Boston Properties
Annual Report 2007

Plain-text annual report

Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact, namely: our employees, our customers, our business associates, our fellow citizens and our shareholders. Life's all about staying healthy and enjoying the good things in life! However, illness is inevitable at all stages of our life. This is where we find the intimate relationship with our global citizens when they take our medicines and find the smiles back in their life. 7 0 0 2 T R O P E R L A U N N A 2 Contents Board and Management Brief Company Profile Brief company history: Chronology Highlights of 2007 Year 2007: News published in London Stock Exchange on company's business performances Chairman’s Statement Thirty-First Annual General Meeting Value Added Statement Notice of the Thirty-Second Annual General Meeting Report of the Directors to the Shareholders Corporate Governance Compliance Report Key Operating and Financial Data Auditors’ Report to the Shareholders Balance Sheet Profit and Loss Account Statement of Changes in Equity Cash Flow Statement Notes to the Accounts Proxy Form 5 6 7 8 9 10 17 18 19 20 24 25 26 27 28 29 30 31 7 0 0 2 T R O P E R L A U N N 3 A Our passionate effort to achieve excellence in all spheres of our operations and our keen endeavor to incorporate innovative new technologies into our manufacturing practice puts us ahead of our contemporaries. 7 0 0 2 T R O P E R L A U N N A 4 The Board of Directors A S F Rahman Salman F Rahman Iqbal Ahmed Mohammad Abul Qasem Osman Kaiser Chowdhury Abu Bakar Siddiqur Rahman Dr. Farida Huq Barrister Faheemul Huq Advocate Ahsanul Karim Dr. Abdul Alim Khan Company Secretary Md. Asad Ullah, FCS Chairman Vice Chairman Director Director Director Director Director Director Director Independent Director The Executive Committee Osman Kaiser Chowdhury Nazmul Hassan Ali Nawaz Afsar Uddin Ahmed Member of the Board of Directors Chief Executive Officer Chief Financial Officer Director, Commercial The Management Committee Osman Kaiser Chowdhury Nazmul Hassan Ali Nawaz Afsar Uddin Ahmed Rabbur Reza Lutfur Rahman Zakaria Seraj Chowdhury Mohd. Tahir Siddique A R M Zahidur Rahman Jamal Ahmed Choudhury Member of the Board of Directors Chief Executive Officer Chief Financial Officer Director, Commercial Director, Marketing Director, Works Director, Sales Executive Director, Quality Executive Director, Production Senior Manager, Accounts & Finance Board and Management 7 0 0 2 T R O P E R L A U N N 5 A 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. Brief Company Profile 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: Australia, Bhutan, Cambodia, Chile, Ghana, Hong Kong, Indonesia, Jordan, Kenya, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Vietnam and Yemen Authorized Capital (Taka): 2,000 million Paid-up Capital (Taka): 1,145.07 million Number of Shareholders: Around 54,000 Stock Exchange Listings: Dhaka, Chittagong and AIM of London Stock Exchanges Number of Employees: 2,384 7 0 0 2 T R O P E R L A U N N A 6 Brief company history: Chronology 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) 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 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 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) 2006 : New USFDA standard Oral Solid Dosage (OSD) Plant Commissioned Successfully relocated/outsourced penicillin and cephalosporin manufacturing facilities as per cGMP guidelines Introduced generic oseltamivir in Bangladesh Launched CFC free ozone benign HFA inhalers as the first company in Bangladesh 7 0 0 2 T R O P E R L A U N N A 7 Highlights of 2007 Achieved Net Sales of Tk. 3,597.0 million and Pre-tax Profit of Tk. 399.7 million as compared to Tk. 3,702.3 million and Tk. 523.2 million respectively, of prior period. Overall sales declined by 2.84%. However, sales of the formulation products increased by 2.55% and export by 6.65% Entered into nine new international markets in Asia, Middle East, Pacific Islands, Africa and Central America. Registered 107 new products in different overseas markets. Therapeutic Goods Administration (TGA), Australia and Joint Inspection Committee of the Ministry of Health of Gulf Cooperation Council (GCC) countries completed audit of the new Oral Solid Dosage (OSD) and Metered Dose Inhaler (MDI) & Spray manufacturing facilities. Signed a Long Term Arrangement with the Global Supply Division of UNICEF (Denmark) to supply 60,000 units CFC free metered dose inhaler product over a two year contract period. 7 0 0 2 T R O P E R L A U N N A 8 As promised to our shareholders, we are taking our company to the global market fast. In the year 2007, we have entered more new markets to strengthen and shape our focus in global market. News Flash 2007 on overseas business expansion i j t o F i t e c h n o l o g y R e l e a s e d 0 7 : 3 2 0 9 - J a n - 0 8 R o c h e a g r e e s H I V d r u g t r a n s f e r s w i t h B e x i m c o P h a r m a R e l e a s e d 1 0 : 1 6 2 5 - O c t - 0 7 B e x i m c o P h a r m a C o m m e n c e s E x p o r t s R e l e a s e d 0 7 : 0 1 2 8 - S e p - 0 7 B e x i m c o P h a r m a C o m m e n c e s E x p o r t s J o r d a n R e l e a s e d 0 8 : 3 3 1 0 - S e p - 0 7 B e x i m c o P h a r m a C o m m e n c e s i p p i n e s E x p o r t s t o P h i t o l Released 14:22 30-Aug-07 Beximco Pharma Commences Exports to Hong Kong Released 13:36 29-May-07 Beximco Pharma Commences Exports to Papua New Guinea Released 12:13 30-Apr-07 Beximco Signs Agreement with Gulf Generics to Export Medicine to Middle Released 07:00 02-Apr-07 Beximco Pharmaceuticals Expands African Presence with Commencement of Exports to Ghana Released 07:00 22-Mar-07 Beximco Pharmaceuticals Commences Exports to Central America East For detailed news, please logon to http://www.beximco-pharma.com/investor/News_Announcements.htm 7 0 0 2 T R O P E R L A U N N 9 A Chairman’s Statement Dear Shareholders On behalf of the Board of Directors and on my own behalf I welcome you all to the 32nd Annual General Meeting of your company, Beximco Pharmaceuticals Limited. It is indeed my pleasure to present to you the Annual Report and the Audited Financial Statements of the company for the year ended December 31, 