Boston Properties Annual Report 2020

Plain-text annual report

AwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwards Powered Powered by by Pharma Pharma Informa Informa Intelligence Intelligence Excellence in Pharma: Excellence in Pharma: Innova�on Innova�on Innova�on in in Response to Response to COVID- COVID- Winner Winner Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals ANNUAL REPORT 2019-20 EXCELLENCE IN PHARMA: INNOVATION IN RESPONSE TO COVID-19 WINNER 2020 BEXIMCO PHARMACEUTICALS AwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwards Powered Powered by by Pharma Pharma Informa Informa Intelligence Intelligence Excellence in Pharma: Excellence in Pharma: Innova�on Innova�on Innova�on in in Response to Response to COVID- COVID- Winner Winner Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Winner COVID- Response to in Innova�on Innova�on Excellence in Pharma: Intelligence Informa Pharma by Powered Awards Awards Awards Awards Awards Awards Awards Awards ANNUAL REPORT 2019-20 BEXIMCO PHARMACEUTICALS LIMITED Contents Our Essence About the Company Corporate Information Our Journey Our Products Our Market Our Manufacturing Capabilities Our Global Accreditations Board and Management The Board of Directors Audit Committee Nomination and Remuneration Committee Executive Committee Directors’ Profile Executive Committee Management Committee Highlights- 2019-20 Financial Highlights Operational Highlights Post Period Highlights Accolades and Awards Our People Environment, Health and Safety (EHS) Our CSR Initiatives Corporate Events Chairman’s Statement Management Discussion and Analysis Report of the Directors to the Shareholders Report of the Audit Committee Activities and other Details of Nomination and Remuneration Committee (NRC) Investor Relations Value Added Statement Consolidated Financial Statements 47 52 56 58 62 78 80 82 85 86 Financial Statements- Beximco Pharma- Standalone 109 Nuvista Pharma Limited Directors’ Report to the Shareholders Financial Statements- Nuvista Pharma Limited Beximco Pharma API Limited Directors’ Report to the Shareholders 147 149 176 Financial Statements- Beximco Pharma API Limited 177 Notice of Annual General Meeting Frequently Asked Questions (FAQs) Proxy Form 185 186 187 05 07 09 10 13 20 21 24 26 26 26 26 27 31 32 34 35 36 37 41 44 • • • • • • • • • • • • • • We continually strive to provide access to safe, effective and affordable medicines. Over the last 4 decades of operation, our motto has remained the same: ensuring health and wellbeing of the people. Our Essence Mission We are committed to enhancing human health and wellbeing 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 the patients and to deliver outstanding results for our shareholders. 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 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. Corporate Social Responsibility 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. Our Essence | Annual Report 2019-20 | 5 About the Company Beximco Pharmaceuticals Limited is a leading manufacturer and exporter of medicines in Bangladesh. Incorporated in 1976, the Company started its operation by importing products from Bayer, Germany and Upjohn, USA and selling them in the local market. In 1980, Beximco Pharma began manufacturing of these products under licensing arrangement and in 1983 launched its own formulation brands. From that humble beginning, Beximco Pharma has grown from strength to strength. Today, it has become an emerging global generic pharma company in the region. The Company’s manufacturing facilities have been accredited by the leading global regulatory authorities, and medicines manufactured by the Company are now being exported to more than 50 countries including the highly regulated markets of USA, Europe, Canada and Australia. The Company has won the National Export (Gold) trophy for 5 times. It remains the only Company in the country to win the highly prestigious SCRIP Award as the “Best Pharma Company in an Emerging Market” and also won CPhI Pharma Awards 2020 for “Innovation in Response to COVID-19.” It also has the unique distinction as the only Bangladeshi Company listed on the AIM of London Stock Exchange. In 2018, Beximco Pharma acquired majority stake in Nuvista Pharma (formerly Organon Bangladesh), a leading hormone and steroid manufacturer in the country. The Company currently employs more than 4,700 employees including pharmacists, doctors, engineers, chemists, microbiologists, accountants, business graduates and other white collar professionals. About the Company | Annual Report 2019-20 | 7 Corporate Information Registered Office 17 Dhanmondi R/A, Road No. 2 Dhaka- 1205, Bangladesh Phone: +880-2-58611891 Fax: +880-2-58613470 E-mail: beximchq@bol-online.com Factory Tongi Plant 126 Kathaldia, Auchpara, Tongi Gazipur-1711, Bangladesh Stock Exchange Listing Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. AIM of London Stock Exchange plc Legal Advisor Huq & Co. 47/1 Purana Paltan Dhaka-1000, Bangladesh Subsidiaries Nuvista Pharma Limited Registered Office Mascot Plaza, 8th Floor 107/A, Sonargaon Janapath; Sector- 7 Uttara C.A, Dhaka - 1230, Bangladesh Phone: +880-2-58952811, Associates BioCare Manufacturing Sdn Bhd Seri Iskandar Pharmaceutical Park 32600 Bota, Perak, Malaysia Operational Headquarters 19 Dhanmondi R/A, Road No. 7, Dhaka- 1205, Bangladesh Phone: +880-2-58611001 Fax: +880-2-58614601 E-mail: info@bpl.net Website: www.beximcopharma.com Kaliakoir Plant Plot No. 1070/1083, Mouchak, Kaliakoir, Gazipur Bangladesh FTI Consulting LLP 200 Aldersgate Aldersgate Street, London EC1A 4HD United Kingdom Bankers Janata Bank Ltd. AB Bank Ltd. First Security Islami Bank Ltd. Dhaka Bank Ltd. Public Relations IMPACT PR Apartment No. A-1, House No. 17, Road No. 4, Gulshan-1, Dhaka-1212, Bangladesh Auditors M. J. Abedin & Co. Chartered Accountants National Plaza (3rd Floor), 109, Bir Uttam C. R. Datta Road Dhaka- 1205, Bangladesh Beximco Pharma API Limited Registered Office 17 Dhanmondi, Road No. 2 Dhaka-1205, Bangladesh Corporate Information | Annual Report 2019-20 | 9 Our Journey 1983 Launched own formulation brands 2005 Got listed on the Alternative Investment Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs 1976 Company incorporated 1993 Commenced formulation product export to Russia 2008 (cid:127) GMP accreditation from TGA, Australia (cid:127) Gulf Central Committee for Drug Registration (GCC), as the ﬁrst Bangladeshi Company 2011 Received GMP accreditation from AGES, Austria (for European Union) 2018-19 Won the Scrip Award in the category of ‘‘Community Partnership of the Year’’ 2014 (cid:127) GMP accreditation from Taiwan Food & Drug Administration (TFDA) and Health Canada (cid:127) Commenced export to Australia 2016-17 (cid:127) Commenced export to the USA. (cid:127) First overseas collaboration with BioCare Manufacturing Sdn Bhd, Malaysia 2003 Introduced anti-retroviral (ARV) drugs ﬁrst time in Bangladesh 1980 Started manufacturing products of Bayer AG, Germany and Upjohn Inc., USA, under license agreements 1985 Listed on Dhaka Stock Exchange 2006 Launched CFC free HFA inhalers ﬁrst time in Bangladesh 10 | Annual Report 2019-20 | Our Journey 2013 Commenced ﬁrst time export to Europe 2015-16 (cid:127) GMP approval from the U.S. FDA as the ﬁrst Bangladeshi company (cid:127) Launched generic version of revolutionary hepatitis C drugs Sovaldi® and Harvoni® (cid:127) Entered the Gulf pharma market (Kuwait) 2019-20 (cid:127) GMP approval from German Regulatory Authority and Malta Medicines Authority (European Union) (cid:127) Global Generics & Biosimilars Awards 2019 as “The Company of the Year, (cid:127) CPhI Pharma Awards 2020 for “Innovation in response to COVID-19” 2017-18 (cid:127) Won the Scrip Award in the category of “Best Company in an Emerging Market” received WHO prequaliﬁcation (cid:127) Acquired 85.22% stake in Nuvista Pharma Limited (cid:127) Oral solid dosage facility Asia-Paciﬁc” 1983 Launched own formulation brands 2005 Got listed on the Alternative Investment Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs 1976 Company incorporated 1993 Commenced formulation product export to Russia 2008 (cid:127) GMP accreditation from TGA, Australia (cid:127) Gulf Central Committee for Drug Registration (GCC), as the ﬁrst Bangladeshi Company 2011 Received GMP accreditation from AGES, Austria (for European Union) 2018-19 Won the Scrip Award in the category of ‘‘Community Partnership of the Year’’ 2014 (cid:127) GMP accreditation from Taiwan Food & Drug Administration (TFDA) and Health Canada (cid:127) Commenced export to Australia 2016-17 (cid:127) Commenced export to the USA. (cid:127) First overseas collaboration with BioCare Manufacturing Sdn Bhd, Malaysia 2003 Introduced anti-retroviral (ARV) drugs ﬁrst time in Bangladesh 1980 Started manufacturing products of Bayer AG, Germany and Upjohn Inc., USA, under license agreements 1985 Listed on Dhaka Stock Exchange 2006 Launched CFC free HFA inhalers ﬁrst time in Bangladesh 2013 Commenced ﬁrst time export to Europe 2015-16 (cid:127) GMP approval from the U.S. FDA as the ﬁrst Bangladeshi company (cid:127) Launched generic version of revolutionary hepatitis C drugs Sovaldi® and Harvoni® (cid:127) Entered the Gulf pharma market (Kuwait) 2019-20 (cid:127) GMP approval from German Regulatory Authority and Malta Medicines Authority (European Union) (cid:127) Global Generics & Biosimilars Awards 2019 as “The Company of the Year, Asia-Paciﬁc” (cid:127) CPhI Pharma Awards 2020 for “Innovation in response to COVID-19” 2017-18 (cid:127) Won the Scrip Award in the category of “Best Company in an Emerging Market” (cid:127) Oral solid dosage facility received WHO prequaliﬁcation (cid:127) Acquired 85.22% stake in Nuvista Pharma Limited Our Journey | Annual Report 2019-20 | 11 Beximco Pharma became the first company in the world to launch generic version of Remdesivir, the most anticipated treatment of COVID-19. It gives hope to the healthcare professionals and patients to fight this unprecedented disease. Beximco Pharma offers Our Products Beximco Pharma currently produces more than 300 generics available in well over 500 presentations and also produces a number of active pharmaceutical ingredients (APIs). Beximco Pharma’s portfolio encompasses various therapeutic categories namely antibiotics, analgesics, anti-diabetics, respiratory, cardiovascular, central nervous system, dermatology, gastrointestinal etc. The Company has sound expertise with specialized and advanced drug delivery systems such as metered dose inhalers, dry powder inhalers, nasal sprays, sterile ophthalmics, lyophilized injectables, oral thin films, suppositories etc. that created strong differentiation for the Company. Many of its brands remain consistent leaders in their respective therapeutic categories. The Company continuously explores and expands its product portfolio to ensure access to newer, better treatment options at affordable cost. Amdocal, Atova, Azmasol, Bexitrol-F, Bextram Gold, Bizoran, D-Rise, Glipita, Napa, Napa Extra, Neofloxin, Tofen, etc. have been household names with strong brand equity. The expanding portfolio, including high value, differentiated, and difficult-to-copy products, will continue to drive strong growth for the Company. The Company also focuses on strengthening API portfolio and its pipeline includes a number of patented, high value products. Our Leading Brands Analgesics NAPA Tablet Syrup Paracetamol 500 mg Paracetamol 120 mg / 5 ml Suspension Paracetamol 120 mg / 5 ml Drops Paracetamol 80 mg / ml Suppository Paracetamol 125 mg, 250 mg And 500 mg Injection Paracetamol 10 mg / ml NAPA EXTRA NAPA EXTEND NAPADOL NAPA RAPID Tablet Tablet Tablet Tablet Paracetamol 500 mg + Caffeine 65 mg Paracetamol 665 mg Extended Release Paracetamol 325 mg + Tramadol 37.5 mg Paracetamol 500 mg (with Actizorb technology) Antacids DIGECID PLUS Suspension Magaldrate 480 mg + Simethicone 20 mg / 5 ml Oral Anti-Diabetic VISCOCID GLIPITA GLIPITA M TRANETA TRANETA M JARDIAN JARDIMET VIBOSE INFORMET Suspension Sodium Alginate 500 mg + Potassium Bicarbonate 100 mg / 5 ml Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Sitagliptin 50 mg, Sitagliptin 100 mg Sitagliptin 50 mg + Metfomin Hydrochloride 500 mg, Sitagliptin 50 mg + Metformin Hydrochloride 1000 mg Linagliptin 5 mg Linagliptin 2.5 mg + Metformin Hydrochloride 500 mg, Linaglip- tin 2.5 mg + Metformin Hydrochloride 850 mg, Linagliptin 2.5 mg + Metformin Hydrochloride 1000 mg Empagliflozin 10 mg, Empagliflozin 25 mg Empagliflozin 5 mg + Metformin Hydrochloride 500 mg Voglibose 0.2 mg, Voglibose 0.3 mg Metfomin Hydrochloride 500 mg, Metfomin Hydrochloride 500 mg LA, Metformin Hydrochloride 850 mg, Metformin Hydrochlo- ride 1000 mg Our Products | Annual Report 2019-20 | 13 Anti-Histamines ATRIZIN AXODIN DUVENT Anti-Hypertensives BIZORAN OLMESAN Tablet Syrup Drops Tablet Cetirizine Hydrochloride 10 mg Cetirizine Hydrochloride 5 mg / 5 ml Cetirizine Hydrochloride 2.5 mg / ml Fexofenadine HCl 120 mg, Fexofenadine HCl 180 mg Suspension Fexofenadine HCl 30 mg / 5 ml Tablet Syrup Tablet Tablet Rupatadine 10 mg Rupatadine 5 mg / 5 ml Amlodipine 5 mg + Olmesartan Medoxomil 40 mg, Amlodipine 5 mg + Olmesartan Medoxomil 20 mg Olmesartan Medoxomil 10 mg, Olmesartan Medoxomil 20 mg, Olmesartan Medoxomil 40 mg Anti-Infectives OLMESAN PLUS Tablet Olmesartan Medoxomil 20 mg + Hydrochlorothiazide 12.5 mg AMDOCAL Tablet Amlodipine 5 mg, Amlodipine 10 mg AMDOCAL PLUS Tablet Amlodipine 5 mg + Atenolol 25 mg, Amlodipine 5 mg + Atenolol 50 mg TELMA TELMACAL TELMA PLUS ARLIN Tablet Tablet Tablet Tablet Telmisartan 40 mg, Telmisartan 80 mg Telmisartan 40 mg + Amlodipine 5 mg, Telmisartan 80 mg + Amlodipine 5 mg Telmisartan 40 mg + Hydrochlorothiazide 12.5 mg Linezolid 400 mg, Linezolid 600 mg Suspension Linezolid 100 mg / 5 ml TRIOCIM Injection Capsule Linezolide 2 mg / 2 ml IV Infusion Cefixime 200 mg, Cefixime 400 mg Suspension Cefixime 100 mg / 5 ml, Cefixime 200 mg / 5 ml TYCLAV Tablet Amoxicillin 250mg + Clavulanic Acid 125 mg, Amoxicillin 500 mg + Clavulanic Acid 125 mg, Amoxicillin 750 mg + Clavulanic Acid 125 mg Suspension Amoxicillin 125 mg + Cavulanic Acid 31.25 mg / 5 ml, Amoxicillin 400 mg + Clavulanic Acid 57 mg / 5 ml Injection Amoxicillin 1 Gm + Clavulanic Acid 200 mg, Amoxicillin 500 mg + Clavulanic Acid 100 mg TURBOCLAV Tablet Cefuroxime 250 mg + Clavulanic Acid 62.5 mg, Cefuroxime 500 mg + Clavulanic Acid 125 mg AZITHROCIN Tablet Azithromycin 250 mg, Azithromycin 500 mg Suspension Azithromycin 200 mg / 5 ml Injection Azithromycin 500 mg IV FILMET NEOFLOXIN Tablet Syrup Tablet Metronidazole 200 mg, Metronidazole 400 mg, Metronidazole 800 mg Metronidazole 200 mg / 5 ml Ciprofloxacin 750 mg, Ciprofloxacin 500 mg, Ciprofloxacin 250 mg Injection Ciprofloxacin 250 mg / 5 ml 14 | Annual Report 2019-20 | Our Products Anti-Ulcerants ACIFIX OPTON Tablet Tablet Capsule Injection Rabeprazole 20 mg Esomeprazole 20 mg, Esomeprazole 40 mg Esomeprazole 20 mg, Esomeprazole 40 mg Esomeprazole 40 mg PANTOBEX Tablet Pantoprazole 20 mg, Pantoprazole 40 mg CNS Cough & Cold PROCEPTIN YAMADIN FRENXIT NERVALIN EMIJOY DEXTRIM TUSPEL MUCOSOL Injection Capsule Injection Tablet Tablet Pantoprazole 40 mg Omeprazole 20 mg, Omeprazole 40 mg Omeprazole 40 mg Famotidine 20 mg, Famotidine 40 mg Flupentixol 0.5 mg + Melitracen 10 mg Capsule Pregabalin 25 mg, Pregabalin 50 mg, Pregabalin 75 mg Tablet Syrup Syrup Syrup Drops Chlordiazepoxide 5 mg + Amitriptyline Hcl 12.5 mg Dextromethorphan Hydrobromide 20 mg + Phenylephrine Hydrochloride 10 mg + Triprolidine Hydrochloride 2.5 mg / 5 ml Guaifenesin 200 mg + Dextromethorphan Hydrobromide 15 mg + Menthol 15 mg / 5 ml Ambroxol Hydrochloride 15 mg / 5 ml Ambroxol Hydrochloride 6 mg / ml Anti-Fungals OMASTIN Capsule Fluconazole 150 mg, Fluconazole 200 mg, Fluconazole 50 mg TERBEX ZYMET DEFLUX FEMZOLE TAMONA ROSTIL Enzymes Gastroprokinetics Hormones Antispasmodic Respiratory AZMASOL Suspension Fluconazole 50 mg / 5 ml Injection Fluconazole 2 mg / ml Infusion Tablet Cream Tablet Tablet Terbinafine 250 mg Terbinafine HCl 1% Pancreatin 325 mg Domperidone 10 mg, Domperidone 10 mg Meltab Suspension Domperidone 5 mg / 5 ml Drops Tablet Tablet Domperidone 5 mg / ml Letrozole 2.5 mg Tamoxifen Citrate 10 mg,Tamoxifen Citrate 20 mg Capsule Mebeverine Hydrochloride 200 mg Tablet MDI Mebeverine Hydrochloride 135 mg Salbutamol 100 mcg / Puff Respirator Solution Salbutamol 2.5 mg / 3 ml Ampoule, Salbutamol 5 mg / ml in amber glass bottle BEXITROL-F MDI Salmetarol 25 mcg + Fluticasone Propionate 125 mcg, Salmetarol 25 mcg + Fluticasone Propionate 250 mcg, Salmeterol 25 mcg + Fluticasone Propinate 50 mcg Our Products | Annual Report 2019-20 | 15 Respiratory Insulin IV Fluids Laxatives DPI MAXHALER Salmetarol 50 mcg + Fluticasone Propionate 100 mcg, Salmetarol 50 mcg + Fluticasone Propionate 200 mcg, Salmeterol 50 mcg + Fluticasone Propinate 500 mcg Salmetarol 50 mcg + Fluticasone Propionate 100 mcg, Salmetarol 50 mcg + Fluticasone Propionate 200 mcg, Salmeterol 50 mcg + Fluticasone Propinate 500 mcg DECOMIT MDI DECOMIT PLUS MDI SYMBION DPI Beclomethasone Dipropionate (100 mcg / Puff), Beclomethasone Dipropionate (50 mcg / Puff) Beclomethasone Dipropionate 100 mcg + Formoterol Fumarate 6 mcg, Beclomethasone Dipropionate 200 mcg + Formoterol Fumarate 6 mcg Formoterol Fumarate 6 mcg + Budesonide 100 mcg, Formoterol Fumarate 6 mcg + Budesonide 200 mcg MAXHALER Formoterol Fumarate Dihydrate 12 mcg + Budesonide 400 mcg TIORIVA DECOMIT NASOMET PERINASE DYNASE TOFEN MONOCAST FIXOLIN MUCOMIST GENSULIN DEXAQUA DEXORIDE SALORIDE FRELAX DPI Tritropium Bromide 18 mcg Nasal Spray Beclomethasone Dipropionate 100 mcg / Actua Nasal Spray Mometasone Furoate 50 mcg / Actuation Nasal Spray Fluticasone Propionate 50 mcg / Actuation Nasal Spray Azelastine hydrochloride 137 mcg + Fluticasone propionate 50 mcg / Actuation Tablet Syrup Tablet Sachet Tablet Tablet Respirator Solution Injection Injection Injection Injection Ketotifen Fumarate 1mg Ketotifen 1 mg / 5 ml Montelukast 4 mg, Montelukast 5 mg, Montelukast 10 mg Montelukast 4 mg Doxofylline 200 mg, Doxofylline 400 mg Acetylcysteine 600 mg Acetylcysteine 600 mg / 3 ml Ampoule Human Insulin 100 IU / ml Injection Dextrose 10% W/V, Dextrose 5% W/V NaCl 0.9% W/V & Dextrose 5% W/V Sodium Chloride 0.09% W/V Suspension Liquid Paraffin 1.25 ml + Magnesium Hydrochloride 300 mg / 5 ml SERELOSE Solution Lactulose 3.35 gm / 5 ml Lipid Lowering Joint Supplement Muscle Relaxant NSAIDs ATOVA ROSUTIN JOINTEC MAX RELENTUS DINOVO Tablet Tablet Tablet Tablet Tablet Atorvastatin 10 mg, Atovastatin 20 mg, Atovastatin 40 mg Rosuvastatin 5 mg, Rosuvastatin 10 mg, Rosuvastatin 20 mg Glucosamine 750 mg + Diacerein 50 mg Tizanidine 2 mg Naproxen 375 mg + Esomeprazole 20 mg, Naproxen 500 mg + Esomeprazole 20 mg VOLIGEL Cream Diclofenac Sodium 50 mg 16 | Annual Report 2019-20 | Our Products Ophthalmic Urogenital Vitamins & Minerals XIDOLAC ZOLFIN ODYCIN TEARON Tablet Injection Tablet Ketorolac Tromethamine 10 mg Ketorolac Tromethamine 30 mg / ml Aceclofenac 100 mg Eye Drops Moxifloxacin 0.5% Eye Drops Polyethylene Glycol 400 0.4% + Propylene Glycol 0.3% TEARON FRESH Eye Drops Caboxymethyl Cellulose Sodium 1% VIVIS URAL-K Capsule Solution Antioxidants & Minerals Potassium Citrate 1500 mg + Citric Acid Monohydrate 250 mg / 5 ml Solution UROFLO Capsule Tamsulosin Hydrochloride 0.4 mg UROFLO PLUS Capsule Tamsulosin Hydrochloride 0.4 mg + Dutasteride 0.5 mg BEXTRAM GOLD Tablet High Potency 32 Multivitamin-Mineral BEXTRAM SILVER Tablet High Potency 30 Multivitamin-Mineral D-RISE Capsule Cholecalciferol 20000 IU, Cholecalciferol 40000 IU HEMOFIX FZ NEUROCARE CALORATE Tablet Tablet Tablet Tablet Cholecalciferol 2000 IU Elemental Iron 48 mg (Ferrous Ascorbate), Folic Acid 0.5 mg And Elemental Zinc 22.5 mg Tab Vitamin B1, B6, and B12 Calcium Orotate 400 mg, Calcium Orotate 740 mg Our product portfolio color Anti Allergy & Cough and Cold Analgesic & Musculoskeletal Anti-Infective CNS CVS & Lipid Lowering Endocrine GI IV Fluids Opthalmics Others Respiratory Anti-Fungal Vitamins Major Active Pharmaceutical Ingredients (APIs) APIXABAN LINAGLIPTIN • RIVAROXABAN • ROSUVASTATIN SITAGLIPTIN Our Products | Annual Report 2019-20 | 17 • • • Key Products Launched in FY 2019-20 18 | Annual Report 2019-20 | Our Products Our Products | Annual Report 2019-20 | 19 Our Market We are a leading player in Bangladesh with over 8.5% share of country’s Taka 230 billon pharma market. The Company over the years has emerged as a dominant exporter with its footprint in more than 50 countries across all continents. We are the only Bangladeshi company exporting medicines to the United States, the largest and most stringent pharma market in the world. While our current revenue predominantly comes from the domestic market, we have a strategic focus on export with an ambition to achieve export-led growth in the longer term. 11% Export Domestic 89% 2019-20 (Net Sales) Export Destination South Asia Afganisthan Bhutan Cambodia Maldives Myanmar Nepal Pakistan Sri Lanka Vietnum Asia Pacifi c +CIS Africa Ajerbaijan Hong Kong Indonesia Laos Malaysia Philipines Singapore Taiwan Thailand Uzbekistan Middle East Iraq Jordan Lebanon Oman UAE Yemen Botswana Burundi Ethiopia Ghana Guniea Conakry Ivory Coast Kenya Lesotho libya Mali Mauritius Mozambique Namibia Nigeria Somalia South Africa Tanzania Uganda Zambia Zimbabwe 20 | Annual Report 2018-19 | Our Market Europe Austria Germany Netherlands Romania North Amercia Canada USA Australia Australia Fiji Kiribati Tonga Australia South Asia Africa Rest of the World North America Latin & Central America Belize Chile Columbia Costa rica Domincian Republic Ecuador Guatemala Guyana Honduras Jamaica Netherland Antilis Nicaragua Panama Peru Suriname T&T Venezulea 5% 14% 17% 17% 47% Region Wise Export (2019-20) Our Manufacturing Capabilities Tongi Site Company’s main manufacturing site at Tongi, Gazipur, is spread over an area of 23 acres which houses a number of self- contained production units including oral solids, metered dose inhalers, intravenous fluids, liquids, ointments, creams, suppositories, ophthalmic drops, injectables, prefilled syringes, nebulizer solutions, insulin, dry powder inhaler, small scale API unit, etc. The site has its own infrastructure to ensure adequate generation and distribution of electricity with an installed capacity of 15 MW. It also contains water purification, effluent treatment, liquid nitrogen and steam generation plant/facilities. There is 125,000 sq ft 5-tier warehouse to accommodate materials and finished products maintaining the GMP compliance. Kaliakoir Site The Kaliakoir plant contains manufacturing facilities for penicillin products, both formulation and active pharmaceutical ingredients (APIs). In compliance with cGMP regulations, the penicillin production is carried out at this facility which is few miles away from the Tongi site. All the plants are highly automated with equipment sourced from reputed suppliers based in Germany, USA, UK, Switzerland, China, India etc. Our Manufacturing Capabilities | Annual Report 2019-20 | 21 Oral Solid Dosage (OSD) Semi Solid and Liquid (SSL) Sterile Production (STP) Oral Solid Dosage (OSD) • Two units (OSD-1 and OSD-2); Tablets, Capsules, Powder for Suspension, Sachets and Oral Soluble Films • Capacity: Tablets-3,556 million, Capsules-223 million, Powder for Suspension-1.86 million bottles, Sachets- 4 million units and Oral Soluble Films- 0.52 million units Semi Solid and Liquid (SSL) • One unit; Large and Small Volume Liquids, Cream & Ointment, Shampoo & Lotion and Suppository • Capacity: Liquids-41.28 bottles, Cream & Ointment-3.2 million tubes, Shampoo & Lotion- 0.25 million bottles and Suppository-10.20 million pieces Sterile Production (STP) • Eight units- Infusion Unit, Amino Acid Unit, Insulin Unit, Nasal Spray and Respiratory Solutions (Non-Steroids), Nasal Spray and Respiratory Solutions (Steroids), Lyophilized Injection Unit, Prefilled Syringe Unit and Ophthalmic Unit • Capacity: Infusion Unit-9.84 million bottles, Amino Acid Unit-0.96 million bottles, Insulin Unit-3 million vials and cartridges, Nasal Spray and Respiratory Solutions (Non-Steroids)- 4.32 million ampules, Nasal Spray and Respiratory Solutions (Steroids)- 2.85 million HDPE containers, Lyophilized Injection Unit-0.93 million vials, Prefilled Syringe Unit-1.92 million units and Ophthalmic Unit – 4.00 million LDPE containers 22 | Annual Report 2019-20 | Our Manufacturing Capabilities Inhaler API Inhalers • Two Metered Dose Inhalers (MDI) units, one Dry Powder Inhaler(DPI) Unit and one Multi Dose Dry Powder Inhaler (mDPI) Unit • Capacity: MDI- 14 million Cans, DPI- 60 million Capsules and mDPI-12 million units Penicillin • One unit, Manufactures Capsules and Dry Syrups • Capacity: Capsules - 3.06 million and Dry Syrups- 42.24 million bottles Active Pharmaceutical Ingredients (APIs) • Two units- API -1 and API-2. Manufactures small volume APIs • Capacity 9.05 MT Our Manufacturing Capabilities | Annual Report 2019-20 | 23 Our Global Accreditations Benchmarked to the highest global regulatory standards, Beximco Pharma’s manufacturing facilities have been audited and approved by the following major global agencies: • U.S. FDA • Therapeutic Goods Administration (TGA), Australia • Malta Medicines Authority (European Union) • German Regulatory Authority (Regierungspräsidiums Tübingen) • Health Canada • Gulf Central Committee (GCC) • World Health Organization (WHO) 24 | Annual Report 2019-20 | Our Global Accreditations Board and Management Salman F Rahman MP Vice Chairman A S F Rahman Chairman The Board of Directors A S F Rahman Salman F Rahman MP Nazmul Hassan MP Osman Kaiser Chowdhury Abu Bakar Siddiqur Rahman Iqbal Ahmed Mamtaz Uddin Ahmed Shah Monjurul Hoque Mohammad Asad Ullah, FCS Chairman Vice Chairman Managing Director Director Director Director Independent Director Independent Director Company Secretary Audit Committee Mamtaz Uddin Ahmed Shah Monjurul Hoque Osman Kaiser Chowdhury Mohammad Asad Ullah, FCS Chairman Member Member Company Secretary Nomination and Remuneration Committee Shah Monjurul Hoque Iqbal Ahmed Osman Kaiser Chowdhury Mohammad Asad Ullah, FCS Chairman Member Member Company Secretary Executive Committee Osman Kaiser Chowdhury Nazmul Hassan MP Rabbur Reza Mohammad Ali Nawaz Afsar Uddin Ahmed Member of the Board of Directors Managing Director Chief Operating Officer Chief Financial Officer Director, Commercial 26 | Annual Report 2019-20 | Board and Management Directors’ Proﬁ le Ahmed Sohail Fasihur Rahman Chairman Salman Fazlur Rahman MP Vice Chairman Mr. Ahmed Sohail Fasihur Rahman is the Chairman and founder of Beximco Group. He is a distinguished business personality of the country and has received many awards and accolades for his outstanding contribution to country’s industrial development. Mr. Rahman was instrumental in introducing best-in-class corporate practice in Bangladesh and is widely credited as the architect of Group’s successful global strategy. He graduated with Honours in Physics from the University of Dhaka in 1966, and also studied in the United Kingdom. Mr. Rahman held key positions with many reputed organizations, serving as the Chairman of IFIC Bank Limited, Director of Industrial Promotion & Development Company Limited, Arab Bangladesh Bank Limited, Pubali Bank Limited and Investment Corporation of Bangladesh. He is currently a member of the Board of Governors of North South University Foundation, the fi rst private sector university in Bangladesh. Mr. Salman Fazlur Rahman MP is an industrialist, philanthropist and politician of Bangladesh. A Member of Parliament, Mr. Rahman currently serves as the Prime Minister’s Private Industry and Investment Adviser, with the rank and status of a cabinet minister, principally tasked with promoting trade, business and investment in the country. He is best known as the co-founder and Vice Chairman of the Beximco Group, the country’s largest private sector conglomerate. He was the President of SAARC Chamber of Commerce and Industry, Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), Metropolitan Chamber of Commerce and Industry (MCCI), Bangladesh Textile Mills Association, Bangladesh Association of Pharmaceutical Industry and Association of Television Channel Owners (ATCO). Currently, he is the Chairman of the Board of Governors, Bangladesh Enterprise Institute, a leading think tank focusing on the growth of private enterprise in Bangladesh. He is also the Chairman of IFIC Bank Limited, Chairman of the Board of Editors, the Independent, one of the leading English-language newspapers, Chairman of the Independent Television, a popular and infl uential 24-hour news channel and the Chairman of Abahani Ltd. the nation’s premier sporting club and the Adviser of Bangladesh Association of Pharmaceutical Industries (BAPI). Mr. Rahman has many accolades to his name and he holds a degree from Karachi University. Board and Management | Annual Report 2019-20 | 27 Nazmul Hassan MP Managing Director Mr. Nazmul Hassan MP is the Managing Director of Beximco Pharmaceuticals Limited and the Chairman of Nuvista Pharma Ltd. and Beximco Pharma API Ltd. He is also the Director of the Board of Bangladesh Antibiotic Industries Limited, Independent Television and Padma Mining and Energy Limited. Mr. Hassan obtained his graduation degree in Public Administration from the University of Dhaka and an MBA degree in Marketing from Institute of Business Administration (IBA). He also received executive education from University of California Los Angeles (UCLA) and Kellogg School of Management, Chicago. Since 2009, Mr. Hassan has been an elected Member of Parliament (MP) of Bangladesh for three consecutive terms. He is also a Member of the Parliamentary Committee for Finance, Sports & Defense. Mr. Hassan is currently the President of Bangladesh Association of Pharmaceutical Industries (BAPI). He is involved with various national and international committees and task force on healthcare and drug policy. Mr. Hassan is the elected President of Bangladesh Cricket Board (BCB) and Asian Cricket Council (ACC), Director of International Cricket Council (ICC) Board and ICC Business Corporation (IBC). He is the President of IBA Alumni Association and a Member of the American Management Association and the Australian Institute of Management. A prominent and highly respected business leader in the country, Mr. Hassan received the prestigious Asia’s Most Infl uential Leader award at the Asian Brand Summit 2013, Dubai for his outstanding business leadership. Osman Kaiser Chowdhury Director Mr. Osman Kaiser Chowdhury is a member of the Institute of Chartered Accountants of England and Wales and a Fellow member of the Institute of Chartered Accountants of Bangladesh. He is involved with Beximco Group for over 40 years and is currently the Director of Group Finance and Corporate Affairs, Chief Executive Offi cer of Beximco Power Ltd. and Beximco Engineering Ltd. He has over 13 years’ experience working abroad, including the United Kingdom. Mr. Chowdhury is a member of the Board of Directors of a number of listed and non-listed Companies including Bangladesh Export Import Company Ltd., Beximco Synthetics Ltd., Shinepukur Ceramics Ltd. and Beximco Securities Ltd. Abu Bakar Siddiqur Rahman Director Mr. Abu Bakar Siddiqur Rahman holds senior positions at a number of entities within the Beximco Group of companies and has over 48 years business experiences in trading, jute, textiles, pharmaceuticals and other sectors. He has been in the Board of Beximco Pharma since 1993. Mr. Rahman is also a member of the Board of Directors of Bangladesh Export Import Company Limited. 28 | Annual Report 2019-20 | Board and Management Iqbal Ahmed Director Mr. Iqbal Ahmed has been with the Beximco Group since 1972 and holds senior positions in a number of entities within the Beximco Group of companies. He received his Bachelor’s Degree in Science from the University of Dhaka in 1966. He has over 48 years business experiences in trading, jute, textile, pharmaceuticals, engineering, IT and other sectors. He has been in the board of Beximco Pharma since 1985. He was the publisher of “The Independent” and the “Muktakantha” an English and a Bengali national daily newspaper respectively in Bangladesh. Mamtaz Uddin Ahmed Independent Director Professor Mamtaz Uddin Ahmed FCMA has joined Beximco Pharmaceuticals Limited as an Independent Director in July 2020. He is currently the Professor of the Department of Accounting and Information Systems, Chairman of the Bureau of Business Research and the Treasurer of the University of Dhaka, Bangladesh. Professor Ahmed is also an experienced Board member, currently an Independent Director in the Board of Ashuganj Power Station Company Ltd. owned by the government of Bangladesh. His previous Board positions include Director of the Chittagong Stock Exchange Ltd. and Director of the Dhaka Stock Exchange Ltd. Professor Ahmed is the former President of the Institute of Cost and Management Accountants of Bangladesh (ICMAB). Professor Ahmed obtained his Bachelor and Masters in Accounting from University of Dhaka. He also obtained MBA from University of Castle, USA and CMA degree from ICMAB, Bangladesh. Shah Monjurul Hoque Independent Director Mr. Shah Monjurul Hoque is a practicing lawyer in the Supreme Court of Bangladesh, both in the High Court Division and Appellate Division. Mr. Hoque is the founder of Hoque & Associates, a law fi rm in Bangladesh, of which he is the Proprietor (a position equivalent to that of a director). He has held various academic appointments in the fi eld of law and has also acted as legal adviser to a number of corporate clients in Bangladesh and as the enlisted lawyer of several Bangladeshi banks. Company Secretary Mohammad Asad Ullah, FCS Executive Director & Company Secretary Mr. Mohammad Asad Ullah has been working with Beximco Group since 1983. He obtained his Bachelor of Arts and Master of Law degree from University of Dhaka. He also holds an MBA with major in Human Resource Management. Mr. Asad Ullah qualifi ed as Chartered Secretary from the Institute of Chartered Secretaries of Bangladesh (ICSB) and is a Fellow Member of the institute. He was four times President of the Institute. He is a widely experienced person with long career in Company Secretarial functions. Board and Management | Annual Report 2019-20 | 29 At Beximco Pharma, we strive to do what matters most to patients: provide high quality, contemporary treatment options and make them affordable. Executive Committee Executive Committee comprises of fi ve members- Mr. Osman Kaiser Chowdhury, Mr. Nazmul Hassan MP, Mr. Rabbur Reza, Mr. Mohammad Ali Nawaz and Mr. Afsar Uddin Ahmed. Mr. Chowdhury and Mr. Hassan are also members of the Board of Directors. Rabbur Reza Chief Operating Offi cer Mr. Rabbur Reza, the Chief Operating Offi cer of the Company, has 25 years of experience in pharmaceutical industry, in the areas of sales, marketing and brand management, international business development, operations management, acquisition and partnerships etc. He had previously worked for Biotech and Milton Pharmaceuticals in Australia. He is also serving as the Managing Director of Nuvista Pharma Ltd. and of Beximco Pharma API Ltd. Mr. Reza holds a Bachelor of Pharmacy from Panjab University, India and an MBA from Queensland University of Technology (QUT), Australia. He received executive education in Strategy and Leadership at Harvard Business School, USA and London Business School, UK. He is a fellow of Australian Institute of Management, a member of Pharmaceutical Society of Australia, and also a member of Montreal Protocol’s Medical Technical Options Committee (United Nations Environment Program–UNEP). Mr. Reza received the prestigious “Australian Alumni Excellence Awards 2014” in the category of Business and Leadership. Mohammad Ali Nawaz Chief Financial Offi cer Mr. Mohammad Ali Nawaz qualifi ed as a CMA from the institute of Cost and Management Accountants of Bangladesh, and is currently a Fellow Member of the Institute. He also obtained an MBA from the Institute of Business Administration, University of Dhaka. After joining as a management trainee in 1990, he worked for different entities within the Beximco group of companies, in varying capacities. He is also the Director of Nuvista Pharma Ltd. and Beximco Pharma API Ltd. He possesses diversifi ed skills and experience in Accounting, Finance, HRM, Project Management, Supply Chain and Operations Management. He attended a number of training courses, seminars and symposiums at home and abroad in various functional areas including organizational leadership. Afsar Uddin Ahmed Director Commercial Mr. Afsar Uddin Ahmed completed his MBA from the Institute of Business Administration (IBA), University of Dhaka, with a major in Marketing. He also received advanced management training at International Management Centre, IIkley College, UK. Mr. Ahmed has worked in and supervised a number of operational areas of BPL including Marketing, Sales, Distribution, Exports, Planning, Procurement, MIS, Business Development, Project Management and API business. Mr. Ahmed also worked as the Country Manager of BPL’s Pakistan operation. Currently he is also serving as the Director of Beximco Pharma API Ltd. He worked for Sanofi -Aventis as Director Marketing of its Bangladesh business overseeing the marketing operations of several business units. Board and Management | Annual Report 2019-20 | 31 Management Committee Nazmul Hassan MP Managing Director Osman Kaiser Chowdhury Member of the Board of Directors Rabbur Reza Chief Operating Offi cer Mohammad Ali Nawaz Chief Financial Offi cer Mohd. Tahir Siddique Director, Quality A R M Zahidur Rahman Director, Production Zakaria Seraj Chowdhury Head of Distribution Services & Director, International Marketing Jamal Ahmed Choudhury Executive Director, Accounts & Finance M A Arshad Bhuiyan General Manager Human Resource 32 | Annual Report 2019-20 | Board and Management Afsar Uddin Ahmed Director, Commercial Rizvi Ul Kabir Director, Marketing Lutfur Rahman Director, Manufacturing Shamim Momtaz Director, Manufacturing Ms. Roksana Hassan Executive Director, Financial Compliance Audit and Internal Control Prabir Ghose Executive Director, Quality Assurance Dr. Selina Akter Executive Director Department of Medical Affairs Shawkat Haider, Ph D Executive Director, Business Development & Corporate Affairs Board and Management | Annual Report 2019-20 | 33 Highlights 2019-20 Financial Highlights Net Sales Domestic Sales Export Sales 12.3% to BDT 25,611.9m (2019-20) (2018-19: BDT 22,816.6m) 12.5% to BDT 22,860.1m (2019-20) (2018-19: BDT 20,314.0m) 10.0% to BDT 2,751.8m (2019-20) (2018-19: BDT 2,502.6m) Profit After Tax 16.6% to BDT 3,544.4m (2019-20) (2018-19: BDT 3,040.4m) EPS Dividend 15.9% to BDT 8.67 (2019-20) (2018-19: BDT 7.48) Proposed 15% Cash (BDT 1.50 per share) and 10% Stock Dividend (2019-20) (2018-2019: 15% Cash) 34 | Annual Report 2019-20 | Highlights 2019-20 Operational Highlights Expansion of Domestic Portfolio • Launched 26 new Products, including - 4 new products fi rst time in Bangladesh - Maxhaler mDPI, the generic version of GSK’s Seretide Accuhaler, for the fi rst time in Bangladesh - Bemsivir, the world’s fi rst generic version of Remdesivir for the treatment of COVID-19 - Virafl u (Favipravir 200mg), a repurposed drug for COVID19 treatment • Launched 5 new gastrointestinal and hormonal products from subsidiary, Nuvista Pharma, in the domestic market Export Business • Completed 63 registrations for 50 products in 20 countries • Commenced export of Nadolol and Sotalol AF, both cardiovascular drugs, in US market • Received GMP approval from a German Regulatory Authority and Malta Medicine Authority (European Union) • Entered four new countries: Maldives, Pakistan, Nicaragua and Dominican Republic Collaboration • Signed an exclusive agreement with Mylan (Now Viatris) for distributing a range of biosimilar products in Bangladesh Highlights 2019-20 | Annual Report 2019-20 | 35 Post-Period Highlights • Signed an exclusive agreement with the Serum Institute of India Pvt. Ltd (SII), the world’s largest vaccine producer, for distribution of Oxford/AstraZeneca vaccine AZD1222 for COVID-19 in Bangladesh • Received highly prestigious CPhl Pharma Award in the category of ‘Innovation in Response to COVID-19’ • Received US Food and Drug Administration (FDA) approval for Flecainide Acetate (50, 100 and 150 mg tablets), an antiarrhythmic drug used for treating irregular heartbeats in conditions such as tachycardia and atrial fi brillation • Assigned AAA Long Term Rating ( Indicates Highest Safety for Timely Repayment) by Credit Rating Information and Services Limited (CRISL) the top credit rating company of the country 36 | Annual Report 2019-20 | Highlights 2019-20 Accolades and Awards CPhI Pharma Awards 2020 for “Innovation in Response to COVID-19” Beximco Pharma has been awarded the prestigious CPhl Pharma Award in the category ‘Innovation in Response to COVID-19’ on October 13, 2020. CPhI Pharma Awards are among the most prestigious recognitions within the pharmaceutical industry judged by an esteemed panel of industry experts from around the world. Accolades and Awards | Annual Report 2019-20 | 37 Global Generics & Biosimilars Awards 2019 Beximco Pharma has been recognized as the “Company of the Year, Asia Pacifi c” at the Global Generics & Biosimilars Awards 2019, held in Frankfurt, Germany, on 5 November 2019. The Company has won the award in this category after competing with global peers namely Aurobindo, MSN Laboratories, Piramal Pharma Solutions and Shanghai Henlius Biotech. Beximco Pharma COO, Mr. Rabbur Reza received the award on behalf of the Company. The Global Generics & Biosimilars Awards are amongst the most coveted recognitions in the pharmaceutical industry, that recognize the efforts made by global generics and to make biosimilar companies, to affordable medicines available more patients across the globe. Global Generics & Biosimilars Award Beximco Pharma has been nominated for the Global Generics & Biosimilars Awards 2020 in the categories of “Company of the Year, Asia Pacifi c.” The Global Generics & Biosimilars Awards recognise the best in the global generics and biosimilars industries. An initiative of UK based Pharma Intelligence/Informa PLC, world’s leading business intelligence, academic publishing, knowledge and events group, these prestigious awards reward ‘best practice’ in the pharma industry. 