Boston Properties
Annual Report 2011

Plain-text annual report

BEXIMCO PHARMACEUTICALS LTD. It is only when you are healthy, you enjoy fully the joy of life. The joy of emotions and experiences. The journey among friends and families. The miracle we live every day. Life. It is that health we strive to sustain. To nurture. A healthy life for all. BEXIMCO PHARMACEUTICALS LTD. Our Mission We are committed to enhancing human health and well being by providing contemporary and affordable medicines, manufactured in full compliance with global quality standards. We continually strive to improve our core capabilities to address the unmet medical needs of patients and to deliver outstanding results for our shareholders. Our Vision We will be one of the most trusted, admired and successful pharmaceutical companies in the region with a focus on strengthening research and development capabilities, creating partnerships and building presence across the globe. Core Values Our core values define who we are; they guide us to take decisions and help realize our individual and corporate aspirations. Commitment to quality We adopt industry best practices in all our operations to ensure highest quality standards of our products. Customer satisfaction We are committed to satisfying the needs of our customers, both internal and external. People focus We give high priority on building capabilities of our employees and empower them to realize their full potential. Accountability Corporate social responsibility We encourage transparency in everything we do and strictly adhere to the highest ethical standards. We are accountable for our own actions and responsible for sustaining corporate reputation. We actively take part in initiatives that benefit our society and contribute to the welfare of our people. We take great care in managing our operations with high concern for safety and environment. Who We Are Corporate Directories Managing Director’s Statement Our Milestones 2011 Highlights Our Healthcare Solutions Manufacturing Capabilities Global Accreditations Export Potential R&D Capabilities Our People Nurturing Our Relationships Corporate Citizenship Our Aspirations Post Balance Sheet Highlights Notice of the Annual General Meeting Chairman’s Statement Report of the Directors to the Shareholders Corporate Governance Compliance Report Key Operating and Financial Data Shareholders’ Meeting Value Added Statement Report of Auditors to the Shareholders Statement of Financial Position Statement of Comprehensive Income Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Contents 4 6 9 12 15 17 23 29 31 33 35 37 41 45 47 49 50 54 57 58 60 62 63 64 65 66 67 68 Who We Are Beximco Pharmaceuticals Ltd. belongs to Beximco Group, the largest private sector business conglomerate in Bangladesh. Incorporated in the late 70s, Beximco Pharma began as a distributor, importing products from global MNCs like Bayer, Germany and Upjohn Inc., USA and selling them in the local market, which were later manufactured and distributed under licensing arrangements. The Company introduced its own branded generic products in 1983. Since then, the journey continued, and today, Beximco Pharma is a leading manufacturer and exporter of pharmaceuticals in the country, winning National Export Trophy (Gold) a record four times. Beximco Pharma’s manufacturing facilities have been accredited by major global regulatory bodies, and it has expanded its geographic footprint across four continents. Beximco Pharma is the only Bangladeshi company listed on the AIM of London Stock Exchange through issuance of GDRs. Having a broad portfolio of more than 500 products and a dedicated team of around 2,700 employees, Beximco Pharma is committed to providing access to medicines which are affordable and manufactured in strict compliance with global standards. ANNUAL REPORT 2011 4 At Beximco Pharma, we dare to dream ...of access to health solutions for everyone We strive to cater to the masses with a diverse portfolio of products covering therapeutic groups such as anti-infectives, gastrointestinal, cardiovascular, ARVs, anti-diabetic, NSAIDs, respiratory, and so on. …of delivering globally trusted quality to our people We secured GMP accreditations from the EU, Australia, Gulf Central Committee, South Africa and Brazil, among others. At the moment, we have the highest number of international accreditations among all the Bangladeshi pharma companies. …of progress; not just of ours, but of the entire community We strive to conduct our business in a responsible manner and respond to the evolving needs of the society through various programs and initiatives. …of a society with no outcasts We do not believe in discriminations. We stand by the HIV positive of our country, well knowing that serving this niche is not commercially feasible. …of a beautiful, breath-taking tomorrow We were among the first in the world who proactively made the transition from the use of ozone-depleting to ozone-benign propellants for our medical inhalers. ......because we work to see you live the life we see in our dreams. We are Beximco Pharma We are here for you, for life. So here’s to life! ANNUAL REPORT 2011 5 Corporate Directories A S F Rahman Chairman Salman F Rahman Vice Chairman The Board of Directors A S F Rahman Salman F Rahman Nazmul Hassan MP Iqbal Ahmed Mohammad Abul Qasem Osman Kaiser Chowdhury Abu Bakar Siddiqur Rahman Advocate Ahsanul Karim Dr. Abdul Alim Khan Chairman Vice Chairman Managing Director Director Director Director Director Director Independent Director Company Secretary Md. Asad Ullah, FCS Executive Director ANNUAL REPORT 2011 6 Management Committee Nazmul Hassan MP Managing Director Osman Kaiser Chowdhury Member of the Board of Directors Rabbur Reza Chief Operating Officer Ali Nawaz Chief Financial Officer Afsar Uddin Ahmed Director, Commercial Lutfur Rahman Director, Manufacturing Zakaria Seraj Chowdhury Director, International Marketing A R M Zahidur Rahman Executive Director, Production Shamim Momtaz Executive Director, Manufacturing Mohd. Tahir Siddique Executive Director, Quality Jamal Ahmed Choudhury Executive Director, Accounts & Finance Executive Committee Osman Kaiser Chowdhury Nazmul Hassan MP Rabbur Reza Ali Nawaz Afsar Uddin Ahmed Member of the Board of Directors Managing Director Chief Operating Officer Chief Financial Officer Director, Commercial ANNUAL REPORT 2011 7 Nazmul Hassan MP Managing Director ANNUAL REPORT 2011 8 Managing Director’s Statement Beximco Pharma has completed yet another successful year delivering robust growth in revenues and profit. In 2011, the Company achieved sales turnover of BDT 7.89 billion registering y-o-y growth of 21.56%. According to IMS, Beximco Pharma achieved the highest growth among all the leading pharmaceutical companies in the country. This outstanding performance is a clear indication that all our initiatives were planned and accordingly executed to meet the strategic goals we set for ourselves. Bangladesh has a vibrant pharmaceutical industry. The country is almost self-sufficient in this sector with 97% of the country’s needs being met by the local manufacturers. Currently valued at BDT 84 billion (USD 1 billion), the pharmaceutical market has been growing steadily over the last few years. This industry has been consistently performing well with a CAGR of 20% in the last 3 years. From the positive trends in this sector, including increased healthcare spending on medicine and medical coverage, enhanced healthcare system, and rising government expenditure, we expect the industry to continue to register healthy growths in the foreseeable future. The sector is highly fragmented with 246 manufacturers: top 10 companies enjoy more than 67% while top 20 companies have 85% of the market share. All of the top 10 players are local manufacturers. We predict that domestic players will continue to dominate and become more competitive with further backward integration in the near future and at the same time go up the value chain with increasing focus on technology driven products. In the year under review we have introduced 40 new generics in 55 presentations, many of which have high growth potential. In the domestic market the Company maintains leading position in key therapeutic segments like analgesics and gastrointestinals; we have also performed very well with our respiratory, cardiovascular, musculoskeletal and anti-infective range registering much better growth than in the previous year. We are confident that your company will continue to outperform industry growth in the coming years led by market share gains in key therapeutic segments along with continuous and successful expansion of our product portfolio. Our major restructuring in the sales division, with the aim of focusing on specialty and chronic care products, will result in considerable growth in these categories. We remain committed to creating value for all our shareholders and customers. A well defined, value-creating strategy is a must for any business to achieve sustained growth and this must take into consideration the company’s immediate and long term growth objectives. With over 30 years of operation, we have achieved many milestones, successfully expanded our business and created significant shareholders’ value, yet sustaining growth and profitability has been a major challenge in today’s changing business environment. This is why we have given special emphasis on improving cost efficiency, resource optimization and R&D capabilities. To achieve sustained growth over the next five years and beyond, the Company has prepared a roadmap for making business strategies actionable. We will further invest in upgrading the existing facilities and expanding capacity which will translate into potentially higher growth. Beximco Pharma has delivered strong results in the domestic market; it also continues to perform well in exports and achieved a growth of 18.08% over the previous year. During the year we have successfully registered 48 products in overseas markets. The Company has the distinction of being the only pharmaceutical company in the country to win National Export Trophy (Gold) a record four times. We are well aware of opportunities in global generic drug space and your Company is formulating strategies and aligning resources to capitalize on these opportunities. Today Beximco Pharma has products registered in Asia, Africa, Latin America, Gulf region, Australia and New Zealand while it enters into generic markets of EU soon. As mentioned earlier we recently entered the US market through acquisition of an ANDA and the response with that product has been encouraging; and we are hopeful that we will be able to complete the site transfer to Beximco Pharma and subsequent USFDA inspection soon. ANNUAL REPORT 2011 9 Key drug patent expirations by the year 2015 have been estimated to be worth more than USD 150 billion in annual drug sales, which present lucrative opportunities for generic drug manufacturers like Beximco Pharma. We are well aware of this and aligning our resources to capitalize on these opportunities. We believe our ability to choose the right products, efficiently develop them, secure regulatory approvals, and achieve economies of scale in production are all critical for our success in the global generics market. We continue to make substantial investment in research and development to create differentiation and enable us to compete in the global marketplace. A number of initiatives aligned with our objectives are currently underway. We have further strengthened our Regulatory Affairs, R&D, and Supply Chain with the appointment of top class people with long experience working in leading generic drug companies in the world. On a different note, taka has been devalued to a record low against dollar in the said period which may have significant impact on the cost of imports of raw materials and thereby profitability. The industry is still heavily dependent on such imports and this will remain so unless the country’s proposed API Technology Park is completed. The generic drug industry is undergoing changes and in such a competitive environment leading companies are now focusing on products where profit levels come with a degree of innovation. Our current portfolio comprising Metered Dose Inhalers, Dry Powder Inhalers, Ophthalmics, Pre-Filled Syringes, etc. offers both innovation and profitability. Particularly, inhalers and eye drops can potentially provide a lucrative niche for us as we have pioneered MDI manufacturing and are the sole company to have both EU and TGA accredited MDI and Ophthalmic facilities in the country. We will pursue growth in the specialized products and accordingly our new projects reflect our strategic focus. As we continue to focus on specialty niche products, a number of new delivery systems are planned to be ANNUAL REPORT 2011 10 launched which will enrich our hi-tech portfolio and at the launched which will enrich our hi-tech portfolio and at the same time help build our image as a technology-driven same time help build our image as a technology-driven company. cost cost Pharma Pharma While MNCs are increasingly looking for cost effective While MNCs are increasingly looking for cost effective sources beyond China and India as these countries are sources beyond China and India as these countries are losing has advantages, Beximco has advantages, Beximco losing differentiated itself by offering generic drugs at the most differentiated itself by offering generic drugs at the most affordable price. The Company is ideally positioned as a affordable price. The Company is ideally positioned as a contract manufacturing partner for clients from developed contract manufacturing partner for clients from developed markets with its cost and skill advantages along with a markets with its cost and skill advantages along with a long track record of working with global MNCs. Amid all long track record of working with global MNCs. Amid all is growing the challenges, Bangladesh economy is growing the challenges, Bangladesh economy satisfactorily, consistently maintaining GDP growth over satisfactorily, consistently maintaining GDP growth over 6%. Positive credit rating by global credit rating agencies 6%. Positive credit rating by global credit rating agencies and an impressive ranking by major investment firms have and an impressive ranking by major investment firms have helped Bangladesh attract huge global attention in recent helped Bangladesh attract huge global attention in recent times; particularly the pharmaceutical industry has been times; particularly the pharmaceutical industry has been highly publicized as the next big sector owing to its highly publicized as the next big sector owing to its significant export potential. While our major focus significant export potential. While our major focus international markets, remains on development of international markets, remains on development of particularly for building presence in the developed and particularly for building presence in the developed and emerging markets, our investment in expanding capacity emerging markets, our investment in expanding capacity will provide the necessary impetus for sustainable growth. will provide the necessary impetus for sustainable growth. We accreditations, accreditations, We collaborations and alliances as a part of our global collaborations and alliances as a part of our global expansion strategy. Our Oral Solid Dosage and Ophthalmic expansion strategy. Our Oral Solid Dosage and Ophthalmic facilities have received GMP accreditation from European facilities have received GMP accreditation from European Union while the Ophthalmic facility also received the same Union while the Ophthalmic facility also received the same from TGA, Australia. continue continue pursue pursue global global to to We are committed to providing safe and effective We are committed to providing safe and effective medicines to enhance health and well being of our people. medicines to enhance health and well being of our people. We do not measure our success only by our ability to We do not measure our success only by our ability to provide affordable medicines: we have given high priority provide affordable medicines: we have given high priority on social responsibilities and always promote activities on social responsibilities and always promote activities that contribute to the betterment of our society. During the that contribute to the betterment of our society. During the year we have made significant contribution to several year we have made significant contribution to several major initiatives; notable among them are joining of major initiatives; notable among them are joining of USAID-led Mobile Alliance