We are moving forward 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 citizens and our fellow shareholders. NNU A L R EPORT 2 0 0 6 A BEXIMCO PHARMACEUTICALS LTD. NNU A L R EPORT 61 2 0 0 A Contents Board and Management 5 Social Responsibility 24 Brief Company Profile Thirtieth Annual General Meeting Report of the Directors to the Shareholders 6 28 36 2006: We are moving forward Value Added Statement Corporate Governance Compliance Report 8 30 40 CEO speaks about accomplishments & initiatives in 2006 Notice of the Thirty-First Annual General Meeting Key Operating and Financial Data 10 31 41 Beximco Pharma: A great company to work with Chairman's Statement Auditors' Report to the Shareholders 19 32 42 NNU A L R EPORT 62 2 0 0 A Balance Sheet 43 Profit and Loss Account Cash Flow Statement 44 46 Statement of Changes in Equity Notes to the Accounts 45 47 NNU A L R EPORT 63 2 0 0 A NNU A L R EPORT 64 2 0 0 A The Board of Directors A S F Rahman Chairman Salman F Rahman Vice Chairman The profile of the company Iqbal Ahmed Director Mohammad Abul Qasem Director Osman Kaiser Chowdhury Director Dr. Abdul Alim Khan Director Abu Bakar Siddiqur Rahman Director Dr. Farida Huq Director Chowdhury Hafizur Rahman Director Faheemul Huq Director Ahsanul Karim Director Md. Asad Ullah, FCS Company Secretary Board and Management The Executive Committee Beximco Pharma is a leading edge pharmaceutical company based in Dhaka, Bangladesh, and is acclaimed for its outstanding product quality, world- class manufacturing facilities, product development capabilities and outstanding professional services. Osman Kaiser Chowdhury Member of the Board of Directors Chowdhury Hafizur Rahman Member of the Board of Directors Nazmul Hassan Chief Executive Officer Ali Nawaz Chief Financial Officer Afsar Uddin Ahmed Director, Commercial The Management Committee Nazmul Hassan Chief Executive Officer Osman Kaiser Chowdhury Member of the Board of Directors Ali Nawaz Chief Financial Officer Afsar Uddin Ahmed Director, Commercial Rabbur Reza Director, Marketing Lutfur Rahman Director, Works Zakaria Seraj Chowdhury Director, Sales Mohd. Tahir Siddique General Manager, Quality Assurance A R M Zahidur Rahman General Manager, Production Jamal Ahmed Choudhury Senior Manager, Accounts & Finance NNU A L R EPORT 65 2 0 0 A Brief Company Profile Beximco Pharma is a leading edge pharmaceutical company based in Dhaka, Bangladesh, and is acclaimed for its outstanding product quality, world-class manufacturing facilities, product development capabilities and outstanding professional services. Beximco Pharma is also the largest exporter of pharmaceutical products from Bangladesh and received National Export Trophy (Gold), the highest national accolade for export, for record three times. Year of Establishment: 1976 Commercial Production: 1980 Status: Public Limited Company Business Lines: Manufacturing and marketing of pharmaceutical Finished Formulation Products, Large Volume Parenterals and Active Pharmaceutical Ingredients (APIs) Overseas Offices & Associates: UK, USA, Pakistan, Myanmar, Singapore, Kenya, Yemen, Nepal, Vietnam, Cambodia and Sri Lanka Authorized Capital (Taka): 2,000 million Paid-up Capital (Taka): 1,040.97 million Number of Shareholders: Around 49,000 Stock Exchange Listings: Dhaka, Chittagong and London Stock Exchanges Number of Employees: 2,403 NNU A L R EPORT 66 2 0 0 A 76-87 1976 : Registration of the company 1980 : Started manufacturing and marketing of licensee products of Bayer AG of Germany and Upjohn Inc. of USA 1983 : Launching of Beximco Pharma’s own brands 1985 : Listing in the Dhaka Stock Exchange (DSE) as a Public Limited Company (PLC) A journey of excellence 88-97 1990 : Commissioning of Basic Chemical (APIs) unit 1992 : Started export operation with Active Pharmaceutical Ingredients (APIs) 1993 : First export market operation with finished formulations 1996 : Introduction of Sustained Release Dosage form 1997 : Introduction of Suppository Dosage form; Commissioning of Metered Dose Inhaler (MDI) plant; Introduction of Metered Dose Nasal Spray 98-05 1998 : First pharmaceutical company of the country achieving 'National Export Trophy (Gold)' for 1994-95 1999 : UNICEF approval of Beximco Pharma as an enlisted supplier 2000 : Agreement to manufacture Metered Dose Inhaler (MDI) for GlaxoSmithKline 2001 : Introduction of Small Volume Parenteral (SVP) products; establishment of Analgesic-Antiinflammatory bulk drug plant 2002 : Won the first prize of ICAB National Awards 2000 for 'Best Published Accounts and Reports' in Non-Financial Sector Category The first Bangladeshi company to supply pharmaceuticals to Raffles Hospital- the most prestigious hospital in Singapore 2003 : Received “National Export Trophy (Gold)” for consecutive 2 years (1998-99, 1999-2000) Won the Silver prize of ICAB National Awards 2003 for 'Best Published Accounts and Reports' in Non-Financial Sector Category Won a tender to supply Neoceptin R and Neofloxin to Raffles Hospital of Singapore for the whole year's consumption Introduced Anti-HIV drugs for the first time in Bangladesh Diversification into Anti-Cancer therapeutic class 2004 : Signed contract with Novartis to manufacture their liquid, cream, ointment and suppository products under “Toll Manufacturing” agreement 2005 : Merger of Beximco Infusions Ltd. with Beximco Pharmaceuticals Ltd. Admission to Alternative Investment Market (AIM) of London Stock Exchange (LSE) NNU A L R EPORT 67 2 0 0 A New USFDA standard Oral Solid Dosage (OSD) Plant became operational: started manufacturing validation batches Successfully relocated/outsourced penicillin and cephalosporin manufacturing facilities to better comply with cGMP guidelines 58 new products launched in domestic markets Introduced generic oseltamivir in Bangladesh 2006 We are moving forward Entered into 3 new overseas markets Registered 36 more new products in existing overseas markets Signed distribution agreement in 5 new markets Launched CFC-free HFA inhalers as the first company in Bangladesh There are only few pharmaceutical companies in the world who are currently offering this technology driven CFC-free HFA MDIs NNU A L R EPORT 68 2 0 0 A Post Year-End Highlights first HFA Launched country's Glyceryl Trinitrate aerosol spray for cardiac patients Launched 11 new products during the first half of 2007 Entered 4 new overseas markets, namely Ghana, Botswana, Belize, and Papua New Guinea Registered 79 new products in existing overseas markets Signed agreement for product registration, distribution and marketing in 10 new countries. As a fast growing, high quality and efficient manufacturer and marketer of global quality medicines covering almost all therapeutic segments, we at Beximco Pharma are moving forward like never before. In view of our accomplishments and initiatives in 2006, we are repositioned for growth: a growth like never before with our significantly enhanced commercial operational capability, by sensibly adding products with significant growth potential, by focused expansion of overseas markets and accomplishing all these with our highly energized and motivated people. We are moving forward NNU A L R EPORT 69 2 0 0 A Nazmul Hassan, CEO of Beximco Pharma the new some focuses accomplishments and initiatives in 2006 to move the company forward: on of To move forward with a better than best pace, we need an excellence in executing every aspect of corporate operation: That's exactly what we are trying to achieve...... We have enhanced our commercial operational capability We have enjoyed good sales and market share in 2006. But, we are not completely satisfied with such modest growth rate of around 10-15% in recent past. We have set an ambitious goal of doubling our sales revenue by 2010. To achieve this revenue goal, we must unleash the untapped potential for our company in custom manufacturing partnership with the global giants in pharmaceutical industry. Aligned with this strategy, we have significantly increased our capacity of Oral Solid Dosage (OSD) production. Our new Oral Solid Dosage (OSD) plant has made our capacity constraint a thing of the past. Now, we are able to probe into the highly regulated markets of the first world countries. We have already commenced the international GMP certification process and the preparations are in the final stage to get this plant approved by TGA, Australia, followed by UK MHRA and USFDA. "Our new plant will enable us to manufacture our own brands and other pharmaceutical companies' products at a standard suitable for commercial scale in developed countries. We offer an extremely cost effective solution to manufacturing quality drugs, enjoying significant cost advantages due to the low labour and energy costs in Bangladesh." NNU A L R EPORT 10 A 2 0 0 6 A delegation from Clinton Foundation Foreign delegations visiting our manufacturing facility A group of business entrepreneur from Bahrain High profile business delegation from UAE led by Mr. Khalifa Mohammed Abdul Aziz Rubaya Al Muhairi Charge the Affairs Ms. Judith A. Chammas of US Embassy in Bangladesh led a delegation Health Minister of Sri Lanka Mr. Nimal Siripala de Silva led a delegation from Sri Lanka Foreign Minister of Maldives, Dr. A. Shahed with others NNU A L R EPORT 11 A 2 0 0 6 NNU A L R EPORT 12 A 2 0 0 6 We have joined world league of CFC free inhaler manufacturers We are the leading manufacturer of pressurized Metered Dose Inhalers (MDIs) in Bangladesh and are among the few pharma companies in the world manufacturing CFC (Chlorofluorocarbon) free MDIs, used in asthma and COPD. CFCs are generally used as propellants in MDI formulation. They are safe for human use but are not environment friendly and the “Montreal Protocol on Substances that deplete ozone layer” (1987) urges to implement gradual phase out of CFC usage globally. This global phase out of CFC production and formidable challenge to develop alternative ozone friendly inhalers placed the country like Bangladesh in a difficult situation to continue the supply of essential MDI to millions of asthma and COPD patients. Many major pharmaceutical companies in the world are undertaking extensive research and development works to produce CFC free MDIs, by replacing CFC propellant with Ozone-benign HFA (Hydrofluoroalkane) propellant. But, manufacturing HFA MDIs is a big challenge as it involves high level of expertise and sophisticated technology and for companies in developing and least developed countries it seemed to be a technology far beyond reach. In collaboration with Europe's one of the leading manufacturers of specialty medical devices and respiratory drug development companies we successfully developed and introduced country's first CFC-free HFA based MDIs in September 2006. There are only few pharmaceutical companies in the world who are currently offering this technology driven CFC-free HFA MDIs. Dr Richard Spiers, speaking at the launching International Seminar on HFA inhalers “We have been exporting our MDI brands to various markets including Singapore, Kenya and Pakistan. However, we have not been able to enter the most attractive US and EU markets due to our CFC based formulation. Our new HFA based formulations will enable us to enter the highly regulated markets of the US and EU which represent the major share of the world MDI market worth more than US$ 10 billion. ” NNU A L R EPORT 13 A 2 0 0 6 “We are focused on sensibly adding new products with significant growth potential” We understand that to grow with new momentum, we should increase our product line but we must not forget that we should also aim for maximizing return on resource allocation. Diversification into Small Volume Parenterals (SVP) and Ophthalmics market In 2006, we started new projects to build facility to manufacture Small Volume Parenterals (SVPs) and ophthalmic