38 | Annual Report 2019-20 | Accolades and Awards ABBC Business Excellence Award 2019 Beximco Pharma won the “ABBC Business Excellence Awards 2019” as a recognition for its pharmaceutical export to Australia and contribution to promoting bilateral trade. ICMAB Best Corporate Award Beximco Pharmaceuticals Limited won the third position in pharmaceutical category in the “ICMAB Best Corporate Award- 2018” for excellenc in corporate performance. Accolades and Awards | Annual Report 2019-20 | 39 Learning and Development Center Our People BPL has a dynamic team of over 4,700 people who are the driving force behind its progress. Our devoted and highly competent people are our key resource to accomplish our mission and consistently remain at the centre of our strategy. We recognize it is our people’s resolute efforts that have driven us to a greater height over the years. Currently, our strong pool of expertise includes over 1,500 professionals such as pharmacists, chemists, doctors, engineers, microbiologists, researchers, and business graduates. At Beximco Pharma, we endeavour to create, promote and sustain an inclusive, high performing and diversified culture for our employees to promote empowerment and encourage innovation. We emphasize on enhancing capacity, strengthening skills, and enabling their success, both individually and collectively. Training and Development We relentlessly focus on providing learning and development opportunities to help our employees achieve career advancement and attain professional success. To ensure that our people are empowered and remain responsive to a rapidly changing world, we provide them with high-quality training to broaden and enrich their professional competencies. Throughout the year, we arranged a wide range of training and professional development programs across different functional areas on a routine basis. The programs are designed and tailored for different levels of employees based on assessment of their needs. The Company has a dedicated training department manned with experienced professionals to conduct in-house training. Besides our own expertise, we invite local and international experts and trainers to conduct these programs. In order to keep our employees abreast of the latest developments in different fields, we send our employees to external training, seminars and workshops arranged at home and abroad. The Company also has resourceful libraries and access to online resources for the employees to encourage self-development. In 2019-20, 779 employees received 7,284 man-hours of specialized training in a wide range of areas including technology transfer, analytical testing and validation, data management & data integrity, leadership skill, brand management, quality risk management and quality control. Sixty five employees received 2,036 man-hours of overseas training in ten different countries including Germany, Switzerland, Italy and Singapore. Additionally, individual departments throughout the year conducted in-plant GMP compliance, Sales skills development and other similar programs which they do on a regular basis. Specialised Training Programs 2019-20 Description Participants Training Hours Overseas Training Local Training 65 714 2,036 5,248 Employment, Retention and Rewards In Beximco Pharma, we always assert on diversity and adopt an inclusive management style through which we gain access to a broader pool of talented workforce and benefits from their innovative strength. The Company’s employment and recruitment policy does not contain any discriminative provision with respect to gender, religion or caste. Currently, we have 160 female employees working at different levels from production workers to managerial positions, and two of them are members of the Company’s seventeen member Management Committee. Employment of female in the Our People | Annual Report 2019-20 | 41 pharmaceutical industry of Bangladesh is quite low due to socio-cultural reasons. The Company has created a specific segment of the production line to be run exclusively by females to manifest its commitment of minimizing gender gap. The proportion of women across all levels of the organization is increasing gradually. Women are now part of more diverse and challenging roles compared to the previous years. safety and health. During this ongoing COVID-19 pandemic, ensuring uninterrupted production and supply of essential medicine maintaining health and safety of our employees were a tough call for us. Since the begining of the pandemic, we took a series of measures for our employees to provide maximum protection at workplace and render every support to them and their family in any medical crisis. Beximco Pharma offers its employees competitive reward packages to attract and retain the industry’s most talented workforce. This well-designed retention program comprises employee compensation, recognition and reward system, work life balance, communication and feedback, effective teamwork, etc. The Company annually revises individual employee salary based on annual assessment of performance. Company’s pay and benefit structures are reviewed at longer intervals to match with the industry trends. Turnover Rate 6.15 2020 2019 2018 11.85 9.5 Employee Welfare Beximco Pharma’s employee welfare schemes reinforce its strong bonding with the employees. The Company carries out routine health check up of our factory based workers and has arranged for free of cost doctor’s consultation services for the members of their families. Under a defined education scholarship program, the children of our workers receive education stipends for their outstanding results at different public examinations and success in enrolling with recognized universities. This year a total of 65 students received such financial support. The Company provides lunch at a nominal charge (free of cost for the workers) to the employees at factory and head office; arranges annual picnic, cultural programs, family day events for workers and officers to strengthen inter- personal relationship and organizes intra and inter-company sports events for better health and mind. Support to Employees during Pandemic We care for our employees and impose highest priority on their Work from Home, Rotation Attendance and Social Distancing During the nationwide lockdown, considering the safety of our employees, we created Work from Home facility for our employees. At office-based facilities, employees were encouraged to work remotely where possible, with the minimum number of people attending the office. Subsequently after withdrawal of the lockdown, to keep our work place less crowded, we encouraged our employees to attend office on a rotation basis. At the manufacturing sites, we implemented new work practices to ensure social distancing. At all facilities, employees were screened upon entry and disinfectants and masks were made available. Everyone working for us got their wages on time. We made full payments to every employee for the leave beyond their entitlements who were sick, quarantined or in isolation because of COVID-19. 24 hours Hotline Service for the Employees and Their Family Members To provide the best care to our employees and their family members during the pandemic, 24 hours hotline service was opened from the begining to respond to all COVID-19 related queries and provide necessary health advice. A team of qualified in–house doctors and pharmacists engaged to render the services. Care for Mental Wellbeing Our Human Resource Management (HRM) monitoring team has remained continuously vigilant to monitor mental health and emotional status of our employees so that they never feel left alone in this critical time. Our HRM monitoring team made follow-up calls to sick employees to enquire whether they require any kind of assistance. Managing Director of the Company sent gift basket with “Get Well Soon” card to each COVID-19 positive patient to provide emotional support. 42 | Annual Report 2019-20 | Our People Free Medical Tests Beximco Pharma outsourced the services of a government authorized testing centre for the COVID-19 tests of all suspected employees and their family at free of cost. We also set up special screening facility in our plant premises. Free Medicines and Ambulance Services Employees who have been tested COVID-19 positive were provided all prescribed medicines at free of cost. Two ambulances were available 24 hours for any emergency need. Establishing Isolation and Quarantine Centres We established several isolation and quarantine centres at different locations of the city. COVID-19 positive employees who do not have isolation facility in their home were placed in the isolation centre for treatment. Oxygen Cylinder for the Emergency Patient We arranged a pool of oxygen cylinders when nationwide oxygen cylinders were in extreme scarcity. In emergency medical crisis of our employees, our trained doctors and technicians rushed home to provide temporary oxygen support till the patients get admitted to the hospitals. Emergency Food Support for Employees in Lockdown Zones We arranged food for the employees, whose residences were under lock down imposed by the government. In some cases where entire family got infected with COVID-19 we even delivered cooked food at their homes. Sample Collection Points for COVID-19 Test We set up few sample collection points so that employees can avoid the hassles and risks of going to the test centres. Our People | Annual Report 2019-20 | 43 the Bangladesh Energy Regulatory Commission (BERC). Environment, Health and Safety (EHS) As a responsible company we are committed to provide a safe and healthy workplace for our employees, promote environmental excellence in our operations and meet global EHS standards. We actively comply with relevant government regulations, industry standards and other requirements to which the Company subscribes and preaches vigorously. Beximco Pharma selects the eco-friendliest technology and our plant & equipment boasted to have the most state of the art technology. We regularly review and implement adequate regulations to ensure the health and safety of our employees, contractors, visitors and neighbors. The company strives to reduce environmental footprint, create adequate facilities and employs appropriate processes to keep the environmental effects to a practicable minimum level. All our liquid and solid waste and gaseous emissions generated from our operations are controlled, disposed and managed in the best practicable means. The carbon footprint in the factory surroundings is measured in regular intervals as per government regulations and is well within the standard limit. Our last analysis is presented below. Solid Waste Control and Conduction The solid waste generated from pharmaceutical manufacturing operations may have an adverse effect on the environment and ecological system. Our solid wastes are strictly managed to comply with the environmental regulations. The entire waste management is handled with the Best Available Technologies (BAT) that includes proper cleaning and disposal system and protocol, dust control units to capture the solid waste generated during manufacturing process and a solid waste incineration plant to burn all solid waste including ETP sludge. Beximco Pharma has installed one of the largest incinerators having capacity of 250 kg per hour. The Incinerator and its operating procedures are approved by the DoE. Environment Sustainability Measures Beximco Pharma has been diligently measuring its carbon footprint and environmental impacts such as quality of treated water, sound level and air quality in the factory surroundings and successfully meeting all the standards set by the Department of Environment (DoE). Our environmental practices boasted to be voluntarily more advanced than the regulatory requirements and does not pose any fi nancial risk to the Company. We are always in compliance with the rules and regulations set by the regulatory authorities and keep all licenses and certifi cates updated such as Manufacturing License, Fire License, Environmental Clearance, Boiler License, Explosive License, Narcotic License and License from The Results of Carbon Footprint in the Factory Surroundings- 2018 439 0 0.13 1.9 783 30.52 190.5 5,000 50 5 25 1,000 150 200 CO2 ppm CO ppm NO2 ppm NO ppm TVOC ppb PM10 µg/m3 SPM µg/m3 Government Standard Result in company surroundings 44 | Annual Report 2019-20 | Environment, Health and Safety (EHS) Liquid Waste Control and Conduction Liquid wastes are primarily generated from fl oor wash, machineries and utensils wash etc. The other source of liquid waste consists of dissolved and suspended APIs, excipients, laboratory reagents and water from cooling tower. Beximco Pharma has proper protocol on the use of water and waste water generation in the facility. We have a large modern waste water treatment plant at our factory site. Waste water is treated in the ETP and the sludge is incinerated and ensured that Chemical Oxygen Demand (COD) and Biological Oxygen Demand (BOD) of the released water are well within the permissible limit. The Company has currently undertaken a project to upgrade the existing ETP through incorporation of PLC based Membrane Bioreactor MBR technology, and the system is based on the combination of a suspended biomass reactor and a separation step on porous membrane fi ltration. Our effi cient MBR technology based ETP will produce high-quality treated water along with reduction of space requirement. We continuously monitor the quality of our discharged water and always found it to be well below the prescribed limit of DoE. Tests pH TDS Specification 6 to 9 NMT 2,100 ppm Dissolved Oxygen 4.528 ppm COD BOD Arsenic NMT 200 ppm NMT 50 ppm NMT 0.2 ppm Results found in October 2020 7.56 680 4.8 158.47 46.02 0.005 Gaseous Emission Control and Conduction Our manufacturing operation does not produce or generate any harmful gases. Generation of gaseous emissions in the manufacturing process is of insignificant quantity and fully contained by our HVAC system through HEPA filtration, hence there is no discharge of gaseous particles in the atmosphere. The company has phased out the use of CFC as well. The air quality analysis of our surrounding areas depicted in the below table certifies our claim. Ambient Air Pollutant Concentration (micro gram/ cubic meter) SPM 168 Remarks • Wind Direction was from South to North <=200 • Weather was sunny and Rainy Sample Location North side and 15 meter from Production Air Quality Standard Noise, Odor and Vibration Control and Conduction Noise and certain vibrations commonly produced by the electromechanical equipment may affect workers and the environment at the vicinity. The machineries used in our production units do not vibrate or create noise and hence have very insignificant effect. The working personnel inside the plant are provided with Personal Protective Equipment (PPE). There is no major odor problem as the factory premises are regularly disinfected and materials are handled in closed spaces where the air in the rooms are frequently changed with the HEPA filter capturing all the particles, hence maintaining a clean air. Sound dBa 2020 75 54 Sound dBa 2019 75 59 Government Standard Result in company surroundings Health, Safety and Hygiene It is the policy of our Company to ensure a safe and healthy workplace for our employees. Beximco Pharma is determined to protect and promote employee health and safety. We enacted proper and effective health and safety guidelines in all our operational and manufacturing sites. Beximco Pharma identifies and assess’ potential exposure to chemical and physical stresses utilizing qualitative and quantitative analysis. Significant risks to chemical and physical stresses are controlled by isolation, engineering control, administrative control and providing protective equipment. EHS aspects are considered before procurement of any equipment. EHS attribute is a part of User Specification Requirement (USR) of all equipment. All machines and moving parts are covered and interlocked through sensors to protect employees from physical injury. Proper work uniforms, lab coats, eye and ear protections are provided where required. We also identify, assess and control the factors that may lead to musculoskeletal or other ergonomically related disorders. Automation in most of the areas reduces work stress. Smoking is prohibited in all our operational and manufacturing premises. Eating or drinking is not permitted in the manufacturing areas and analytical labs where chemical exposures are possible. All employees are trained on different EHS issues including firefighting, personal protective equipment, First Aid and Material Safety Data Sheet (MSDS). All areas in head office and factories are provided with emergency exits along with proper signage, and where applicable, flame proof appliances, fire doors etc. are used. Partitions are made with PU panel capable of retaining fire for a definitive time period. Each and every employee undergoes pre-employment and annual health check-ups organized by the Company. Company has contracted physicians specialized in Medicine, Gynecology, Child Health etc. Employees can consult them free of cost. We have a sick bay and employees can take advice from the qualified physicians engaged by the Company. There is an arrangement with the nearest clinics for handling emergencies. We have several ambulances to send patients to the hospitals and clinics in emergency cases. First aid boxes are provided to each department of every facility. Environment, Health and Safety (EHS) | Annual Report 2019-20 | 45 Company conducts mock evacuation drills twice in a year in order to prepare the employees to act properly incase an emergency arises. Operational and manufacturing sites are fully equipped with fi re hydrants and standalone fi re extinguishers. We have installed sophisticated Fire Detection and Alarm System in our factory and head offi ce premises to locate the exact place of any fi re occurrence and employed trained experienced Emergency Core Response Team (ECRT) to respond to any situation. Child Labor The Company strictly complies with the codes of Bangladesh Labor Act in all respects including restrictive provisions relating to “Employment of Adolescent”. No Child labor is directly or indirectly employed in any part of the Company. 46 | Annual Report 2019-20 | Environment, Health and Safety (EHS) Our CSR Initiatives Corporate social responsibility (CSR) at Beximco Pharma stems from the ideology of providing sustainable value to the society. We strongly believe we can only be successful if we create value not just for the company but also for the society we live in. We invest in CSR activities and in doing so we achieve sustainability and growth by improving the health and wellbeing of the people. Some of our major CSR activities carried out in 2019-20 were: Donated PPE Worth Taka 15 Crore to Protect the Healthcare Professionals COVID-19 Contributions Beximco Pharma has remained fully committed to fighting the pandemic, in all possible ways. In response to crisis, Beximco was among the first to source and procure high quality personal protective equipment (PPE), N95 masks, goggles, PCR kits etc. from abroad, despite very limited availability of those products due to soaring demands worldwide. The company provided different types of protective equipment worth Taka 15 crore to protect the frontline health workers in Bangladesh. These were distributed nationwide to more than 150 leading hospitals. Provided Remdesivir Injection Free of Cost to All Govt. Designated COVID-19 Hospitals Beximco Pharma donated large quantities of Remdesivir (Bemsivir) injections to the Bangladesh Government for supply to all government designated COVID-19 hospitals free of cost. Remdesivir is administered intravenously and is authorized for the treatment of hospitalized patients with severe COVID-19 disease. While handing over this drug to the Health Minister, Beximco Pharma Managing Director Nazmul Hassan MP said, "We are pleased to be the first generic company in the world to introduce this very important drug for COVID-19 patients. This reinforces our commitment to ensure access to breakthrough therapies, despite facing tremendous challenges amid this pandemic." Our CSR Initiatives | Annual Report 2019-20 | 47 Collaboration for Development of Isolation Canopy for Protecting Frontline Health Workers Beximco Pharma provided funding and full logistics support for development of negative pressure isolation canopy to protect the healthcare workers in COVID-19 hospitals. This research was led by Professor Khondkar Siddique-e Rabbani, founding chairperson and now Honorary Professor of Biomedical Physics and Technology Department in Dhaka University, along with Professor AKM Akhtaruzzaman, head of Anaesthesia, Analgesia and Intensive Care Medicine Department of BSMMU. Negative pressure isolation canopy uses an ultraviolet light (UVC) chamber which destroys all micro-organisms and viruses before the air is further disinfected and cleaned by a HEPA filter. This isolation canopy, developed first time in the country, has more advanced features than similar devices currently available in many countries. Our researchers could keep the cost reasonably within reach and significantly less than those available in other countries since the technology is homegrown. Sweden's Uppsala University is also a partner of this initiative. The first prototype of the isolation canopy was demonstrated at BSMMU, and several canopies were later donated by Beximco Pharma to the same hospital. BPL Employees Donated One-day Salary for Victims of COVID-19 Employees of Beximco Pharma and its subsidiary Nuvista Pharma contributed one day’s salary to the fight against COVID-19 pandemic. The lockdowns and restrictions in the country to prevent the spread of COVID-19 harshly impacted those who depend on daily wages for their livelihood. Beximco Pharma pledged to contribute to alleviate their struggle by working with other volunteer organizations who work in the frontline to provide emergency food, medicine etc. to the underprivileged people. 48 | Annual Report 2019-20 | Our CSR Initiatives Regular Supply of Personal Protective Equipment (PPE) to Frontline Healthcare Professionals Providing PPE to Brig Gen Jamil Ahmed, Director, Kurmitola General Hospital, Kurmitola, Dhaka Cantonment. Providing PPE to Dr.Abul Hashem Sheikh, Asst.Director, Mugda Medical College Hospital, Dhaka. Providing PPE to the Director of Dhaka Medical College Hospital. Providing PPE and medicines to icddr,b. Telemedicine Initiatives for Doctors During the Pandemic COVID-19 seriously disrupted healthcare services and it has created panic among the doctors, nurses and patients alike. Hundreds of frontline health-workers including renowned doctors in the country have died from COVID-19. The situation led doctors reluctant about seeing patients and providing direct consultations to them. Beximco Pharma has taken several initiatives especially with Bangladesh Society of Medicine to allow leading doctors to render their services to the patients. In addition it partnered with different telehealth service providers to organize online appointment with doctors. Our CSR Initiatives | Annual Report 2019-20 | 49 Nationwide Campaign for Mask Awareness Beximco Pharma sponsored the country’s largest mask awareness campaign in partnership with Jaago Foundation, a leading volunteer organization in Bangladesh. The initiative called “Apnar Mask Kothay? (Where Is Your Mask?)” – aimed to inspire and create awareness among people to wear masks amid the COVID-19 pandemic. More than 6,000 volunteers participated from Dhaka, Chattogram, Khulna, Barisal, Sylhet, Rajshahi, Rangpur, and Mymensingh divisions and set out to raise mass awareness by taking to the streets. The volunteers discussed the ongoing coronavirus situation and made people aware of the importance of using masks to reduce the spread of COVID-19. Free masks were distributed among the people during the campaign. Community Care Program Promoting Education Support to Centre for the Rehabilitation of the Paralyzed (CRP) long Beximco Pharma has been a supporter of CRP, known an internationally organization which serves and rehabilitates people with different kinds of disabilities. extended The support in the form of funding on the occasion of CRP’s 40th founding anniversary. company Free Medical Camps Beximco Pharma supports many organizations to conduct health camps throughout the year. In the year, the Company provided free medicines to health camps organized by Diabetic Association of Bangladesh, Agami Education Foundation, Dhaka City Corporation, Bangladesh Medical Association, Bangladesh Air Force, Jaago Foundation, and UN Peace Keeping Missions in Lebanon and Central Africa. Support to Computer Literacy Centers Beximco Pharma continued its financial support to three Computer Literacy Centers (CLCs) in two different districts of Bangladesh. These CLCs are being run in cooperation with the Computer Literacy Program (CLP), USA, and its implementation partner in Bangladesh-Dnet. The main objective of this initiative is to the promote computer learning and information technology among the underprivileged students of Bangladesh. Humanitarian Support to Rohingya Refugees Beximco Pharma has been providing healthcare support to the Rohingya refugees since the beginning of this humanitarian crisis. Throughout the year, the Company continued to extend its support in many ways to Rohingya camps in Coxs Bazar. 50 | Annual Report 2019-20 | Our CSR Initiatives Supporting Research, Innovation and Development Beximco Pharma Sponsored icddr,b’s Clinical Trial of Ivermectin for the Treatment of COVID-19 Beximco Pharma sponsored the clinical trial conducted by internationally renowned research organization ICDDR,B to evaluate the efficacy of Ivermectin in COVID19 patients. The randomised, double-blind, placebo-controlled clinical trial aims at evaluating the safety and efficacy of anti-parasitic medicine Ivermectin in combination with antibiotic doxycycline or Ivermectin alone. It is being conducted in hospitalised adults diagnosed with COVID-19. About the trial, Beximco Pharma managing director Nazmul Hassan MP said, “We are pleased to sponsor the first randomized, well designed clinical trial of Ivermectin in COVID-19 patients in Bangladesh. Should the outcomes be positive from this trial, as well as other ongoing trials in different countries, Ivermectin can offer itself as a highly affordable and readily available solution for the COVID-19 pandemic.” The manuscript of this therapeutic study is now accepted for publication in a peer-reviewed international Journal Supporting Other Clinical Trials on COVID-19 treatments Beximco pharma extended support to several clinical trials initiated by leading institutes or researchers, namely IEDCR, Dr. Tarek Alam and Combined Military Hospital (CMH), Dhaka. The Company supported them with all trial drugs (Ivera, Megadox, Azithrocin, Bemsivir) free of cost to facilitate their trials to combat the COVID-19 pandemic. Our CSR Initiatives | Annual Report 2019-20 | 51 Corporate Events Beximco Pharma Signed MoU with Serum Institute for COVID-19 Vaccine Beximco Pharma entered into a Memorandum of Understanding with Serum Institute of India and Govt of Bangladesh for the supply and distribution of 30 million doses of the Oxford/AstraZeneca vaccine, AZD1222, in Bangladesh. Serum Institute of India (SII) is the world’s largest producer of vaccines which will manufacture the Oxford vaccine under a license agreement with AstraZeneca. Beximco Pharma also has an arrangement with SII to import the same vaccine for sale and distribution to the private pay market in Bangladesh. Beximco Pharma Introduces World's First Generic Remdesivir for COVID-19 Treatment Beximco Pharma Announces a Commercial Agreement with Mylan (Viatris) On February 24, 2020, Beximco Pharma signed an agreement for distribution of biosimilar products of Mylan in Bangladesh. Under the terms of the agreement, Beximco Pharma has the exclusive rights to launch Mylan’s portfolio of key monoclonal antibodies to treat different types of cancers, rheumatoid arthritis, Crohn’s disease, ulcerative colitis and other medical conditions. The first product under this deal, OgivriTM (Trastuzumab), a breast cancer drug which is biosimilar to blockbuster drug Herceptin from Roche, has already been launched in the market. On May 21, 2020 Beximco Pharma launched world’s first generic remdesivir (under the brand name Bemsivir), an antiviral drug for the treatment of COVID-19. Originally developed by US based Gilead Sciences, Remdesivir is a direct acting antiviral drug that inhibits viral RNA synthesis, which received emergency use authorization from US FDA on May 1, 2020 for the treatment of hospitalized COVID19 patients. Bemsivir was launched in presence of Health and Family Welfare Minister Mr Zahid Maleque MP, Beximco Pharma managing director Nazmul Hassan MP and other high officials from the government and the company. 52 | Annual Report 2019-20 | Corporate Events International Conference on Lung Health, 6th Pulmocon- 2019 GERD Awareness Week 2019 international conference on The 6th lung health, Pulmocon-2019 was held in BICC during November 05- 08, 2019. Beximco pharma was one of the major scientific partners of that conference. Launching of Bexitrol F Maxhaler Beximco Pharma celebrated GERD awareness week 2019 during November 17-23, 2019. This year Beximco arranged an interactive live session with Prof. Dr. Mahmud Hasan, President, Bangladesh gastroenterology society to raise public awareness. Annual Sales and Marketing Conference, Kenya Beximco Pharmaceuticals Limited achieved another launching Bexitrol F Maxhaler, generic milestone by equivalent of GSK’s Seretide Accuhaler, on September 5, 2019. Beximco Pharma introduced this sophisticated mDPI device for the first time in Bangladesh. Annual Sales and Marketing Conference 2018-19 of the field force of BPL – Kenya was held on October 18, 2019, in Nairobi. The field force also received an extensive 6-day training before the Conference. CPhI Worldwide 2019, Germany Beximco Pharma showcased its products to potential clients from around the world in CPhI Worldwide 2019 held in Frankfurt, Germany in November 2019. Corporate Events | Annual Report 2019-20 | 53 Visitors from Drug Administration Plant Visit A group of high offi cials from Drugs Administration, Bangladesh headed by Major General Md. Mahbubur Rahman, Director General visited the factory on October 07, 2019. Delegates from Maldives Visitors from China A group of delegates from State Trading Organization, Maldives headed by Mr. Mohammed Nizam visited the Tongi Plant of BPL on July 07, 2019. A group of visitors from China visited the factory on October 09, 2019. 54 | Annual Report 2019-20 | Corporate Events Media Spotlight This year, the Company received tremendous media coverage in global media especially for its outstanding initiatives in fi ghting COVID-19 pandemic. The top executives were interviewed on multiple platforms both nationally and internationally during the year 2019-20. 1. On May 5, 2020 Reuters featured Beximco Pharma exclusively for launching world’s fi rst generic Remdesivir. 2. Mr. Rabbur Reza, COO of the Company was interviewed on digital platform of British Broadcaster, Sky TV on 21 May, 2020 on the occasion of introducing Remdesivir generic (Bemsivir) in Bangladesh. 3. An international news agency Bloomberg News, headquartered in New York, featured Beximco Pharma for pioneering role in producing Remdesivir to treat COVID-19 on 21 May, 2020. 4. Mr. Nazmul Hassan MP, Managing Director of Beximco Pharmaceuticals Ltd. was interviewed by Manufacturing Chemist, leading global magazine for the pharmaceuticals industry, on 26 May, 2020 regarding donation of Remdesivir (Bemsivir) to the Bangladesh Government for treating critical COVID-19 patients. 5. Bemsivir Launch was also covered by various other digital platforms around the globe such as The New York Times, The Business Standard, S & P Global, and Mint. Corporate Events | Annual Report 2019-20 | 55 Chairman’s Statement A S F Rahman Chairman Dear Shareholders, We are now passing through a hard time. The COVID-19 pandemic has shattered the economy and life of the people across the world. Amidst this economic onslaught and social disruptions, we completed perhaps one of the most challenging years in our history. Despite hurdles and challenges, our performance during the year was truly remarkable. We achieved double digit growth in domestic and international sales, attained excellent profi t growth, enriched our product portfolio, expanded our market reach and delivered results for our shareholders. Such an impressive performance in an entirely volatile situation is a manifestation of our strength to withstand and ability to drive business in any diffi cult and uncertain condition. Our experienced, matured and expert management team took appropriate decisions and realigned their strategies to achieve targets defying the pandemic. drug Virafl u. During the extreme crisis, we came forward to supplement governmental efforts to save lives. We are the fi rst to donate high quality personal protective equipment (PPEs) and other logistics to our doctors and frontline workers. Our proactive response to public health issues has earned us the most prestigious CPhI Award 2020 in the category of “Innovation in Response to COVID-19.” This award is a clear testimony of our technical capability and foresighted leadership. Dr. Abdur Rahman Khan, Independent Director and Chairman of the Audit Committee, has retired from the Board on completion of his tenure of offi ce for two consecutive terms of three years each. On behalf of the Board, I thank Dr. khan for his guidance and valuable contribution as a Director of the Company. Dr. Khan has been replaced by Mr. Mamtaz Uddin Ahmed, Professor, Department of Accounting and Information System, University of Dhaka. Professor Ahmed is also the Treasurer of the University of Dhaka. I welcome Professor Mamtaz Uddin Ahmed in the Beximco Pharma family and like to ensure him all necessary co-operation from the Board in discharging his duty as an Independent Director and Chairman, Audit Committee. The Audit Committee and the Nomination and Remuneration Committee have carried out their respective responsibilities with utmost sincerity and diligence. On behalf of the Board, I like to thank the Chairman and members of both the committees for their sincere efforts and valued contribution. During this pandemic we lost two of our employees Mr. Mohd. Haydarul Islam and Mr. Amjad Hussain. I am extremely saddened on their premature departure and respectfully recognize their contribution to the Company. I want to thank the employees of the company for their dedication and hard work amid the devastation of COVID-19 pandemic. It is their passionate and committed effort that drives the business forward delivering excellent results and strong growth. The success we have achieved was only possible due to their collective efforts. Finally, I express my gratitude to you, dear shareholders, for extending invaluable support at all times. I wish you all good health and safe life. We played a pioneering and laudable role to address the public health crisis caused by the pandemic. Beximco Pharma became the fi rst Company in the world to launch a generic version of remdesivir which has earned global respect for us. Besides this, we launched another repurposed COVID-19 Thanking you A S F Rahman Chairman 56 | Annual Report 2019-20 | Chairman’s Statement †Pqvig¨v‡bi cÖwZ‡e`b m¤§vwbZ †kqvi‡nvìvie„›`, Avgiv mevB eZ©gv‡b AZ¨šÍ KwVb mgq AwZevwnZ KiwQ| ‡KvwfW-19 gnvgvix c„w_ex Ry‡o gvby‡li Rxeb Ges A_©bxwZ‡K wech©¯Í K‡i‡Q| A_©bxwZ I mgv‡Ri Dci m„ó AvNv‡Zi e¨vcKZvi ga¨ w`‡q Avgiv BwZnv‡mi KwVbZg eQiwU AwZevwnZ K‡iwQ| wewfbœ cÖwZK‚jZv Ges evav m‡Ë¡I Av‡jvP¨ erm‡i Avgv‡`i mdjZv wQj D‡jøL‡hvM¨| Avgiv Af¨šÍixY weµq Ges ißvbx Dfq †ÿ‡ÎB `yB As‡Ki cÖe„w× AR©b K‡iwQ| GKBfv‡e Avgv‡`i gybvdv e„w× †c‡q‡Q Ges D‡jøL‡hvM¨ msL¨K bZzb Jla evRviRvZ K‡iwQ hv e‡q G‡b‡Q Avcbv‡`i Rb¨ Kvw•LZ djvdj| m¤ú~Y© Aw¯’i GKwU cwi‡e‡k GB PgrKvi mvdj¨ Avgv‡`i k³wfwË, cÖwZK‚j Ges AwbwðZ Ae¯’vq e¨emv Pvwj‡q wb‡q hvIqvi mÿgZvi ewn:cÖKvk| gnvgvix‡K †gvKv‡ejv K‡i Kvw•LZ jÿ¨ AR©‡bi Rb¨ Avgv‡`i AwfÁ, cwic° Ges `ÿ e¨e¯’vcbvgÛjx cÖ‡qvRbxq †KŠkj Aej¤^‡bi mwVK mg‡q mwVK wm×všÍ MÖnY K‡i‡Qb| gnvgvixi Kvi‡Y m„ó Rb¯^v‡¯’¨i Sz uwK †gvKv‡ejvq Avgiv AMÖYx Ges cÖksmbxq f‚wgKv cvjb K‡iwQ| we‡k¦i cÖ_g †Kv¤úvbx wnmv‡e †ew·g‡Kv dvgv© †igwWwmwfi Gi †R‡bwiK fvm©b evRviRvZ Ki‡Yi gva¨‡g AvšÍRv©wZK gn‡j e¨vcK m¤§vb AR©b K‡i‡Q| GQvovI Avgiv †KvwfW-19 Gi e¨envi‡hvM¨ AviI GKwU Jla Òwfivd¬zÓ evRviRvZ Kwi| Pig msKU gyn~‡Z© †`‡ki gvby‡li Rxeb iÿvq Avgiv miKv‡ii mv‡_ Kv‡a Kva wgwj‡q Ask wb‡qwQ| †ew·g‡Kv dvgv©B me©cÖ_g †`‡ki wPwKrmK Ges m¤§yLmvwii ¯^v¯’¨ Kgx©‡`i Dchy³ gvbm¤úbœ e¨w³MZ myiÿv mvgMÖx (PPE) Avg`vbx K‡i webvg~‡j¨ cÖ`v‡bi gva¨‡g †KvwfW-19 †ivMx‡`i wPwKrmvq D‡jøL‡hvM¨ f‚wgKv cvjb K‡i‡Q| †ew·g‡Kv dvgv©wmDwUK¨vjm wj: †KvwfW-19 †gvKv‡ejvq Zvi ¯^cÖ‡Yvw`Z Ges D™¢vebx D‡`¨vMmg~‡ni Rb¨ AZ¨šÍ ghv©`vc~Y© (CPhI) cyi¯‹vi 2020 AR©b K‡i‡Q| G cyi¯‹vi AR©b Avgv‡`i KvwiMwi Ges e¨emvwqK DrKl©Zv Ges `~i`„wó m¤úbœ †bZ…‡Z¡i Kvi‡YB m¤¢e n‡q‡Q| †Kv¤úvbxi mZš¿ cwiPvjK Ges AwWU KwgwUi †Pqvig¨vb W: Ave`yi ingvb Lvb cici `yB †gqv‡` †Kv¤úvbxi cwiPvjbv cl©‡` `vwqZ¡ cvjb K‡i‡Qb| †gqv` c~Y© nIqvq eZ©gv‡b wZwb cwiPvjbv cl©` †_‡K Aemi MÖnY K‡i‡Qb| Avwg cwiPvjKgÛjxi cÿ †_‡K W: Ave`yi ingvb Lvb‡K cwiPvjK wnmv‡e Zvi g~j¨evb Ae`v‡bi Rb¨ ab¨ev` Rvbvw”Q| XvKv wek¦we`¨vj‡qi GKvDw›Us GÛ Bbdi‡gkb wm‡÷g wefv‡Mi Aa¨vcK ggZvR DwÏb Avn‡g` W: Ave`yi ingvb Lvb Gi ¯’jvwfwl³ n‡q‡Qb| Aa¨vcK ggZvR DwÏb Avn‡g` eZ©gv‡b XvKv wek¦we`¨vj‡qi †Kvlva¨ÿ wnmv‡eI `vwqZ¡ cvjb Ki‡Qb| Avwg Aa¨vcK ggZvR DwÏb Avn‡g`‡K Avgv‡`i †ew·g‡Kv dvgv© cwiev‡i ¯^vMZ RvbvB Ges mZš¿ cwiPvjK Ges AwWU KwgwUi †Pqvig¨vb wnmv‡e `vwqZ¡ cvj‡bi ‡ÿ‡Î mev©Z¥K mn‡hvwMZvi Avk¦vm cÖ`vb KiwQ| AwWU KwgwU Ges Nomination and Remuneration KwgwU AZ¨šÍ AvšÍwiKZv Ges cwikÖ‡gi mv‡_ Zv‡`i `vwqZ¡ h_vh_fv‡e cvjb K‡i‡Qb| Avwg AwWU KwgwU Ges Nomination and Remuneration KwgwUi †Pqvg¨vb Ges m`m¨‡`i g~j¨evb Ae`v‡bi Rb¨ ab¨ev` Rvbvw”Q| †KvwfW-19 gnvgvixi Kvi‡Y Avgv‡`i `yB Rb mnKgx© Rbve †gvnv¤§` nvq`viæj Bmjvg Ges Rbve AvgvRv` †nv‡mb‡K nvwi‡qwQ| Avwg Zv‡`i AKvj cÖqv‡Y `y:L cÖKvk KiwQ Ges †Kv¤úvbx‡Z Zv‡`i Ae`v‡bi K_v kÖ×v Ges m¤§v‡bi mv‡_ m¥iY KiwQ| †KvwfW-19 gnvgvixi g‡a¨I Avgv‡`i Kgx© evwnbx †hfv‡e wb‡ew`Z wP‡Ë K‡Vvi cwikÖg K‡i‡Qb Zvi Rb¨ Zv‡`i AvšÍwiK ab¨ev` RvbvB| †Kv¤úvbxi AMÖhvÎv mvdj¨ Ges cÖe„w× mewKQzB n‡”Q Avgv‡`i Kgx© evwnbxi AvšÍwiK cÖ‡Póvi dmj| cwi‡k‡l Avwg Avgv‡`i m¤§vwbZ †kqvi‡nvìvie„›`‡K mKj mg‡q Zv‡`i Ag~j¨ mg_©‡bi Rb¨ AvšÍwiK K…ZÁZv Ávcb KiwQ Ges Avcbv‡`i mK‡ji my¯^v¯’¨ Ges wbivc` Rxeb Kvgbv KiwQ| G Gm Gd ingvb †Pqvig¨vb Chairman’s Statement | Annual Report 2019-20 | 57 Management Discussion and Analysis The sector was particularly affected in the last quarter (April– June 2020) when its growth sharply fell below 1%. Many of the leading companies slipped into negative territory. Beximco Pharma, however, still managed to grow by 8% in the last quarter owing to its proactive planning and timely execution of strategies. This growth was largely driven by our performance in key therapeutic areas namely cardiovascular, analgesics, anti-diabetic and respiratory. Bangladesh reported its fi rst confi rmed case of COVID-19 on 8 March 2020 and since then the number of cases has risen steadily to cross 400,000 in November with more than 6,000 deaths which include hundreds of frontline healthcare workers. Bangladesh imposed a nationwide lockdown on 26 March 2020 that was extended up to end of May 2020. Subject to a few exceptions, manufacturing units across all industries, business and offi ces remained shut and all kinds of public transport were suspended. Pharma companies were however exempted from the lockdown and allowed to continue their operations ensuring social distancing and strict health safety measures at the factories. The lockdown in China and many other countries throughout the fi rst quarter of 2020 had a signifi cant impact on price and availability of APIs and packaging materials. Price of large number of APIs suddenly shot up causing a shortage of many drugs. Serious disruptions in supply chain posed tremendous challenge to the industry to continue production and delivery of medicines across the country maintaining adequate safety of our people. We had to take several mitigating measures to confront the unforeseen situation in order to continue our operations. Review of Operations Sales, Profi ts and Products Despite facing unprecedented challenges of COVID-19 pandemic, we achieved a growth of 12.5% in consolidated revenue in the domestic market over the last year. Our export business posted 10% growth amid serious supply chain and logistics challenges, especially in the last quarter. Many of our export markets were hit hard due to extended lock down in those countries; shipping and cargo operations collapsed and freight cost increased manifold. We launched 26 new products in the local market to expand Nazmul Hassan MP Managing Director Economic and Industry Overview COVID-19 pandemic has confronted the world with an unprecedented situation and has profoundly impacted human lives and well-being. The massive shock of the pandemic and lockdown measures around the world to contain it have plunged the global economy into a severe contraction. According to IMF projections, the global economy would contract by 3% in 2020, while the World Bank predicts that to decline by 2.1-3.9%. GDP growth of Bangladesh fell to 5.24% in FY2019-20, lowest in 12 years, as the pandemic ravaged the economy for at least a third of the fi nancial year. Country’s export earnings registered a sharp decline of 16.9% at US $33.67 billion. As the pandemic continues to impact global economy taking toll on every industry, pharma sector is no exception to this economic downturn. According to IQVIA 2020 audited report (MAT June 2020), Bangladesh pharma market managed to grow by just 4.34% in 2019-20, the lowest in recent times. 