for Maternal Action (MAMA) USAID-led Mobile Alliance for Maternal Action (MAMA) as the founding corporate partner, and supporting ASHIC as the founding corporate partner, and supporting ASHIC Foundation, an organization for children with cancer. Foundation, an organization for children with cancer. The year 2011 also witnessed a series of rebranding initiatives taken by the management. Corporate brand equity is the most valuable asset of a company as it engages all the stakeholders in a relationship that drives future growth. This is critical for sustaining competitive advantage in light of changing corporate priorities. We have felt an increasing need to convey a strong and distinct identity, with renewed focus and commitment, to reflect Beximco Pharma’s rising prominence. The Company now has a new tagline ‘Here’s to Life’, corporate identity programs and a new website including the online knowledge center – all to reflect our commitment and vision and convey to our customers who we are and what we do. As we continue to evolve into a stronger company, our strategy for growth is to build a strong and diverse product portfolio; to expand our geographic reach; and to develop and leverage our generic drug capabilities. All these will drive us to build a future for our employees, to create value for shareholders and to focus on the reason for being in this business – to enhance the health and wellbeing of people. We are confident that your Company will continue to deliver strong financial results and achieve sustained growth in the coming days. It’s a privilege for me to work with the exceptionally talented team of Beximco Pharma management and the wonderful people who have diligently worked towards building this remarkable company. I would like to thank all our employees and shareholders for your unwavering confidence and trust in us, and look forward to your continued support. Nazmul Hassan MP Managing Director ANNUAL REPORT 2011 11 Company incorporated Started manufacturing products of Bayer AG, Germany and Upjohn Inc., USA, under license agreements Launched own formulation brands Listed on Dhaka Stock Exchange Export operation started with APIs ANNUAL REPORT 2011 12 Our Milestones Received GMP accreditation from AGES, Austria (for European Union) Received GMP approval from INVIMA, Colombia Only pharmaceutical company to win ‘National Export Trophy (Gold)’ for the fourth time The only pharmaceutical company in Bangladesh to enter the US market through the acquisition of an Abbreviated New Drug Application (ANDA) for a product Only Bangladeshi company to receive GMP approval from ANVISA, Brazil First Bangladeshi company to receive GMP accreditation from Therapeutic Goods Administration (TGA), Australia, and Gulf Central Committee for Drug Registration, for GCC states Technology transfer arrangement to manufacture Roche’s ARV drug Saquinavir Launched CFC free HFA inhalers for the first time in Bangladesh First company to introduce anti-retroviral (ARV) drugs in Bangladesh Only Company in Bangladesh to be listed on the Alternative Investment Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs Russia became the first export destination for formulation products ANNUAL REPORT 2011 13 ANNUAL REPORT 2011 14 2011 Highlights Achieved the highest sales growth among the top ten pharmaceutical companies (IMS 2011) Received EU GMP accreditation for OSD and Ophthalmic facilities Registered 48 new products in 8 countries including New Zealand, Azerbaijan, Kuwait, Singapore and Colombia Became the only pharmaceutical company to win National Export Trophy (Gold) for the fourth time Introduced 40 new generics in 55 different dosage forms and strengths Launched combination therapies: NapaDol (Paracetamol+tramadol), Dinovo (Naproxen+Esomeprazole) & Glipita M (Sitagliptin+Metformin) for the first time in Bangladesh Launched operation of Dry Powder Inhaler (DPI) and Prefilled Syringe (PFS) units Took up a major corporate rebranding initiative ANNUAL REPORT 2011 15 ANNUAL REPORT 2011 16 Our Health Solutions We offer our customers a comprehensive and high-quality product portfolio encompassing all major therapeutic categories, available in various dosage forms including tablets, capsules, syrup, suspension, sterile eye drops, injectables, nasal sprays, creams, ointments, suppositories, IV fluids, metered dose inhalers, dry powder inhalers, prefilled syringes etc. Our therapeutic groups host quality solutions for treating cardiovascular, musculoskeletal, endocrine, gastrointestinal, metabolic, allergic, respiratory and other disorders. Currently, Beximco Pharma produces 284 generics in 508 strengths and dosage forms. Time after time, our pharmaceutical brands are found in the top ranks in their respective therapeutic categories. In the domestic market, Beximco Pharma maintained its leadership position in key therapeutic segments such as gastrointestinal and analgesic. 2011 was a year of restructuring and renewed spirits for our Marketing and Sales teams. The sales division was restructured to pay particular attention to specialty and chronic care products, with the goal of registering considerable growth in these categories in the near future. To add to the momentum, the teams were also more aggressive than before in the race to the top. In the year under review, the Company experienced a significantly more extended doctor reach as well as enhanced distribution reach. This is very important for us because, today’s efforts at brand building will help us create a stronger platform for tomorrow’s blockbuster products to carry on with high performance in keeping with the likes of our emerging brands such as Amdocal Plus, Atova, Azmasol etc. In the domestic market, our product brand equity remained respectably strong. When it comes to the generic pharmaceutical markets, it is rightly said that prescription generation is key to a pharmaceutical company’s health. On a bright note, Beximco Pharma’s prescription (Rx) share in terms of both product and value crossed the double digits Rx share benchmark during the year. To keep the impetus flowing, the Company shall continue to strengthen market penetration beyond urban areas through our wholly-owned distribution network and further augment our value added services for doctors. At Beximco Pharma, it is not just about how many products we sell, but rather, it is about the lives we save One of the major components for the long-term health of any generic and specialty pharmaceutical company is its ability to continually introduce new products while building its pipeline for future launches. The Company delivered exceptionally on both fronts during the year under review. We have a robust generic product pipeline based on market needs and we are set to venture into a number of new delivery systems such as lyophilized products very soon. ANNUAL REPORT 2011 17 In 2011, we introduced 40 new generics in 55 presentations, five of which were launched for the first time in Bangladesh ANNUAL REPORT 2011 18 A Glimpse of Products Introduced in 2011 NapaDol NapaDol, a fixed dose combination of Paracetamol and Tramadol, is indicated in moderate to severe pain such as osteoarthritis flare, post-surgery pain management, traumatic pain and low back pain. Moderate to severe pain is an emergency condition that needs to be addressed immediately. The launching of NapaDol offers patients a breakthrough approach to managing pain because of its superior efficacy and safety. Dinovo Dinovo, the combination of Naproxen and Esomeprazole, was launched in the final quarter of 2011. The drug is indicated for the relief of signs and symptoms of osteoarthritis, rheumatoid arthritis and ankylosing spondylitis. Dinovo helps relieve the sufferings of arthritic pain with exceptional GI safety. The excellent quality and safety profile of this combination has established this brand as the preferred weapon in arthritic pain management among doctors. Acifix is a preparation of Rabeprazole which is a second generation proton pump inhibitor (PPI). It is mainly indicated for healing of erosive or ulcerative gastroesophageal reflux disease (GERD), maintenance of healing of erosive or ulcerative GERD, treatment of symptomatic GERD and healing of duodenal ulcers. Rabeprazole has a number of unique features. It is a fast acting PPI, can be taken irrespective of meal and having predominant nonenzymatic metabolism. Rabeprazole is quickly establishing itself as the preferred choice of drug in treating the underlying acid disorders. Acifix Glipita M Glipita-M is a fixed dose combination of Sitagliptin and Metformin. Glipita-M is indicated to treat Type 2 diabetes where Metformin is not enough to improve glycemic control. It is a unique combination to treat three core defects of Type 2 diabetes mellitus: insulin resistance, decreased insulin release, unsuppressed hepatic glucose overproduction. It is more powerful than Metformin alone in reducing HbA1c at goal. Moreover, Glipita-M is a very promising combination therapy with additional benefits. Weight loss and incidence of hypoglycemia for Glipita-M is similar to Metformin alone. We have launched Glipita-M for the first time in Bangladesh in October 2011. Cleven Cleven is a ready-to-use sterile aqueous solution containing Enoxaparin Sodium, a low molecular weight heparin with a high anti-Xa activity and with a low anti-lla or anti-thrombin activity. Cleven is indicated in thromboembolic emergencies like acute coronary syndrome, deep vein thrombosis, and pulmonary embolism. Xalaprost Xalaprost is a preparation of Latanoprost, the best selling glaucoma drug worldwide. Xalaprost is a prostaglandin analogue that helps to reduce intraocular pressure (IOP) by increasing the uveoscleral outflow. It is indicated for the reduction of elevated intraocular pressure in patients with primary open-angle glaucoma (POAG) or ocular hypertension (OHT). ANNUAL REPORT 2011 19 55 NEW PRODUCTS LAUNCHED IN 2011 Analgesic Napa 60 suppository (Paracetamol 60 mg) NapaDol tablet – 1st Time in Bangladesh (Paracetamol 325 mg+Tramadol 37.5 mg) Triocim DS suspension (Cefixime 4 gm/50 ml) Turbocef 1.5 gm inj IV (Cefuroxime 1.5 gm/vial) Tetracef 500 Inj (Cefepime 500 mg) Tetracef I g Inj (Cefepime 1 gm) Tetracef 2 g Inj (Cefepime 2 gm) Azithrocin powder for suspension (Azithromycin 200 mg/5 ml) Anti-Infective Thalin tablet (Chlorthalidone 25 mg) Prasuva 5 tablet (Prasugrel 5 mg) Prasuva 10 tablet (Prasugrel 10 mg) Cleven 20 inj (Enoxaparin Sodium 20 mg/0.2 ml) Cleven 40 inj (Enoxaparin Sodium 40 mg/0.4 ml) Cleven 60 inj (Enoxaparin Sodium 60 mg/0.6 ml) Cleven 80 inj (Enoxaparin Sodium 80 mg/0.8 ml) Cardiovascular Cardiovascular 3 Products CNS Vomec Plus tablet (Meclizine 25 mg+Pyridoxin HCL 50 mg) Endocrine & Met Disorders Glipita 100 tablet (Sitagliptin 50 mg) Glipita 50 tablet (Sitagliptin 100 mg) Glipita M 50/500 tablet – 1st time in Bangladesh (Sitagliptin 50 mg+Metformin Hydrochloride 500 mg) Glipita M 50/1000 tablet – 1st time in Bangladesh (Sitagliptin 50 mg+Metformin Hydrochloride 1000 mg) Diaryl 3 tablet (Glimepiride 3 mg) GI System Misopa 100 tablet (Misoprostol BP 100 mg) Misopa 200 tablet (Misoprostol BP 200 mg) Misopa 600 tablet (Misoprostol 600 mg) Acifix tablet (Rabeprazole 20 mg) IV Fluid Nutrimin IV Infusion (5% composite Amino Acid with D-Sorbitol & Electrolytes) Nutrimin D IV Infusion (7% composite Amino Acid+10% Dextrose+Electrolyte) ANNUAL REPORT 2011 20 Lospan 10 tablet (Baclofen 10 mg) Lospan 20 tablet (Baclofen 20 mg) Tolmus tablet (Tolperisone Hydrochloride 50 mg) Ribox 120 tablet (Etoricoxib 120 mg) Dinovo 375/20 tablet – 1st time in Bangladesh (Naproxen USP 375 mg+Esomeprazole USP 20 mg) Dinovo 500/20 tablet – 1st time in Bangladesh (Naproxen USP 500 mg+Esomeprazole USP 20 mg) Mobicam tablet (Tenoxicam 20 mg) Musculo-Skeletal Musculo-Skeletal 7 Products Odycin eye drop (Moxifloxacin 0.5%) Evo TS eye drop (Levofloxacin INN 1.5%) Olopan DS eye drop (Olopatadine INN 0.2%) Hypersol 5 eye drop (Hypromellose 0.3%) Cinarex eye drop (Tobramycin 0.3%) Mydrate eye drop (Cyclopentolate Hydrochloride 1%) Xalanol eye drop (Latanoprost 0.05 mg+Timolol 5 mg) Xalaprost eye drop (Latanoprost 0.05 mg/ml) Cinarex D eye drop (Tobramycin 30 mg+Dexamethasone 1 mg/ml) Neofloxin D eye drop (Ciprofloxacin 3 mg+Dexamethasone 1 mg/ml) Azmasol Bexicap DPI (Salbutamol 0.20 mg) Symbion 100 Bexicap DPI (Formoterol fumarate 6 mcg+Budesonide 0.1 mg) Symbion 200 Bexicap DPI (Formoterol fumarate 6 mcg+Budesonide 0.2 mg) Bexitrol 50/500 Bexicap DPI (Salmeterol 0.05 mg+Fluticasone propionate 0.1 mg) Bexitrol 50/250 Bexicap DPI (Salmeterol 0.05 mg+Fluticasone propionate 0.25 mg) Bexitrol 50/100 Bexicap DPI (Salmeterol 0.05 mg+Fluticasone propionate 0.5 mg) Olopan nasal spray (Olopatadin 0.6 gm/100 ml-120 metered spray) Ophthalmic Ophthalmic 10 Products Respiratory Respiratory 7 Products Skin Skin 2 Products Limogel gel (Lycin Hydrochloride USP 150 mg) Candoral oral gel (Miconazole 2% w/w) Vitamins & Minerals Vitamins & Minerals 1 Product Veniron Inj (Iron-sucrose 20 mg) Other Others 1 Product Lopidam 370 infusion diagnostic reagent (Lopamidol 37.75 g) ANNUAL REPORT 2011 21 ANNUAL REPORT 2011 22 Manufacturing Capabilities Situated at Tongi, near the capital city Dhaka, our manufacturing site extends over an area of 23 acres. The site houses manufacturing facilities for producing various drug formulae in different strengths and delivery systems such as capsules, tablets, intravenous fluids, metered dose inhalers, sterile ophthalmic drops, prefilled syringes, dry powder inhalers, injectables, nebulizer solutions, creams, ointments, suppositories, etc. The site has its own utility infrastructure to ensure adequate generation and distribution of electricity with an installed capacity of 10MW, in addition to water purifying and liquid nitrogen generation facilities. The bulk drug unit for producing paracetamol is also located within this site. The Company’s penicillin API and formulation units are situated at Kaliakoir, 20 km from the main site. ANNUAL REPORT 2011 23 Oral Solid Dosage The state-of-the-art Oral Solid Dosage unit is designed as per US FDA standards. The facility incorporates contemporary technological advancements with automated material handling systems and multilevel designs to enable gravity feed between various processing stages. This facility houses a total of five lines with an annual capacity to produce 5 billion tablets. This facility is already accredited by the regulatory authorities of EU, Australia and the Gulf member states, and is awaiting inspection and approvals from the USFDA, which would give Beximco Pharma access to the most regulated markets in the world. ANNUAL REPORT 2011 24 Metered Dose Inhaler Beximco Pharma was among the first few companies in the world who made the transition away from CFC-based inhalers to the ozone-benign HFA based formulations, in compliance with the Montreal Protocol. As CFCs are harmful to the earth’s protective ozone layer, the Company proactively developed ozone-benign HFA based MDIs which inevitably require very high level of expertise and sophisticated technology. The company is currently the largest producer of MDIs in Bangladesh, and it produces a popular inhaler brand for a reputed MNC under a contract manufacturing agreement. The MDI units have been designed with technical collaboration from Pamasol, Switzerland which now have an annual production capacity of more than 20 million canisters. ANNUAL REPORT 2011 25 Intravenous Fluid The Intravenous (IV) fluid unit is ISO 9001: 2010 certified and was designed in collaboration with PharmaPlan, a sister concern of Fresenius AG of Germany. fully Absolute sterile manufacturing conditions are rigorously maintained through a series of automated manufacturing procedures including robotics. The facility utilizes FFS (Form-Fill-Seal) Bottelpack® aseptic system of PharmaPlan Germany. Plastic bottles are blow molded, filled with the solution and sealed under sterile conditions, in a single working cycle where there is no environmental exposure or human contact during manufacturing. The whole process is performed in a class 100 environment which ensures the highest standards of quality and purity. The facility produces a broad assortment of large volume parenterals (LVPs). As a line extension of this IV unit, the company has installed an amino acid line to produce a range of parenteral nutrition products such as Nutrimin and Nutrimin D. Ophthalmic the accredited Beximco Pharma’s ophthalmic facility was launched in 2009. Today this facility has been regulatory by authorities of EU and Australia. There is increasing response from European clients where the demand for generic ophthalmic products is rising due to patent expiration of a number of key products and the positive