products. Entering these two segments will increase our local market share significantly. NNU A L R EPORT 14 A 2 0 0 6 We are focused on Excellence in execution In 2006, we started to adopt the “excellence in execution” in everything we do from manufacturing to marketing with our highly motivated and inspired people. In 2006, our excellence in execution approach helped us better identifying new products and reduced time requirement from concept to product launch significantly. In 2006, we launched a total of 58 new products and these new products made our business portfolio more robust to propel our growth in future. Business process: improving efficiency From the very beginning, Beximco Pharma has always been a pioneer in adopting innovative technologies intended to take the organization to a standard which would match other reputed global pharma companies. In 2006, we undertook various projects of upgrading our existing process in operations with new technology to drive greater productivity in quality control, warehouse, and production lines. initiatives are also ongoing to Several improve our overall manufacturing efficiencies, including reduction in wastage and operational costs. In this regard, we started to develop an Enterprise Resource Planning system( ERP) to integrate all data and processes in our company into a unified system. These development in the business process would definitely help us improve our efficiency. Oseflu (Oseltamivir) capsule is one of important products the most launched in 2006. The Government of Bangladesh made a stockpile of our Oseflu as a preparation for any potential pandemic of ‘Bird-Flu’. NNU A L R EPORT 15 A 2 0 0 6 Going the distance We are focused in global pharmaceutical markets While we are continuously strengthening our position in existing markets, we are also entering new geographies in global markets to achieve dynamic growth by 2010. We could advance much in 2006 in maintaining the momentum and gained new momentum of rapid transformation to become a globally respected international pharmaceutical company. We entered into 3 new overseas markets, registered 36 more new products in existing overseas markets, and signed distribution agreement in 5 new markets. In post 2006 period, we entered 4 new overseas markets, namely Ghana, Botswana, Belize, and Papua New Guinea, registered 79 new products in existing overseas markets, and signed agreement for product registration, distribution and marketing in 10 new countries. NNU A L R EPORT 16 A 2 0 0 6 NNU A L R EPORT 17 A 2 0 0 6 We have always considered the Middle East as a high potential market for our growth. We signed an agreement with Gulf Generic, a widely renowned and highly accredited pharmaceutical distributor in the Gulf region. Gulf Generic is owned by the members of the Kuwait Royal Family. Under the terms of the agreement, Gulf Generic will be responsible for the registration, distribution and marketing of Beximco Pharma products in Kuwait and other Gulf Central Committee (GCC) states whose pharmaceutical market is currently valued at over $2 billion. This agreement with Gulf Generic will help us mark our presence in the Gulf region and is a further evidence of our commitment to global expansion of our market. Africa has the potential to be an important growth driver in the global generic pharmaceutical market. We have been exporting pharmaceuticals to Kenya and Somalia in Eastern Africa, Mozambique in South-East Africa and Botswana in South-Central Africa. As part of our continued strategic expansion in Africa, we successfully started exporting to Ghana as the first country in Western Africa. Success in these markets will strengthen our presence in Africa and will definitely speed up the next phase of our expansion plan in this region. In summary, as a fast growing, high quality and efficient manufacturer and marketer of global quality medicines, we at Beximco Pharma are moving forward like never before. In view of our accomplishments and new initiatives in 2006, we are repositioned for growth: a growth with new momentum, and to become an internationally reputed pharmaceutical company. We believe, our highly skilled, motivated and inspired people will make our dream come true, as it always happened in the past. Nazmul Hassan Chief Executive Officer NNU A L R EPORT 18 A 2 0 0 6 Beximco Pharma A great company to work with From the very beginning, Beximco Pharma believes in one paradigm- 'a business is judged in the market based on two basic components- its products and people'. The company considers the most valuable asset it has, is the people who work for the company for its 'successes' built to last. This people focused culture, indeed, makes Beximco Pharma unique compared to others. So it makes sense for the management of the company to do everything possible to ensure that every member of stuff enjoys the friendly and welcoming atmosphere in the company that encourages the employees to be themselves. Here, the workplace has evolved to be a very close community of co-workers where employees take pride in their job, their team, and their company. They celebrate the successes of their peers and cooperate with others throughout the organization. Here, communication is open and accessible, hiring and rewarding are impartial and decisions are taken together with the employees in a free and fair process. Here, everyone is treated and cared for as an individual with personal life and respected of their professional life by encouraging and supporting professional development. Today, Beximco Pharma is not just a great workplace but is a great way of life. It has made itself a great company to work with where the company and its people 'grow together'. NNU A L R EPORT 19 A 2 0 0 6 “Here we all share a passion of thriving for excellence” After spending long 20 years with Beximco Pharma, when I look back and ask myself, what kept me here for such a long time, I find the answer to be the splendid spirit of Beximco Pharma that underlies the everyday activities here - a spirit that encourages to innovate and to participate, motivates to perform and to contribute, inspires to think big; and above all, a spirit that has a genuine desire to serve people in a better way. Throughout my career here, whatever I do, I know, I am doing it for my society and for my country - because at Beximco Pharma we all share a passion of thriving for excellence and serving the country for building a healthier tomorrow. Nazmul Hassan, Chief Executive Officer “Being with Beximco Pharma means being full of life” I have always wished for a job which is challenging and which would bring the best out of me. Working in a dynamic organization like Beximco Pharma gives me all of these. The vibrant entrepreneurial spirit that prevails here at Beximco Pharma creates newer challenges for me and I feel exploring new boundaries while keeping pace with its momentum. For me, being with Beximco means being full of life. Ali Nawaz, Chief Financial Officer “At the end of the day it gives me a great feeling of contentment” I never felt like doing a job in Beximco Pharma; I always feel that I’m fulfilling responsibilities towards my society, my company and to myself. My job allows me to make my own decisions and implement them in order to get the job done and delivering my responsibilities. At the end of the day I look back with contentment that I have achieved for my company, for my country and for myself. Afsar Uddin Ahmed, Director, Commercial NNU A L R EPORT 20 A 2 0 0 6 “The brisk and electric atmosphere always inspires us to think big and make it happen” Thinking out-of-the-box and being innovative is one of the foremost personal aspirations of my life and this is exactly what we do in Beximco Pharma. Here the brisk and electric atmosphere always inspires us to think big and make it happen, stimulates our thoughts and encourages us to invent. Here we don't just share views and ideas; we in fact try implementing those creative ideas. Working with Beximco Pharma is fun for me and I really enjoy being here. Rabbur Reza, Director, Marketing “I own my job here” I always loved to take total control of my life. At the very outset of my career I wanted to take total responsibility of my job as if I were the owner of my company - I wanted to own my job. The unique ownership culture which prevails here at Beximco Pharma encouraged me to achieve many and after these long years with Beximco Pharma I feel I have been practising, nourishing and enriching myself. Md. Zakaria S. Chowdhury, Director, Sales “After so many years I find no division between my family and my colleagues” from company growing I have been in this company for long. I saw this a humble beginning. Today, after so many years I find no division between my family and in Beximco Pharma - I am attached to both of my colleagues here them equally! Lutfur Rahman, Director, Works NNU A L R EPORT 21 A 2 0 0 6 “Here I am able to explore my ideas” Our society in general is unforgiving of failure, even honest mistakes, thus creating a cultural context that encourages only low risk, low reward ventures. With such perception in my mind, I was always a risk averter, not a risk taker. After joining the Beximco Pharma team, my second evolution of mind took place. Now, I am not afraid to make mistakes, which allows me to be a risk taker. In process, I learned from my mistake which I never repeated. I am not afraid to try different 'ideas' for my brands’ success. Here, I am able to explore my ideas. A Group Brand Manager “Here I can truly balance my work life and personal life” Management truly encourages and expects individuals to care for themselves before work. They understand personal lives are as important as jobs. A Female Executive “Here I feel comfortable and confident that I can achieve anything” Personal and professional opportunities here are endless. The company is always striving to improve itself and at the same time giving individuals the motivation and encouragement to achieve their desires. I have never worked anywhere else where I felt so comfortable and confident that I can achieve anything. “I think Beximco Pharma is the best place for self development” Manager, Production It's not long since I have been with Beximco pharma sales team, but within this very short period I discovered myself. If I were not here, I might have never known my real capabilities. I think Beximco Pharma is the best place for self development. A newly promoted Regional Sales Manager NNU A L R EPORT 22 A 2 0 0 6 “I say it the 'Beximco Pharma Experience' - one has to experience it to know it” Before I joined Beximco pharma, I worked with some other top-ranked pharmaceutical companies. Within only a year of joining, I realized the difference. The only thing my superiors compel me to do is self- development. Everything here has a class, everything I do here differentiates me from others. I say it the 'Beximco Pharma Experience' - one has to experience it to know it. A Beximco Pharma Sales Representative “Being with Beximco means adding value to one’s life” I joined Beximco Pharma about ten years back, and this was my first job. I am still here and never could think of anything else. Everything here at Beximco Pharma is special to me. Being with Beximco Pharma means adding value to one’s life. Front Desk Executive Our Core Values in Beximco Pharma NNU A L R EPORT 23 A 2 0 0 6 Social Responsibility We see it more as a 'duty' than as a 'responsibility' Corporate social responsibility is an integral part of Beximco Pharma's business strategy which is reflected in its mission statement - 'Each of our activities must benefit and add value to the common wealth of our society'. Here at Beximco Pharma, we view our operational success in terms of both being financially profitable so that we can