2007. REVIEW OF PERFORMANCE We passed through a very difficult year in 2007. The company achieved a sales revenue of Tk. 3,597.0 million and pre-tax profit of Tk. 399.7 million, as compared to Tk. 3702.3 and Tk. 523.2 million respectively of 2006. While any pretext is neither enough nor desirable to justify this below expected achievement, we however feel that it is our responsibility to keep you posted of the real situation. For long, our working capital facilities provided by banks were lagging behind the pace of the business growth that we achieved over the past years. The biggest of the constraints was the letter of credit limit. Our long initiative to extend that limit was hindered by a number of factors including the regulatory restrictions of the bank itself, which we successfully negotiated with the bank and came close to a solution in early 2007. But due to changes in macro-political business environment of the country the negotiated solutions could not come to its logical conclusion. To worsen the situation, we had to payoff our PAD and LIM- two short term credit facilities that we hoped for renewal/extension. All these factors have seriously affected our supply chain and we had to de-prioritize and in certain cases, suspend production and sales of certain products as a strategy to reap the most out of the situation. Consequent to this, sales of our infusion products and Active Pharmaceutical ingredients (APIs) were down by Tk. 114.1 million and Tk. 78.1 million respectively. These have pulled down our overall sales by 2.84%. The least expected performance in sales however should not overshadow our achievement in certain key areas. I would like to inform you that despite the difficult operating situation, we were able to achieve growth in our core formulation business and export. Sales of our formulation products have increased to Tk. 3,216 million as against Tk. 3,136 million of prior year. We continued to maintain our key market focus, strengthened customer relationship and persuaded appropriate marketing and promotional strategies. As a result we have successfully retained our market position despite temporary problem at supply end. 7 0 0 2 T R O P E R L A U N N A 10 We also tried to maintain performance in the overseas markets. Export sales during the period increased by 6.7% despite product shortages. In 2007, we have entered into nine new international markets in Asia, Middle East, Pacific Islands, Africa and Central America and have registered 107 products in different markets. Besides, BPL signed a Long Term Arrangement with the Global Supply Division of UNICEF (Denmark) to supply 60,000 units CFC free metered dose inhaler product over a two year contract period. During the first quarter of 2008, we have entered into 3 new international markets- namely, Afghanistan, kiribati and Solomon Islands. There is a rising trend of prices of materials in the international market. This along with the lower sales has pulled down the achievement of our profit target. We have however, effectively persuaded for containment of operating expenses to minimize the effect of fall in gross profit. The bank related issues have been successfully resolved by the first quarter of 2008. The letter of Credit limit and the working capital facilities have been increased. DIVIDEND We have maintained our dividend rate despite lower earnings and sales in 2007. Board of directors has recommended 10% stock and 5% cash dividend -same as in prior year to ensure better yield on the investment of our valued shareholders. PROJECTS AND EXPANSION PROGRAMS I am pleased to inform that GMP (Good Manufacturing Practices) audit of our new Oral Solid Dosage (OSD) facility has been carried out by a number of Drug Regulatory Authorities including Gulf Co-operation Council (GCC) and TGA (Therapeutic Goods Administration), Australia. Additionally, audit of our existing Metered Dose inhaler (MDI) and Spray manufacturing facilities have also been carried out during the period under review. We are hopeful of positive outcome of theses audits. During the year, our project to build facility to manufacture Small Volume Parenterals (SVP), Opthalmic and Nebulizer Solutions progressed as scheduled. Hopefully as planned, we will be able to commence marketing of these products by first quarter of 2009. We are now expediting the process of adding more lines to our existing Oral Solid Dosage Facility. As you are aware, BPL is one among the few pharmaceuticals companies in the world that are currently producing technology driven CFC-free HFA MDIs. Based on the very encouraging responses that we are getting for our MDI products particularly for our Non-CFC MDIs from Central and Latin America and Middle East Countries, we have undertaken a project to add another 10 million units capacity plant beside our existing MDI facility. The project is progressing as planned. 7 0 0 2 T R O P E R L A U N N 11 A FUTURE Pharmaceutical sector of Bangladesh like all other industries is going to face new challenges. Rising prices of materials in the international market and higher domestic inflation is going to be a big issue. Besides, competition in the local pharmaceutical market is expected to intensify further. We are mindful of the challenges and confident about our capabilities to face them. Expected GMP certification of our new OSD facilities by recognized drug regulatory authorities will give a new momentum to our existing operation and will be inline with our target to achieve export led growth in medium to long term. Recognizing today's unmet needs of healthcare sector - our marketing strategy will continue to focus on value added but cost effective medicines. Our future strategy will continue to concentrate on retaining and expanding the domestic market share while capitalizing on the enormous export opportunities. CONTRIBUTION TO NATIONAL EXCHEQUER During 2007, BPL contributed Tk. 772.7 million in the form of import related taxes, VAT and Income tax to the national exchequer. CONDOLENCE In 2007 we have lost our long term colleague in the Board - a highly experienced and knowledgeable personality Mr. Choudhury Hafizur Rahman, who passed away on September 17, 2007. On behalf of the board I express my deep