Boston Properties Annual Report 2021

Plain-text annual report

ANNUAL REPORT 2020-21 First Time in The WORLD* BEXIMCO PHARMACEUTICALS LIMITED BEXIMCO PHARMACEUTICALS LIMITED *During the pandemic, Beximco Pharma became the ﬁrst company in the world to launch generic *During the pandemic, Beximco Pharma became the ﬁrst company in the world to launch generic *During the pandemic, Beximco Pharma became the ﬁrst company in the world to launch generic *During the pandemic, Beximco Pharma became the ﬁrst company in the world to launch generic *During the pandemic, Beximco Pharma became the ﬁrst company in the world to launch generic *During the pandemic, Beximco Pharma became the ﬁrst company in the world to launch generic *During the pandemic, Beximco Pharma became the ﬁrst company in the world to launch generic versions of the breakthrough antiviral drugs Remdesivir and Molnupiravir for COVID-19 which were originally developed by Gilead Sciences and Merck/Ridgeback Biotherapeutics respectively. ANNUAL REPORT 2020-21 BEXIMCO PHARMACEUTICALS LIMITED Date of Release: November 30, 2021 “Beximco Pharma aspires to become a globally admired generic pharmaceutical company, committed to enhancing human health and life.” Contents Our Essence About the Company Corporate Information Our Journey Our Subsidiaries Our Products Our Market Our Manufacturing Capabilities Our Global Accreditations Research and Development Board and Management Financial Highlights Operational Highlights Accolades and Awards Our People Environment, Health and Safety Our CSR Initiatives Corporate Events Media Spotlights 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 Dividend Policy Statement Value Added Statement Consolidated Financial Statements - 64 66 71 74 91 93 95 99 101 Beximco Pharmaceuticals Ltd. and Its Subsidiaries 103 Financial Statements- Beximco Pharmaceuticals Limited 124 Financial Statements- Nuvista Pharma Limited 157 Financial Statements- Beximco Pharma API Limited Notice of Annual General Meeting Proxy Form 184 194 195 05 07 09 10 13 17 23 24 30 31 32 42 45 46 48 54 56 60 We take it minute by minute, drop by drop, molecule by molecule. The miracle of a pyramid is in the perfection of every stone. The miracle of life is in the health of every cell. At Beximco Pharma, we are tireless at achieving such perfection in every molecule of our medicines. That’s our little contribution to life. Here’s to perfection. Here’s to life. 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. Annual Report 2020-21 | Our Essence | 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 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 manufactures more than 300 products in different forms and strengths covering almost all therapeutic categories. 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 currently has more than 5,000 permanent full time employees including professionals like pharmacists, doctors, engineers, chemists, microbiologists, accountants, lawyers, information technology specialists, and graduates from other disciplines. Beximco Pharma has received recognitions from different national and global organizations for its excellence, innovation, and performance. It is the winner of the highly prestigious SCRIP Award 2017 (“Best Pharma Company in an Emerging Market”), Global Generics & Biosimilar Awards 2019 (“Company of the Year, Asia Pacific”), CPhI Pharma Awards 2020 (“Innovation in Response to COVID-19”). In 2021, Beximco Pharma was recognized as “The Company of the Year, Asia Pacific” at the Global Generics and Biosimilar Awards 2021. The Company is listed with Dhaka and Chittagong stock exchanges of Bangladesh and the Alternative Investment Market (AIM) of London Stock Exchange. Beximco Pharma holds 85.22% stake in Nuvista Pharma Limited (formerly Organon Bangladesh), a leading non-listed Bangladeshi pharmaceutical company specializing in hormone and steroid drugs. In 2021, the Company acquired a majority stake (54.6%) in Sanofi Bangladesh Limited, a subsidiary company of global pharmaceutical giant Sanofi Group. Annual Report 2020-21 | About the Company | 7 At Beximco Pharma, it is not just about how many products we sell, but rather, it is about the lives we save 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 Chittagong Stock Exchange AIM of London Stock Exchange 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 Public Relations IMPACT PR Apartment No. A-1, House No. 17 Road No. 4, Gulshan-1 Dhaka-1212, Bangladesh Legal Advisor Huq & Co. 47/1 Purana Paltan Dhaka-1000, Bangladesh Hoque & Associates House No. 11, Suite No. 201 Road No. 108, Gulshan-2 Dhaka-1212, Bangladesh Auditors M. J. Abedin & Co. Chartered Accountants National Plaza (3rd Floor), 109, Bir Uttam C. R. Datta Road Dhaka- 1205, Bangladesh Sanofi Bangladesh Limited 6/2/A Segun Bagicha, Dhaka-1000 Factory Tongi Station Road, Gazipur Subsidiaries Nuvista Pharma Limited Mascot Plaza, 8th Floor 107/A, Sonargaon Janapath; Sector- 7 Uttara C.A, Dhaka - 1230, Bangladesh Phone: +880-2-58952811 Factory 48, Tongi Industrial Area, Block-C, Tongi Gazipur. Associates BioCare Manufacturing Sdn Bhd Seri Iskandar Pharmaceutical Park 32600 Bota, Perak, Malaysia 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. Agrani Bank Limited Beximco Pharma API Limited 17 Dhanmondi, Road No. 2 Dhaka-1205, Bangladesh Annual Report 2020-21 | Corporate Information | 9 Our Journey 1976 1980 1983 1985 1993 2003 2005 2006 2008 10 | Our Journey | Annual Report 2020-21 Company incorporated Started manufacturing products of Bayer AG, Germany and Upjohn Inc., USA, under license agreements Launched own formulation brands Listed on Dhaka Stock Exchange Received GMP accreditation from AGES, Austria (for European Union) Commenced ﬁrst time export to Europe • GMP accreditation from Taiwan Food & Drug Administration (TFDA) and Health Canada • Commenced export to Australia • GMP approval from the U.S. FDA as the ﬁrst Bangladeshi company • Launched generic version of revolutionary hepatitis C drugs Sovaldi® and Harvoni® • Entered the Gulf pharma market (Kuwait) 2015-16 Commenced formulation product export to Russia • First overseas collaboration with BioCare Manufacturing Sdn Bhd, Malaysia • Commenced export to the USA 2016-17 Introduced anti-retroviral (ARV) drugs ﬁrst time in Bangladesh • Won the Scrip Award in the category of “Best Company • Oral solid dosage facility received WHO prequaliﬁcation • Acquired 85.22% stake in Nuvista Pharma Limited in an Emerging Market” Got listed on the Alternative Investment Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs Won the Scrip Award in the category of ‘‘Community Partnership of the Year’’ Launched CFC free HFA inhalers ﬁrst time in Bangladesh • GMP accreditation from TGA, Australia • Gulf Central Committee for Drug Registration (GCC), as the ﬁrst Bangladeshi Company • GMP approval from German Regulatory Authority and Malta Medicines Authority (European Union) • Global Generics & Biosimilars Awards 2019 as “The Company of the Year, Asia-Paciﬁc” • Launched the world's ﬁrst generic remdesivir • Became exclusive distributor of Serum Institute of India for AstraZeneca/Oxford's Covishield vaccine in Bangladesh • Acquired Sanoﬁ Bangladesh Limited (54.6% stake) • CPhI Pharma Award 2020 for “Innovation in response to COVID-19” • “The Company of the Year, Asia Paciﬁc” at the Global Generics and Biosimilar Awards 2021 • Launched the world's ﬁrst generic molnupiravir 2011 2013 2014 2017-18 2018-19 2019-20 2020-21 1976 1980 1983 1985 1993 2003 2005 2006 2008 Company incorporated Started manufacturing products of Bayer AG, Germany and Upjohn Inc., USA, under license agreements Launched own formulation brands Listed on Dhaka Stock Exchange Received GMP accreditation from AGES, Austria (for European Union) Commenced ﬁrst time export to Europe • GMP accreditation from Taiwan Food & Drug Administration (TFDA) and Health Canada • Commenced export to Australia 2011 2013 2014 • GMP approval from the U.S. FDA as the ﬁrst Bangladeshi company • Launched generic version of revolutionary hepatitis C drugs Sovaldi® and Harvoni® • Entered the Gulf pharma market (Kuwait) 2015-16 Commenced formulation product export to Russia • Commenced export to the USA • First overseas collaboration with BioCare Manufacturing Sdn Bhd, Malaysia 2016-17 Introduced anti-retroviral (ARV) drugs ﬁrst time in Bangladesh • Won the Scrip Award in the category of “Best Company in an Emerging Market” • Oral solid dosage facility received WHO prequaliﬁcation • Acquired 85.22% stake in Nuvista Pharma Limited Got listed on the Alternative Investment Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs Won the Scrip Award in the category of ‘‘Community Partnership of the Year’’ • GMP accreditation from TGA, Australia • Gulf Central Committee for Drug Registration (GCC), as the ﬁrst Bangladeshi Company • GMP approval from German Regulatory Authority and Malta Medicines Authority (European Union) • Global Generics & Biosimilars Awards 2019 as “The Company of the Year, Asia-Paciﬁc” • Launched the world's ﬁrst generic remdesivir • Became exclusive distributor of Serum Institute of India for AstraZeneca/Oxford's Covishield vaccine in Bangladesh • Acquired Sanoﬁ Bangladesh Limited (54.6% stake) • CPhI Pharma Award 2020 for “Innovation in response to COVID-19” • “The Company of the Year, Asia Paciﬁc” at the Global Generics and Biosimilar Awards 2021 • Launched the world's ﬁrst generic molnupiravir 2017-18 2018-19 2019-20 2020-21 Annual Report 2020-21 | Our Journey | 11 Our Subsidiaries Nuvista Pharma Limited Nuvista Pharma Limited (NPL) was originally formed as Organon (Pakistan) Limited in 1963 as a subsidiary of Organon Holding BV, the Netherlands. The Company has been operating in Bangladesh since 1964. In the post-independent Bangladesh, it was incorporated as Organon (Bangladesh) Limited. Following the divestment of Oraganon’s equity to the local management in 2006, the Company was renamed as Nuvista Pharma Limited. Through acquisition of 85.22% stake by Beximco Pharma in 2018, Nuvista Pharma became the subsidiary of the Company. Nuvista Pharma currently produces a total of 84 products covering several therapeutic categories with leading position in hormones, steroids and women’s health segment. The manufacturing facilities of Nuvista Pharma is situated at Tongi Industrial Area Gazipur. NPL’s manufacturing plant has facilities for injection, tablet and capsule and specialty products like hormone and steroid. The facilities are accumulated in a multistoried building covering 126,408 sft floor area. NPL employs over 1100 people of diverged skills, academic and professional backgrounds. Annual Report 2020-21 | Our Subsidiaries | 13 Sanofi Bangladesh Limited Sanofi Bangladesh Limited (SBL) was part of global biopharmaceutical company Sanofi S.A. before being taken over by Beximco Pharma in 2021. SBL started its operation in Bangladesh as part of the British chemical company, May & Baker. Following a series of mergers, it became known as Sanofi-Aventis in 2004, before being renamed in 2013 as Sanofi Bangladesh Limited. Beximco Pharmaceuticals Limited acquired 54.6% stake of SBL held by Sanofi Group represented through May & Baker Limited and Fisons Limited. The remaining 45.4% is held by Bangladesh Government through Bangaldesh Chemical Industries Corporation (20%) and Ministry of Industries (25.4%). Sanofi Bangladesh’s state-of-the-art manufacturing facilities, including a PIC/S certifiable manufacturing facility for the leading antibiotic, cephalosporin, are spread over c25 acres of land, located at Tongi, Gazipur. The plant operated by SBL has manufacturing capabilities across several drug technologies, including tablets, capsules, topical, liquids, powder for suspension as well as sterile liquids and powders. The Corporate Headquarters is located at Segun Bagicha, Dhaka in a six storied building over a 26 katha land. Sanofi Bangladesh has over 800 employees and produces approximately 100 branded generic products. SBL has a strong presence in cardiology, diabetes, oncology, dermatology and CNS. SBL also imports certain global brands of Sanofi including vaccines, insulins and chemotherapy drugs for sale in the Bangladesh market. Beximco Pharma took over the control of the company effective from 01 October 2021. 