58 | Annual Report 2019-20 | Management Discussion and Analysis and strengthen our existing product portfolio which includes 4 products introduced for the first time in Bangladesh. We also launched 5 new products from our subsidiary, Nuvista Pharma Limited. The COVID-19 pandemic has been considered as a humanitarian crisis with a public health dimension that has put tremendous pressure on pharma industry to act swiftly to make treatments available to the patients. On 21 May 2020 Beximco Pharma launched generic version of Remdesivir (under the brand name Bemsivir) in Bangladesh, which received emergency use authorization from US FDA. Beximco Pharma became the first pharma company in the world to launch this generic version for the treatment of COVID-19 patients which drew worldwide attention. We also launched Favipiravir tablets, another repurposed drugs for the treatment of COVID-19 patients under the brand name Viraflu. We introduced multidose Dry Powder Inhaler (mDPI) device for the first time in Bangladesh under the name Maxhaler mDPI and our first product in this delivery system was Bexitrol-F mDPI which is equivalent to GSK’s Seretide Accuhaler. Globally there are only a few manufacturers using this delivery system for this product. Our newly launched products cover 12 therapeutic segments, which includes analgesic, anti-diabetic, anti-infective cardiovascular, hormones, gastrointestinal and respiratory to name a few. Our leading brands across key therapeutic areas performed strongly with cardiovascular, analgesic, respiratory and anti- diabetic posting impressive double-digit growth. All the key financial indexes of the Company have moved upward in the financial year concluded. The pre and post-tax profit increased in consistent with growth in sales revenue. Profit before tax rose by 17.9% over last year to reach at Taka 4,653 million; profit after tax also grew by 16.6% to Taka 3,544 million. Earnings per Share has increased by 15.9% to Taka 8.67. Directors have proposed 15% cash and 10% stock dividend. Report of the Directors presents further details on financial performance. International Market We completed 63 registrations of 50 Products in 20 countries to further broaden and consolidate our export markets. In the US, currently our largest export market, we launched two new products, Nadolol and Sotalol AF, both are cardiovascular drugs. We received regulatory approval from German Regulatory Authority and Malta Medicines Authority (European Union). During the year we began exporting to 4 new markets namely, Maldives, Pakistan, Nicaragua and Dominican Republic. We also received US Food and Drug Administration (FDA) approval for Flecainide Acetate (50, 100 and 150 mg tablets), an antiarrhythmic drug used for treating irregular heartbeats in conditions such as tachycardia and atrial fibrillation. COVID-19 Responses As a socially responsible organization, Beximco Pharma has always responded to national and international emergency and this remains an integral part of its strategic commitment. During the critical and uncertain times, amid serious supply chain disruptions and prolonged lockdowns, we responded effectively to ensure uninterrupted supply of medicines throughout the country. Besides taking a series of measures to protect health and safety at work places, we ensured that our employees and their families get every possible support in any health crises. We implemented new work practices, introduced social distancing and encouraged employees to work remotely where possible. The Company among host of other initiatives has also set up an emergency response team, available 24 hours a day, to respond to employee concerns and provide medical support in the event they may be exhibiting COVID-19 symptoms. During the initial outbreak of COVID-19 in Bangladesh, health services across the country went through a tremendous crisis. Visits to hospitals and clinics sharply declined, Doctors and other healthcare workers, as well as patients were fearful of the infection. This caused healthcare delivery system to nearly collapse resulting in significant increase in other non- communicable, life threatening diseases. Beximco Pharma was among the first to extend support in this critical time to the frontline health workers. We provided much needed personal protective equipment (PPE), N95 masks, goggles, and PCR kits worth US $2 million. Management Discussion and Analysis | Annual Report 2019-20 | 59 The Company supported various telemedicine initiatives for doctors to continue providing treatment to their patients. indicates strong internal fund generation and outstanding alternative source of fund) rating in the short term to Beximco Pharmaceuticals Limited. As noted earlier, we launched a number of repurposed drugs including the world’s first generic Remdesivir that earned us the prestigious CPhI Awards 2020 for “Innovation in Response to COVID-19.” The Company has been providing Bemsivir to the government designated COVID-19 hospitals free of cost from the very first day of its official launch. It has also sent free medicines abroad on humanitarian grounds. This has drawn positive attention and notes of praise from around the world. We collaborated and sponsored the research done by University of Dhaka and Bangabandhu Sheikh Mujib Medical University (BSMMU) to develop country’s first Negative Pressure Isolation Canopy to prevent patients from spreading COVID-19 in hospitals. We have sponsored a clinical trial to evaluate the efficacy of two potential treatments, Ivermectin alone and Ivermectin with Doxycycline, in COVID-19 patients of Bangladesh in collaboration with globally reputed research organization, icddr,b. The manuscript of this therapeutic study is now accepted for publication in a peer reviewed international journal. We have also signed the Open pledge from global manufacturers of generic medicines against COVID-19. Through this pledge, we commit to work with the UN-backed Medicines Patent Pool (MPP) in making COVID-19 treatments available especially in low- and middle-income countries. And by doing so, we support SUCCESS (Sustainable Universal access through Collaboration, Coordination, Emergency measures, Scale and Speed). Our positive branding and overall performance earned us the prestigious “Global Generics & Biosimilars Awards 2019” in the category of Company of the Year, Asia Pacific, which recognizes the efforts made by global generics and biosimilars sectors, to make affordable medicines available to more patients across the globe. Accounting (IFRS)/International Accounting Policies and Estimates Bangladesh has adopted International Financial Reporting Standards Standards (IAS). Beximco Pharma has been consistently applying these standards in preparation of its financial statements. Management has the discretion to decide on the accounting policies within framework and the financial reporting make estimates and provision in preparing those financial statements. The Company’s accounting policies remain consistent with those of the previous year and there has been no changes in the accounting policies that could materially impact the financial statements. The accounting estimates and provisions are based on prudent judgments. A new IFRS 16: Leases has introduced a single on-balance sheet lease accounting model for leases and replaces the previously adopted IAS 17: Leases. The standard requires that an asset acquired under a lease be recognized as Right- of-use Asset and the corresponding liability as lease liability. The company has reclassified the assets acquired under the lease into ‘Right-of-use Assets’ and presented them in the Statement of Financial Position following IFRS 16. Risks related to the Financial Statements The Company has a robust system of internal control and well-designed accounting reporting process. The Company’s accounting and finance functions are manned with adequate experienced professionals. Appropriate policies and procedures, as well as adequate review and control mechanisms are in place in every steps of the financial reporting value chain to avoid, eliminate or reduce the risk of errors, omissions or material misstatements in the financial reports. Moreover, quarterly and annual public reports are subject to rigorous review by the Board’s audit committee in addition to the annual accounts being audited by independent external auditors. Credit Rating Credit Rating Information and Services Limited (CRISL), the country’s leading credit rating company, has assigned AAA (Highest safety for timely repayment) rating in the long term and ST-1 (Highest certainty of timely repayment which Looking Forward With the pandemic trajectory still remains unpredictable, we are trying our best to respond to the challenges arising from the economic and social disruptions while adjusting our short and long-term operating strategies in light of the experience 60 | Annual Report 2019-20 | Management Discussion and Analysis gathered from the crisis. As vaccines remain the mainstay in combating the pandemic, we have been closely watching the developments in this space from the very beginning. Recently we have signed Distribution Agreement with the Serum Institute of India Pvt. Ltd. (Serum), the world’s largest vaccine producer to become its exclusive distributor for supplying Oxford/AstraZeneca vaccine AZD1222 and Novavax vaccine NVXCoV2373 in Bangladesh. Subsequent to this agreement, a tripartite Memorandum of Understanding (MoU) has been signed among Serum, Government of Bangladesh (GoB) and Beximco Pharma for procurement of 30 (thirty) million doses of Oxford/AstraZeneca vaccine AZD1222 by GoB for the people of Bangladesh. Beximco Pharma has further booked 1 (one) million doses of this vaccine for the private pay market. We also signed a distribution agreement with Mylan (Viatris) for certain biosimilar products in Bangladesh. Our key focus would remain on launching a range of biosimilar products which have good potential in the market. Under the Mylan deal, Beximco Pharma has the exclusive rights to launch Mylan’s portfolio of key monoclonal antibodies to treat different types of cancers, rheumatoid arthritis, Chron’s disease, ulcerative colitis and other medical conditions. We have already launched Ogivri (Trastuzumab), a breast cancer drug which is biosimilar to blockbuster drug Herceptin from Roche. Cancer is now one of the leading causes of death in Bangladesh and currently there are more than 50,000 HER2-positive breast cancer patients in the country. We expect to launch additional biosimilar products progressively. Implementation of our new Oral Solid Dosage (OSD) expansion project- Unit-III was affected during the lockdown imposed by the government. As the situation is slowly improving, we have resumed some of our project activities. We hope if situation does not get any worse to enforce further lockdown, our new facility will be operational by the middle of 2021. At Beximco Pharma, as we face the COVID-19 challenges, we take this as an opportunity to become more resilient and effi cient, and make ourselves prepared for any future crisis. We are doing our best to respond to the disruption caused by COVID-19 and taking all measures to ensure continuity of our business. Nazmul Hassan MP Managing Director Management Discussion and Analysis | Annual Report 2019-20 | 61 Report of the Directors to the Shareholders I am pleased to place before you the Directors’ Report and the Audited Accounts of the Company for the year ended 30 June 2020 along with the report of the auditors thereon. General Economic Overview Performance of the Economy Bangladesh economy despite the hit of the pandemic performed relatively well and attained a remarkable 5.2% GDP growth against its targeted 8.2% growth set for the fiscal year. Following the spread of pandemic in early March, the government announced countrywide lockdown, imposing restrictions on business and social activities at varying levels with exceptions for certain essential sectors. The lockdown continued till May which was gradually relaxed to bring back normalcy in economic and business life of people. This adversely impacted the entire fourth quarter of the 2019- 20 fiscal period pulling back the robust economic growth achieved in the previous three quarters. Country’s industrial sector which contributes around 35% of the GDP grew by 6.48% while the agriculture sector increased by 3.11% even with the asymmetric shock and downswing due to the pandemic. The per capita income though improved by 8.15% to US $2,064, the economists fear that the number of people living below the poverty line may go up for loss of their earnings consequent to the pandemic. Domestic inflation remained under control at a moderate 5.6% level. Although earnings from export, which is predominantly from the readymade garments, declined by almost 17%, remittance inflow from the wage earners reached a record high. The downturn in import and strong inflow of remittance resulted in a record foreign exchange reserve of US $35.8 billion and helped the exchange rate of domestic currency against US dollar remain stable. The economic outlook of Bangladesh in the prevailing global context appears encouraging. While the economists predict a 3% contraction of the global economy, Bangladesh is projected to grow by 6.8% in the fiscal year 2020-21. COVID-19 Support to Business and industries to combat the COVID-19 crisis and keep the economy afloat. These includes cash credit at a subsidised interest rates for payments of wages and salaries; extension of time for loan repayment; reduced 4% interest for agricultural credit; allowing foreign-owned companies to obtain loan from abroad; relaxing letter of credit usance period for certain imports. The Central Bank also announced certain monetary measures interest rates, purchase of securities from the secondary markets, various refinancing schemes to help ease the liquidity. importantly reduction of repo Duty and tax waivers were granted for import and sale of all COVID-19 related life saving medicines, Personal Protective Equipment (PPEs), testing Kits, medical equipment and other essential medical items. Banks relaxed the payment criteria for import and allowed advance payment up to US $500k without repayment guarantee for import of COVID-19 related items. Further measures include putting restrictions on laying off workers, mandated payment of full salary in garments and disbursement of Taka 12.5 billion cash aid for the poor families. This year banks have reduced their interest rate following a Central Bank’s directive that puts a maximum 9% interest rate cap on lending. This is going to benefit industries across all sectors. Review of Financial Performance Impressive sales and Profit Growth Despite COVID-19-hit fourth quarter The Company continued its historic growth momentum with notable increase in sales, operating and net profit defying a difficult market condition prevailing throughout the fourth quarter of the fiscal period. Our consolidated sales registered a 12.3% increase to reach at Taka 25,612 million from Taka 22,816 million of previous year. Sales in the domestic market increased by 12.5% while our export rose by 10% to Taka 2,751.8 million. The growth in export though falls short of our expectation, given the context of disruptive supply chain and global lockdown, it deserves appreciation. Alongside with taking up measures prioritizing the healthcare and earnings of the disadvantaged people, the government offered several fiscal and non-fiscal schemes for the business Our profit from operation, pre-tax and post-tax profit all posted a double digit growth. The operating profit rose by 10.7% to Taka 5,609 million, while the pre -tax profit increased by 62 | Annual Report 2019-20 | Report of the Directors to the Shareholders 17.9% to Taka 4,653 million. The net profit after tax reached to Taka 3,544 million with 16.6% YoY growth. Sales Revenue Gross Profit Operating Profit Pre-Tax Profit Net Profit after Tax Earnings Per Share (Taka) Million Taka 2019-2020 2018-2019 Growth 25,612 11,899 5,609 4,653 3,544 8.67 22,816 10,620 5,066 3,946 3,040 7.48 12.3% 12.0% 10.7% 17.9% 16.6% 15.9% Improved sales mix and relatively stable exchange rate coupled with leverage effect of higher sales volume has helped maintain the gross margin at 46.5% neutralizing the effect of an increase in cost of materials in international and domestic markets. Country wide lockdown throughout the fourth quarter compelled us to cancel or defer certain programs, events and market promotion activities which have caused a decrease or relatively lower increase of some operating expenses. Additionally, the distribution commission expenses have increased partly because of the higher sales volume and partly for the use of BPL’s distribution network by the subsidiary company Nuvista Pharma for greater cost synergy. Overall, the operating expenses remained contained at 24.6% of sales as against 24.3% of the previous year. Earnings per Share also went up to Taka 8.67 from Taka 7.48 of last year. Improved Operating Cash Flow Strong sales and profit growth coupled with insignificant changes in the working capital resulted in a considerable increase in operating cash flow. Our NOCFPS increased to Taka 13.67 as compared to Taka 7.30 of the previous year. This also contributed to the decline in Bank borrowings by Taka 2,981 million during the year, bringing the total bank borrowing to Taka 10,504 million in 2019-20 as against Taka 13,485 million of last year. The Net Asset Value (NAV) per share increased to Taka 80.12 from Taka 72.96 of the prior year. Continuity of Other Income Cash incentives on export and Royalty are two significant sources of other income reported during the period under review. The government declared 10% cash incentive on export of finished pharmaceutical products, which came into effect from the fourth quarter of 2018-19. The companies receive this incentive on the FOB value of their export subject to fulfilment of certain conditions. Cash incentives on export as reported in the financial statement represent the amount claimed and accrued for the year fulfilling the eligibility criteria. We have royalty income from the sale of few selected products in the overseas markets. The amount reported in the consolidated financial statements does not include the royalty earned from the subsidiary company Nuvista Pharma, which are eliminated as inter-company transactions. Both the cash incentives and royalty are linked to export and accounted for on accrual basis. An amount of Taka 18.25 million included in the interest income reported for the period relates to the interest earned on Company’s short term investment with Bangladesh Export Import Company Limited. The Company has fully recalled the investment and as such this income will not continue in future periods. The other items of income are either insignificant or inherent to normal business operations. Profit and its Appropriation Directors propose the appropriation of profit as follows: Particulars Amount in Taka’000 BPL (Stand-alone) 2019-20 2018-19 Net Profit After Tax 3,363,400 3,023,500 Adjustment for depreciation of Revalued Assets 8,114 9,175 Profit Brought Forward 16,548,524 14,124,183 Profit Available for Appropriation Proposed Dividend: Cash Dividend Stock Dividend 19,920,038 17,156,858 (608,334) (608,334) (405,556) - Profit Carried Forward 18,906,148 16,548,524 Dividend The Board of Directors recommends 15% Cash Dividend i.e. Taka 1.50 per share and 10% Stock Dividend i.e. 10 shares for every 100 shares held for the year ended 30 June 2020 for onward approval at the Annual General Meeting. The Company has declared no interim dividend during the year. The Board of Directors found it prudent to propose stock dividend along with cash dividend considering the Company’s Report of the Directors to the Shareholders | Annual Report 2019-20 | 63 requirement of cash to invest in growth opportunities, support its ongoing capital expenditure projects and to fund the import of vaccines for COVID-19. Risks and Concerns Risks have always been an important and inherent part of doing business and pharmaceutical industry is no exception to it. Beximco Pharma like any other company, is exposed to different risks-systematic and unsystematic, that might affect its operating and economic performance. Managing risk thus remains key to a sustainable advancement and expansion of our business. Beximco Pharma’s strong and experienced executive team has over the years established robust policies and controls to identify, assess and address diverse risks that might affect the accomplishment of its operational or financial targets. Under the broad direction of the Board, the management of the Company monitors and reviews risks on a continual basis. Based on the variety and intensity of the risk, the business takes appropriate mitigating measures to avoid, eliminate or reduce risks. While the Company has an appropriate system of vigilance and established procedures to address the risks arising from internal or external sources, there are uncertainties beyond control of the Company which might affect achievement of its goals. Demand for pharmaceutical products is largely driven by the economic advancement and consequent increase in the purchasing power of the people. Any decline in economic growth could affect the future demand for pharmaceutical products. Bangladesh maintained steady economic progress over the years with substantial uplift in all socio-economic indexes. However, the country’s economy along with the world is now passing through a difficult time and there are uncertainties about how the COVID-19 situations evolve and affect the socio-economic indexes in the days ahead. The growth of Pharmaceutical market in Bangladesh being primarily driven by individual private spending for healthcare, the current pandemic if prolonged, might impact individual’s earnings and hinder the future economic progress, thus affecting the Company’s growth target. However, after an initial shock of the pandemic, the economy of Bangladesh has started to revert and there are signs of recovery. Economists project a positive outlook for Bangladesh with economy growing at 6.8% for the fiscal year 2020-21 while the global economy is expected to shrink. Because of regulatory control and sensitivity to public health, prices of pharmaceutical products can’t be promptly adjusted responding to the rise in cost. This poses additional threat to attaining Company’s profit target. The management is quite aware of the risk and the Company’s sourcing, procurement and pricing strategies properly accommodates the issues to minimise any adverse impact. Beximco Pharma buys its raw materials from multiple sources, both local and international, at competitive prices. The Company is not reliant on any single supplier for its materials and thus, reduces the individual supplier’s influence on procurement prices. BPL manufactures few of the APIs and steadily building up its API manufacturing capabilities to lessen dependency on import. The regulatory authority in the past has always responded positively to any upward adjustment of price for increase of costs. Government policy for the Pharmaceutical sector continues to remain supportive to its growth. Existing fiscal and non-fiscal incentives enjoyed by the industry is expected to continue in future. No significant changes in policy, regulation or tax regime that can have any adverse effect on the growth potential of the business are foreseen in the days ahead. Retirement and Re-election of Directors Mr. A S F Rahman and Mr. Salman F Rahman, Directors of the Company retire by rotation as per Articles 126 and 127 of the Articles of Association of the Company and being eligible, offer themselves for re-election. Both Mr. A S F Rahman and Mr. Salman F Rahman are long term directors in the Board. Detailed bio-data of the Directors are available in the Directors’ Profile section of this Annual Report. 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 43rd Annual General Meeting of the Company has carried out the audit for the year ended 30 June 2020. 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 2020-21. The board after due consideration of the proposal made by the Audit Committee recommends for reappointment of M. J. Abedin & Co., Chartered Accountants as auditors for the year 2020-21. The global pandemic is creating disruptions in the supply chain, which if persists for long might adversely affect the cost of materials, shipment and logistics. We have encountered such an increase in cost at the initial stage of the COVID-19 outbreak. Related Party Disclosure The Company has a number of transactions between its subsidiaries and other related parties. The transactions are carried out on an arm’s length basis. The Audit Committee 64 | Annual Report 2019-20 | Report of the Directors to the Shareholders periodically reviews these transactions. The full disclosure of all related party transactions are provided in the notes to the accounts. Remuneration to Directors All the Directors in the Board except the Managing Director are non-executive and receive no remuneration or benefits from the Company other than the Board Meeting attendance fee. The salary and other perquisites paid to the Managing Director for his service has been disclosed in the notes to the accounts. Compensation Policy for Top Executives The Company offers industry competitive compensation packages to the employees. Managing Director and all other senior management team members are full time employees of the Company and receive fixed monthly salary. They are also entitled to certain perquisites as per the terms of their employment contract. Additionally, Beximco Pharma has defined contribution plan (Provident Fund) and defined benefit plan (Gratuity) for employees irrespective of their positions. The Company has a rigorous performance evaluation and appraisal system linked to KPIs. Employee salary and allowances are reviewed once in every year and revised based on individual performance. The Nomination and Remuneration Committee is entrusted with the responsibility of reviewing and appraising the salary of the senior executives and making appropriate recommendation to the board. Senior management is not entitled to any performance linked variable incentive scheme other than the benefits of statutory workers’ profit participation fund. Directors’ Statement on Financial Reports Directors are pleased to report the following: • 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. • Proper books of accounts of the Company have been maintained. • Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment. • The International Accounting Standards (IASs), International Financial Reporting Standards (IFRSs) have been followed in preparation of the financial statements. • effectively implemented and monitored. • protected. Internal Control System is sound in design and has been Interests of the minority shareholders have been duly • There is no significant doubt about the ability of the Company to continue as a going concern. Declaration by CEO and CFO Declaration by CEO and CFO on the Financial Statement of the Company is attached as Annexure- 1. Key Operating and Financial Data The summarized key operating and financial data for 2019-20 and immediately preceding five years is provided in Annexure- 2. Management Discussion and Analysis Detailed discussion on the Operating and Financial performance of the Company along with other disclosures as required under Corporate Governance Code issued by Bangladesh Securities and Exchange Commission through Notification No. BSEC/ CMRRCD/2006-158/207/Admin/80 dated June 3, 2018 has been separately reported by the Managing Director. Board Meetings and Attendance Twelve Board meetings were held during the year under review. The attendance records of the Directors are as follows: Name Representation in the Board Attendance in Board Meeting A S F Rahman Chairman Salman F Rahman MP Vice Chairman Nazmul Hassan MP Managing Director Osman Kaiser Chowdhury Director Iqbal Ahmed A B Siddiqur Rahman Director Director Dr. Abdur Rahman Khan Independent Director Shah Monjurul Hoque Independent Director 9 12 12 12 12 12 8 12 The Pattern of Shareholding The Shareholding of Directors, CEO, CFO, Company Secretary, Key Executives and their spouses and children are provided in Annexure- 3. the Corporate Governance Compliance Report In accordance with requirement of Bangladesh Securities and Exchange Commission Notification No. BSEC/ CMRRCD/2006-158/207/Admin/80, dated 3 June 2018, Report on “Corporate Governance Compliance” is provided in Annexure- 4. On behalf of the Board, A S F Rahman Chairman Report of the Directors to the Shareholders | Annual Report 2019-20 | 65 Annexure- 1 The Board of Directors Beximco Pharmaceuticals Limited Subject: Declaration on Financial Statements for the year ended on 30 June 2020 Dear Sirs, Pursuant to the condition No. 1(5) (xxvi) imposed vide the Commission’s Notifi cation No. BSEC/CMRRCD/2016-158/207 Admin/80, Dated June 03, 2018 & under section 2CC of the Securities and Exchange Ordinance 1969, we do hereby declare that: 1. The Financial Statements of Beximco Pharmaceuticals Limited for the year ended on 30 June 2020 have been prepared in compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately disclosed; 2. The estimates and judgments related to the fi nancial statements were made on a prudent and reasonable basis, in order for the fi nancial statements to reveal a true and fair view; 3. The form and substance of transactions and the Company’s state of affairs have been reasonably and fairly presented in its fi nancial statements; 4. To ensure above, the Company has taken proper and adequate care in installing a system of internal control and maintenance of accounting records; 5. Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed; and 6. The management’s use of the going concern basis of accounting in preparing the fi nancial statements is appropriate and there exists no material uncertainty related to events or conditions that may cast signifi cant doubt on the Company’s ability to continue as a going concern. In this regard, we also certify that: i. We have reviewed the fi nancial statements for the year ended on 30 June 2020 and that to the best of our knowledge and belief: a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; b) These statements collectively present true and fair view of the Company’s affairs and are in compliance with existing accounting standards and applicable laws. ii. There are, to the best of knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the code of conduct for the company’s Board of Directors or its members. Sincerely yours, Nazmul Hassan MP Nazmul Hassan MP Managing Director Mohammad Ali Nawaz Chief Financial Offi cer 66 | Annual Report 2019-20 | Report of the Directors to the Shareholders Annexure- 2 Key Operating and Financial Data 30 June 2020 30 June 2019 30 June 2018 30 June 2017 Authorized Capital Paid up Capital Shareholders’ Equity Fixed Assets (Gross) 15,000,000 4,055,564 32,797,450 45,615,625 15,000,000 4,055,564 29,864,324 43,454,027 9,100,000 4,055,564 27,351,837 39,081,675 9,100,000 4,055,564 25,072,426 31,692,789 30 June 2016 31 Dec 2014 Taka in Thousand 9,100,000 3,678,516 20,920,185 25,818,728 9,100,000 3,862,442 23,059,412 28,756,326 Net Asset Value (NAV) Per Share -Taka Market Price Per Share Price Earning Ratio (Time) 80.12 69.20 7.98 72.96 83.50 11.16 Number of Shareholders Foreign Investors ICB including ICB Investors Account Sponsors, General Public & Other Institutions 56,101 71 882 55,148 56,177 77 881 55,219 66.78 93.90 15.02 57,982 90 879 57,013 61.82 113.00 20.58 62,741 92 874 61,775 59.70 83.50 17.47 56.87 58.70 14.82 67,679 83 878 66,718 89,913 68 882 88,963 Number of employees 4,737 4,523 4,256 3,833 3,515 3,063 Total Sales Export Sales Gross Profit Profit Before Tax Net Profit EPS/Restated EPS- Taka Net Operating Cash Flow Per Share New Product Launched-numbers Cash Dividend Stock Dividend *18 months period. 