contribute to the national economy and also being socially responsible so that we can do our part for the betterment of the society. Guided by this spirit, each year an increasing amount of contribution is ploughed back into social causes, demonstrating Beximco Pharma's commitment to the nation. More importantly, these contributions extend beyond and above one-time donation to a deep-rooted continued partnership with the society. At Beximco Pharma, we are in a business which deals with human life and this makes us more responsible to keep the highest standards of our products. Highest quality products, however, are only one side of our expression of commitment. We believe our responsibility lies even more in ensuring that our society gets benefited while we continue to grow. Likely, our passion for a healthier tomorrow is perpetually reflected in every effort we make. NNU A L R EPORT 24 A 2 0 0 6 We do business, do serve the humanity too As the country's one of the leading pharmaceutical companies, it is our mission to improve access to essential medicines saving our peoples’ lives. In line with this mission, Beximco Pharma introduced many products which were guided by its social commitment, not by its financial ambition. For example, Beximco Pharma is the first company in Bangladesh which introduced 5 (five) anti-retroviral medicines for HIV/ AIDS treatment fully knowing that these would not be commercially viable in Bangladesh. Currently Beximco Pharma supplies these HIV medications to several non-profit organizations at highly discounted price. Beximco Pharma also introduced oral anti-smoking drug Zybex® SR (Bupropion) just on the day before the announcement of a ban on smoking in public places in Bangladesh. This came as a huge relief for the chronic smokers who, despite all efforts, were unable to quit smoking. Beximco Pharma also introduced Oseflu®, a preparation of Oseltamivir, the only medication against the virus of bird flu, when the government and other working groups of the country were preparing to combat the potential pandemic of bird flu. Beximco Pharma donated Oseflu® to the government and proposed several initiatives for ‘Public- Private’ partnership to face the crisis. Beximco Pharma also donated Oseflu® to the government of Myanmar as a gesture of its empathy for the neighboring country. NNU A L R EPORT 25 A 2 0 0 6 Everyone here at Beximco Pharma knows that the company does not view its success and achievements in financial terms only, but also in terms of its deep relationship with the society and environment. It is one of our core values that we should take maximum care for our environment and should reduce environmental effects of manufacturing activities to a practical minimum. Keeping this in mind, whenever practicable, Beximco Pharma works to reduce the impact of its operations on the environment. Shifting from CFC-based inhalers to HFA-based inhalers is an evidence of our firm commitment to ‘Environment Protection’. Though it is still not a regulatory obligation, not even in the developed countries until end of 2008, Beximco Pharma proactively and deliberately invested heavily for the conversion of its MDI Facility and commenced manufacturing HFA based inhalers, replacing CFC-based inhalers, as a responsibility to protect the environment. Background of CFC phase out The metered dose inhalers (MDIs) generally contain CFCs as propellants, which are safe for human use but are considered as major culprits of ozone depletion. Ozone depletion poses a serious environmental threat, as it reduces the amount of ozone in the ozone layer that acts as a shield to protect the earth against the sun's harmful rays. In 1987, 183 countries including Bangladesh agreed to a treaty called “Montreal Protocol on Substances that deplete ozone layer” and this treaty urges to implement gradual phase out of CFC usage. For Bangladesh this puts a ban on CFC usage from January 1, 2010. We took initiatives to stop usage of CFCs by introducing CFC-free ozone-benign HFA inhalers in 2006, to take small part in protecting our mother planet. NNU A L R EPORT 26 A 2 0 0 6 Our commitment to community is one of our core values and this has been reflected in our partnerships with community, government and various non-government organizations over the years. Beximco Pharma has arranged many public awareness campaigns on AIDS, Cancer, Diabetes, smoking, asthma etc. and worked with different professional organizations to convey information and create public awareness through arranging seminars, making rallies, publishing posters etc. Besides these, Beximco pharma has also organized, participated in and sponsored many cultural and sports events like Corporate Cricket League, School Handball Tournament etc. Above all, our corporate responsibility is reflected in our maneuvering effort to represent a picture of glorious Bangladesh and its people in different international forums. All our endeavours are to prove that Bangladesh is not just another third world country - it is bigger than it seems and it can make bigger things happen. NNU A L R EPORT 27 A 2 0 0 6 Thirtieth Annual General Meeting The 30th Annual General Meeting (AGM) of the shareholders of Beximco Pharmaceuticals Limited was held on 22 June 2006. Around 7,000 shareholders attended the meeting. Mr. A S F Rahman, Chairman of the Board of Directors presided over the meeting. The Chairman thanked the shareholders for their interest in the company. The shareholders were informed about the performance of the company in 2005. Strategies and future vision of the company were also briefed at the AGM. The meeting among other agenda approved 15% cash dividend for the year 2005. NNU A L R EPORT 28 A 2 0 0 6 Partial view of the shareholders attending the 30th Annual General Meeting NNU A L R EPORT 29 A 2 0 0 6 Value Added Statement For the year ended 31 December 2006 2006 Figures in Taka 2005 Tk. % Tk. % 4,364,863,360 (2,101,277,696) 3,879,420,007 (1,895,584,603) 2,263,585,664 100 1,983,835,404 100 885,580,709 492,656,586 475,883,617 253,318,784 156,145,968 39 22 21 11 7 696,410,182 448,555,707 473,037,848 221,949,324 143,882,343 35 23 24 11 7 2,263,585,664 100 1,983,835,404 100 35% 7% 11% 24% 23% 2005 Turnover & Other Income Bought-in-Materials & Services Value Added APPLICATIONS Duties & Taxes to Government Exchequer Salaries and Benefits to Employees Earnings Retained by the Company Interest to Lenders Dividend to Shareholders 7% 39% 11% 21% 22% 2006 Duties & Taxes to Government Exchequer Salaries and Benefits to Employees Earnings Retained by the Company Interest to Lenders Dividend to Shareholders NNU A L R EPORT 30 A 2 0 0 6 BEXIMCO PHARMACEUTICALS LIMITED 17, Dhanmondi R/A, Road No. 2, Dhaka-1205 Notice of the Thirty-First Annual General Meeting Notice is hereby given that the THIRTY-FIRST ANNUAL GENERAL MEETING of the Shareholders of Beximco Pharmaceuticals Limited will be held on Sunday, the 2nd September, 2007 at 10.30 a.m. at 1, Shahbag C/A, Dhaka to transact the following business: AGENDA 1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended 31st December, 2006 together with reports of the Auditors and the Directors thereon. 2. To elect Directors. 3. To declare 5% Cash and 10% Stock Dividend. 4. To appoint Auditors for the year 2007 and to fix their remuneration. 5. To transact any other business of the Company with the permission of the Chair. By order of the Board, (MD. ASAD ULLAH, FCS) Company Secretary Dated: 28th June, 2007 NOTES : (1) The Record Date shall be on 1st August, 2007. The Shareholders whose names will appear in the Share Register of the Company or in the Depository Register on that date will be entitled to attend at the Annual General Meeting and to receive the dividend. (2) A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meeting. (3) Admission to the meeting room will be strictly on production of the attendance slip sent with the Notice as well as verification of signature of Member(s) and/or proxy-holder(s). NNU A L R EPORT 31 A 2 0 0 6 Chairman’s Statement We are striving to emerge as an international pharmaceutical company through export-led growth in medium to long term. Dear Shareholders, I am privileged to welcome you all to the 31st Annual General Meeting of Beximco Pharmaceuticals Limited. I take this opportunity to present before you a brief on the operating and financial performance of the company for the year 2006. Sales and profitability It is indeed a matter of great pleasure and pride that in 2006, as in the past, the company successfully maintained its historic trend of continued growth. During the year, sales of the company registered an appreciable 11.3% growth to reach at Tk. 3,702.32 million as compared to 3,327.02 million of 2005. In the domestic market our sales increased by 10.8%. This significantly outperformed the industry growth which, according to IMS (Information Medical Statistics, Switzerland), was only 4.1%. Thanks to our reorganized and mirrored sales team strategy improving doctor coverage and winning brand building strategies that have better positioned the company in the minds of the doctors and other healthcare professionals. In 2006 we achieved export sales of Tk. 115.1 million- a significant 29.5% up over the prior period; entered into three new overseas markets namely, Sri Lanka, Somalia and Bhutan; and registered 36 new products in Kenya, Myanmar, Sri lanka, Nepal and Cambodia. Besides we signed distribution agreement in 5 new markets. We consider these to be a modest beginning of the intensified efforts that we are initiating to significantly boost up our export sales. Along with sales, the profit before tax also increased by 7.8% to Tk. 523.24 million as compared to Tk. 485.37 million in 2005. NNU A L R EPORT 32 A 2 0 0 6 Products Over the last few years we have successfully added a significant number of new products in our portfolio. Consistent with our previous trend and consequent to our constant drive to innovate quality product, in 2006, we introduced 58 products (including dosage forms) across a wide range of therapeutic classes. Importantly, we introduced Oseflu® (Oseltamivir) in Bangladesh market to combat the growing threat of Bird Flu. Also introduced 3 environment-friendly CFC free ozone- benign HFA based Metered Dose Inhalers (MDIs) for the first time in Bangladesh. Notable is that we are getting very encouraging response from overseas markets for our high-tech HFA based inhaler products. Projects and Expansion Programs In collaboration with Europe's one of the leading manufacturers of specialty medical devices and respiratory drug, we completed conversion of Metered Dose Inhaler (MDI) plant to manufacture HFA-based inhalers. I am proud to say that through introduction of this technology BPL joined the list of very few companies of the world that have capacity to manufacture HFA inhalers. Owing to increased demand, a project for capacity expansion of the MDI facility is currently undergoing. Another milestone achievement in 2006 was completion of the 2 lines of our USFDA approvable Oral Solid Dosage (OSD) facility. This facility is going to significantly ease our long suffered capacity constraint. We have now initiated the process of international GMP certification of the plant. In this regard a GMP audit by a developed country's drug regulatory authority is expected by the end of this year. I am also pleased to inform you that in 2006, we have successfully re-located / Outsourced cephalosporin and penicillin facilities which was pre-requisite for our OSD plant to better comply with cGMP guidelines. We also commenced a project to create manufacturing facility for Small Volume Parenterals (SVP) and Ophthalmic products which will help diversify our product portfolio. The work of this project has substantially progressed. Dividend Although we have