14 | Our Subsidiaries | Annual Report 2020-21 Annual Report 2020-21 | Our Subsidiaries | 15 First Bangladeshi pharma company to export medicine to U.S.A Our growing presence in overseas markets, combined with our reputation as a world class manufacturer, drives us to aspire to even greater heights. Our Products Beximco Pharma currently produces more than 300 generics available in well over 500 presentations. Beximco Pharma’s portfolio encompasses wide range of 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 ophthalmic, lyophilized injectable, oral thin films, suppositories etc. creating strong differentiation for the Company. Many of its brands remain consistent leaders in their respective therapeutic categories. Napa, Napa Extra, Neofloxin, Atova, Azmasol, Arlin, Bexitrol F, D-Rise, Bizoran, Amdocal, Tofen, Tyclav etc. are household names with strong brand equity. The Company is continually focused on expanding and diversifying its product portfolio in order to ensure that people have access to newer, better treatment options at affordable cost. The expanding portfolio, including high value, differentiated, and difficult to copy products, will continue to remain as a driver of its growth. Beximco Pharma also produces a number of active pharmaceutical ingredients (APIs) for its captive consumption as well as sale to other pharmaceutical manufacturers. The Company is working on strengthening the API portfolio and its current 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 Joint Supplement Muscle Relaxant NSAIDs Oral Anti-Diabetic Suppository Paracetamol 125 mg, 250 mg And 500 mg Injection Paracetamol 10 mg / ml NAPA ONE NAPA EXTRA Tablet Tablet Paracetamol 1000 mg Paracetamol 500 mg + Caffeine 65 mg NAPA EXTEND Tablet Paracetamol 665 mg Extended Release NAPADOL NAPA RAPID Tablet Tablet Paracetamol 325 mg + Tramadol 37.5 mg Paracetamol 500 mg (with Actizorb technology) JOINTEC MAX Tablet Glucosamine 750 mg + Diacerein 50 mg RELENTUS DINOVO VOLIGEL XIDOLAC ZOLFIN GLIPITA GLIPITA M TRANETA TRANETA M Tablet Tablet Cream Tablet Tizanidine 2 mg Naproxen 375 mg + Esomeprazole 20 mg, Naproxen 500 mg + Esomeprazole 20 mg Diclofenac Sodium 50 mg Ketorolac Tromethamine 10 mg Injection Ketorolac Tromethamine 30 mg / ml Tablet Tablet Tablet Tablet Tablet Aceclofenac 100 mg 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, Linagliptin 2.5 mg + Metformin Hydrochloride 850 mg, Linagliptin 2.5 mg + Metformin Hydrochloride 1000 mg JARDIAN Tablet Empagliflozin 10 mg, Empagliflozin 25 mg Annual Report 2020-21 | Our Products | 17 Oral Anti-Diabetic JARDIMET VIBOSE INFORMET Tablet Tablet Tablet 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 Hydrochloride 1000 mg Insulin GENSULIN Injection Human Insulin 100 IU / ml Injection SEMGLEE Prefield Pen Insulin Glargine 100IU/ML REGLUTIDE Injection Semaglutide inn 1.34 mg/ml Anti-Histamines ATRIZIN AXODIN DUVENT BILLI 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 Rupatadine 10 mg Rupatadine 5 mg / 5 ml Bilastine 20 mg MELTAB Bilastine 10 mg Oral Solution Bilastine Cough & Cold DEXTRIM TUSPEL MUCOSOL Anti-Hypertensives BIZORAN Syrup Syrup Syrup Drops Tablet 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 Amlodipine 5 mg + Olmesartan Medoxomil 40 mg, Amlodipine 5 mg + Olmesartan Medoxomil 20 mg OLMESAN Tablet Olmesartan Medoxomil 10 mg, Olmesartan Medoxomil 20 mg, Olm- esartan Medoxomil 40 mg 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 Lipid Lowering ATOVA ROSUTIN Anti-Infectives ARLIN Tablet Tablet 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 Atorvastatin 10 mg, Atovastatin 20 mg, Atovastatin 40 mg Rosuvastatin 5 mg, Rosuvastatin 10 mg, Rosuvastatin 20 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 18 | Our Products | Annual Report 2020-21 Anti-Infectives 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 BEMSIVIR EMORIVIR VIRAFLU IVERA Tablet Syrup Tablet Injection Injection Capsule Tablet Tablet Metronidazole 200 mg, Metronidazole 400 mg, Metronidazole 800 mg Metronidazole 200 mg / 5 ml Ciprofloxacin 750 mg, Ciprofloxacin 500 mg, Ciprofloxacin 250 mg Ciprofloxacin 250 mg / 5 ml Remdisivir Inn 100 mg Monlupiravir 200 mg Favipiravir 200 mg Ivarmectine 6 mg, Ivarmectine 12mg, Antacids DIGECID PLUS Suspension Magaldrate 480 mg + Simethicone 20 mg / 5 ml VISCOCID Suspension Sodium Alginate 500 mg + Potassium Bicarbonate 100 mg / 5 ml Anti-Ulcerants ACIFIX REMMO OPTON Tablet Tablet Tablet Capsule Injection Rabeprazole 20 mg Esomeprazole 20 mg, Esomeprazole 40 mg Esomeprazole 20 mg, Esomeprazole 40 mg Esomeprazole 20 mg, Esomeprazole 40 mg Esomeprazole 40 mg PANTOBEX Tablet Pantoprazole 20 mg, Pantoprazole 40 mg Injection Pantoprazole 40 mg PROCEPTIN Capsule Omeprazole 20 mg, Omeprazole 40 mg Injection Omeprazole 40 mg YAMADIN Tablet Famotidine 20 mg, Famotidine 40 mg FAMOMAX Suspension Famotidine ZYMET Pro Capsule Pancreatin 325 mg DEFLUX Tablet Domperidone 10 mg, Domperidone 10 mg Meltab Enzymes Gastroprokinetics Antispasmodic ROSTIL CNS FRENXIT Suspension Domperidone 5 mg / 5 ml Drops Capsule Tablet Tablet Domperidone 5 mg / ml Mebeverine Hydrochloride 200 mg Mebeverine Hydrochloride 135 mg Flupentixol 0.5 mg + Melitracen 10 mg NERVALIN Capsule Pregabalin 25 mg, Pregabalin 50 mg, Pregabalin 75 mg Hormones EMIJOY FEMZOLE TAMONA Tablet Tablet Tablet Chlordiazepoxide 5 mg + Amitriptyline Hcl 12.5 mg Letrozole 2.5 mg Tamoxifen Citrate 10 mg,Tamoxifen Citrate 20 mg Annual Report 2020-21 | Our Products | 19 Laxatives FRELAX Suspension Liquid Paraffin 1.25 ml + Magnesium Hydrochloride 300 mg / 5 ml Anti-Fungals SERELOSE OMASTIN Solution Capsule Lactulose 3.35 gm / 5 ml Fluconazole 150 mg, Fluconazole 200 mg, Fluconazole 50 mg TERBEX Respiratory AZMASOL Suspension Fluconazole 50 mg / 5 ml Injection Fluconazole 2 mg / ml Infusion Tablet Cream MDI Terbinafine 250 mg Terbinafine HCl 1% Salbutamol 100 mcg / Puff Respirator Solution Salbutamol 2.5 mg / 3 ml Ampoule, Salbutamol 5 mg / ml in amber glass bottle BEXITROL-F MDI DPI MAXHALER Salmetarol 25 mcg + Fluticasone Propionate 125 mcg, Salmetarol 25 mcg + Fluticasone Propionate 250 mcg, Salmeterol 25 mcg + Fluticasone Propinate 50 mcg 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 TRIBREZ DEXAQUA DEXORIDE SALORIDE 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 Inhaler 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 Formoterol Fumarate BP5.5MCG+Glycopyrro Dextrose 10% W/V, Dextrose 5% W/V NaCl 0.9% W/V & Dextrose 5% W/V Sodium Chloride 0.09% W/V IV Fluids Ophthalmic ODYCIN Eye Drops Moxifloxacin 0.5% ODYCIN D Eye Drops Moxifloxacin Hcl 20 | Our Products | Annual Report 2020-21 Ophthalmic TEARON Eye Drops Polyethylene Glycol 400 0.4% + Propylene Glycol 0.3% TEARON FRESH Eye Drops Caboxymethyl Cellulose Sodium 1% Urogenital VIVIS URAL-K MIRASOL UROFLO Capsule Solution Tablet Capsule Antioxidants & Minerals Potassium Citrate 1500 mg + Citric Acid Monohydrate 250 mg / 5 ml Solution Mirabegron INN 25 mg,Mirabegron INN 50 mg Tamsulosin Hydrochloride 0.4 mg UROFLO PLUS Capsule Tamsulosin Hydrochloride 0.4 mg + Dutasteride 0.5 mg Biologies OGIVRI FULPHILA Lyophilized Powder Prefield Syringe Trastuzumeb INN 440mg/Vial Pegfilgrastim Vitamins & Minerals BEXTRAM GOLD Tablet High Potency 32 Multivitamin-Mineral BEXTRAM SILVER D-RISE HEMOFIX FZ NEUROCARE CALORATE BECORAL D BECORAL DX Tablet High Potency 30 Multivitamin-Mineral Capsule Cholecalciferol 20000 IU, Cholecalciferol 40000 IU Tablet Tablet 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 Coral Calcium Coral Calcium 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 • PENICILLINS • DICLOFENAC Annual Report 2020-21 | Our Products | 21 Key Products Launched We have expanded our product portfolio with 22 generics available in 32 different presentations. Triovix Junior Tablet; Symbion 6/100 Maxhaler; Zymet Pro Capsule; Remmo, a buffered esomeprazole MUPS formulation; Fulphila, first Biosimilar Pegfilgrastim from Mylan are few among the new products launched during the year. Two more products have been launched post reporting period. 