements. Accounting Policies (Note 5). Figure in bracket indicates deduction. The notes are an integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 29 April 2003 and signed for and on behalf of the Board: Iqbal Ahmed Director C. H. Rahman Director Dhaka 29 April 2003 Md. Asad Ullah Company Secretary Per our report of even date. M. J. Abedin & Co. Chartered Accountants Statement of Changes in Equity 35 Beximco Pharmaceuticals Limited Cash Flow Statement For the year ended 31 December 2002 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 : (Increase)/ Decrease in Current Account with Related Parties Proceeds from Long Term Borrowings Cash Credit & other Short Term Loan Received Dividend Paid Net Cash Generated in Financing Activities (Decrease)/ Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Begining of Year Notes 2002 2001 47 2,416,212,879 (2,030,592,004) 385,620,875 (161,521,864) (31,431,703) 192,667,308 (283,739,051) 1,249,336 (9,321,731) (291,811,446) (61,994,400) 100,469,477 90,070,923 (67,504,990) 61,041,010 (38,103,128) 43,021,401 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 Cash and Cash Equivalents at End of Year Tk. 4,918,273 43,021,401 Accounting Policies 5 Figures in brackets indicate deductions. The notes are an integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 29 April 2003 and signed for and on behalf of the Board: Iqbal Ahmed Director Md. Asad Ullah Company Secretary Per our report of even date. M. J. Abedin & Co. Chartered Accountants C. H. Rahman Director Dhaka 29 April 2003 36 Cash Flow Statement Beximco Pharmaceuticals Limited Index to Notes to the Financial Statements - 2002 Statutory background of the company and overview of it's operational activities Basis of presenting financial statements Adoption of international accounting standards (IASs) Impact of recently issued accounting standards Critical corporate accounting policies in respect of recognition and valuation of key accounting issues Concentrations Profit and loss account Reporting currency Re-arrangement Information by industry segments and geographical areas Long term borrowing (secured) Investment in shares of Padma Textile Mills Ltd. Inventories 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Recognised gains and losses 12. Historical cost profit and losses 13. Appropriation of dividend of previous year (2001) 14. Property, plant and equipment 15. Pre-production expenses 16. 17. 18. Accounts receivable 19. Loans, advances and deposits 20. Current account with related parties 21. Cash and cash equivalents 22. Issued share capital 23. Share premium 24. Tax-holiday reserve 25. 26. Deferred liability (provision for gratuity) 27. Customs debentures 28. Short term borrowing from banks 29. Creditors and other payables 30. Accrued expenses 31. Provision for income tax 32. Revenue (turnover) from net sales 33. Cost of goods sold 34. Raw material consumed 35. Packing material consumed 36. 37. Factory overhead 38. Administrative expenses 39. Selling and distribution expenses 40. Other income 41. Finance cost 42. Contribution to workers' profit participation / welfare funds 43. 44. Tax-holiday reserve 45. Basic earnings per share (EPS) 46. Reconciliation of shareholders' equity 47. Cash flow from operation under indirect method 48. Related party transactions 49. Financial instruments and related disclosures 50. Particulars of disposal of property, plant and equipment 51. Payment/perquisites to directors and officers 52. Production capacity, actual production in 2002 and reason of excess/(shortfall) 53. Contingent liabilities 54. Capital expenditure commitment 55. Operating lease commitment 56. Claim not acknowledged as debt 57. Un-availed credit facilities 58. Payments made in foreign currency 59. Dividend paid to the non-resident shareholders in 2002 60. Dividend subject to income tax deduction at source 61. Foreign exchange earned 62. Commission, brokerage or discount against sales 63. Post closing events Laboratory chemical consumed Income tax expenses Index to Notes to the Financial Statements 37 Beximco Pharmaceuticals Limited Notes to the Financial Statements 31 December 2002 1. Statutory Background of the Company and Overview of it's Operational Activities Beximco Pharmaceuticals Ltd. (the "Company"), a member of BEXIMCO Group, is a company incorporated in Bangladesh as a public limited company. It commenced commercial operation in 1980 and went for public issue of shares in 1985. The shares of the Company are listed with 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, 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 1,218 employees (1,151 in 2001) as of 31 December 2002. 2. Basis of Presenting Financial Statements The following underlying assumptions, measurement base, laws, rules, regulations and accounting pronouncements have been considered in preparing and presenting the financial statements : Going concern Accrual Historical cost convention Generally accepted accounting principles and practices in Bangladesh The Companies Act, 1994 The Securities and Exchange Rules, 1987 The Listing Regulations of Dhaka and Chittagong Stock Exchanges and The Accounting Standards issued by the Institute of Chartered Accountants of Bangladesh (ICAB). The Board of Directors are responsible for preparing and presenting the financial statements, who have approved and authorised issue of these financial statements on 29 April, 2003. 