2019-20 2018-19 2017-18 2016-17 25,611,947 2,751,790 11,899,100 4,653,440 3,544,483 22,816,630 2,502,633 10,620,343 3,946,065 3,040,403 17,716,717 1,476,978 8,285,979 3,361,334 2,532,654 15,508,777 1,078,472 7,184,882 2,891,482 2,226,695 2015-16 Jan-Dec14 Taka in Thousand 11,206,886 500,469 5,104,191 2,109,556 1,528,298 13,785,325 861,653 6,408,857 2,564,267 1,938,894 8.67 13.67 26 15% 10% 7.48 7.30 20 15% - 6.25 4.49 16 5.49 6.49 15 12.50% - 12.50% - 4.78 8.21 21 15%* 5%* 3.96 6.02 28 10% 5% Report of the Directors to the Shareholders | Annual Report 2019-20 | 67 Graphical View of Selected Growth Indicators Taka in million 68 | Annual Report 2019-20 | Report of the Directors to the Shareholders Annexure-3 The Pattern of Shareholding Name-wise details 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. Shares held 22,634,287 2,899,933 9,405,234 877,460 1,189,550 Directors, CEO, Company Secretary, CFO, Head of Internal Audit and their Spouses and Minor Children: A S F Rahman, Chairman Salman F Rahman, Vice Chairman Nazmul Hassan, Managing Director Company Secretary, Spouse and Minor Children Chief Financial Officer, Spouse and Minor Children Head of Internal Audit, Spouse and Minor Children Executives Shareholders holding 10% or more voting interest in the Company 8,235,353 8,254,632 13,325 - - - - - Report of the Directors to the Shareholders | Annual Report 2019-20 | 69 Annexure-4 Corporate Governance Compliance Report As per condition No. 1(5)(xxvii) Status of compliance with the conditions imposed by the Commissions Notification No. BSEC/CMRRCD/2006-158/207/ Admin/80, dated 3 June 2018 issued under section 2CC of the Securities and Exchange Ordinance, 1969 (Report under Condition No. 9) Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) Condition No. 1 1(1) 1(2) 1(2)(a) Board of Directors (BOD) Board’s Size [number of Board members to be 5 – 20] Independent Directors (ID) Number of Independent Directors [at least 1/5th of the Board members shall be the Independent Directors] 1(2)(b)(i) Holding no share or holding less than 1% shares 1(2)(b)(ii) Not being a sponsor and connected with any sponsor or director or nominated director or shareholder of the company or any of its associates, sister concerns, subsidiaries, and parents or holding entities who holds 1% or more shares of the total paid-up shares of the Company on the basis of family relationship and his or her family members are also not allowed to hold more than 1% shares of the total paid-up shares of the Company 1(2)(b)(iii) Not an executive of the company in immediately preceding 2 (two) financial years 1(2)(b)(iv) 1(2)(b)(v) 1(2)(b)(vi) 1(2)(b)(vii) Not having any pecuniary or otherwise relationship with the company or its subsidiary/associated companies Not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of any stock exchange Not a shareholder, director excepting independent director or officer of any member or TREC holder of any stock exchange or an intermediary of the capital market Not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the company’s statutory audit firm or audit firm engaged in internal audit services or audit firm conducting special audit or professional certifying compliance 1(2)(b)(viii) Not an Independent Director in more than 5 listed companies 1(2)(b)(ix) Not been convicted by a court as defaulter in any loan of a bank or NBFI 1(2)(b)(x) Not been convicted for a criminal offence 1(2)(c) 1(2)(d) 1(2)(e) 1(3) 1(3)(a) To be appointed by BOD and approved by the shareholders in the AGM The post cannot remain vacant for more than 90 days Office tenure of Independent Director Qualification of Independent Director Knowledgeable, having integrity, ability to ensure compliance with relevant laws and make meaningful contribution to the business 70 | Annual Report 2019-20 | Report of the Directors to the Shareholders √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) 1(3)(b)(i) 1(3)(b)(ii) 1(3)(b)(iii) 1(3)(b)(iv) 1(3)(b)(v) 1(3)(c) 1(3)(d) 1(4) 1(4)(a) 1(4)(b) 1(4)(c) 1(4)(d) 1(4)(e) 1(5) 1(5)(i) Business Leader: Promoter/director of an unlisted company having minimum paid up capital of Taka 100.00 mil. or any listed company or a member of any national or international chamber of commerce/business association, or Corporate Leader: who is or was a top level executive not lower than CEO/ MD/ AMD/DMD/COO/ CFO/CS or Head of Finance or Accounts or Head of Internal Audit and Compliance or Head of Legal Service or a candidate with equivalent position of an unlisted company having minimum paid up capital of Taka 100.00 mil. or of a listed company, or Former official of Govt./statutory/autonomous/regulatory body in the position not below 5th Grade of the national pay scale, who has at least educational background of bachelor degree in economics/commerce/business or law, or √ University Teacher having educational background in Economics or Commerce or Business Studies or Law, or Practicing advocate at least in the High Court Division of Bangladesh Supreme Court or a CA/CMA/CFA/CCA/CPA or CS Having at least 10 (ten) years of experiences in any field mentioned in clause (b) Qualification of Independent Directors may be relaxed subject to prior approval of the Commission. N/A Duality of Chairperson of the Board and MD or CEO The positions of the Chairperson of the Board and MD and/or CEO of the company shall be different individuals MD and/or CEO of a listed company shall not hold the same position in another listed company Chairperson shall be a non-executive directors of the company The Board shall clearly define respective roles and responsibilities of the Chairperson and the MD and/or CEO In the absence of the Chairperson of the Board, the remaining members may elect from non-executive directors as Chairperson for that particular Board’s meeting Inclusions in Director’s Report to Shareholders Industry outlook and possible future developments 1(5)(ii) Segment-wise or product-wise performance 1(5)(iii) 1(5)(iv) 1(5)(v) 1(5)(vi) 1(5)(vii) 1(5)(viii) 1(5)(ix) 1(5)(x) 1(5)(xi) 1(5)(xii) 1(5)(xiii) Risks and concerns including internal and external risk factors, threat to sustainability and negative impact on environment, if any Discussion on COGS, Gross Profit and Net Profit Margins Discussion on continuity of Extra-Ordinary gain or loss A detailed discussion on related party transactions A statement of utilization of proceeds raised through public issues, rights issues and/or any other instruments Explanation, if the financial results deteriorate after going for IPO, RPO, Right Offer, Direct Listing, etc. Explanation about significant variance between Quarterly Financial performance and Annual Financial Statements Remuneration paid to directors including Independent Directors Statement on fair presentation in the financial statements Maintaining proper books of accounts Consistent application of appropriate accounting policies, and accounting estimates being reasonable and prudent Company operates in a single product segment. √ √ √ √ √ √ √ √ √ √ √ N/A N/A N/A √ √ √ √ Report of the Directors to the Shareholders | Annual Report 2019-20 | 71 Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) Condition No. 1(5)(xiv) 1(5)(xv) 1(5)(xvi) IAS/IFRS applied and adequate disclosure made Soundness of internal control system and it’s monitoring A statement that minority shareholders have been protected from abusive actions by, or controlling shareholders acting either directly or indirectly 1(5)(xvii) Statement regarding ability to continue as going concern 1(5)(xviii) Significant deviations from last year’s operating results 1(5)(xix) 1(5)(xx) 1(5)(xxi) Summary of key operating/financial data of last 5 years Reason for non declaration of Dividend Board’s statement on interim bonus share or stock dividend 1(5)(xxii) Number of Board meetings and attendance of directors 1(5)(xxiii) Pattern of shareholding (along with name wise details) 1(5)(xxiii)(a) Parent/Subsidiary/Associate Companies & related parties 1(5)(xxiii)(b) Directors, CEO, CS, CFO, HOIA, their spouses & children 1(5)(xxiii)(c) Executives (Top 5 salaried employees other than above) 1(5)(xxiii)(d) Shareholders holding 10% or more voting interest 1(5)(xxiv) Appointment/re-appointment of a director 1(5)(xxiv)(a) A brief resume of the director 1(5)(xxiv)(b) Nature of his/her expertise in specific functional areas 1(5)(xxiv)(c) Names of companies in which he/she holds directorship and the membership of committees of the board 1(5)(xxv) A Management’s Discussion and Analysis signed by CEO or MD focusing on: 1(5)(xxv)(a) Accounting policies and estimation 1(5)(xxv)(b) Changes in accounting policies and estimation 1(5)(xxv)(c) Comparative analysis of financial performance or results and financial position as well as cash flows for current financial year with immediate preceding five years explaining reasons thereof 1(5)(xxv)(d) Compare such financial performance or results and financial position as well as cash flows with the peer industry scenario 1(5)(xxv)(e) Briefly explain the financial and economic scenario of the country and the globe 1(5)(xxv)(f) 1(5)(xxv)(g) 1(5)(xxvi) 1(5)(xxvii) 1(6) 1(6) 1(7) 1(7)(a) 1(7)(b) Risks and concerns issues related to the financial statements, explaining such risk and concerns mitigation plan of the company Future plan or projection or forecast for company’s operation, performance and financial position Declaration or certification by the CEO and the CFO to the Board as required under condition No. 3(3) shall be disclosed as per Annexure- 1 The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 shall be disclosed as per Annexure-5 and Annexure-4. Meetings of the Board of Directors Shall conduct Board meetings and record the minutes of the meetings as per the provisions of the relevant Bangladesh Secretarial Standards (BSS) Code of Conduct for the Chairperson, other Board members and Chief Executive Officer A code of conduct for the Chairperson of the Board based on the recommendation of the Nomination and Remuneration Committee (NRC) at condition No. 6. The code of conduct as shall be posted on the website of the company 72 | Annual Report 2019-20 | Report of the Directors to the Shareholders Disclosed in Annexure- 2 Annexure-3 Disclosed in Annexure-2 Disclosed in Annexure- 1 √ √ √ √ √ √ N/A N/A √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) 2 2(a) 2(b) 2(c) 2(d) 2(e) 3 3(1) 3(1)(a) 3(1)(b) 3(1)(c) 3(1)(d) 3(1)(e) 3(2) 3(3) 3(3)(a) 3(3)(a)(i) 3(3)(a)(ii) 3(3)(b) 3(3)(c) 4 4(i) 4(ii) 5 5(1)(a) 5(1)(b) 5(1)(c) 5(2)(a) 5(2)(b) 5(2)(c) 5(2)(d) 5(2)(e) Governance of Board of Directors of Subsidiary Company Composition of BOD to be similar to holding company One Independent Director to be in both holding and subsidiary company Minutes of Board meetings of subsidiary company to be placed at following Board meeting of holding company Minutes of respective Board meeting of holding company to state that affairs of subsidiary company be reviewed Audit Committee of holding company to review financial statements/investments of subsidiary company Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS) Appointment Appointment of MD or CEO, CS, CFO and a HIAC The positions of the MD or CEO, CS, CFO and HIAC shall be different individuals The MD or CEO, CS, CFO and HIAC of a listed company shall not hold any executive position in any other company at the same time The Board shall clearly define respective roles, responsibilities and duties of the CFO, the HIAC and the CS The MD or CEO, CS, CFO and HIAC shall not be removed from their position without approval of the Board The MD or CEO, CS, CFO and HIAC of the company shall attend the meetings of the Board Duties of MD or CEO and CFO The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year Financial statements do not contain anything which is materially untrue or misleading Financial statements present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws The MD or CEO and CFO shall also certify that there are no transactions entered during the year which are fraudulent, illegal or in violation of the code of conduct The certification of the MD or CEO and CFO shall be disclosed in the Annual Report Board of Directors’ Committee Audit Committee Nomination and Remuneration Committee Audit Committee Having Audit Committee as a sub-committee of the BOD Assist the BOD in ensuring fairness of financial statements and a good monitoring system Duties of Audit Committee clearly set out in writing Audit Committee composition Audit Committee members to be non-executive Members to be “financially literate” and at least one to have 10 years of accounting/financial management experience Vacancy in Audit Committee to be fiiled up immediately or no later than 1 month The CS to act as the secretary of the Audit Committee √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Annexure-1 Report of the Directors to the Shareholders | Annual Report 2019-20 | 73 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) 5(2)(f) 5(3)(a) 5(3)(b) 5(3)(c) 5(4)(a) 5(4)(b) 5(5) 5(5)(a) 5(5)(b) 5(5)(c) 5(5)(d) 5(5)(e) 5(5)(f) 5(5)(g) 5(5)(h) 5(5)(i) 5(5)(j) 5(5)(k) 5(5)(l) No quorum in Audit Committee meeting without one Independent Director Chairperson to be an Independent Director, selected by the BOD In the absence of the Chairperson of the Audit Committee, the remaining members may elect one of themselves as Chairperson for that particular meeting Chairperson of audit committee to remain present in AGM The Audit Committee shall conduct at least its four meetings in a financial year The meeting of the Audit Committee shall be constituted in presence of either two members or two-third of the members of the Committee, whichever is higher, where presence of an Independent Director is a must Role of Audit Committee Oversee the financial reporting process Monitor choice of accounting policies and principles Monitor Internal Audit and Compliance process, including approval of the Internal Audit and Compliance Plan and review of the Internal Audit and Compliance Report Oversee hiring and performance of external auditors Meeting with the external auditors for review of the annual financial statements Review the annual financial statements Review the quarterly and half yearly financial statements Review the adequacy of internal audit function Review the Management’s Discussion and Analysis before disclosing in the Annual Report Review statement of significant related party transactions Review Letter of Internal Control weakness issued by statutory auditors Oversee the determination of audit fees and time required for effective audit and evaluate the performance of external auditors 5(5)(m) Review disclosures/statements/ declarations about uses of funds Raised through IPO/RPO/Rights Issue 5(6)(a) Reporting to the Board of Directors 5(6)(a)(i) Reporting on the activities of Audit Committee 5(6)(a)(ii)(a) Reporting on conflicts of interests 5(6)(a)(ii)(b) Reporting on suspected/presumed fraud or irregularity or material defect in the internal control system 5(6)(a)(ii)(c) Reporting on suspected infringement of laws 5(6)(a)(ii)(d) Reporting on any other matter to disclose immediately 5(6)(b) Reporting to BSEC 5(7) 6 6(1) 6(1)(a) 6(1)(b) 6(1)(c) 6(2) Reporting to the Shareholders and General Investors Nomination and Remuneration Committee (NRC) Responsibility to the Board of Directors Shall have a NRC as a sub-committee of the Board Assists the Board in formulation of the NRC policy The Terms of Reference (ToR) of the NRC shall be clearly set forth in writing Constitution of the NRC 74 | Annual Report 2019-20 | Report of the Directors to the Shareholders √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ - √ - - - - - √ √ √ √ Total 4 meetings held in the FY 2019-20. Referred to Report of the Audit Committee. No such IPO/RPO/Right Issue occurred during FY 2019-20. Audit Committee found no such issue or activity. - - - - - - Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) - No such instance occurred during the period. - No such instance happened during the period. 6(2)(a) 6(2)(b) 6(2)(c) 6(2)(d) 6(2)(e) 6(2)(f) 6(2)(g) 6(2)(h) 6(2)(i) 6(3) 6(3)(a) 6(3)(b) 6(3)(c) 6 (4) 6(4)(a) At least three members including an Independent Director All Committee members shall be non-executive directors Members of the Committee shall be nominated and appointed by the Board The Board reserve the authority to remove and appoint any member of the Committee The Board shall fill the vacancy in case of death, resignation, disqualification, or removal of any member The Chairperson of the Committee may appoint external expert for advice or suggestion The company secretary shall act as the secretary of the Committee Quorum of the NRC meeting shall not constitute without attendance of at least an Independent Director No remuneration other than director fees/honorarium for any member Chairperson of the NRC Board shall select 1 (one) member of the NRC to be Chairperson who shall be an ID In the absence of regular Chairperson, the position may elect from the remaining members of the committee Chairperson shall attend the AGM Meeting of the NRC At least one meeting in a financial year 6(4)(b) Any emergency meeting upon request by any member of the NRC 6(4)(c) 6(4)(d) 6(5) 6(5)(a) 6(5)(b) Quorum: Higher of two members or 2/3 of total members including at least one independent director The proceedings of each meeting shall duly be recorded in the minutes and such minutes shall be confirmed in the next meeting of NRC Role of the NRC Shall be independent and responsible or accountable to the Board and to the shareholders NRC shall oversee, among others, the following matters and make report with recommendation to the Board: 6(5)(b)(i) 6(5)(b)(i)(a) Formulation of the nomination criteria and recommend a policy to the Board, relating to the remuneration of the directors, top level executive, considering the following: The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate suitable directors 6(5)(b)(i)(b) Clear relationship among remuneration, performance & benchmarks 6(5)(b)(i)(c) Balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals 6(5)(b)(ii) Devising a policy on Board’s diversity 6(5)(b)(iii) Identification of qualification of directors and recommendation for their appointment and removal to the Board 6(5)(b)(iv) Evaluating the performance of independent directors and the Board 6(5)(b)(v) 6(5)(b)(vi) Identifying needs for employees and determine their selection, transfer or replacement and promotion criteria Developing, recommending and reviewing annually the company’s human resources and training policies √ √ √ √ - √ √ √ √ √ √ √ √ - √ √ √ √ √ √ √ √ √ √ √ Report of the Directors to the Shareholders | Annual Report 2019-20 | 75 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) External or statutory auditors are not engaged in any kind of internal issue of the company. The auditors performed no other services except statutory audit. 6(5)(c) 7 7(1)(i) 7(1)(ii) 7(1)(iii) 7(1)(iv) 7(1)(v) 7(1)(vi) Disclose the nomination and remuneration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report External or Statutory Auditors Non-engagement in appraisal/valuation/fairness opinions Non-engagement in designing & implementation of Financial Information System Non-engagement in Book Keeping or accounting Non-engagement in Broker-Dealer services Non-engagement in Actuarial services Non-engagement in Internal Audit services or special audit services 7(1)(vii) Non-engagement in services determined by Audit Committee 7(1)(viii) Not involved in audit or certification services on compliance of corporate governance 7(1)(ix) Not involved in any other service that creates conflict of interest 7(2) 7(3) 8 8(1) 8(2) 8(3) 9 9(1) 9(2) 9(3) No partner or his/her family or employees of the external audit firms hold any share at least during the tenure of their audit assignment Representative of external auditors shall remain present in the AGM Maintaining a website by the Company An official website linked with the website of the stock exchange Website shall keep functional from the date of listing Shall make available the detailed disclosures on website as required under the listing regulations of the concerned stock exchanges Reporting and Compliance of Corporate Governance Compliance certificate on Corporate Governance Code of the Commission shall be disclosed in the Annual Report The professional who will provide the certificate on compliance of this Corporate Governance Code shall be appointed by the shareholders in the AGM The directors shall state, in accordance with the Annexure-C attached, in the directors’ report whether the company has complied with these conditions or not √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 76 | Annual Report 2019-20 | Report of the Directors to the Shareholders Annexure-5 Report of the Directors to the Shareholders | Annual Report 2019-20 | 77 Report of the Audit Committee This report of the Audit Committee of Beximco Pharmaceuticals Limited is being presented in pursuance with the Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission (BSEC), dated June 03, 2018.The principal purpose of the Audit Committee is to assist the Board in effective fulfillment of its oversight responsibilities. The Committee has distinct Terms of Reference (ToR) developed conforming to the Code of Corporate Governance issued by the BSEC which includes but not confined to overseeing the financial reporting process, monitoring accounting policies and principles, evaluating internal control system, reviewing the statement of significant related party transactions, assessing potential conflict of interests, reviewing the management discussion and analysis, overseeing selection and performance of external auditors and reviewing the financial statements of subsidiary companies. This report is a brief on the activities performed by the Audit Committee throughout the year. Review of Financial Statements The Audit Committee in its meeting held on 25 October 2020 reviewed along with management, the financial statements and the report of the auditors of the company and its subsidiaries for the year ending on June 30, 2020. During the meeting Mr. Mohammad Ali Nawaz, the Chief Financial Officer of the Company presented the annual accounts along with the independent auditors report to the Committee. Detailed discussions on the financial statements were held with the representatives of the management of the Company. The CFO briefed the Committee that the consolidated as well as standalone financial statements have been prepared in compliance with IFRS/IAS. He appraised the Committee that the accounting policies applied in preparation of the financial statements are consistent with those of the previous financial years and are within the framework of international accounting standards and practices. The Committee reviewed the significant estimates and judgements made in preparation of the accounts and looked into their prudence and justification. They also evaluated the compliance of the financial statements to the disclosure requirements as per IFRS/IAS and other regulatory authorities including BSEC. They further discussed the financial reporting process and the adequacy of the internal control system of the Company in place, to prevent errors and fraudulent activities. The Committee carefully examined the related party transactions carried out among different associated companies including the subsidiary. The Committee was well satisfied that the related party transactions were made on an arm’s length basis in the normal course of business and the transactions have been appropriately disclosed in the financial statements as per IAS 24: ‘Related Party Disclosures.’ The independent auditors’ report also did not contain any material audit observation that called for the Boards’ consideration. The Committee being satisfied authorized for onward submission of the annual audited financial statements to the Board for approval. Additionally, during the year the Committee met three other occasions to review among others, the interim un-audited financial statements issued by the Company at quarter ends. In each instance, the Committee held detailed discussions with senior management on different aspects of the financial statements to ensure accuracy, consistency and compliance of the reports in all material aspects. The Committee also considered the related party transactions and found that all related party transactions were made on an arm’s length basis. In reliance to the reviews and considerations of the Audit Committee the Board in each case approved the financial statements including the annual audited financial statements for release to the shareholders. Changes in the Composition of the Committee Dr. Abdur Rahman Khan an Independent Director of the Board and the Chairman of the Audit Committee retired from the Board on completion of his tenure of office for two consecutive terms of three year each. He has been replaced by Mr. Mamatz Uddin Ahmed, Professor, Department of Accounting and Information system and Treasurer, University of Dhaka. The Board has appointed Mr. Ahmed as Chairman of the Audit Committee. The Committee has been reconstituted as follows: 78 | Annual Report 2019-20 | Report of the Audit Committee Membership Representation in the Board Position in the Committee Prof. Mamtaz Uddin Ahmed Independent Director Mr. Shah Monjurul Hoque Independent Director Mr. Osman Kaiser Chowdhury, FCA Director Mr. Mohammad Asad Ullah, FCS Company Secretary Chairman Member Member Secretary Meetings and Attendance The Committee held four meetings to carry out its business under the ToR during the year. Record of attendance of the members in the meetings are as below: Membership Representation in the Board Position in the Committee Attendance in Meeting Dr. Abdur Rahman Khan* Independent Director Chairman (outgoing) Prof. Mamtaz Uddin Ahmed* Independent Director Mr. Shah Monjurul Hoque Independent Director Mr. Osman Kaiser Chowdhury, FCA Director Mr. Mohammad Asad Ullah, FCS Company Secretary Chairman Member Member Secretary 3/4 1/4 4/4 4/4 4/4 *The period of Dr. Abdur Rahman Khan has expired on 12 March 2020 and Mr. Mamtaz Uddin Ahmed has joined as Chairman of the Audit Committee in place of Dr. Khan. External Auditor The Committee assessed the independence, objectivity and expertise of the independent auditors engaged to carry out the audit for the year 2019-20. Based on the evaluation, the Committee proposed the Board to re-engage existing auditors M. J. Abedin & Co., Chartered Accountants, for the year 2020-21 which shall be subject to the approval of the shareholders in the Annual General Meeting. Other Reviews and Activities During 2019-20 the Committee also assessed and examined risk management process, monitored internal audit and compliance process and reviewed the report thereon. The fi nancial reporting process and the related compliance and disclosure issues also came up as matters of periodic review by the Committee. The senior management of the company on invitation attended various meetings of the Audit Committee to apprise the members on different issues. The Committee noted no material deviations or non-compliance or adverse audit fi ndings that warrants for board or shareholders’ attention during the year under review. Mamtaz Uddin Ahmed Chairman Audit Committee Report of the Audit Committee | Annual Report 2019-20 | 79 Activities and other Details of Nomination and Remuneration Committee (NRC) Formation and Composition of the Committee The Board of Directors of Beximco Pharmaceuticals Limited constituted the Nomination and Remuneration Committee as a sub Committee of the Board. The Committee is independent of the Company’s executive management and is composed of three members including one independent director, nominated by the Board. The Committee comprises the following members: Membership Representation in the Board Position in the Committee Mr. Shah Monjurul Hoque Independent Director Chairman Mr. Iqbal Ahmed Director Mr. Osman Kaiser Chowdhury, FCA Director Member Member Mr. Mohammad Asad Ullah, FCS Company Secretary Secretary Terms of Reference (ToR) of the Committee The Board of the Directors sets out the ToR of the Committee in line with the corporate governance code issued by Bangladesh Securities and Exchange Commission. The ToR of the Committee includes the following: • Formulate policy on qualifications criteria, positive attributes and independence of Directors and top-level executives. • Oversee the Company’s remuneration policy for the Directors and top-level executives and make appropriate recommendation to the Board. • Assist the Board to select persons qualified to be a Director or hold a top-level executive position fulfilling the pre-set nomination criteria and recommend for their appointment. • Devise a policy on Board’s diversity taking into consideration of age, gender, experience, ethnicity, educational background, etc. • Review the code of conduct of the Board on a periodic basis and recommend any amendments for Board’s consideration. • Assist the Board to devise the criteria for evaluation of performance of Independent Directors and other Board members. • Develop, recommend and review annually the Company’s human resources and training policies. Meeting and Attendance The Committee had one meeting during the year. All the three members attended the meeting. The proceedings of the meeting were appropriately recorded. No member of the Committee received any remuneration other than the meeting attendance fee. Nomination and Remuneration Policy The Company has a written policy on nomination and appointment of Directors in the Board. The policy it sets out the detail qualification and other eligibility norms for the members and the process of their nomination. The policy is fair and non- discriminative. The Company is listed with AIM of London Stock Exchange and in compliance to AIM regulations it conducts independent third party verification of the eligible candidates before their appointment as Directors. All the Directors of the Board except the Managing Director are non-executive. The Company pays no remuneration to them 80 | Annual Report 2019-20 | Activities and other Details of Nomination and Remuneration Committee (NRC) other than the fees for attending the Board and other committee meeting. The Company has a well-structured policy on selection, recruitment and promotion of the senior level executives which is duly authorized by the Board. The Managing Director and all other top-level executives are full-time employee of the Company. They get fixed monthly salary and allowances as per terms of their service contracts. The Company has a robust performance appraisal system linked to KPI. Performances are reviewed on an annual basis. Further details on the remuneration policy are available in the report of Directors. Activities carried out during the period The Committee carried out the following activities in line with its Terms of Reference during the reporting period: a. Evaluated the code of conduct for the Chairman and other Board members and made appropriate recommendation. b. Reviewed the Company’s existing policy on remuneration to Directors and top executives. c. Studied Company’s human resource and training policies. d. Conducted an assessment of the qualification and other details of the Independent Director and made appropriate recommendation to the Board. Activities and other Details of Nomination and Remuneration Committee (NRC) | Annual Report 2019-20 | 81 investors overseas to update them about the ongoing business of the Company. The fund managers and analysts at home also holds pre-arranged meeting with our top management to know the present and future potentials of the Company. During the year, COO and CFO attended a total of 17 meetings with the foreign investors. Reporting to the Shareholders The Company prepares unaudited fi nancial statements for fi rst, second and third quarters and full year Audited Financial Statements and publishes the summary of the fi nancial statements through newspapers and online portals as required by law. Detailed fi nancial statements are released through the Company’s website. Additionally, the Company prepares Annual Reports that contains detailed operational and fi nancial information along with other statutory disclosures. Company’s Reporting Calendar Fi n a n c i a l s Fi n a n c i a l s Q1 Q2 November January Fi n a n c i a l s Fi n a n c i a l s Q3 April Full Year Audited Financials October Fi n a n c i a l s Annual Report Investor Relations Communication with Shareholders and Investors The shareholders and investors are kept well informed of the Company’s operation and performance through periodic updates of price sensitive information, publications of fi nancial reports, investors’ meeting with the Company’s top executives and Annual General Meeting (AGM) of the Company. Any price sensitive information are immediately released through the stock exchanges and Company’s own website. In applicable cases such information are also published in the print media and online portals. The Company regularly holds AGM as required by the Companies Act, 1994 to inform the shareholders about the overall affairs of the Company and to obtain their consent on agenda placed in the meeting. Extra-ordinary General Meeting (EGM) are also held in cases that require calling of such meeting. The board members and senior management of the Company remains present in those meetings to answer queries and address any concerns of the shareholders and investors.This year, the AGM of the Company will be held virtually by using digital platform. Beximco Pharma has a distinct Company Secretarial Department adequately manned with qualifi ed professionals to carry out the regulatory company secretarial functions and to meet administrative enquiries from the shareholders and investors. There is also a proactive investor relation team within accounting and fi nance function to deal with investor queries and complaints with high priority. During the year under review, the Company has not received any complaints from its shareholders/investors. Beximco Pharma is the only company in Bangladesh listed with Alternative Investment Market (AIM) of London Stock Exchange. In compliance to AIM regulation, the Company has engaged SPARK Advisory Partners Limited as Nominated Advisor (NOMAD), SP Angel Corporate Finance LLP as designated Broker and FTI Consulting LLP as Public Relations agent. Analyst of SP Angel publishes report on the Company for the investors. We are followed by a wide range of institutional investors. The senior management of the Company meets large scale GDRs 82 | Annual Report 2019-20 | Investor Relations Website Communication their net earnings for the year as dividend. The rule further specifi es that where a company declares both cash and stock dividend, the amount of stock dividend must not exceed the cash dividend. Market Capitalization Market capitalization of Beximco Pharma as on 30 June 2020 both in DSE/CSE and GDRs in the AIM of London Stock Exchange are as follows: Stock Exchange No. of Securities Closing Price (BDT/GBP) Market Capitalization In BDT (mln.) In GBP (mln.) DSE/CSE 314,612,818 69.2 21,771 208.67 GDRs 90,943,627 0.355 3,368 32.28 405,556,445 25,139 240.95 The Company has a rich website (www.beximcopharma.com) that contains historical as well as latest information about the Company and its operation. The website is well organized to meet information requirement of different stakeholders and updated on a regular basis. The Company’s corporate website is linked with Dhaka, Chittagong and AIM of London Stock Exchange. In addition to accessing information on the Company’s website, investors and other report users are able to contact the company for their information. The contact details are available on the Company’s website, in the annual report and other communications. Dividend Policy The Company does not have a declared dividend policy but consistently paying dividend over the years based on its earnings and availability of free cash. Bangladesh Companies Act 1994 authorises the board of directors to make decision on dividend which is to be approved by the shareholders in the Annual General Meeting. Shareholders however, can’t approve more dividend than what is recommended by the board. Bangladesh Tax regulation provides for a penalising tax provision for companies that fail to declare at least 30% of GDRs Information Nominated Advisor SPARK Advisory Partners Limited 5 St. John’s Lane, EC1M 4BH, London, UK No.1 Aire Street, Leeds, LS1 4PR, UK Broker SP Angel Corporate Finance LLP Prince Frederick House 35-39 Maddox Street, London W1S 2PP, United Kingdom Custodian HSBC Level 4, Shanta Western Tower 186 Bir Uttam Mir Shawkat Ali Road Tejgaon Industrial Area Dhaka- 1208, Bangladesh Depositary The Bank of New York Mellon 240 Greenwich Street, 22W New York, NY 10286- USA Investor Relations | Annual Report 2019-20 | 83 84 | Annual Report 2019-20 | Investor Relations Value Added Statement For the Year Ended 30 June 2020 Value Added : Sales & Other Income Bought-in-Materials & Services Appilcations : Retained by the Company Salaries and Beneﬁts to Employees Interest to Lenders Dividend to Shareholders Duties & Taxes to Govt. Exchequer Taka in thousand Taka % 100 23 27 6 7 37 100 29,924,359 (14,357,927) 15,566,432 3,625,707 4,131,651 1,013,804 1,055,017 5,740,253 15,566,432 37% Duties & Taxes to Govt. Exchequer 6% Interest to Lenders 7% Dividend to Shareholders 23% Retained by the Company 27% Salaries and Beneﬁts to Employees Value Added Statement | Annual Report 2019-20 | 85 Consolidated Financial Statements Beximco Pharmaceuticals Ltd. and its Subsidiaries Independent Auditor’s Report To the Shareholders of Beximco Pharmaceuticals Limited and its Subsidiaries Report on the Audit of the Consolidated Financial Statements Opinion We have audited the consolidated financial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the Consolidated Statement of Financial Position as at June 30, 2020 and Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash flows for the year then ended, and notes to the Consolidated Financial Statements, including a summary of significant accounting policies. The Accounting year of the subsidiary companies- Beximco Pharma API Limited and Nuvista Pharma Limited, ends on the same date as of the Company. We have audited the Financial statements of Beximco Pharma API Limited and expressed our unmodified opinion on those statements vide our report dated October 28, 2020. The Financial Statements of Nuvista Pharma Limited was audited by A. Qasem & Co. Chartered Accountants, who through their report dated October 21, 2020 have also expressed unmodified opinion on those statements. In our opinion, the accompanying consolidated financial statements of the Company give a true and fair view of the Consolidated Financial Position of the Company as at June 30, 2020, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Risk Our response to the risk Valuation of Property, Plant and Equipment (PPE) The carrying value of the PPE was Tk. 35,000,809,631 as at June 30, 2020. Expenditures are capitalized if they create new assets or enhance the existing assets, and expensed if they relate to repair or maintenance of the assets. Classification of the expenditures involves judgment. The useful lives of PPE items are based on management’s estimates regarding the period during which the assets or its significant components will be used. The estimates are based on historical experience and market practice and take into consideration the physical condition of the assets. The valuation of PPE was identified as a key audit matter due to the significance of this balance to the consolidated financial statements and that there is significant measurement uncertainty involved in this valuation. See Note No. 4 to the consolidated financial statements Our audit included the following procedure: • We assessed whether the accounting policies in relation to the capitalization of expenditures are in compliance with IFRS and found them to be consistent. • We inspected a sample of invoices and L/C documents to determine whether the classification between capital and revenue expenditure was appropriate. • We evaluated whether the useful lives determined and applied by the management were in line with historical experience and the market practice. • We checked whether the depreciation of PPE items was commenced timely, by comparing the date of the reclassification from capital work in progress to ready for use, with the date of the act of completion of the work. Consolidated Financial Statements | Annual Report 2019-20 | 87 Risk Our response to the risk Valuation of Inventory The inventory of Tk. 5,944,769,057as at June 30, 2020 was held at different locations across the country. We verified the appropriateness of management’s assumptions applied in calculating the value of the inventory by: Inventories are carried at the lower of cost and net realizable value. As a result, the management apply judgment in determining the appropriate values for slow-moving or obsolete items. Since the value of Inventory is significant to the consolidated financial statements and there is significant measurement uncertainty involved in this valuation, the valuation of inventory was significant to our audit. See Note No. 8 to the consolidated financial statements. • Evaluating the design and implementation of key inventory controls. • Attending inventory counts on sample basis and reconciling the count results to the inventory listing to test the completeness of data. • Reviewing the requirement of inventory provisioning and action there upon by the management. • Comparing the net realizable value obtained through a detailed review of sales subsequent to the year-end, to the cost price of a sample of inventories. Related party transactions The Company has related party transactions as described in Note No. 35 of the consolidated financial statements. We focused on identification of related parties and disclosure of related party transactions in accordance with relevant accounting standards. Our audit procedures amongst others included the following: • Evaluated the design and tested the operating effectiveness of controls over identification and disclosure of related party transactions. • Evaluated the transactions among the related parties and tested material accounts balances. • Evaluated the disclosures in the consolidated financial statements in compliance with IAS 24. Other Information Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the consolidated financial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on such work we perform, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance. Consolidated Financial Statements | Annual Report 2019-20 | 88 Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements and Internal Controls Management is responsible for the preparation and fair presentation of the consolidated financial statements of the Company in accordance with IFRSs, The Companies Act 1994, The Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the Consolidated Financial Statements | Annual Report 2019-20 | 89 • • • • • • audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994, The Securities and Exchange Rules 1987 and relevant notifications issued by Bangladesh Securities and Exchange Commission, 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 accounts as required by law have been kept by the company so far as it appeared from our examination of those books; c. The company’s Consolidated Statement of Financial Position (Balance sheet) and Consolidated Statement of Profit or Loss and Other Comprehensive Income (Profit & Loss Account) dealt with by this report are in agreement with the books of accounts and; d. The expenditures incurred and payment made were for the purpose of the Company’s business for the year. The engagement partner on the audit resulting in the independent