22 | Our Products | Annual Report 2020-21 Our Market We are a leading player in Bangladesh with over 9% share of country’s Taka 276 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. North America CIS Central Asia Europe Middle East Asia Africa Central America & Caribbean Islands South America Export Destinations South Asia Afghanistan Bhutan Cambodia Maldives Myanmar Nepal Pakistan Sri Lanka Vietnam Azerbaijan Hong Kong Indonesia Laos Malaysia Mongolia Philippines Singapore Taiwan Thailand Uzbekistan Middle East Iraq Jordan Lebanon Oman UAE Yemen Australia New Zealand North America Latin & Africa Botswana Burundi DR Congo Ethiopia Ghana Guinea Ivory Coast Kenya Lesotho Libya Mali Mauritius Mozambique 3.9% Export (% ) Namibia Region Africa 17.0% Nigeria Australia Europe 1.1% North America Somalia South Asia 12.1% Asia Pacific + CIS 8.4% South Africa Latin and Central America Middle East 4.8% Tanzania 36.5% Europe Austria Germany Kosovo Netherlands Romania Canada USA Australasia Australia Fiji Kiribati Tonga Europe 1.1% Australia Africa 3.9% Asia Rest of the World North America 16.1% 17% Central America Belize Bolivia Chile Colombia Costa Rica Dominican Republic Ecuador Guatemala Guyana Honduras Jamaica Mexico Netherlands Antilles Nicaragua Panama Peru Suriname Uganda Zambia Zimbabwe 20.5% 21% Trinidad & Tobago Venezuela 36.5% Region Wise Export (2020-21) Annual Report 2020-21 | Our Market | 23 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 selfcontained 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 over 2,42,000 sq ft warehouse area 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. Annual Report 2020-21 | Our Manufacturing Capabilities | 25 Current Production Capacity: Liquids, Cream & Ointment, Shampoo & Lotion Semi Solid and Liquid (SSL) • and Suppository • Capacity: Liquids-41.25 bottles, Cream & Ointment-3.2 million Tubes, Suppository-10.20 million pieces, and Shampoo & Lotion- 0.25 million bottles 26 | Our Manufacturing Capabilities | Annual Report 2020-21 Oral Solid Dosage (OSD) • Tablets, Capsules, Powder for Suspension, Sachets and Oral Soluble Films • Capacity: Tablets-5492 million, Capsules-232 million, Powder for Suspension-1.86 million bottles, Sachets- 4.08 million and Oral Soluble Films- 0.52 million units Sterile, Nasal Spray & Respiratory Solutions • Intravenous fluid, Amino Acid, Insulin Nasal Spray and Respiratory Solutions (Non-Steroids), Nasal Spray and Respiratory Solutions (Steroids), Lyophilized Injection, Prefilled Syringe and Ophthalmic products • Capacity: Intravenous fluids-9.84 million bottles, Amino Acid -0.96 million bottles, Insulin -3.00 million vials and cartridges, Nasal Spray and Respiratory Solutions (Non-Steroids)- 6.31 million ampules, Nasal Spray and Respiratory Solutions (Steroids)- 2.85 million HDPE containers, Lyophilized Injection -2.11million vials, Prefilled Syringe -1.92 million units and Ophthalmic – 4.56 million LDPE containers Inhalers Metered Dose Inhalers (MDI), Dry Powder Inhaler(DPI)/ Multi Dose Dry Powder Inhaler (mDPI) • Capacity: MDI- 18.10 million Cans, DPI- 108.8 million Capsules Penicillin • Capsules and Dry Syrups • Capacity: Capsules – 42.24 million and Dry Syrups- 3.06 million bottles Active Pharmaceutical Ingredients (APIs) • Multiple APIs • Capacity: 22MT Annual Report 2020-21 | Our Manufacturing Capabilities | 27 Unit 3 Our new state-of-the art manufacturing facility (Unit-3) for oral solids, semi-solids and liquid products is almost complete. This multistoried facility having floor space of 49,854 m2 and production area of 26,468 m2 is equipped with latest machineries mostly from European sources. The facility is capable of producing of 9 billion tablet/capsules and 210 million units liquid and semi-liquid Products. Two solid lines and one liquid line are now manufacturing validation batches and is expected to go for commercial production by January 2022. The facilities will be fully operational in phases after validation of and product transfer to other lines. 28 | Unit 3 | Annual Report 2020-21 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) • Gulf Central Committee (GCC) • World Health Organization (WHO) • ANVISA (Brazil) 30 | Our Global Accreditations | Annual Report 2020-21 Research and Development Our research and development activities are closely focused on market needs and driven by technological progress. As an emerging global generic drug company, our key strength lies in our ability to excel in developing technologically complex and differentiated products. Our state-of-the-art R&D lab facilitates the development of innovative and difficult products with a focus on creating unique market opportunities. We have given top priority in building and strengthening our capabilities to excel in formulating technologically complex products such as multi-layer tablet, sustained release formulation, dispersible tablet, metered dose inhalers, dry powder inhalers, prefilled syringes, lyophilized injectables, sterile ophthalmics, oral thin films etc. We are also pursuing research collaboration with universities and biotech companies both at home and abroad for strengthening our capabilities in selected areas. Annual Report 2020-21 | Research and Development | 31 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 Iqbal Ahmed A B Siddiqur Rahman Quamrun Naher Ahmed Reem H. Shamsuddoha Prof. Mamtaz Uddin Ahmed Dr. Md. Ibraheem Hosein Khan Chairman Vice Chairman Managing Director Director Director Director Director Director Independent Director Independent Director Mohammad Asad Ullah, FCS Company Secretary Audit Committee Prof. Mamtaz Uddin Ahmed Osman Kaiser Chowdhury Reem H. Shamsuddoha Mohammad Asad Ullah, FCS Chairman Member Member Secretary Nomination and Remuneration Committee Dr. Md. Ibraheem Hosein Khan Iqbal Ahmed Osman Kaiser Chowdhury Mohammad Asad Ullah, FCS Chairman Member Member 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 Annual Report 2020-21 | Board and Management | 33 Directors’ Profile Ahmed Sohail Fasihur Rahman 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 phenomenal contribution to the country’s journey of 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 well-reputed organizations, which includes 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 Trustees of North South University Foundation, the first private university in Bangladesh. 34 | Board and Management | Annual Report 2020-21 Salman Fazlur Rahman MP Vice Chairman Mr. Salman Fazlur Rahman MP, is a distinguished industrialist, philanthropist and politician of Bangladesh. Mr Rahman is an elected Member of Parliament and currently serving as the Prime Minister’s Private Industry and Investment Adviser, with the rank and status of a cabinet minister. One of the most renowned and successful businessmen in the country, Mr. Rahman is widely recognized for his contribution to the development of the private sector in Bangladesh. He has been active with different trade bodies of home and abroad and was the President of SAARC Chamber of Commerce and Industry (SCCI); Federation of Bangladesh Chambers of Commerce and Industries (FBCCI); Metropolitan Chamber of Commerce and Industry (MCCI); Bangladesh Association of Pharmaceutical Industries (BAPI); Bangladesh Textile Mills Association (BTMA) and Association of Television Channel Owners (ATCO). Mr. Rahman is the Chairman of IFIC Bank Limited. He is the also the Chairman of the Board of Governors of Bangladesh Enterprise Institute; Board of Editors of English daily The Independent; and news channel Independent TV. He is a keen promoter of sports and is the Chairman of Abahani Ltd Dhaka, the premier sporting club of the country. He holds a degree from the University of Karachi. Annual Report 2020-21 | Board and Management | 35 Nazmul Hassan MP Managing Director Mr. Nazmul Hassan MP is a prominent and highly respected business leader of the country. Besides being the Managing Director of Beximco Pharmaceuticals Limited, he is the Chairman of the Board of Directors of Nuvista Pharma Ltd, and Beximco Pharma API Limited and a Director of Sanofi Bangladesh Limited- the subsidiary companies of Beximco Pharma. He is also a 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 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. He is the President of IBA Alumni Association; a Member of the American Management Association and Australian Institute of Management. Mr. Hassan is an elected Member of Parliament (MP) of Bangladesh Since 2009. He is a Member of the Parliamentary Committee for Finance, Sports & Defense. Mr. Hassan is passionate to sports and actively involved with Bangladesh’s national cricket. He is currently the president of Bangladesh Cricket Board (BCB), elected to the position for three consecutive terms. He is a board member of the International Cricket Council (ICC), ICC Business Corporation (IBC), and a Member of HR & Remuneration Committee, ICC. He was the elected President of Asian Cricket Council (ACC) for 2018. Mr. Hassan is the President of Bangladesh Association of Pharmaceutical Industries (BAPI) and a member of Int’l Society for Pharmaceutical Engineering (ISPE). He is involved with various national and international committees and task forces related to formulation of healthcare and drug policy. 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, Managing Director of Bangladesh Export Import Company (Beximco) Limited. 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 Beximco Synthetics Ltd., Shinepukur Ceramics Ltd. and Beximco Securities Ltd. 36 | Board and Management | Annual Report 2020-21 Abu Bakar Siddiqur Rahman Director Mr. Abu Bakar Siddiqur Rahman held senior positions at a number of entities within the Beximco Group of companies and has an extensive 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. Iqbal Ahmed Director Mr. Iqbal Ahmed has been with the Beximco Group since 1972 and held senior positions in a number of entities within the Beximco Group of companies. He has over 45 years business experiences in trading, jute, textile, pharmaceuticals, engineering, IT and other sectors. Mr. Ahmed has been in the Board of Beximco Pharma since 1985. He is also a director of Bangladesh Export Import Company Limited, Shinepukur Ceramics Limited, and Beximco Synthetics Limited. He was the publisher of “The Independent” and “Muktakantha” an English and a Bengali national daily newspaper respectively, in Bangladesh. He received his Bachelor’s Degree in Science from the University of Dhaka in 1966. Quamrun Naher Ahmed Director Ms. Quamrun Naher Ahmed is a retired civil servant. She last served as an Additional Secretary, Financial Institution Division, Ministry of Finance. Starting at an entry level of civil service, she has risen through the ranks to the senior administrative and policy level. In her career she served senior positions in different ministries including Ministry of Shipping, Commerce, Home affairs, and Fisheries & Livestock. She was also a Director of Karmasangsthan Bank for more than five years. She had an excellent academic record with an MPhil in Social Change from the Norwegian University of Science and Technology (NTNU) and an M.S.S. in Economics from the University of Dhaka. She attended a wide range of trainings, workshops, and conferences covering different fields including public administration, development management, law, accounts and finance, held home and abroad. Currently she is a full time member of National River Conservation Commission, a Board member of IFIC Bank Limited, IFIC Securities Ltd., IFIC Money Transfer (UK) Ltd. and Nepal Bangladesh Bank Ltd. Reem H Shamsuddoha Director Ms. Reem H Shamsuddoha had her Bachelor of Science in Business Administration from Fordham University, Gabelli School of Business, New York. She has participated in professional training in Advance Management Program in the University of Hong Kong. She has a wide range of working experience in renowned local and overseas organizations