initiatives taken by the governments to control increasing healthcare cost. Currently are being 29 ophthalmic products manufactured which include high potential products such as Xalaprost (Latanoprost), (Latanoprost+Timolol), Odycin Xalanol (Moxifloxacin), Olopan (Olopatadine), etc. ANNUAL REPORT 2011 26 Liquid and Semisolid Beximco Pharma has a broad range of liquid formulations like syrups and semisolid dosage forms including creams, suppositories and ointments. At present the capacity of liquid dosage facility is 37 million units per annum and the Company has taken up expansion program along with further upgradation of the existing unit to meet the growing demand in the marketplace. Pre-Filled Syringe Prefilled syringes (PFS) provide both convenience and accuracy to self-administered drugs. With their ease of use and improved safety features PFS has become one of most widely used drug delivery systems today. Beximco Pharma launched its PFS range with Enoxaparin Sodium, a low molecular weight heparin, which is widely used in cardiac emergency. The Company plans to add a few more high value products to its PFS portfolio shortly. The high precision PFS line employs sophisticated technology and the entire filling operation is done under laminar flow in a class 100 environment to provide absolute sterile conditions. Dry Powder Inhaler Dry powder inhaler (DPI) is a device that delivers medication to the lungs in the form of a dry powder. DPIs do not require the timing and coordination that are necessary with metered-dose inhaler and they do not contain any propellants. Beximco Pharma offers dry powder inhaler in innovative patient-friendly and DPI-friendly packaging. Instead of bottle pack we provide alu-alu blister pack which protects medicine from moisture. HPMC capsule shell ensures maximum protection against moisture. And our unique and simple Bexihaler device, imported from Europe, consisting of 8 pins ensures optimum dose delivery. Currently the facility has the capacity to produce 36 million units of DPI every year. ANNUAL REPORT 2011 27 ANNUAL REPORT 2011 28 Global Accreditations AGES, Austria (for EU) Therapeutic Goods Administration (TGA), Australia Gulf Central Committee (for GCC member states) ANVISA, Brazil INVIMA, Colombia ANNUAL REPORT 2011 29 ANNUAL REPORT 2011 30 Export Potential In 2011, we added yet another milestone to our repertoire when Beximco Pharma was awarded the National Export Trophy (Gold) by the Export Promotion Bureau for excellent export performances for the year 2009-2010. This is the highest recognition for the companies in the export sector for significant contribution to Bangladesh's economic growth. We hope to persevere in stride in our service towards the progress of our country. At the moment, we have the highest number of international accreditations in the country and we aim to leverage our resources as we venture into new territories. Our strategy is to capitalize further on export opportunities. In addition to strengthening our position in current export markets, we are targeting export opportunities in new overseas markets, particularly in the regulated and emerging markets. With the newly received product approvals from New Zealand, Kuwait and Azerbaijan, we plan to enter into these markets soon. We received GMP accreditation from Austrian Agency for Health and Food Safety (AGES), Austria; for European Union and have set our target of market entry into the EU within the shortest possible time. Our products have been well received in the overseas markets and have been supplied to various reputed institutions such as the Raffles Hospital, Heathway and K K Women’s & Children’s Hospital in Singapore, MEDS and Kenyatta National Hospital, Kenya. Beximco Pharma is also an enlisted supplier for UNICEF (United Nations International Children's Emergency Fund), Save the Children, WHO (World Health Organization) and ADF (Asthma Drug Facility). ANNUAL REPORT 2011 31 Tablets Pre-filled Syringes Sterile Ophthalmics MDI with Dose Counter Dry Powder Inhaler Sterile Injectable Sublingual Spray Diagnostic Dye ANNUAL REPORT 2011 32 R&D Capabilities R&D is the key to success for any pharmaceutical company. We have given it top priority and have made substantial investment in upgrading our generic drug capabilities as we firmly believe R&D plays the most important role in spurring innovation and helps a company go up the value chain. Our research and development activities are closely focused on market needs and driven by technological progress in order to create product differentiation. Our team comprising top class formulation scientists with extensive experience of working in leading pharmaceutical companies in the world continuously strives to integrate the advanced technological changes to create competitive edge and match international standards. There has been a series of positive developments in the year and our team successfully introduced 40 new generic formulations in 55 different presentations and expanded our dosage delivery portfolio with technology driven products like prefilled syringes, total parenteral nutrition, dry powder inhalers, etc. Beximco Pharma’s well defined organizational structure, policy guidelines and internal controls ensure efficiency of operations, and compliance with applicable regulations. The Company continuously upgrades these systems in line with the best practices in the industry. Other initiatives to keep our team updated with the recent advances in analytical methodology, platform technology, and regulatory affairs include frequent in-house and overseas workshops and training programs. The benefits we derive as a result of these initiatives will only increase in the coming years. ANNUAL REPORT 2011 33 With almost 2,700 hearts beating as one, miracles are bound to happen. The Miracle of the Honeybee “Build dwellings in the mountains and the trees, and also in the structures which men erect. Then eat from every kind of fruit and travel the paths of your Lord, which have been made easy for you to follow…From inside them comes a drink of varying colors, containing healing for humanity. There is certainly a sign in that for people who reflect.” ANNUAL REPORT 2011 34 Our People We recognize it is our people’s unwavering values that molded us into who we are today. It is their tireless contributions that have propelled us to greater heights over the years. They are indeed our greatest assets in the way they create meaningful difference. Every product, every experience, and every breakthrough we ever presented for the betterment of human health and well-being have been made possible by our people. We are prouder than ever of the collective intentions and determination we have witnessed time and time again. The shared vision and values, reflected in our leadership and execution, help us attract the very best. Currently, the Company employs almost 2,700 people including around 400 white-collar professionals such as Pharmacists, MBAs, Doctors, Chemists, Engineers, Microbiologists etc. In 2011, we welcomed into the Beximco Pharma family highly experienced expatriates in key positions to deliver a fresh take on strategic direction as we steadily progress towards our aspirations of becoming a global pharmaceutical company. We are strong advocates of the notion that learning never really ends simply with the completion of formal education. One of the best perks of being a part of the Beximco Pharma family is that the people undergo continuous training and development programs to further develop their skills. In 2011 alone, over 30 such workshops and training, covering various departments, were conducted. Within Beximco Pharma, we support employees interested in reaching out to others. In 2011, we launched our very own internal Knowledge Center as a platform for continuous learning and interconnectivity; an initiative that is still quite a novel concept in Bangladesh. However, we know that competence alone is not enough; it is the intricate threads of connectivity, binding us as one family, which makes our organizational culture truly coveted and one of a kind. We have also undertaken a major corporate branding initiative as a reflection of our rejuvenated drive and aspirations. ANNUAL REPORT 2011 35 ANNUAL REPORT 2011 36 Nurturing Our Relationships Beximco Pharma & the Medical Community Over the years, we have nurtured and developed a special bondage with the medical community. We stand by healthcare providers and appreciate their valiant services to the community at large. Knowledge-based professional services In 2011, we served the medical community with complementary knowledge-based professional services such as the following: (cid:31) (cid:31) (cid:31) (cid:31) (cid:31) (cid:31) (cid:31) (cid:31) conducted around 300 clinical meetings nationwide responded to over 1100 doctors by providing assistance according to their requests responded to approximately 1000 doctors by sending latest clinical and medical journals on a regular basis as per interest prepared over 50 slide presentations on behalf of doctors on various occasions prepared several poster presentations on behalf of doctors for both national and international occasions published 4 quarterly Medical Newsletter published 12 online monthly E-Newsletter on Ophthalmology published Cardiovascular Therapeutic Index CRM through E-detailing In the spirit of reinvention, stemming from our rebranding initiative, we decided to be the first to introduce e-detailing in Bangladesh. This is a step towards solidifying our commitment for strengthening our relationship with the medical community. The Vision team task force would be the first to be equipped with Tablets (mobile computers with touch-screen and pen-enabled interface), for the purpose of “electronic pharmaceutical detailing”. This digital communication is greener than paper based communication, and will enhance the quality of service in building one-to-one relationship with the doctors. The Tablets will be enriched with data, not only of our products, but also other valuable information. For instance, the medical representatives can instantly pull up whatever references or research findings a doctor may wish to study. ANNUAL REPORT 2011 37 Our medical representatives will be able to offer multi-brand detailing within shortest possible time with individual-doctor or group-specific detailing aids, thus enhancing our services to doctors. It will also allow doctors to know us better e.g. from the comfort of their own desks, doctors will then have the option of taking a virtual tour in our facility. We hope to capitalize on first-movers advantage and set the benchmark for the competition. We hope to establish ourselves as the premier source of reliable and relevant medical information Partnerships & Alliances We, at Beximco Pharma, acknowledge and appreciate the value of collaborations with our strategic alliances and partnerships. We believe that mutually beneficial partnerships are key to accomplishing our goals. We have had a sound track record of working with global partners as early as 1980 when we commenced manufacturing operations with products under licenses of Bayer AG of Germany and Upjohn Inc of USA. Moreover, we have been producing asthma inhalers under contract manufacturing for a global MNC. We have a co-development agreement with a pharmaceutical company in the USA. We also provided technical support to Johns Hopkins University for a WHO funded vaccine study in Bangladesh. Furthermore, we actively look forward to working with MNCs in the area of biopharmaceuticals and new drug delivery systems. We also extend our support to various initiatives from global development agencies such as USAID, Save the Children etc. as well as reputed research institutes; in the year we joined a USAID-led major initiative Mobile Alliance for Maternal Action (MAMA) in Bangladesh. ANNUAL REPORT 2011 38 7 BILLION FACES OF 5 ELEMENTS Hydrogen. Oxygen. Nitrogen. Carbon. Phosphorus. Just 5 elements make the mighty DNA. This DNA creates the identities for 7 billion people, 7 billion different faces, 7 billion different thoughts, 7 billion different DNAs to create another 7 billion different identities. It is the miracle we live everyday – “life”. At Beximco Pharma, we celebrate our existence everyday. We celebrate life. ANNUAL REPORT 2011 39 Mobile Alliance for Maternal Action The power of health in every mama’s hand... Aponjon Health information for expecting and new mothers through mobile phone The Founding Corporate Partner of MAMA in Bangladesh ANNUAL REPORT 2011 40 Every successful corporation has a responsibility to use its resources and influence to make a positive impact on the world and its people. Economically, Environmentally and Socially Responsible, Beximco Pharma endeavors to achieving success in ways that respect ethical values, people in need, their communities and the environment. The Company’s key strategies always aim to provide a strong return for shareholders, while creating social and economic value in the communities where it operates. Responsibility to the Community at Large Our vision is to make significant contribution to humanity by improving health. This vision guides our Company’s operations, to corporate responsibility. its commitment including improve people's Trusted Partner in Health We work together with non-profit organizations who work to lives through research, information, and advocacy. As the Company writes its success story as an emerging leader in the pharmaceutical industry, we also realize that responsibility towards all our stakeholders increases in tandem. We remain committed to being a good corporate citizen. In the year under review, we joined Mobile Alliance for Maternal Action (MAMA) in Bangladesh. MAMA is a country-owned, country-led initiative managed by an alliance of stakeholders. Through a core group of founding partners, MAMA Bangladesh is designing and testing a platform to provide both audio and text health messages to pregnant women and new mothers linked to their delivery date. The service also includes family gatekeepers for inspiring healthcare seeking behavior. The commercial brand name to be tested is Aponjon. As part of the new United States Global Health Initiative, the United States Agency for International Development (USAID) catalyzed the creation of a public-private coalition in Bangladesh to support the execution of the service. The Ministry of Health and Family Welfare (MoHFW) and Access to Information (A2I) Program at Prime Minister's Office are official partners of the initiative. Global partners Corporate Citizenship Johnson & include Foundation, among others. Johnson and United Nations The Objectives of the initiative are as follows: • Reach 500,000 pregnant women and new mothers within three years • Deliver critical life-saving health messages, leading to sustained improvements in health knowledge, behaviors and outcomes • Build upon USAID and Government of Bangladesh maternal child health and family planning programs. MAMA coalition activities are being organized by D.Net, a leading social enterprise working for integration of ICTs in education, health, livelihood and social accountability. Awareness Campaigns Prevention is the best cure and the first step is to create awareness. Every year, we launch campaigns touching on different forms of heath impediments ranging from asthma, diabetes, hypertension and many more. Campaign activities include rallies in addition to organizing and sponsoring scientific seminars and conferences for various associations and societies in medical disciplines. ANNUAL REPORT 2011 41 Preserving Cultural Heritage Preservation and promotion of cultural heritage are linked Preservation and promotion of cultural heritage are linked to economic welfare of any country. We at Beximco to economic welfare of any country. We at Beximco Pharma hope to preserve and promote our country’s Pharma hope to preserve and promote our country’s vibrant heritage in a way that would imprint its immortal vibrant heritage in a way that would imprint its immortal beauty in the hearts of our today’s modern demography beauty in the hearts of our today’s modern demography and the generations to come. In 2011, we sponsored and organized the grand cultural In 2011, we sponsored and organized the grand cultural event, at the National Museum, marking the 150th birth birth anniversary of Rabindranath Tagore; the legend who had anniversary of Rabindranath Tagore; the legend who had irrefutable contribution towards the heritage and identity irrefutable contribution towards the heritage and identity of Bengali culture. We also sponsored the making and of Bengali culture. We also sponsored the making and distribution of a