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 of contingent assets and liabilities at the date of and during the reporting period. Due to the inherent uncertainty involved in making estimates, actual result reported could differ from those estimates. 3. Adoption of International Accounting Standards (IASs) In preparing and presenting these financial statements, considering relevant for the significant accounting issues of the company, following IASs have been adopted by the company, which were issued by the ICAB formulated in the light of the IASs originally issued by the International Accounting Standards Board and the conditions and practices prevailing in Bangladesh, and valid as on the balance sheet date : IAS 1 Presentation of Financial Statements IAS 2 Inventories IAS 7 Cash Flow Statements IAS 8 Net Profit or Loss for the period, Fundamental Errors and Changes in Accounting Policies IAS 10 Events after the Balance Sheet Date IAS 16 Property, Plant and Equipment IAS 18 Revenue IAS 21 The effects of Changes in Foreign Exchange Rates IAS 23 Borrowing Costs IAS 33 Earnings Per Share 38 Notes to the Financial Statements 4. Impact of Recently Issued Accounting Standards There was no such impact on these financial statements as no new accounting standard was issued by the ICAB during the year under review. 5. Critical Corporate Accounting Policies in respect of Recognition and Valuation of Key Accounting Issues Following are the accounting policies relating to recognition and valuation of items in financial statements which are material and critical in determining the company's results of operations for the year and financial position as on the balance sheet date and are consistent with those adopted in the financial statements for the previous year : (a) Recognition of Income Sales are accounted for on preparation of invoices alongwith delivery of goods. Dividend income on investment in shares has been recognised on approval of said dividend in the annual general meeting of relevant company. (b) Property, Plant and Equipment These are initially stated at cost of acquisition and subsequently stated at cost less accumulated depreciation. 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 pre-operational borrowing cost. 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 profit and loss account which is determined with reference to the net book value of the assets and the net sales proceeds. (c) Depreciation 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 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. The annual depreciation rates applicable to the principal categories are : Building and other Construction Plant and Machinery Furniture & Fixtures Transport & Vehicle Office Equipment 10% 15% 10% 20% 10% to 50% (d) Capital Work-in-Progress Advances paid to acquire fixed assets and the cost of assets not put to use before the year-end are reported under capital work-in-progress. This shall be capitalised to proper fixed assets as and when the related project goes into commercial operation. (e) Investment in Shares of Padma Textile Mills Ltd. The cost method of accounting is followed whereby the investment is recorded at cost. The Profit and Loss Account reflects income from the investment only to the extent of distributions from accumulated net profit of the investee company in the form of dividend, which is recognised when the Notes to the Financial Statements 39 company’s right to receive payment is established, that is, approval as dividend in the annual general meeting of the said company. (f) Pre-production Expenses This shall be capitalised to the factory building and plant and machinery when the relevant project goes into commercial operation. (g) Promotional Expenses All costs associated with product promotion are generally expensed in the year in which they are incurred. (h) Borrowing Costs In respect of existing projects, borrowing costs are charged as expenses for the year under review. In respect of projects not yet commenced its commercial production, borrowing costs are debited to Capital Work in Progress. (i) Lease Rental Fixed assets acquired under leases are considered as operating lease, and therefore, lease rentals are charged as expenses. (j) Inventories Inventories are stated at the lower of cost and net realizable value. The cost is calculated on weighted average method. Costs comprise of 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. (k) Accounts Receivable These are carried at original invoice amount which represents net realisable value only. 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. (l) Cash and Cash Equivalents This represents cash consisting of cash in hand and at banks. (m) Other Current Assets Other current assets have a value on realisation in the ordinary course of the company's business which is at least equal to the amount at which they are stated in the balance sheet. (n) Income Taxes Income taxes are accounted for on an accrual basis with respect to currently payable amounts. The tax effect resulting from timing differences (deferred tax) in recognizing revenues and expenses for financial statements and tax returns is not recognized. The existing income tax rate of 30% has been considered. (o) Provisions for Cost of Post Employment Benefits The Company provides a variety of post employment benefit plans to eligible employees that consists of recognized contributory provident fund, unfunded gratuity scheme and group insurance scheme. Assets of provident fund are held in a separate trustee administered 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. 