condolence at the sad and untimely demise of Mr. Rahman and pray for the salvation of his departed soul. We with great appreciation recall the valuable contribution he has made during his long association with this company in various capacities. ACKNOWLEDGEMENT I would like to express my sincere thanks to all BPL employees for their loyalty, commitment, professionalism and hard work during the difficult time the company has passed through. Without their skills and dedication BPL would not have been able to achieve today's position. I extend my heartfelt thanks to our medical community, customers, bankers, suppliers, government agencies, regulatory bodies and everyone BPL interacted with in conducting its business. I would also like to extend sincere gratitude to our valued shareholders and stakeholders for extending at all times their invaluable support and co- operation. Once again, on behalf of the Board of Directors and on my behalf, I convey my heartiest thanks to you all and look forward to your continued support and co-operation in the future as well. 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shareholders of Beximco Pharmaceuticals Limited was held on September 02, 2007. Around 7,000 shareholders attended the meeting. Mr. Osman Kaiser Chowdhury, Director of Beximco Pharmaceuticals Limited 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 2006. Strategies and future vision of the company were also briefed at the AGM. The meeting among other agenda approved 5% cash and 10% stock dividend for the year 2006. 7 0 0 2 T R O P E R L A U N N A 22 7 0 0 2 T R O P E R L A U N N A 17 Value Added Statement For the year ended 31 December 2007 2007 Figures in Taka 2006 Tk. % Tk. % 4,202,886,208 (2,136,359,277) 4,364,863,360 (2,101,277,696) 2,066,526,931 100 2,263,585,664 100 772,726,001 528,614,856 254,742,392 171,760,565 338,683,117 38 26 12 8 16 885,580,709 492,656,586 253,318,784 156,145,968 475,883,617 39 22 11 7 21 2,066,526,931 100 2,263,585,664 100 Turnover & Other Income Bought-in-Materials & Services Value Added APPILCATIONS Duties & Taxes to Govt. Exchequer Salaries and Benifits to Employees Interest to Lenders Dividend to Shareholders Earnings Retained by the Company 38% 26% 16% 39% 12% 8% 2007 22% 21% 11% 7% 2006 Duties & Taxes to Govt. Exchequer Salaries and Benifits to Employees Interest to Lenders Dividend to Shareholders Earnings Retained by the Company 7 0 0 2 T R O P E R L A U N N A 18 BEXIMCO PHARMACEUTICALS LIMITED 17, Dhanmondi R/A, Road No. 2, Dhaka-1205 Notice of the Thirty-Second Annual General Meeting Notice is hereby given that the THIRTY-SECOND ANNUAL GENERAL MEETING of the Shareholders of Beximco Pharmaceuticals Limited will be held on Thursday, the 21ST August, 2008 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, 2007 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 2008 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: 6th May, 2008 NOTES : (1) The Record Date shall be on 2nd July, 2008. 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). 7 0 0 2 T R O P E R L A U N N A 22 7 0 0 2 T R O P E R L A U N N 19 A Report of the Directors to the Shareholders For the year ended 31 December 2007 The Directors are pleased to present their report to the shareholders together with the audited accounts of the Company for the year ended 31st December, 2007 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 2007 2006 353,068 2,883,629 3,236,697 (78,155) (171,761) 30,634 (219,282) 3,017,415 470,659 2,549,402 3,020,061 (125,369) (156,146) 145,083 (136,432) 2,883,629 Dividend The Board of Directors has recommended 5% cash and 10% stock dividend for approval of the shareholders for the year ended 31 December, 2007. Directors The Board regrets to report that Mr. Chowdhury Hafizur Rahman FCMA, Director of the company, expired on 17th September 2007 ( Inna lillahe wa inna illaihe razeun). The Board wishes to place on record its appreciation for the contribution made by Mr. Chowdhury during his tenure with the company. Mr. Salman F Rahman, Director of the company retires by rotation as per Articles 126 and 127 of the Articles of Association of the Company and being eligible offers himself for re-election. Dr. Farida Huq, 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 herself for re-election as representative of General Shareholders. Barrister Faheemul Huq, Director of the Company also 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 being the nominee of Beximco Holdings Limited. 7 0 0 2 T R O P E R L A U N N A 20 Board Audit Committee The Company has an audit committee, which met twice in 2007, to consider its Annual Financial Statements for the year ended 31 December 2006 and Half-Yearly Report for the half-year to 30 June 2007. The Committee comprises 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, 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 Thirty-first Annual General Meeting of the Company has carried out the audit for the year ended 31 December 2007. 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 2008. Board Meetings and Attendance During the year 17 (Seventeen) 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 Barrister Faheemul Huq Advocate Ahsanul Karim Meetings attended 4 2 12 16 17 17 17 15 14 14 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. 7 0 0 2 T R O P E R L A U N N 21 A 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) 7 0 0 2 T R O P E R L A U N N A 22 13,002,617 6,885,475 1,818,445 1,330,943 578,263 3,422 4,228 4 Nil Nil 13,002,617 30,993,325 Key Operating and Financial Data The summarized key operating and financial data of five 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 6 May, 2008 7 0 0 2 T R O P E R L A U N N A 22 7 0 0 2 T R O P E R L A U N N 23 A 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) 7 0 0 2 T R O P E R L A U N N A 24 Key Operating and Financial Data 2007 2006 2005 2004 2003 Amounts in thousand Taka 2,000,000 1,145,070 3,597,025 122,752 1,629,515 399,678 353,068 10,516,030 8,250,940 15% 72 3.08 58.9 19.12 53,892 52,953 60 879 2,384 1,910 474 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 4.11 53.7 13.06 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 57.8 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 92.1 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 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 Net Sales Revenue 3 2 0 , 7 2 3 , 3 1 0 7 , 2 0 4 , 2 7 1 3 , 2 0 7 , 3 5 2 0 , 7 9 5 , 3 0 3 8 , 3 8 1 , 2 a k a T d n a s u o h t n i t n u o m A 2003 2004 2005 2006 2007 7 0 0 2 T R O P E R L A U N N 25 A 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, 2007 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 International Standards on Auditing (ISA). 