auditor’s report is Hasan Mahmood, FCA Dhaka October 28, 2020 M. J. Abedin & Co. Chartered Accountants Consolidated Financial Statements | Annual Report 2019-20 | 90 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Financial Position As at June 30, 2020 Notes June 30, 2020 ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Right-of-use Assets Intangible Assets Goodwill Other Investment Other Non-current Assets Current Assets Inventories Spares & Supplies Accounts Receivable Loans, Advances and Deposits Advance Income Tax Short Term Investment Cash and Cash Equivalents TOTAL ASSETS EQUITY AND LIABILITIES Equity Attributable to the Owners of the Company Issued Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/(Loss) Retained Earnings Non-Controlling Interest TOTAL EQUITY Non-Current Liabilities Long Term Borrowings-Net of Current Maturity Liability for Gratuity and WPPF & Welfare Funds 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 4 4( a ) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Amount in Taka June 30, 2019 35,949,930,818 33,853,977,656 202,689,556 1,334,921,698 546,691,213 5,329,379 6,321,316 13,264,161,542 5,924,031,678 726,127,262 3,334,958,905 2,309,503,747 35,681,115 323,364,536 610,494,299 49,214,092,360 29,588,317,284 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,144,333,029 276,006,553 29,864,323,837 6,603,936,369 2,595,607,792 1,860,904,996 2,147,423,581 37,069,663,021 35,000,809,631 240,163,919 1,275,560,330 546,691,213 3,751,551 2,686,377 13,049,078,919 5,944,769,057 775,528,787 3,305,451,434 2,388,313,122 - - 635,016,519 50,118,741,940 32,495,120,607 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,125,767,451 926,375 20,058,799,733 302,329,006 32,797,449,613 5,963,327,323 1,651,590,390 2,144,053,434 2,167,683,499 11,357,965,004 12,745,832,154 7,398,361,360 1,454,311,995 1,462,806,200 739,512,826 17,086,213 285,886,410 9,272,501,280 1,616,670,549 1,091,809,722 590,317,150 7,235,215 167,298,238 50,118,741,940 49,214,092,360 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended June 30, 2020 Notes July 2019 - June 2020 July 2018 - June 2019 Amount in Taka 22 23 26 27 28 29 30 Net Revenue Cost of Goods Sold Gross Profit Operating Expenses Administrative Expenses Selling, Marketing and Distribution Expenses Profit from Operations Other Income Finance Cost Share of Loss of Associates Profit Before Contribution to WPPF & Welfare Funds Contribution to WPPF & Welfare Funds Profit Before Tax Income Tax Expenses Current Tax Deferred Tax Profit After Tax Profit/(Loss) Attributable to: Owners of the Company Non-controlling interest Other Comprehensive Income-Unrealized Gain/(Loss) Total Comprehensive Income Total Comprehensive Income Attributable to: Owners of the Company Non-controlling interest 25,611,947,655 (13,712,847,509) 11,899,100,146 (6,289,606,032) (792,951,709) (5,496,654,323) 5,609,494,114 293,558,304 (1,013,804,085) - 4,889,248,333 (235,808,378) 4,653,439,955 (1,108,956,854) (1,086,668,418) (22,288,436) 3,544,483,101 3,514,687,301 29,795,800 3,544,483,101 (1,577,828) 3,542,905,273 3,513,109,473 29,795,800 3,542,905,273 22,816,629,795 (12,196,286,770) 10,620,343,025 (5,554,169,458) (752,944,182) (4,801,225,276) 5,066,173,567 139,917,665 (1,029,762,542) (29,325,720) 4,147,002,970 (200,937,234) 3,946,065,736 (905,662,782) (803,760,846) (101,901,936) 3,040,402,954 3,033,402,333 7,000,621 3,040,402,954 (1,852,559) 3,038,550,395 3,031,549,774 7,000,621 3,038,550,395 Earnings Per Share (EPS) 31 8.67 7.48 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Changes in Equity For the year ended June 30, 2020 As at June 30, 2020 Amount in Taka Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/ (Loss) Retained Earnings Equity attributable to Owners of the Company Non- Controlling Interests Total Equity Balance as on July 01, 2019 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,144,333,029 29,588,317,284 276,006,553 29,864,323,837 Total Comprehensive Income: Profit/(Loss) for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - - 3,514,687,301 3,514,687,301 29,795,800 3,544,483,101 - (1,577,828) - (1,577,828) - (1,577,828) (608,334,668) (608,334,668) (3,473,347) (611,808,015) (8,114,071) 2,028,518 - - 8,114,071 - - 2,028,518 - - - 2,028,518 Balance as on June 30, 2020 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,125,767,451 926,375 20,058,799,733 32,495,120,607 302,329,006 32,797,449,613 Net Asset Value (NAV) Per Share (Note-32) 80.12 As at June 30, 2019 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/ (Loss) Retained Earnings Equity attributable to Owners of the Company Non- Controlling Interests Total Equity Balance as on July 01, 2018 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,159,277,845 4,356,762 14,608,700,961 27,081,962,616 269,874,176 27,351,836,792 Total Comprehensive Income: Share Capital Beximco Pharma API Ltd. Profit/(Loss) for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - - - - - - - - - - 100 100 - 3,033,402,333 3,033,402,333 7,000,621 3,040,402,954 (1,852,559) - (1,852,559) - (1,852,559) (506,945,556) (506,945,556) (868,344) (507,813,900) (9,175,291) (18,249,550) - - 9,175,291 - - (18,249,550) - - - (18,249,550) Balance as on June 30, 2019 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,144,333,029 29,588,317,284 276,006,553 29,864,323,837 Net Asset Value (NAV) Per Share (Note-32) 72.96 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Consolidated Financial Statements | Annual Report 2019-20 | 93 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Cash Flows For the year ended June 30, 2020 Notes July 2019-June 2020 July 2018-June 2019 Amount in Taka Cash Flows from Operating Activities : Receipts from Customers and Others Payments to Suppliers and Employees Cash Generated from Operations Interest Paid Interest Received Income Tax Paid Net Cash Generated from Operating Activities 34 Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment Intangible Assets Disposal of Property, Plant and Equipment Dividend Received Decrease in 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 Share capital Dividend Paid Net Cash (Used in) / from Financing Activities Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Effect of exchange rate changes on Cash and Cash Equivalents Cash and Cash Equivalents at End of Year Net Operating Cash Flow Per Share 13 33 25,934,454,695 (18,467,458,543) 22,463,550,299 (17,434,690,241) 7,466,996,152 5,028,860,058 (1,012,519,091) 20,409,291 (932,399,131) 5,542,487,221 (1,032,409,014) 36,457,527 (1,072,991,667) 2,959,916,904 (2,243,555,782) (31,745,002) 3,646,251 1,427,930 323,364,536 (4,416,446,385) (128,619,282) 17,540,625 1,491,901 16,032,638 (1,946,862,067) (4,510,000,503) (1,000,373,112) (1,970,741,462) - (601,957,017) (3,573,071,591) 22,553,563 610,494,299 1,968,657 635,016,519 (1,412,334,115) 3,684,312,230 100 (505,351,881) 1,766,626,334 216,542,735 393,735,946 215,618 610,494,299 13.67 7.30 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Consolidated Financial Statements | Annual Report 2019-20 | 94 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Beximco Pharmaceuticals Limited and its Subsidiaries Notes to the Financial Statements As at and for the year ended June 30, 2020 1. The Reporting Entity 1.1 About the Company Beximco Pharmaceuticals Limited (BPL/ the Company) is a public limited company incorporated in Bangladesh in 1976. It is a leading manufacturer of pharmaceutical formulations and Active Pharmaceutical Ingredients (APIs). 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 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). In 2018, BPL acquired 85.22% shares of Nuvista Pharma Limited – a non-listed pharmaceutical company in Bangladesh specializing in hormones and steroid drugs and took over control of its management. 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. The manufacturing facilities of the Company are certified by leading global regulatory authorities including United States Food and Drug Administration (USFDA). 1.2 The Subsidiaries Nuvista Pharma Limited (NPL) Nuvista Pharma, formerly Organon (Bangladesh) Ltd., was a subsidiary of Netherlands based Organon International. It was originally incorporated in 1973 as a private limited company. In 2006 the foreign shareholding was sold out to Bangladeshi management and was renamed as Nuvista Pharma Limited. The Company through amendments to its memorandum of association in 2011 converted it into a public limited company. In April 2018, Beximco Pharmaceuticals Limited acquired majority shareholdings in Nuvista Pharma Limited (NPL) and became the immediate and ultimate parent of the company. Beximco Pharma API Limited Beximco Pharma API Limited was formed as a private limited company in December 2017 with a paid up capital of Taka 20 million divided into 2 million shares of Taka 10 each, fully held by BPL. The company intends to set up a facility at API Industrial Park to manufacture Active Pharmaceutical Ingredients (APIs) for domestic and international markets. The company is still in the initial phase of establishment. 1.3 Nature of Business BPL is engaged in manufacturing and marketing of generic pharmaceuticals formulation products covering a wide range of therapeutic categories. It offers products in different dosage forms including Solid, Liquid, Cream and Ointment, Suppositories, Metered Dose Inhaler, Dry Powder Inhaler, Nasal Spray, Sterile, Lyophilized Injectable, Large Volume Intravenous Fluids. Besides formulation products BPL also manufactures Active Pharmaceutical Ingredients (APIs) and renders contract manufacturing services to other companies. Products of the company are sold in domestic and international markets. NPL produces various pharmaceutical products including oral contraceptives, hormone, steroid, anti-histamine, anti-fibrinolytic, anti- infective, cardiac, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold in the domestic market. Both BPL and NPL provide contract manufacturing services. 2. Basis of Preparation of Financial Statements 2.1 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). 2.2 Basis of Measurement The financial statements have been prepared on Historical Cost basis except for certain Property, Plant and Equipment measured at revalued amount (revaluation carried out in 2008). The Tangible and Intangible Assets and Liabilities of the acquired subsidiary has been reported at their fair values at the date of acquisition. Investment in Shares of listed companies have been valued at the year- end quoted prices. Cash flow statement has been prepared on cash basis. Consolidated Financial Statements | Annual Report 2019-20 | 95 2.3 Reporting Period Financial year of Beximco Pharmaceutical Limited (BPL) and its subsidiaries Nuvista Pharma Limited (NPL) and Beximco Pharma API Limited begins on July 1 and ends on June 30. The Financial Statements cover 12 months period starting from July 01,2019 to June 30, 2020. 2.4 Comparative Information Figures for earlier year have been re-arranged wherever considered necessary to ensure better comparability with the current year. 3. Significant Accounting Policies 3.1 Basis of Consolidation The financial statements of the subsidiaries-Nuvista Pharma Limited and Beximco Pharma API Limited, have been consolidated with those of Beximco Pharmaceuticals Limited in accordance with IFRS 10: Consolidated Financial Statements. The Company acquired 85.22% shares of the issued and paid up capital of Nuvista Pharma Limited. This ownership interest is adequate enough to establish control over NPL and thus BPL meets the conditions as stated in IFRS 10: Consolidated Financial Statements to consider NPL as a subsidiary. Beximco Pharma API Limited (BPAL) was formed with a paid up capital of Tk.20,000,000 divided into 2,000,000 shares of Tk.10 each, all of which excepting 10 shares are held by Beximco Pharmaceuticals Ltd (BPL). Beximco Pharma API Ltd thus meets the conditions stated in IFRS 10: Consolidated Financial Statements to consider it as a subsidiary. 3.2 Inter-Company Transactions Assets, Liabilities, Equity, Income, Expenses and Cash Flows arising out of transactions between the Company and the subsidiaries have been eliminated in full in the Consolidated Financial Statements. 3.3 Non-Controlling Interests (NCIs) Non-Controlling Interests (NCIs) at the date of acquisition has been measured at fair value of the net assets of the acquired company in proportion to the shares of the entitled holders. Profit or Loss and Other Comprehensive Income subsequent to the acquisition has been allocated to the Owners of the Company and to the NCIs and also disclosed in the financial statements. 3.4 Valuation of Goodwill Goodwill has been determined in accordance with IFRS 3: Business Combination. This represents the excess of the aggregate of Purchase Consideration and the acquisition-date fair value of NCI’s share in the net assets over the acquisition-date fair value of the net assets of the subsidiary. 3.5 Investment in Associates Investment in Associates has been accounted for using the Equity method as per IAS 28: Investment in Associates and Joint Ventures. This represents value of 1,500,000 Ordinary Shares of Malaysian Ringgit (RM) 1 each issued to Beximco Pharmaceuticals Ltd. by BioCare Manufacturing Sdn Bhd (“BioCare”), Malaysia. Beximco Pharmaceuticals Ltd. was issued 30% of the equity share of the Malaysian based company for providing full technical support to set up a manufacturing facility to produce specialized pharmaceutical products in Seri Iskandar Pharmaceutical Park, Perak, Malaysia. BioCare is considered to be an associate of BPL as per IAS 28: Investment in Associates and Joint Ventures. Accounting year of BioCare ends on December 31 which is different from the date of preparation of this Consolidated Statement of Financial Positions. BioCare has provided unaudited interim financial statements as of June 30, 2020. Beximco Pharma has not recognized 30% share of the accumulated loss of the company exceeding the value of investment of Tk 29,325,720 by an amount of Tk. 19,813,172 following IAS 28: Investment in Associates and Joint Ventures as the Company has no obligation for any liability beyond the value of its investment in associates. Consolidated Financial Statements | Annual Report 2019-20 | 96 4. Property Plant and Equipment As on June 30, 2020 Amount in Taka Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Total Property Plant & Equipment Right-of-use Assets Total Cost As on July 01, 2019 Additions Transferred in & Capitalized Disposal during the Year 4,067,829,596 - - - 7,820,306,150 1,964,386 - - 15,758,504,631 76,637,502 - (68,147,647) 314,394,814 16,059,142 - - 832,159,558 8,650,472 - (13,523,004) 594,975,443 23,204,371 - (1,327,600) 29,388,170,192 126,515,873 - (82,998,251) 312,742,914 81,724,782 - - 29,700,913,106 208,240,655 - (82,998,251) Cost As on June 30, 2020 4,067,829,596 7,822,270,536 15,766,994,486 330,453,956 827,287,026 616,852,214 29,431,687,814 394.467,696 29,826,155,510 Accumulated Depreciation As on July 01, 2019 Depreciation Charged Fair Value Depreciation Adjustment for Assets disposed off Accumulated Depreciation As on June 30, 2020 - - - 1,988,863,726 188,862,087 2,363,364 - 6,205,719,687 667,013,870 9,652,060 (34,640,793) 142,895,364 17,051,814 - - 563,820,219 59,343,002 - (9,928,860) 386,007,571 34,309,438 - (984,456) 9,287,306,567 966,580,211 12,015,424 (45,554,109) 110,053,358 44,250,419 - - 9,397,359,925 1,010,830,630 12,015,424 (45,554,109) - 2,180,089,177 6,847,744,824 159,947,178 613,234,361 419,332,553 10,220,348,093 154,303,777 10,374,651,870 Net Book Value June 30, 2020 4,067,829,596 5,642,181,359 8,919,249,662 170,506,778 214,052,665 197,519,661 19,211,339,721 240,163,919 19,451,503,640 Capital Work in Progress Carrying Value as on June 30, 2020 Carrying Value as on June 30, 2019 4 (a). Right-of-use Assets At Cost Accumulated Depreciation 5. Intangible Assets Cost As on July 01, 2019 Addition During the year As on June 30, 2020 Amortization As on July 01, 2019 Amortized During the year As on June 30, 2020 Balance as on June 30, 2020 Balance as on June 30, 2019 Particulars 15,789,469,910 - 15,789,469,910 35,000,809,631 240,163,919 35,240,973,550 33,853,977,656 202,689,556 34,056,667,212 June 30, 2020 394,467,696 (154,303,777) 240,163,919 Amount in Taka June 30, 2019 312,742,914 (110,053,358) 202,689,556 Product development, Licensing and Marketing Rights ERP Project Trade Name & Trade Marks Total 1,319,952,047 29,103,370 167,103,702 2,641,632 54,000,000 - 1,541,055,749 31,745,002 1,349,055,417 169,745,334 54,000,000 1,572,800,751 203,974,051 72,236,000 - 16,710,370 2,160,000 2,160,000 206,134,051 91,106,370 276,210,051 16,710,370 4,320,000 297,240,421 1,072,845,366 153,034,964 49,680,000 1,275,560,330 1,115,977,996 167,103,702 51,840,000 1,334,921,698 Consolidated Financial Statements | Annual Report 2019-20 | 97 6. Goodwill This is carried forward from the previous year and relates to acquisition of Nuvista Pharma Limited (Note 3.4). There has been no indica- tion of impairment of goodwill during the year. 7. Other Investments a. Investment Datails (Taka) Bangladesh Export Import Co. Ltd. Central Depository Bangladesh Ltd. (CDBL) b. Number of Shares: Bangladesh Export Import Co. Ltd. Central Depository Bangladesh Ltd. (CDBL) Balance July 01, 2019 Addition/ Adjustment Unrealised Gain/(Loss) 3,759,929 1,569,450 5,329,379 (1,577,828) - (1,577,828) Balance July 01, 2019 167,854 571,182 Amount in Taka Balance June 30, 2020 2,182,101 1,569,450 3,751,551 Balance June 30, 2020 167,854 571,182 c. The shares of Bangladesh Export Import Co. Ltd. are listed in Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. on the last working day of the year 2019-2020 was Tk. 13.00 (2018-2019: Tk.22.40). The fair value loss of Tk. 1,577,828 has been accounted for as Other Comprehensive Income following IFRS:9 Financial Instruments. d. Shares of Central Depository Bangladesh Ltd.(CDBL) are not traded . The value at acquisition is considered to be the fair value as on the Balance Sheet date. 8. Inventories This consists of as follows : Finished Goods Work in Process Raw Materials Packing Materials Laboratory Chemicals Physician Samples R&D Materials Materials in Transit 9. Spares & Supplies This consists of as follows : Spares & Accessories Stock of Stationery Literature & Other Materials Miscellaneous Item Consolidated Financial Statements | Annual Report 2019-20 | 98 June 30, 2020 1,128,728,172 294,258,178 3,089,296,983 960,326,569 64,584,938 69,468,235 15,232,992 322,872,990 5,944,769,057 660,313,987 14,209,600 101,005,200 - 775,528,787 Amount in Taka June 30, 2019 1,255,181,983 455,530,899 2,710,825,646 1,098,348,379 44,838,125 85,135,960 12,004,065 262,166,621 5,924,031,678 579,804,147 13,100,977 133,118,401 103,737 726,127,262 10. Accounts Receivable This consists of : Trade Receivable Other Receivable June 30, 2020 3,088,509,497 216,941,937 3,305,451,434 Amount in Taka June 30, 2019 3,244,703,035 90,255,870 3,334,958,905 Accounts Receivable is reported net of provision for bad debts of Tk. 6,554,783. It includes an amount of Tk. 817,658,851, equivalent USD 9,710,913 (June 30, 2019: Tk. 771,731,426, USD 9,214,704) receivable against export sales. Part of the export sales receivables are against Letter of Credit while the rest are unsecured but considered good. Accounts Receivable also includes Tk. 1,969,764,709 due from I & I Services Ltd., who provides distribution service to the Company and a “Related Party”. The maximum amount due from the company during the year was Tk. 2,719,264,917 on April 30, 2020. 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. Aging of Trade Receivables : Amount due within 6 months Amount due for 6 months & above 11. 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 Salary Advance / Loan Rent Advance Motor Cycle Raw & Packing Material Prepaid Insurance Overseas Liaison Office Others 3,036,824,038 51,685,459 3,088,509,497 3,171,871,132 72,831,903 3,244,703,035 281,675,299 441,074,569 6,636,489 83,541,576 10,821,850 209,723,000 264,086,628 35,585,120 161,306,524 29,898,335 154,443,129 442,658,728 155,346,536 40,724,614 70,790,725 159,119,478 329,321,836 6,320,466 67,972,220 10,821,850 224,723,000 255,058,852 37,773,704 155,890,739 13,420,366 199,755,875 592,000,065 163,840,275 35,318,373 58,166,648 2,388,313,122 2,309,503,747 a. 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. b. Prepaid Insurance includes the insurance premium paid to German Export Credit Agency Euler Hermes Aktiengesellschaft, Hamburg for guarantee of the project loan which is an integral part of the overseas loan financing agreement with ODDO BHF Aktiengesellschaft, Frankfurt, Germany. Consolidated Financial Statements | Annual Report 2019-20 | 99 12. Short Term Investment The Company has fully recalled the Short Term Investment with Bangladesh Export Import Company Limited (Beximco Ltd.). 13. Cash and Cash Equivalents This consists of as follows : a. Cash in Hand (including Imprest Cash) b. Cash at Bank : Current & FC Account FDR Account 14. Issued Share Capital a. Authorized : 1,000,000,000 Ordinary Shares of Tk. 10 each 50,000,000 fully convertible 5 % Preference Shares of Tk. 100 each b. Issued, Subscribed and Paid-up : 51,775,750 Ordinary Shares fully paid-up in cash 316,538,298 Ordinary Shares issued as stock dividend 5,951,250 Ordinary Shares issued in Exchange of Shares of Beximco Infusions Ltd. 31,291,147 Ordinary Shares issued on conversion of Preference Shares June 30, 2020 Amount in Taka June 30, 2019 170,478,822 235,292,449 426,156,203 38,381,494 635,016,519 338,805,413 36,396,437 610,494,299 10,000,000,000 5,000,000,000 15,000,000,000 10,000,000,000 5,000,000,000 15,000,000,000 517,757,500 3,165,382,980 517,757,500 3,165,382,980 59,512,500 59,512,500 312,911,470 4,055,564,450 312,911,470 4,055,564,450 5,951,250 Ordinary Shares of Tk. 10 each were issued to the shareholders of Beximco Infusions Ltd. on it’s merger with Beximco Pharmaceuticals Ltd. In 2005. 41,000,000 fully convertible 5% preference shares of Tk. 100 each were issued in 2009. 50% of the preference shares were converted into 16,169,191 ordinary shares of Tk. 10 each on February 1, 2010. The rest 50% were converted into 15,121,956 ordinary shares of Tk. 10 each on May 2, 2010. 90,943,627 Ordinary Shares have been issued as underlying shares for the GDRs listed with AIM of London Stock Exchange. c. Composition of Shareholding : Sponsors: A S F Rahman Salman F Rahman Other Directors and Associates Public Issue: GDRs- AIM of London Stock Exchange Foreign Portfolio Investors (DSE/CSE) Institutions (ICB, ICB Investors Accounts & Others) Individual Shareholders June 30, 2020 June 30, 2019 Number of shares % of Share Capital Number of shares % of Share Capital 8,235,353 8,254,632 37,019,789 53,509,774 90,943,627 48,720,273 148,762,402 63,620,369 352,046,671 405,556,445 2.03 2.04 9.13 8,235,353 8,254,632 37,019,789 2.03 2.04 9.13 13.20 53,509,774 13.20 22.42 12.01 36.68 15.69 90,943,627 60,060,586 136,573,957 64,468,501 86.80 352,046,671 100.00 405,556,445 22.42 14.81 33.67 15.90 86.80 100.00 Consolidated Financial Statements | Annual Report 2019-20 | 100 15. Non-controlling Interest Non-controlling Interest (Opening ) Proportionate profit/loss (NPL) Less Cash Dividend (NPL) Share Capital - Beximco Pharma API Limited (API) 16. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Amount in Taka June 30, 2020 June 30, 2019 276,006,553 29,795,800 (3,473,347) - 269,874,176 7,000,621 (868,344) 100 302,329,006 276,006,553 Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany 1,437,978,890 1,974,611,879 Lease Liability Term Loan-AB Bank Limited Dhaka Bank Ltd. Lease Liability This consists of as follows: Within one year Within two to five years 17. Liability for Gratuity and WPPF & Welfare Funds Gratuity Payable Workers Profit Participation and Welfare Fund 18. Short Term Borrowings Janata Bank Ltd. - Cash Credit-Hypothecation Loan AB Bank Limited Liability for UPAS Letter of credit First Security Islamic Bank Ltd. Dhaka Bank Ltd. 208,860,444 - 4,751,056 247,375,215 330,410,281 43,210,417 1,651,590,390 2,595,607,792 108,115,288 208,860,444 316,975,732 165,766,263 247,375,215 413,141,478 1,185,669,111 1,040,022,968 958,384,323 820,882,028 2,144,053,434 1,860,904,996 3,963,918,204 1,106,352,880 1,406,768,304 510,491,234 410,830,738 5,336,101,392 2,491,112,625 873,810,482 - 571,476,781 7,398,361,360 9,272,501,280 Consolidated Financial Statements | Annual Report 2019-20 | 101 19. Long Term Borrowings-Current Maturity This consists of as follows: Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Lease Liability Term Loan-AB Bank Limited Dhaka Bank Ltd 20. Creditors and Other Payables Goods & Services Provident Fund Advance Against Sales Others 21. Accrued Expenses This is unsecured, falling due within one year and consists of as follows : For Expenses Workers’ Profit Participation and Welfare Funds -(Current year) Amount in Taka June 30, 2020 June 30, 2019 937,110,252 108,115,288 377,802,906 31,283,549 860,104,664 165,766,263 462,991,847 127,807,775 1,454,311,995 1,616,670,549 575,012,150 726,878,755 12,393,114 148,522,181 573,345,769 403,722,991 23,952,936 90,788,026 1,462,806,200 1,091,809,722 503,704,448 235,808,378 739,512,826 389,379,916 200,937,234 590,317,150 Consolidated Financial Statements | Annual Report 2019-20 | 102 22. Net Revenue Domestic Sales Export Sales Toll Income 23. Cost of Goods Sold This is made-up as follows : Work-in-Process (Opening) Materials Consumed (Note: 24) Factory Overhead (Note: 25) 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) 24. Materials Consumed This is made-up as follows : Opening Stock Purchase Closing Stock July 2019- June 2020 Amount in Taka July 2018- June 2019 22,808,998,367 20,300,942,074 2,751,790,244 2,502,632,517 51,159,044 13,055,204 25,611,947,655 22,816,629,795 455,530,899 10,054,371,739 3,623,979,789 262,723,223 9,840,645,571 3,165,298,448 14,133,882,427 13,268,667,242 (294,258,178) (455,530,899) 13,839,624,249 12,813,136,343 1,255,181,983 864,137,218 15,094,806,232 13,677,273,561 (253,230,551) (225,804,808) (1,128,728,172) (1,255,181,983) 13,712,847,509 12,196,286,770 3,854,012,150 3,182,574,225 10,314,568,079 10,512,083,496 (4,114,208,490) (3,854,012,150) 10,054,371,739 9,840,645,571 Consolidated Financial Statements | Annual Report 2019-20 | 103 25. Factory Overhead Salary & Allowances Repairs and Maintenance Insurance Premium Municipal Tax & Land Revenue Advertisement Registration & Renewals Travelling & Conveyance Entertainment Research and Development Rent Printing & Stationery Telephone, Cell Phone, Internet & Postage Toll Expense Electricity, Gas & Water Training & Conference Plant Certification and Regulatory Approvals Depreciation Security Expenses Other Expenses 26. Administrative Expenses Salary & Allowances Rent Repairs and Maintenance Registration & Renewals Travelling & Conveyance Entertainment Printing & Stationery Audit Fee Telephone, Cell Phone, Internet & Postage Electricity, Gas & Water Legal & Consultancy Business Acquisition Cost Company Secretarial, Regulatory Fee and AGM Expense Municipal Tax & Land Revenue Advertisement Training & Conference Depreciation Meeting Fee Security Expenses Other Expenses Consolidated Financial Statements | Annual Report 2019-20 | 104 Amount in Taka July 2019- June 2020 July 2018- June 2019 1,345,684,174 1,188,378,116 391,224,077 36,933,338 9,034,338 - 19,443,939 27,128,815 2,801,983 357,815,843 31,563,027 2,340,256 39,992 12,214,261 13,607,099 2,406,063 272,389,951 284,160,790 4,756,535 30,094,938 9,599,588 231,429,690 252,097,664 6,129,368 37,358,555 920,137,361 21,979,283 5,756,192 - 30,586,880 9,563,197 211,045,966 185,846,861 5,847,370 26,970,395 776,720,982 19,223,665 6,967,685 3,623,979,789 3,165,298,448 458,035,801 422,172,373 23,948,000 58,709,365 5,019,043 29,587,058 6,881,179 5,572,906 2,195,000 5,927,093 13,770,520 15,823,054 - 34,599,077 463,682 - 6,630,474 35,015,790 2,301,650 11,209,371 77,262,646 21,596,203 52,754,516 11,157,571 33,292,606 7,452,594 9,623,113 2,090,000 8,389,087 15,238,998 10,931,928 2,876,555 27,156,197 1,294,203 72,068 12,734,287 29,897,226 1,108,950 9,011,269 74,094,438 792,951,709 752,944,182 27. Selling, Marketing and Distribution Expenses Salary & Allowances Rent Repairs and Maintenance Travelling & Conveyance Entertainment Printing & Stationery Telephone, Cell Phone, Internet & Postage Software & Licences Electricity, Gas & Water Market Research & New Products Training & Conference Insurance Premium Sample Expense Advertisement Field Operation Events, Programs & Campaigns Brand Development CSR Expenses Sales Promotion Expenses Books, Journal and Periodicals Salesforce Logistics Clinincal Studies and Research Pharmacovigilance Literature and News Letter Registration & Renewals Export Insurance, Freight and C&F Expenses Distribution Commission Delivery Expense Depreciation & Amortization Security Expenses Bad Debts Other Expenses July 2019- June 2020 Amount in Taka July 2018- June 2019 2,092,122,649 1,746,110,649 82,034,461 15,310,108 86,475,238 10,265,214 567,898,731 520,316,148 56,439,513 37,381,062 58,915,054 26,876,458 15,361,760 69,374,568 112,364,209 29,966,989 315,070,105 2,555,997 44,293,568 186,559,672 106,570,287 81,344,051 138,324,168 8,705,778 32,042,162 5,002,419 14,768,459 209,372,035 62,603,853 225,789,212 376,830,927 335,270,945 158,799,273 19,941,269 3,692,812 5,071,769 54,522,468 36,718,700 31,583,013 2,659,362 10,614,278 57,305,983 103,797,825 32,048,113 286,686,387 2,633,824 61,562,536 224,353,163 90,550,386 15,344,589 79,557,840 8,276,327 19,773,552 4,652,433 11,394,312 207,829,781 87,161,934 273,539,867 260,673,378 315,948,856 136,144,095 18,179,874 2,894,595 1,650,556 5,496,654,323 4,801,225,276 Consolidated Financial Statements | Annual Report 2019-20 | 105 28. Other Income Interest Income Dividend Income Royalty Cash Incentive on Export Exchange Rate Fluctuation Gain / (Loss) Sale of Miscellaneous Item Profit/(Loss) on Sale of Fixed Assets 29. Finance Cost Interest on Bank Borrowings Interest on Lease Liability Interest on Loan from PF, WPPF & Welfare Fund Other Bank Charges 30. Income Tax Expenses This consists of as follows : (a) Current Tax (b) Deferred Tax Expense 31. Earnings Per Share (EPS) July 2019- June 2020 20,409,291 1,427,930 151,552,031 139,620,667 13,196,829 1,149,448 (33,797,892) 293,558,304 Amount in Taka July 2018- June 2019 36,457,527 1,491,901 95,941,689 23,646,180 (20,010,341) 952,663 1,438,046 139,917,665 787,650,804 28,711,869 166,837,043 30,604,369 824,858,713 60,109,947 128,075,983 16,717,899 1,013,804,085 1,029,762,542 1,086,668,418 22,288,436 1,108,956,854 803,760,846 101,901,936 905,662,782 (a) Earnings attributable to the Owners of the Company 3,514,687,301 3,033,402,333 (b) Weighted average number of Shares outstanding during the year 405,556,445 405,556,445 Earnings Per Share (EPS) 8.67 7.48 32. Net Asset Value (NAV) Per Share Total Assets Less Total Liabilities Less Non-controlling Interest Equity Attributable to the Owners of the Company Number of Ordinary Shares Net Asset Value (NAV) Per Share Amount in Taka June 30, 2020 June 30, 2019 50,118,741,940 49,214,092,360 (17,321,292,327) (19,349,768,523) (302,329,006) (276,006,553) 32,495,120,607 29,588,317,284 405,556,445 405,556,445 80.12 72.96 Consolidated Financial Statements | Annual Report 2019-20 | 106 33. Net Operating Cash Flow Per Share (NOCFPS) Net Cash Generated from Operating Activities Number of Ordinary Shares Net Operating Cash Flow Per Share (NOCFPS) July 2019- June 2020 Amount in Taka July 2018- June 2019 5,542,487,221 2,959,916,904 405,556,445 405,556,445 13.67 7.30 34. Reconciliation of Net Profit with Cash Flows from Operating Activities Profit after Tax 3,544,483,101 3,040,402,954 Adjustment to reconcile net profit to net cash provided by operating activities : (a) Non-cash Expenses : Depreciation Amortization Gratuity & WPPF Exchange rate fluctuation (Gain) / Loss on Foreign Currency Bank Loan Deferred Tax (b) Non-operating Items Dividend Income (Profit) / Loss on sale of Fixed Assets Effect of exchange rate changes on Cash and Cash Equivalents 1,409,987,996 1,022,846,054 91,106,370 283,148,438 (9,401,302) 22,288,436 30,401,305 (1,427,930) 33,797,892 (1,968,657) 1,606,962,596 868,369,303 74,393,000 536,738,498 25,559,859 101,901,936 26,190,223 (1,481,833) (1,438,046) (215,618) Share of Loss of Associates - 29,325,720 (c) Changes in working Capital (Increase)/Decrease in Inventories (Increase)/Decrease in Spares & Supplies (Increase)/Decrease in Accounts Receivable (Increase)/Decrease in Advance Income Tax (Increase)/Decrease in Loans, Advances & Deposits (Increase)/Decrease in Other Non-current Assets Increase/(Decrease) in Creditors and Other Payables Increase/(Decrease) in Accrued Expenses Increase/(Decrease) in Income Tax Payable Net cash Generated from Operating Activities 557,634,819 (1,713,638,869) (20,737,379) (49,401,525) 29,507,471 35,681,115 (78,809,375) 3,634,939 370,996,478 148,154,924 118,588,172 (865,183,997) (62,216,166) (573,449,512) (3,112,607) (215,273,845) (221,598) 100,096,815 171,840,255 (266,118,214) 5,542,487,221 2,959,916,904 Consolidated Financial Statements | Annual Report 2019-20 | 107 35. Related Party Disclosures a. Following transactions were carried out with related parties in the normal course of business on arms length basis: Name of Related Parties (i) I & I Services Ltd. (ii) Bangladesh Export Import Co. Ltd Nature of Transactions Value of Transaction Balance at year end Local Delivery Distribution Commission Short Term Investment & Interest there on 23,912,620,326 376,830,927 341,614,550 1,969,764,709 - b. Related party transaction between the Company and its subsidiaries have been eliminated in the consolidation. Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Cheif Financial Officer Dhaka October 28, 2020 Consolidated Financial Statements | Annual Report 2019-20 | 108 Financial Statements- Beximco Pharma- Standalone Independent Auditor’s Report To the Shareholders of Beximco Pharmaceuticals Limited Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the Statement of Financial Position as at June 30, 2020 and Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements of the Company give a true and fair view of the financial position of the Company as at June 30, 2020, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Risk Our response to the risk Valuation of Property, Plant and Equipment (PPE) The carrying value of the PPE was Tk. 33,244,656,330 as at June 30, 2020. Expenditures are capitalized if they create new assets or enhance the existing assets, and expensed if they relate to repair or maintenance of the assets. Classification of the expenditures involves judgment. The useful lives of PPE items are based on management’s estimates regarding the period during which the assets or its significant components will be used. The estimates are based on historical experience and market practice and take into consideration the physical condition of the assets. The valuation of PPE was identified as a key audit matter due to the significance of this balance to the financial statements and that there is significant measurement uncertainty involved in this valuation. See Note No. 4 to the financial statements Our audit included the following procedure: We assessed whether the accounting policies in relation to the capitalization of expenditures are in compliance with IFRS and found them to be consistent. We inspected a sample of invoices and L/C documents to determine whether the classification between capital and revenue expenditure was appropriate. We evaluated whether the useful lives determined and applied by the management were in line with historical experience and the market practice. • We checked whether the depreciation of PPE items was commenced timely, by comparing the date of the reclassification from capital work in progress to ready for use, with the date of the act of completion of the work. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 111 • • • Risk Our response to the risk Valuation of Inventory The inventory of Tk. 5,528,438,165 as at June 30, 2020 was held at different locations across the country. We verified the appropriateness of management’s assumptions applied in calculating the value of the inventory by: Inventories are carried at the lower of cost and net realizable value. As a result, the management apply judgment in determining the appropriate values for slow-moving or obsolete items. Since the value of Inventory is significant to the Financial Statements and there is significant measurement uncertainty involved in this valuation, the valuation of inventory was significant to our audit. See Note No. 9 to the financial statements Evaluating the design and implementation of key inventory controls. Attending inventory counts on sample basis and reconciling the count results to the inventory listing to test the completeness of data. Reviewing the requirement of inventory provisioning and action there upon by the management. Comparing the net realizable value obtained through a detailed review of sales subsequent to the year-end, to the cost price of a sample of inventories. Contingent Liabilities The Company is subject to a number of claims and litigations. The amounts of claims are significant and estimates of the amounts of provisions or contingent liabilities are subject to management judgement. These claims and regulatory matters are uncertain in timing of resolutions and amount or consequences. These claims and litigation matters were a key audit matter due to the amounts involved, potential consequences and the inherent difficulty in assessing the outcome. The assessment of whether or not a liability should be recognized involves judgement from management. We obtained an understanding, evaluated the design and tested the operational effectiveness of the company’s key controls over the legal provision and contingency processes. We enquired to those charged with governance to obtain their view on the status of the litigations. We enquired of the company’s internal legal counsel for the litigation and inspected internal notes and reports. We also reviewed formal confirmations in this regard from external counsel. We also validated the completeness and appropriateness of the related disclosures in Note No. 49 of the financial statements. Related party transactions The Company has related party transactions with its subsidiaries and other related parties as described in Note No. 40 of the financial statements. We focused on identification of related parties and disclosure of related party transactions in accordance with relevant accounting standards. Our audit procedures amongst others included the following: Evaluated the design and tested the operating effectiveness of controls over identification and disclosure of related party transactions. Evaluated the transactions among the related parties and tested material accounts balances. Evaluated the disclosures in the financial statements in compliance with IAS 24. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 112 • • • • • • • Other Information Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the financial statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on such work we perform, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance. Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls Management is responsible for the preparation and fair presentation of the financial statements of the Company in accordance with IFRSs, The Companies Act 1994, The Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 113 • • • • • We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994, The Securities and Exchange Rules 1987 and relevant notifications issued by Bangladesh Securities and Exchange Commission, 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 accounts as required by law have been kept by the company so far as it appeared from our examination of those books; c. The company’s Statement of Financial Position (Balance sheet) and Statement of Profit or Loss and Other Comprehensive Income (Profit & Loss Account) dealt with by this report are in agreement with the books of accounts and; d. The expenditures incurred and payment made were for the purpose of the Company’s business for the year. The engagement partner on the audit resulting in the independent auditor’s report is Hasan Mahmood, FCA Dhaka October 28, 2020 M. J. Abedin & Co. Chartered Accountants Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 114 Beximco Pharmaceuticals Limited Statement of Financial Position As at June 30, 2020 ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Right-of-use Assets Intangible Assets Investment in Subsidiaries Investment In Associates Other Investments 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 Unrealized Gain/(Loss) Retained Earnings Non-Current Liabilities Long Term Borrowings-Net of Current Maturity Liability for Gratuity and WPPF & Welfare Funds 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 June 30, 2020 4 4 (c) 5 6 7 8 9 10 11 12 13 14 15 16 4(b) 17 18 19 20 21 22 23 24 36,240,980,000 33,244,656,330 237,100,169 580,960,330 2,145,185,900 29,325,720 3,751,551 12,438,793,173 5,528,438,165 735,703,950 3,213,666,345 2,345,039,872 - 615,944,841 48,679,773,173 32,356,359,135 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,125,767,451 926,375 19,920,038,261 5,692,973,418 1,641,924,046 2,015,304,583 2,035,744,789 10,630,440,620 6,987,530,622 1,421,497,401 1,332,058,976 609,401,272 16,803,657 263,148,692 48,679,773,173 Amount in Taka June 30, 2019 34,999,402,741 32,010,669,238 198,770,806 610,121,698 2,145,185,900 29,325,720 5,329,379 12,793,492,489 5,573,549,171 715,341,316 3,325,890,597 2,273,040,821 323,364,536 582,306,048 47,792,895,230 29,600,843,240 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,156,858,985 6,296,204,472 2,544,732,500 1,748,900,794 2,002,571,178 11,895,847,518 8,701,024,499 1,487,254,413 1,037,089,244 496,178,291 7,002,833 167,298,238 47,792,895,230 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Beximco Pharmaceuticals Limited Statement of Profit or Loss and Other Comprehensive Income For the year ended June 30, 2020 Notes July 2019 - June 2020 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 & Welfare Funds Contribution to WPPF & Welfare Funds 25 26 29 30 31 32 33 23,557,775,896 (12,753,521,901) 10,804,253,995 (5,690,899,854) (699,940,325) (4,990,959,529) 5,113,354,141 445,556,500 (957,931,515) 4,600,979,126 Amount in Taka July 2018 - June 2019 21,156,331,039 (11,365,929,686) 9,790,401,353 (4,991,627,668) (663,362,904) (4,328,264,764) 4,798,773,685 245,184,534 (938,074,846) 4,105,883,373 (219,094,244) (195,518,256) Profit Before Tax 4,381,884,882 3,910,365,117 Income Tax Expenses Current Tax Deferred Tax Income/ (Expense) Profit after Tax Other Comprehensive Income - Unrealized Gain/(Loss) Total Comprehensive Income Earnings Per Share (EPS) 35 36 34 (1,018,485,009) (983,282,880) (35,202,129) 3,363,399,873 (1,577,828) 3,361,822,045 (886,864,143) (792,365,900) (94,498,243) 3,023,500,974 (1,852,559) 3,021,648,415 8.29 7.46 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 116 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Beximco Pharmaceuticals Limited Statement of Changes in Equity For the year ended June 30, 2020 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/(Loss) Retained Earnings Total Amount in Taka Balance as on July 01, 2019 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,156,858,985 29,600,843,240 Total Comprehensive Income for the Year : Profit for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - - - - - - - (8,114,071) 2,028,518 - (1,577,828) 3,363,399,873 - 3,363,399,873 (1,577,828) - - - (608,334,668) (608,334,668) 8,114,071 - - 2,028,518 Balance as on June 30, 2020 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,125,767,451 926,375 19,920,038,261 32,356,359,135 Net Asset Value (NAV) Per Share (Note-37) 79.78 For the Year ended June 30, 2019 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/(Loss) Retained Earnings Total Balance as on July 01, 2018 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,159,277,845 4,356,762 14,631,128,276 27,104,389,931 Total Comprehensive Income for the Year : Profit for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - (1,852,559) 3,023,500,974 - 3,023,500,974 (1,852,559) - (506,945,556) (506,945,556) - - - - - - - - (9,175,291) (18,249,550) - - 9,175,291 - - (18,249,550) Balance as on June 30, 2019 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,156,858,985 29,600,843,240 Net Asset Value (NAV) Per Share (Note-37) 72.99 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 117 Beximco Pharmaceuticals Limited Statement of Cash Flows For the year ended June 30, 2020 Cash Flows from Operating Activities : Receipts from Customers and Others Payments to Suppliers and Employees Cash Generated from Operations Interest Paid Interest Received Income Tax Paid Notes July 2019 - June 2020 24,096,145,079 (17,060,430,359) 7,035,714,720 (957,931,515) 20,409,291 (887,432,426) Net Cash Generated from Operating Activities 39 5,210,760,070 Amount in Taka July 2018 - June 2019 20,798,619,790 (16,112,060,651) 4,686,559,139 (938,074,846) 36,457,527 (1,058,484,114) 2,726,457,706 (4,337,220,303) (128,619,282) (19,999,900) 17,267,628 1,491,901 16,032,638 (2,224,544,487) (31,745,002) - 3,572,001 21,454,903 323,364,536 (1,907,898,049) (4,451,047,318) Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment Intangible Assets Investment in Subsidiary Disposal of Property, Plant and Equipment Dividend Received Decrease in 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 Dividend Paid Net Cash (Used in)/from Financing Activities Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Effect of Exchange Rate Changes on Cash and Cash Equivalents Cash and Cash Equivalents at End of Year Net Operating Cash Flow Per Share (959,164,164) (1,713,493,877) (598,533,844) (3,271,191,885) 31,670,136 582,306,048 1,968,657 615,944,841 (1,296,871,228) 3,738,926,253 (504,483,537) 1,937,571,488 212,981,876 369,108,554 215,618 582,306,048 12.85 6.72 14 38 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2020 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Dhaka October 28, 2020 Mohammad Ali Nawaz Chief Financial Officer Per our report of even date M.J. Abedin & Co. Chartered Accountants Beximco Pharmaceuticals Limited Notes to the Financial Statements As at and for the year ended June 30, 2020 1. Reporting entity 1.1. About the company Beximco Pharmaceuticals Limited (BPL/ the Company) is a Public Limited Company incorporated in Bangladesh in 1976. It is a leading manufacturer of pharmaceutical formulations and Active Pharmaceutical Ingredients (APIs). 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 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). In 2018, BPL acquired 85.22% shares of Nuvista Pharma Limited – a non-listed pharmaceutical company in Bangladesh specializing in hormones and steroid drugs and took over control of its management. 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. The manufacturing facilities of the Company are certified by leading global regulatory authorities including United States Food and Drug Administration (USFDA). 1.2. Nature of Business The Company is engaged in manufacturing and marketing of generic pharmaceuticals formulation products covering a wide range of therapeutic categories. It offers products in different dosage forms including Solid, Liquid, Cream and Ointment, Suppositories, Metered Dose Inhaler, Dry Powder Inhaler, Nasal Spray, Sterile, Lyophilized Injectable, Large Volume Intravenous Fluids. BPL also manufactures Active Pharmaceutical Ingredients (APIs) and renders contract manufacturing services to other companies. Products of the Company are sold in domestic and international markets. 2. Basis of Preparation of Financial Statements 2.1. 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). 2.2. Basis of Measurement The financial statements have been prepared on Historical Cost Basis except land, building and plant & machinery revalued on December 31, 2008, investment in shares of listed company being valued at year end quoted price and the cash flow statement being prepared on cash basis. 2.3. Presentation of Financial Statements The presentation of the financial statements is in accordance with the guidelines provided by IAS 1: Presentation of Financial Statements. The financial statements comprise of: a. Statement of Financial Position as at the end of the year June 30, 2020; b. Statement of Profit or Loss and Other Comprehensive Income for the year ended June 30, 2020; c. Statement of Changes in Equity for the year ended June 30, 2020; d. Statement of Cash Flows for the year ended June 30, 2020; and e. notes, comprising summary of significant accounting policies and explanatory information. 2.4. Reporting Period and Comparative Information The Financial statements cover 12 months period starting from July 1, 2019 to June 30, 2020. The last audited financial statements were prepared for the year ending June 30, 2019. Figures for earlier year have been re-arranged wherever considered necessary to ensure better comparability with the current year. 2.5. Authorization for issue The financial statements have been authorized for issue by the Board of Directors on October 28, 2020. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 119 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. 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, others payable, capitalization of assets 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 from Contracts with Customers In compliance with the requirements of IFRS 15: Revenue from Contracts with Customers, revenue is recognized when the company fulfills the performance obligations in contract with the customers. It usually occurs when customers take possession of the products or goods are delivered at destination specified in the contracts and recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. Revenue from sale of goods is measured at the fair value of the consideration received or receivable net of returns and allowances, trade discounts, rebates and Value Added Tax (VAT). 3.2. Property, Plant and Equipment (PP&E) 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. 3.2.3. Depreciation Depreciation is provided to amortize 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. Right-of-use Assets IFRS 16: Leases has introduced a single on-balance sheet lease accounting model for leases and replaces the previously adopted IAS 17: Leases. The standard requires that an asset acquired under a lease be recognized as Right of use Asset and the corresponding Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 120 liability as lease liability. The Leasee shall measure the lease liability at the present value of the future lease payment discounted using the interest rate implicit in the lease. The asset shall be depreciated over the lease period and the interest on the lease shall be charged as finance expense. The Company has been consistently recording its underlying assets acquired under lease as Assets and the corresponding obligation as Lease Liabilities in the financial statements. The company has reclassified the assets acquired under the lease into “Right-of-use Assets” and presented them in the Statement of Financial Position following IFRS 16. Interest costs on lease liabilities and depreciation of right-of- use Assets are charged to the profit or loss account. 3.4. 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 software for internal use are capitalized as intangible fixed assets where the software supports a significant business system and the expenditure leads to the creation of a durable asset. Also, the research and development expenditures that are definite to yield benefit to the company are capitalized. 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. Financial Instruments comprise Financial Assets and Financial Liabilities which are recognized, classified, measured and reported following IFRS-9: Financial Instruments. 3.5.1. Financial assets Financial assets of the company include cash and cash equivalents, accounts receivable, other receivables and investments in marketable securities. 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 a price quoted in the stock exchange at year end. Investment in other shares is valued at cost. 3.5.2. Financial Liability 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 3.6.1. Financial Assets Accounts receivable and other receivables are assessed at each reporting date to determine whether there is any objective evidence of impairment. Financial assets are 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. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 121 3.6.2. 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 Profit or Loss and Other Comprehensive Income and accounted for in accordance with the requirements of IAS 12: Income Taxes. 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 25%. However, profit generated from export is subject to a reduced 12.5% tax. Additionally certain other incomes are also liable to a lower rates which can be found in Note: 34 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). In BPL’s case deferred tax arises due to the difference in the carrying amount and the tax base value of the Property, Plant & Equipment, Gratuity & Bad debts provisions. 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. 3.10. Other Income Dividend 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. Export Incentives Cash Incentives for export are recognized when all conditions as laid done in the relevant incentive scheme including receipt of export remittances are satisfied and the right to claim the incentives are established. Royalty Royalty income is accounted for on accrual basis on fulfillment of the terms laid in the agreement between the contracting parties giving BPL the right to claim the Royalty. Toll Income Toll income is recognized when services are delivered and there remains no unfulfilled obligation in connection with the service. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 122 Interest Income Interest income is recognized on accrual basis. 3.11. Borrowing Cost Borrowing costs are recognized as expenses in the period in which they are incurred excepting those that qualifies for capitalization 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: 3.12.1. 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. Employees contribute 10% of their basic salary to the provident along with the Company that makes an 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. 3.12.2. Defined Benefit Plan (Gratuity) This represents unfunded gratuity scheme for its permanent employees. Though no valuation was done to quantify actuarial liabilities as per the IAS 19: Employee Benefits, such valuation is not likely to yield a result significantly different from the current provision. 3.12.3. Contribution to Workers’ Profit Participation and Welfare Funds (WPPF) This represents 5% of net profit before tax contributed by the company as per provisions of the Bangladesh Labor (amendment) Act 2013 and is payable to workers as defined in the said law. 3.12.4. 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. 3.12.5. 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 is not accounted for but disclosed in the notes to the accounts in accordance with the requirements of the International Accounting Standard (IAS) 1: Presentation of Financial Statements. Also the proposed dividend is not considered as liability in accordance with the requirement 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 by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. Diluted Earnings per Share No diluted EPS is required to be calculated for the year as there was no scope for dilution during the year under review. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 123 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. Exchange differences are charged off as revenue expenditure 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 The 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. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 124 4 . Property, Plant and Equipment As on June 30, 2020 Amount in Taka Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Total Property Plant & Equipment Right-of-use Assets Total Cost As on July 01, 2019 Additions Transferred in & Capitalized Disposal during the Year Cost as on June 30, 2020 3,343,741,442 - - - 7,497,797,147 1,964,386 - - 14,503,959,431 59,327,454 - (68,147,647) 267,440,926 13,630,814 - - 690,157,709 5,219,741 - (9,372,204) 568,771,334 18,322,149 - (1,278,000) 26,871,867,989 98,464,544 - (78,797,851) 308,467,914 81,724,782 - - 27,180,335,903 180,189,326 - (78,797,851) 3,343,741,442 7,499,761,533 14,495,139,238 281,071,740 686,005,246 585,815,483 26,891,534,682 390,192,696 27,281,727,378 Accumulated Depreciation As on July 01, 2019 Depreciation Charged Adjustment for Assets disposed off Accumulated Depreciation as on June 30, 2020 - - - - 1,934,157,220 182,499,881 - 5,704,119,053 602,789,053 (34,640,793) 118,839,763 14,860,116 - 463,605,963 40,958,686 (5,820,178) 365,410,593 30,330,293 (942,296) 8,586,132,592 871,438,029 (41,403,267) 109,697,108 43,395,419 - 8,695,829,700 914,833,448 (41,403,267) 2,116,657,101 6,272,267,313 133,699,879 498,744,471 394,798,590 9,416,167,354 153,092,527 9,569,259,881 Net Book Value June 30, 2020 3,343,741,442 5,383,104,432 8,222,871,925 147,371,861 187,260,775 191,016,893 17,475,367,328 237,100,169 17,712,467,497 Capital Work in Progress 4 (a) Carrying Value as on June 30, 2020 As on June 30, 2019 15,769,289,002 - 15,769,289,002 33,244,656,330 237,100,169 33,481,756,499 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Office Equipment Total Property Plant & Equipment Right-of-use Assets Total Cost As on July 01, 2018 Additions Transferred in & Capitalized Reclassified as Right-of-use Assets Disposal during the Year 3,343,741,442 - - - - 6,794,566,920 - 703,230,227 - - 12,154,522,473 1,465,749,248 905,532,878 - (21,845,168) 247,566,170 18,622,458 1,252,298 - - 926,148,671 88,962,490 - (308,467,914) (16,485,538) 542,239,692 25,435,247 1,096,395 - - 24,008,785,368 1,598,769,443 1,611,111,798 (308,467,914) (38,330,706) - - - 308,467,914 24,008,785,368 1,598,769,443 1,611,111,798 - (38,330,706) Cost as on June 30, 2019 3,343,741,442 7,497,797,147 14,503,959,431 267,440,926 690,157,709 568,771,334 26,871,867,989 308,467,914 27,180,335,903 Accumulated Depreciation As on July 01, 2018 Depreciation Charged Reclassified as Right-of-use Assets Adjustment for Assets disposed off Accumulated Depreciation as on June 30, 2019 - - - - - 1,780,559,564 153,597,656 - - 5,238,747,927 473,926,803 - (8,555,677) 104,536,829 14,302,934 - - 503,064,602 84,090,016 (109,697,108) (13,851,547) 334,366,427 31,044,166 - - 7,961,275,349 756,961,575 (109,697,108) (22,407,224) - - 109,697,108 - 7,961,275,349 756,961,575 - (22,407,224) 1,934,157,220 5,704,119,053 118,839,763 463,605,963 365,410,593 8,586,132,592 109,697,108 8,695,829,700 Net Book Value June 30, 2019 3,343,741,442 5,563,639,927 8,799,840,378 148,601,163 226,551,746 203,360,741 18,285,735,397 198,770,806 18,484,506,203 Capital Work in Progress 4 (a) Carrying Value as on June 30, 2019 13,724,933,841 - 13,724,933,841 32,010,669,238 198,770,806 32,209,440,044 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 125 4 (a) Capital Work in Progress is arrived at as follows : June 30, 2020 June 30, 2019 Amount in Taka Opening Balance Addition during the year Transferred & Capitalized Building and Other Constructions Plant & Machinery Furniture & Fixture Office Equipment 13,724,933,841 2,044,355,161 15,769,289,002 - - - - - 12,597,594,779 2,738,450,860 15,336,045,639 (1,611,111,798) (703,230,227) (905,532,878) (1,252,298) (1,096,395) Closing balance at end of year 15,769,289,002 13,724,933,841 4 (b). Revaluation Surplus Opening Balance Adjustment for depreciation on revalued assets Adjustment for Deferred Tax on revalued assets 4 (c). Right-of-use Assets At Cost Accumulated Depreciation 5. Intangible Assets 1,131,853,004 (8,114,071) 2,028,518 1,159,277,845 (9,175,291) (18,249,550) 1,125,767,451 1,131,853,004 390,192,696 (153,092,527) 237,100,169 308,467,914 (109,697,108) 198,770,806 Particulars Product development, Licensing and Marketing Rights ERP Project Total Cost As on July 01, 2019 Addition During the year As on June 30, 2020 Amortization As on July 01, 2019 Amortized During the year As on June 30, 2020 618,952,047 29,103,370 648,055,417 175,934,051 44,196,000 220,130,051 167,103,702 2,641,632 169,745,334 - 16,710,370 16,710,370 786,055,749 31,745,002 817,800,751 175,934,051 60,906,370 236,840,421 Carrying Value as on June 30, 2020 427,925,366 153,034,964 580,960,330 Carrying Value as on June 30, 2019 443,017,996 167,103,702 610,121,698 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 126 6. Investment in Subsidiaries Nuvista Pharma Ltd. Beximco Pharma API Ltd. June 30, 2020 2,125,186,000 19,999,900 2,145,185,900 Amount In Taka June 30, 2019 2,125,186,000 19,999,900 2,145,185,900 a. The Company acquired 10,013,474 shares representing 85.22% of the Paid Up Capital of Nuvista Pharma Ltd (NPL) . The investment in subsidiary represents the cost of the aforesaid acquisition. b.Beximco Pharma API Limited (API) was formed with a paid up capital of Tk. 20,000,000 divided into 2,000,000 shares of Tk. 10 each, all of which excepting 10 shares are held by Beximco Pharmaceuticals Ltd (BPL). c. Investment in subsidiaries has been accounted for using cost method as per IAS 27: Separate Financial Statements, in preparing financial statements of the Company. 7. Investment in Associates This represents value of 1,500,000 Ordinary Shares of Malaysian Ringgit (RM) 1 each issued to Beximco Pharmaceuticals Ltd. by BioCare Manufacturing Sdn Bhd (“BioCare”), Malaysia. Beximco Pharmaceuticals Ltd. was issued 30% of the equity share of the Malaysian based company for providing full technical support to set up a manufacturing facility to produce specialized pharmaceutical products in Seri Iskandar Pharmaceutical Park, Perak, Malaysia. BioCare is considered to be an associate of BPL as per IAS 28: Investment in Associates and Joint Ventures. The Company follows Cost method for the investment as per IAS 27: Separate Financial Statements. 8. Other Investments a. Investment Details (Taka): Bangladesh Export Import Co. Ltd.(Note c) Central Depository Bangladesh Ltd. (CDBL) b. Number of Shares: Bangladesh Export Import Co. Ltd. Central Depository Bangladesh Ltd. (CDBL) July 01, 2019 Addition/ Adjustment Unrealised Gain/(Loss) 3,759,929 1,569,450 5,329,379 (1,577,828) - (1,577,828) June 30, 2020 2,182,101 1,569,450 3,751,551 July 01, 2019 June 30, 2020 167,854 571,182 167,854 571,182 c. The shares of Bangladesh Export Import Co. Ltd. are listed in Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. on the last working day of the year 2019-2020 was Tk. 13.00 (2018-2019: Tk.22.40). The fair value loss of Tk. 1,577,828 has been accounted for as Other Comprehensive Income following IFRS:9 Financial Instruments. d. Shares of Central Depository Bangladesh Ltd.(CDBL) are not traded . The value at acquisition is considered to be the fair value as on the Balance Sheet date. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 127 9. Inventories Amount in Taka This consists of as follows : June 30, 2020 June 30, 2019 Finished Goods Work in Process Raw Materials Packing Materials Laboratory Chemicals Physician Samples R & D Materials Materials in Transit 10. Spares & Supplies This consists of as follows : Spares & Accessories Stock of Stationery Literature & Other Materials 11. Accounts Receivable This consists of : Trade Receivable Other Receivable 972,564,349 249,838,762 2,955,008,164 921,692,743 38,688,339 69,468,235 15,232,992 305,944,581 5,528,438,165 1,155,804,007 420,135,832 2,590,103,665 1,072,840,831 27,356,035 85,135,960 12,004,065 210,168,776 5,573,549,171 649,953,543 14,209,600 71,540,807 735,703,950 569,443,182 13,100,977 132,797,157 715,341,316 2,978,567,354 235,098,991 3,213,666,345 3,235,634,727 90,255,870 3,325,890,597 Accounts Receivable is reported net of provision for bad debts of Tk. 5,144,353. It includes an amount of Tk. 817,658,851, equivalent USD 9,710,913 (June 30, 2019: Tk. 771,731,426, USD 9,214,704) receivable against export sales. Part of the export sales receivables are against Letter of Credit while the rest are unsecured but considered good. Accounts Receivable also includes Tk. 1,969,764,709 due from I & I Services Ltd., who provides distribution service to the Company and a “Related Party”. The maximum amount due from the company during the year was Tk. 2,719,264,917 on April 30, 2020. Additionally Tk 17,612,694 and Tk. 544,360 is receivable from subsidiary companies- Nuvista Pharma Ltd. and Beximco Pharma API Ltd. respectively. 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. Aging of Trade Receivables : Amount due within 6 months Amount due for 6 months & above 2,930,309,371 48,257,983 2,978,567,354 3,167,422,788 68,211,939 3,235,634,727 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 128 12. Loans, Advances and Deposits Amount in Taka This is unsecured, considered good and consists of as follows : June 30, 2020 June 30, 2019 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 Prepaid Insurance Overseas Liaison Office Others 281,675,299 419,480,062 6,636,489 76,960,836 10,821,850 209,723,000 263,194,117 35,585,120 157,725,898 29,898,335 154,443,129 442,658,728 150,084,798 40,724,614 65,427,597 159,119,478 306,316,482 6,320,466 62,559,041 10,821,850 224,723,000 253,580,629 37,773,704 152,573,688 13,420,366 199,755,875 592,000,065 160,757,931 35,318,373 57,999,873 2,345,039,872 2,273,040,821 a. The maximum amount due from the employees during the year was Tk. 161,359,843 on May 31, 2020. 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. Prepaid Insurance includes the insurance premium paid to German Export Credit Agency Euler Hermes Aktiengesellschaft, Hamburg for guarantee of the project loan which is an integral part of the overseas loan financing agreement with ODDO BHF Aktiengesellschaft, Frankfurt, Germany. 13. Short Term Investment The Company has fully recalled the Short Term Investment with Bangladesh Export Import Company Limited (Beximco Ltd.). 14. Cash and Cash Equivalents This consists of as follows : a. Cash in Hand (including Imprest Cash) b. Cash at Bank : Current & FC Account FDR Account June 30, 2020 Amount in Taka June 30, 2019 170,283,669 235,175,572 407,279,678 38,381,494 615,944,841 310,734,039 36,396,437 582,306,048 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 129 15. Issued Share Capital a. Authorized : 1,000,000,000 Ordinary Shares of Tk. 10 each 50,000,000 Fully convertible 5 % Preference Shares of Tk. 100 each b. Issued, Subscribed and Paid-up : Amount in Taka June 30, 2020 June 30, 2019 10,000,000,000 10,000,000,000 5,000,000,000 5,000,000,000 15,000,000,000 15,000,000,000 51,775,750 Ordinary Shares fully paid-up in cash 316,538,298 Ordinary Shares Issued as stock dividend 517,757,500 517,757,500 3,165,382,980 3,165,382,980 5,951,250 Ordinary Shares issued in Exchange of Shares of Beximco Infusions Ltd. 59,512,500 59,512,500 31,291,147 Ordinary Shares issued on conversion of Preference Shares 312,911,470 312,911,470 4,055,564,450 4,055,564,450 5,951,250 Ordinary Shares of Tk. 10 each were issued to the shareholders of Beximco Infusions Ltd. on it’s merger with Beximco Pharmaceuticals Ltd. In 2005. 41,000,000 fully convertible 5% preference shares of Tk. 100 each were issued in 2009. 50% of the preference shares were converted into 16,169,191 ordinary shares of Tk. 10 each on February 1, 2010. The rest 50% were converted into 15,121,956 ordinary shares of Tk. 10 each on May 2, 2010. 90,943,627 Ordinary Shares have been issued as underlying shares for the GDRs listed with AIM of London Stock Exchange. c. Composition of Shareholding: Sponsors: A S F Rahman Salman F Rahman Other Directors and Associates Public Issue: GDRs- AIM of London Stock Exchange Foreign Portfolio Investors (DSE/CSE) Institutions (ICB, ICB Investors Accounts & Others) Individual Shareholders June 30, 2020 June 30, 2019 Number of shares % of Share Capital Number of shares % of Share Capital 8,235,353 8,254,632 37,019,789 53,509,774 90,943,627 48,720,273 148,762,402 63,620,369 352,046,671 405,556,445 2.03 2.04 9.13 8,235,353 8,254,632 37,019,789 13.20 53,509,774 22.42 12.01 36.68 15.69 86.80 90,943,627 60,060,586 136,573,957 64,468,501 352,046,671 100 405,556,445 2.03 2.04 9.13 13.20 22.42 14.81 33.67 15.91 86.80 100 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 130 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 % of Shareholders Number of Shares % of Share Capital June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 41,587 12,340 1,059 484 159 81 58 129 162 42 41,958 12,144 980 469 154 77 70 121 163 41 74.13% 22.00% 1.89% 0.86% 0.28% 0.14% 0.10% 0.23% 0.29% 0.07% 100% 74.69% 21.62% 1.74% 0.83% 0.27% 0.14% 0.12% 0.22% 0.29% 0.07% 6,052,732 18,684,552 7,555,392 6,983,130 4,044,868 2,832,929 2,666,648 9,472,994 50,405,277 296,857,923 5,876,193 17,827,041 7,015,971 6,683,931 3,819,206 2,686,413 3,220,468 8,692,718 51,410,310 298,324,194 100% 405,556,445 405,556,445 1.49% 4.61% 1.86% 1.72% 1.00% 0.70% 0.66% 2.34% 12.43% 73.20% 100% 1.45% 4.40% 1.73% 1.65% 0.94% 0.66% 0.79% 2.14% 12.68% 73.56% 100% Total 56,101 56,177 e. Market Price of Ordinary Shares: The shares are listed with Dhaka and Chittagong Stock Exchanges of Bangladesh while the GDRs with the AIM of London Stock Exchange. Price of each Share / GDR on the last working day of the fiscal year were: Dhaka Stock Exchange Chittagong Stock Exchange AIM June 30, 2020 June 30, 2019 Tk. Tk. GBP 69.20 69.10 0.355 83.50 84.30 0.389 f. Option on unissued Ordinary Shares : There is no option on unissued shares as on June 30, 2020. 16. Excess of Issue Price over Face Value of GDRs This represents excess of issue price of GDRs over the face value of underlying 28,175,750 ordinary shares issued against the same number of GDRs less GDRs issue expenses. 17. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Amount in Taka June 30, 2020 June 30, 2019 Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany 1,437,978,890 Lease Liability Term Loan- AB Bank Limited 203,945,156 - 1,641,924,046 1,974,611,879 239,710,340 330,410,281 2,544,732,500 a. Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany This represents part of the foreign currency loan of US$ 51.559 million and Euro 24.386 million to partially finance the machinery and equipment for expansion and diversification project being implemented by the Company. US Dollar loan carries interest at 6 month’s USD LIBOR plus 2.25% while Euro loan is priced at 6 month’s EURIBOR plus 1.30% interest per annum. Both the loans are secured by exclusive first charge by way of hypothecation against machinery and equipment procured under the pertinent loans. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 131 b. Lease Liability This consists of as follows: Within one year Within two to five years c. Term Loan-AB Bank Limited June 30, 2020 106,584,243 203,945,156 310,529,399 Amount in Taka June 30, 2019 164,157,902 239,710,340 403,868,242 This loan is payable in quarterly installments and is secured by hypothecation along with Janata Bank on all fixed and floating assets of the Company excepting the machinery and equipment financed by ODDO BHF Aktiengesellschaft, Frankfurt, Germany. The loan maturing in the current period has been reported under Long Term Borrowing - Current Maturity. 18. Liability for Gratuity and WPPF & Welfare Funds Liability for gratuity is the amount payable to the permanent employees at the time of separation from the Company. The liability for WPPF refers to the undistributed portion of Workers’ Profit Participation and Welfare Fund lying with the Company. Further detail is available at Note 3.12 a. Gratuity Payable Opening Balance Provisions during the year Paid during the year Closing balance at end of the Year b. Workers Profit Participation and Welfare Fund 19. Deferred Tax Liability Opening Balance Addition during the Year : Deferred Tax on Assets-Note : 34 (b) Adjustment for Deferred Tax on revalued amount Closing Balance at end of the Year 20. Short Term Borrowings Janata Bank Ltd. - Cash Credit-Hypothecation Loan AB Bank Limited Liability for UPAS Letter of credit First Security Islamic Bank Ltd. 933,437,744 184,425,140 1,117,862,884 (60,942,624) 1,056,920,260 958,384,323 2,015,304,583 660,004,303 306,176,739 966,181,042 (32,743,298) 933,437,744 815,463,050 1,748,900,794 2,002,571,178 1,889,823,385 35,202,129 (2,028,518) 94,498,243 18,249,550 2,035,744,789 2,002,571,178 3,963,918,204 1,106,352,880 1,406,768,304 510,491,234 6,987,530,622 5,336,101,392 2,491,112,625 873,810,482 - 8,701,024,499 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 132 a. Short term borrowings from Janata Bank represents revolving credit facilities renewable annually. The borrowing carries 9% interest. b. Loan from AB Bank represents the Time Loan taken by the Company to settle UPAS/Deferred LC liabilities related to import of various project materials other than machinery and equipment for different projects under implementation. c. The loan with Janata Bank and AB Bank is secured by hypothecation of fixed and floating assets of the Company excepting the machinery and equipment financed by ODDO BHF Aktiengesellschaft, Frankfurt, Germany. d. The borrowing from First Security Islami Bank Ltd represents a Bai-Murabaha (Hypo) investment limit of Tk.50 crore approved for purchasing raw and packing materials. The facility is secured by corporate guarantee and second charge by way of hypothecation on present and future fixed and floating assets of the company. 21. Long Term Borrowings-Current Maturity Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Lease Liability Term Loan-AB Bank Limited 22. Creditors and Other Payables Goods & Services Provident Fund Advance Against Sales Others 23. Accrued Expenses This is unsecured, falling due within one year and consists of as follows : For Expenses Workers’ Profit Participation and Welfare Funds - (current year) 24. Income Tax Payable Opening Balance Provision for the year Short / (Excess) Provision for previous year Advance Income Tax Paid 25. Net Sales Revenue Domestic Sales Export Sales June 30, 2020 937,110,252 106,584,243 377,802,906 Amount in Taka June 30, 2019 860,104,664 164,157,902 462,991,847 1,421,497,401 1,487,254,413 485,464,404 726,878,755 12,393,114 107,322,703 518,625,291 403,722,991 23,952,936 90,788,026 1,332,058,976 1,037,089,244 390,307,028 219,094,244 609,401,272 167,298,238 983,282,880 - 1,150,581,118 (887,432,426) 263,148,692 300,660,035 195,518,256 496,178,291 433,416,452 809,208,912 (16,843,012) 1,225,782,352 (1,058,484,114) 167,298,238 July 2019 - June 2020 July 2018 - June 2019 20,805,985,652 2,751,790,244 23,557,775,896 18,653,698,522 2,502,632,517 21,156,331,039 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 133 a. Revenue consists of sales of pharmaceutical formulation products of wide range of therapeutic categories in different dosage forms and strengths and Active Pharmaceutical Ingredients (APIs). The quantity sold under different broad categories are as follows: Product Category Tablet, Capsule, Suppository & DPI Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable,Inhaler and Insulin Diet Care Products Active Pharmaceutical Ingredients Liquid Nitrogen Quantity July 2019 - June 2020 July 2018 - June 2019 6,778.75 114.54 - 190,552 438,734 5,778.50 111.96 6,572 163,538 379,012 Unit Million pcs. Million pcs. Pcs Kg Liter b. Export Sales in foreign currency equivalent amounts to US$ 32,745,911 in 2019-20 as against US$ 30,064,573 in 2018-19. 26. Cost of Goods Sold This is made-up as follows : Work-in-Process (Opening) Materials Consumed (Note: 27) Factory Overhead (Note: 28) 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 June 30, 2020 Tablet, Capsule, Suppository & DPI Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin Active Pharmaceutical Ingredients Stock as June 30, 2019 Tablet, Capsule, Suppository & DPI Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin July 2019 - June 2020 Amount in Taka July 2018 - June 2019 420,135,832 205,169,517 9,491,277,964 9,461,947,813 3,153,943,937 2,749,978,649 13,065,357,733 12,417,095,979 (249,838,762) (420,135,832) 12,815,518,971 11,996,960,147 1,155,804,007 744,138,733 13,971,322,978 12,741,098,880 (245,236,728) (219,365,187) (972,564,349) (1,155,804,007) 12,753,521,901 11,365,929,686 Unit Quantity Value (Tk.) Million pcs. Million pcs. Kg 451.57 7.23 5,674 535,160,110 421,235,247 16,168,992 972,564,349 Unit Quantity Value (Tk.) Million pcs. Million pcs. 601.66 9.81 655,507,429 471,081,153 Active Pharmaceutical Ingredients Kg 9,390 29,215,425 1,155,804,007 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 134 27. Materials Consumed This is made-up as follows : Opening Stock Purchase Closing Stock 28. Factory Overhead Salary & Allowances Repairs and Maintenance Insurance Premium Municipal Tax & Land Revenue Advertisement Registration & Renewals Travelling & Conveyance Entertainment Research and Development Rent Printing & Stationery Telephone, Cell Phone, Internet & Postage Toll Expense Electricity, Gas & Water Training & Conference Plant Certification and Regulatory Approvals Depreciation Security Expenses Other Expenses July 2019 - June 2020 3,690,300,531 9,716,366,679 (3,915,389,246) 9,491,277,964 1,164,060,001 278,944,645 33,154,830 7,485,850 - 19,443,939 24,252,401 2,058,287 242,175,885 4,756,535 28,658,943 9,599,588 245,250,757 199,203,953 6,129,368 37,358,555 827,924,271 19,794,331 3,691,798 Amount in Taka July 2018 - June 2019 2,983,410,526 10,168,837,818 (3,690,300,531) 9,461,947,813 1,027,826,755 266,430,909 29,239,356 1,743,735 39,992 12,214,261 10,510,955 1,892,086 259,057,257 - 28,098,315 9,563,197 217,766,232 145,518,810 5,847,370 26,970,395 685,050,226 19,223,665 2,985,133 3,153,943,937 2,749,978,649 a. Salary and allowances include Company’s Contribution to provident fund amounting to Tk. 21,084,619 b. Repairs and maintenance includes maintenance of office, premises, vehicles, building, equipment and other infrastructures. Also included therein imported stores and spares that has been consumed during the year. c. Travelling & Conveyance includes foreign travel Tk. 3,284,085 ( in 2018-19 Tk. 4,346,488 ) d. Other expenses does not include any item exceeding 1% of total revenue. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 135 29. Administrative Expenses Amount in Taka Salary & Allowances Rent Repairs and Maintenance Registration & Renewals Travelling & Conveyance Entertainment Printing & Stationery Audit Fee Telephone, Cell Phone, Internet & Postage Electricity, Gas & Water Legal & Consultancy Business Acquisition Cost Company Secretarial, Regulatory Fee and AGM Expense Advertisement Training & Conference Depreciation Meeting Fee Security Expenses Other Expenses July 2019 - June 2020 July 2018 - June 2019 402,132,499 369,071,303 12,494,000 49,579,163 5,019,043 25,983,471 5,745,084 4,869,332 1,800,000 4,102,321 11,669,432 15,679,054 - 34,599,077 - 4,853,033 32,019,171 2,013,650 11,209,371 76,172,624 699,940,325 10,998,853 47,635,169 11,157,571 29,680,929 6,875,109 6,145,732 1,700,000 6,637,613 13,282,061 9,670,609 2,876,555 27,156,197 72,068 11,104,287 26,493,655 838,950 9,011,269 72,954,974 663,362,904 a. Salary and allowances include Company’s Contribution to provident fund amounting to Tk. 7,771,231 b. Repairs and maintenance includes maintenance of office, premises, vehicles, building, equipment and other infrastructures. c. Meeting fee is paid to the Directors for attending Board and other Committee Meetings. d. Travelling & Conveyance includes foreign travel Tk. 10,163,463 ( in 2018-19 Tk.11,803,905) e. Other expenses does not include any item exceeding 1% of total revenue. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 136 30. Selling, Marketing and Distribution Expenses Salary & Allowances Rent Repairs and Maintenance Travelling & Conveyance Entertainment Printing & Stationery Telephone, Cell Phone, Internet & Postage Software & Licences Electricity, Gas & Water Market Research & New Products Training & Conference Insurance Premium Sample Expense Advertisement Field Operation Events, Programs & Campaigns Brand Development CSR Expenses Sales Promotion Expenses Books, Journal and Periodicals Salesforce Logistics Clinical Studies and Research Pharmacovigilance Literature and News Letter Registration & Renewals Export Insurance, Freight and C&F Expenses Distribution Commission Delivery Expense Depreciation & Amortization Security Expenses Bad Debts Other Expenses July 2019 - June 2020 Amount in Taka July 2018 - June 2019 1,814,891,870 1,505,566,145 77,674,161 11,169,984 501,475,286 55,361,967 36,243,329 48,665,728 26,876,458 14,609,690 61,977,278 106,900,944 27,514,266 303,551,534 339,292 38,162,913 181,475,156 103,983,835 79,166,624 124,237,987 7,590,396 16,732,466 5,002,419 14,768,459 189,320,900 62,136,798 225,789,212 376,830,927 335,270,945 115,796,376 19,941,269 2,983,000 4,518,060 82,061,605 6,533,997 456,534,374 53,789,575 35,647,182 21,656,034 2,659,362 9,779,736 49,003,151 98,146,246 30,611,846 277,485,580 524,550 54,193,966 219,091,710 84,315,097 15,344,589 59,348,518 7,267,968 6,220,243 4,652,433 11,394,312 188,842,902 86,136,878 273,539,867 260,673,378 315,948,856 89,610,694 18,179,874 2,193,977 1,310,119 4,990,959,529 4,328,264,764 a. Salary and allowances include Company’s Contribution to provident fund amounting to Tk. 36,231,843. b. Distribution commission is paid to I & I Services Ltd., a “ Related Party” for rendering distribution services throughout the country. c. Repairs and maintenance includes maintenance of office, premises, vehicles, building, equipment and other infrastructures. d. Sample expense includes VAT on sample. e. Travelling & Conveyance includes foreign travel Tk. 9,794,247 ( in 2018-19 Tk. 4,734,661 ) f. Other expenses does not include any item exceeding 1% of total revenue. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 137 31. Other Income Interest Income Dividend Income Royalty Distribution Commission Income Cash Incentive on Export Exchange Rate Fluctuation Gain / (Loss) Income from sale of materials Profit/(Loss) on Sale of Fixed Assets (Note 41) July 2019 - June 2020 20,409,291 21,454,903 172,940,165 111,757,229 139,620,667 13,196,829 - (33,822,584) 445,556,500 Amount in Taka July 2018 - June 2019 36,457,527 1,491,901 104,779,694 91,886,707 23,646,180 (20,010,341) 5,588,720 1,344,146 245,184,534 a. Taka 21,388,134 of the Royalty income comes from licensing of BPL products given to Nuvista Pharma Limited while the remaining amount is from overseas business. b. The Distribution Commission is received from the subsidiary company Nuvista Pharma Limited for providing delivery of Nuvista’s products using the BPL’s distribution network across the country as per the agreement entered into between the companies on an arm’s length basis. c. In December 2018, Government declared 10% incentives on net FOB value of export of finished pharmaceutical formulation products subject to fulfillment of certain conditions. The incentive claimed during the reporting period has been accrued and accounted for. Further details are available in Note 3.10. d. Exchange rate fluctuation gains has been netted off with the Exchange rate fluctuation losses. An exchange gain of Tk. 9,401,302 has arisen from the translation of outstanding foreign currency loan from ODDO BHF Aktiengesellschaft, Frankfurt, Germany at the exchange rate prevailing on the financial position date. 32. Finance Cost Interest on Bank Borrowings Interest on Lease Liability Interest on Loan from PF, WPPF & Welfare Fund Other Bank Charges 33. Contribution to WPPF & Welfare Funds 733,669,187 27,790,746 166,837,043 29,634,539 957,931,515 734,759,832 59,643,281 128,075,983 15,595,750 938,074,846 This represents statutory contribution by the company as per Bangladesh Labour Act 2013. The amount is computed @ 5% of net profit before tax (but after charging such contribution). Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 138 34. Income Tax Expenses This consists of as follows : a. Current Tax (i) Tax provision for current Year (Note 3.9) (ii) Short/(Excess) Provision for earlier year b. Deferred Tax Expense Total Tax Deferred Tax Expense is arrived at as follows : Property, Plant & Equipment ( Difference in book value & Tax base) Deferred liability (Gratuity) Bad Debts Temporary Difference Tax Rate Deferred Tax Liability at end of the year Deferred Tax Liability at beginning of the year Change in Deferred Tax Liability Adjustment for Deferred tax on Revaluation Surplus Deferred Tax charged to profit or Loss and Other Comprehensive Income July 2019 - June 2020 983,282,880 - 983,282,880 35,202,129 1,018,485,009 9,205,043,771 (1,056,920,260) (5,144,353) 8,142,979,158 25% 2,035,744,789 2,002,571,178 33,173,611 2,028,518 35,202,129 Amount in Taka July 2018 - June 2019 809,208,912 (16,843,012) 792,365,900 94,498,243 886,864,143 8,943,722,454 (933,437,744) - 8,010,284,710 25% 2,002,571,178 1,889,823,385 112,747,793 (18,249,550) 94,498,243 Reconciliation of Effective tax rate Profit before Tax Applicable Tax Effect of lower rate on Export Profit excluding Cash Incentive Effect of lower rate on cash incentive Effect of lower rate on dividend income Effect of permanent disallowances Tax impact of prior year adjustment Income Tax Expense 2019-20 2018-19 % Tk. % Tk. 4,381,884,882 1,095,471,221 (96,362,751) (20,943,100) (1,072,745) 41,392,384 - 25.00% -2.20% -0.48% -0.02% 0.94% 0.00% 23.24% 1,018,485,009 3,910,365,117 977,591,279 (94,689,032) (3,546,927) (74,595) 24,426,430 (16,843,012) 886,864,143 25.00% -2.42% -0.09% -0.00% 0.62% -0.43% 22.68% a. Export Profits are subject to 12.5% Tax rate b. 10% Tax deductible at source on the incentives as final tax liability on such income as per the Income Tax regulations c. Dividend Income is taxable @ 20% Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 139 35. Other Comprehensive Income - Unrealized Gain/(Loss) Fair Value Gain/(Loss) on Investment in Listed Shares (Note-8 a ) Exchange Rate Fluctuation Gain or loss/adjustment 36. Earnings Per Share (EPS) July 2019 - June 2020 (1,577,828) - (1,577,828) Amount in Taka July 2018 - June 2019 (428,429) (1,424,130) (1,852,559) a. Earnings attributable to the Ordinary Shareholders b. Weighted average number of Shares outstanding during the year (Note 3.15) Earnings Per Share (EPS) 3,363,399,873 3,023,500,974 405,556,445 405,556,445 8.29 7.46 37. Net Asset Value (NAV) Per Share Total Assets Less Total Liabilities Net Assets Number of Ordinary Shares Net Asset Value (NAV) Per Share 38. Net Operating Cash Flow Per Share (NOCFPS) Net Cash Generated from Operating Activities Number of Ordinary Shares Net Operating Cash Flow Per Share (NOCFPS) June 30, 2020 June 30, 2019 48,679,773,173 47,792,895,230 (16,323,414,038) (18,192,051,990) 32,356,359,135 29,600,843,240 405,556,445 405,556,445 79.78 72.99 July 2019 - June 2020 July 2018 - June 2019 5,210,760,070 2,726,457,706 405,556,445 405,556,445 12.85 6.72 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 140 39. Reconciliation of Net Profit with Cash Flows from Operating Activities July 2019 - June 2020 Amount in Taka July 2018 - June 2019 Profit after Tax 3,363,399,873 3,023,500,974 Adjustment to reconcile net profit to net cash provided by operating activities : Non-cash Expenses : Depreciation Amortization Gratuity & WPPF Exchange rate fluctuation (Gain)/loss (Foreign Currency Bank Loan ) Deferred tax Non-operating items: Dividend Income (Profit) /Loss on sale of Fixed Assets Effect of exchange rate changes on Cash and Cash Equivalents Changes in working Capital (Increase)/Decrease in Inventories (Increase)/Decrease in Spares & Supplies (Increase)/Decrease in Accounts Receivable (Increase)/Decrease in Loans, Advances & Deposits Increase/(Decrease) in Creditors and Other Payables Increase/(Decrease) in Accrued Expenses Increase/(Decrease) in Income Tax Payable Net cash Generated from Operating Activities 40. Related Party Disclosures 1,267,944,433 1,445,651,201 914,833,448 756,961,575 60,906,370 44,193,000 266,403,789 524,438,524 (9,401,302) 35,202,129 25,559,859 94,498,243 10,399,024 (21,454,903) 33,822,584 (1,968,657) (3,051,665) (1,491,901) (1,344,146) (215,618) 569,016,740 (1,739,642,804) 45,111,006 (908,099,710) (20,362,634) 112,224,252 (71,999,051) 294,969,732 113,222,981 (60,560,046) (588,946,450) (206,199,860) 97,551,009 192,730,467 95,850,454 (266,118,214) 5,210,760,070 2,726,457,706 Following transactions were carried out with related parties in the normal course of business on arms length basis: Name of Related Parties Nature of Transactions a. I & I Services Ltd. Local Delivery Distribution Commission b. Bangladesh Export Import Co. Ltd Short Term Investment & Interest there on c. Nuvista Pharma Ltd Toll Manufacturing Cost of services Asset Transfer Gratuity (Transferred Employee) Dividend Distribution Commission d. Beximco Pharma API Limited Short Term Advance Value of Transaction Balance Type Balance at year end 23,912,620,326 376,830,927 341,614,550 19,417,187 51,318,664 3,430,731 12,455,838 20,026,948 111,757,229 544,360 Dr. 1,969,764,709 Cr. Dr. Dr. Dr. - 1,730,683 4,191,977 - - - 13,420,717 544,360 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 141 41. Particulars of Disposal of Property, Plant and Equipment The following assets were disposed off during the year ended June 30, 2020: Particulars of Assets Cost Accumulated Depreciation Written Down Value Sales Price Profit / (Loss) Mode of Disposal Name of Parties Plant & Machinery Office Equipment 68,147,647 34,640,793 33,506,854 - (33,506,854) Retirement N/A 1,278,000 942,296 335,704 8,000 (327,704) Negotiation Individuals Transport & Vehicle 9,372,204 5,820,178 3,552,026 3,564,001 11,975 Negotiation Individuals Total Taka 78,797,851 41,403,267 37,394,584 3,572,001 (33,822,584) 42. Payment / Perquisites to Managers and Directors 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 379,789,680 37,322,147 14,483,023 37,497,936 10,178,039 13,025,783 492,296,608 a. The above includes salary, allowances, and perquisites amounting Tk. 53,323,926 paid to the Managing Director. b. No remuneration is paid to Directors of the board other than meeting attendance fees which has been separately reported. c. No amount of money was expended by the Company for compensating any member of the board for special services rendered. 43. Production Capacity and Utilization Item Unit Production Capacity Actual Production Capacity Utilization July 19 to June 20 July 18 to June 19 July 19 to June 20 July 18 to June 19 July 19 to June 20 July 18 to June 19 Tablet, Capsule, Suppository & DPI Million Pcs 5,842.87 5,560.19 6,586.29 6,125.42 112.72% 110.17% Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin Million Pcs 100.98 98.99 115.39 117.28 114.27% 118.48% Production does not include goods manufactured under contract manufacturing arrangement from third party manufacturing sites. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 142 44. Capital Expenditure Commitment There was no capital expenditure contracted but not incurred or provided for at June 30, 2020. 45. Claim not Acknowledged as Debt There was no claim against the Company not acknowledged as debt as on June 30,2020. 46. Un-availed Credit Facilities ODDO BHF Aktiengesellshaft, Frankfurt, Germany approved an ECA term loan of Euro 24.386 million to partially finance the machinery and equipment for expansion project being implemented by the Company. An amount of Euro 4.59 million has been disbursed as on Balance Sheet date. The remaining Euro 19.80 million is disbursable against procurement of the machinery & equipment. 47. Payments & Receipts Made in Foreign Currency : Payments : Materials, Spares and Capital Machinery, Foreign Currency Loans, Fees & Expenses Receipts : Export Sales & Others Foreign Currency (Equivalent US$) Taka 114,834,021 9,744,198,289 14,780,165 1,244,489,856 Foreign Currency (Equivalent US$) Taka 33,464,524 2,811,262,283 48. 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. 49. Contingent Liability The Company has a contingent liability aggregating Tk. 150,788,789 against disputed income tax claims for the year 1999, 2007, 2008 and 2010. The Company has filed Income Tax Reference cases with the High Court Division of the supreme court against these claims. There is also a disputed VAT claim aggregating Tk. 144,113,691 against the Company. The Company own the verdict of the Appellate Tribunal in its favor. The concerned authority filed appeal to the honorable 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 these claims. If any liability arises on disposal of the cases, the Company shall provide for such liability in the year of final disposal. 50. Events after The Reporting Period 50.1 The directors recommended 15% cash dividend (i.e. Tk. 1.50 per share) and 10% stock dividend (i.e. 10 shares for every 100 shares held) for the year 2019-20. The dividend proposal is subject to shareholders’ approval at the forthcoming Annual General Meeting. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 143 50.2 Board of Directors of Nuvista Pharma Limited (NPL)- a subsidiary of BPL has declared Cash dividend @ 35%, i.e. Tk. 3.50 per share for the financial year ended on June 30, 2020. The proposed dividend is subject to approval of the shareholders of NPL in their Annual General meeting. 50.3 The COVID-19 pandemic that began in Bangladesh since early March 2020 continued to disrupt social and economic activities of the country as with the world. The government announced countrywide lockdown from 26 March which lasted till the end of May. The healthcare and certain other essential services though remained exempted from the lockdown, ensuring uninterrupted production and supply with highest priority on the health and safety of the employees was indeed challenging. Management took various mitigating measures to confront this unforeseen situation and continued its production and supply of products overcoming the challenges. Directors are continually reviewing the local and global situation of the pandemic and the associated risks affecting the operation of the business. As the country gradually adapts to the new environment, the economy started showing signs of recovery in the post balance sheet period. While there are uncertainties how the COVID-19 situations evolve and affects the business in the future, given the currently prevailing situation, directors believe that there is no material adverse effect of the pandemic on the business’s continuity in the foreseeable future. Excepting above, 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. 51. 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 risks for its use of financial instruments. Credit risk Liquidity risk Market risk 51.1 Credit Risk Credit risk is the risk of a financial loss to the company if a customer or counterparty 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 June 30, 2020 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. 51.2 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 obligation and accordingly arrange for sufficient liquidity/fund to make the expected payment within due date. In extreme stressed conditions the company may get support from the related company in the form of short term financing. 51.3 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 financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters. Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 144 a. Currency risk The company is exposed to currency risk on export revenues and import of raw material, machineries and equipment. Majority of the company’s foreign currency transactions are denominated in USD. Additionally the Company has foreign currency loan which shall be repaid in foreign currency. However, The Company maintains an Export Retention Quota (ERQ) account in USD where 50% of the export earnings are deposited. This partly contributes to minimize the currency risk associated with payments in foreign currency. b. Interest rate risk Interest rate risk is the risk that arises due to changes in interest rates on borrowing. An increase in interest rates will result in higher borrowing costs and impact the Company’s profitability. The Company continuously monitors and negotiates viable deals to minimize the interest rate risk. Further, the company tries to remain at a lower level of gearing to minimize the impact of financing costs. With its strong ability to generate cash flows from operating activities, the company tries to pay off its debts on due time to minimize the impact of an increase in interest rates. The company has arrangement with banks to transfer the sales proceeds into its overdraft account on a real time basis through RTGS system to minimize borrowing cost. The foreign currency loan is subject to floating rates of interest. The company has not entered into any type of derivative instrument in order to hedge interest rate risk as at the reporting date. Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Dhaka October 28, 2020 Financial Statements- Beximco Pharma- Standalone | Annual Report 2019-20 | 145 Nuvista Pharma Limited NUVISTA PHARMA LIMITED DIRECTORS’ REPORT TO THE SHAREHOLDERS On behalf of the Board of Directors of Nuvista Pharma Limited, I am pleased to present the Directors’ Report and the Audited Financial Statements for the year ended 30 June 2020 together with the Auditors’ Report thereon. 1. Operating Performance We concluded year 2019-20 with remarkable achievement despite a challenging economic and business environment prevailing throughout the fourth quarter of the year. To contain the spread of Covid-19, the Government announced lockdown from 26th March imposing restrictions at varying degrees on social and business activities with limited exceptions. This lasted till the end of May 2020, affecting the entire fourth quarter of the fiscal year under review. Like all other businesses, the pandemic impacted the healthcare services across the country; Doctors refrained from private practices and visits to hospitals and clinics declined significantly. In this hard time, our key challenge was to ensure uninterrupted production and supply of essential medicines across the country with highest priority on the health and safety of our employees. We took various measures to cope up with the unforeseen challenge and managed to keep the impact of the pandemic on the operational performance of the Company at its minimum. Our sales revenue increased by a significant 24.2% to reach a new height of Tk. 2,073.6 million in 2019-20 as against Tk. 1,669.4 million of preceding year. All of our key therapeutic segments recorded double digit growth. During the year, we added 5 new products in our portfolio and got encouraging market response. They contributed Tk. 73.7 million in sales in the first year of introduction, which shows their strong growth potential. Also in 2019-20, we generated Tk. 70.57 million from rendering Toll Services as compared to Tk. 22.15 million of 2018-19. The Company earned an after-tax net profit of Tk. 243.8 million in 2019-20 as against Tk. 89.6 million in 2018-19. Impressive achievement of sales, improved gross margin predominantly for the revenue mix and proper containment of operating expenses helped attain such a growth in net profit. The Net Operating Cash Flow (NOCFPS) and the Net Asset Value (NAV) per share increased to Tk. 28.2 and Tk. 64.8 in 2019-20 from Tk. 19.9 and Tk. 46.1 respectively, of the previous year. 2. Profit and its Appropriation Net Profit before tax Provision for tax Net Profit after tax Unappropriated profit from previous year Payment of dividend Profit available for appropriation Recommended for appropriation: Proposed dividend Retained Earnings after proposed dividend Year ended 30 June 2020 334,282,670 (90,471,845) 243,810,825 222,649,477 (23,500,320) 442,959,982 Amount in Taka Year ended 30 June 2019 108,379,564 (18,798,639) 89,580,925 133,936,896 (868,344) 222,649,477 (41,125,560) 401,834,422 (23,500,320) 199,149,157 Directors’ Report to the Shareholders | Annual Report 2019-20 | 147 3. Dividend The Board of Directors recommends 35% cash dividend i.e. Tk. 3.50 per share for the year ended 30 June 2020 to the Shareholders subject to the approval of the Shareholders in the Annual General Meeting (AGM) of the Company. 4. Board of Directors The current Board of Directors is composed of: Mr. Nazmul Hassan, MP : Chairman and Director Begum Parag : Nominee Director, Government of Bangladesh Mr. S. M. Rabbur Reza : Managing Director Mr. Mohammad Ali Nawaz : Director Mr. Shah Monjurul Hoque : Independent Director 5. Retirement and Re-Election of Director The Board appointed Mr.Nazmul Hassan, MP as Director of the Company in its meeting held on 13 May 2018. This was subsequently approved by the shareholders in the 44th AGM held on 25 November 2018. As per Article 125 and 126 of the Articles of Association of the Company Mr. Nazmul Hassan, MP retires by rotation and being eligible, offer himself for re-election as Director and is placed for approval by the shareholders in the AGM. 6. Auditors The existing auditors A. Qasem & Co., Chartered Accountants, who were appointed as auditors of the Company in the 45th AGM of the Company carried out the audit for the year ended 30 June 2020. A. Qasem & Co., Chartered Accountants, the auditors of the Company retires at this meeting and have expressed their willingness to continue in office for the year ended on 30 June 2021 subject to the approval of the shareholders in the 46th AGM of the Company. The Board recommends for reappointment of A. Qasem & Co., Chartered Accountants as auditors of the Company for the year ended on 30 June 2021. On behalf of the Board, Nazmul Hassan, MP Chairman 21 October 2020 Annual Report 2019-20 | Directors’ Report to the Shareholders | 148 Independent auditor’s report To the shareholders of Nuvista Pharma Limited Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Nuvista Pharma Limited (the Company), which comprise the statement of financial position as at 30 June 2020, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 30 June 2020, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirement that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 149 - - - - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements In accordance with the Companies Act 1994, we also report the following: (a) (b) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books; and (c) the statement of financial position and statement of profit or loss and other comprehensive income dealt with by the report are in agreement with the books of account. Dhaka, 21 October 2020 A. Qasem & Co. Chartered Accountants Partner: Mohammad Motaleb Hossain, FCA Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 150 Nuvista Pharma Limited Statement of financial position As at 30 June 2020 ASSETS Notes 30 June 2020 30 June 2019 Amount in Taka Non-current assets Property, plant and equipment Capital work-in-progress Loan to employees Current assets Advances, deposits and prepayments Loan to employees Advance income tax Inventories Trade receivables Cash and cash equivalents Total assets EQUITY AND LIABILITIES Shareholders’ equity Share capital Reserves and surplus Non-current liabilities Lease liabilities - long term portion Long term bank borrowings Deferred liability - gratuity payable Deferred tax liabilities Current liabilities and provisions Lease liabilities - current portion Short term bank borrowings Trade payables Liabilities for expenses Income tax payable Other liabilities Total liability Total equity and liabilities 4 5 6 7 6 20 8 9 10 11 12 13 14 15 16 13 17 18 19 20 21 1,144,501,502 180,908 2,686,377 1,147,368,787 39,692,624 3,580,626 - 456,155,729 111,672,826 18,976,993 630,078,798 1,212,496,913 8,180,190 6,321,316 1,226,998,419 33,145,875 3,317,051 35,681,115 361,268,453 31,341,064 28,152,726 492,906,284 1,777,447,585 1,719,904,703 117,501,600 643,897,646 761,399,246 4,915,288 4,751,056 128,748,851 131,938,710 270,353,905 1,531,045 442,114,287 89,547,746 132,720,796 22,737,718 57,042,842 745,694,434 1,016,048,339 1,777,447,585 117,501,600 423,587,141 541,088,741 7,664,875 43,210,417 106,585,224 144,852,403 302,312,919 1,608,361 699,284,556 53,587,152 99,996,369 - 22,026,605 876,503,043 1,178,815,962 1,719,904,703 The annexed notes 1 to 36 form an integral part of these financial statements. Chairman Managing Director Director Dhaka, 21 October 2020 As per our report of same date A. Qasem & Co. Chartered Accountants Nuvista Pharma Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2020 Revenue Cost of goods sold Gross profit General and administration expenses Selling and distribution expenses Profit from operations Non-operating income Interest expenses Profit before tax and WPPF Contribution to WPPF Profit before tax Tax expense Current Deferred Profit after tax Other comprehensive income Notes 30 June 2020 Amount in Taka 30 June 2019 22 23 24 25 26 27 20 16 2,073,588,946 1,669,392,491 (966,727,371) (833,024,115) 1,106,861,575 (92,526,184) 836,368,376 (88,443,477) (608,640,157) (543,485,224) 405,695,234 204,439,675 1,174,140 (55,872,570) 350,996,804 (16,714,134) 334,282,670 (103,385,538) 12,913,693 (90,471,845) 243,810,825 - 1,046,563 (91,687,696) 113,798,542 (5,418,978) 108,379,564 (11,394,946) (7,403,693) (18,798,639) 89,580,925 - Total comprehensive income for the year 243,810,825 89,580,925 Earnings Per Share (EPS) 20.75 7.62 The annexed notes 1 to 36 form an integral part of these financial statements. Chairman Managing Director Director Dhaka, 21 October 2020 As per our report of same date A. Qasem & Co. Chartered Accountants Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 152 Nuvista Pharma Limited Statement of changes in equity For the year ended 30 June 2020 Particulars Share capital General reserve Share premium Pre- incorporation profit Revaluation reserve Retained earnings Total reserves and surplus Total Reserves and surplus Amount in Taka Balance as at 1 July 2018 117,501,600 7,511,991 30,844,170 243,737 162,337,766 133,936,896 334,874,560 452,376,160 Dividend paid (868,344) (868,344) (868,344) Profit after tax for the year ended 30 June 2019 - - - - - 89,580,925 89,580,925 89,580,925 Balance as at 30 June 2019 117,501,600 7,511,991 30,844,170 243,737 162,337,766 222,649,477 423,587,141 541,088,741 Number of shares Net assets value per share 11,750,160 46.05 Balance as at 1 July 2019 117,501,600 7,511,991 30,844,170 243,737 162,337,766 222,649,477 423,587,141 541,088,741 Dividend paid (23,500,320) (23,500,320) (23,500,320) Profit after tax for the year ended 30 June 2020 - - - - - 243,810,825 243,810,825 243,810,825 Balance as at 30 June 2020 117,501,600 7,511,991 30,844,170 243,737 162,337,766 442,959,982 643,897,646 761,399,246 Notes 11 12 12 12 12 12 12 Number of shares Net assets value per share The annexed notes 1 to 36 form an integral part of these financial statements. 11,750,160 64.80 Chairman Managing Director Director Dhaka, 21 October 2020 As per our report of same date A. Qasem & Co. Chartered Accountants Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 153 Nuvista Pharma Limited Statement of cash flows For the year ended 30 June 2020 A. Cash flows from operating activities Cash receipts from customers and others Cash paid to suppliers and employees Cash generated from operation Interest paid Income tax paid Net cash generated from operating activities B. Cash flows from investing activities Notes 30 June 2020 30 June 2019 Amount in Taka 1,993,257,184 1,664,930,509 (1,562,034,912) (1,322,231,151) 431,222,272 342,699,358 (54,587,576) (94,334,168) 20 (44,966,705) (14,507,553) 331,667,991 233,857,637 Purchase of property, plant and equipment including right of use assets (19,011,295) (59,670,116) Proceeds from disposal of property, plant and equipment Net cash used in investing activities 74,250 272,997 (18,937,045) (59,397,119) C. Cash flows from financing activities Long term bank borrowings Short term bank borrowings Lease finance-payment for right of use assets Dividend paid Net cash (used in)/from financing activities (38,459,361) (124,736,123) (257,170,269) (54,614,023) (2,826,903) (23,450,146) 9,273,236 (858,274) (321,906,679) (170,935,184) D. Net increase/(decrease) in cash and cash equivalents (A+B+C) (9,175,733) 3,525,334 E. Opening cash and cash equivalents F. Closing cash and cash equivalents (D+E) Net operating cash flow per share Number of shares The annexed notes 1 to 36 form an integral part of these financial statements. 28,152,726 24,627,392 18,976,993 28,152,726 28.23 19.90 11,750,160 11,750,160 Chairman Managing Director Director Dhaka, 21 October 2020 Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 154 As per our report of same date A. Qasem & Co. Chartered Accountants Nuvista Pharma Limited Notes to the financial statements As at and for the year ended 30 June 2020 1. Reporting entity 1.1 Nuvista Pharma Limited (“the company”) was originally incorporated as a private limited company in 1973 in Bangladesh as Organon (Bangladesh) Limited under the Companies Act 1913. The company in its extra ordinary general meeting of the shareholders held on 02 November 2006 changed the name of the company from “Organon (Bangladesh) Limited” to “Nuvista Pharma Limited.” The company in its extra ordinary general meeting held on 05 May 2011 made some amendments to the Memorandum and Articles of Association with a view to broadening the objects clause of the company (subsequently approved by the High Court on 12 October 2011), converting it into a Public Limited company, increasing its authorized capital, complying with the Companies Act 1994, and eliminating certain redundant provisions in the Articles of Association of the company consequent upon the transfer of Organon International’s shareholding in the Company, which were filed with the Registrar of Joint Stock Companies and Firms, Dhaka. On 2nd April 2018, Beximco Pharmaceuticals Limited (BPL), a public limited company listed with Dhaka Stock Exchange, Chittagong Stock Exchange and AIM of London Stock Exchange acquired majority shareholdings in Nuvista Pharma Limited (NPL) and through this acquisition BPL has become the immediate and ultimate parent of the company. Current shareholding comprises 85.22% by BPL, 12.92% by Government of Bangladesh and rest by other local shareholders. 1.2 The address of the registered office of the company is Plot no. 107/A, Mascot Plaza (8th floor), Sonargaon Janapath, Sector-7, Uttara C/A, Dhaka-1230, Bangladesh. 1.3 The company produces various pharmaceutical products including oral contraceptives, hormone, steroid, anti-histamine, anti- fibrinolytic, anti-infective, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold in the local market. The company also provides toll manufacturing services to other pharmaceutical companies. 2. Basis of preparation 2.1 Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations. Initial application of new standards The company has initially applied IFRS 16 (see Note 4.3) from 1 July 2019. This new standard do not have a material effect on the company’s financial statements. 2.2 Basis of measurement The financial statements have been prepared on the historical cost basis except revaluation of certain property, plant and equipment. Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 155 2.3 Functional and presentational currency These financial statements are prepared in Bangladeshi Taka (Taka/Tk.), which is the company’s functional currency. All financial information has been presented in Taka and rounded off to the nearest integer. 2.4 Use of estimates and judgments The preparation of financial statements requires management to make judgment, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an on going basis. 2.5 Going concern The company has adequate resources to continue its operation for the foreseeable future. For this reason the directors continue to adopt going concern basis in preparing the financial statements. The current resources and credit facilities of the company are sufficient to meet the present requirements of its existing business. 2.6 Statement of cash flows Statement of cash flows has been prepared in accordance with as per IAS 7: “Statement of cash flows” under direct method. 2.7 Reporting period These financial statements cover one year from 1 July 2019 to 30 June 2020. 3. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements. 3.1 Shareholders’ capital - paid-up capital Paid-up capital represents the total amount of shareholders capital that has been paid in full by the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to time. 3.2 Leases IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the company, as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. The company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred. The right of use asset is depreciated using the straight line methods from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term. Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 156 The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company’s incremental borrowing rate. 3.2.1 Leased vehicle The company has adopted IFRS 16 in preparing the financial statements and reclassified leased vehicle as “Right-of-use assets” and disclosed it in note 4.3. 3.2.2 Office rent As per IFRS 16, a contract is a lease if the contract conveys the right to control the use of an identified asset. As per terms of the agreement of office rent (clause 4.13, 17(m), 4.8, 4.9, 4.15, 4.18, 4.23) lessor has the right to control the use of office building. Furthermore, the lessee and lessor each has the right to terminate the lease by giving 90 days notice period without permission from the other party with no penalty clause. As a result, the company considers office rent as off-balance sheet item. 3.3 Staff gratuity fund The company operates an unfunded gratuity scheme, provision in respect of which is made annually for all eligible employees. Gratuity payable to all eligible employees at the end of each year is determined on the basis of the existing rules and regulations of the company. 3.4 Employees provident fund The company subscribes to a contributory provident fund for its permanent employees which is administered by a Board of Trustees. 3.5 Property, plant and equipment 3.5.1 Recognition and measurement Property, plant and equipment (PPE) is recognised as an asset if it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the item can be measured reliably. Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the assets, bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management. 3.5.2 Subsequent costs The costs of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the company and its costs can be measured reliably. The costs of the day to day servicing of property, plant and equipment are recognised in the Statement of profit or loss and other comprehensive income as incurred. Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 157 3.5.3 Depreciation Depreciation is recognised in the Statement of profit or loss and other comprehensive income on a straight line basis over the estimated useful lives of each item of property, plant and equipment. Depreciation on property, plant and equipment is charged from the month of acquisition. In case of disposals, depreciation is charged up to the immediate previous month of disposal. No depreciation is charged on leasehold land and capital work-in-progress. Depreciation is calculated and charged on all other property, plant and equipment at the following rates on cost or valuation, considering the estimated useful lives of the assets: Factory building and warehouse Motor cars and vans Plant, machinery and equipment Computer and IT equipment Electric fixtures and fittings Furniture and fittings 2.5% 20%-25% 5% -15% 30% 7% 6% Gain or loss on sale of property, plant and equipment is recognised in the Statement of profit or loss and other comprehensive income as per provision of IAS 16: “Property, plant and equipment”. 3.6 Impairment 3.6.1 Recognition The carrying value of the company’s assets, other than inventories, are reviewed at each Statement of financial position date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of the asset or its cash-generating unit exceeds its recoverable amount. Impairment losses, if any, are recognised in the Statement of profit or loss and other comprehensive income. For the assets that have indefinite useful life, the recoverable amount is estimated at each Statement of financial position date. No indication of impairment was observed in the year ended 30 June 2020. 3.6.2 Calculation of recoverable amount The recoverable amount of an asset is the greater of net selling price and value in use. The estimated future cash flows are discounted to their present value using discount rate that reflects the current market assessment of the time value of money and the risk specific to the asset. For an asset that does not generate significantly independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. 3.6.3 Reversal of impairment An impairment loss recognised in prior periods for an asset shall be reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, had no impairment loss been recognised for the asset in prior years. There was no reversal of impairment in the year ended 30 June 2020. 3.7 Capital work-in-progress Capital work-in-progress represents the cost incurred for acquisition and/or construction of items of property, plant and equipment that were not ready for use at the year end and these are stated at cost. Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 158 3.8 Taxation Tax on the Statement of profit or loss and other comprehensive income for the year comprises current and deferred tax. Tax is recognised in the Statement of profit or loss and other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. 3.8.1 Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the Statement of financial position date, and any adjustment to tax payable in respect of previous years. 3.8.2 Deferred tax Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets and liabilities are offset if there is a legal enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that is no longer probable that the related tax benefit will be realised. 3.9 Inventories Inventories include raw materials, raw materials in transit, work-in-process, finished goods and spare parts. These are valued at the lower of cost and net realisable value, with appropriate provisions for obsolete and slow-moving items. Cost is determined using the weighted average method and includes all expenses incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. 3.10 IFRS 9: Financial Instruments IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 contains three principal classification categories for financial assets such as measured at amortised cost, Fair Value through Other Comprehensive Income (FVOCI) and Fair Value through Profit or Loss (FVTPL). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and the contractual cash flow characteristics. IFRS 9 replaces the previous financial assets categories defined under IAS 39. IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities. Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 159 3.11 Foreign currency 3.11.1 Foreign currency transactions Foreign currency transactions are converted into equivalent Taka at the ruling exchange rates on the respective dates of such transactions and subsequently retranslated using the rate at the date of settlement. 3.11.2 Foreign currency translations Monetary assets and liabilities denominated in foreign currencies have been converted into Taka at the exchange rate ruling at the year end. 3.11.3 Translation gains and losses Foreign exchange difference arising on translation are recognised in the Statement of profit or loss and other comprehensive income. 3.12 Provisions A provision is recognised in the Statement of financial position when the company has a legal or constructive obligation as a result of past events, and 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. 