40 Notes to the Financial Statements (p) Other Corporate Debt, Accounts Payable, Trade and Other Liabilities These liabilities are carried at the anticipated settlement amount in respect of goods and services received, whether or not billed by the supplier. (q) Provisions Provisions are liabilities of uncertain timings or amount. Provisions are recognized when the company has a present legal or constructive obligation as a result of past events. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. (r) Share Premium The Share Premium shall be utilized in accordance with provisions of the Companies Act 1994 and direction of the Securities and Exchange Commission. The details of which are given in the Note 23. (s) Tax Holiday Reserve This is being created out of tax holiday profit 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 for other purposes as specified in the Income Tax Ordinance 1984. (t) Proposed Dividend Dividend proposed by the board of directors for the year under review has not been recognized as a liability in the Balance Sheet. This will be accounted for after the approval by the shareholders in the annual general meeting. (u) Earnings Per Share (EPS) This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. 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. 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. (v) Foreign Currencies Foreign Currency transactions are recorded at the applicable rates of exchange ruling at the transaction date. 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. The rate of relevant foreign exchange at year end is : 1 U S Dollar ($) 6. Concentrations 2002 = Tk. 59.1200 2001 57.6450 As of 31 December 2002, the Company does not have any significant concentration of business transacted with a particular customer, supplier or lender that could, if suddenly eliminated, severely impact the company's operations. The company also does not have a concentration of available sources of labour, services, or licences or other rights that could, if suddenly eliminated, severely impact the operations of the company. Notes to the Financial Statements 41 7. Profit and Loss Account The results for the year were not materially affected by : (a) transactions of a nature not usually undertaken by the company ; (b) circumstances of an exceptional or non-recurring nature ; (c) charges or credits relating to prior years ; and (d) changes in accounting policies. 8. Reporting Currency The amounts shown in these financial statements are presented in Bangladesh Taka, which have been rounded off to the nearest Taka except where indicated otherwise. 9. Re-Arrangement Certain amounts for previous year have been re-arranged to conform with 2002 presentation. 10. Information by Industry Segments and Geographical Areas Industry Segment Information No mention is made because the company does not have any segment other than the pharmaceutical business. Geographic Segment Information Not applicable as the company does not have any business unit abroad. 11. Recognised Gains and Losses No gain or loss was directly dealt with through the shareholders' equity without being recognized in the profit and loss account. Therefore, net profit after tax for the year is the total recognized gains. 12. Historical Cost Profit and Losses As there was no extra ordinary item, there was no difference in profit from ordinary activities before taxation and the net profit before tax. Furthermore, 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. 13. Appropriation of Dividend of Previous Year (2001) In the 26th Annual General Meeting held on June 29, 2002, the shareholders of the Company approved a dividend of Tk. 1.50 per share (15%) for the year 2001. Accordingly, total dividend amount of Tk. 66,375,000 in respect of 2001 has been provided for in the accounts of 2002. 42 Notes to the Financial Statements 14. Property, Plant and Equipment - Tk. 4,649,544,673 Particulars Cost At 31 December, 2001 Additions in 2002 Disposal in 2002 Transferred & Capitalized in 2002 At 31 December, 2002 Depreciation At 31 December, 2001 For 2002 Adjustment on disposal At 31 December, 2002 Net Book Value 31 December, 2002 Capital Work in Progress Tk. Tk. Carrying Value Freehold Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Total 408,219,855 435,122,718 13,361,237 2,359,562 - - - 421,581,092 28,579,068 466,061,348 744,026,791 28,044,606 33,435,314 86,434,400 1,735,283,684 2,427,149 - 58,499,125 3,963,926 (181,200) - 1,784,552 12,512,013 (2,739,840) - - - 36,408,439 (2,921,040) 87,078,193 804,953,065 31,827,332 32,480,026 98,946,413 1,855,849,276 - - - - 188,573,815 24,247,088 - 400,326,527 12,065,229 24,265,874 62,053,136 687,284,581 54,438,001 1,783,693 2,075,790 5,468,103 - (79,408) (2,164,804) - 88,012,675 (2,244,212) 212,820,903 454,764,528 13,769,514 24,176,860 67,521,239 773,053,044 421,581,092 253,240,445 350,188,537 18,057,818 8,303,166 31,425,174 1,082,796,232 - - - - - - 3,566,748,441 31 December, 2002 Tk. 421,581,092 253,240,445 350,188,537 18,057,818 8,303,166 31,425,174 4,649,544,673 Capital Work in Progress of Taka 3,566,748,441 is arrived as follows : As on 01.01.2002 Addition in 2002 Capitalized in 2002: Building and other Constructions Plant and Machinery As on 31.12.2002 15. Pre-Production Expenses - Tk. 90,376,402 This is in respect of the expansion project and represents : Salaries and related expenses Utilities Foreign Travel Entertainment Other Expenses 2002 3,406,496,022 247,330,612 3,653,826,634 (28,579,068) (58,499,125) (87,078,193) Tk. 3,566,748,441 2002 2001 57,964,222 4,279,411 5,377,142 1,804,369 20,951,258 90,376,402 Tk. 51,388,013 3,931,514 5,335,661 1,686,806 18,712,677 81,054,671 16. 