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 International Financial Reporting Standards (IFRSs), including International Accounting Standards (IASs), give a true and fair view of the state of the company's affairs as of December 31, 2007 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 6 May, 2008 7 0 0 2 T R O P E R L A U N N A 26 M. J. ABEDIN & CO. Chartered Accountants BEXIMCO PHARMACEUTICALS LIMITED Balance Sheet Notes 2007 2006 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 on Merger Tax-Holiday Reserve Retained Earnings Non-Current Liabilities Long Term Borrowing-Net off Current Maturity (Secured) Liability for Gratuity & WPPF Deferred Tax Liability Current Liabilities and Provisions Short Term Borrowings Long Term Borrowing-Current Maturity Creditors and Other Payables Accrued Expenses Dividend Payable Income Tax Payable 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY Tk. The Notes are integral part of the Financial Statements. 9,029,643,482 8,992,942,392 36,701,090 2,923,775,458 1,652,480,291 499,680,792 685,915,465 85,698,910 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 Tk. 11,953,418,940 11,912,512,487 8,250,939,647 1,145,070,430 1,489,750,000 1,689,636,958 294,950,950 442,354,953 3,189,176,356 2,074,506,357 1,776,449,778 246,704,610 51,351,969 1,627,972,936 907,582,327 343,604,498 271,814,118 60,052,739 3,285,324 41,633,930 11,953,418,940 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 Approved and authorised for issue by the board of directors on 6 May, 2008 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 6 May, 2008 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants 7 0 0 2 T R O P E R L A U N N 27 A BEXIMCO PHARMACEUTICALS LIMITED Profit and Loss Account For the year ended 31 December 2007 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 Profit Before Contribution to WPPF Contribution to Workers' Profit Participation/ Welfare Funds Profit Before Tax Income Tax Expense Current Tax Deferred Tax Income/(Expense) Profit After Tax Transferred to Statement of Changes in Equity Earnings Per Share (of Tk. 10 /- each) (Adjusted EPS of 2006) Number of shares used to compute EPS Notes 36 37 40 41 42 43 44 19.5, & 45 Tk. Tk. 46 2007 2006 3,597,024,812 (1,967,509,975) 1,629,514,837 3,702,317,159 (1,971,231,333) 1,731,085,826 (974,736,690) (145,544,701) (829,191,989) 654,778,147 19,625,795 (254,742,392) 419,661,550 (19,983,883) 399,677,667 (46,609,789) (57,661,278) 11,051,489 353,067,878 3.08 114,507,043 (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 4.11 114,507,043 The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 6 May, 2008 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 6 May, 2008 7 0 0 2 T R O P E R L A U N N A 28 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants BEXIMCO PHARMACEUTICALS LIMITED Statement of Changes in Equity For the year ended 31 December 2007 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Tax Holiday Reserve Capital Reserve on Merger Retained Earnings Total Opening Balance on 01.01.2007 Profit after tax for 2007 Tax Holiday Reserve provided for 2007 (Note-47) Tax Holiday Reserve no longer required Cash Dividend of Previous Year (2006) Bonus Share of Previous Year (2006) 1,040,973,120 1,489,750,000 - - 1,689,636,958 - 104,097,310 - 294,950,950 - 394,834,828 - 78,154,622 (30,634,497) 3,039,774,569 7,949,920,425 353,067,878 - - (52,048,656) - 353,067,878 (78,154,622) 30,634,497 (52,048,656) (104,097,310) At the end of year 2007 Tk. 1,145,070,430 1,489,750,000 1,689,636,958 442,354,953 294,950,950 3,189,176,356 8,250,939,647 Total Number of shares Shareholders' Equity per share 114,507,043 72.06 Tk. The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 6 May, 2008 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 6 May, 2008 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants 7 0 0 2 T R O P E R L A U N N 29 A BEXIMCO PHARMACEUTICALS LIMITED Cash Flow Statement For the year ended 31 December 2007 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 ( Note : 48) Investment in Shares Sales of Shares in Bextex Ltd. Disposal of Property, Plant and Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities : Net Increase/(Decrease) in Long Term Borrowings Issue of Shares against GDR Net Excess of Issue Price over Face Value of GDRs Net (Decrease)/Increase in Short Term Borrowings Dividend Paid Net cash Generated from Financing Activities (Decrease)/Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year 2007 2006 3,542,690,128 (2,947,335,836) 595,354,292 4,097,579,564 (2,714,775,105) 1,382,804,459 (222,581,780) (32,303,532) 340,468,980 (229,719,450) (73,557,767) 1,079,527,242 (460,904,187) - 9,730,325 1,928,598 (449,245,264) (1,083,478,873) (10,000,000) 15,294,792 450,467 (1,077,733,614) 70,386,381 - - (395,234,653) (61,775,479) (386,623,751) (495,400,035) 581,098,945 85,698,910 (760,582,217) 81,757,500 720,461,653 240,805,788 (131,700,637) 150,742,087 152,535,715 428,563,230 581,098,945 Tk. The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 6 May, 2008 and signed for and on behalf of the Board : O. K. Chowdhury Director M. A. Qasem Director Dhaka 6 May, 2008 7 0 0 2 T R O P E R L A U N N A 30 Ali Nawaz Chief Finance Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants BEXIMCO PHARMACEUTICALS LIMITED Notes to the Accounts For the year ended 31 December 2007 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 in 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 at Tongi, 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 International Financial Reporting Standards (IFRSs) The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRSs), including International Accounting Standards (IASs). 