including Daraz, TapFury LLC, International Quality and Productivity Center (IQPC), Opal Financing Group and had Internship experience with ASB Communications and Elida Olsen et CIE of New York. Ms. Reem is a member of the Board of Directors of a number of listed and non-listed companies including Global Voice Holdings Limited, Global Voice Telecom Limited, Beximco IOC Petroleum & Energy Limited, and Bangladesh Export Import Co. Ltd. Annual Report 2020-21 | Board and Management | 37 Mamtaz Uddin Ahmed Independent Director Professor Mamtaz Uddin Ahmed joined Beximco Pharmaceuticals Limited as an Independent Director on July 2020. He is currently a professor of the Department of Accounting and Information Systems, University of Dhaka and has over 36 years of teaching experience at university level. Professor Ahmed is the Treasurer of the University of Dhaka and Chairman of the Bureau of Business Research. He is an experienced Board member, currently an Independent Director of Alhaj Textile Mills Limited and a Director of Ashuganj Power Station Company Ltd. His previous Board positions include Director of Chittagong Stock Exchange Ltd. and Dhaka Stock Exchange Ltd. In addition, Professor Ahmed was the Vice President of the South Asian Federation of Accountants (SAFA) and President of the Institute of Cost and Management Accountants of Bangladesh (ICMAB). Professor Ahmed obtained his Bachelor and Masters in Accounting from the University of Dhaka. He also obtained MBA from University of Castle, USA and CMA degree from ICMAB, Bangladesh. Dr. Md. Ibraheem Hosein Khan Independent Director Dr. Md. Ibraheem Hosein Khan is a retired civil servant, last served as the Secretary, Ministry of Cultural Affairs, Government of Bangladesh. Before his retirement from service in the Bangladesh Government, he worked in different Government departments including the Prime Minister’s Office, Ministry of Land and Ministry of Cultural Affairs. Dr. Khan has also served as Administrator for the Dhaka South City Corporation. Dr. Khan holds a PhD from Jahangirnagar University, Dhaka, two master and two bachelor degrees from institutions in Bangladesh, Australia and the United Kingdom. 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 degrees from the University of Dhaka. He also holds an MBA with major in Human Resource Management. Mr. Asad Ullah qualified 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 ICSB. He is a widely experienced person with long career in Company Secretarial functions. 38 | Board and Management | Annual Report 2020-21 Executive Committee Executive Committee comprises five 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 Officer Mr. Rabbur Reza is a pharmaceutical industry expert with wide experience in the areas of sales, marketing, brand management, international business development, operations management, partnerships and acquisition. In addition to his role in Beximco Pharma, he is the Managing Director of Nuvista Pharma Ltd. and Beximco Pharma API Ltd and CEO of Sanofi Bangladesh Ltd., subsidiary companies of Beximco Pharma. He had previously worked for Biotech and Milton Pharmaceuticals in Australia. Mr. Reza holds a Bachelor of Pharmacy degree 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 and London Business School. He is a fellow of Australian Institute of Management, a member of Pharmaceutical Society of Australia, and a member of Montreal Protocol’s Medical Technical Options Committee (United Nations Environment Program–UNEP). Mr. Reza received the “Australian Alumni Excellence Awards 2014” in the category of Business and Leadership. Mohammad Ali Nawaz Chief Financial Officer Mr. Mohammad Ali Nawaz is a well-rounded finance professional with extensive exposures in corporate finance and restructuring, merger and acquisitions, project management, supply chain and operations management. After joining Beximco Group as a Management Trainee in 1990, he worked for different entities within the group, in varying capacities. He was appointed Chief Financial Officer of Beximco Pharma in 2009. He is also a Director of Nuvista Pharma Ltd., Sanofi Bangladesh Ltd., and Beximco Pharma API Ltd. Mr. Nawaz qualified 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. 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, Yorkshire, 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. He is a Director of Beximco Pharma API Ltd. and BioCare Manufacturing Sdn Bhd, Malaysia, an associate company of Beximco Pharma. He served Sanofi-Aventis as Director Marketing of its Bangladesh business overseeing the marketing operations of several business units. Mr. Ahmed also worked as the Country Manager of BPL’s Pakistan operation. Annual Report 2020-21 | Board and Management | 39 We strive to convert every possibility into a reality. We continue to develop capabilities and build scale in order to meet the challenges of the future. Management Committee Nazmul Hassan MP Managing Director Osman Kaiser Chowdhury Member of the Board of Directors Rabbur Reza Chief Operating Officer Mohammad Ali Nawaz Chief Financial Officer Afsar Uddin Ahmed Director, Commercial Lutfur Rahman Director, Manufacturing Zakaria Seraj Chowdhury Head of Distribution Services & Director, International Marketing Shamim Momtaz Director, Manufacturing Mohd. Tahir Siddique Director, Quality Rizvi Ul Kabir Director, Marketing Jamal Ahmed Choudhury Director, Accounts & Finance Ms. Roksana Hassan Executive Director, Financial Compliance Audit and Internal Control Dr. Selina Akter Executive Director Department of Medical Affairs Shawkat Haider, Ph D Executive Director, Business Development & Corporate Affairs M A Arshad Bhuiyan General Manager Human Resource Annual Report 2020-21 | Board and Management | 41 Beximco Pharma introduces Beximco Pharma introduces World’s ﬁrst generic Molnupiravir, an oral antiviral drug for COVID-19 treatment Operational Highlights Product Portfolio 24 new generics (2 post-period) in 34 different presentation forms in domestic market • 4 for the First Time in Bangladesh • Remmo, a buffered esomeprazole MUPS formulation of Esomeprazole • Fulphila, a USFDA and EMA approved ﬁrst Biosimilar Pegﬁlgrastim from Mylan • The world's FIRST generic Molnupiravir, an oral antiviral drug for COVID-19 treatment (Post period). 10 new products from subsidiary Nuvista Pharma International Market • Completed 25 registrations for 22 products in 14 countries • Entered 8 new countries: Oman, Lebanon, Venezuela, Bolivia, Kosovo, Mexico, Congo, Mongolia • US FDA approval for Flecainide Acetate an antiarrhythmic drug • US FDA approval for muscle relaxant drug Baclofen (post period) Acquisition & Partnerships • Acquired 54.6% stake in Sanoﬁ Bangladesh Limited from May & Baker Limited and Fisons Limited, UK (Post period) • Appointed as the exclusive distributor of Serum Institute of India Pvt. Ltd (SII), for the distribution of Oxford's AstraZeneca COVID-19 vaccine in Bangladesh • Signed the "Open pledge from Global Manufacturers of Generic Medicines against COVID-19" Awards & Accreditation • CPhI Pharma Award in the category of 'Innovation in Response to COVID-19' • Global Generics & Biosimilars Awards 2021 in the category of “Company of the year, Asia Paciﬁc” (post period). • ANVISA (Brazil) approval for OSD (T-II), MDI and Sterile unit Annual Report 2020-21 | Operational Highlights | 45 Accolades and Awards CPhI Pharma Awards 2020 AwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwardsAwards Powered Powered by by Pharma Pharma Informa Informa Intelligence Intelligence Excellence in Pharma: Excellence in Pharma: Innova�on Innova�on Innova�on Innova�on Innova�on Innova�on in in Response to Response to COVID- COVID- WinnerWinner Winner Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Received highly prestigious CPhI Pharma Award in the category of ‘Innovation in Response to COVID- 19’ Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Beximco Pharmaceu�cals Bangladesh Business Innovation Award 2021 Won “Public Service-Best COVID-19 Response awards” at the 3rd edition of the Bangladesh Innovation Award 2021 46 | Accolades and Awards | Annual Report 2020-21 Global Generics & Biosimilars Awards 2021 Company of the year, Asia Paciﬁc Winner Beximco Pharmaceu�cals Won the Global Generics & Biosimilars Awards 2021 in the category of “Company of the year, Asia Pacific” Our People 48 | Our People | Annual Report 2020-21 At Beximco Pharma, we firmly believe that our greatest resource is our people. We consider our people as the catalyst behind our progress and value contribution of each and every employee towards achieving our goals. Throughout the ongoing pandemic disruptions our people have shown unwavering dedication, agility and resilience. Their committed effort has enabled us to serve our patients and other stakeholders and helped continue uninterrupted operations of our business. We believe, with the accumulated strength of our people, we can reach to a greater height in the days ahead. Our commitment is to ensure the highest level of employee engagement by providing a congenial environment, competitive remuneration packages, end- service benefits, and importantly, career progression in the organization. BPL’s HR policy is designed to attract committed and talented resources with ability to get aligned with the Company’s mission, vision, values and goals and drive the value chain of the Company. The Company adopts objective, fair and unbiased evaluation criteria in the selection and recruitment process. Our people is well composed with adequate diversity in terms of education, age, experience, and gender. We try to hire people from diversified fields of expertise. We focus on gender diversity and prefer female candidates where male and female are found equally qualified for any position. Currently, Beximco Pharma employs 210 full time permanent female employees at different levels, two of them are members of the Company’s Management Committee. Employment of woman is increasing gradually across all levels of organization and in 2020-21, the number of female employees has risen by 31% over last year. The Company does not make any discrimination in terms of gender, religion, faith, color or nationality in the selection and recruitment process. The Company is creating new employment opportunities and during the year under review, we recruited 718 employees in permanent positions befitting our business growth. There was a net addition of 349 employees in 2020-21 against 266 in 2019-20. 