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., a listed company with foreign collaboration. 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, 2002 was Tk. 17.52 (on 31-12-01 Tk.19.06) in the Dhaka Stock Exchange Ltd. and Tk. 17.50 (on 31-12-01 Tk. 19.35) in the Chittagong Stock Exchange Ltd. The investment in 2,632,500 shares represents 6.25% of total 42,120,000 issued, subscribed and paid-up shares of Padma Textile Mills Ltd. Notes to the Financial Statements 43 17. Inventories - Tk. 1,113,539,289 This consists of as follows : 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 2002 2001 411,049,204 80,625,166 391,493,587 104,790,428 417,427 6,948,712 4,856,124 61,408,282 1,696,259 50,254,100 368,956,089 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 Tk. 1,113,539,289 1,144,320,036 18. Accounts Receivable - Tk. 447,307,967 This is unsecured, considered good and is falling due within one year. This includes receivable of Tk. 43,907,765 equivalent to US $ 775,512.77 (on 31-12-2001 Tk. 21,797,784 equivalent to US $ 398,494.84) against export sales. This also includes Tk. 387,549,191 (on 31-12-2001 Tk. 292,661,848) 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. 387,549,191 on 31-12-2002 (on 31-12-2001 Tk. 292,661,848). 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. 19. Loans, Advances and Deposits - Tk. 258,562,676 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 Others Deposits : VAT Claim Receivable Security Deposit Lease Deposit Earnest Money Bank Guarantee Margin 24,002,407 1,520,209 9,683,474 41,983,412 958,997 23,894,888 1,947,515 950,968 6,825,284 7,268,680 119,035,834 65,332,848 16,058,743 8,402,466 48,161,262 1,337,978 233,545 139,526,842 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. 258,562,676 167,044,720 (a) The maximum amount due from the officers during the year was Tk. 9,683,474 on 31-12-2002 (on 01-01-2001 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. 44 Notes to the Financial Statements 20. Current Account with Related Parties - Tk. 157,898,170 This is unsecured but considered good and bears interest @ 10% to 15% p.a. 21. Cash and Cash Equivalents - Tk. 4,918,273 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$ 35,356.77) (on 31-12-2001 US$ 16,109.60) (iv) In FDR 2002 558,703 2,263,035 6,243 2,090,292 - 4,359,570 4,918,273 Tk. 2001 495,387 10,773,762 2,621 928,638 30,820,993 42,526,014 43,021,401 22. Issued Share Capital - Tk. 442,500,000 This represents : Authorised : 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 (a) Composition of Shareholding : Sponsors Foreign Investors General Public (b) Distribution Schedule : 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 2002 2001 No. of shares % No. of shares % 11,922,631 501,581 31,825,788 44,250,000 26.94 1.13 71.93 100.00 11,922,631 1,788,971 30,538,398 44,250,000 26.94 4.04 69.02 100.00 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 2002 40,392 8,945 369 155 40 21 7 17 9 5 2001 41,055 8,730 355 142 30 16 9 15 9 6 2002 80.85% 17.91% 0.74% 0.31% 0.08% 0.04% 0.01% 0.03% 0.02% 0.01% 2001 81.51% 17.33% 0.71% 0.28% 0.06% 0.03% 0.02% 0.03% 0.02% 0.01% Total 49,960 50,367 100.00% 100.00% 2002 2001 5,770,971 11,538,540 2,597,736 2,192,424 984,365 713,704 314,475 1,329,508 1,907,897 16,900,380 44,250,000 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 2002 13.04% 26.08% 5.87% 4.96% 2.23% 1.61% 0.71% 3.00% 4.31% 2001 13.52% 25.03% 5.66% 4.49% 1.64% 1.26% 0.94% 2.56% 4.36% 38.19% 100.00% 40.54% 100.00% (c) Market Price : The shares are listed in the Dhaka and Chittagong Stock Exchanges, on 31-12-2002 each share was quoted at Tk. 41.83 (on 31-12-01 Tk. 49.50) in the Dhaka Stock Exchange Ltd. and Tk. 41.89 (on 31-12-01 Tk. 49.47) 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. Notes to the Financial Statements 45 23. Share Premium - Tk. 1,489,750,000 This is as per last account and made-up as follows : (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 2002 2001 191,750,000 1,298,000,000 1,489,750,000 Tk. 191,750,000 1,298,000,000 1,489,750,000 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 of 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 redumption of any redeemable preferance shares or of any debenture of the company. in this respect, a statutory 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. 