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 IAS 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 6 May, 2008. 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. 7 0 0 2 T R O P E R L A U N N 31 A 9. Comparative Information and Rearrangement Thereof Comparative information has been disclosed in respect of the year 2006 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 2006 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 the IFRSs including IASs require 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 disclosure, 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 IAS 8 : Accounting Policies, Changes in Accounting Estimates and Errors. 11. Accrued Expenses and Other Payables Liabilities for the goods and services received have 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 of 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 IAS 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 observed till to date. 15. Segment Reporting No segment reporting is applicable for the company as required by IAS 14 : Segment Reporting as its revenue from external customers and from transactions with internal customers (other segments) is not 10% or more of total revenue of all segments. 16. Cash Flow Statement The Cash Flow Statement has been prepared in accordance with the requirements of IAS 7: Cash Flow Statements. The cash generated 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 IAS 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 IAS 24 : Related party Disclosures has been disclosed in a separate note to the accounts. 18. Events After the Balance Sheet Date In compliance with the requirements of IAS 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. 7 0 0 2 T R O P E R L A U N N A 32 19. Accounting Policies in respect of Material 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 IAS 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 IAS 16: Property, Plant and Equipment. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the 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 IAS 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 IAS 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% 19.3 Inventories Inventories are carried at the lower of cost and net realizable value as prescribed by IAS 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. 7 0 0 2 T R O P E R L A U N N 33 A 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 IAS 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 qualifies 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 IAS 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 IAS 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 IAS 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 IAS 19 : Employee Benefits, such valuation in not likely to yield a result significantly different from the current provision. (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 Labor Law, 2006 and is payable to workers as defined in the said scheme. (d) Insurance Scheme Employees of the company are covered under group life insurance scheme. 7 0 0 2 T R O P E R L A U N N A 34 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 IAS 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 Current Year (2007) The Bonus Shares issued during the year 2007 were treated as if they always had been in issue. Hence, in computing the Basic EPS of 2007, the total number of shares including the said bonus shares has been considered as the Weighted Average number of Shares Outstanding during the year 2007. Earlier Year (2006) The number of shares outstanding before the bonus issue has been adjusted for the proportionate change in the number of shares outstanding as if the bonus issue had occurred at the beginning of the earliest period reported (2006), and accordingly, in calculating the adjusted EPS of 2006, the total number of shares including the subsequent bonus issue in 2007 has been considered as the Weighted Average number of Shares Outstanding during the year 2006. The basis of computation of number of shares as states above is in line with the provisions of IAS 33 “ Earning Per Share “. The logic behind this basis, as stated in the said IAS is, that the bonus Shares are issued to the existing shareholders without any consideration, and therefore, the number of shares outstanding is increased without an increase in resources generating new earnings. 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 IAS 21 : The Effects of Changes in Foreign Exchange Rates. The rates of relevant foreign exchanges at year end are : 1 US Dollar $ = Tk. 2007 69.20 2006 70.40 7 0 0 2 T R O P E R L A U N N 35 A 20. Property, Plant and Equipment - Tk. 8,992,942,392 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Total Cost At 31 December, 2006 Additions during the year Transferred & Capitalized Disposal during the year 1,234,446,169 1,625,230 869,656,175 65,305,077 - 112,346,818 - - 1,417,339,058 11,511,610 25,060,308 (5,442,737) 61,816,064 5,682,007 125,400,266 1,523,150 - - (2,377,958) (547,000) 216,468,132 3,925,125,864 98,250,756 12,603,682 137,407,126 - (8,848,833) (481,138) Cost at 31 December, 2007 1,236,071,399 1,047,308,070 1,448,468,239 65,120,113 126,376,416 228,590,676 4,151,934,913 Accumulated Depreciation At 31 December, 2006 Depreciation during the year Adjustment for assets disposed off - 363,411,626 - 44,944,230 - - 780,778,966 82,853,156 (5,051,695) 28,064,348 3,812,531 (1,093,350) 70,200,124 11,297,597 (403,607) 130,248,314 1,372,703,378 157,375,803 14,468,289 (6,991,442) (442,790) Accumulated Depreciation at 31 December, 2007 - 408,355,856 858,580,427 30,783,529 81,094,114 144,273,813 1,523,087,739 Net Book Value 31 December, 2007 Tk. 1,236,071,399 638,952,214 589,887,812 34,336,584 45,282,302 84,316,863 2,628,847,174 Capital Work in Progress Carrying Value as on 31 December, 2007 Tk. 6,364,095,218 Tk. 8,992,942,392 Assets include lease hold assets of Tk 507,535,669 at cost and Tk. 335,007,513 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 2007 2006 5,960,713,895 540,788,449 - 6,501,502,344 (137,407,126) (112,346,818) (25,060,308) - - Tk. 6,364,095,218 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) 5,960,713,895 Capital Work in Progress includes an aggregate amount of Tk. 5,391,751,875 being investment in property, plant and equipment of our US FDA standard Oral Solid Dosage Plant. The project is now under certification by different international regulatory authorities. 