5104 4755 4489 e e y o l p m E l a t o T 2018-19 2019-20 2020-21 Annual Report 2020-21 | Our People | 49 Net Addition to Head Counts 349 266 234 2018-19 2019-20 2020-21 Training and Development: Despite the disruptive pandemic situation, we arranged several training programs for different level of employees to equip them with right knowledge and update their skills. The Company has dedicated departments both at factory level and head office who carried out need based and tailored training programs throughout the year for employees across the organization. Besides our own expertise, we invite local and international trainers and experts to conduct trainings. Selected employees get overseas training. During the year, 252 employees received specialized training in areas such computerized system validation, brand management, strategy formulation and WHO GSDP implementation, arranged by external organizations home and abroad. Diversity of Professionals Accountants/Lawyers/PhDs /Other Professionals 369 Pharmacists 463 Chemist 293 Engineers 481 Doctors 27 50 | Our People | Annual Report 2020-21 Learning and Development Centre at our Plant Annual Report 2020-21 | Our People | 51 The unwavering commitment of our people-their energy and enthusiasm-remain the driving force that leads us towards achieving newer milestones. Covid-19 Support to Employee At the beginning pandemic in 2020, we initiated package of COVID-19 support services for our employees which include 24 hours hotline services for the employees and their family members; free medical tests; free medicine and ambulance services; isolation and quarantine centers; oxygen cylinder supports; emergency food supply; hassle and risk free COVID-19 sample collection centers at convenient places; and 24/7 medical consultation services by our dedicated medical service team; and mental health care. These supports for the employees and their families continued this year as well. We continued preventive measures such as use of masks all times, temperature screening, sanitization, and wearing of personal protective equipment where necessary. Our HR department issued different guidelines for the employees including restriction on outside travelling, attending at public gatherings etc. to minimize the risk of COVID-19 infections. In collaboration with NOVUS Clinical Research Services, Beximco Pharma established a dedicated isolation center equipped with high flow oxygen facility for emergency use by employees in emergency cases of unavailability of hospital facilities. The center is manned with doctors, nurses and other medical staffs. Annual Report 2020-21 | Our People | 53 Environment, Health and Safety Beximco Pharma cares for environment and we are mindful of our responsibilities to protecting the environment and promoting sustainable eco-friendly operations. The Compnay endeavors to provide a safe and healthy workplace, promote environmental excellence in our operations, and meet global EHS standards. We consciously select technologies that meet environmental standard and use state of art machineries and equipment in our manufacturing operation. Our facilities and processes are designed to keep the environmental effects of the manufacturing activities to a practicable minimum level. Lliquid and solid wastes and gaseous emissions generated from our operations controlled, disposed, and managed in the best practicable means. We actively comply with relevant government regulations and industry standards and all our manufacturing facilities have got the relevant certifications from the Department of Environment. Beximco Pharma has stringent Occupational Health and Safety System in place to ensure the health and safety of the employees, contractors, visitors and neighbors who may be affected by its operations. The Company has a separate Environment, Health and Safety (EHS) Department manned with qualified personnel to look after EHS compliance issues. The Company also has an EHS committee composed of high-level management employees. The committee meet once in every two months to evaluate overall EHS situation and resolve identified issues. Beximco Pharma conducts EHS audit once every year. The Company also has an “Environment Health and Safety” policy which is binding for all. Environment Sustainability Measures Solid, Liquid Waste and Gaseous Emission Control and Conduction The solid wastes generated from the manufacturing operation are appropriately managed complying to regulations and have no degrading effect on the environment and ecological system. The entire waste management is handled with the Best Available Technologies (BAT) that include incineration plant, dust control units and scrubber to ensure zero discharge of solid waste that may harm the surrounding ecological system. Beximco Pharma has its own incineration unit, having a capacity of 250kg per hour depending on calorific value of the products and appropriate system for the purification of generated smoke. As per international guideline, the height of the chimney is more than 30 meter. The quality of gas finally discharged from the incinerator is well within acceptable standard set by the Directorate of Environment (DoE). Proper filter in the exhaust has been implemented to prevent dust flowing outside the building and is controlled by Building Atomization System (BAS). We installed in High-Efficiency Particulate Air (HEPA) filters and proper scrubber for enhanced protection in manufacturing areas. Dust particles collected from the filters are incinerated. There is treatment device to purify the vapour before discharging into atmosphere. Quality of air emission from Incinerator, Boiler and Generator etc. are regularly monitored. A considerable amount of wastewater is generated mainly from washing and cleaning of machineries, empty bottles, utensils, floors, etc., The other source of liquid waste consists of dissolved and suspended API, excipients, laboratory re-agents; water from the cooling tower. The Company has adequate control over managing the liquid waste and has its own effluent treatment plant. No toxic wastewater is discharged into the open land or water bodies without treatment. About 50% of this water is recycled and used for gardening, car washing and water scrubber of incinerator while the settled sludge is incinerated. The work of setting new generation wastewater treatment process (PLC based Membrane Bioreactor technology) considering the future load of wastewater generation has significantly progressed. This turnkey project having a treatment capacity of 605 m3/day is being implemented by Envision Enviro Technologies of India. The Submerged Membrane Unit (SMU) is being procured from KUBOTA Corporation, Japan. Carbon Footprints Beximco Pharma measures the carbon footprint in the factory surroundings once in every three years as per government regulations. The results have always been well below the standard limit set by DoE. The latest 2021 findings are as below: 54 | Environment, Health and Safety | Annual Report 2020-21 CO2 ppm 5,000 425 CO ppm 50 0 NO2 ppm 5 0.14 NO ppm 25 1.70 TVOC ppb 1,000 0.96 PM10 µg/m3 150 31.51 SPM µg/m3 200 192 Government Standard Result in company surroundings Saving Water and Energy We inspire the reduced use of natural resources and endeavor to use system, process or technology that helps saving water and energy. In this context we installed sensor based water taps in our facilities to reduce social water consumption. We are re-using the waste water of our WFI (water for injection) treatment plant to clean cooking utensils of used in canteen. Beximco Pharma has introduced Economizer in the exhaust line of boiler to preheat feed water and also uses condensate recovery system to utilize hot water as a feed water of boiler. Moreover, Exhaust Gas Boiler (EGB) has been installed near the power generation unit to utilize the exhaust heat being exposed in the atmosphere to produce steam. This in one hand is thus protecting atmospheric air heat and saving energy on the other hand. Beximco Pharma’s new Learning and Development Center has been designed and built with using steel sheets and glass panels for maximum use of daylight. Different parameters of the treated water of the plant as on September, 2021 is: Tests pH TDS Dissolved Oxygen COD BOD Arsenic Specification 6.0 to 9.0 NMT 2,100 ppm 4.5 to 8.0 ppm NMT 200 ppm NMT 50 ppm NMT 0.2 ppm Results 7.39 533 5.1 131.85 41.75 0.005 Noise, Odor And Vibration Management Noise and certain vibrations generally produced by the electromechanical equipment may affect the surrounding. The noise requires no mitigation step as the factory is located in a non-residential/commercial area falling under ‘Ga’ area (mixed) as per standard. Our machineries are sound efficient and has very insignificant effect in the sound level. Machine cover in required cases are also installed to muffle the sound level. The working personnel inside the plant are provided with Personal Protective Equipment (PPE). Vibration problems are mitigated as the reactors are located at a proper distance from the boundary level. There is no major odor problem as the factory premises are regularly disinfected and scrubbers are installed in the main header of gas emission line. Latest measures of Noise level around the factory is: Sound dBa (2021) Sound dBa (2020) Sound dBa (2019) Government Standard Result in company surroundings 75 57 75 54 75 59 Child Labour Beximco Pharma firmly follows the codes of Bangladesh Labor Act in all respects including restrictive provisions relating to “Employment of Adolescent”. The Company does not employ any Child labour directly or indirectly. Annual Report 2020-21 | Environment, Health and Safety | 55 Our CSR Initiatives CSR is an integral part of our business. As a responsible business entity, Beximco Pharma undertakes different CSR programs aiming at serving the community at large. We are focused especially at three key areas- healthcare, education for the underprivileged children, and research. Our major CSR initiatives throughout the year include: Free Remdesivir Injection Beximco Pharma continues to supply Remdesivir injection free of cost to all government hospitals across the country for COVID-19 treatment. Beximco also donated 10,000 vials of Remdesivir to India through the government’s medical assistance program. The supplies also included oral anti-viral, PPE kits and zinc, calcium, vitamin C tablets. Mask Awareness Campaign Beximco Pharma sponsored country’s largest mask awareness campaign in partnership with Jaago Foundation, a leading volunteer organization in Bangladesh. The campaign took place during Durga Puja festival under the title “Mask Pori Pujai Ghuri”– aimed to inspire and create awareness among people to wear masks during the pandemic. Large quantities of masks, sanitizers and leaflets were provided for this campaign. 