3.13 IFRS 15: Revenue from Contracts with Customers Revenue is measured based on the consideration specified in a contract with a customer. The Company recognises revenue when it transfers control over a good or service to a customer. The following steps provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies: Identify the contract with a customer, Identify the performance obligations in the contract, Determine the transaction price, Allocate the transaction price to the performance obligations in the contract and Recognise revenue when the entity satisfies a performance obligation. 3.14 Interest expenses Interest expense comprises interest expense on overdraft, import loan, demand loan, finance lease and term loan. All interest expenses are recognised in the Statement of profit or loss and other comprehensive income when it accrues. 3.15 Workers’ Profit Participation Fund (WPPF) The company provides 5% of its net profit before tax (but after charging such expense) as WPPF in accordance with Bangladesh Labour Act 2006. Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 160 3.16 Standards adopted but not yet effective-IFRS 17: Insurance Contracts A new Standard IFRS 17: Insurance Contracts, has been made effective for the reporting period beginning on or after 1 January 2021. This standard, however, has no material issue that might affect the reported financial statements of the company. 3.17 Events after the reporting date Events after the reporting date that provide additional information about the company’s position at the reporting date are reflected in the financial statements. Events after the reporting date that are not adjusting events are disclosed in the notes when material. 3.18 General Previous year’s figures have been rearranged/reclassified wherever considered necessary to conform to current year’s presentation. Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 161 4. Property, plant and equipment Particulars Land Factory building Factory warehouse Plant and machinery Motor vehicles Amount in Taka Computer and IT equipment Equipment and electric fixtures and fittings Furniture fittings Total Cost or valuation As at 1 July 2019 275,608,713 236,790,594 18,193,678 472,146,006 146,276,849 26,204,107 676,834,023 46,953,888 1,899,007,858 Addition/transfer during the year 8,510,998 3,430,731 4,882,222 8,799,050 2,428,328 28,051,329 Adjustment/disposal As at 30 June 2020 Accumulated depreciation As at 1 July 2019 Charge during the year Adjustment/disposal As at 30 June 2020 Net book value 275,608,713 236,790,594 18,193,678 480,657,004 145,556,780 31,036,729 685,633,073 49,382,216 1,922,858,787 (4,150,800) (49,600) (4,200,400) - 48,293,922 3,458,379 171,317,721 100,570,506 20,596,978 318,217,838 24,055,601 686,510,945 5,907,364 454,842 23,384,127 19,239,316 3,979,145 40,840,690 2,191,698 95,997,182 (4,108,682) (42,160) (4,150,842) - 54,201,286 3,913,221 194,701,848 115,701,140 24,533,963 359,058,528 26,247,299 778,357,285 As at 30 June 2020 275,608,713 182,589,308 14,280,457 285,955,156 29,855,640 6,502,766 326,574,545 23,134,917 1,144,501,502 As at 30 June 2019 275,608,713 188,496,672 14,735,299 300,828,285 45,706,343 5,607,129 358,616,185 22,898,287 1,212,496,913 4.1 Depreciation charge has been allocated as under Conversion cost included in cost of goods sold (Note 23.3) General and administration expenses (Note 24) Selling and distribution expenses (Note 25) 4.2 Disclosure for revalued assets Amount in Taka 30 June 2020 30 June 2019 80,197,666 2,996,619 12,802,897 95,997,182 79,655,332 3,403,571 16,333,401 99,392,304 The land is stated at revalued amount on the basis of the reports of external surveyor. The surplus on revaluation over the original cost of the assets was credited to revaluation reserve. Land was revalued in 1976 for the first time. The company once again revalued its land, plant and machinery, and equipment at the time of divestment of Organon (Bangladesh) Limited in 2006. The Company’s land was further revalued in 2010. 4.3. Right-of-use assets Motor vehicle includes right-of-use assets amounts to Tk. 4,275,000 (2019: Tk. 4,275,000) and written down value of which amounts to Tk. 3,063,750 (2019: Tk. 3,918,750) related to leased property. Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 162 5. Capital work-in-progress Factory Warehouse Plant and machinery Motor vehicles Furniture Equipment & Electric fixture and fittings Computer and IT equipment Balance as at 30 June 6. Loan to employees Car loan General loan Current portion of loan to employees Balance as at 30 June 7. Advances, deposits and prepayments Advance against operating expenses Security deposits VAT Prepaid insurance LC Margin Others Balance as at 30 June As at 1 July 2019 - - - - 7,280,190 900,000 8,180,190 Addition during the year Transfer to property, plant and equipment - 8,691,906 3,430,731 2,428,328 1,518,860 3,982,222 - 8,510,998 3,430,731 2,428,328 8,799,050 4,882,222 20,052,047 28,051,329 Amount in Taka As at 30 June 2020 - 180,908 - - - - 180,908 Amount in Taka 30 June 2020 30 June 2019 4,346,942 1,920,061 6,267,003 (3,580,626) 2,686,377 8,920,525 717,842 9,638,367 (3,317,051) 6,321,316 892,511 6,580,740 21,594,507 5,261,738 4,265,999 1,097,129 39,692,624 1,478,223 5,413,179 23,005,354 3,082,344 - 166,775 33,145,875 Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 163 8. Inventories Stocks Finished goods Semi-finished and Work-in-process Raw materials Chemicals Packing materials Materials-in-transit Stores Spares and accessories Laboratory consumables Miscellaneous items Literature, brochure and other materials Spares-in-transit Amount in Taka 30 June 2020 30 June 2019 156,163,823 44,419,416 134,288,819 25,896,599 38,633,826 16,928,409 99,377,976 35,395,067 120,721,981 17,482,090 25,507,548 51,997,845 416,330,892 350,482,507 9,928,538 313,561 - 29,150,832 431,906 39,824,837 9,577,874 321,244 103,737 - 783,091 10,785,946 Balance as at 30 June 456,155,729 361,268,453 9. Trade receivables Ageing of the trade receivables is as follows: Receivables due over six months Receivables due below six months Balance as at 30 June Above receivables are unsecured and considered good. Trade receivables is net off provision for bad debts Tk. 1,410,430. 10. Cash and cash equivalents Cash in hand Cash at banks Eastern Bank Limited The City Bank Limited Mutual Trust Bank Limited Dhaka Bank Limited BRAC Bank Limited IFIC Bank Limited Shimanto Bank Limited Janata Bank Limited National Bank Limited Balance as at 30 June Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 164 3,427,476 108,245,350 4,619,964 26,721,100 111,672,826 31,341,064 100,468 81,352 64,569 415,483 - 655 - 13,559,470 28,160 4,493,168 315,020 18,876,525 18,976,993 36,869 111,519 30,395 32,983 63,766 20,445,497 23,850 6,697,164 629,331 28,071,374 28,152,726 11. Share capital Authorised Amount in Taka 30 June 2020 30 June 2019 50,000,000 Ordinary shares of Tk. 10 each 500,000,000 500,000,000 Issued, subscribed and paid-up 11,579,160 Ordinary shares of Tk. 10 each issued for cash 115,791,600 115,791,600 171,000 Ordinary shares of Tk. 10 each issued for consideration other than cash 1,710,000 1,710,000 11,750,160 Shareholding position 117,501,600 117,501,600 Nominal value (Taka) Percentage of holding (%) 30 June 2020 30 June 2019 30 June 2020 30 June 2019 Beximco Pharmaceuticals Limited 100,134,740 100,134,740 Government of Bangladesh 15,186,000 15,186,000 Other shareholders (2020:28; 2019:28) 2,180,860 2,180,860 117,501,600 117,501,600 85.22 12.92 1.86 100 85.22 12.92 1.86 100 11.1 In 2012, the company raised its paid-up capital from Tk. 9,791,800 to Tk. 58,750,800 by issuing 4,895,900 rights share to the existing shareholders on the basis of 5R:1 (i.e. five rights share against one existing share held on the record date). However, the subscription against the rights share (632,750 share of Tk. 10 each) held by the Ministry of Industries, Govt. of Bangladesh was received on 20 June 2013. 11.2 In 2017, the company further raised its paid-up capital from Tk. 58,750,800 to Tk. 117,501,600 by issuing 5,875,080 rights share to the existing shareholders on the basis of 1R:1 (i.e. one rights share against one existing share held on the record date). 12. Reserves and surplus General reserve Share premium (Note 12.1) Pre-incorporation profit Revaluation reserve (Note 12.2) Retained earnings Balance as at 30 June 30 June 2020 30 June 2019 7,511,991 30,844,170 243,737 162,337,766 442,959,982 7,511,991 30,844,170 243,737 162,337,766 222,649,477 643,897,646 423,587,141 Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 165 12.1 Share premium This represents the amount received on 48,959 ordinary shares @ Tk. 630 each issued in 1997. 12.2 Revaluation reserve This represents revaluation surplus on revaluation of land made during 2006 and 2010. 13. Lease liabilities Lease liabilities arising from leased vehicle as per IFRS 16 is as follows: Not later than one year Later than one year and not later than five years 14. Long term bank borrowings Dhaka Bank Limited (Note 14.1) Less: Current portion (Note 17) Balance as at 30 June 14.1 Dhaka Bank Limited Amount in Taka 30 June 2020 30 June 2019 1,531,045 4,915,288 6,446,333 1,608,361 7,664,875 9,273,236 36,034,605 171,018,192 (31,283,549) (127,807,775) 4,751,056 43,210,417 This represents amount outstanding against the remaining instalments of the loan balances which were taken over by Dhaka Bank Limited from The City Bank Limited and United Finance Limited on 29 March 2018. This also represents amount outstanding against the term loans financed by Dhaka Bank Limited on various dates for setting up the new Oral Solids facility and equipment at the factory. 14.2 Collateral All loans are secured by a registered mortgage on specific factory land and buildings of the company. 14.3 Security All loans are also secured with respect to the following: a) b) c) d) Registered (1st charge) hypothecation on present and future plant and machinery, equipment, furniture and fixture of the company. Registered (1st charge) hypothecation over all stock, book debts and receivables of the company. Shares held by Beximco Pharmaceuticals Ltd. are kept under lien with Dhaka Bank Ltd. Corporate guarantee issued by Beximco Pharmaceuticals Limited. Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 166 15. Deferred liability - gratuity payable Balance as at 1 July Add : Provision made during the year Add : Liability for transferred employees Less: Payments made during the year Balance as at 30 June 16. Deferred tax liabilities Deferred tax liabilities arrived at as follows: Amount in Taka 30 June 2020 30 June 2019 106,585,224 22,766,607 12,455,838 99,704,228 21,818,144 - 141,807,669 121,522,372 (13,058,818) (14,937,148) 128,748,851 106,585,224 Carrying amount on statement of financial position date Tax base Taxable/ (deductible) temporary difference Year: 2019-2020 Property, plant and equipment Provision for gratuity (net of payment) Allowance for expected credit loss Temporary difference 868,892,789 (128,748,851) (1,410,430) Applicable tax rate for items recognised in statement of comprehensive income Applicable tax rate for items recognised in equity Deferred tax Liabilities(a): Deferred tax liabilities on revaluation surplus Net deferred tax liabilities 420,915,448 447,977,341 (128,748,851) (1,410,430) 317,818,060 32.5% 15.0% (103,290,869) (28,647,841) (131,938,710) Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 167 Carrying amount on statement of financial position date Tax base Amount in Taka Taxable/ (deductible) temporary difference Year: 2018-2019 Property, plant and equipment Provision for gratuity (net of payment) Temporary difference 936,888,200 (106,585,224) 498,289,941 Applicable tax rate for items recognised in statement of comprehensive income Applicable tax rate for items recognised in equity Deferred tax Liabilities(b): Deferred tax Liabilities on revaluation surplus Net deferred tax liabilities Deferred tax recognised in the statement of profit or loss and other comprehensive income in 2019-2020 (a-b) 438,598,259 (106,585,224) 332,013,035 35.0% 15.0% (116,204,562) (28,647,841) (144,852,403) 12,913,693 Deferred tax recognised in the statement of profit or loss and other comprehensive income in 2018-2019 (7,403,693) 17. Short term bank borrowings Bank overdrafts Dhaka Bank Limited (Limit Tk.180,000,000) Short term bank loans Dhaka Bank Limited Current portion of long term loan (Note 14) Amount in Taka 30 June 2020 30 June 2019 77,213,282 77,213,282 86,077,696 86,077,696 333,617,456 485,399,085 333,617,456 485,399,085 31,283,549 127,807,775 442,114,287 699,284,556 Collateral and security given against short-term finance are a part of overall financing arrangement with Dhaka Bank Limited as indicated in note 14. The interest rate is 9.0% -12.5% per annum and is payable on quarterly rests. 18. Trade payables Trade payables 89,547,746 89,547,746 53,587,152 53,587,152 This represents amount due against purchase of raw, chemical and packing materials. Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 168 19. Liabilities for expenses Accrued expenses Audit fees Accrued interest 20. Income tax payable Balance as at 1 July Add: Provision for the year Less: AIT and treasury deposits during the year Balance as at 30 June 21. Other liabilities Salary and allowances Provident fund dues Workers’ profit participation fund Tax deducted at source VAT deducted at source Net VAT payable Tax on salaries Final settlement of staff Corporate social responsibility project Commission payable Unpaid dividend 22. Revenue Net sales revenue Toll income Quantitative details of sales Locally manufactured products 23. Cost of goods sold Opening stock of finished goods Cost of production (Note 23.1) Cost of goods available for sale Cost of physician sample Closing stock of finished goods Unit Tabs Caps Amps & Suspensions Amount in Taka 30 June 2020 30 June 2019 128,588,968 450,000 3,681,828 132,720,796 97,117,035 482,500 2,396,834 99,996,369 (35,681,115) 103,385,538 (44,966,705) (32,568,508) 11,394,946 (14,507,553) 22,737,718 (35,681,115) 1,877,366 2,457,329 16,714,134 914,214 - 16,424,262 600,790 4,351,474 - 13,420,717 282,556 57,042,842 858,729 2,109,941 5,418,978 2,420 809,848 - 1,025,940 3,028,774 374,270 8,165,323 232,382 22,026,605 2,003,012,715 70,576,231 1,647,243,552 22,148,939 2,073,588,946 1,669,392,491 30 June 2020 30 June 2019 Quantity Quantity 378,685,916 32,207,937 13,145,696 248,639,734 26,627,792 12,636,917 Amount in Taka 30 June 2020 30 June 2019 99,377,976 1,031,507,041 1,130,885,017 (7,993,823) (156,163,823) 119,998,485 818,843,227 938,841,712 (6,439,621) (99,377,976) 966,727,371 833,024,115 Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 169 23.1 Cost of production Opening stock of semi-finished and WIP Materials consumed (Note 23.2) Conversion cost (Note 23.3) Closing stock of semi-finished and WIP 23.2 Materials Consumed Opening stock Purchase Closing stock Item wise quantity and value of finished goods stock are as follows : Stock as July 1, 2019 Tabs Caps Amps & Suspensions Stock as June 30, 2020 Tabs Caps Amps & Suspensions Amount in Taka 30 June 2020 30 June 2019 35,395,067 563,093,775 477,437,615 1,075,926,457 (44,419,416) 1,031,507,041 57,553,706 384,286,478 412,398,110 854,238,294 (35,395,067) 818,843,227 163,711,619 598,201,400 (198,819,244) 199,163,699 348,834,398 (163,711,619) 563,093,775 384,286,478 Quantity Value (Tk.) 36,149,741 6,497,142 1,473,298 57,990,530 16,240,513 25,146,933 99,377,976 Quantity Value (Tk.) 59,388,662 11,548,926 1,416,442 89,677,865 42,908,358 23,577,599 156,163,822 Unit pcs. pcs. pcs. Unit pcs. pcs. pcs. Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 170 23.3 Conversion cost Amount in Taka 30 June 2020 30 June 2019 Salaries and allowances Power and fuel Factory supplies Software and hardware support expenses Canteen expenses Insurance Repair and maintenance Security services Toll manufacturing charges Stores materials consumed Product development cost Overseas travelling expenses Factory staff uniform Printing and stationery Entertainment Vehicle repair, maintenance and running cost Local authority taxes Other expenses Depreciation (Note 4.1) 170,579,565 52,893,711 30,274,741 1,531,525 8,936,659 3,778,508 35,074,596 2,184,952 5,596,120 42,183,816 30,214,066 2,876,414 2,107,949 1,435,995 743,696 3,214,754 1,548,488 2,064,394 80,197,666 477,437,615 Salaries and allowances include company’s contribution to provident fund amounting to Tk. 2,048,504. 24. General and administration expenses Salaries and allowances Directors’ fees (Note 29) Office rent Overseas travelling expenses Local travelling expenses Entertainment Vehicle repair, maintenance and running cost Postage, telephone and internet Printing and stationery Repairs and maintenance Office supplies Software and hardware support expenses Utilities Canteen expenses Local authority taxes Medical expenses Insurance premium Statutory audit fees Legal and professional expenses Meeting and seminars General expenses Depreciation (Note 4.1) 52,704,065 288,000 11,454,000 2,460,534 1,143,053 807,635 3,425,351 1,824,772 703,574 1,271,822 1,181,300 3,251,729 2,101,088 3,078,880 463,682 120,357 181,869 375,000 144,000 1,777,441 771,413 2,996,619 92,526,184 151,223,341 40,328,051 23,074,599 1,372,706 7,582,176 2,323,671 26,067,334 2,115,683 2,373,469 39,384,600 25,103,533 3,096,144 1,745,844 1,115,859 513,977 2,858,401 596,521 1,866,869 79,655,332 412,398,110 50,241,444 270,000 10,597,350 2,574,754 1,036,923 577,485 3,059,651 1,751,474 643,358 966,473 1,093,223 2,834,023 1,956,937 2,748,550 1,294,203 111,076 420,402 350,000 177,993 1,630,000 704,587 3,403,571 88,443,477 Salaries and allowances include company’s contribution to provident fund amounting to Tk. 1,088,218. Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 171 25. Selling and distribution expenses Amount in Taka 30 June 2020 30 June 2019 Salaries and allowances Overseas travelling expenses Local travelling expenses Entertainment Samples Sales promotion expenses Brand development Product launch expenses Sales force logistic Welfare and corporate social responsibility Field operation Books and periodicals Royalty expenses Literature, brochure and printed materials Distribution commission Event, program and campaign Sales meeting and conference Advertisement Vehicle repair, maintenance and running cost Postage, telephone and internet Printing and stationery Medical expenses Training expenses Market survey and research Registration and renewals Insurance premium Office rent Bad debts Utilities General expenses Depreciation (Note 4.1) 275,653,657 5,198,082 61,225,363 1,077,546 11,518,571 14,086,181 2,586,452 6,912,327 15,309,696 2,177,427 6,130,655 1,115,382 21,388,134 20,051,135 111,757,229 5,084,516 2,824,876 2,216,705 4,140,124 10,249,326 1,137,733 1,577,122 2,638,389 484,963 467,055 2,452,723 4,360,300 709,812 752,070 553,709 12,802,897 608,640,157 239,172,276 6,957,103 56,824,671 732,893 9,200,807 20,209,322 6,235,289 7,842,832 13,553,309 - 7,368,570 1,008,359 8,838,005 18,986,879 91,886,707 5,261,453 3,230,123 2,109,274 3,731,217 9,926,979 1,071,518 1,372,228 2,421,456 460,000 1,025,056 1,436,267 4,413,633 700,618 834,542 340,437 16,333,401 543,485,224 Salaries and allowances include company’s contribution to provident fund amounting to Tk. 5,069,183. 26. Non-operating income/(expenses) Gain/(loss) on disposal of property, plant and equipment Rental income Sale of miscellaneous items 27. Interest expenses Interest on Long term loan Short term finance Finance lease Bank charges Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 172 24,692 866,400 283,048 93,900 649,800 302,863 1,174,140 1,046,563 13,290,514 40,691,103 921,123 969,830 55,872,570 27,718,969 62,379,912 466,666 1,122,149 91,687,696 28. Capacity utilisation Amps & Suspensions Tablet Capsule 29. Remuneration and fees to directors Fees (Note 24) 30. Auditors’ remuneration Statutory audit fees P.F. audit fees WPPF audit fees 31. Payments made in foreign currency Installed capacity Unit Actual production Unit Actual Utilisation % 19,822,400 1,322,390,400 56,044,880 14,225,790 436,886,250 37,125,140 72% 33% 66% Amount in Taka 30 June 2020 30 June 2019 288,000 288,000 270,000 270,000 375,000 40,000 35,000 450,000 350,000 35,000 35,000 420,000 Particulars 30 June 2020 30 June 2019 Foreign currency (Equivalent USD) Taka Taka Import of raw, chemicals and packing materials Import of machinery and spare parts 4,229,488 155,633 359,506,535 13,228,851 256,786,558 33,111,263 372,735,386 289,897,821 32. Related party disclosures Following transactions were carried out with related parties in the normal course of business on arms length basis: Name of related party Relationship Beximco Pharmaceuticals Limited Immediate and ultimate parent Nature of transactions Toll income Cost of services Asset purchase Dividend paid Gratuity Distribution commission Value of transaction Balance at year end 19,417,187 51,318,664 3,430,731 20,026,948 12,455,838 1,730,683 4,191,977 - - - 111,757,229 13,420,717 Financial Statements-Nuvista Pharma Limited | Annual Report 2019-20 | 173 33. Capital expenditure commitment There was no capital expenditure contracted but not incurred or provided for at 30 June 2020. 34. Contingent liabilities 34.1 There is a contingent liability of Tk. 75,195,722 in respect of disputed tax claim for earlier years (from AY:1996-1997 to AY: 1999- 2000). This matter has been referred to the High Court for a ruling and is still pending. 34.2 There is additional contingent liabilities in respect of outstanding letters of credit of Tk. 91,536,648 (June 2019: Tk. 23,451,928). 35. Number of employees engaged The number of employees engaged for the whole period or part thereof who received a total remuneration of Tk. 36,000 and above were 1,142 (June 2019: 1,007). 36. Events after reporting date 36.1 In an effort to curb the spread of COVID-19 pandemic, government announced countrywide lockdown from 26th of March imposing restrictions at varying levels on social and business activities with limited exceptions. Pharmaceuticals and other healthcare services though remained outside the purview of the lockdown, it was indeed challenging to operate, particularly ensuring the uninterrupted supply of essential medicines across the country during this disruptive period. Management however, took various mitigating measures and continued its production and supply overcoming the difficulties while giving highest priority on the health and safety of the employees. Directors are continually monitoring the local and global situation of the pandemic and taking up appropriate measures to mitigate the risks associated therewith. With people gradually adapting to the new environment, the economy began to recover slowly in the post- balance sheet period. While there are uncertainties how the COVID-19 situations evolve and affects the business in the future, given the currently prevailing situation, directors believe that there is no material adverse effect of the pandemic on the business’s continuity in the foreseeable future. 36.2 The Board in its meeting dated 21 October 2020 recommended that 35% cash dividend i.e. Tk. 3.50 per share, totalling Tk. 41,125,560 be paid for the year 2019-2020. The dividend proposal is subject to shareholders’ approval at the forthcoming annual general meeting. Chairman Managing Director Director Annual Report 2019-20 | Financial Statements-Nuvista Pharma Limited | 174 Beximco Pharma API Limited Beximco Pharma API Limited DIRECTORS’ REPORT to the Shareholders I am pleased to place before you the Directors’ Report and the Audited Accounts of the Company for the year ended 30 June, 2020 along with the report of the auditors thereon. Beximco Pharma API Limited (BPAL) was incorporated in Bangladesh on December 12, 2017 as Private Limited Company under the Companies Act 1994. The Company is a fully owned Subsidiary of Beximco Pharmaceuticals Limited (BPL). OPERATION The Company intends to set up a API manufacturing facility at the API Industrial Park, Gajaria, Munshigang. API Industrial Park has been set up by the Government of Bangladesh to encourage and facilitate API manufacturing in Bangladesh to reduce import dependency and ensure availability of patented APIs after graduation of Bangladesh from LDC to developing nation status. Government has also promulgated National API Policy to ensure all necessary benefits and incentives that may be required by the API manufacturers in the initial years. We have 2 (two) plots in the API Park which are now fully developed to start construction. The company has identified number of APIs it intends to manufacture. It has also short listed few Indian/ Chines Technology partners evaluating their proposals. Once done, the agreements of construction shall be signed. It is expected that by the middle of Q3 of 2021 facility construction shall be started and within December 2022 the API unit will be ready for commercial production. BOARD OF DIRECTORS The Board of Director of BPAL consists of the following persons: Nazmul Hassan MP, Chairman S.M. Rabbur Reza, Managing Director, Mohammad Ali Nawaz, Director Afsar Uddin Ahmed, Director Shah Monjurul Hoque, Independent Director AUDITOR The existing Auditors, M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, Bir Uttam C. R. Datta Road, Dhaka-1205 has carried out the audit for the year ended 30 June 2020. M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, Bir Uttam C.R. Datta Road, Dhaka-1205, the Auditors of the Company has expressed their willingness to continue in office for the year 2020-21. The board after due consideration of the proposal made by the Audit Committee recommends the reappointment of M. J. Abedin & Co., Chartered Accountants as auditors for the year 2020-21. On behalf of the Board Chairman Annual Report 2019-20 | Directors’ Report to the Shareholders | 176 Independent Auditors’ Report To the Shareholders of Beximco Pharma API Limited Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Beximco Pharma API Limited, which comprise the Statement of Financial Position as at June 30, 2020, and Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and Notes to the Financial Statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the Financial Position of the Company as at June 30, 2020 and of its Financial Performance and its Cash Flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and those Charged with Governance 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), the Companies Act 1994, other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decision of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional Skepticism throughout the audit. We also • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidences that is sufficient and appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. • • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made • by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidences obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability Financial Statements-Beximco Pharma API Limited | Annual Report 2019-20 | 177 to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidences obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994 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 and; c) The statement of Financial Position (Balance Sheet) and Statement of Profit or Loss and Other Comprehensive Income (Profit and Loss Account) dealt with by the report are in agreement with the books. Dhaka Date: October 28, 2020 M.J. Abedin & Co. Chartered Accountants Annual Report 2019-20 | Financial Statements-Beximco Pharma API Limited | 178 • Beximco Pharma API Limited Statement of Financial Position As at June 30, 2020 ASSETS Non-current Assets Advance against purchase of Land Current Assets Cash and Cash Equivalents TOTAL ASSETS EQUITY AND LIABILITIES Shareholders’ Equity Issued Share Capital Retained Earnings Current Liabilities Short Term Advance Creditors and Other Payables Audit Fees Payable Amount in Taka Notes June 30, 2020 June 30, 2019 4 5 20,000,000 20,000,000 94,685 94,685 20,000,000 20,000,000 35,525 35,525 20,094,685 20,035,525 18,376,999 20,000,000 (1,623,001) 1,717,686 544,360 1,153,326 20,000 18,862,199 20,000,000 (1,137,801) 1,173,326 - 1,133,326 40,000 TOTAL EQUITY AND LIABILITIES 20,094,685 20,035,525 The notes are an integral part of the financial statements. S.M. Rabbur Reza Managing Director Dhaka Date: October 28, 2020 Mohammad Ali Nawaz Director Per our report of even date M.J. Abedin & Co. Chartered Accountants Financial Statements-Beximco Pharma API Limited | Annual Report 2019-20 | 179 Beximco Pharma API Limited Statement of Profit or Loss and Other Comprehensive Income For the year ended June 30, 2020 Revenue Cost of Revenue Gross Operating Profit/(Loss) Amount in Taka Notes July 2019 - June 2020 July 2018 - June 2019 - - - - - - Administrative Expenses 6 (485,200) (46,993) Profit/(Loss) from Operations Income Tax Expense Net Profit/(Loss) after Tax Other Comprehensive Income (485,200) - (485,200) (46,993) - (46,993) - - Total Comprehensive Income/(Loss) for the Year (485,200) (46,993) Earning Per Share (EPS) (0.24) (0.02) The notes are an integral part of the financial statements. S.M. Rabbur Reza Managing Director Dhaka Date: October 28, 2020 Annual Report 2019-20 | Financial Statements-Beximco Pharma API Limited | 180 Mohammad Ali Nawaz Director Per our report of even date M.J. Abedin & Co. Chartered Accountants Beximco Pharma API Limited Statement of Changes in Equity For the year ended June 30, 2020 Particulars Balance as on July 01,2019 Net Loss for the Year Balance as on June 30, 2020 Number of Shares Net Assets value per share For the year ended June 30, 2019 Particulars Balance as on July 01,2018 Net Loss for the Year Balance as on June 30, 2019 Number of Shares Net Assets value per share The notes are an integral part of the financial statements. S.M. Rabbur Reza Managing Director Dhaka Date: October 28, 2020 Share Capital Retained Earnings Total 20,000,000 (1,137,801) 18,862,199 Amount in Taka - (485,200) (485,200) 20,000,000 (1,623,001) 18,376,999 2,000,000 9.19 Share Capital Retained Earnings Total 20,000,000 (1,090,808) 18,909,192 - (46,993) (46,993) 20,000,000 (1,137,801) 18,862,199 2,000,000 9.43 Mohammad Ali Nawaz Director Per our report of even date M.J. Abedin & Co. Chartered Accountants Financial Statements-Beximco Pharma API Limited | Annual Report 2019-20 | 181 Beximco Pharma API Limited Statement of Cash Flows For the year ended June 30, 2020 Cash Flows from Operating Activities: Cash receipts from customers and others Payments for expenses & others Net Cash Genarated from/(Used in) Operating Activities Cash Flows from Investing Activities: Advance Against Purchase of Land Net Cash Used in Investing Activities Cash Flows from Financing Activities: Net Cash Genarated 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 The notes are an integral part of the financial statements. S.M. Rabbur Reza Managing Director Dhaka Date: October 28, 2020 July 2019 - June 2020 544,360 (485,200) 59,160 - - - 59,160 35,525 94,685 Amount in Taka July 2018 - June 2019 - (13,840) (13,840) (20,000,000) (20,000,000) - (20,013,840) 20,049,365 35,525 Mohammad Ali Nawaz Director Per our report of even date M.J. Abedin & Co. Chartered Accountants Annual Report 2019-20 | Financial Statements-Beximco Pharma API Limited | 182 Beximco Pharma API Limited Notes to the Financial Statements As at and for the year ended June 30, 2020 1. Reporting Entity 1.01 Statutory Background of the Company Beximco Pharma API Limited was incorporated in Bangladesh on December 12, 2017 as a Private Limited Company under the Companies Act, 1994. The Company is a fully-owned subsidiary of Beximco Pharmaceuticals Limited (BPL). 1.02 Nature of Business Activities The company intends to set up a facility at API Industrial Park to manufacture Active Pharmaceutical Ingredients (APIs) for domestic and International markets. However, the Company is still in the initial phase of establishment and has carried out no operational activities. 2. Basis of Preparation 2.01 Basis of Measurement The financial statements have been prepared under historical cost convention which does not take into consideration the effect of inflation. 2.02 Statement of Compliance The financial statements have been prepared in compliance with the requirements of the Companies Act, 1994 and International Financial Reporting Standards (IFRSs), and other relevant and applicable local laws and regulations. 2.03 Presentation of Financial Statements The financial statements comprise of: a) Statement of Financial Position as at June 30, 2020; b) Statement of Profit or Loss and other Comprehensive Income for the year ended June 30, 2020; c) Statement of Changes in Shareholders’ Equity for the year ended June 30, 2020; d) Statement of Cash Flows for the year ended June 30, 2020 and e) Notes, comprising summary of significant accounting policies and explanatory information. 2.04 Reporting Period Financial Statements of the company cover the period of 12 months from July 01, 2019 to June 30, 2020. 3. 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. Financial Statements-Beximco Pharma API Limited | Annual Report 2019-20 | 183 Amount in Taka June 30, 2020 June 30, 2019 4. Cash and Cash Equivalents This represents Cash at Bank with Current Account (IFIC Bank Limited, Dhanmondi Branch) 94,685 94,685 35,525 35,525 5. Issued Share Capital A. Authorized: 100,000,000 Ordinary Shares of taka 10 each B. Issued and Paid-up: 2,000,000 Ordinary Shares of taka 10 each paid in cash C. Composition of Shareholding of Ordinary Shares Beximco Pharmaceuticals Limited S.M. Rabbur Reza 6. Administrative Expenses Legal Expenses Audit Fees Bank Charges Entertainment Other Expenses S.M. Rabbur Reza Managing Director Dhaka Date: October 28, 2020 Annual Report 2019-20 | Financial Statements-Beximco Pharma API Limited | 184 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 20,000,000 20,000,000 20,000,000 20,000,000 No. of Shares % of Shares Capital 1,999,990 10 2,000,000 99.9995 0.0005 100 July 2019 - July 2018 - June 2020 June 2019 - 20,000 840 328,460 135,900 485,200 13,153 20,000 13,840 - - 46,993 Mohammad Ali Nawaz Director Notice of Annual General Meeting BEXIMCO PHARMACEUTICALS LIMITED 17, Dhanmondi R/A, Road No. 2, Dhaka-1205 NOTICE OF THE FORTY-FOURTH ANNUAL GENERAL MEETING Notice is hereby given that the 44th Annual General Meeting of the Shareholders of Beximco Pharmaceuticals Limited will be held virtually on Saturday, the 19th December, 2020 at 10.30 a.m.to transact the following business: AGENDA 1. 2. 3. 4. 5. 6. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended on 30th June, 2020 together with reports of the Auditors and the Directors thereon. To declare 15% cash dividend and 10% stock dividend. To elect Directors. To approve the appointment of Independent Director. To appoint Auditors for the year 2020-21 and to fix their remuneration. To appoint Corporate Governance Compliance Auditor for the year 2020-21 and to fix remuneration. By order of the Board, Dated: November 18, 2020 Executive Director & Company Secretary (MOHAMMAD ASAD ULLAH, FCS) NOTES: (1) The Shareholders whose names will appear in the Share Register of the Company or in the Depository Register on the record date i.e. 25 November, 2020, 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) Annual Report for the year 2019-20 will be sent through e-mail address of the Shareholders and will be available in the Website of the Company at: www.beximcopharma.com . (4) The Shareholders will join the Virtual AGM through the link https://bxpharma.bdvirtualagm.com . The Shareholders will be able to submit their questions/comments and vote electronically 1 (one) hour before commencement of the AGM and also during the AGM. For logging in to the system, the Shareholders need to put their 16-digit Beneficial Owner (BO) ID/Folio Number and other credential as proof by visiting the said link. (5) We encourage the Shareholders to login into the system prior to the meeting. Please allow ample time to login and establish your connectivity. For any IT related guidance, Shareholders may contact vide email : monir@beximco.net or mazibur@beximco.net . Notice of Annual General Meeting | Annual Report 2019-20 | 185 Frequently Asked Questions (FAQs) on Virtual Shareholders’ Meeting 1. Why is this Annual General Meeting (AGM) will only be held under virtual platform? In light of the prevailing COVID-19 situation in Bangladesh and considering the health and safety of all shareholders, members and others, a listed company can arrange virtual shareholders meeting which may be conducted via live webcast by using digital platform to avoid large gathering at one place and also to maintain social distancing. In this connection, Bangladesh Securities and Exchange Commission has issued a directive, vide order no. SEC/SRMIC/04-231/932 dated 24 March, 2020. Under this circumstance, Beximco Pharmaceuticals Limited has planned to arrange its 44th AGM virtually by using digital platform. 2. Who are entitled to participate in the AGM? The Shareholders, whose names will appear in the Share Register of the Company or in the Depository Register on the record date i.e. 25 November, 2020, will be entitled to attend at the Annual General Meeting and to receive the dividend. 3. How can I participate in the AGM? The Shareholders will join the Virtual AGM through the link- https://bxpharma.bdvirtualagm.com/ For logging in to the system, the Shareholders need to put their 16-digit Beneficial Owner (BO) ID/Folio Number and other credential as proof by visiting the said link. We encourage the Shareholders to login into the system prior to the meeting. Please allow ample time to login and establish your connectivity. 4. How can I submit questions/comments prior to and during the meeting? The Shareholders will be able to submit their questions/comments electronically one (1) hour before commencement of the AGM and also during the AGM by visiting the link-https://bxpharma.bdvirtualagm.com/ 5. How the Company will address our questions/comments? During the live Q&A session on the AGM day, the Board and the Management will try to answer the relevant questions, which will be submitted through the system and email prior to or during the meeting. However, Beximco Pharma reserves the right to edit and reject questions if it deems impudent or otherwise inappropriate. 6. How can I vote my shares in the AGM? You can vote your shares electronically one (1) hour prior to commencement of the AGM and during the AGM by visiting the link https://bxpharma.bdvirtualagm.com/ 7. How can I submit Proxy Form? 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. 8. What If I have technical difficulties or trouble accessing the virtual meeting? For any IT related guidance, Shareholders may contact vide email: monir@beximco.net or mazibur@beximco.net Annual Report 2019-20 | Frequently Asked Questions (FAQs) on Virtual Shareholders’ Meeting | 186 Proxy Form BEXIMCO PHARMACEUTICALS LIMITED 17, DHANMONDI R/A, ROAD NO. 2, DHAKA-1205, BANGLADESH I/We ………………………………………………………..of……………………………………………..…………… ……………………………being a member of Beximco Pharmaceuticals Limited hereby appoint Mr./Ms./Miss……………………………………………………………………………...............of…………………… ………………………………………………………………………as my proxy to attend and vote for me on my behalf at the 44th Annual General Meeting of the Company to be held on Saturday, the 19th December, 2020 at 10.30 a.m. under virtual platform and at any adjournment thereof. As witness my hand this……………………………..day of December, 2020. Signed by the said in presence………………………………………………………… Revenue Stamp Tk. 20.00 ………………………………….. ……………………………………………….............................. (Signature of Proxy) Signature of Shareholder(s) Dated: ……………………….. Register Folio / BOID No.: ………………………………………………….. …………………………..... (Signature of Witness) Dated: …………………………… Note: A member entitled to attend and vote at the Annual 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. Signature Verified ………………………………… Authorised Signatory Proxy Form | Annual Report 2019-20 | 187 www.beximcopharma.com Follow us Like us Watch BEXIMCO PHARMACEUTICALS LIMITED

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