7 0 0 2 T R O P E R L A U N N A 36 21. Investment in Shares - Tk. 36,701,090 This Consists of : a) 3,268,991 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) 2007 25,701,090 10,000,000 1,000,000 2006 30,982,840 10,000,000 1,000,000 Tk. 36,701,090 41,982,840 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 30 December, 2007 was Tk.18.90 ( on 28-12-06 Tk. 22.40) in the Dhaka Stock Exchange Ltd. and Tk.19.00 (on 28-12-06 Tk. 22.40) in the Chittagong Stock Exchange Ltd. 22. Inventories - Tk. 1,652,480,291 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 331,438,214 142,743,433 607,643,749 188,571,634 2,673,958 49,039,537 18,397,570 178,683,684 2,162,958 131,125,554 Tk. 1,652,480,291 398,102,771 178,713,956 623,238,087 200,227,273 2,163,268 44,474,997 14,025,516 196,082,038 2,537,415 94,874,967 1,754,440,288 23. Accounts Receivable - Tk. 499,680,792 This is unsecured, considered good and is falling due within one year. This includes receivable of Tk.27,811,796 equivalent to US$ 399,645 (on 31-12-2006 Tk.3,151,402 equivalent to US $ 45,455) against export sales. This also includes Tk. 427,386,197 ( on 31-12-2006 Tk. 364,005,726) 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. 566,999,130 on 28.06.2007 (on 30.04.06 Tk. 770,764,638). 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. 7 0 0 2 T R O P E R L A U N N 37 A 24. Loans, Advances and Deposits - Tk. 685,915,465 This is unsecured, considered good and consists of as follows : 2007 2006 Clearing & Forwarding VAT Claim Receivable Security Deposit Lease Deposit Earnest Money Capital Expenditure Expenses Bank Guarantee Margin Advance against Salary Rent Advance Motor Cycle Raw & Packing Material Others 15,908,958 103,793,763 15,214,568 16,924,082 15,458,331 2,120,839 158,660,096 26,483,401 341,414 27,672,341 1,468,303 62,295,492 189,924,320 49,649,557 685,915,465 Tk. 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 (a) The maximum amount due from the officers during the year was Tk. 29,516,725 on 30.04.2007 (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. 85,698,910 This consists of as follows : (a) Cash in Hand (b) Imprest Cash (c) Cash at Banks : (i) In Current Accounts (ii) In FDR Accounts - (iii) In F.C. Accounts (Equivalent US$ 63,874.45) (on 31-12-2006 US$ 30,177) Tk. 737,246 1,402,400 79,139,152 - 4,420,112 83,559,264 85,698,910 1,426,068 2,636,111 (2,536,354) 577,448,630 2,124,490 577,036,766 581,098,945 26. Issued Share Capital - Tk. 1,145,070,430 This represents : Authorized : 200,000,000 Ordinary Shares of Tk. 10/- each Tk. 2,000,000,000 2,000,000,000 Issued, Subscribed and Paid-up : 51,775,750 Ordinary Shares (2006: 51,775,750) of Tk. 10/- each fully paid-up in cash 56,780,043 Bonus Shares (2006: 46,370,312) of Tk. 10/- each 5,951,250 Shares of Tk. 10/- each Issued in Exchange of Shares of Beximco Infusions Ltd. 517,757,500 567,800,430 59,512,500 517,757,500 463,703,120 59,512,500 114,507,043 Shares Tk. 1,145,070,430 1,040,973,120 7 0 0 2 T R O P E R L A U N N A 38 The movement of issued shares during the year 2007 is as follows : (a) As on 01.01.2007 Bonus Share issued as dividend of 2006 Closing as at 31.12.2007 Number of Shares 104,097,312 10,409,731 114,507,043 Amount in Taka 1,040,973,120 104,097,310 1,145,070,430 (b) Composition of Shareholding : Sponsors/Directors Foreign Investors ICB including ICB Investors Account General Public and Institutions (c) Distribution Schedule : 2007 No. of shares 23,619,165 38,303,493 12,881,852 39,702,533 % 20.63 33.45 11.25 34.67 2006 No. of shares 21,471,970 31,000,305 14,242,332 37,382,705 % 20.63 29.78 13.68 35.91 114,507,043 100.00 104,097,312 100.00 Range of Holdings In number of shares No. of Shareholders 2007 2006 % of Shareholders 2007 2006 No. of Shares 2007 2006 % of Share Capital 2007 2006 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 42,754 10,201 541 204 60 30 18 32 38 14 53,892 39,471 8,501 525 239 65 32 19 36 31 13 79.33% 18.93% 1.00% 0.38% 0.11% 0.06% 0.03% 0.06% 0.07% 0.03% 5,267,925 80.67% 17.37% 13,121,792 3,729,112 1.07% 2,844,702 0.49% 1,437,596 0.13% 1,076,154 0.07% 802,656 0.04% 0.07% 2,215,866 0.06% 13,175,792 0.03% 70,835,448 5,074,404 11,770,861 3,668,789 3,327,993 1,616,329 1,128,449 853,446 2,420,867 11,532,064 62,704,110 4.60% 11.46% 3.26% 2.48% 1.26% 0.94% 0.70% 1.94% 11.51% 61.85% 4.87% 11.31% 3.52% 3.20% 1.55% 1.08% 0.82% 2.33% 11.08% 60.24% 48,932 100.00% 100.00% 114,507,043 104,097,312 100.00% 100.00% (d) Market Price : The shares are listed in Dhaka, Chittagong and London Stock Exchanges. On the last working day of the year, each share was quoted at Tk. 58.90 (in 2006 Tk. 53.70) in the Dhaka Stock Exchange Ltd., Tk. 59.30 (in 2006 Tk. 53.50) in the Chittagong Stock Exchange Ltd., and GBP 0.37 in London Stock Exchange (in 2006 GBP 0.615). (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 (2006 : 6,666,662). 27. Tax-Holiday Reserve - Tk. 442,354,953 This has been provided for as per provisions of the Income Tax Ordinance, 1984 which is arrived at as follows : 2007 2006 Opening Balance Add: Provided during the year (Note - 47) Less : Tax Holiday Reserve no longer required 394,834,828 78,154,622 (30,634,497) 442,354,953 414,548,999 125,369,152 (145,083,323) 394,834,828 Tk. 7 0 0 2 T R O P E R L A U N N 39 A 28. Long Term Borrowing-Net off Current Maturity (Secured)- Tk. 1,776,449,778 This Consists of : (a) Project Loan (b) Interest and PAD Block (c ) Obligation Under Finance Leases (a) Project Loan 2007 1,516,920,475 223,810,664 35,718,639 1,776,449,778 Tk. 2006 964,687,435 159,719,746 35,002,766 1,159,409,947 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 is 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, 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 12.5% to 14.5% per annum, is repayable in quarterly installments ending by 2012. (b) Interest and PAD Block This represents blocked PAD and blocked interest of Janata Bank to be paid in quarterly installments ending by 30.04.2011. 