proposed dividend for 2006 at 15%, the same rate of 2005, 10% stock dividend with 5% cash dividend for 2006 are expected to give better yield compared to prior year. Dear Shareholders, 2006 has given us a new impetus particularly our new OSD facility and HFA-based MDI facility has given us a competitive edge. As you will find in the CEO's statement we are striving to emerge as an international pharmaceutical company. In this regard we are repositioning ourselves to achieve an export-led growth in medium to long term. This however is a quite challenging task. We are aware of the challenges and confident of our capabilities. Finally, I take this opportunity to express my sincere thanks to our customers, bankers, suppliers, health professionals, 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. Above all we are grateful to you, dear shareholders, for extending, at all times, the invaluable support and cooperation to bring the company to the level it has reached today. With your continued support Beximco Pharmaceuticals Limited is destined to move forward. Thank you all. A S F RAHMAN Chairman Dhaka 28 June, 2007 NNU A L R EPORT 33 A 2 0 0 6 ßY~JroqJPjr k´KfPmhj Kk´~ ßv~JrPyJflJrmOª, ßmKéoPTJ lJoJtKxCKaTqJux& KuKoPaPcr 31fo mJKwtT xJiJre xnJ~ IJkjJPhr ˝JVf \JjJPf ßkPr IJKo ßVRrmJKjõf ßmJi TrKZ FmÄ Ifq∂ IJjPªr xJPg IJkjJPhr xÿMPU ßTJŒJjLr 2006 xJPur mqmxJK~T S IJKgtT TJptâPor FTKa xÄK㬠KY© Ck˙Jkj TrKZÇ Kmâ~ S oMjJlJ : FaJ Ifq∂ IJjª S ßVRrPmr Kmw~ ßp IfLf m“xrèPuJr jqJ~ 2006 xJPuS ßTJŒJjLr IV´VKfr iJrJ ImqJyf KZuÇ kNmtmfLt m“xPrr 3,327.02 KoKu~j aJTJ KmâP~r KmkrLPf IJPuJYq m“xPr ßTJŒJjL 3,702.32 KoKu~j aJTJ Kmâ~ TPrPZ- xJKmtT Kmâ~ k´mOK≠r yJr 11.3%Ç IMS (Information Medical Statistics, Switzerland) Fr fgq IjMpJ~L 2006 xJPu mJÄuJPhPvr Hwi KvP·r xJKmtT k´mOK≠r yJr KZu oJ© 4.1%Ç KT∂á IJnq∂rLj mJ\JPr IJoJPhr Kmâ~ k´mOK≠ IK\tf yP~PZ 10.8% pJ k´vÄxJr hJmL rJPUÇ IJoJPhr kNjKmtjqJKxf S xNxÄVKbf Kmâ~ S Kmkjj ßTRvPur oJiqPo IJorJ IJoJPhr Hwi ˝J˙qPxmJ k´hJjTJrL xTu oyPu pPgJkpMÜnJPm Ck˙JkPj xão yP~KZ mPuA FA I\tj x÷m yP~PZÇ 2006 xJPu IJoJPhr ßoJa r¬JjLr kKroJj KZu 115.1 KoKu~j aJTJ pJ Fr kNmtmfLt m“xPrr r¬JjLr ßYP~ 29.5% ßmvLÇ FmZPr KfjKa jfáj ßhv fgJ - vsLuÄTJ, ßxJoJKu~J S náaJPj IJorJ r¬JjL TPrKZÇ FZJzJ ZK©vKa jfáj Hwi ßTKj~J, oJ~JjoJr, vsLuÄTJ, ßjkJu S TP’JKc~JPf Kjmºj TrJ yP~PZÇ CPuäKUf ßhv xoNy ZJzJS IJPrJ 5Ka jfáj ßhPv IJoJPhr kjq KmâP~r uPãq Kmfrj YMKÜ xŒJKhf yP~PZÇ r¬JjL mJKeP\q CPuäUPpJVq k´mOK≠ I\tPjr \Pjq IJorJ ßp xo˜ ß\JrJPuJ khPãk V´ye TPrKZ IJPuJYq mZPr IJoJPhr I\tjxoNy fJrA k´JgKoT k´Kfluj mPu IJorJ oPj TKrÇ Kmâ~ k´mOK≠r xJPg xJPg IJoJPhr TrkNmt oMjJlJS 7.8% yJPr mOK≠ ßkP~PZÇ 2006 xJPu IJoJPhr TrkNmt oMjJlJ yP~PZ 523.24 KoKu~j aJTJ pJ KmVf m“xPr KZu 485.37 KoKu~j aJTJÇ jfáj Hwi : KmVf m“xrèPuJPf IJorJ xJlPuqr xJPg CPuäUPpJVq xÄUqT jfáj Hwi IJoJPhr C“kJhj fJKuTJ~ xÄpMÜ TrPf ßkPrKZÇ oJjxÿf Hwi ‰frLPf IJoJPhr IfLf GKfPyqr iJrJmJKyTfJ~ IJorJ 2006 xJPu KmKnjú Therapeutic ßvseLnëÜ 58Ka jfáj Hwi mJ\Jr\Jf TPrKZÇ Bird Flu nJArJx Fr x÷Jmq ^á ÅKT ßoJTJPmuJ~ èÀfôkMet Oseflu® (Oseltamivir) jJoT Hwi FmZPrA IJorJ CØJmj S mJ\Jr\Jf TPrKZÇ FZJzJS k´gomJPrr of mJÄuJPhPv kKrPmv mJºm 3Ka CFC free HFA Metered Dose Inhaler (MDIs) IJorJ C“kJhj S mJ\Jr\Jf TPrKZÇ FUJPj KmPvwnJPm CPuäUq ßp, KmPhv ßgPTS IJoJPhr FA IfqJiMKjT CFC free Inhaler Fr C“xJymqJ†T YJKyhJ kKruKãf yPòÇ xŒsxJre k´T· xoNy : KmPvwJK~f KYKT“xJ xJoV´L S Respiratory Hwi C“kJhPj ßjfí˙JjL~ FTKa ACPrJkL~ ßTJŒJjLr xJKmtT xyJ~fJ~ IJorJ IJoJPhr Metered Dose Inhaler (MDI) TJrUJjJPT CFC oMÜ S kKrPmv mJºm HFA KnK•T AjPyuJr C“kJhPj xão TJrUJjJ~ „kJ∂r Fr TJ\ xŒjú TPrKZÇ IJKo muPf VmtPmJi TrKZ ßp, FA k´pMKÜ xÄPpJ\Pjr oJiqPo ßmKéoPTJ lJoJtKxCKaTqJux& Ku: KmPvõ HFA Inhaler tÜ yPuJÇ âomitoJj YJKyhJr ßk´KãPf IJoJPhr MDI Plant C“kJhjTJrL UMm ˝· xÄUqT k´KfÔJPjr fJKuTJ~ FT VKmtf xhxq KyxJPm I∂në Fr C“kJhj ãofJ mOK≠r \Pjq xŒsxJre k´TP·r TJ\ AKfoPiq IJorJ yJPf KjP~KZÇ NNU A L R EPORT 34 A 2 0 0 6 IJoJPhr USFDA IjMPoJhjPpJVq Oral Solid Dosage (OSD) käJP≤r 2Ka C“kJhj uJAj xÄ˙JkPjr TJ\ FmZPr xJluq\jTnJPm xŒjú yP~PZ, pJ IJoJPhr hLWtKhPjr C“kJhj ãofJr xLoJm≠fJ hNrLTrPe CPuäUPpJVqnJPm xyJ~fJ TrPmÇ ßTJŒJjLr VKfvLu IV´pJ©J~ FKa FTKa èÀfôkNet oJAuluTÇ IJorJ FA k´TP·r IJ∂\JtKfT GMP xjh k´JK¬r \jq k´P~J\jL~ TJptâo ÊÀ TPrKZÇ IJorJ IJvJ TrKZ Cjúf OkPãr I∂f FTKa F m“xPrr ßvw jJVJh IJoJPhr TJrUJjJKar KjKrãJ TJptâo xŒjú TrPm pJr oJiqPo IJorJ KmPvõr Hwi Kj~πj Tft TJrUJjJKar GMP xjh I\tj TrPf xão ymÇ IJkjJPhr ImVKfr \Pjq \JjJKò ßp, 2006 xJPu xJlPuqr xJPg Cephalosporin FmÄ Penicillin Fr C“kJhj TJrUJjJ ˙JjJ∂r/Outsourcing xŒjú yP~PZÇ Fr oJiqPo IJoJPhr añL˙ xTu ACKjPar xmtPvw GMP KmKioJuJr k´KfkJuj KjKÁf yP~PZÇ FZJzJ keq x÷Jr xoO≠ TrPjr uPãq IJorJ Small Volume Parenterals (SVP) S Ophthalmic Hwi C“kJhPjr \Pjq k´P~J\jL~ ˙JkjJ KjoJtPjr FTKa k´T· yJPf KjP~KZÇ AKfoPiq FA k´T· TJP\r pPgÓ IV´VKf yP~PZÇ unqJÄv : FmZr IJorJ 15% yJPr unqJÄv ßWJwjJr k´˜Jm TPrKZ, pJ 2005 xJPur xokKroJj yPuS 10% ßmJjJx ßv~Jr S 5% jVh unqJÄPvr xÄKovsPjr lPu ßv~JrPyJflJrPhr k´Tíf IJ~ KmVf m“xPrr ßYP~ ßmvL yPm mPu IJvJ TrJ pJ~Ç xÿJKjf ßv~Jr ßyJflJrmOª, 2006 xJPu ßTJŒJjL jfáj VKf uJn TPrPZ, KmPvw TPr OSD S HFA AjPyuJr käJ≤ Fr xÄPpJ\j k´KfPpJVL ßTJŒJjLxoNPyr fáujJ~ IJoJPhrPT FT KnjúoJ©J k´hJj TPrPZÇ IJkjJrJ CEO Fr k´KfPmhj ßgPT ¸ÔfA ImKyf yP~PZj ßp, Hwi k´˜áfTJrL ßTJŒJjL KyxJPm IJ∂\JtKfTnJPm k´KfÔJ kJS~Jr uPãq IJoJPhr Ihoq ¸OyJ S TJptâo ImqJyf rP~PZÇ FßãP© IJoJPhr uãq yPò oiq ßgPT hLWt ßo~JhL xoP~ r¬JjLr oJiqPo PTJŒJjLr k´mOK≠ I\tj KjKÁf TrJÇ pKhS FKa FTKa TKbj TJ\, KT∂á F uãq I\tPjr mqJkJPr IJorJ IJ®KmvõJxL FmÄ m≠kKrTrÇ kKrPvPw, IJKo IJoJPhr xÿJKjf xTu V´JyT, mqJÄTJr, IJKgtT k´KfÔJj, xrmrJyTJrL, ˝J˙q ßxmJToLt, xrTJrL xÄ˙JxoNy, KmKnjú Kj~πT xÄ˙JxoNy FmÄ IJoJPhr TotTJP¥r xJPg xÄKväÓ k´PfqTPT IJoJr IJ∂KrT ijqmJh S TífùfJ \JjJKòÇ IJoJPhr Ijqfo vKÜ yPò ßkvJVfnJPm C“xVtLTíf xPYfj S hJK~fôxŒjú ToLtmJKyjL, IJKo TífùfJr xJPg fJPhr ImhJPjr k´vÄxJ TrKZÇ xPmtJkKr IJoJPhr xÿJKjf ßv~Jr ßyJflJrVPer xJmtãKjT xKâ~ xogtj FmÄ xyPpJVLfJr lPuA ßTJŒJjL mftoJj kpJtP~ ßkRÅZPf xão yP~PZÇ ßx\jq IJkjJPhrPT IJ∂KrT IKnjªj ùJkj TrKZÇ IJKo hO|nJPm KmvõJx TKr IJkjJPhr ImqJyf xogtj KjP~ ßmKéoPTJ lJoJtKxCKaTqJux& KuKoPaPcr IV´pJ©J nKmwqPfS ImqJyf gJTPmÇ IJkjJPhr xTuPT IxÄUq ijqmJhÇ F Fx Fl ryoJj ßY~JroqJj dJTJ 28 \Mj 2007 NNU A L R EPORT 35 A 2 0 0 6 t Report of the Directors to the Shareholders For the year ended 31 December 2006 The Directors are pleased to present their report to the shareholders together with the audited accounts for the year ended 31st December, 2006 along with Auditors' Report thereon. Financial Results and Profit Appropriations Net Profit After Tax Add : Profit brought forward from previous year Profit Available for Appropriation Recommended for Appropriations: Transfer to tax-holiday reserve Proposed dividend Tax holiday reserve no longer required Un-appropriated Profit Carried Forward Figures in '000 Taka 2006 2005 470,659 2,549,402 3,020,061 (125,369) (156,146) 145,083 (136,432) 2,883,629 489,262 2,173,216 2,662,478 (117,824) (143,882) 148,630 (113,076) 2,549,402 Dividend The Board of Directors have recommended 5% cash and 10% stock dividend for approval of the shareholders for the year ended 31 December, 2006. Directors Dr. Abdul Alim Khan, Director of the company retires by rotation as per Articles 126 and 127 of the Articles of Association of the Company and being eligible offers himself for re-election. Messrs. Iqbal Ahmed and O K Chowdhury (Nominees of Beximco Holdings Limited) and M A Qasem (Nominee of Bangladesh Export Import Company 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. NNU A L R EPORT 36 A 2 0 0 6 Board Audit Committee The Company has an audit committee, which met once in 2006, to consider its Half-Yearly Report for the half-year to 30 June 2006. The Company however re-constituted the Committee in 2007 with Mr. M A Qasem as Chairman and Dr. Abdul Alim Khan and Advocate Ahsanul Karim as Members. Auditors The Directors hereby report that the existing Auditors, Messrs 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 Thirtieth Annual General Meeting of the Company has carried out the audit for the year ended 31 December 2006. Messrs 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 2007. Board Meetings and Attendance During the year 12(twelve) Board Meetings were held. The attendance record of the Directors is as follows: Name of Directors Mr. A S F Rahman Mr. Salman F Rahman Mr. Iqbal Ahmed Mr. M. A. Qasem Mr. O. K. Chowdhury Dr. Abdul Alim Khan Mr. A. B. Siddiqur Rahman Dr. Farida Huq Mr. C. H. Rahman Barrister Faheemul Huq Advocate Ahsanul Karim Meetings attended 12 11 12 12 11 12 12 12 6 12 12 Statement of Directors on Financial Reports a) The financial statements together with the notes thereon have been drawn up in conformity with the Companies Act, 1994 and Securities and Exchange Rules, 1987. These statements present fairly the Company's state of affairs, the result of its operations, cash flow and changes in equity. NNU A L R EPORT 37 A 2 0 0 6 b) Proper books of accounts of the Company have been maintained. c) Appropriate accounting policies have been consistently applied in preparation of the financial statements except those referred to in the financial statements and that the accounting estimates are based on reasonable and prudent judgment. d) The International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial statements. e) Internal Control System is sound in design and has been effectively implemented and monitored. f) There is no significant doubts about the ability of the Company to continue as a going concern. The pattern of shareholding Name-wise details No. of Shares held (i) (ii) Parent/Subsidiary/Associate companies and other related parties : Beximco Holdings Ltd. Bangladesh Export Import Company Ltd. Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children : Mr. A S F Rahman, Chairman Mr. Salman F Rahman, Vice Chairman Dr. Abdul Alim Khan, Director Dr. Farida Huq, Director Mr. Nazmul Hassan, Chief Executive Officer Mr. Afsar Uddin Ahmed, Director Commercial Chief Financial Officer, Company Secretary And Head of Internal Audit, spouse and minor children (iii) Executives (iv) Shareholders holding ten percent (10%) or more voting interest in the company Beximco Holdings Ltd. (mentioned in Sl. No. (i) ) The Bank of New York (International Nominees) 11,820,561 6,259,523 1,653,132 1,209,949 525,694 3,111 3,845 2,308 Nil Nil 11,820,561 28,175,750 NNU A L R EPORT 38 A 2 0 0 6 Key Operating and Financial Data The summarized key operating and financial data of four preceding years is annexed. Corporate Governance Compliance Report In accordance with the requirement of the Securities and Exchange Commission, “Corporate Governance Compliance Report” is annexed. Thank you all. On behalf of the Board A S F RAHMAN Chairman Dhaka 28 June 2007 NNU A L R EPORT 39 A 2 0 0 6 Corporate Governance Compliance Report Status of compliance with the conditions imposed by the Commission's Notification No. SEC/CMRRCD/2006/158/ Admin/02-08 dated 20th February 2006 issued under section 2CC of the Securities and Exchange Ordinance, 1969. (Report under Condition No.5.00) Title Compliance status Complied Not complied Explanation for non-compliance with the condition Boards Size Independent Directors Independent Directors Appointment Chairman & Chief Executive Directors Report on financial Statements Books of Accounts Accounting Policies IAS Applicable in Bangladesh System of Internal Control Going Concern Deviation in Operating Results Key operating and Financial Data Declaration of Dividend Number of Board Meetings Pattern of Shareholdings CFO, HIA & CS Appointment Board Meeting Attendance Audit Committee Composition of Audit Committee Audit Committee Members Appointment Terms of service of Audit Committee Chairman of Audit Committee Audit Committee Chairman's Qualification Reporting to the Board of Directors Report of Conflicts of Interest Defect in the Internal Control System