56 | Our CSR Initiatives | Annual Report 2020-21 Support to the Government Vaccination Program Beximco Pharma has been providing full logistics support to the government’s COVID-19 vaccination program in terms of storage and nationwide distribution of Sinopharm, Moderna and AstraZeneca vaccines totally free of cost. The company has also purchased several ultra-cold freezers for supporting the storage of Pfizer vaccine received through COVAX. Annual Report 2020-21 | Our CSR Initiatives | 57 Donation of Female Hygiene Products handed Pharma Beximco over menstrual hygiene products to Sarkari Shishu Paribar (Girls) authorities on June 30, 2021.These hygiene products were distributed among 1786 girls aged above 13 years living in 42 Sarkari Shishu Paribar (Girls) orphanages across the country. Support to IEDCR Beximco pharma has provided logistics and transportation support throughout the year to the Institute of Epidemiology, Disease Control and Research (IEDCR) for sample collection from various parts of the country. IEDCR is the national reference laboratory, which accounts for disease surveillance and disease outbreak investigation. COVID-19 Equipment to Dhaka Medical College Hospital (DMCH) Beximco Pharma handed over large quantities of COVID-19 equipment, including PPE, ceiling fans and face masks to support the frontline health workers of Dhaka Medical College Hospital. It was part of the company’s continued initiatives to combat COVID-19 pandemic. Central Oxygen Plant at Dohar and Nawabganj Beximco Pharma has been at the forefront of the fight against COVID-19. The company provided full support to set up an oxygen plant at the Nawabganj Health Complex and Dohar Health Complex with central refillable oxygen storage capacity of 254 cubic meters and 431 cubic meters respectively to ensure uninterrupted supply of oxygen for the COVID-19 patients. 58 | Our CSR Initiatives | Annual Report 2020-21 Support to Jaago’s “Back To School- Education Program” Schools in Bangladesh remained closed for long eighteen monhts due to COVID-19. Beximco Pharma extended support through Jaago Foundation to ensure health and safety of the returning students on reopning of the schools. The company donated COVID-19 hygiene products including sanitizer, spray bottle, masks, PPE etc to the underprivileged kids. Donation of Medical Equipment to Charitable Dental Clinic Donated medical equipment to a charitable dental clinic founded by Dr. Osama Bin Noor in Raipura, Narsingdi to provide quality oral health care for around half a million people living in the village. Dr. Osama Bin Noor is well known for winning Queen’s Young Leaders 2016 award. Annual Report 2020-21 | Our CSR Initiatives | 59 Corporate Events Sanofi Acquisition: Deal Closing Ceremony Beximco Pharmaceuticals Limited acquired 54.6% stake in Sanofi Bangladesh Limited. A brief ceremony on the occasion took place at a hotel in Dhaka. The event was attended by Beximco Pharma Managing Director Nazmul Hassan MP, BCIC Chairman Shah Md Imdadul Haque, Secretary to the Ministry of Industries, SM Alam, and other senior officials from both Sanofi and Beximco. 60 | Corporate Events | Annual Report 2020-21 Launching of World’s First Generic Molnupiravir Beximco Pharmaceuticals Limited, launched the world’s first generic Molnupiravir on 9th November 2021, following the Emergency Use Authorization by the Directorate General of Drug Administration (DGDA). Molnupiravir is an oral antiviral drug for symptomatic COVID-19 recently developed by Merck, Sharp & Dohme (MSD) and Ridgeback Bio-therapeutics. Beximco Pharma’s branded generic version of Molnupiravir is being marketed as Emorivir. Annual Report 2020-21 | Corporate Events | 61 We continuously review, update and expand our product portfolio in order to ensure that patients have access to newer generics and better treatment options at an affordable price. Announcement of the Preliminary Findings of icddr,b’s Clinical Trial of Ivermectin Beximco Pharma funded the clinical trial conducted by internationally renowned research organization icddr,b to evaluate the efficacy of Ivermectin in COVID-19 patients. The randomized, 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 was conducted in hospitalized adults diagnosed with COVID-19. The participating hospitals were Mugda Medical College and Hospital; Kurmitola General Hospital, and Dhaka Medical College & Hospital, Dhaka. The study findings have been published in the International Journal of Infectious Diseases (IJID) on December 2, 2020. On December 7, 2020, icddr,b organized a dissemination seminar to share preliminary findings of the concluded study that was held in a local Hotel. National public health experts, representatives from the DGHS, DGDA, BMRC, icddr,b, Beximco Pharma and media were also present at the seminar. 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.” Annual Report 2020-21 | Corporate Events | 63 Media Spotlights Forbes Singapore featured Beximco Pharma. Beximco Pharma’s Learning and Development Center was featured in The Business Standard- a popular news portal of Bangladesh. 64 | Media Spotlights | Annual Report 2020-21 Chief Operating Officer (COO) of the Company, Mr. Rabbur Reza was interviewed by The Business Standard about Beximco Pharma’s success in the US drugs market, and the overall export potentials of Bangladesh’s pharmaceutical industry. Media coverage of the manufacture of Molnupiravir. Annual Report 2020-21 | Media Spotlights | 65 Chairman’s Statement A S F Rahman Chairman I am delighted to report yet another year of excellent performance of Beximco Pharmaceuticals Limited. Amidst pandemic-hit economic and social onslaught, we ended the year with commendable operational and financial performance. We not only achieved our targets but also set few milestones, delivered results and progressed towards successful accomplishment of our strategic goals to strengthen the shareholders’ value. Economic and social life in Bangladesh throughout 2020-21 remained volatile because of the pandemic. Despite constraints and disruptions, we attained impressive sales growth in domestic and international markets, achieved remarkable profit growth and further reinforced our market position. Our overall sales increased by 15.2% with domestic market growing by 15.4% and export by 13.5% over prior year. Pre-tax and post-tax profit recorded 37.1% and 45.7% YoY growth, respectively. This is indeed an appreciable achievement and manifest our strength to withstand challenges and uncertainties to achieve business goals. 66 | Chairman’s Statement | Annual Report 2020-21 As part of our strategy to diversify, expand and reinforce our market position, we completed our second strategic acquisition within three years following the successful acquisition of Nuvista Pharma in 2018. Beximco Pharma acquired 54.6% stake in Sanofi Bangladesh Limited, the Bangladesh operation of the multinational pharmaceutical company Sanofi S.A. We acquired the foreign shareholding in the Company from May & Baker Limited and Fisons Limited, UK while the remaining 45.4% remains with the government of Bangladesh represented through the Ministry of Industries and Bangladesh Chemical Industries Corporation. This acquisition is a strategic fit for Beximco Pharma and I believe, it will generate opportunities for long-term value creation for the Company. We introduced the world’s first generic remdevisir in 2020. This year we set yet another milestone and drew global attention when Beximco Pharma launched a generic copy of molnupiravir, the first oral antiviral drug for the symptomatic treatment of COVID-19. Our pioneering roles and initiatives to innovate and deliver high-quality medicines to the people have continued to earn recognitions from home and abroad. This year we won the CPhI Pharma Awards 2020 for “Innovation in Response to COVID-19”. We also won the Global Generics & Biosimilars Awards 2021 in the category of “Company of the year, Asia Pacific” for the second time. To sustain the growth momentum, we made significant investment in our Unit-3 manufacturing facilities. The project is almost complete and few of the manufacturing lines are now producing validation batches, while the rest will be operational in phases after validation and product transfer. This facility, once fully operational, will significantly increase our production capacity, ease our manufacturing constraints and secure our future growth. Mr. Shah Monjurul Hoque, an Independent Director of the Board and a member of the Audit Committee, retired on completion of his tenure of office for two consecutive terms. On behalf of the Board, I thank Mr. Hoque for his guidance and valuable contribution as a director of the Company. Mr. Hoque has been replaced by Dr. Md. Ibraheem Hosein Khan. Dr. Khan is a retired Civil Servant and last served as the Secretary, Ministry of Cultural Affairs, Government of Bangladesh. I welcome Dr. Khan in the Beximco Pharma family. The Board has appointed him as the Chairman of the Nomination and Remuneration Committee (NRC). I assure Dr. Khan all necessary co-operation in discharging his duty as an Independent Director and Chairman, Nomination and Remuneration Committee (NRC). 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. I am truly proud of our devoted people, who showed strong resilience and commitment during this period of pandemic turmoil. It’s because of their unwavering dedication we could continue seamless operations and steady supply of medicines to the people of home and abroad. I extend my sincere gratitude to each of our employees. I also note with gratitude the contributions of all healthcare professionals and workers especially, the doctors, nurses, and other medical caregivers, for their invaluable services to the pandemic stricken people. Finally, I express my thanks to you, respected shareholders, for extending invaluable support at all times. I wish you all good health and safe life. Thanking you A S F Rahman Chairman Annual Report 2020-21 | Chairman’s Statement | 67 †Pqvig¨v‡bi cÖwZ‡e`b m¤§vbxZ ‡kqvi‡nvìvie„›`, ‡ew·g‡Kv dvgv©wmDwUK¨vjm wjwg‡UW Zvi avivevwnK mvd‡j¨i Av‡iv GKwU eQi mym¤úbœ K‡i‡Q| gnvgvixi Kvi‡Y mviv eQi Ry‡o †`‡ki A_©‰bwZK I mvgvwRK cwi‡ek wQj cÖwZK~j| GZ`m‡Z¡I Avgiv Avgv‡`i e¨emvwqK jÿ¨gvÎv AR©‡bi cvkvcvwk †Kv¤úvbxi Avw_©K cÖe„w× AR©‡bi gva¨‡g ‡kqvi‡nvìvi‡`i `xN©‡gqv`x ¯^v_© msiÿ‡Yi mv‡_ mswkøó ‡KŠkjMZ jÿ¨ ev¯Íevq‡b wKQz bZzb gvBjdjK ¯’vcb Ki‡Z mÿg n‡qwQ| cÖwZKzj I AwbwðZ cwiw¯’wZ weivRgvb _vKv m‡Z¡I 2020-21Bs mv‡j Avgiv Avf¨šÍixY weµq I ißvbxi †ÿ‡Î jÿ¨bxq cÖe„w× AR©b K‡iwQ, Avgv‡`i gybvdv D‡jøL‡hvM¨ cwigvb e„w× †c‡q‡Q Ges evRv‡i Avgv‡`i Ae¯’vb Av‡iv mymsnZ I my`„p n‡q‡Q| MZ eQ‡ii Zzjbvq G eQi Avgv‡`i mvwe©K weµq ivR¯^ 15.2% †e‡o‡Q| †`kxq evRv‡i GB cÖe„w×i nvi 15.4% Ges ißvbxi †ÿ‡Î GB cÖe„w×i nvi 13.5%| Avgv‡`i Ki c~e©© I Ki cieZx© gybvdv h_vµ‡g 37.1% I 45.7% e„w× ‡c‡q‡Q| Av‡jvP¨ eQ‡i Avgv‡`i e¨emvwqK mvdj¨ K…wZ‡Z¡i `vex iv‡L| †h‡Kvb P¨v‡jÄ I AwbðqZv †gvKv‡ejvq Avgv‡`i ‡h mvwe©K mvg_©¨ i‡q‡Q GwU Zvi cwiPq enb K‡i| eûg~LxKiY Ges evRvi m¤úªmvi‡Yi gva¨‡g †Kv¤úvbxi Ae¯’vb‡K Av‡iv my`„p I mymsnZ Kivi †KŠkjMZ j‡ÿ¨ G eQi Avgiv Sanofi Bangladesh Ltd. 