comprehensive documentary, highlighting distribution of a comprehensive documentary, highlighting Rabindranath Tagore's intermittent stay in Bangladesh. It Rabindranath Tagore's intermittent stay in Bangladesh. It was premiered on 7th May at the National Museum, May at the National Museum, Dhaka. The documentary, based on research by the Dhaka. The documentary, based on research by the eminent Tagore researcher Ahmed Rafique, was directed eminent Tagore researcher Ahmed Rafique, was directed by Dr. Chanchal Khan, better known as a Tagore singer by Dr. Chanchal Khan, better known as a Tagore singer and exponent. Elements of the documentary include nine and exponent. Elements of the documentary include nine songs that were penned by the Nobel laureate poet during songs that were penned by the Nobel laureate poet during his stay in Bangladesh. The film also features glimpses his stay in Bangladesh. The film also features glimpses from a play based on a Tagore short story; interviews of from a play based on a Tagore short story; interviews of distinguished personalities and recitals. The rich content distinguished personalities and recitals. The rich content lends it historical, archival and educational value. Employee Volunteering Program In this program, we sent employee volunteers to devote their time and energy in spreading smiles across the faces of children battling the ultimate battle of survival against cancer. The children are currently being treated at the ASHIC Foundation. We arranged an outing at an amusement park in the capital city where the children were accompanied by their parents and representatives from the not-for-profit organization. We had a wonderful day together packed with fun rides and great food. Later on we donated hospital equipment to the palliative care unit where the children at the terminal stage of cancer are being treated. The ASHIC foundation is a full member of International Confederation of Childhood Cancer Parents Organization (ICCCPO), which is an international forum to increase awareness and action on childhood cancer related issues. This small Foundation strives to improve the quality of life for children living with cancer in Bangladesh by providing hope, physical and emotional support, and raising public awareness for early detection, improved treatment and social acceptance. We appreciate their noble cause and extended our support. We believe that a genuine spirit of giving itself is credential enough and therefore we stand by the unsung heroes who dedicate their lives for the betterment but do not get the recognition or enough support to carry out their intentions with optimized efficiency and impact. ANNUAL REPORT 2011 42 Children’s Education is a Right, not a Privilege Beximco Pharma, being in a knowledge based industry, fully understands the crucial role that education plays in the building of a nation. We offer financial assistance to the children, of our employees, who are brilliant and possess a thirst for knowledge; and yet may not be able to actualize their dreams due to unfavorable financial circumstances. In the year 2011, Beximco Pharma offered assistance to a total of 36 meritorious students coming from diverse academic backgrounds. Responsibility to the Environment We are always aware of environmental compliance and adopt policy to preserve the environment by practically minimizing emission and waste, thereby reducing our carbon footprint. The premise that drives us is we always put the needs of people before anything else in every chapter of our success story. Our Safety, Health and Environment (SHE) program is also based on a framework of consistent standards. Our Path to Protecting the Ozone Layer Inhaled therapy is essential for the treatment of patients with asthma and COPD. Unfortunately, CFC gases used in inhalers as propellants have ozone-depleting properties. The “Montreal Protocol on Substances that Deplete the Ozone Layer”, that control ozone-depleting to established measures substances, made it mandatory for Bangladesh and many other countries to implement and complete the phase-out of CFC based MDIs by December 31, 2009. international agreement the It was a challenge for Bangladesh to make the transition from ozone-depleting CFC to ozone-benign HFA-based inhalers to save the environment and to ensure availability of inhalers for the patients. In 2006, we were the first Bangladeshi company to proactively and successfully make the shift to HFA inhalers to ensure that no patient in Bangladesh suffers from a lack of availability of MDIs when CFC would become scarce in the future. This was an enormous feat not only for a developing country like Bangladesh but also for the world at large. In addition to proactively adopting ozone-benign HFAs, Beximco Pharma actively advocated so that others would also do the same. As a follow-up to UNEP’s Langkawi Declaration on Public-Private Partnership, Beximco Pharmaceuticals Ltd. and Bangladesh Lung Foundation, designed an effective awareness raising strategy for CFC-free MDIs for asthma and COPD patients. Today, we are the single largest producer of ozone-benign MDI in Bangladesh, and as a responsible company we conduct well thought-out multi-stakeholder campaigns when we launch a product. Such partnerships are now regarded as a successful role model of public-private partnership involving government, pharmaceutical industries, doctors, environmental agencies and others stakeholders that could be replicated in other developing countries. Responsibility to the Stakeholders Even though at the core of any business is the aim to maximize profit, we actively look out for our stakeholders’ best interest and ensure that our growth is “sustainable” in the long run. Once again, this year we achieved substantial growth and surpassed the industry average. From the handsome revenues earned, we always make it a point to invest in the future. We are committed to ensure the optimal utilization of resources in order to create and sustainably maintain our shareholders’ wealth. Every day we are mindful of our responsibilities to create value for our community, for instance, our support for Save the Children’s program on human rights; nourishing employee relations through the creation and maintenance of employment; creating change though environmental into the future with stewardship and progressing excellence in financial performance. In our everyday interactions with our stakeholders including employees, customers, suppliers, competitors and so on, we do our utmost to maintain integrity and fairness in all dealings. In the final analysis, the basic premise behind is the Company’s same old firm it all determination, which is to give people the confidence to live life without fear and reach their highest potential. ANNUAL REPORT 2011 43 ANNUAL REPORT 2011 44 Our Aspirations We bid farewell to the year 2011 with a sense of accomplishment and high spirits. 2011 will be warmly remembered as a year of many high notes including resounding octaves such as achieving outstanding growth in revenue, receiving GMP certification from EU regulatory authority and winning the National Export Trophy (Gold). On that note, we look forward to push further and broaden our horizons so that we may supersede our previous accomplishments. With almost 2,700 people on board, inevitably our collective aspirations are countless; however the following are ones we hope to achieve in the near future: Making significant investment in R&D Making significant investment in R&D Product diversification Product diversification Product diversification Targeted global expansion; building presence in regulated markets Targeted global expansion; building presence in regulated markets Targeted global expansion; building presence in regulated markets Partnership with global pharmaceutical and research companies Partnership with global pharmaceutical and research companies Partnership with global pharmaceutical and research companies To become a leading contract manufacturer in the region To become a leading contract manufacturer in the region To become a leading contract manufacturer in the region ANNUAL REPORT 2011 45 ANNUAL REPORT 2011 46 Post Balance Sheet Highlights Launched 10 new products during the first quarter of 2012 Sterile ophthalmic facility was accredited by Therapeutic Goods Administration (TGA) Australia Received approval from MCC, South Africa for metered dose inhalers Formal shut down of the chlorofluorocarbon (CFC) based MDI plant in the presence of Health Minister of Bangladesh and high profile representatives from UNDP and UNEP Director General of World Trade Organization (WTO) Pascal Lamy visited our state-of-the-art manufacturing facilities and expressed high satisfaction over the operations Launched 9 new products in overseas markets ANNUAL REPORT 2011 47 ANNUAL REPORT 2011 48 Notice BEXIMCO PHARMACEUTICALS LIMITED 17, Dhanmondi R/A, Road No. 2, Dhaka-1205 Notice of the Thirty-Sixth Annual General Meeting Notice is hereby given that the Thirty-Sixth Annual General Meeting of the Shareholders of Beximco Pharmaceuticals Limited will be held on Saturday the 30th June, 2012 at 10.30 a.m. at Beximco Industrial Park, Sarabo, Kashimpur, Gazipur 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, 2011 together with reports of the Auditors and the Directors thereon. 2. To elect Directors. 3. To declare 21% Stock Dividend. 4. To appoint Auditors for the year 2012 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, (MOHAMMAD ASAD ULLAH, FCS) Executive Director & Company Secretary Dated : May 17, 2012 NOTES : (1) The Shareholders whose names appear in the Share Register of the Company or in the Depository Register on the record date i.e. 21 May, 2012, 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). (4) No gift or benefit in cash or kind shall be paid to the holders of equity securities in terms of Clause (c) of the Notification No. SEC/SRMI/2000-953/1950 dated 24 October 2000 for attending the AGM of the Company. ANNUAL REPORT 2011 49 Chairman’s Statement Dear Shareholders, On behalf of the Board, I am pleased to report another year of continued success for Beximco Pharma despite a very challenging business environment. The Bangladesh economy experienced a turbulent year marked by a hefty devaluation of Taka against the US Dollar. This weakening commenced in the 4th quarter of 2010 and continued throughout 2011 resulting in an exchange rate of Tk.81.98 to the Dollar at the end of December 2011 against a rate of Tk. 70.90 a year earlier. Additionally, high domestic inflation and a resulting increase in prices of local materials, coupled to a shortage of liquidity available for the private sector (due to increased government borrowings) as well as an increase in interest rates made 2011 exceptionally challenging - especially given the backdrop of a struggling global economy. I am very pleased to report that we successfully countered these challenges delivering solid growth in all key business areas and making significant progress towards accomplishing our strategic goal of building shareholder value. significantly enhanced our prescription share in sales of the formulation products and maintained, as expected, growth in all our key therapeutic segments. Sales of our Active Pharmaceutical Ingredients (APIs) also recorded a significant 37.1% growth to reach Tk. 486.91 million (2010: Tk. 355.24 million). However, its impact on the overall profitability of the company is currently low because of a low gross margin predominantly due to the high cost of intermediate materials to manufacture these APIs. In 2011 export sales grew by 18.1% to Tk. 390.32 million (2010: Tk. 330.54 million). import of Along with sales growth, Beximco Pharma also achieved a marked growth in profit in 2011. Our pre-tax profit increased 23.2% to Tk. 1,677.85 million (2010: Tk. 1,361.53 million). Gross margin as percentage of sales however, slightly declined to 48% as against 48.9% for the prior period. This was due principally to a depreciation in the value of the Taka against the Dollar and the high level of domestic inflation. However, with our constant drive to contain costs and effective profit optimization strategies, the negative impact of rising cost on profit has been kept to the practicable minimum. Overseas Business Certification of the relevant manufacturing facility by the duly accredited authorities is the first step of the enduring process of the export of pharmaceutical products. Our manufacturing facilities have been approved by a number of major regulatory authorities. In 2011 we received GMP (Good Manufacturing Practice) accreditation from the Austrian Agency for Health and Food Safety (AGES) for our oral solid dosage and ophthalmic manufacturing facilities. This is another testimony of our manufacturing excellence and important progress towards achieving targeted exports into the regulated European markets. During the year under review we registered 48 products in 8 countries including New Zealand, Azerbaijan, Kuwait, Singapore and Colombia. Sales and Profitability We maintained our record of uninterrupted growth, achieving a 21.6% increase in sales to Tk. 7,890.24 In 2011 we million (2010: Tk. 6,490.85 million). At home we have received the prestigious National Export Trophy (Gold) for excellence in pharmaceutical export for the record fourth time. This is an endorsement of our commitment towards strengthening our presence in overseas market. ANNUAL REPORT 2011 50 Research & Development (R&D) and New Products We are continuously focused on strengthening our R&D capabilities. There have been a series of positive developments in the year under review. We have inducted in our existing pool of talent two highly experienced professionals from overseas. un-explored therapeutic segments. A number of such un-explored therapeutic segments. A number of such projects that can drive future growth are in our projects that can drive future growth are in our investment plan. We are taking up projects to expand investment plan. We are taking up projects to expand capacities and upgrade some of our exisiting facilities to capacities and upgrade some of our exisiting facilities to meet the growing demand in the marketplace. We also meet the growing demand in the marketplace. We also need significant investment in R&D and overseas market need significant investment in R&D and overseas market development to realize the full potential of generic drug development to realize the full potential of generic drug opportunities. launched combination Consistent to our continued drive to deliver quality products at affordable prices our R&D team successfully introduced 40 new generic formulations in 55 different dosage forms and strengths. During the year Beximco therapies such as Pharma Dinovo® NapaDol® Glipitia®M (Naproxen+Esomeprazole) (Sitagliptin+Metformin). We also outsourced some R&D services to develop certain specialized products for regulated markets. (Paracetamol+Tramadol), and Investments for Sustainable Growth A number of projects initiated in earlier years were completed and became commercially operational in 2011. Expansion of our state-of-the-art metered dose inhaler (MDI) plant has added significant further capacity raising the total manufacturing capacity to 20 million canisters. Two other projects, namely facilities for dry powder inhalers (DPI) and pre-filled syringe products were also successfully completed and became operational. Amino acid unit also started commercial operation in 2011. Facilities for liquid lyophilized products and powder for suspensions and sachets are nearing completion. Other projects are progressing as planned. Beximco Pharma has always been a pioneer in adopting innovative technologies. This brings both sophistication and the potential to sustain growth to our business. Over the past couple of years we have made considerable investments improve productivity, drive growth and achieve excellence in operations. The results that we have achieved today was possible due to these farsighted investments in the past. There are avenues for further acceleration of our growth through diversification of our product portfolio into as yet facilities and processes to in Alongside investment in manufacturing facilities, we are Alongside investment in manufacturing facilities, we are equally focused on investing in products, markets and equally focused on investing in products, markets and most importantly our human resource to ensure both the most importantly our human resource to ensure both the sustainable growth of our business and a meaningful sustainable growth of our business and a meaningful return for our valued shareholders. Whatever we have achieved so far is the reflection of