29. Liability for Gratuity & WPPF - Tk. 246,704,610 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 30. Deferred Tax Liability - Tk. 51,351,969 This is arrived at as follows: Opening Balance Deferred Tax (Income)/Expense for the year (Note : 45) 94,836,599 17,558,748 112,395,347 (9,950,918) 102,444,429 144,260,181 246,704,610 Tk. Tk. 83,598,054 15,280,229 98,878,283 (4,041,684) 94,836,599 118,521,260 213,357,859 62,403,458 (11,051,489) 51,351,969 Tk. 45,220,901 17,182,557 62,403,458 7 0 0 2 T R O P E R L A U N N A 40 31. Short Term Borrowings - Tk. 907,582,327 This represents : (a) Janata Bank : Cash Credit-Pledge Cash Credit-Hypothecation PAD LIM (b) Citibank NA (c) Standard Chartered Bank (d) IPDC 2007 2006 149,972,531 666,029,415 - - 41,570,459 9,922 50,000,000 165,214,805 628,919,853 250,305,095 165,057,074 41,626,869 1,762 51,691,522 Tk. 907,582,327 1,302,816,980 32. Long Term Borrowing-Current Maturity - Tk. 343,604,498 This consists of as follows and is payable within next twelve months from the Balance Sheet date : Project Loan Interest & PAD Block Obligation under Finance Leases 152,025,355 159,478,000 32,101,143 343,604,498 Tk. 489,443,207 67,200,136 155,479,587 712,122,930 33. Creditors and other Payables - Tk. 271,814,118 This consists of : Goods & Services Provident Fund Capital Expenditure Advance Against Export Others These are unsecured, and falling due within one year. 34. Accrued Expenses - Tk. 60,052,739 This is unsecured falling due within one year and consists of as follows : For expenses Workers' Profit Participation/ Welfare Funds (current year's provision) 35. Income Tax Payable - Tk. 41,633,930 This is arrived at as follows : Opening Balance Tax provided (Note - 45) Short/(Excess) in tax provision of earlier years Tax paid (including advance tax) during the year 112,027,880 149,723,824 5,051,325 1,705,718 3,305,371 271,814,118 Tk. 146,825,002 112,692,882 69,581,555 15,294,367 20,862,132 365,255,938 40,068,856 19,983,883 60,052,739 Tk. 91,774,437 26,162,183 117,936,620 16,276,184 57,661,278 - 73,937,462 (32,303,532) 41,633,930 Tk. 54,431,402 43,413,478 (8,010,929) 89,833,951 (73,557,767) 16,276,184 7 0 0 2 T R O P E R L A U N N 41 A 36. Net Sales Revenue - Tk. 3,597,024,812 This represents net sales and consists of as follows : Local Sales Export Sales-US$ 1,777,322 (in 2006 US$ 1,671,522) Sales represent : Solid. Liquid & Inhalation Formulations Basic Chemicals IV Fluids Pcs Kg. Bottles 2007 2006 3,474,272,775 122,752,037 3,597,024,812 Tk. 3,587,218,117 115,099,042 3,702,317,159 1,768,179,996 9,040 6,565,071 1,684,695,282 44,751 8,724,310 37. Cost of Goods Sold - Tk. 1,967,509,975 This is made-up as follows : Notes Work-in-Process (Opening) Material Consumed Factory Overhead Work-in-Process (Closing) COST OF PRODUCTION Finished Goods (Opening) Finished Goods available Finished Goods (Closing) Cost of Physician Sample 38 39 178,713,956 1,486,392,827 414,930,167 2,080,036,950 (142,743,433) 1,937,293,517 398,102,771 2,335,396,288 (331,438,214) 2,003,958,074 (36,448,099) 156,374,814 1,622,394,163 426,338,680 2,205,107,657 (178,713,956) 2,026,393,701 378,744,903 2,405,138,604 (398,102,771) 2,007,035,833 (35,804,500) Tk. 1,967,509,975 1,971,231,333 Item wise quantity and value of Finished Goods Stock are as follows : Item Stock as on 01-01-07 Solid. Liquid & Inhalation Formulations Basic Chemicals IV Fluids Stock as on 31-12-07 Solid. Liquid & Inhalation Formulations IV Fluids Unit Quantity Value Pcs kg Bottles 366,491,147 8,989 1,231,511 353,990,375 20,880,681 23,231,715 Tk. 398,102,771 Pcs Bottles 312,870,267 960,630 307,290,151 24,148,063 Tk. 331,438,214 38. Material Consumed - Tk. 1,486,392,827 This is made-up as follows : Opening Stock Purchase Closing Stock 7 0 0 2 T R O P E R L A U N N A 42 825,628,628 926,370,836 1,459,653,540 1,521,651,955 (798,889,341) (825,628,628) Tk. 1,486,392,827 1,622,394,163 39. Factory Overhead - Tk. 414,930,167 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 2007 2006 164,122,324 52,288,675 2,746,192 243,532 95,103 615,056 290,292 5,408,921 5,392,708 2,353,985 14,240,267 19,876,997 8,765,408 138,490,707 414,930,167 152,419,522 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 Tk. (a) Salary and allowances include Company's Contribution to provident fund of Tk. 2,411,504 (in 2006 Tk. 2,235,542). (b) (c) The value of imported stores and spares consumed is Tk. 12,577,281 (in 2006 Tk.16,056,036) included in repairs & In 2007, all the 662 factory employees received annual salary and allowances of Tk. 36,000 and above. maintenance. (d) Other expenses does not include any item exceeding 1% of total revenue. 40. Administrative Expenses - Tk. 145,544,701 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, Company Secretarial Expenses and Regulatory Fees Other Expenses Training Depreciation 76,563,948 5,505,570 7,554,565 1,560,457 10,921,693 1,093,769 1,068,943 365,750 3,330,813 2,417,841 2,059,086 18,433,038 7,896,605 477,591 6,295,032 145,544,701 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 6,368,427 403,910 6,791,295 150,285,977 Tk. (a) Salary and allowances include provident fund contribution of Tk. 2,265,163 (in 2006 Tk. 1,835,719). (b) In 2007, all the 132 employees of Administrative and General Management received annual salary and allowances of Tk. 36,000 and above. (c) Auditors' remuneration represents audit fee for auditing the accounts for the year 2007. 7 0 0 2 T R O P E R L A U N N 43 A 41. Selling, Marketing and Distribution Expenses - Tk. 829,191,989 2007 2006 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 Export Freight, Insurance & C &F Expense Delivery Commission Depreciation Other Expenses 267,944,701 13,005,628 14,696,235 138,760,988 663,066 10,189,762 7,147,739 2,719,882 20,434,120 21,498,705 53,540,434 88,106,570 47,070,903 14,952,132 106,083,796 12,590,064 9,787,264 Tk. 829,191,989 242,771,658 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 (a) Salary and allowances include provident fund contribution of Tk.7,784,687 (in 2006 Tk. 6,551,980). (b) In 2007, all the 1,465 employees relates to selling and distribution received annual salary and allowances of Tk. 36,000 and above. (c) Delivery commission represents 3% of local sales of Formulation and IV Fluids which has been paid to I & I Services Ltd., the local distributor of the company and a related party. 