Suspected infringement of Laws Any other matter Reporting to the Authorities Reporting to the Shareholders Appraisal or Valuation Services Financial information system Book keeping or other services Broker dealer services Actuarial services Internal Audit services Any other services √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Condition No. 1.1 1.2(I) 1.2(II) 1.3 1.4(a) 1.4(b) 1.4(c) 1.4(d) 1.4(e) 1.4(f) 1.4(g) 1.4(h) 1.4(i) 1.4(j) 1.4(k) 2.1 2.2 3.00 3.1(i) 3.1(ii) 3.1(iii) 3.2(I) 3.2(ii) 3.3.1(I) 3.3.1(ii)(a) 3.3.1(ii)(b) 3.3.1(ii)(c) 3.3.1(ii)(d) 3.3.2 3.4 4.00 (I) 4.00 (ii) 4.00 (iii) 4.00 (iv) 4.00 (v) 4.00 (vi) 4.00 (vii) NNU A L R EPORT 40 A 2 0 0 6 Key Operating and Financial Data 2006 2005 2004 2003 2002 Amounts in thousand Taka 2,000,000 1,040,973 3,702,317 115,099 1,731,086 523,244 470,659 9,885,840 7,949,920 15% 76 4.67 53.70 11.50 48,932 47,888 58 986 2,403 1905 498 2,000,000 959,216 3,327,023 88,858 1,558,500 485,367 489,262 8,623,969 6,820,925 15% 71 6.36 57.80 9.09 50,591 48,429 55 2,107 1,981 1,505 476 1,000,000 559,763 2,402,701 79,485 1,023,772 353,661 329,376 6,822,860 4,836,013 30% 86 4.71 92.10 19.55 50,750 41,882 49 8,819 1,385 964 421 1,000,000 508,875 2,183,830 59,594 828,081 263,619 207,140 6,669,824 4,596,421 20% 90 2.96 39.72 13.42 47,811 35,568 42 12,201 1,328 862 466 1,000,000 442,500 2,508,788 50,284 888,295 362,232 341,680 5,512,974 4,411,406 20% 100 4.88 41.83 8.57 49,960 37,317 43 12,600 1,218 747 471 Particulars Authorized Capital Paid up Capital Net Sales Revenue Export Sales Gross Profit Profit Before Tax Net Profit Fixed Assets (Gross) Shareholders' Equity Dividend Shareholders' Equity Per Share Earnings Per Share (EPS) Market Price Per Share (at end of the year) Price Earning Ratio (Times) Number of Shareholders Sponsors, General Public & Other Institutions Foreign Investors ICB including ICB Investors Account Human Resources Number of Employees Officers Staff Note: Effective from 1st January 2005, Beximco Infusions Limited was amalgamated with Beximco Pharmaceuticals Limited. Figures from 2005 onward are therefore, the combined result of Beximco Pharmaceuticals Limited and former Beximco Infusions Limited. Net Sales Revenue a k a T d n a s u o h t n i t n u o m A , 8 8 7 8 0 5 2 , , 0 3 8 3 8 1 2 , , 1 0 7 2 0 4 2 , , 3 2 0 7 2 3 3 , , 7 1 3 2 0 7 3 , 2002 2003 2004 2005 2006 NNU A L R EPORT 41 A 2 0 0 6 Auditors' Report To The Shareholders of BEXIMCO PHARMACEUTICALS LIMITED We have audited the accompanying Balance Sheet of the Beximco Pharmaceuticals Limited as of December 31, 2006 and the related Profit and Loss Account, Statement of Changes in Equity and Statement of Cash Flows for the year then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 made by management, as well as evaluating presentation of the overall financial statement. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS), give a true and fair view of the state of the company's affairs as of December 31, 2006 and of the results of its operations and its cash flows for the year then ended and comply with the applicable sections of the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. 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 purposes of our audit and made due verification thereof ; (b) in our opinion, proper books of account 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 the report are in agreement with the books of account ; and (d) the expenditure incurred was for the purposes of the company's business. Dhaka 28 June, 2007 M. J. ABEDIN & CO. Chartered Accountants NNU A L R EPORT 42 A 2 0 0 6 BEXIMCO PHARMACEUTICALS LIMITED Balance Sheet As at 31 December 2006 Notes 2006 2005 ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Investment in Shares Current Assets Inventories Accounts Receivable Loans, Advances and Deposits Cash and Cash Equivalents TOTAL ASSETS SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' Equity Issued Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve Tax-Holiday Reserve Retained Earnings Non-Current Liabilities Tk. 20 21 22 23 24 25 26 27 28 29 30 Long Term Borrowing-Net off Current Maturity (Secured) Liability for Gratuity & WPPF Deferred Tax Liability 31 32 19.5 & 33 Current Liabilities and Provisions Short Term Borrowings Long Term Borrowing-Current Maturity Creditors and Other Payables Accrued Expenses Dividend Payable Income Tax Payable 34 35 36 37 38 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY Tk. The Notes are integral part of the Financial Statements. 8,555,119,221 8,513,136,381 41,982,840 3,357,393,266 1,754,440,288 430,240,095 591,613,938 581,098,945 11,912,512,487 7,949,920,425 1,040,973,120 1,489,750,000 1,689,636,958 294,950,950 394,834,828 3,039,774,569 1,435,171,264 1,159,409,947 213,357,859 62,403,458 2,527,420,798 1,302,816,980 712,122,930 365,255,938 117,936,620 13,012,146 16,276,184 11,912,512,487 7,449,630,817 7,412,474,567 37,156,250 3,495,849,163 1,683,722,059 779,798,943 603,764,931 428,563,230 10,945,479,980 6,820,925,052 959,215,620 1,489,750,000 969,175,305 294,950,950 414,548,999 2,693,284,178 1,622,730,360 1,387,455,909 190,053,550 45,220,901 2,501,824,568 1,062,011,192 1,066,030,957 216,660,743 101,859,834 830,440 54,431,402 10,945,479,980 Approved and authorised for issue by the board of directors on 28 June 2007 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 28 June, 2007 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants NNU A L R EPORT 43 A 2 0 0 6 BEXIMCO PHARMACEUTICALS LIMITED Profit and Loss Account For the year ended 31 December 2006 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses : Administrative Expenses Selling, Marketing 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 Income/(Expense) Current Tax Deferred Tax Income/(Expense) Net Profit After Tax Transferred to Statement of Changes in Equity Earnings Per Share (of Tk. 10 /- each) Number of shares used to compute EPS Notes 2006 2005 39 40 43 44 45 46 47 19.5, 33 & 48 Tk. Tk. 49 3,702,317,159 (1,971,231,333) 1,731,085,826 3,327,022,574 (1,768,522,363) 1,558,500,211 (984,562,332) (150,285,977) (834,276,355) 746,523,494 56,201,142 (253,318,784) 549,405,852 (26,162,183) 523,243,669 (52,585,106) (35,402,549) (17,182,557) 470,658,563 4.67 100,737,415 (834,148,493) (119,006,535) (715,141,958) 724,351,718 7,232,609 (221,949,324) 509,635,003 (24,268,333) 485,366,670 3,895,094 (46,169,026) 50,064,120 489,261,764 6.36 76,878,446 The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 28 June 2007 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 28 June, 2007 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants NNU A L R EPORT 44 A 2 0 0 6 BEXIMCO PHARMACEUTICALS LIMITED Statement of Changes in Equity For the year ended 31 December 2006 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Tax Holiday Reserve Capital Reserve Retained Earnings Total Opening Balance on 01.01.2006 Net Profit after tax for 2006 Tax Holiday Reserve provided for 2006 (Note-50) Tax Holiday Reserve no longer required Cash Dividend of Prior Period (2005) Shares issued against GDR in 2006 959,215,620 1,489,750,000 969,175,305 414,548,999 294,950,950 125,369,152 (145,083,323) 81,757,500 720,461,653 2,693,284,178 6,820,925,052 470,658,563 - - (143,882,343) 802,219,153 470,658,563 (125,369,152) 145,083,323 (143,882,343) At the end of year 2006 Tk. 1,040,973,120 1,489,750,000 1,689,636,958 394,834,828 294,950,950 3,039,774,569 7,949,920,425 Total Number of shares Shareholders' Equity per share 104,097,312 76.37 Tk. The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 28 June 2007 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 28 June, 2007 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants NNU A L R EPORT 45 A 2 0 0 6 BEXIMCO PHARMACEUTICALS LIMITED Cash Flow Statement For the year ended 31 December 2006 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 Net Cash Generated from Operating Activities Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment Investment in Shares Amalgamation Expenditure Sales of Shares in Bextex Ltd. Disposal of Property, Plant and Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities : Net (Decrease)/Increase in Long Term Borrowings Issue of Shares against GDR Net Excess of Issue Price over Face Value of GDRs (Note : 28) Net (Decrease)/Increase in Short Term Borrowings Dividend Paid Net cash Generated from Financing Activities Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year 2006 2005 4,097,579,564 (2,714,775,105) 1,382,804,459 (229,719,450) (73,557,767) 1,079,527,242 (1,224,925,205) (10,000,000) - 15,294,792 450,467 (1,219,179,946) (619,135,885) 81,757,500 720,461,653 240,805,788 (131,700,637) 292,188,419 152,535,715 428,563,230 581,098,945 3,303,531,937 (2,754,388,271) 549,143,666 (202,541,434) (34,977,184) 311,625,048 (908,660,504) - (8,311,848) - 3,844,428 (913,127,924) 65,200,780 200,000,000 969,175,305 (180,510,567) (34,318,673) 1,019,546,845 418,043,969 10,519,261 428,563,230 Tk. The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 28 June 2007 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 28 June, 2007 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants NNU A L R EPORT 46 A 2 0 0 6 BEXIMCO PHARMACEUTICALS LIMITED Notes to the Accounts For the year ended 31 December 2006 1. Reporting Entity Beximco Pharmaceuticals Limited (BPL/ the Company) was incorporated in Bangladesh in 1976 under the Companies Act, 1913 as a Public Limited Company. It commenced its manufacturing operation in 1980. The Company was listed with Dhaka Stock Exchange in 1985 and with Chittagong Stock Exchange in 1995 on its debut. In 2005 BPL was enlisted with the Alternative Investment Market (AIM) of the London Stock Exchange. The shares of the Company are now traded in Dhaka and Chittagong Stock Exchanges of Bangladesh and also in the AIM of the London Stock Exchange. Also during the year 2005, the company took over, under a Scheme of Amalgamation Beximco Infusions Ltd., a listed company of the Beximco Group engaged in manufacturing and marketing of intravenous fluids. The registered office of the company is located at House No. 17, Road No. 2, Dhanmondi R/A, Dhaka. The industrial units are located in Gazipur district - a close vicinity of the capital city. The Company is engaged in manufacturing and marketing of pharmaceuticals finished Formulation Products, Active Pharmaceutical Ingredients (APIs) and life saving Intravenous (I.V) Fluids which it sells in the local as well as international markets. The Company also provides contract manufacturing services. 2. Basis of Measurement of Elements of Financial Statements The financial statements have been prepared on the Historical Cost basis, and therefore, do not take into consideration the effect of inflation. 3. Statement on Compliance with Local Laws The financial statements have been prepared in compliance with the requirements of the Companies Act 1994, the Securities & Exchange Rules 1987, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and other relevant local laws as applicable. 4. Statement on Compliance of Bangladesh Accounting Standards The financial statements have been prepared in accordance with the applicable Bangladesh Accounting Standards (BASs) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) based on International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs). 5. Structure, Content and Presentation of Financial Statements Being the general purpose financial statements, the presentation of these financial statements are in accordance with the guidelines provided by BAS 1 : Presentation of Financial Statements. 6. Reporting Period The financial period of the company covers one calendar year from 1st January to 31st December consistently. 7. Approval of Financial Statements The financial statements were approved by the Board of Directors on 28 June 2007. 