the Whatever we have achieved so far is the reflection of the exceptional efforts by the employees Beximco Pharma. I exceptional efforts by the employees Beximco Pharma. I would like to thank them all for their outstanding would like to thank them all for their outstanding contribution and support in helping to deliver a very contribution and support in helping to deliver a very successful 2011 and creating the new opportunities for successful 2011 and creating the new opportunities for growth and performance in 2012 and beyond. Before I conclude, I express my gratitude for your constant Before I conclude, I express my gratitude for your constant support over the years. I also take this opportunity to support over the years. I also take this opportunity to the support and acknowledge, with appreciation, the support and acknowledge, with appreciation, co-operation that we have received from our stakeholders. co-operation that we have received from our stakeholders. I am confident that we are investing in the right areas, I am confident that we are investing in the right areas, taking the right actions and building the right kind of taking the right actions and building the right kind of culture. I firmly believe Beximco Pharma has an enduring culture. I firmly believe Beximco Pharma has an enduring role to play in meeting humanity’s most important priority- role to play in meeting humanity’s most important priority- better health. I look forward with great enthusiasm to our future. Thank You All A S F Rahman Chairman ANNUAL REPORT 2011 51 ßY~JroqJPjr k´KfPmhj Kk´~ ßv~JrPyJøJrmOª, ßmKéoPTJ lJoJtKxCKaTqJux KuKoPac Fr iJrJmJKyT xJlPuqr IJrS FTKa mZr IKfâJ∂ yP~PZÇ kKrYJuTo¥uLr kã ßgPT ßTJŒJjLr 2011 xJPur TJptâPor FTKa xÄK㬠k´KfPmhj IJkjJPhr xJoPj Ck˙Jkj TrPf ßkPr IJKo Ifq∂ IJjKªf S VKmtfÇ 2011 xJu mJÄuJPhPvr IgtjLKfr \jq FTKa WajJmÉu mZrÇ F mZr cuJPrr KmkrLPf aJTJr ßrTct kKroJe ImoNuqJ~j WPaÇ 2010 xJPur ßvw k´J∂ ßgPT aJTJ ßp ImoNuqJ~j Êr∆ yP~KZu 2011 xJPur kMPrJ mZr \MPz fJ ImqJyf gJPT FmÄ mZr ßvPw cuJr aJTJr KmKjo~ yJr hJzJ~ 81.98 aJTJ pJ 2010 xJPu KcPxÍr oJPx KZu 70.90 aJTJÇ Ckr∂á CóY oMhsJ°LKf \Kjf TJrPe CkTrPer oNuqmOK≠, xrTJPrr IKfKrÜ Ee V´yPer lPu mqKÜUJPf fJruq xÄTa, xMPhr yJr mOK≠ FmÄ xPmJtkKr IJ∂\JtKfT IgtjLKfr âoJVf oªJnJm, AfqJKhr TJrPe 2011 xJu k´TífkPã FTKa YqJPuK†Ä mZr KyPxPm IKmnátf y~Ç IJKo IJjPªr xJPg \JjJPf YJA IJorJ F YqJPu† Ifq∂ xJlPuqr xJPg ßoJTJPmuJ TPr mqmxJP~r xTu èr∆fôkNet ßãP© CPuäUPpJVq kKroJe k´mOK≠ I\tj TPrKZÇ ßTRvuVf uãqxoNy I\tPjr oJiqPo KmKjP~JVTJrLPhr ˝Jgt xÄrãe S mOK≠r Kjr∂r uPãq IJorJ pgJpgnJPm IV´xr yP~KZÇ ANNUAL REPORT 2011 52 Kmâ~ S oMjJlJ kpJtPuJYjJ IJoJPhr Kmâ~ k´mOK≠r iJrJmJKyTfJ mrJmPrr of F mZrS ImqJyf KZuÇ 2011 xJPu IJoJPhr Kmâ~ kNmtmfLt mZPrr fáujJ~ 21.6% mOK≠ ßkP~PZÇ F k´vÄxjL~ ksmOK≠r ßk´KãPf 2011 xJPu IJoJPhr KmâP~r kKroJe hJzJ~ 7,890.24 KoKu~j aJTJ pJ kNmtmfLt mZPr KZu 6,490.85 KoKu~j aJTJÇ IJPuJYq mZPr IJoJPhr ksmOK≠r k´iJj YuT lroNPuvj kPeqr ßk´xKâkvj ßv~Jr CPuäUPpJVq yJPr mOK≠ ßkP~PZÇ FZJzJ k´KfKa k´iJj ßgrJKkCKaT ßv´eLPf IJorJ IJoJPhr TJK–Uf k´mOK≠ I\tPj xão yP~KZÇ IJPuJYq mZPr IJoJPhr C&kJKhf F.Kk.IJA keqxoNPyr Kmâ~ Fr kKroJe hJKzP~PZ 486.91 KoKu~j aJTJ pJ kNmtmfLt mZPrr Kmâ~ 355.24 KoKu~j aJTJ IPkãJ 37.1% ßmvLÇ Imvq Fxo˜ F.Kk.IJA C&kJhPj mqmÂf IJohJjLTíf TÅJYJoJPur IKf oNPuqr TJrPe F UJPf oMjJlJr kKroJe UMmA xJoJjq pJr lPu ßTJŒJjLr xJKmtT oMjJlJ~ F UJPfr ImhJj ffaJ CPuäUPpJVq j~Ç 2011 xJPu IJoJPhr r¬JjLr kKroJe hJKzP~PZ 390.32 KoKu~j aJTJ pJ kNmtmfLt mZPrr 330.54 KoKu~j aJTJ IPkãJ 18.1% ßmvLÇ KmâP~r of oMjJlJr ßãP©S IJoJPhr k´mOK≠ WPaPZÇ IJPuJYq mZPr IJoJPhr Tr­kNmt oMjJlJr kKroJe 1,677.85 KoKu~j aJTJ pJ kNmtmfLt mZPr KZu 1,361.53 KoKu~j aJTJ ­ k´mOK≠r yJr 23.2%Ç Imvq IJoJPhr V´x oMjJlJr yJr 48.9% PgPT KTZáaJ y∑Jx ßkP~ 48% yP~PZÇ cuJr Fr KmkrLPf aJTJr ImoNuqJ~j FmÄ Inq∂rLe oNuq°LKf F\jq oMUqf hJ~LÇ fPm UrY Kj~πPj rJUJr \jq IJoJPhr Kjr∂r k´PYÓJ FmÄ oMjJlJ xPmJtóYTrPer uPãq VOyLf KmKnjú TJptTr ßTRvPur TJrPe oMjJlJr Ckr mq~ mOK≠r EeJfìT k´nJmPT jMjqfo kpJtP~ rJUJ x÷m yP~PZÇ IJ∂\JtKfT mJ\Jr IJkjJrJ ImVf IJPZj ßp, Hwi r¬JKjr ßãP© IJ∂\JtKfTnJPm ˝LTíf k´KfÔJjxoNy ßgPT TJrUJjJ k´fq~Pjr k´P~J\j y~Ç FKa Hwi r¬JKjr xMhLWt k´Kâ~Jr k´JgKoT khPãkÇ Fr IJPuJPT AKfoPiq IJoJPhr ßTJŒJjL ßmv TP~TKa IJ∂J\JtKfT k´KfÔJPjr IjMPoJhj uJn TPrPZÇ xmtPvw IJorJ Austrian Agency for Health and Food Safety - AGES TfítT xjhk´J¬ yP~KZÇ FKa FTKhPT ßpoj IJoJPhr C&kJhj S C&TwtfJr ˝LTíKf, IjqKhPT Fr lPu ACPrJkL~Jj mJ\JPr IJoJPhr r¬JKjr uãq I\tPj IJrS FT iJk IV´VKf xJKif yuÇ IJPuJYq mZPr IJorJ KjCK\uqJ¥, IJ\JrmJA\Jj, TáP~f S TuKÍ~Jxy 8Ka ßhPv 48Ka keq KjmKºf TPrKZÇ F mZr IJ∂\JtKfT ˝LTíKfr kJvJkJKv IJorJ \JfL~ ˝LTíKf I\tPjS xão yP~KZÇ r¬JKjr ßãP© CPuäUPpJVq ImhJPjr ˝LTíKf˝r‡k IJorJ ßrTct Yfágt mJPrr of \JfL~ r¬JKj asKl uJn TPrKZÇ FKa IJoJPhr \jq FTKa KmvJu xÿJjÇ Fr lPu IJoJPhr r¬JKjr CPhqJV IJrS k´xJKrf yPmÇ R&D FmÄ jfáj keq CØJmj S VPmweJ TJptâoPT xoO≠TrPer k´PYÓJ IjqJjq mZPrr of FmZrS ImqJyf KZuÇ FrA iJrJmJKyTfJ~ FmZr IJorJ IJoJPhr R&D KaoPT IJrS vKÜvJuL TPrKZÇ hMA\j KmPvwù KmPhvL VPmwT AKfoPiq IJoJPhr VPmweJ KmnJPV ßpJV KhP~PZjÇ KjKmz VPmweJ TJptâPor oJiqPo CóY èeVfoJjxŒjú keq CØJmj FmÄ fJ xTPur \Pjq xy\unq TrJr uPãq IJoJPhr xmJtfìT k´PYÓJ mrJmPrr of F mZPrS ImqJyf KZuÇ luv´∆ KfPf FmZr 55Ka ßv´eLKmjqJPx 40Ka jfáj keq IJoJPhr keqx÷JPr xÄPpJK\f yP~PZÇ IJPuJYq mZPr IJorJ ßmv TP~TKa Combination ­ NapaDol® keq (Paracetamol+Tramadol), Dinovo® (Naproxen+Esomeprazole) FmÄ Glipita® M (Sitagliptin+Metformin) xmtk´go IJorJA mJÄuJPhPvr mJ\JPr KjP~ FPxKZÇ Cjúf ßhvxoNPyr mJ\JrPT xJoPj ßrPU KTZá KTZá KmPvw keqPT ßx ßhPvr Kj~πeTJrL k´KfÔJjxoNPyr YJKyhJ ßoJfJPmT xJo†xqkNet TPr ßfJuJr \jq IJorJ VPmweJPxmJ IJCaPxJxt TJptâPoS KmKjP~JV TPrKZÇ ßpoj ßaTxA Cjú~Pjr \jq KmKjP~JV KmVf mZrxoNPy VOyLf ßmv KTZá k´T· F mZr xŒjú yP~PZ FmÄ mJKeK\qTnJPm TJptâo Êr∆ TPrPZÇ IJoJPhr xmJtiMKjT k´pMKÜxŒjú Metered Dose Inhaler(MDI) käqJ≤ Fr C&kJhj ãofJ mKitfTrPer TJ\ xŒjú yP~PZÇ lPu F käqJP≤r ßoJa C&kJhj ãofJ yP~PZ 20 KoKu~j TqJKjÓJrÇ FZJzJ Dry Powder Inhaler (DPI) FmÄ Pre-filled Syringe k´T·xoNyS xlunJPm xŒjú yP~PZÇ Amino Acid ACKja Fr C&kJhjS 2011 xJPu Êr∆ yP~PZÇ Liquid Lyophilized Products FmÄ Powder for Suspension and Sachet Fr \jq k´P~J\jL~ ImTJbJPoJ KjoJte k´T·xoNPyr TJ\xoJK¬r kPg; IjqJjq k´T·xoNyS kKrT·jJoJKlT IV´xr yPóZÇ ßmKéoPTJ xmxoP~ xmJtiMKjT ßaTxA k´pMKÜPf KmKjP~JPV IV´eL nëKoTJ kJuj TPr IJxPZÇ Fxm KmKjP~JPVr oJiqPo mqmxJK~T TJptâo xy\LTrPer kJvJkJKv hLWtPo~JhL k´mOK≠ PTS xMKjKÁf TrJ yP~PZÇ KmVf TP~T mZPr C&kJhj­ C&TwtfJ, C&kJhjvLufJ FmÄ k´mOK≠r uPãq IJorJ ImTJbJPoJ C&TwtfJ, C&kJhjvLufJ FmÄ k´mOK≠r uPãq IJorJ ImTJbJPoJ KjoJtexy Ijqjq UJPf CPuäUPpJVq kKroJe KmKjP~JV TPrKZÇ F KjoJtexy Ijqjq UJPf CPuäUPpJVq kKroJe KmKjP~JV TPrKZÇ F xo˜ hNrhvLt KmKjP~JPVr TJrPe IJ\PTr I\tj x÷m yP~PZÇ xo˜ hNrhvLt KmKjP~JPVr TJrPe IJ\PTr I\tj x÷m yP~PZÇ fPm keqx÷JPrr Km˜íKfTrPer oJiqPo C&kJhj k´mOK≠PT IJrS fPm keqx÷JPrr Km˜íKfTrPer oJiqPo C&kJhj k´mOK≠PT IJrS fôrJKjõf TrJr \jq jfáj jfáj x÷JmjJo~ Therapeutic UJPf UJPf KmKjP~JV \r∆rLÇ IJoJPhr nKmwqf k´mOK≠r TgJ oJgJ~ ßrPU KmKjP~JV \r∆rLÇ IJoJPhr nKmwqf k´mOK≠r TgJ oJgJ~ ßrPU IJrS ßmv KTZá k´T· IJoJPhr kKrT·jJ~ IJPZÇ KTZá KTZá IJrS ßmv KTZá k´T· IJoJPhr kKrT·jJ~ IJPZÇ KTZá KTZá ßãP© âomitoJj YJKyhJr fáujJ~ IJoJPhr C&kJhj ãofJr ßãP© âomitoJj YJKyhJr fáujJ~ IJoJPhr C&kJhj ãofJr xLoJm≠fJ rP~PZ FmÄ ßTJj ßTJj ßãP© IJoJPhr C&kJhj xLoJm≠fJ rP~PZ FmÄ ßTJj ßTJj ßãP© IJoJPhr C&kJhj ImTJbJPoJr IJiMKjTJ~j S k´Kf˙Jkj k´P~J\jÇ F xÄâJ∂ KTZá ImTJbJPoJr IJiMKjTJ~j S k´Kf˙Jkj k´P~J\jÇ F xÄâJ∂ KTZá k´T· IJoJPhr xKâ~ KmPmYjJ~ rP~PZÇ FZJzJ CØJmj S k´T· IJoJPhr xKâ~ KmPmYjJ~ rP~PZÇ FZJzJ CØJmj S VPmweJ TJptâo FmÄ r¬JKj mJ\Jr Cjú~j xÄKväÓ UJPf VPmweJ TJptâo FmÄ r¬JKj mJ\Jr Cjú~j xÄKväÓ UJPf C&kJhj ImTJbJPoJr CPuäUPpJVq kKroJe KmKjP~JV hrTJrÇ C&kJhj ImTJbJPoJr kJvJkJKv keq, mJ\Jr FmÄ xPmJtkKr oJjmxŒh Cjú~j UJPf kJvJkJKv keq, mJ\Jr FmÄ xPmJtkKr oJjmxŒh Cjú~j UJPf KmKjP~JVPTS IJorJ xonJPm k´JiJjq KhKóZÇ mqmxJP~r âoJVf KmKjP~JVPTS IJorJ xonJPm k´JiJjq KhKóZÇ mqmxJP~r âoJVf k´mOK≠r oJiqPo IJoJPhr xÿJKjf ßv~JPyJøJrPhr xŒh mOK≠ k´mOK≠r oJiqPo IJoJPhr xÿJKjf ßv~JPyJøJrPhr xŒh mOK≠ xMKjKÁf TrJA IJoJPhr uãqÇ IJoJPhr IK\tf xJlPuqr KkZPj rP~PZ IJoJPhr xMhã ToLt IJoJPhr IK\tf xJlPuqr KkZPj rP~PZ IJoJPhr xMhã ToLt mJKyjLr IxJiJre v´o S k´PYÓJÇ xJlPuqr xJPg 2011 xJPur mJKyjLr IxJiJre v´o S k´PYÓJÇ xJlPuqr xJPg 2011 xJPur uãq xoNy I\tj TPr IJoJPhr nKmwqf x÷JmjJPT IJrS uãq xoNy I\tj TPr IJoJPhr nKmwqf x÷JmjJPT IJrS Cöôufr TrJr ßãP© IxJoJjq ImhJj rJUJr \Pjq IJKo Cöôufr TrJr ßãP© IxJoJjq ImhJj rJUJr \Pjq IJKo ßmKéoPTJ lJoJtKxCKaTqJux Fr xTu ToLtPT IJoJr IJ∂KrT ßmKéoPTJ lJoJtKxCKaTqJux Fr xTu ToLtPT IJoJr IJ∂KrT ijqmJh ùJkj TrKZÇ kKrPvPw, xÿJKjf ßv~JrPyJøJrVe, ßTJŒJjL kKrYJujJ~ kKrPvPw, xÿJKjf ßv~JrPyJøJrVe, ßTJŒJjL kKrYJujJ~ kKrPvPw, xÿJKjf ßv~JrPyJøJrVe, ßTJŒJjL kKrYJujJ~ kKrPvPw, xÿJKjf ßv~JrPyJøJrVe, ßTJŒJjL kKrYJujJ~ Kjr∂r xyPpJKVfJr \Pjq IJKo IJkjJPhr TJPZ TífùfJ ùJkj TJPZ TífùfJ ùJkj TrKZÇ FTAxJPg IJKo IJoJPhr ßTJŒJjLr xJPg xÄKväÓ TrKZÇ FTAxJPg IJKo IJoJPhr ßTJŒJjLr xJPg xÄKväÓ xTuPT fJPhr xJKmtT xogtj S kOÔPkJwTfJr \jq ijqmJh xTuPT fJPhr xJKmtT xogtj S kOÔPkJwTfJr \jq ijqmJh \JjJKóZÇ IJKo IJ˙Jr xJPg muPf kJKr ßp, TJptTr KmKjP~JV \JjJKóZÇ IJKo IJ˙Jr xJPg muPf kJKr ßp, TJptTr KmKjP~JV ßTRvu V´ye, xKbT Totk∫J ImuÍj FmÄ pPgJkpMÜ mqmxJK~T ßTRvu V´ye, xKbT Totk∫J ImuÍj FmÄ pPgJkpMÜ mqmxJK~T kKrPmv VPz ßfJuJr ßãP© IJorJ xKbT kPg FèKóZÇ IJKo kKrPmv VPz ßfJuJr ßãP© IJorJ xKbT kPg FèKóZÇ IJKo hO|nJPm KmvõJx TKr ßp, xTu oJjMPwr xM˝J˙q KjKÁf TrJr hO|nJPm KmvõJx TKr ßp, xTu oJjMPwr xM˝J˙q KjKÁf TrJr ßãP© ßmKéoPTJ lJoJtr èr∆fôkNet ImhJj rP~PZÇ IJKo ßmKéoPTJ lJoJtr FTKa xlu nKmwqf TJojJ TrKZÇ F Fx Fl ryoJj ßY~JroqJj ANNUAL REPORT 2011 53 Report of the Directors to the Shareholders For the year ended 31 December 2011 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, 2011 along with Auditors' Report thereon. Financial Results and Appropriation of Profit 2008 Net Profit After Tax Adjustment for depreciation on revalued assets Profit brought forward from previous year Profit Available for Appropriation Proposed dividend Profit Carried Forward Dividend 2011 1,198,525 23,560 4,667,699 5,889,784 Taka in Thousand 2010 1,051,649 26,811 4,008,852 5,087,312 (528,712) (419,613) 5,361,072 4,667,699 The Board of Directors has recommended 21% stock dividend for approval of the shareholders for the year ended 31 December, 2011. Directors Mr. A S F Rahman, Director, Dr. Abdul Alim Khan, Independent Director and Advocate Ahsanul Karim, Director (Nominated by different Associated Companies combinedly) 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. Board Audit Committee Four meetings of the audit committee were held in 2011 to consider Annual Financial Statements for the year ended 31 December 2010, Quarterly Report for the period ended 31 March 2011, Half-Yearly Report for the period ended 30 June 2011 and Quarterly Report for the period ended 30 September 2011. The Committee comprises of Mr. M A Qasem as Chairman, Dr. Abdul Alim Khan and Advocate Ahsanul Karim as Members. ANNUAL REPORT 2011 54 Auditors The existing Auditors, M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, Bir Uttam C. R. Datta Road, Dhaka-1205 who were appointed as Auditors of the Company in the Thirty-fifth Annual General Meeting of the Company has carried out the audit for the year ended 31 December 2011. M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, Bir Uttam C. R. Datta Road, Dhaka-1205, the Auditors of the Company retires at this meeting and has expressed their willingness to continue in office for the year 2012. Board Meetings and Attendance During the year 18 (Eighteen) Board Meetings were held. The attendance record of the Directors is as follows: Name of Directors Meetings attended Mr. A S F Rahman Mr. Salman F Rahman Mr. Nazmul Hassan Mr. Iqbal Ahmed Mr. M. A. Qasem Mr. O. K. Chowdhury Dr. Abdul Alim Khan Mr. A. B. Siddiqur Rahman Advocate Ahsanul Karim 18 16 17 13 18 18 18 18 5 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. 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. ANNUAL REPORT 2011 55 The pattern of shareholding Name-wise details Number of Shares held (i) Parent/Subsidiary/Associate companies and other related parties : Beximco Holdings Ltd. Bangladesh Export Import Company Ltd. New Dacca Industries Ltd. Beximco Engineering Ltd. National Investment & Finance Company Ltd. (ii) 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 Mr. Nazmul Hassan, Managing Director Dr. Abdul Alim Khan, Independent Director Chief Financial Officer, Company Secretary and Head of Internal Audit and their spouse and minor children (iii) Executives (iv) Shareholders holding ten percent (10%) or more voting interest in the company: Key Operating and Financial Data The summarized key operating and financial data of five years is annexed. Corporate Governance Compliance Report 14,038,029 1,772,968 6,582,729 1,380,000 923,437 3,312,476 2,454,444 8,274 1,053,361 Nil Nil Nil 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 Date: April 28, 2012 ANNUAL REPORT 2011 56 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) 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) Title Compliance status Complied Not complied 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 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ ANNUAL REPORT 2011 57 Key Operating and Financial Data Authorized Capital Paid up Capital Total Sales Export Sales Gross Profit Profit Before Tax Net Profit Fixed Assets (Gross) Shareholders' Equity Taka in thousand 2011 2010 2009 2008 2007 9,100,000 2,517,678 7,890,242 390,315 3,786,533 1,677,849 1,198,525 19,289,344 17,128,128 9,100,000 2,098,065 6,490,847 330,541 3,173,207 1,361,532 1,051,649 9,100,000 1,511,493 4,868,255 272,126 2,302,048 867,467 624,740 2,000,000 1,259,577 4,010,167 170,604 2,007,296 714,121 545,341 2,000,000 1,145,070 3,597,025 122,752 1,629,515 399,678 353,068 18,191,956 15,974,086 15,621,366 10,885,707 14,291,850 10,516,030 10,450,202 8,250,940 Dividend Net Asset Value (NAV) Per Share EPS/Restated EPS Market Price Per Share (at end of the year) Price Earning Ratio (Times) Number of shareholders Foreign Investors ICB including ICB Investors Account 21% 68 4.76 93.60 19.66 20% 79 4.18 135.1 32.32 15% 72 3.5 155.8 44.51 30% 83 3.61 167.7 46.45 88,697 93,371 80,189 65,556 58 896 57 899 54 890 54 885 15% 72 2.80 58.9 21.04 53,892 60 879 Sponsors, General Public & Other Institutions 87,743 92,415 79,245 64,617 52,953 Number of Employees 2,670 2,507 2511 2,310 2,384 ANNUAL REPORT 2011 58 Total Sales Taka in thousand Profit Before Tax Taka in thousand 7,890,242 6,490,847 1,677,849 1,361,532 4,868,255 3,597,025 4,010,167 867,467 714,121 11% 21% 33% 22% 399,678 79% 21% 57% 23% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Fixed Assets (Gross) Taka in thousand Shareholders' Equity Taka in thousand 18,191,956 19,289,344 15,621,366 14,291,850 10,516,030 10,450,202 10,885,707 8,250,940 36% 9% 16% 6% 27% 4% 47% 7% 17,128,128 15,974,086 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 ANNUAL REPORT 2011 59 Shareholders’ Meeting The 35th Annual General Meeting (AGM) of the shareholders of Beximco Pharmaceuticals Limited was held on July 2, 2011. Mr. Salman F Rahman, Vice Chairman of the Company presided over the meeting. The performance of the company in 2010 and the future strategies were discussed in the meeting. The meeting among other agenda approved 20% stock dividend for the year 2010. The Chairman thanked the shareholders for their keen interest in and continued support for the company. ANNUAL REPORT 2011 60 ANNUAL REPORT 2011 61 Value Added Statement For the year ended 31 December 2011 Value Added: Sales & Other Income Bought-in-Materials & Services Applications Duties & Taxes to Govt. Exchequer Salaries and Benefits to Employees Interest to Lenders Dividend to Shareholders Retained by the Company Amount in Thousand Taka Tk. % 9,493,946 (4,165,702) 5,328,244 100 1,750,552 1,041,757 567,646 528,712 1,439,577 33 19 11 10 27 5,328,244 100 27% 33% 10% 11% 19% Duties & Taxes to Govt. Exchequer Salaries and Benefits to Employees Interest to Lenders Dividend to Shareholders Retained by the Company ANNUAL REPORT 2011 62 Auditors’ Report To The Shareholders of BEXIMCO PHARMACEUTICALS LIMITED Introduction We have audited the accompanying financial statements of Beximco Pharmaceuticals Limited, which comprise of the Statement of Financial Position as at 31 December 2011, and the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards (IFRSs), Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ responsibility 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) and Bangladesh Standards on Auditing (BSA). Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair preparation of the financial statements in order to design audit procedure that are appropriate in the circumstance, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) and Bangladesh Financial Reporting Standard (BFRSs), give a true and fair view of the state of the company’s affairs as at 31 December 2011 and of the results of its operations and cash flows for the year then ended and comply with 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 these books ; (c) the Statement of Financial Position ( Balance Sheet) and Statement of Comprehensive Income (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 April, 2012 M. J. ABEDIN & CO. Chartered Accountants ANNUAL REPORT 2011 63 BEXIMCO PHARMACEUTICALS LIMITED Statement of Financial Position As at 31 December 2011 ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Intangible Assets Investment in Shares Current Assets Inventories Spares & Supplies Accounts Receivable Loans, Advances and Deposits Short Term Investment Cash and Cash Equivalents TOTAL ASSETS EQUITY AND LIABILITIES Shareholders' Equity Issued Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Retained Earnings Non-Current Liabilities Long Term Borrowings-Net off Current Maturity (Secured) Liability for Gratuity & WPPF Deferred Tax Liability Current Liabilities and Provisions Short Term Borrowings Long Term Borrowings-Current Maturity Creditors and Other Payables Accrued Expenses Dividend Payable Income Tax Payable TOTAL EQUITY AND LIABILITIES Notes 2011 2010 Amount in Taka 4 (a) 3.3 & 5 6 7 8 9 10 11 12 13 14 15 4(b) 16 17 18 19 20 21 22 23 15,884,877,780 15,180,731,678 15,123,306,298 51,126,854 6,298,526 15,745,492,625 135,933,879 3,451,276 7,148,462,753 2,291,844,631 325,881,244 978,224,317 840,320,705 2,193,423,560 518,768,296 6,191,667,831 1,983,809,444 276,520,188 821,356,439 779,129,620 859,403,704 1,471,448,436 23,033,340,533 21,372,399,509 17,128,128,177 2,517,678,100 5,269,474,690 1,689,636,958 294,950,950 1,466,602,600 5,889,784,879 15,974,086,451 2,098,065,090 5,269,474,690 1,689,636,958 294,950,950 1,534,645,820 5,087,312,943 3,257,050,368 1,890,074,651 403,598,795 963,376,922 2,885,155,826 1,902,150,733 335,885,792 647,119,301 2,648,161,988 1,642,216,008 363,744,181 523,798,136 101,559,917 1,361,452 15,482,294 2,513,157,232 1,639,961,052 348,860,443 432,315,660 90,512,178 1,507,899 - 23,033,340,533 21,372,399,509 The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 28 April, 2012 and signed for and on behalf of the Board : Salman F Rahman Vice Chairman Nazmul Hassan Managing Director Dhaka 28 April, 2012 ANNUAL REPORT 2011 64 Ali Nawaz Chief Financial Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants BEXIMCO PHARMACEUTICALS LIMITED Statement of Comprehensive Income For the year ended 31 December 2011 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 Notes 2011 2010 Amount in Taka 24 7,890,241,843 6,490,847,353 25 28 29 30 31 (4,103,709,021) 3,786,532,822 (3,317,640,254) 3,173,207,099 (1,798,053,124) (275,201,846) (1,522,851,278) 1,988,479,698 (1,537,426,907) (233,413,980) (1,304,012,927) 1,635,780,192 340,907,774 (567,645,757) 1,761,741,715 456,011,134 (662,182,384) 1,429,608,942 Contribution to Workers' Profit Participation/Welfare Funds 32 (83,892,463) (68,076,616) Profit Before Tax Income Tax Expenses Current Tax Deferred Tax Expense Profit after Tax for the Year Other Comprehensive Income Total Comprehensive Income for the Year 33 1,677,849,252 (479,323,910) (207,549,905) (271,774,005) 1,198,525,342 - 1,198,525,342 1,361,532,326 (309,883,518) (71,085,835) (238,797,683) 1,051,648,808 - 1,051,648,808 Earnings Per Share (EPS) / Adjusted EPS (2010) 34 4.76 4.18 Number of Shares used to compute EPS 251,767,810 251,767,810 The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 28 April, 2012 and signed for and on behalf of the Board : Salman F Rahman Vice Chairman Nazmul Hassan Managing Director Dhaka 28 April, 2012 Ali Nawaz Chief Financial Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants ANNUAL REPORT 2011 65 BEXIMCO PHARMACEUTICALS LIMITED Statement of Changes in Equity For the year ended 31 December 2011 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Retained Earnings Total Amount in Taka Balance as on January 01, 2011 2,098,065,090 5,269,474,690 1,689,636,958 294,950,950 1,534,645,820 5,087,312,943 15,974,086,451 Total Comprehensive Income for 2011: Profit for the Year Other Comprehensive Income - - Transactions with the Shareholders: Stock Dividend for 2010 419,613,010 Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - 1,198,525,342 1,198,525,342 - - - (419,613,010) - (23,559,604) 23,559,604 - (44,483,616) - (44,483,616) - - Balance as on December 31, 2011 2,517,678,100 5,269,474,690 1,689,636,958 294,950,950 1,466,602,600 5,889,784,879 17,128,128,177 Number of Shares Net Asset Value (NAV) per Share The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 28 April, 2012 and signed for and on behalf of the Board : 251,767,810 68.03 Ali Nawaz Chief Financial Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants Salman F Rahman Vice Chairman Nazmul Hassan Managing Director Dhaka 28 April, 2012 ANNUAL REPORT 2011 66 BEXIMCO PHARMACEUTICALS LIMITED Statement of Cash Flows For the year ended 31 December 2011 Cash Flows from Operating Activities : Cash Receipts from Customers and Others Cash Paid to Suppliers and Employees Cash Generated from Operations Interest Paid Interest Received Income Tax Paid Net Cash Generated from Operating Activities Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment Intangible Assets Investment in Shares Disposal of Property, Plant and Equipment Short Term Investment Net Cash Used in Investing Activities Cash Flows from Financing Activities : Net Increase / (Decrease) in Long Term Borrowings Net Increase / (Decrease) in Short Term Borrowings Preference Share Dividend Ordinary Share Dividend Net Cash Generated from Financing Activities Increase / (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Net Operating Cash Flow Per Share Amount in Taka 2011 2010 7,741,749,367 (5,773,745,087) 1,968,004,280 (567,645,757) 330,494,566 (154,331,358) 1,576,521,731 6,442,514,780 (4,770,465,029) 1,672,049,751 (508,432,384) 367,995,851 (179,406,569) 1,352,206,649 (1,112,175,207) (95,949,037) 2,847,250 5,178,814 (1,334,019,856) (2,534,118,036) (2,595,098,749) (46,545,634) (3,416,700) 13,350,073 1,640,596,296 (991,114,714) 2,807,656 2,254,956 - (146,447) 4,916,165 (952,680,140) 1,471,448,436 17,258,054 188,634,698 (153,750,000) (219,825) 51,922,927 413,014,862 1,058,433,574 518,768,296 1,471,448,436 6.26 6.65 The Notes are integral part of the Financial Statements. Approved and authorised for issue by the board of directors on 28 April, 2012 and signed for and on behalf of the Board : Salman F Rahman Vice Chairman Nazmul Hassan Managing Director Dhaka 28 April, 2012 Ali Nawaz Chief Financial Officer Per our report of even date. M. J. Abedin & Co. Chartered Accountants ANNUAL REPORT 2011 67 BEXIMCO PHARMACEUTICALS LIMITED Notes to the Financial Statements As at and for the year ended 31 December 2011 1. Reporting Entity 1.1 About the Company Beximco Pharmaceuticals Limited (BPL/ the Company) was incorporated as a public limited company in Bangladesh in 1976. It commenced its manufacturing operation in 1980. The company was listed with Dhaka Stock Exchange in 1985 and with Chittagong Stock Exchange on its debut in 1995. In 2005, BPL took over Beximco Infusions Ltd., a listed company of the Beximco Group engaged in manufacturing and marketing of intravenous fluids and got enlisted with the Alternative Investment Market (AIM) of the London Stock Exchange through issuance of Global Depository Receipts (GDRs). Shares of the Company are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh and its GDRs in AIM of the London Stock Exchange. 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 and Kaliakoir of Gazipur district – vicinities close to the capital city Dhaka. 1.2 Nature of Business The company is engaged in manufacturing and marketing of generic pharmaceuticals formulation products including life saving intravenous fluids and Active Pharmaceutical Ingredients (APIs). Products of the company are sold in domestic and international markets. The company also provides contract manufacturing services. 2. Basis of Preparation of Financial Statements 2.1 Basis of Measurement The financial statements have been prepared on the Historical Cost basis except land, building and plant & machinery revalued as on 31 December 2008 and disclosed through Note: 4 b. The financial statements therefore, do not take into consideration the effect of inflation. 2.2 Statement of Compliance 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 and in accordance with the International Financial Reporting Standards (IFRSs), and Bangladesh Financial Reporting Standards (BFRSs). 2.3 Presentation of Financial Statements The presentation of these financial statements are in accordance with the guidelines provided by IAS 1 : Presentation of Financial Statements. The financial statements comprises of : (a) a Statement of Financial Position as at the end of the year 2011 ; (b) a Statement of Comprehensive Income for the year 2011 ; (c) a Statement of Changes in Equity for the year 2011 ; (d) a Statement of Cash Flows for the year 2011 ; and (e) notes, comprising summary of significant accounting policies and explanatory information. 2.4 Reporting Period The financial statements cover one calendar year from January 01, 2011 to December 31, 2011. ANNUAL REPORT 2011 68 2.5 Authorization for Issue The financial statements have been authorised for issue by the Board of Directors on April 28, 2012. 2.6 Functional and Presentation Currency The financial statements are prepared and presented in Bangladesh Currency (Taka), which is the company’s functional currency. All financial information presented has been rounded off to the nearest Taka except where indicated otherwise. 2.7 Comparative Information Comparative information has been disclosed in respect of the year 2010 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 2010 have been re-arranged wherever considered necessary to ensure better comparability with the current year. 2.8 Use of Estimates and Judgments The preparation of financial statements in conformity with the IFRSs including IASs require management to make judgments, 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. Any revision of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. In particular, the key areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include depreciation, inventory valuation, accrued expenses, other payable and deferred liability for gratuity. 3. Significant Accounting Policies The accounting principles and policies in respect of material items of financial statements set out below have been applied consistently to all periods presented in these financial statements. 3.1 Revenue Recognition In compliance with the requirements of IAS 18 : Revenue, revenue receipts from customers against sales is recognized 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 continu- ing 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. 3.2 Property, Plant and Equipment 3.2.1 Recognition and Measurement This has been stated at cost or revalued amount 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. 3.2.2 Maintenance Activities The company incurs maintenance costs for all its major items of property, plant and equipment. Repair and maintenance costs are charged as expenses when incurred. ANNUAL REPORT 2011 69 3.2.3 Depreciation 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 at the following rates on reducing balance basis: Building and Other Construction Plant and Machinery Furniture & Fixtures Transport & Vehicle Office Equipment 2% - 10% 5% - 15% 10% 20% 10% - 15% 3.2.4 Retirements and Disposals 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. 3.3 Intangible Assets Intangible assets are stated at cost less provisions for amortization and impairments. Licenses, patents, know-how and marketing rights acquired are amortized over their estimated useful lives, using the straight line basis, from the time they are available for use. The cost of acquiring and developing computer software for internal use and internet sites for external use are capitalized as intangible fixed assets where the software or site supports a significant business system and the expenditure leads to the creation of a durable asset. Also, the research and development expenditures that is definite to yield benefit to the company are capitalized. 3.4 Leased Assets In compliance with the IAS 17 : Leases, cost of assets acquired under finance lease along with related obligation has been accounted for as assets and liabilities respectively of the company, and the interest element has been charged as expenses. Lease payments made under finance leases are apportioned between the finance expenses and the reduction of the outstanding liability. 3.5 Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. 3.5.1 Financial Assets Financial assets of the company include cash and cash equivalents, accounts receivable and other receivables. The company initially recognizes receivable on the date they are originated. All others financial assets are recognized initially on the date at which the company becomes a party to the contractual provisions of the transaction. The company derecognizes a financial asset when, and only when the contractual rights or probabilities of receiving the cash flows from the asset expire or it transfer the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risk and rewards of ownership of the financial asset are transferred. 3.5.1(a) Accounts Receivable Accounts receivable are created at original invoice amount less any provisions for doubtful debts. Provisions are made where there is evidence of a risk of non-payment, taking into account aging, previous experience and general economic conditions. When an accounts receivable is determined to be uncollected it is written off, firstly against any provision available and then to the profit and loss account. Subsequent recoveries of amounts previously provided for are credited to the profit and loss account. 3.5.1(b) Cash and Cash Equivalents Cash and cash equivalents include cash in hand, in transit 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. 3.5.1(c) Investment in Shares Investment in shares of listed company is valued at lower of cost and stock exchange quoted value of year end. Investment in other shares is valued at lower of cost and net book value. ANNUAL REPORT 2011 70 3.5.2 Financial Liabilities Financial liabilities are recognized initially on the transaction date at which the company becomes a party to the contractual provisions of the liability. The company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. Finance liabilities include payable for expenses, liability for capital expenditure and other current liabilities. 3.6 Impairment (a) Financial Assets Accounts receivable and other receivables are assessed at each reporting date to determine whether there is any objective evidence of impairment. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effects on the estimated future cash flows of that asset, that can be estimated reliably. Objective evidence that financial assets are impaired can include default or delinquency by a debtor, indications that a debtor or issuer will enter bankruptcy etc. (b) Non-Financial Assets An asset is impaired when its carrying amount exceeds its recoverable amount. The company assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Carrying amount of the assets is reduced to its recoverable amount by recognizing an impairment loss if, and only if, the recoverable amount of the asset is less than its carrying amount. Impairment loss is recognized immediately in profit or loss, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset shall be treated as a revaluation decrease. 3.7 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. 3.8 Provisions A provision is recognized in the statement of financial position when the company has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provision is ordinarily measured at the best estimate of the expenditure required to settle the present obligation at the date of statement of financial position. Where the effect of time value of money is material, the amount of provision is measured at the present value of the expenditures expected to be required to settle the obligation. 3.9 Income Tax Expense Income tax expense comprises of current and deferred tax. Income tax expense is recognized in the Statement of Comprehensive Income 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 27.50%. Deferred Tax The company has recognized 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 recognized to the extent that it is probable that future taxable profit will be available, against which temporary differences can be utilized. 