24. Tax-Holiday Reserve - Tk. 998,690,522 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 - 44) 873,166,091 125,524,431 998,690,522 Tk. 764,676,274 108,489,817 873,166,091 25. Long Term Borrowing (Secured) - Tk. 757,115,841 This loan was sanctioned under the consortium arrangement of Janata Bank, Sonali Bank, Agrani Bank, Rupail Bank Ltd. and United Commercial Bank Ltd. for the expansion project of the company. Janata bank was the lead bank to the consourtium. A repayment re- arrangement of the disbursed amount is under progress. 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. 26. Deferred Liability (Provision for Gratuity) - Tk. 55,476,158 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 46 Notes to the Financial Statements 47,508,787 10,391,496 57,900,283 (2,424,125) 55,476,158 Tk. 40,308,478 9,137,495 49,445,973 (1,937,186) 47,508,787 27. Customs Debentures - Tk. 1,758,387 This is as per last account and represents : 2002 2001 Installment due Interest due 265,854 1,492,533 1,758,387 Tk. 265,854 1,492,533 1,758,387 28. Short Term Borrowing From Banks - Tk. 1,171,975,598 This represents : (a) Janata Bank : Cash Credit-Pledge Cash Credit-Hypothecation LIM PAD (b) Citibank N.A. (c) Credit Agricole Indosuez (d) Standard Chartered Bank 29. Creditors and Other Payables - Tk. 155,928,586 These are unsecured, and falling due within one year. This consists of : Suppliers Payable to RAJUK Loan from Workers' Participation/Welfare Funds 30. Accrued Expenses - Tk. 129,682,896 This is falling due within one year. This consists of as follows: For Expenses-Unsecured Workers’Participation/Welfare Funds Provident Fund 31. Provision for Income Tax - Tk. 47,906,598 This is arrived at as follows : Opening Balance Add : Tax provided in 2002 (Note - 43) Less : Tax paid during the year Less : Advance tax adjusted 32. Revenue (Turnover) from Net Sales - Tk. 2,522,942,523 This represents net sales and consists of as follows : Local Sales Export Sales - US$ 860,012 (in 2001 US$ 842,652) Sales Represents : Tablet & Capsules Bottle & Tubes Basic Chemicals Pcs Pcs Kg 163,642,057 691,970,393 20,225,824 103,074,258 77,354,361 398,924 115,309,781 1,171,975,598 155,337,898 625,133,177 43,695,796 76,015,905 51,521,670 130,200,229 1,081,904,675 66,668,887 14,833,258 74,426,441 155,928,586 178,236,892 9,423,531 63,032,797 250,693,220 72,081,994 19,148,863 38,452,039 129,682,896 70,277,976 21,521,023 23,891,841 115,690,840 37,393,516 20,552,415 57,945,931 (10,039,333) 47,906,598 - 47,906,598 72,913,988 28,640,644 101,554,632 (4,000,000) 97,554,632 (60,161,116) 37,393,516 Tk. Tk. Tk. Tk. 2,472,659,005 50,283,518 2,522,942,523 Tk. 2,353,916,337 47,324,774 2,401,241,111 1,457,850,760 25,568,572 67,518 1,320,438,707 21,474,310 101,890 Notes to the Financial Statements 47 33. Cost of Goods Sold - Tk. 1,620,493,149 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 COST OF 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 : Item Stock as on 01-01-2002 Tablet & Capsules Bottle & Tubes Basic Chemicals Stock as on 31-12-2002 Tablet & Capsules Bottle & Tubes Basic Chemicals 34. Raw Material Consumed - Tk. 1,195,594,016 This is made-up as follows : Opening Stock Purchase Closing Stock Itemwise quantity and value : Opening Stock (Consists of 381 items) Add : Purchase (Consists of 349 items) Less : Closing Stock (Consists of 390 items) Consumption (Consists of 365 items) Kg Ltr. Unit Kg Ltr. Unit Kg Ltr. Unit Kg Ltr. Unit SOLID 604,342 2,243 75,841,354 2,289,578 5,147 75,394,552 424,313 4,420, 67,923,593 2,469,607 2,970 83,312,313 LIQUID 232,713 - - 729,305 - - 116,387 - - 845,631 - - BASIC 309,377 - - 528,718 - - 423,668 - - 414,427 - - Raw material consumed is 71% imported. 48 Notes to the Financial Statements Notes 34 35 36 37 2002 2001 71,803,128 1,195,594,016 250,678,370 4,650,034 1,522,725,548 69,175,003 1,168,189,896 234,078,428 4,119,057 1,475,562,384 (80,625,166) (71,803,128) 1,442,100,382 230,508,370 1,672,608,752 368,956,089 2,041,564,841 (411,049,204) 1,630,515,637 (10,022,488) 1,620,493,149 Tk. 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 Unit Quantity Value Pcs Pcs Kg Pcs Pcs Kg 366,587,102 3,066,408 9,527 370,291,749 5,407,219 9,028 245,282,899 67,551,432 56,121,758 368,956,089 264,618,403 92,295,515 54,135,286 411,049,204 Tk. Tk. 2002 2001 487,421,624 1,099,665,979 (391,493,587) 1,195,594,016 Tk. TOTAL(Qnty) 1,146,432 2,243 75,841,354 3,547,601 5,147 75,394,552 964,368 4,420 67,923,593 681,283,898 974,327,622 (487,421,624) 1,168,189,896 TOTAL(Value) 476,036,158 115,383 11,270,083 487,421,624 1,082,530,327 4,315,967 12,819,685 1,099,665,979 377,226,521 3,336,435 10,930,631 391,493,587 3,729,665 2,970 83,312,313 1,181,339,964 1,094,915 13,159,137 Tk. 1,195,594,016 35. Packing Material Consumed - Tk. 250,678,370 This is made-up as follows : Opening Stock Purchase Closing Stock 2002 2001 104,502,699 250,966,099 (104,790,428) 250,678,370 Tk. 81,117,431 257,463,696 (104,502,699) 234,078,428 Packing material consumed is 36% imported. Particulars in respect of quantity of each packing material as well as value of each class of packing material are not given as the number of items as well as classes of items are numerous. 36. Laboratory Chemical Consumed - Tk. 4,650,034 This is made-up as follows : Opening Stock Purchase Closing Stock 449,162 4,618,299 (417,427) 4,650,034 Tk. 412,569 4,155,650 (449,162) 4,119,057 Particulars in respect of quantity of each laboratory chemical as well as value of each class of laboratory chemical are not given as the number of items as well as classes of items are numerous. 