8. Reporting Currency The financial statements are prepared and presented in Bangladesh Currency (Taka), which is the company's functional currency. All financial information presented have been rounded off to the nearest Taka except where indicated otherwise. NNU A L R EPORT 47 A 2 0 0 6 9. Comparative Information and Rearrangement Thereof Comparative information has been disclosed in respect of the year 2005 for all numerical information in the financial statements and also the narrative and descriptive information where it is relevant for understanding of the current year's financial statements. Figures for the year 2005 have been re-arranged wherever considered necessary to ensure better comparability with the current year. 10. Risk and Uncertainty For Use of Estimates and Judgements The preparation of financial statements in conformity with Bangladesh Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and for contingent assets and liabilities that require disclousure, during and at the date of the financial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected as required by BAS 8 : Accounting Policies, Changes in Accounting Estimates and Errors. 11. Accrued Expenses and Other Payables Liabilities for the goods and services received has been accounted for. Payables are not interest bearing and are stated at their nominal value. 12. Going Concern The company has adequate resources to continue in operation for the foreseeable future. For this reason the directors continue to adopt going concern basis in preparing the accounts. 13. Financial Instruments Non-derivative financial instruments comprise accounts and other receivables, cash and cash equivalents, borrowings and other payables and are shown at transaction cost. 14. Impairment In accordance with the provisions of BAS 36 : Impairment of Assets, the carrying amount of non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated and impairment losses are recognised in profit and loss account. No such indication of impairment has been raised till to date. 15. Segment Reporting No segment reporting is applicable for the company as required by BAS 14 : Segment Reporting, as the company operates in a single industry segment . 16. Cash Flow Statement The Cash Flow Statement has been prepared in accordance with the requirements of BAS 7: Cash Flow Statements. The cash generating from operating activities has been reported using the Direct Method as prescribed by the Securities and Exchange Rules 1987 and as the benchmark treatment of BAS 7 whereby major classes of gross cash receipts and gross cash payments from operating activities are disclosed. 17. Transactions with Related Parties The company carried out a number of transactions with related parties in the normal course of business and on arm's length basis. The information as required by BAS 24 : Related party Disclosures has been disclosed in a separate note to the accounts. NNU A L R EPORT 48 A 2 0 0 6 18. Events After the Balance Sheet Date In compliance with the requirements of BAS 10 : Events After the Balance Sheet Date, post balance sheet adjusting events that provide additional information about the company's position at the balance sheet date are reflected in the financial statements and events after the balance sheet date that are not adjusting events are disclosed in the notes when material. 19. Accounting Policies For Significant Items The accounting policies in respect of material items of financial statements set out below have been applied consistently to all periods presented in these financial statements. 19.1 Revenue Recognition Policy In compliance with the requirements of BAS 18 : Revenue, revenue from receipts from customers against sales is recognised when products are dispatched to customers, that is, when the significant risk and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. Revenue from sales is exclusive of VAT. Cash dividend income on investment in shares is recognized on approval of said dividend in the annual general meeting . Stock dividend income (Bonus Shares) is not considered as revenue. 19.2 Property, Plant and Equipment 19.2.1 Recognition and Measurement Property, plant and equipment are capitalised at cost of acquisition and subsequently stated at cost less accumulated depreciation in compliance with the requirements of BAS 16: Property, Plant and Equipment. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes. 19.2.2 Pre-Operating Expenses and Borrowing Costs In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalised. Expenses capitalised also include applicable borrowing cost considering the requirement of BAS 23: Borrowing Costs. 19.2.3 Disposal of Fixed Assets On disposal of fixed assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sales proceeds. 19.2.4 Depreciation on Fixed Assets Depreciation is provided to amortise the cost of the assets after commissioning, over the period of their expected useful lives, in accordance with the provisions of BAS 16: Property, Plant and Equipment. Depreciation is provided for the period in use of the assets. Depreciation is provided at the following rates on reducing balance basis: Building and Other Construction Plant and Machinery Furniture & Fixtures Transport & Vehicle Office Equipment 5% to 10% 7.5% to 15% 10% 20% 10% to 15% NNU A L R EPORT 49 A 2 0 0 6 19.3 Inventories Inventories are carried at the lower of cost and net realizable value as prescribed by BAS 2 : Inventories. Cost is determined on weighted average cost basis. The cost of inventories comprises of expenditure incurred in the normal course of business in bringing the inventories to their present location and condition. Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale. 19.4 Cash and Cash Equivalents Cash and cash equivalents include cash in hand and with banks on current and deposit accounts which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same. 19.5 Income Tax Expense Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit and loss account and accounted for in accordance with the requirements of BAS 12 : Income Tax. Current Tax Current tax is the expected tax payable on the taxable income for the year, and any adjustment to tax payable in respect of previous years. The company qualified as a “Publicly Traded Company”, hence the applicable Tax Rate is 30%. Deferred Tax The company has recognised deferred tax using balance sheet method in compliance with the provisions of BAS 12 : Income Taxes. The company's policy of recognition of deferred tax assets/ liabilities is based on temporary differences (Taxable or deductible) between the carrying amount (Book value) of assets and liabilities for financial reporting purpose and its tax base, and accordingly, deferred tax income/expenses has been considered to determine net profit after tax and earnings per shares (EPS). A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised. 19.6 Leased Assets In compliance with the BAS 17 : Leases, cost of assets acquired under finance lease along with related obligation have been accounted for as assets and liabilities respectively of the company, and the interest element has been charged as expenses . 19.7 Lease Payment Lease payments made under finance leases are apportioned between the finance expenses and the reduction of the outstanding liability. 19.8 Employee Benefits The company has accounted for and disclosed of employee benefits in compliance with the provisions of BAS 19: Employee Benefits. The cost of employee benefits are charged off as revenue expenditure in the period to which the contributions relate. The company's employee benefits includes the following : (a) Defined Contribution Plan This represents recognized contributory provident fund for all its permanent employees. Assets of provident fund are held in a separate trustee administered fund as per the relevant rules and is funded by contributions from both the employees and the company at pre-determined rates. (b) Defined Benefits Plan This represents unfunded gratuity scheme for its permanent employees. Employees are entitled to gratuity benefit after completion of minimum five years of service in the company. The gratuity is calculated on the latest applicable basic pay and is payable at the rate of one month basic pay for every completed year of service. Though no valuation was done to quantify actuarial liabilities as per the BAS 19 : Employee Benefits, such valuation is not likely to yield a result significantly different from the current provision. NNU A L R EPORT 50 A 2 0 0 6 (c) Contribution To Workers' Profit Participation/ Welfare Funds This represents 5% of net profit before tax contributed by the company as per provisions of the Bangladesh Labour Law 2006 and is payable to workers as defined in the said scheme. (d) Insurance Scheme Employees of the company are covered under life insurance scheme. 19.9 Share Premium The Share Premium shall be utilized in accordance with the provisions of the Companies Act 1994 and as directed by the Securities and Exchange Commission in this respect. 19.10 Tax Holiday Reserve This is being created out of profit of units enjoying tax holiday status to invest in the same undertaking or in any new industrial undertaking or in stocks and shares of listed companies or in government bonds or securities or for other purposes as required by the Income Tax Ordinance 1984. On expiry of the tax holiday period of a unit, related tax holiday reserve being no longer required are released and transferred to retained earnings. 19.11 Proposed Dividend Proposed dividend is accounted for after approval by the shareholders in the annual general meeting. 19.12 Earnings Per Share (EPS) This has been calculated in compliance with the requirements of BAS 33 : Earnings Per Share 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 The basis of computation of number of shares is in line with the provisions of BAS 33 : Earnings Per Share. Therefore, the total number of shares issued in 2006 has been multiplied by a time weighting factor which is the number of days the specific shares were outstanding as a proportion of 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. 