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 realized. ANNUAL REPORT 2011 71 3.10 Interest Income Interest income is recognized on accrual basis. 3.11 Borrowing Costs Borrowing costs are recognized as expenses in the period in which they are incurred unless capitalization of such is allowed under IAS 23 : Borrowing Costs. 3.12 Employee Benefits The company maintains both defined contribution plan and defined benefit plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective deeds. The company has accounted for and disclosed employee benefits in compliance with the provisions of IAS 19: Employee Benefits. The cost of employee benefits is charged off as revenue expenditure in the period to which the contributions relate. The company’s employee benefits include the following: (a) Defined Contribution Plan (Provident Fund ) The company has a registered provident fund scheme (Defined Contribution Plan) for employees of the company eligible to be members of the fund in accordance with the rules of the provident fund constituted under an irrevocable trust. All permanent employ- ees contribute 10% of their basic salary to the provident fund and the company also makes equal contribution. The company recognizes contribution to defined contribution plan as an expense when an employee has rendered services in exchange for such contribution. The legal and constructive obligation is limited to the amount it agrees to contribute to the fund. (b) Defined Benefit Plan (Gratuity) 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) Short-term Employee Benefits Short-term employee benefits include salaries, bonuses, leave encashment, etc. Obligations for such benefits are measured on an undiscounted basis and are expensed as the related service is provided. (d) 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 law. (e) Insurance Scheme Employees of the company are covered under insurance schemes. 3.13 Share Premium The Share Premium shall be utilized in accordance with the provisions of the Companies Act, 1994 and as per direction of the Securities and Exchange Commission in this respect. 3.14 Proposed Dividend The amount of proposed dividend has not been accounted for but disclosed in the notes to the accounts along with dividend per share in accordance with the requirements of the Para 125 of International Accounting Standard (IAS) 1: Presentation of Financial Statements. Also, the proposed dividend has not been considered as “Liability” in accordance with the requirements of the Para 12 ANNUAL REPORT 2011 72 & 13 of International Accounting Standard (IAS) 10: Events After The Reporting Period, because no obligation exists at the time of approval of accounts and recommendation of dividend by the Board of Directors. 3.15 Earnings Per Share (EPS) This has been calculated in compliance with the requirements of IAS 33: Earnings Per Share - dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. Basic earnings represent the earnings for the year attributable to ordinary shareholders. Current Year (2011) The Bonus Shares issued during the year 2011 were treated as if they always had been in issue. Hence, in computing the Basic EPS of 2011, the total number of shares including the said bonus shares has been considered as the Weighted Average Number of Shares outstanding during the year 2011. Earlier Year (2010) 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 (2010), and accordingly, in calculating the adjusted EPS of 2010, the total number of shares including the subsequent bonus issue in 2011 has been considered as the Weighted Average Number of Shares outstanding during the year 2010. The basis of computation of number of shares as stated 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. 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. 3.16 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 financial position date are translated at the applicable rates of exchanges ruling at that date. Any gain or loss due to exchange differences are recognized as revenue income/expense in compliance with the provisions of IAS 21 : The Effects of Changes in Foreign Exchange Rates. 3.17 Statement of Cash Flows The Statement of Cash Flow has been prepared in accordance with the requirements of IAS 7: Statement of Cash Flows. 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. 3.18 Events after Reporting Period Events after the reporting period that provide additional information about the company’s position at the date of Statement of Financial Position or those that indicate that the going concern assumption is not appropriate are reflected in the financial statements. Events after reporting period that are not adjusting events are disclosed in the notes when material. ANNUAL REPORT 2011 73 4 (a). Property, Plant and Equipment Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Amount in Taka Total Cost As on January 01, 2011 Additions during the year Transferred & Capitalized Disposal during the year 3,277,506,000 5,532,326,770 5,982,434,942 114,007,328 310,840,465 297,160,579 15,514,276,084 22,771,064 54,330,111 337,049,736 19,413,093 79,686,097 16,636,459 529,886,560 - - 690,853,922 709,159,431 6,079,065 - - (8,699,295) (70,000) (6,017,440) - - 1,406,092,418 (14,786,735) Cost as on December 31, 2011 3,300,277,064 6,277,510,803 7,019,944,814 139,429,486 384,509,122 313,797,038 17,435,468,327 Accumulated Depreciation As on January 01, 2011 Depreciation during the year Adjustment for assets disposed off Accumulated Depreciation as on December 31 , 2011 - - - - 565,793,628 2,166,047,990 43,983,781 103,448,241 189,376,258 3,068,649,898 143,417,227 279,562,405 6,999,643 40,989,546 15,879,052 486,847,873 - (8,029,900) (42,881) (3,572,947) - (11,645,728) 709,210,855 2,437,580,495 50,940,543 140,864,840 205,255,310 3,543,852,043 Net Book Value as on December 31, 2011 3,300,277,064 5,568,299,948 4,582,364,319 88,488,943 243,644,282 108,541,728 13,891,616,284 Capital Work in Progress Carrying Value as on December 31, 2011 Assets include lease hold assets of Tk. 895,091,938 at cost and Tk. 763,492,392 at carrying value. Capital Work in Progress is arrived at as follows : Balance as on January 01 Addition during the year Transferred & Capitalized Building and Other Constructions Plant & Machinery Furniture & Fixtures 4 (b). Revaluation Surplus S.F. Ahmed & Co, Chartered Accountants and Valuers revalued the land, building and plant & machinery of the Company as of 31 December 2008, following "Current cost method". Such revaluation resulted into a revaluation surplus aggregating Tk. 1,711,174,747. Current balance is arrived at as follows: Balance as on January 01 Adjustment for depreciation on revalued assets Adjustment for Deferred Tax on revalued assets 1,853,876,341 15,745,492,625 Amount in Taka 2011 2010 2,677,680,112 582,288,647 3,259,968,759 (1,406,092,418) (690,853,922) (709,159,431) (6,079,065) 1,348,945,269 2,079,614,699 3,428,559,968 (750,879,856) - (750,879,856) - 1,853,876,341 2,677,680,112 1,534,645,820 (23,559,604) (44,483,616) 1,617,361,714 (26,810,763) (55,905,131) 1,466,602,600 1,534,645,820 ANNUAL REPORT 2011 74 5. Intangible Assets This is arrived at as follows : Balance as on January 01 Add during the year Total Less amortised during the year Closing Balance 6. Investment in Shares This consists of as follows : (a) Bangladesh Export Import Co. Ltd. (former Bextex Ltd.) (b) Central Depository Bangladesh Ltd. (CDBL) Share details: (a) Former Bextex Ltd. Balance as on January 01, 2011 Stock Dividend for 2010 Total number of Bextex's shares Conversion in to Bangladesh Export Import Co. Ltd's share @ 5:1 basis (b) Central Depository Bangladesh Ltd. (CDBL) Balance as on January 01, 2011 Refund of Share premium against Right issue in 2010 No. of Share Amount in Taka 302,783 45,417 348,200 69,640 256,945 - 256,945 1,881,826 - 1,881,826 1,881,826 4,416,700 (2,847,250) 1,569,450 The shares of Bangladesh Export Import Co. Ltd. are listed with Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. on 29 December, 2011 was Tk. 113.00 in Dhaka Stock Exchange Ltd. and Tk. 113.40 in Chittagong Stock Exchange Ltd. 7. Inventories This consists of as follows : Finished Goods Work in Process Raw Materials Packing Materials Laboratory Chemicals Physician Samples Raw & Packing Materials in Transit 2011 2010 Amount in Taka 51,126,854 95,949,037 147,075,891 (11,142,012) 135,933,879 5,726,525 46,545,634 52,272,159 (1,145,305) 51,126,854 1,881,826 1,569,450 3,451,276 1,881,826 4,416,700 6,298,526 639,241,751 169,345,787 842,081,846 473,502,950 1,026,434 52,126,812 114,519,051 565,049,644 195,111,787 769,883,557 327,253,736 4,076,834 41,239,901 81,193,985 2,291,844,631 1,983,809,444 ANNUAL REPORT 2011 75 8. Spares & Supplies This consists of as follows : Spares & Accessories Stock of Stationery Literature & Promotional Materials 9. Accounts Receivable This includes receivable of Tk. 67,778,102 equivalent to US$ 841,964 (on 31-12-2010 Tk. 68,268,464 equivalent to US $ 976,659) against export sales. This also includes Tk. 768,912,524 ( on 31-12-2010 Tk. 589,633,177) due from I & I Services Ltd., who provides delivery support to the Company and a "Related Party". The maximum amount due from that company during the year was Tk. 802,568,012 on 30 November, 2011 (on 30.09.2010 Tk. 618,177,584). No amount was due from the directors, managing agent, managers and other officers of the company and any of them severally or jointly with any other person. 10. Loans, Advances and Deposits This is unsecured, considered good and consists of as follows : Clearing & Forwarding VAT Claims Receivable Security Deposit & Earnest Money Lease Deposit Capital Expenditure/ Project Expenses Bank Guarantee Margin Advance against Salary Rent Advance Motor Cycle Raw & Packing Material Advance Income Tax Prepaid Expenses Others 2011 2010 Amount in Taka 228,521,952 2,161,257 95,198,035 198,512,867 876,990 77,130,331 325,881,244 276,520,188 19,954,936 229,819,634 17,726,489 15,232,730 15,262,058 14,725,188 40,745,505 221,546 56,643,777 4,505,333 110,196,782 282,346,315 - 1,949,153 30,991,259 23,017,468 209,985,542 32,870,917 29,060,383 13,376,677 14,893,328 35,508,812 1,331,546 49,633,854 3,666,626 - 139,475,754 161,055,013 37,736,253 - 27,517,447 840,320,705 779,129,620 (a) The maximum amount due from the employees during the year was Tk. 58,154,026 on 30.11.2011. (b) No amount was due from 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 from any related party. (d) Advance income tax is after netting off the income tax liability. 11. Short Term Investment This represents the Company's temporary investment with Bangladesh Export Import Company Limited (Beximco Ltd.), carrying interest 1% avobe bank interest rate. This investment is returnable as and when required by the Company. ANNUAL REPORT 2011 76 12. Cash and Cash Equivalents This consists of as follows : (a) Cash in Hand, Current & FC Account (b) Imprest Cash (c) FDR Account 13. Issued Share Capital This represents : A. Authorized : 500,000,000 ( 2010: 500,000,000) Ordinary Shares of Tk. 10/- each 41,000,000 (2010: 41,000,000) Fully Convertible, 5% Dividend, Preference Shares of Tk. 100/- each B. Issued, Subscribed and Paid-up : 51,775,750 shares (2010: 51,775,750) of Tk. 10/- each fully paid-up in cash 162,749,663 Bonus Shares (2010: 120,788,362) of Tk. 10/- each 5,951,250 Shares of Tk. 10/- each issued in Exchange of Shares of Beximco Infusions Ltd. 31,291,147 Shares issued on conversion of Preference Shares 2011 2010 Amount in Taka 107,782,912 1,116,149 409,869,235 59,991,354 1,789,149 1,409,667,933 518,768,296 1,471,448,436 5,000,000,000 4,100,000,000 5,000,000,000 4,100,000,000 9,100,000,000 9,100,000,000 517,757,500 1,627,496,630 59,512,500 312,911,470 517,757,500 1,207,883,620 59,512,500 312,911,470 2,517,678,100 2,098,065,090 The movement of Ordinary Shares during the year 2011 is as follows : Balance as on January 01, 2011 Stock Dividend for 2010 Balance as on December 31, 2011 Number of Shares Amount in Taka 209,806,509 41,961,301 251,767,810 2,098,065,090 419,613,010 2,517,678,100 C. Composition of Shareholding of Ordinary Shares: 2011 2010 Sponsors: 1. A S F Rahman 2. Salman F Rahman Associates Foreign Investors ICB including ICB Investors Account General Public & Institutions Number of Shares % Number of Shares % 3,312,476 2,454,444 23,461,592 59,970,526 29,135,058 133,433,714 1.32 0.97 9.32 23.82 11.57 53.00 2,760,397 2,020,370 22,437,204 48,303,437 23,511,271 110,773,830 1.32 0.96 10.69 23.02 11.21 52.80 251,767,810 100.00 209,806,509 100.00 ANNUAL REPORT 2011 77 D. Distribution Schedule of Ordinary Shares: Range of Holdings In number of shares 1 to 499 500 to 5,000 5,001 to 10,000 10,001 to 20,000 20,001 to 30,000 30,001 to 40,000 40,001 to 50,000 50,001 to 100,000 100,001 to 1,000,000 Over 1,000,000 No. of Shareholders 2011 69,988 16,816 943 441 142 67 33 95 136 36 2010 75,349 16,420 815 362 102 52 38 82 122 29 % of Shareholders 2011 78.91% 18.96% 1.06% 0.50% 0.16% 0.07% 0.04% 0.11% 0.15% 0.04% 2010 80.70% 17.58% 0.87% 0.39% 0.11% 0.06% 0.04% 0.09% 0.13% 0.03% Number of Shares 2010 2011 8,744,514 8,603,693 21,358,898 22,653,112 5,856,413 6,614,186 5,108,823 6,029,631 2,493,069 3,484,617 1,812,896 2,312,160 1,763,174 1,487,163 6,047,905 6,670,278 39,226,466 36,446,752 154,686,504 120,174,065 % of Share Capital 2011 3.42% 9.00% 2.63% 2.39% 1.38% 0.92% 0.59% 2.65% 15.58% 61.44% 2010 4.17% 10.18% 2.79% 2.44% 1.19% 0.86% 0.84% 2.88% 17.37% 57.28% Total 88,697 93,371 100.00% 100.00% 251,767,810 209,806,509 100.00% 100.00% E. Market Price of Ordinary Shares: The shares are listed with Dhaka, Chittagong and London Stock Exchanges. On the last working day of the year, each share was quoted at Tk. 93.60 (in 2010 Tk. 135.10) in the Dhaka Stock Exchange Ltd., Tk. 93.60 (in 2010 Tk. 135.70) in the Chittagong Stock Exchange Ltd., and GBP 0.257 in London Stock Exchange (in 2010 GBP 0.47). F. Option on Unissued Ordinary Shares : There was no option on unissued shares as on 31.12.2011. 14. Share Premium This is arrived at as follows : Balance as on January 01 Premium on Conversion of Preference share Preference Share Issue Expense 15. Excess of Issue Price over Face Value of GDRs This represents the issue price of 28,175,750 GDRs at Tk. 2,244,080,670 net off face value of underlying shares against GDRs and GDR issue expenses as per IAS 32: Financial Instruments - Presentation. 16. Long Term Borrowings - Net off Current Maturity (Secured) This arrived at as follows : (a) Project Loan (b) Interest and PAD Block (c ) Obligation Under Finance Leases (a) Project Loan This loan was sanctioned under the consortium arrangement of Janata Bank Ltd., Sonali Bank Ltd., Agrani Bank Ltd., Rupali Bank Ltd. and United Commercial Bank Ltd. for the US FDA standard oral solid dosage facility of the company. Janata Bank is the lead bank to the consortium. This Loan is secured against : (i) First (registered mortgage) charge on pari passu basis with the participating banks on 1,113 decimals of land at Kathaldia, Aushpara, Tongi of Gazipur along with the building and other constructions thereon ; and ANNUAL REPORT 2011 78 2011 2010 Amount in Taka 5,269,474,690 - - 1,489,750,000 3,787,088,530 (7,363,840) 5,269,474,690 5,269,474,690 1,696,629,049 9,205,000 184,240,602 1,733,509,289 41,526,100 127,115,344 1,890,074,651 1,902,150,733 (ii) First pari passu charge by way of hypothecation on all assets of the company both present and future. (iii) This Loan, carrying interest at 13% to 15% per annum, is repayable in quarterly installments ending by 2017. (b) Interest and PAD Block This represents blocked PAD of Janata Bank Ltd. to be paid in quarterly installments ending latest by 2013. 