37. Factory Overhead - Tk. 230,508,370 This consists of as follows : Salary & Allowances (including welfare expenses and retrial benefit) Repairs & Maintenance Insurance Premium Municipal Tax & Land Revenue Advertisement & Subscription Travelling & Conveyance Entertainment Printing & Stationery Telephone & Postage Toll Charge (net) Electricity, Gas & Water Lease Rental Other Expenses Depreciation 76,319,180 13,007,586 5,988,427 432,228 225,135 1,143,891 112,088 2,100,103 1,505,214 4,608,013 11,672,266 21,945,012 3,436,552 88,012,675 230,508,370 Tk. 69,576,106 13,513,925 4,678,307 165,000 92,760 1,589,703 177,800 1,505,707 1,407,721 (699,259) 12,510,329 14,159,678 4,764,045 89,884,195 213,326,017 (a) Salary and allowances include company’s contribution to provident fund of Tk. 1,676,199 (in 2001 Tk. 1,335,654). (b) In 2002, all the 441 factory employees received annual salary and allowances of Tk. 36,000 and above. (c) The value of imported stores and spares consumed is Tk. 6,054,125 (in 2001 Tk. 5,276,985) which is 57% (55% in 2001) of total stores and spares consumed as included in repairs & maintenance. (d) Other expenses does not include any item exceeding 1% of total revenue. Notes to the Financial Statements 49 38. Administrative Expenses -Tk. 79,926,759 This consists of as follows : 2002 2001 Salary & Allowances (including welfare expenses and retrial benefit) Rent Expenses Repairs & Maintenance (including car maintenance) Donation & Subscription Travelling & Conveyance Entertainment Printing & Stationery Auditors’ Remuneration Telephone & Postage Software Development Expenses Electricity, Gas & Water Legal & Consultancy Fee AGM Expenses Other Expenses Lease Rental 24,315,143 1,995,921 3,300,665 620,632 674,027 217,685 584,807 150,000 1,965,711 4,400,000 1,135,862 441,431 7,143,832 1,253,303 31,727,740 79,926,759 Tk. 20,171,116 2,255,160 2,695,418 222,928 596,790 285,640 571,578 150,000 2,014,732 3,200,000 1,228,752 163,200 6,108,937 796,349 36,135,234 76,595,834 (a) Salary and allowances include provident fund contribution of Tk. 735,029 (in 2001 Tk. 639,595). (b) In 2002, all the 92 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 2002. In addition, an aggregate amount of Tk. 71,752 (in 2001 Tk. 72,000) was paid to auditors for income tax consultancy and other services as included in legal and consultancy fee stated above. 39. Selling and Distribution Expenses - Tk. 277,413,230 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 Telephone & Postage Electricity, Gas & Water Market Research & New Products Training & Conference Sample Expenses Promotional Expenses Literature/News Letter Special Discount Export Expenses Lease Rental Distribution Commission Other Expenses 101,394,868 7,791,252 7,155,807 35,253,370 1,142,392 3,190,115 7,600,265 3,117,677 3,405,881 6,406,263 13,179,005 15,457,363 7,765,505 14,154,455 2,791,160 6,562,732 34,520,436 6,524,684 277,413,230 Tk. 91,549,196 11,154,708 6,206,237 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 6,570,069 30,732,376 5,042,208 245,887,486 (a) Salary and allowances include provident fund contribution of Tk. 3,219,611 (in 2001 Tk. 2,580,967). (b) In 2002, all the 685 employees relates to selling and distribution received annual salary and allowances of Tk. 36,000 and above. (c) Distribution commission represents 1.5% 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 a related party. 50 Notes to the Financial Statements 40. Other Income -Tk. 7,266,435 This is arrived at as follows : Interest income Dividend income received on investment in shares of Padma Textile Mills Ltd. Technical assistance fee Exchange gain on retention quota (F.C.) accounts Profit on sale of fixed assets 41. Finance Cost - Tk. 170,994,495 This is made-up as follows : Interest on Cash Credit and others Interest on loan from PF and WPP & Welfare Fund Note 2002 2001 5,251,359 4,835,807 1,316,250 - 126,318 572,508 7,266,435 3,948,750 2,862,500 163,943 1,076 11,812,076 50 Tk. 161,521,864 9,472,631 170,994,495 Tk. 171,404,878 8,115,207 179,520,085 42. Contribution to Workers’ Profit Participation/Welfare Funds - Tk. 19,148,862 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. 43. Income Tax Expense - Tk. 20,552,415 This represents : (a) Estimated Tax liability of the year 2002 : (i) 30% tax on the net profit of taxable units (ii) 15% tax on dividend income (b) Short provision of income tax 44. Tax-Holiday Reserve - Tk. 125,524,431 This represents 40% of net profit of the Tax-Holiday units. 45. Basic Earnings Per Share (EPS): The computation of EPS is given below : 20,354,977 197,438 20,552,415 - 20,552,415 Tk. 22,693,641 592,313 23,285,954 5,354,689 28,640,643 (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. 341,680,048 44,250,000 7.72 401,779,808 44,250,000 9.08 The definition of numerator (Earnings) and denominator (weighted average number of shares) are stated in Note-5. 46. Reconciliation of Shareholders Equity : Share Capital Share Premium Tax Holiday Reserve Retained Earnings Total Shareholders’ Equity At the beginning of year 442,500,000 1,489,750,000 873,166,091 1,360,375,053 4,165,791,144 Net Profit after Tax for 2002 Transfer to Tax Holiday Reserve (Note-44) Dividend of previous year (2001) - - - - - - - 341,680,048 341,680,048 125,524,431 (125,524,431) - - (66,375,000) (66,375,000) At the end of year Tk. 442,500,000 1,489,750,000 998,690,522 1,510,155,670 4,441,096,192 Notes to the Financial Statements 51 47. 