19.13 Foreign Currency Transactions Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date. The monetary assets and liabilities, if any, denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchanges ruling at that date. Exchange differences are charged off as revenue expenditure in compliance with the provisions of BAS 21 : The Effects of Changes in Foreign Exchange Rates. However, as a requirement of the Companies Act 1994, exchange loss relating to obligation under lease has been capitalized to relevant fixed assets being procured under the said obligation. The rates of relevant foreign exchanges at year end are : 1 US Dollar ($) = Tk. 70.4000 67.2500 2006 2005 NNU A L R EPORT 51 A 2 0 0 6 20. Property, Plant and Equipment - Tk. 8,513,136,381 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Total Cost At 01.01.2006 Additions during the year Transferred & Capitalized Exchange Loss Disposal during the year 1,199,313,610 8,104,304 596,284,330 14,333,972 - 259,037,873 27,028,255 - - - 1,233,272,178 85,666,968 94,662,571 3,737,341 53,234,461 8,465,175 287,928 - 105,798,712 19,666,000 - - - (171,500) (64,446) 176,963,786 3,364,867,077 165,789,248 29,552,829 363,850,880 9,862,508 30,854,605 89,009 (235,946) - Cost at 31 December, 2006 1,234,446,169 869,656,175 1,417,339,058 61,816,064 125,400,266 216,468,132 3,925,125,864 Accumulated Depreciation At 31 December, 2005 Depreciation during the year Adjustment for assets disposed off - 324,180,935 - 39,230,691 - - 690,953,174 89,825,792 - 24,440,536 3,747,546 (123,734) 56,461,014 13,777,057 (37,947) 115,458,378 1,211,494,037 161,371,022 14,789,936 (161,681) - Accumulated Depreciation at 31 December, 2006 - 363,411,626 780,778,966 28,064,348 70,200,124 130,248,314 1,372,703,378 Net Book Value 31 December, 2006 Capital Work in Progress Carrying Value as on 31 December, 2006 Tk. 1,234,446,169 506,244,549 636,560,092 33,751,716 55,200,142 86,219,818 2,552,422,486 Tk. 5,960,713,895 Tk. 1,234,446,169 506,244,549 636,560,092 33,751,716 55,200,142 86,219,818 8,513,136,381 Assets include lease hold assets of Tk. 1,404,292,092 at cost and Tk. 1,217,024,800 at written down value. Capital Work in Progress is arrived at as follows : Opening Balance Addition during the year Exchange Loss Transferred & Capitalized Building and Other Constructions Plant & Machinery Furniture Office Equipment 2006 2005 5,259,101,527 1,059,135,957 6,327,291 6,324,564,775 (363,850,880) (259,037,873) (94,662,571) (287,928) (9,862,508) Tk. 5,960,713,895 4,392,597,712 844,412,619 22,091,196 5,259,101,527 - - - - 5,259,101,527 NNU A L R EPORT 52 A 2 0 0 6 21. Investment in Shares - Tk. 41,982,840 This Consists of : a) 3,582,538 Shares of Tk. 10 each of Bextex Limited (former Padma Textile Mills Ltd.) b) 100,000 Shares of BPL Power Company Ltd. of Tk. 100 each c) 1 Share of Tk.1,000,000 each of Central Depository Bangladesh Ltd. (CDBL) Tk. 2006 2005 30,982,840 10,000,000 1,000,000 41,982,840 36,156,250 - 1,000,000 37,156,250 The shares of the Bextex Limited are listed in the Dhaka and Chittagong Stock Exchanges. The market value of each share of Bextex Ltd. as on 28th December, 2006 was Tk. 22.40 ( on 29-12-05 Tk. 21.90) in the Dhaka Stock Exchange Ltd. and Tk. 22.40 (on 29-12-05 Tk. 22.10) in the Chittagong Stock Exchange Ltd. The investment in 3,582,538 shares represents 2.09% of total 171,167,841 issued, subscribed and paid-up shares of Bextex Limited. 22. Inventories - Tk. 1,754,440,288 This consists of as follows : Finished Goods Work in Process Raw Material Packing Material Laboratory Chemical Literature & Promotional Material Physician Sample Raw & Packing Material in Transit Stock of Stationery Spares & Accessories 398,102,771 178,713,956 623,238,087 200,227,273 2,163,268 44,474,997 14,025,516 196,082,038 2,537,415 94,874,967 Tk. 1,754,440,288 378,744,903 156,374,814 695,165,382 229,060,186 2,145,268 18,745,269 12,998,593 107,063,860 1,874,526 81,549,258 1,683,722,059 23. Accounts Receivable - Tk. 430,240,095 This is unsecured, considered good and is falling due within one year. This includes receivable of Tk. 3,151,402 equivalent to US$ 45,455 (on 31-12-2005 Tk. 48,424,050 equivalent to US $ 826,785) against export sales. This also includes Tk. 364,005,726 ( on 31-12-2005 Tk. 683,362,096) due from I & I Services Ltd., the local distributor of the pharmaceutical products of the Company and a "Related Party". The maximum amount due from that company during the year was Tk. 770,764,638 on 30-4-2006 (on 28-11-2005 Tk. 693,297,037). 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. NNU A L R EPORT 53 A 2 0 0 6 24. Loans, Advances and Deposits - Tk. 591,613,938 This is unsecured, considered good and consists of as follows : 2006 2005 Clearing & Forwarding VAT Claim Receivable Security Deposit Lease Deposit Earnest Money For Capital Expenditure For Expenses Bank Guarantee Margin Advance against Salary Rent Advance Motor Cycle Raw & Packing Material Others 10,792,368 139,504,808 16,085,288 11,008,107 26,248,190 1,729,384 46,673,169 12,766,250 2,875,744 29,977,777 2,128,286 54,067,439 186,198,704 51,558,424 591,613,938 41,109,112 128,957,135 14,705,569 10,231,066 23,635,890 3,033,844 29,657,950 13,568,564 1,539,813 18,950,286 1,627,297 68,811,816 233,898,656 14,037,933 603,764,931 Tk. (a) The maximum amount due from the officers during the year was Tk. 31,418,798 on 30.11.06. (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. 25. Cash and Cash Equivalents - Tk. 581,098,945 This consists of as follows : (a) Cash in Hand (b) Imprest Cash (c) Cash at Banks : In Current Accounts (i) (ii) In FDR Accounts (iii) In F.C. Accounts (Equivalent US$ 30,177) (on 31-12-2005 US$ 125,354) 26. Issued Share Capital - Tk. 1,040,973,120 This represents : Authorized : 200,000,000 Ordinary Shares of Tk. 10/- each 1,426,068 2,636,111 (2,536,354) 577,448,630 2,124,490 577,036,766 581,098,945 Tk. 529,884 780,965 16,520,973 402,301,370 8,430,038 427,252,381 428,563,230 Tk. 2,000,000,000 2,000,000,000 Issued, Subscribed and Paid-up : 51,775,750 Ordinary Shares (2005: 43,600,000) of Tk. 10/- each fully paid-up in cash 46,370,312 Bonus Shares (2005: 46,370,312) of Tk. 10/- each 5,951,250 Shares of Tk. 10/- each issued in Exchange of Shares of Beximco Infusions Ltd. 517,757,500 463,703,120 59,512,500 104,097,312 Shares Tk. 1,040,973,120 436,000,000 463,703,120 59,512,500 959,215,620 NNU A L R EPORT 54 A 2 0 0 6 The movement of issued shares during the year 2006 is as follows : (a) As on 01.01.2006 Issued in 2006 against : Underlying Shares against GDRs Closing as at 31.12.2006 (b) Composition of Shareholding : Sponsors Foreign Investors ICB including ICB Investors Account General Public and Institutions (c) Distribution Schedule : Number of Shares Amount in Taka 95,921,562 959,215,620 8,175,750 104,097,312 81,757,500 1,040,973,120 2006 No. of shares 21,471,970 31,000,305 14,242,332 37,382,705 % 20.63 29.78 13.68 35.91 2005 No. of shares 21,471,970 20,870,436 14,191,356 39,387,800 % 22.38 21.76 14.79 41.07 104,097,312 100.00 95,921,562 100.00 Range of Holdings In number of shares No. of Shareholders 2006 2005 % of Shareholders 2006 2005 No. of Shares 2006 2005 % of Share Capital 2006 2005 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 Total 39,471 8,501 525 239 65 32 19 36 31 13 48,932 40,419 9,122 563 278 76 31 23 40 29 10 80.67% 17.37% 1.07% 0.49% 0.13% 0.07% 0.04% 0.07% 0.06% 0.03% 79.89% 5,074,404 18.03% 11,770,861 3,668,789 1.11% 3,327,993 0.55% 1,616,329 0.15% 1,128,449 0.06% 0.05% 853,446 2,420,867 0.08% 0.06% 11,532,064 0.02% 62,704,110 5,268,754 12,783,259 3,966,045 3,973,112 1,867,586 1,067,595 1,001,725 2,835,678 8,980,367 54,177,441 4.87% 11.31% 3.52% 3.20% 1.55% 1.08% 0.82% 2.33% 11.08% 60.24% 5.49% 13.33% 4.13% 4.14% 1.95% 1.11% 1.04% 2.96% 9.36% 56.49% 50,591 100.00% 100.00% 104,097,312 95,921,562 100.00% 100.00% (d) Market Price : The shares are listed in the Dhaka, Chittagong and London Stock Exchanges on the last working day of the year, each share was quoted at Tk. 53.70 (on 29.12.2005 Tk. 57.80) in the Dhaka Stock Exchange Ltd., Tk. 53.50 (on 29.12.2005 Tk. 58.00) in the Chittagong Stock Exchange Ltd., and GBP 0.615 in London Stock Exchanges (GBP 0.655 at 31.12.2005). (e) Option on unissued shares : There is option regarding authorized capital not yet issued but can be used to increase the issued, subscribed and paid-up capital through the issuance of new shares against GDRs to the number of 6,666,662 (2005 : 6,666,662). 27. Share Premium - Tk. 1,489,750,000 This is 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 2006 2005 191,750,000 1,298,000,000 1,489,750,000 Tk. 191,750,000 1,298,000,000 1,489,750,000 NNU A L R EPORT 55 A 2 0 0 6 28. Excess of Issue Price over Face Value of GDRs- Tk. 1,689,636,958 This represents the issue price of 28,175,750 GDRs at Tk. 2,244,080,670 net of face value of underlying shares against GDRs and GDR expenses. 29. Capital Reserve-Tk. 294,950,950 This is as per last account. 30. Tax-Holiday Reserve - Tk. 394,834,828 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 - 50) Less : Tax Holiday Reserve no longer required 2006 2005 414,548,999 125,369,152 (145,083,323) 394,834,828 445,355,048 117,823,763 (148,629,812) 414,548,999 Tk. 31. Long Term Borrowing - Net off Current Maturity (Secured)- Tk. 1,159,409,947 This Consists of : (a) Project Loan (b) Interest and PAD (c) Obligation Under Finance Leases (a) Project Loan 964,687,435 159,719,746 35,002,766 1,159,409,947 Tk. 1,182,785,716 148,209,229 56,460,964 1,387,455,909 This loan was sanctioned under the consortium arrangement of Janata Bank, Sonali Bank, Agrani Bank, Rupali Bank and United Commercial Bank Ltd. for the US FDA standard oral solid dosages facility of the company. Janata Bank was the lead bank to the consortium. This Loan is secured against : (i) First (registered mortgage) charge on paripassu basis with the participating banks on 1,112.82 decimals of land along with the building and other construction to be built thereon at Kathaldia and Aushpara of Gazipur; and (ii) First paripassu charge by way of hypothecation on all assets of the company both present and future. (iii) This Loan, carrying interest at 11% to 13% per annum, is repayable in half-yearly installments ending by 2012. (b) Interest and PAD This represents PAD and blocked interest of Janata Bank to be paid in quarterly installments over a period of 7(seven) years ending by 30.04.2011. NNU A L R EPORT 56 A 2 0 0 6 32. Liability for Gratuity & WPPF - Tk. 213,357,859 This consists of payable to the permanent employees at the time of separation from the company and Loan from Workers' Profit Participation/Welfare Funds as detailed below : (a) Gratuity Payable Opening Balance Provided during the year Paid during the year (b) Loan from Workers' Profit Participation/Welfare Funds 33. Deferred Tax Liability - Tk. 62,403,458 This is arrived at as follows: Opening Balance Deferred Tax (Income)/Expense for the year (Note : 48) 34. Short Term Borrowings - Tk. 1,302,816,980 This represents : (a) Janata Bank : Cash Credit-Pledge Cash Credit-Hypothecation PAD LIM (b) Citibank NA (c) Standard Chartered Bank (d) IPDC 2006 2005 83,598,054 15,280,229 98,878,283 (4,041,684) 94,836,599 118,521,260 213,357,859 73,138,962 16,030,813 89,169,775 (5,571,721) 83,598,054 106,455,496 190,053,550 45,220,901 17,182,557 62,403,458 95,285,021 (50,064,120) 45,220,901 Tk. Tk. Tk. 165,214,805 628,919,853 250,305,095 165,057,074 41,626,869 1,762 51,691,522 1,302,816,980 Tk. 152,305,681 582,349,567 - 218,200,735 40,853,947 18,301,262 50,000,000 1,062,011,192 35. Long Term Borrowing-Current Maturity - Tk. 712,122,930 This consists of as follows and is payable within next twelve months from the Balance Sheet date : Project Loan Interest & PAD Obligation under Finance Leases 36. Creditors and other Payables - Tk. 365,255,938 This consists of : For Goods & Services Provident Fund For Capital Expenditure Advance Against Export Others These are unsecured, and falling due within one year. 489,443,207 67,200,136 155,479,587 712,122,930 - 92,679,968 973,350,989 1,066,030,957 Tk. 146,825,002 112,692,882 69,581,555 15,294,367 20,862,132 365,255,938 Tk. 103,097,124 88,291,329 20,845,776 - 4,426,514 216,660,743 NNU A L R EPORT 57 A 2 0 0 6 37. Accrued Expenses - Tk. 117,936,620 This is falling due within one year and consists of as follows : For expenses - Unsecured Workers' Profit Participation/ Welfare Funds (current year's provision) 38. Income Tax Payable - Tk. 16,276,184 This is arrived at as follows : Opening Balance Tax provided in 2006 (Note - 48) (Excess)/Shortfall in tax provision of earlier years Tax paid (including advance tax) during the year 39. Net Sales Revenue - Tk. 3,702,317,159 This represents net sales and consists of as follows : Local Sales Export Sales-US$ 1,671,522 (in 2005 US$ 1,395,584 ) Sales represent : Tablet & Capsules Bottles & Tubes Basic Chemicals IV Fluids Pcs Pcs Kg. Bottles 40. Cost of Goods Sold - Tk.1,971,231,333 This is made-up as follows : Work-in-Process (Opening) Material Consumed Work-in-Process (Closing) TOTAL CONSUMPTION Factory Overhead COST OF PRODUCTION Finished Goods (Opening) Finished Goods available Finished Goods (Closing) Cost of Physician Sample 2006 2005 91,774,437 26,162,183 117,936,620 Tk. 77,591,501 24,268,333 101,859,834 54,431,402 43,413,478 (8,010,929) 89,833,951 43,239,560 43,217,283 2,951,743 89,408,586 (73,557,767) 16,276,184 Tk. (34,977,184) 54,431,402 3,587,218,117 115,099,042 3,702,317,159 Tk. 3,238,165,045 