17. Liability for Gratuity & WPPF 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 Balance as on January 01 Provisions during the year Paid during the year (b) Loan from Workers' Profit Participation/Welfare Funds 18. Deferred Tax Liability This is arrived at as follows : Balance as on January 01 Deferred Tax Expense for the year (Note : 33) Deferred Tax on revalued assets 19. Short Term Borrowings This represents : Janata Bank Ltd.: Cash Credit-Hypothecation 20. Long Term Borrowings-Current Maturity 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 Amount in Taka 2011 2010 156,355,610 38,123,003 194,478,613 (6,977,537) 187,501,076 216,097,719 129,226,456 33,970,920 163,197,376 (6,841,766) 156,355,610 179,530,182 403,598,795 335,885,792 647,119,301 271,774,005 44,483,616 352,416,487 238,797,683 55,905,131 963,376,922 647,119,301 1,642,216,008 1,639,961,052 250,000,000 30,000,000 83,744,181 250,000,000 47,391,326 51,469,117 363,744,181 348,860,443 ANNUAL REPORT 2011 79 Amount in Taka 2011 2010 206,960,545 309,454,709 1,424,747 5,958,135 161,570,971 263,783,942 222,069 6,738,678 523,798,136 432,315,660 17,667,454 83,892,463 22,435,562 68,076,616 101,559,917 90,512,178 - 166,380,262 41,169,643 (7,518,596) 200,031,309 (184,549,015) 15,482,294 70,584,481 71,085,835 - (66,000,000) 75,670,316 (75,670,316) - 7,499,926,523 390,315,320 6,160,306,406 330,540,947 7,890,241,843 6,490,847,353 21. Creditors and Other Payables This consists of : Goods & Services Provident Fund Advance Against Export Others 22. Accrued Expenses This is unsecured, falling due within one year and consists of as follows : For Expenses Workers' Profit Participation/ Welfare Funds - current year's provision (Note : 32) 23. Income Tax Payable This is arrived at as follows : Balance as on January 01 Provision for the year Short Provision for previous period Paid during the year Adjustment with Advance Income Tax 24. Net Sales Revenue This represents net sales and consists of as follows : Local Sales Export Sales US $ 5,255,965 (in 2010 US $ 4,817,829) Sales represent : Product Category Tablet, Capsule, Suppository & DPI Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, injectable & Inhaler Active Pharmaceutical Ingredients Liquid Nitrogen Unit Million Pcs Million Pcs Kg. Liter Quantity 2011 2,789.6 59.2 146,626 102,985 2010 2,379.1 56.9 108,573 611,731 ANNUAL REPORT 2011 80 25. Cost of Goods Sold This is made-up as follows : Work-in-Process (Opening) Materials Consumed (Note : 26) Factory Overhead (Note : 27) Total Manufacturing Cost Work-in-Process (Closing) Cost of Goods Manufactured Finished Goods (Opening) Finished Goods available Cost of Physician Sample transferred to Sample Stock Finished Goods (Closing) Item wise quantity and value of Finished Goods Stock are as follows : Stock as on January 01, 2011 Tablet, Capsule, Suppository & DPI Unit Quantity Value (Tk.) Million Pcs 477.8 355,479,444 Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, injectable & Inhaler Million Pcs 7.4 178,727,151 Active Pharmaceutical Ingredients Kg 11,920 30,843,049 565,049,644 Stock as on December 31, 2011 Tablet, Capsule, Suppository & DPI Million Pcs 499.8 374,175,104 Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, injectable & Inhaler Million Pcs 8.2 241,774,083 Active Pharmaceutical Ingredients Kg 8,084 23,292,564 639,241,751 26. Materials Consumed This is made-up as follows : Opening Stock Purchase Closing Stock Amount in Taka 2011 2010 195,111,787 3,195,829,494 1,066,936,836 4,457,878,117 (169,345,787) 4,288,532,330 565,049,644 4,853,581,974 (110,631,202) (639,241,751) 189,396,879 2,537,648,743 894,097,750 3,621,143,372 (195,111,787) 3,426,031,585 554,393,259 3,980,424,844 (97,734,946) (565,049,644) 4,103,709,021 3,317,640,254 1,101,214,127 3,411,226,597 (1,316,611,230) 887,971,933 2,750,890,937 (1,101,214,127) 3,195,829,494 2,537,648,743 ANNUAL REPORT 2011 81 27. Factory Overhead This consists of as follows : Salary & Allowances Repairs and Maintenance Insurance Premium Municipal Tax & Land Revenue Advertisement & Subscription Registration & Renewal Travelling & Conveyance Entertainment Research and Development Printing & Stationery Telephone, Internet & Postage Toll Charge/ (Income) - Net Electricity, Gas & Water Training & Conference Plant Certification and Regulatory Approvals Depreciation Other Expenses Amount in Taka 2011 2010 326,562,556 79,042,533 18,130,033 1,857,310 24,771 7,010,239 2,523,694 783,929 17,795,956 7,815,198 2,189,723 76,878,595 55,852,069 3,387,122 22,902,482 440,597,325 3,583,301 270,910,357 66,680,578 10,762,989 1,237,290 96,769 715,777 2,250,371 721,850 6,815,379 5,765,044 2,228,125 76,281,942 40,587,162 609,919 12,753,618 392,890,096 2,790,484 1,066,936,836 894,097,750 (a) Salary and allowances include Company's Contribution to provident fund of Tk. 6,482,519 (in 2010 Tk. 5,739,527). (b) The value of imported stores and spares consumed is Tk. 39,843,777 (in 2010 Tk. 20,664,179) is included in repairs & maintenance. This also includes maintenance of office, premises, Vehicles, building, machinery, equipment and other infrastructures. (c) Other expenses does not include any item exceeding 1% of total revenue. 28. Administrative Expenses This consists of as follows : Salary & Allowances Rent Expenses Repairs and Maintenance Registration & Renewals Travelling & Conveyance Entertainment Printing & Stationery Audit Fee Telephone, Internet & Postage Electricity, Gas & Water Legal & Consultancy Fee AGM,Company Secretarial Expenses and Regulatory Fees Training & Conference Depreciation Other Expenses 132,468,375 9,676,551 18,364,907 1,624,597 15,167,565 3,948,638 2,371,399 850,000 3,790,301 7,393,412 3,099,655 45,430,058 3,300,188 17,039,676 10,676,524 120,635,185 9,615,930 11,903,815 535,967 12,792,422 3,546,181 1,948,640 862,500 4,011,859 7,479,958 2,920,722 29,326,959 2,808,265 15,194,645 9,830,932 275,201,846 233,413,980 (a) Salary and allowances include provident fund contribution of Tk. 3,345,556 (in 2010 Tk. 3,318,203). (b) Repairs & maintenance includes maintenance of office, premises, Vehicles, building, equipment and other infrastructures. ANNUAL REPORT 2011 82 29. Selling, Marketing and Distribution Expenses This consists of as follows : Salary & Allowances Rent Expenses Repairs and Maintenance Travelling & Conveyance Entertainment Printing & Stationery Telephone, Internet & Postage Electricity, Gas & Water Market Research & New Products Training & Conference Insurance Premium Sample Expenses Promotional Expenses Literature/News Letter Registration & Renewals Export Insurance, Freight and C&F Expenses Delivery Expense Depreciation and Amortization Other Expenses (a) Salary and allowances include provident fund contribution of Tk. 12,445,850 (in 2010 Tk. 11,378,454). (b) Delivery expense includes delivery support fee @ 2% of local sales of Formulation and IV Fluids paid to I & I Services Ltd., a " Related Party". (c) Repairs & maintenance includes maintenance of office, premises, Vehicles, building, equipment and other infrastructures. 30. Other Income This is arrived at as follows : Interest on FDR & Short term Investment Income from HFA Technology Adoption and Transfer Dividend Income Royalty Exchange Rate Fluctuation Gain Profit on Sale of Fixed Assets (Note 36) 31. Finance Cost This is arrived at as follows : Interest on Cash Credit, Lease Finance and other Charges Interest on Loan from PF and WPP & Welfare Fund Dividend on Preference Shares Amount in Taka 2011 2010 498,833,494 16,033,956 2,148,084 215,921,654 13,649,841 17,635,053 7,559,384 4,166,628 21,380,415 36,943,909 7,225,282 104,526,024 219,155,686 72,206,847 6,132,572 31,015,418 199,262,811 40,352,884 8,701,336 394,172,411 14,018,539 9,884,277 205,017,107 12,487,400 15,300,027 7,497,939 3,378,686 16,256,229 28,902,890 4,235,200 94,019,074 188,563,588 63,977,381 2,372,417 35,827,506 169,065,853 27,193,267 11,843,136 1,522,851,278 1,304,012,927 330,494,566 - 200,000 2,997,369 5,178,032 2,037,807 340,907,774 367,995,851 78,812,136 100,000 - - 9,103,147 456,011,134 504,933,292 62,712,465 - 567,645,757 463,200,224 45,232,160 153,750,000 662,182,384 ANNUAL REPORT 2011 83 32. Contribution to Workers' Profit Participation / Welfare Funds This represents 5% of net profit before tax after charging the contribution as per provisions of the Bangladesh Labor law 2006. 33. Income Tax Expenses This consists of as follows : (i) Short provision of earlier year (ii) Tax for the year under review (Note 3.9) (iii) Deferred Tax Expense (Note 3.9) 34. Earnings Per Share (EPS) : Amount in Taka 2011 2010 41,169,643 166,380,262 271,774,005 479,323,910 - 71,085,835 238,797,683 309,883,518 (a) Earnings attributable to the Ordinary Shareholders Tk. 1,198,525,342 1,051,648,808 (b) Weighted average number of Ordinary Shares outstanding during the year Earnings Per Share (EPS)/ Adjusted EPS (2010) 35. Related Party Disclosures : Nos. 251,767,810 251,767,810 4.76 4.18 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 Value of Transaction in 2011 Balance at year end (a) I & I Services Ltd. (b) Bangladesh Export Import Co. Ltd Local Delivery Delivery Support Fee Short Term Investment Interest on Short Term Investment Nature of Relationship : The Companies are subject to common control from same source i.e., Beximco Group. 36. Particulars of Disposal of Property, Plant and Equipment : The following assets were disposed off during the year ended 31 December 2011: 8,199,575,911 140,204,673 1,334,019,856 240,314,856 768,912,524 - 2,193,423,560 - Particulars of Assets Cost Accumulated Depreciation Written Down Value Sales Price Profit / (Loss) Mode of Disposal Name of Parties Furniture Transport & Vehicle Plant & Machinery 70,000 6,017,440 8,699,295 42,881 3,572,947 8,029,900 27,119 2,444,493 669,395 27,119 4,482,300 669,395 - 2,037,807 - Negotiation Negotiation Negotiation Various Individuals Various Individuals Various Individuals Tk. 14,786,735 11,645,728 3,141,007 5,178,814 2,037,807 ANNUAL REPORT 2011 84 37. Salaries and Perquisites to Managers and above : (a) The aggregate amounts paid to/ provided for the Managers and above of the company is disclosed below : Remuneration Gratuity Contribution to Provident Fund Bonus Medical Others Total Amount in Taka 2011 2010 100,027,020 3,839,150 4,606,980 7,678,300 3,188,195 27,630,916 146,970,561 86,381,088 3,326,065 3,957,684 6,652,130 3,170,595 24,451,244 127,938,806 (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. 38. Production Capacity and Actual Production : Item Tablet, Capsule, Suppository & DPI Million Pcs 3,891 2,308 2,956 2,490 Unit Production Capacity Actual Production Capacity Utilization 2011 2010 2011 2010 2011 76% 2010 108% Liquid, Cream and Oinment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, injectable & Inhaler Million Pcs 82 78 61 55 74% 71% 39. Capital Expenditure Commitment There was no capital expenditure contracted but not incurred or provided for at 31 December 2011. 40. Finance Lease Commitment At December 31, 2011, the company had annual commitment under finance leases as set out below : 83,744,181 Leases expiring within 1 year 184,240,602 Leases expiring within 2-5 years (inclusive) Tk. 267,984,783 41. Claim Not Acknowledged as Debt There was no claim against the company not acknowledged as debt as on December 31, 2011. 42. Un-availed Credit Facilities There is 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 December 31, 2011. 43. Payments Made in Foreign Currency : Foreign Currency (Equivalent US$) Taka Import of Machinery, Equipments & Spares Import of Raw & Packing Material Regulatory Fees & Other Expenses 6,716,693 32,631,729 3,247,196 483,601,908 2,420,621,680 236,538,558 No other expenses including royalty, technical expert and professional advisory fee, interest, etc. was incurred or paid in foreign currencies except as stated above. ANNUAL REPORT 2011 85 44. Foreign Exchange Earned : (a) Collection from Export Sales of US$ 5,461,913 (in 2010 US$ 4,817,829). (b) Royalty received US$ 6,620 45. 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. 46. Contingent Liability The company has a contingent liability aggregating Tk. 122,934,264 against disputed income tax claims for the year 1999, 2007 and 2008. The company has filed writ petitions against the claims for the years 1999 and 2007 and an appeal with the Appellate Tribunal against the claim of 2008. There is also a disputed VAT claim aggregating Tk. 144,113,691 against the company. The company has recently won the verdict of the appellate tribunal in it’s favour. The concerned authority may now appeal to the honourable High Court against this verdict. Additionally, there are claims of custom duty aggregating Tk. 22,507,358 against the indemnity bond issued by the company in connection with import of certain plant and machinery. The company has filed writ petitions against this claims. If any liability arises on disposal of the cases, the company shall provide for such liability in the year of final disposal. 47. Events After the Reporting Period The directors recommended 21% Stock dividend (i.e. 21 shares for every 100 shares held) for the year 2011. The dividend proposal is subject to shareholders' approval at the forthcoming annual general meeting. Excepting to that, no circumstances have arisen since the date of Statement of Financial Position which would require adjustment to, or disclosure in, the financial statements or notes thereto. 48. Financial Risk Management The management of company has overall responsibility for the establishment and oversight of the company’s risk management framework. Risk management policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company’s activities. The company has exposure to the following risk for its use of financial instruments. - Credit risk - Liquidity risk - Market risk 48.01 Credit Risk Credit risk is the risk of a financial loss to the company if a customer or counter party to a financial instrument fails to meet its contractual obligations and arises principally from the company’s receivables. Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. As at 31 December 2011 substantial part of the receivables are those from its related company and subject to insignificant credit risk. Risk exposures from other financial assets i.e. Cash at bank and other external receivables are nominal. 48.02 Liquidity Risk Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company’s approach to managing liquidity ( cash and cash equivalents) is to ensure as far as possible, that it will always have sufficient liquidity to meet its liabilities when due under both normal and stressed conditions without incurring unacceptable losses or risking damage to the company’s reputation. Typically, the company ensures that it has sufficient cash and cash equivalent to meet expected operational expenses including financial obligations through preparation of the cash flow forecast with due consideration of time line of payment of the financial obligations and accordingly arrange for sufficient fund to make the expected payments within due date. In extreme stressed conditions the company may get support from the related company in the form of short term financing. ANNUAL REPORT 2011 86 48.03 Market Risk Market risk is the risk that any change in market prices such as foreign exchange rates and interest will affect the company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters. (a) Currency risk The company is exposed to currency risk on certain revenues and purchases such as revenue from foreign customers and import of raw material, machineries and equipment. Majority of the company’s foreign currency transactions are denominated in USD and relate to procurement of raw materials, machineries and equipment from abroad. (b) Interest rate risk Interest rate risk is the risk that arises due to changes in interest rates on borrowing. There was no foreign currency loan which is subject to floating rates of interest. Local loans are, however, not significantly affected by fluctuations in interest rates. The company has not entered into any type of derivative instrument in order to hedge interest rate risk as at the reporting date. Salman F Rahman Vice Chairman Nazmul Hassan Managing Director Ali Nawaz Chief Financial Officer Dhaka 28 April, 2012 ANNUAL REPORT 2011 87 Corporate Information Operational Headquarters 19 Dhanmondi R/A, Road # 7(cid:31) Dhaka 1205, Bangladesh(cid:31) Phone : +880-2-8619151, +880-2-8619091 Fax : +880-2-8613888(cid:31) E-mail : info@bpl.net(cid:31) Website : www.beximcopharma.com Corporate Headquarters 17 Dhanmondi R/A, Road # 2 Dhaka 1205, Bangladesh Phone : +880-2-8611891(cid:31) Fax : +880-2-8613470 E-mail : beximchq@bol-online.com Factory Tongi Unit 126 Kathaldia, Tongi, Gazipur Bangladesh Kaliakoir Unit Plot No. 1070/1083, Mouchak Kaliakoir, Gazipur Bangladesh Stock Exchange Listing Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. AIM of London Stock Exchange plc (GDRs) Public Relations IMPACT PR Apartment # A-1, House # 17, Road # 4 Gulshan-1, Dhaka-1212, Bangladesh FTI Consulting Group Limited Holborn Gate, 26 Southampton Buildings London WC2A 1PB, UK Legal Advisor Huq and Company 47/1 Purana Paltan Dhaka-1000 Bangladesh Auditors M. J. Abedin & Co. Chartered Accountants National Plaza (3rd Floor) 109, Bir Uttam C. R. Datta Road Dhaka-1205 Bangladesh Banker Janata Bank Ltd. Local office 1 Dilkusha C/A Dhaka-1000 Bangladesh For GDRs Nominated Advisor and Broker Libertas Capital Corporate Finance Limited 17c Curzon Street. London W1J 5HU Custodian HSBC Anchor Tower, 1/1-B, Sonargaon Road Dhaka-1205, Bangladesh Depository Bank The Bank of New York Mellon 101 Barclay Street New York, NY 10286  BEXIMCO PHARMACEUTICALS LTD. www.beximcopharma.com 

Continue reading text version or see original annual report in PDF format above