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) Gain on Sale of Fixed Assets Fund from Operation before Changes in Working Capital (c) Changes in Working Capital Decrease in Inventories Increase in Accounts Receivable Decrease/(increase) in Loans, Advances & Deposits Increase/(Decrease) in Creditors and Other Payables (Decrease)/Increase in Accrued Expenses Increase/(Decrease) in Provision for Income Tax 2002 2001 341,680,048 401,779,808 95,980,045 88,012,675 7,967,370 (572,508) 437,087,585 (244,420,277) 30,780,747 (113,423,572) (91,517,956) (94,764,634) 13,992,056 10,513,082 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) Net Cash Provided by Operating Activities Tk. 192,667,308 510,180,633 48. Related Party Transactions : Nature of Transactions (a) Accounts Receivable (b) Trade Creditors (c) Current Account Balances (d) Interest Income (e) Distribution Commission (f) Software Development Expenses (g) Investment in Shares (h) Dividend Income 49. Financial Instruments and Related Disclosures (a) Primary (On Balance Sheet) Fiancial Instruments : 2002 2001 387,549,191 500,000 157,898,170 3,068,245 34,520,436 4,400,000 40,543,750 1,316,250 292,661,848 13,523,810 95,903,770 2,464,760 30,732,376 3,200,000 40,543,750 3,948,750 Set out below is a year-end balance of carrying amounts (book values) of all financial assets and liabilities (financial instruments) : Financial Assets Investment in Shares of Padma Textile Mills Ltd. Accounts Receivable Current Account with Related Parties Cash & Cash Equivalents Financial Liabilities Customs Debentures Short Term Borrowings from Banks Creditors and Other Payables Accrued Expenses Deferred Liability - Provision for Gratuity Long Term Loan Tk. Interest Bearing Maturity within one year Maturity after one year Non Interest Bearing Total - - 157,898,170 - 157,898,170 1,758,387 1,171,975,598 - - - - 1,173,733,985 - - - - - - - - - - 757,115,841 757,115,841 40,543,750 447,307,967 - 4,918,273 492,769,990 - - 155,928,586 129,682,896 55,476,158 - 341,087,640 40,543,750 447,307,967 157,898,170 4,918,273 650,668,160 1,758,387 1,171,975,598 155,928,586 129,682,896 55,476,158 757,115,841 2,271,937,466 Net Financial Assets/(Liabilities) Tk. (1,015,835,815) (757,115,841) 151,682,350 (1,621,269,306) Carrying Amounts (Book value) The basis of carrying amounts have been stated in accounting policies (Note 5) 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 16. The market value of other financial instruments are not available as these are not traded on organized markets in standardized form. (i) 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. 52 Notes to the Financial Statements (ii) Concentration of Credit Risk The company’s management believe that there was no significant concentration of credit risk in Accounts Receivable. The company monitors its exposure to credit risk on an ongoing basis. Accounts Receivable are evaluated for recoverability. (iii) Foreign Currency Risk The company is subject to foreign currency fluctuations as the local currency (Taka) varies with US Dollar and other foreign currencies. (b) Derivative (Off Balance Sheet) 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. 50. Particulars of Disposal of Property, Plant and Equipment : The following assets were disposed off during the Year ended 31-12-2002 : PARTICULARS OF ASSETS COST DEP. UPTO W.D.V. AS ON SALES PROFIT/ NAME OF PARTIES MODE OF DISPOSAL Motor Cycle Hero 100CC Motor Cycle Hero 100CC Motor Cycle Hero 100CC Toyota Car Hundai excel 1.8 LS Toyota Car Toyota Corolla Tx 1300 CC Recondition EE 90 Toyota Corolla Toyota Corolla Tx 1300 CC Recondition EL30 Toyota Corolla Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture 31-12-01 31-12-01 44,795 52,655 40,573 3,850 26,447 31,088 23,954 770 PRICE 15,120 15,100 15,150 (LOSS) (3,228) M/S Shar Bitan (6,467) M/S Shar Bitan (1,469) M/S Shar Bitan 18,348 21,567 16,619 3,080 211,500 208,420 Dolphin Car Center 755,395 628,661 126,734 71,000 (55,734) Nahid Auto 3,850 494,154 485,414 499,154 360,000 3,800 5,500 29,700 30,000 25,000 15,200 36,000 36,000 770 3,080 155,000 151,920 M/S Alif Enterprise 390,523 383,615 394,474 284,503 1,982 1891 13,916 14,057 8,598 5,227 16,868 16,868 103,631 170,000 66,369 M/S Alif Enterprise 101,799 185,000 83,201 M/S Alif Enterprise 104,680 180,000 75,320 Kazi Badir uddin Babu 75,497 127,500 52,003 Mr. Dipak Roy 1,818 3,609 15,784 15,943 16,402 9,973 19,132 19,132 5,300 2,300 15,784 15,943 16,402 9,973 19,132 19,132 3,482 Mr. Nazrul Islam Khan (1,309) Mr. Nazrul Islam Khan - - - - - - Mr. Afsar Uddin Ahmed Mr. Afsar Uddin Ahmed Mr. Afsar Uddin Ahmed Mr. Afsar Uddin Ahmed Mr. Afsar Uddin Ahmed Mr. Afsar Uddin Ahmed Tender Tender Tender Tender Tender Tender Tender Tender Tender Tender Tender Tender Negotiation Negotiation Negotiation Negotiation Negotiation Negotiation Tk. 2,921,040 2,244,212 676,828 1,249,336 572,508 51. Payment/Perquisites to Directors and Officers : (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 : 2002 2001 Managerial Remuneration Gratuity Company's Contribution to Provident Fund Bonus Perquisites : Housing Transport Medical Telephone Electricity, Gas & Water 16,582,454 1,077,860 1,091,662 1,950,720 5,193,461 4,093,864 