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Ges Fisons Ltd., UK Gi wbKU †_‡K µq K‡i| Aewkó 45.4% †kqvi evsjv‡`k miKvi Z_v evsjv‡`k wkí gš¿Yvjq I evsjv‡`k †KwgK¨vj BÛvw÷ªR K‡cv©‡ik‡bi gvwjKvbvq i‡q‡Q| GB AwaMÖnY †ew·g‡Kv dvgv©i †KŠkjMZ j‡ÿ¨i mv‡_ h_vh_fv‡e mvgÄm¨c~Y©| Avgvi wek¦vm, GwU †Kv¤úvwbi `xN©-‡gqv`x jÿ¨ AR©‡b GKwU ¸iæZ¡c~Y© f~wgKv cvjb Ki‡e| 2020 mv‡j we‡k¦ AvgivB cÖ_g †R‡bwiK ‡ig‡Wwmwfi (remdesivir) Drcv`b I evRviRvZ K‡iwQjvg| GeQi AveviI Avgiv mviv we‡k¦ cÖ_g †Kv¤úvbx wnmv‡e Molnupiravir Gi †R‡bwiK fvm©b evRviRvZ K‡i bZzb gvBjdjK ¯’vcb K‡iwQ, wek¦e¨vcx hv bRi †K‡o‡Q| Molnupiravir ‡KvwfW-19 wPwKrmvq gy‡L MÖnY‡hvM¨ cÖ_g A¨vw›UfvBivj Jla| Jla Drcv`‡b Avgv‡`i D™¢vebx mÿgZv Ges gvby‡li Kv‡Q Zv mnRjf¨ Kivi †ÿ‡Î Avgv‡`i cÖ‡Póv, †`‡k we‡`‡k µgvMZ ¯^xK…wZ cv‡”Q| GiB avivevwnKZvq G eQi Avgiv CPhI Pharma Award in the category of ‘Innovation in Response to COVID -19’ Ges wØZxqev‡ii gZ Global Generics & Biosimilars Awards 2021 in the category of “Company of the year, Asia Pacific” AR©b K‡iwQ| `xN©‡gqv‡` cÖe„w× a‡i ivLvi Rb¨ Avgv‡`i Drcv`b mÿgZv e„w× AZ¨šÍ Riæix Ges G j‡ÿ¨ Avgiv Avgv‡`i BDwbU-3 Drcv`b cÖK‡í D‡jøL‡hvM¨ cwigvb wewb‡qvM K‡iwQ| cÖKíwU cÖvq m¤ú~‡Y©i c‡_| BwZg‡a¨ Gi K‡qKwU Drcv`b jvBb validation batch ˆZwi ïiæ K‡i‡Q, evwK¸wj validation I product transfer Kvh©µg m¤ú‡bœi gva¨‡g chv©qµ‡g Drcv`‡bi R‡b¨ cÖ¯‘Z n‡e| GB Drcv`b cÖKíwU m¤ú~Y©fv‡e Pvjy n‡j Avgv‡`i Drcv`b mÿgZv D‡jøL‡hvM¨fv‡e e„w× cv‡e hv fwel¨Z cÖe„w× AR©‡b mnvqK n‡e| cwiPvjbv cl©‡`i ¯^Zš¿ cwiPvjK Ges AwWU KwgwUi m`m¨ Rbve kvn gÄyiæj nK ci ci `yB †gqv‡` `vwqZ¡ cvjb †k‡l GeQi cwiPvjbv cl©` †_‡K Aemi MÖnY K‡i‡Qb| Avwg cwiPvjKgÛjxi cÿ †_‡K Rbve kvn gÄyiæj nK‡K †Kv¤úvbxi cwiPvjbv Kvh©µ‡g ¸iæZ¡c~Y© Ae`vb ivLvi Rb¨ ab¨ev` Rvbvw”Q| 68 | Chairman’s Statement | Annual Report 2020-21 Wt †gvt Beªvwng †nv‡mb Lvb GKRb ¯^Zš¿ cwiPvjK wnmv‡e Rbve kvn gÄyiæj nK Gi ¯’jvwfwl³ n‡q‡Qb| Wt Lvb GKRb AemicÖvß miKvwi Kg©KZv©| wZwb MYcÖRvZš¿x evsjv‡`k miKv‡ii ms¯‹…wZ gš¿Yvj‡qi mwPe wn‡m‡e Aemi MÖnY K‡ib| Avwg Wt Lvb‡K †ew·g‡Kv dvgv© cwiev‡i ¯^vMZ RvbvB| cwiPvjbv cl©` Zv‡K Nomination and Remuneration KwgwUi †Pqvig¨vb wn‡m‡e `vwqZ¡ cÖ`vb K‡i‡Q| GKRb ¯^Zš¿ cwiPvjK Ges Nomination and Remuneration KwgwUi †Pqvig¨vb wn‡m‡e `vwqZ¡ cvj‡b mev©Z¡K mn‡hvwMZvi e¨vcv‡i Avwg Wt Lvb‡K c~Y© Avk¦vm cÖ`vb KiwQ| AwWU KwgwU Ges Nomination and Remuneration KwgwU AZ¨šÍ AvšÍwiKZvi mv‡_ Zv‡`i `vwqZ¡ h_vh_fv‡e cvjb K‡i‡Qb| Avwg cwiPvjbv cl©‡`i cÿ †_‡K Dfq KwgwUi †Pqvig¨vb Ges m`m¨‡`i‡K Zv‡`i g~j¨evb Ae`v‡bi Rb¨ ab¨ev` Rvbvw”Q| Avwg Avgv‡`i wb‡ew`ZcÖvY Kg©x‡`i wb‡q AZ¨šÍ Mwe©Z| Zviv GB gnvgvixKvjxb mg‡q AZ¨šÍ `„p g‡bvej †`wL‡q‡Qb Ges Zv‡`i ¯^¯^ `vwqZ¡ wbôvi mv‡_ cvjb K‡i‡Qb| Zv‡`i AvbyMZ¨ Ges `vwqZ¡c~Y© AvPi‡bi d‡j †Kv¤úvbxi e¨emvwqK Kvh©µg Ges †`k we‡`‡k Ily‡ai wbiwew”Qbœ mieivn m¤¢e n‡q‡Q| Avwg GRb¨ Zv‡`i cÖ‡Z¨K‡K Avgvi AvšÍwiK K…ZÁZv I ab¨ev` Rvbvw”Q| Avwg ¯^v¯’¨‡mevi mv‡_ mswkøó Wv³vi, bvm©mn ¯^v¯’¨ I wPwKrmv ‡mev cÖ`vbKvix mKj‡K Avgvi AvšÍwiK K…ZÁZv Rvbvw”Q| gnvgvix AvµvšÍ gvby‡li cv‡k †_‡K Zviv Zv‡`i AK¬všÍ †mev cÖ`vb Ae¨vnZ †i‡L‡Qb| cwi‡k‡l, Avgv‡`i‡K mvwe©K mnvqZv cÖ`vb Ges memgq Avgv‡`i Dci Av¯’v ivLvi Rb¨ Avwg Avgv‡`i m¤§vwbZ †kqvi‡nvìvi‡`i ab¨ev` RvbvB| Avwg mK‡ji my¯^v¯’¨ Ges `xN©Rxeb Kvgbv KiwQ| ab¨ev`v‡šÍ, G Gm Gd ingvb †Pqvig¨vb Annual Report 2020-21 | Chairman’s Statement | 69 Nazmul Hassan MP Managing Director Management Discussion and Analysis We completed yet another challenging year amidst the ongoing pandemic that continued to disrupt business and economic activities around the world. Global Covid-19 deaths have now surpassed five million and countries are still battling the highly infectious delta strain of the virus. The biggest vaccination campaign in history is currently underway but there remains a wide gap in vaccine access. Out of 7.86 billion doses of vaccine administered worldwide, only 5.1% have been in low-income countries and this vaccine inequity remains the biggest obstacle to ending this pandemic. Bangladesh started its nationwide vaccination in early February with AstraZeneca/Covishield vaccine from Serum Institute India (SII), even ahead of many developed nations. But an unforeseen export restriction on vaccine imposed by the Indian Government due to their worsening pandemic situation, badly disrupted Bangladesh’s vaccination program. The country has so far received 8 million doses of Covishield vaccine out of contracted 30 million doses being purchased under a tripartite agreement among Beximco Pharma, GoB and SII. However, as the Covid vaccine manufacturers in developed nations ramped up their production with large proportion of their populations already vaccinated, some rich countries namely US, Canada, UK, Japan, Germany began donating surplus vaccines to low and middle-income countries through the WHO-led Covax initiative. The country till to date has administered 92 million doses with 21% population fully vaccinated. Majority of the vaccines are currently being supplied under GoB’s commercial deal with Chinese firm Sinopharm, while large quantities are committed through Covax to vaccinate almost 70% our population by the first quarter of 2022. On the economic front, as the pandemic headwinds ease and economic activities are returning to normal, Bangladesh achieved GDP growth of 5.4% in 2020-21 with per capita income rising to $2,227. According to the latest World Bank projection, Bangladesh’s GDP will grow by 6.4% in the 2021-22 driven by export and remittance. As Bangladesh celebrates the golden jubilee of its independence, the country has achieved another historic milestone in its pursuit of development when it received the final recommendation from UN to graduate from the LDC category. Bangladesh was set to leave the LDC group in 2024. However, in view of the COVID-19 pandemic and, as per the request from Bangladesh government, the graduation year is now deferred to 2026. Global pharma industry remains at the forefront in the fight against the pandemic and Bangladesh is no exception. Despite facing all the pandemic challenges, Bangladesh pharma industry maintained double digit growth. Pharmaceutical export from Bangladesh also grew by 25% to $169 million in the last fiscal. Export of COVID-19 drugs, especially remdesivir and Favipiravir, played an important part in achieving this growth. Government supportive policy towards the industry remains unchanged. Review of Operations Sales, Products and Markets Beximco Pharma continued to perform strongly maintaining its growth momentum with remarkable increase in sales, operating, pre-tax and post-tax profit- all attaining impressive double digit growth. Our domestic sales revenue grew by 15.4% to reach at Taka 26,369 million. Defying the supply chain and logistic challenges, we managed to maintain the growth trajectory of our export. During the year, our export revenue fetched Taka 3,124 million registering a 13.5% increase over last year, with over 50% of the total export shipped to highly regulated developed markets. Beximco Pharma alone now contributes 22% of the country’s total export of pharmaceutical products. We expanded our product portfolio with 24 new generics available in 34 different presentations, 4 of them for the first time in Bangladesh. We have maintained our leadership positions in key therapy areas, namely cardiovascular, respiratory and analgesic. We also performed exceptionally well with diabetes, anti-infective and CNS categories. During the year, we introduced buffered Esomeprazole MUPS Brand - Remmo® which has been well accepted by the market. We also launched Fulphila® (6 mg/ 0.6 ml prefilled syringe), the first USFDA and EMA approved biosimilar pegfilgrastim from Mylan for supportive treatment of chemotherapy. Fulphila is our second biosimilar product launched under the Mylan deal. In November 2021, Beximco Pharma became the first in the world to launch a generic copy of molnupiravir, the first oral antiviral drug for the symptomatic Covid-19, which was originally developed by Merck Sharp & Dohme (MSD) and Ridgeback Biotherapeutics. Molnupiravir is being hailed as a game changer which reportedly cut the risk of hospitalisation and death by half. Beximco Phamra’s branded generic version of molnupiravir is being marketed as Emorivir. Mentionable that, Beximco Pharma made global headlines with the launch of the world’s first generic version of remdesivir, under the brand name bemsivir, in May 2020. Annual Report 2020-21 | Management Discussion and Analysis | 71 In the international market, we completed 25 registrations for 22 products in 14 countries and entered eight new markets, namely Oman, Lebanon, Venezuela, Bolivia, Kosovo, Mexico, Congo, and Mongolia. Beximco Pharma remains the country’s lone exporter of medicines to the US and this year the Company launched its 7th product an anti histamine drug cyproheptadine, in this important market. We received the US FDA approval for antiarrhythmic drug flecainide acetate (50, 100, and 150 mg tablets) and muscle relaxant drug baclofen (10 and 20 mg tablets). As of today, we have nine ANDAs approved in the US market that have been fully developed in-house besides eight ANDAs acquired from Sandoz in 2019. Acquisition of Sanofi Bangladesh After the successful acquisition of Nuvista Pharma in 2018, this year we acquired a majority stake (54.6 percent) in Sanofi Bangladesh Limited (SBL) a multinational pharmaceutical company operating in Bangladesh since 1958. This acquisition is a major milestone for us and in line with our strategy to further consolidate our domestic market position and accelerate growth. SBL produces over 100 generic brands with strong footings in cardiology, diabetes, oncology, dermatology and CNS. SBL also sells Sanofi’s global brands of vaccines, insulins and chemotherapy drugs in Bangladesh through direct imports. SBL’s rich product offerings will largely supplement our product portfolio and reinforce our strategy to diversify into new and expanding specialty therapy areas. We believe leveraging our robust product development skills & strong sales-marketing infrastructure and utilizing the manufacturing platforms of SBL, we will be able to generate substantial opportunities for long-term value creation for Beximco Pharma. Support to Community Ensuring uninterrupted supply of quality medicines during lockdowns and supply chain disruptions was more than just a business to us. Our dedicated and committed team successfully accomplished this goal. Beximco Pharma took several initiatives to support the community throughout the pandemic. Notable among them, were donating negative pressure isolation canopies to leading