88,857,529 3,327,022,574 1,647,670,068 37,025,214 44,751 8,724,310 1,559,743,959 25,760,260 - 8,993,424 156,374,814 1,622,394,163 1,778,768,977 (178,713,956) 1,600,055,021 426,338,680 2,026,393,701 378,744,903 2,405,138,604 (398,102,771) 2,007,035,833 (35,804,500) 1,971,231,333 41 42 Tk. 124,370,616 1,537,380,433 1,661,751,049 (156,374,814) 1,505,376,235 338,892,462 1,844,268,697 321,243,903 2,165,512,600 (378,744,903) 1,786,767,697 (18,245,334) 1,768,522,363 NNU A L R EPORT 58 A 2 0 0 6 Item wise quantity and value of Finished Goods Stock are as follows : Item Stock as on 01-01-06 Tablet & Capsule Bottle & Tube Basic Chemicals IV Fluids Stock as on 31-12-06 Tablet & Capsule Bottle & Tube Basic Chemicals IV Fluids Unit Quantity Value Pcs Pcs Kg Bottles Pcs Pcs Kg Bottles 302,731,794 6,997,074 2,372 2,580,489 360,793,569 5,697,578 8,989 1,231,511 235,154,176 111,789,537 2,467,189 29,334,001 Tk. 378,744,903 252,207,009 101,783,366 20,880,681 23,231,715 Tk. 398,102,771 41. Material Consumed - Tk. 1,622,394,163 This is made-up as follows : Opening Stock Purchase Closing Stock 2006 2005 926,370,836 871,493,939 1,521,651,955 1,592,257,330 (825,628,628) (926,370,836) Tk. 1,622,394,163 1,537,380,433 42. Factory Overhead - Tk. 426,338,680 This consists of as follows : Salary & Allowances Repairs & Maintenance Insurance Premium Municipal Tax & Land Revenue Advertisement & Subscription Traveling & Conveyance Entertainment Research and Development Printing & Stationery Telephone & Postage Toll Charge/ (income) - Net Electricity, Gas & Water Other Expenses Depreciation 152,419,522 55,432,059 4,464,103 966,105 207,280 508,110 289,979 5,012,565 5,047,093 2,110,387 30,865,623 19,620,220 7,513,532 141,882,102 426,338,680 134,469,797 39,456,949 6,498,801 620,390 175,410 1,310,215 507,828 16,710,265 3,171,742 1,738,720 3,917,000 16,901,507 5,938,553 107,475,285 338,892,462 Tk. Salary and allowances include Company's Contribution to provident fund of Tk. 2,235,542 (in 2005 Tk. 2,169,838). In 2006, all the 625 factory employees received annual salary and allowances of Tk. 36,000 and above. (a) (b) (c) The value of imported stores and spares consumed is Tk. 16,056,036 (in 2005 Tk.5,136,590) which is 70% (42% in 2005) of total stores and spares consumed as included in repairs & maintenance. (d) Other expenses does not include any item exceeding 1% of total revenue. NNU A L R EPORT 59 A 2 0 0 6 43. Administrative Expenses Tk. 150,285,977 This consists of as follows : Salary & Allowances Rent Expenses Repairs & Maintenance Donation & Subscription Traveling & Conveyance Entertainment Printing & Stationery Auditors' Remuneration Telephone & Postage Electricity, Gas & Water Legal & Consultancy Fee AGM and Company Secretarial Expenses Other Expenses Depreciation 2006 2005 71,303,223 5,067,449 8,419,528 1,288,074 9,916,494 2,376,972 1,334,676 306,270 3,819,394 2,477,526 2,474,773 27,937,966 6,772,337 6,791,295 150,285,977 60,096,658 5,062,150 8,141,534 1,522,742 7,074,211 1,805,972 1,099,500 300,000 3,273,840 3,552,365 3,350,442 13,759,040 1,678,042 8,290,039 119,006,535 Tk. (a) Salary and allowances include provident fund contribution of Tk. 1,835,719 (in 2005Tk. 1,222,163). (b) In 2006, all the 136 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 2006. 44. Selling, Marketing and Distribution Expenses - Tk. 834,276,355 This consists of as follows : Salary & Allowances Rent Expenses Repairs & Maintenance Traveling & Conveyance Entertainment Printing & Stationery Telephone & Postage Electricity, Gas & Water Market Research & New Products Training & Conference Sample Expenses Promotional Expenses Literature/News Letter Freight, Insurance etc-Export Delivery Commission Depreciation Other Expenses 242,771,658 13,323,650 14,059,422 132,569,372 876,932 11,927,246 7,612,156 3,077,875 38,372,541 24,760,303 55,899,980 91,107,283 47,851,630 15,903,140 107,908,247 12,697,625 13,557,295 834,276,355 Tk. 229,720,919 14,174,590 12,531,386 112,894,909 1,769,800 9,179,084 8,177,292 3,012,474 31,002,585 18,679,751 34,687,667 67,568,237 43,429,760 7,922,655 99,483,680 11,893,102 9,014,067 715,141,958 (a) Salary and allowances include provident fund contribution of Tk. 6,551,980 (in 2005 Tk. 5,357,062). (b) In 2006, all the 1,547 employees relates to selling and distribution received annual salary and allowances of Tk. 36,000 and above. (c) Delivery commission represents 3% of sales other than export and API sales which has been paid to the I & I Services Ltd., the local distributor of the company and a related party. NNU A L R EPORT 60 A 2 0 0 6 45. Other Income - Tk. 56,201,142 This is arrived at as follows : Interest Income Cash Dividend received Exchange gain on retention quota (F.C.) accounts Gain on Sale of shares in Bextex Ltd. Liability against customs Debenture Written off (Loss)/profit on sale of Fixed Assets 46. Finance Cost - Tk. 253,318,784 This is arrived at as follows : Interest on Cash Credit and others Interest on loan from PF and WPP & Welfare Fund 2006 2005 43,748,781 1,900,336 54,441 10,121,382 - 376,202 56,201,142 2,873,370 1,520,269 1,169,216 - 1,758,387 (88,633) 7,232,609 229,719,450 23,599,334 253,318,784 202,541,434 19,407,890 221,949,324 Tk. Tk. 47. Contribution To Workers' Profit Participation / Welfare Funds -Tk. 26,162,183 This represents 5% of net profit before tax after charging the contribution as per provisions of the Bangladesh Labour Law, 2006 and is payable to workers as defined in the said Act. 48. Income Tax (Income)/Expenses - Tk. 52,585,106 This consists of as follows : (i) Current Tax (ii) Deferred Tax (Income)/Expense Current Tax consists of as Follows : Tax for the year under review Short/(Excess) provision of Tax relating to earlier years 49. Earnings Per Share (EPS) : (a) Earnings attributable to the Ordinary Shareholders ( Net profit after Tax) (b) Weighted average number of Ordinary Shares outstanding during the year Note 19.5 & 33 35,402,549 17,182,557 52,585,106 43,413,478 (8,010,929) 35,402,549 Tk. Tk. 46,169,026 (50,064,120) (3,895,094) 43,217,283 2,951,743 46,169,026 Tk. 470,658,563 489,261,764 100,737,415 76,878,446 Earnings Per Share (EPS) Tk. 4.67 6.36 50. Tax-Holiday Reserve - Tk.125,369,152 This represents 40% of net profit of the Tax-Holiday units. NNU A L R EPORT 61 A 2 0 0 6 51. Related Party Transactions : The Company carried out a number of transactions with related parties in the normal course of business and on arms length basis. The nature of transactions and their total value is shown below : Name of Related Parties Nature of Transactions (a) I & I Services Ltd. (b) I & I Services Ltd. (c) Bextex Ltd. (a) Local Delivery (b) Delivery Commission (c) Dividend Income Value of Transaction in 2006 4,076,663,567 107,908,247 1,900,336 Balance at year end 364,005,726 - - 52. Particulars of Disposal of Property, Plant and Equipment The following assets were disposed off during the year ended 31-12-06 : PARTICULARS OF ASSETS COST DEP.UPTO 31-12-05 W.D.V. AS ON 31-12-05 SALES PRICE PROFIT/ (LOSS) NAME OF PARTIES MODE OF DISPOSAL Transport & Vehicle Transport & Vehicle Transport & Vehicle Furniture Furniture Total Tk. 13,676 41,770 9,000 163,500 8,000 235,946 2,735 30,820 4,392 117,587 6,147 161,681 10,941 10,950 4,608 45,913 1,853 74,265 13,676 89,925 310,666 34,000 2,200 Asia Pacifiq 2,735 78,975 Mr. Yousuf Ali 306,058 Mr. Tareq Rana Kazi Enterprise (11,913) 347 Mr. Mahabub Momen 450,467 376,202 Tender Tender Tender Tender Tender 53. Payment/Perquisites to Directors and Officers : (a) The aggregate amounts paid to/ provided for the officers of the company as defined in the Securities and Exchange Rules 1987 are disclosed below : 2006 2005 Managerial Remuneration 23,569,740 1,964,145 Gratuity 2,181,974 Company's Contribution to Provident Fund Bonus 3,985,461 Perquisites : Housing Transport Medical Telephone Electricity, Gas & Water Total 9,565,106 8,303,045 3,985,461 3,605,513 2,486,927 59,647,372 Tk. 20,240,480 1,668,706 1,779,048 2,995,580 6,881,638 5,977,451 2,165,891 2,501,781 1,746,468 45,957,043 (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. NNU A L R EPORT 62 A 2 0 0 6 54. Production Capacity, Actual Production in 2006 : Production Capacity Actual Production Excess/(Shortfall) Unit 2006 2005 2006 2005 2006 2005 Tablet & Capsule (in million pcs) Bottle, Tube & Can (in million pcs) Bottle-IV (in million pcs) 1,566 1,336 2,124 1,789 558 453 39 26 41 29 2 14 14 10 15 (4) 3 1 55. Capital Expenditure Commitment There was no capital expenditure contracted but not incurred or provided for at 31 December 2006. 56. Finance Lease Commitment At 31December, 2006, the company had annual commitment under finance leases as set out below : Leases expire within 1 year Leases expire within 2-5 years (inclusive) Leases expire after five years 57. Claim not Acknowledged as Debt 81,696,779 50,513,105 - Tk. 132,209,884 There was no claim against the company not acknowledged as debt as on 31-12-06. 58. Un-availed Credit Facilities The company has 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 31.12.2006. 59. Payments Made in Foreign Currency : Foreign Currency (Equivalent US$) Taka Import of Machinery & Equipments Import of Raw & Packing material and Spares 10,314,332 15,996,613 723,844,163 1,110,583,061 No other expenses including royalty, technical expert and professional advisory fee, interest, etc. was incurred or paid in foreign currencies except as stated above. 60. Dividend Paid to the Non-resident Shareholders in 2006: (i) Dividend for 2005 was declared on 22nd June, 2006 and therefore, dividend for 2005 was paid in 2006. (ii) Dividend of Tk. 26,250,510 relating to the year 2005 was paid to 8 non-resident shareholders against 20,588,635 shares held by them. (iii) No dividend was remitted in foreign currency but paid in local currency to their local custodian banks. NNU A L R EPORT 63 A 2 0 0 6 61. Foreign Exchange Earned : Export Sales of US$ 1,671,522 (in 2005 US$ 1,395,584). (a) (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 to selling agent : No commission was incurred or paid to any sales agent nor any brokerage or discount other than conventional trade discount was incurred or paid against sales. 63. Contingent Liability: The company has a contingent liability to the extent of Tk. 1,611,120,096 (Yen 2,693,280,000) for third party corporate gurantee issued to Bank of Tokyo, Mitsubishi, Marubeni Corporation, Tokyo and Marubeni Trust Banking Corporation in favour of Bextex Limited, a member of Beximco Group. 64. Post Closing Events Following events have occurred since the Balance Sheet date: The company has fully paid its obligation to Shamil Bank and LIM liabilities of Janata Bank. (a) (b) The directors recommended 5% cash dividend and 10% Stock dividend (Bonus Share). The dividend proposal is subject to shareholders' approval at the forthcoming annual general meeting. (c) Except the fact stated above, no circumstances have arisen since the balance sheet date which would require adjustment to, or disclosure in, the financial statements or notes thereto. O. K. Chowdhury Director M. A. Qasem Director Ali Nawaz Chief Finance Officer Dhaka 28 June, 2007 NNU A L R EPORT 64 A 2 0 0 6 Operational Headquarter 19 Dhanmondi R/A, Road No. 7 Dhaka 1205, Bangladesh Phone : +880-2-8619151 (5 lines), +880-2-8619091 (5 lines) Fax : +880-2-8613888 Email : info@bpl.net Website : www.beximcopharma.com 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 Factory Tongi Unit 126 Kathaldia, Tongi, Gazipur Kaliakoir Unit Plot No. 1070/1083, Mouchak, Kaliakoir, Gazipur Legal Advisor Huq and Company 47/1 Purana Paltan, Dhaka-1000 Auditors 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. 109 Gulshan Avenue Dhaka-1212 Concept, Text and Design : Beximco Pharma Marketing Team Printed by : Shuktara Printers Ltd. 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