1,086,447 1,907,864 1,025,197 34,009,529 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. (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. Notes to the Financial Statements 53 52. Production Capacity, Actual Production in 2002 and Reason of Excess/(Shortfall) : (Production capacity on single shift basis) Production Capacity 2002 2001 Unit Actual Production 2002 2001 Excess / (Shortfall) 2002 2001 Reason of Excess or Shortfall Solid Section Liquid Section Basic Chemical Tablet & Capsule (in million pcs) Bottle & Tube (in million pcs) Metric ton 53. Contingent Liability 1,275 1,216 1,523 1,537 248 321 Overtime work for increased demand 22 20 180 172 29 67 23 92 7 3 Overtime work for increased demand (113) (80) As per market demand The aggregate amount of disputed income tax in respect of assessment years 2000-2001, 2001-2002 and 2002-2003 is Taka 14,084,634 which is not provided for in the financial statements. The company has filed appeals with appropriate authority in this regard. 54. Capital Expenditure Commitment At the balance sheet date, there was no commitment for capital expenditure. 55. Operating Lease Commitment At 31 December, 2002 the company had annual commitment under operating leases as set out below : Leases expire within 1 year Leases expire within 2-5 years (inclusive) Leases expire after five years 11,846,592 51,554,172 - Tk. 63,400,764 56. Claim not Acknowledged as Debt There was no claim against the company not acknowledged as debt as on 31-12-02. 57. Unavailed Credit Facilities There was no credit facilities available to the company under any contract, other than trade credit available in the ordinary course of business and not availed of as on 31-12-02. 58. Payments made in Foreign Currency : Import of Machinery Import of Raw & Packing Material and Spares Consultancy Fee Foreign Currency (Equivalent US$) 776,681 11,338,594 114,500 Taka 45,710,691 662,060,523 6,709,085 No other expenses including royalty, technical expert and professional advisory fee, interest, etc. was incurred or paid in foreign currencies except as stated above. 59. Dividend Paid to the Non-Resident Shareholders in 2002 : (i) Dividend for 2001 was declared on 29-06-2002 and therefore, dividend for 2001 was paid in 2002. (ii) Net dividend of Tk. 20,447.17 relating to the year 2001 was paid to 3 non-resident shareholders against 16,037 shares held by them after deduction of Income Tax at source of Tk. 3,608.33 (iii) No dividend was remitted in foreign currency but paid in local currency to their local custodian banks. 60. Dividend Subject to Income Tax Deduction at Source : Nature of Shareholders (a) Resident Company (b) Non-resident Company (c) Resident other than Company (d) Non-resident other than Company Amount of Dividend Rate of Tax Deduction at Source Any amount Any amount Amount not exceeding Tk. 25,000/- Amount exceeding Tk. 25,000/- Any amount 15% 15% Nil 10% 25% 54 Notes to the Financial Statements 61. Foreign Exchange Earned : (a) Export Sales of US$ 860,012 (in 2001 US$ 842,652). (b ) No other income including royalty, technical assistance and professional advisory fee, interest and dividend was earned or received in foreign currency. 62. Commission, Brokerage or Discount against Sales : (a) Distribution commission of Tk. 34,520,436 (in 2001 Tk. 30,732,376) and special discount of Tk. 14,154,455 (in 2001 Tk. 12,458,295) as stated in the Note - 39 were incurred and paid during the year under review. (b) 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. 63. Post Closing Events Subsequent to the balance sheet date, the directors recommended 5% cash dividend and 15% stock dividend (Bonus Share). The dividend proposal is subject to shareholders’approval at the forthcoming annual general meeting. The stock dividend shall be accounted for in terms of a statutory notification issued by the Securities and Exchange Commission in 2001. Except the fact stated above, no circumstances have arisen since the balane sheet date which would require adjustment to, or disclosure in the financial statements or notes thereto. C. H. Rahman Director Dhaka 29 April, 2003 Iqbal Ahmed Director Md. Asad Ullah Company Secretary Notes to the Financial Statements 55 Notes 56 BEXIMCO PHARMA Beximco Pharmaceuticals Limited Registered Office : 17 Dhanmondi R/A, Road No. 2, Dhaka 1205 Proxy Form I/We of being a member of Beximco Pharmaceuticals Ltd. hereby appoint Mr/Ms of as my/our proxy to attend and vote for me/us on my/our behalf at the 27th Annual General Meeting of the Company to be held on Tuesday the 24th June, 2003 at 10:30 a.m. at 1, Shahbagh C/A, Dhaka and at any adjournment thereof. As witness my/our hand this day of June, 2003. Signed by the said in presence of Revenue Stamp Tk. 8.00 (Signature of the Proxy) Signature of the Shareholder (s) Dated : Register Folio No. : Dated : (Signature of the Witness) Note : 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 appointed for the meeting. Signature Verified Authorised Signatory BEXIMCO PHARMA Corporate Headquarter 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 Standard Chartered Bank Hadi Mansion 2 Dilkusha C/A, Dhaka-1000 Concept, Text and Design : Central Product Management Department Printed by : Mavis International, Dhaka Phone : 9568619, 9568030 BEXIMCO PHARMA BEXIMCO PHARMACEUTICALS LTD.