42. Other Income - Tk. 19,625,795 This is arrived at as follows : Interest Income Cash Dividend received Exchange gain/(loss) on retention quota (F.C.) accounts Gain on Sale of shares in Bextex Ltd. Profit on sale of Fixed Assets (Note-50) 43. Finance Cost - Tk. 254,742,392 This is arrived at as follows : Interest on Cash Credit and others Interest on loan from PF and WPP & Welfare Fund 15,169,014 - (63,001) 4,448,575 71,207 19,625,795 43,748,781 1,900,336 54,441 10,121,382 376,202 56,201,142 Tk. 222,581,780 32,160,612 Tk. 254,742,392 229,719,450 23,599,334 253,318,784 44. Contribution To Workers' Profit Participation / Welfare Funds -Tk. 19,983,883 This represents 5% of net profit before tax after charging the contribution as per provisions of Bangladesh Labour Law-2006. 7 0 0 2 T R O P E R L A U N N A 44 45. Income Tax Expenses-Tk. 46,609,789 This consists of as follows : (i) Current Tax (ii) Deferred Tax (Income)/Expense (Note 19.5) Current Tax consists of as Follows : Tax for the year under review Short/(Excess) provision of Tax relating to earlier years 46. 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 2007 2006 57,661,278 (11,051,489) Tk. 46,609,789 57,661,278 - 57,661,278 Tk. 35,402,549 17,182,557 52,585,106 43,413,478 (8,010,929) 35,402,549 Tk. 353,067,878 470,658,563 114,507,043 114,507,043 Earnings Per Share (EPS) (Adjusted EPS of 2006) Tk. 3.08 4.11 47. Tax-Holiday Reserve - Tk. 78,154,622 This represents 40% of net profit of the Tax-Holiday units. 48. Acquisition of Property, Plant and Equipment Tk. 460,904,187 This is net of Interest During Construction Period (IDCP) amounting Tk. 178,135,018 (in 2006 Tk. 141,446,332). 49. 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) Bangladesh Online Ltd. (a) Local Delivery (b) Delivery Commission (c) Internet Bill Value of Transaction in 2007 3,981,860,549 106,083,796 1,819,423 Balance at year end 427,386,197 - - 7 0 0 2 T R O P E R L A U N N 45 A 50. Particulars of Disposal of Property, Plant and Equipment The following assets were disposed off during the year ended 31-12-07 : Particulars Of Assets Cost Dep.Upto 31-12-06 Furniture Office Equipment Plant & Machinery Transport & Vehicle 2,377,958 481,138 5,442,737 547,000 1,093,350 442,790 5,051,695 403,607 W.D.V. as on 31-12-06 1,284,608 38,348 391,042 143,393 Sales Price Profit/ (Loss) Mode Of Disposal Name of Parties 1,055,111 67,724 625,663 180,100 (229,497) 29,376 234,621 36,707 Tender Tender Tender Tender Various Various Various Kh. Mohsin Uddin Total Tk. 8,848,833 6,991,442 1,857,391 1,928,598 71,207 51. Payment/Perquisites to Directors and Managers : (a) The aggregate amounts paid to/ provided for the Directors and Managers of the company are disclosed below : Managerial Remuneration Gratuity Company's Contribution to Provident Fund Bonus Perquisites : Transport Medical Telephone Electricity, Gas & Water Total 2007 2006 35,788,874 2,302,025 2,253,984 4,604,050 9,719,924 2,979,925 3,160,179 2,160,518 62,969,479 33,134,846 1,964,145 2,181,974 3,985,461 8,303,045 3,985,461 3,605,513 2,486,927 59,647,372 Tk. (b) No compensation was allowed by the company to the Directors of the company. (c) No amount of money was expended by the company for compensating any member of the board for special services rendered. (d) No board meeting attendance fee was paid to the directors of the company. 52. Production Capacity, Actual Production in 2007: Unit Tablet & Capsule (in million pcs) Bottle,Tube & Cans (in million pcs) Bottle-IV (in million pcs) Production Capacity Actual Production Excess/(Shortfall) 2007 1,742 2006 1,566 2007 2006 1,774 2,124 39 14 39 14 36 6 41 10 2007 32 (3) (8) 2006 558 2 (4) 53. Capital Expenditure Commitment There was no capital expenditure contracted but not incurred or provided for at 31 December 2007. 7 0 0 2 T R O P E R L A U N N A 46 54. Finance Lease Commitment At 31December, 2007, 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 32,101,143 35,718,639 - Tk. 67,819,782 55. Claim not Acknowledged as Debt There was no claim against the company not acknowledged as debt as on 31-12-07. 56. 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 31.12.2007. 57. Payments Made in Foreign Currency : Foreign Currency (Equivalent US$) Taka Import of Machinery, Equipments and Spares Import of Raw & Packing material Regulatory Fees 539,824 11,426,107 47,801 37,938,831 803,060,645 3,359,480 No other expenses including royalty, technical expert and professional advisory fee, interest, etc. was incurred or paid in foreign currencies except as stated above. 58. Dividend Paid to the Non-resident Shareholders in 2007: (i) Dividend for 2006 was declared on 2nd September, 2007 and therefore, dividend for 2006 was paid in 2007. (ii) Dividend of Tk. 15,561,493 relating to the year 2006 was paid to 13 non-resident shareholders against 36,615,493 shares held by them. (iii) No dividend was remitted in foreign currency but paid in local currency to their local custodian banks. 59. Foreign Exchange Earned : (a) Export Sales of US$ 1,777,322 (in 2006 US$ 1,671,522). (b ) No other income including royalty, technical assistance and professional advisory fee, interest and dividend was earned or received in foreign currency. 60. 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. 61. Contingent Liability: The company has a contingent liability to the extent of Tk. 1,721,005,920 (Yen 2,693,280,000) for third party corporate gurantee issued to Marubeni Corporation, Tokyo in favour of Bextex Limited, a member of Beximco Group. 7 0 0 2 T R O P E R L A U N N 47 A 62. Post Closing Events Following events have occurred since the Balance Sheet date: (a) 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. (b) 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 6 May, 2008 7 0 0 2 T R O P E R L A U N N A 48 Operational Headquarter 19 Dhanmondi R/A, Road No. 7 Dhaka 1205, Bangladesh Phone : +880-2-8619151, +880-2-8619091 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 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 Banker Janata Bank Local office 1 Dilkusha C/A Dhaka-1000 Concept, Text and Design : Beximco Pharma Marketing Team Printed by : Shuktara Printers Ltd. www.beximcopharma.com 

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