hospital, supplying remdesivir free of cost to Government designated COVID-19 hospitals, providing PPE and masks for the health professionals, giving logistics support to DMCH and IEDCR, sponsoring country’s biggest mask awareness campaigns etc. Beximco Pharma offered full support to the country’s vaccination program by providing free of charges storage and nationwide distribution services of all COVID-19 vaccines namely Sinopharm, Moderna, AstraZeneca procured by the Government from different sources other than the supply under contract with SII. As on the reporting date, we have distributed 90 million doses, almost all of the country’s COVID19 vaccines nationwide. Awards and Recognitions This year we won the prestigious CPhI Pharma Awards 2020 for “Innovation in Response to COVID-19” which is a clear testimony of our initiatives and capabilities to face challenging situations. The Company also won the Global Generics & Biosimilars Awards 2021 in the category of “Company of the year, Asia Pacific” for the second time. This prestigious award recognizes the tremendous achievements made by the global generics and biosimilar industries in delivering high-quality medicines to those who need them most. Beximco Pharma received Special Appreciation as one of the Top Taxpayer Companies from the Large Taxpayer Unit of the National Board of Revenue. It became one of the top income tax payers in the manufacturing sector category. Accounting Policies and Estimates Bangladesh has adopted International Financial Reporting Standards (IFRS)/International Accounting 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 the financial reporting framework and make estimates and provisions 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. 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. 72 | Management Discussion and Analysis | Annual Report 2020-21 Looking Forward We started 2021-22 with a positive outlook amidst the uncertainties and challenges emanating from any new wave of the pandemic. However, gaining from our experience over the last two years and relying on our strength of resilience, we remain confident to explore the maximum business potentials in any challenging situation. Acquisition of Sanofi Bangladesh is an important strategic step to reinforce our market position through diversified portfolio and expanded market reach. This year, one of our key priorities would be to realign and restructure the business and operating model of SBL and ensure its successful integration to build strong foundation for a sustainable growth of business. Ensuring safety of our employees remains our top priority. We will take all possible measures to keep them safe. I am immensely proud of our dedicated people who demonstrated exceptional resilience in the face of this global pandemic. It’s because of their unwavering commitment and courage we could continue our operations and ensure uninterrupted supply of medicines to every corner of the country even during lockdowns. Throughout the pandemic, Beximco Pharma has stood by the healthcare professionals of the country. In addition to our various initiatives for supporting them, we want to express our gratitude saying ‘Thank you’ to each and every frontline health worker who puts their lives at stake in order to save countless lives. My heartfelt gratitude to all our employees for their hard work and dedication in this extremely difficult time. Finally, I would like to extend my sincere thanks to all our stakeholders for showing their confidence and trust on us. Nazmul Hassan MP Managing Director Annual Report 2020-21 | Management Discussion and Analysis | 73 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 2021 along with the report of the auditors thereon. General Economic Overview With some ease of the pandemic following substantial vaccination progress in advanced countries and its rollout in other countries, the global economy is gradually rebounding although the risk of another wave of the pandemic remains a concern. The world economy, as per OECD, is projected to grow 5.7 percent in 2021 and 4.5 percent in 2022, as against a 3.5 percent contraction in the pandemic hit 2020. The global trade and supply chain severely affected during the peak of the pandemic has improved showing the signs of returning to normalcy. Bangladesh detected its first case of Covid-19 in March 2020. Since then, responding to the varying severity of surge of the virus, Government intermittently imposed lockdowns and other restrictive measures to contain its spread. Throughout the year, the industry and business passed difficult time especially in the first and fourth quarter, when Bangladesh faced two surges of Covid-19 upsetting the life and livelihood of the people. With the emergence of the delta variant, almost a quarter of FY 2020-21 was under lockdowns and restrictions of varying degrees, adversely affecting the economic activities of the country. Alongside the vaccination program, Government took up several fiscal and non-fiscal measures to support business and keep the economy afloat. It has so far announced 28 stimulus packages worth Taka 1.35 trillion for mitigating the adverse impact of the pandemic and to facilitate faster recovery of the economy. Other supporting measures include relaxation of interest rates, relaxed repayment schedule and loan classification rules, extended settlement time in foreign trade, duty and tax waivers for import and sale of all Covid-19 related medicines, supplies and equipment. Bangladesh economy relying on robust inflows of wage earner’s remittances and rebound of export, bounced back and grew by 5.47% during FY 2020-21, a strong turnaround from 3.51% of prior year. The inflation rate remained stable at around 5.6%. Low import payment, higher foreign remittance helped reach the forex reserve at 46.39 billion and the exchange rate of Taka against its intervening currency the USD, remained broadly stable throughout 2020-21. However, with the ease of pandemic and unwinding of disrupted supply chain, import of raw materials and capital machinery significantly rose. The Inflow of wage earners’ remittance on the other hand, in recent months has declined. These caused deprecation of Taka against US Dollar by around 1% during the first quarter of the new fiscal year. The economic outlook of Bangladesh in the prevailing global context appears encouraging with Government projecting a 7.2% growth in 2021-22. The Word Bank and multilateral agencies however projects 6.4% to 6.8% growth for Bangladesh. Review of Financial Performance Impressive sales and Profit Growth The Company despite a challenging market condition prevailing throughout the fiscal period, achieved remarkable progress in all parameters of financial performance. Our consolidated sales registered a 15.2% increase to reach at Taka 29,494 million from Taka 25,612 million of previous year. Sales in the domestic market increased by 15.4% while our export rose by 13.5% to Taka 3,124 million. The operating profit rose by 18.6% to Taka 6,651 million, while the pre-tax profit increased by 37.1% to Taka 6,378 million. The net profit after tax reached to Taka 5,166 million with remarkable 45.7% YoY growth. Earnings per share rose by 45.8% to Taka 11.49 from Taka 7.88 of prior year. Improved sales mix and relatively stable exchange rate coupled with leverage effect of higher sales volume has helped maintain the gross margin at 47.2%, marginally higher over 46.5% of last year. The operating expenses remained contained at 24.6% of sales. 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 74 | Report of the Directors to the Shareholders | Annual Report 2020-21 Sales and Proﬁt Snapshot 15.2% 17.0% 18.6% 37.1% 45.7% Sales Revenue Gross Proﬁt Operating Proﬁt Pre-Tex Proﬁt Net Proﬁt after Tex 2019 - 2020 2020 - 21 Improved Operating Cash flow Strong sales and profit growth enabled to generate a healthy cash flow. Our Net Cash from Operating Activities increased to Taka 6,023 million against Taka 5,542 million of prior year, registering an 8.7% YoY increase. The Company used cash of Taka 2,521 million for acquisition of property, plant and equipment compared to TK 2,243 million of previous year. The Company also repaid long term borrowing of Taka 505 million and short term borrowing of Taka 2,375 million during the year. These resulted a decline in Company’s bank borrowings by Taka 2,873 million to Taka 7,631 million from Taka 10,504 million of prior year. Net Operating Cash Flows Per Share (NOCFPS) however, slightly dropped to Taka 13.50 against Taka 13.67 of prior year due to increase in the number of shares declared as stock dividend for the year 2019-20. Subsidiary Companies Nuvista Pharma Limited Nuvista Pharma Limited (NPL)has almost doubled its revenue in a short span of three years since acquisition by Beximco Pharma. Along with sales, the company made strong improvements in other areas of operating and financial performance, especially in prescription share, product portfolio, operating and net profit. In FY 2020-21, it registered 24.0% growth in sales to reach at Taka 2,572 million. Profit after tax stood at Tk. 300 million, a 22.9% increase over the prior year. Because of strong cash flow resulting from impressive sales growth, NPL is now meeting its working capital requirements from its own cash flow with insignificant or no use of bank credit facilities. Total Sales Profit Before Tax Net Profit Earnings Per Share Net Operating Cash Flows Per Share Dividend (Cash) 2020-21 2,572 421 300 25.51 34.76 40% 2019-20 2,074 334 244 20.75 28.23 35% 2018-19 1,669 108 90 7.62 19.87 20% Taka in million 2017-18 1,320 (59) (95) -8.06 14.33 5% Sanofi Bangladesh Limited Beximco Pharma completed the acquisition of 54.6% stake in Sanofi Bangladesh Limited (SBL) at a consideration of approximately Taka 469.62 crore (equivalent £39.35 million) pending final closing adjustments, if any. The transfer of ownership was completed by end of business day of September 30, 2021 and SBL effectively became a subsidiary of Beximco Pharma from October 1, 2021. Sanofi Bangladesh, therefore, has not been consolidated in the current reporting period. The acquisition of Sanofi Bangladesh has been disclosed in the annual report as an event after reporting period. Beximco Pharma API Limited This company was formed with an intent to set up a facility at API industrial park being developed by the government of Bangladesh, to manufacture Active Pharmaceutical Ingredients (APIs) for domestic and international market. However, the company is still in the initial phase and has carried out no operational activities during the year. Continuity of Other Income The Company reports Cash Incentives on Exports on submission of claims fulfilling the eligibility criteria. Claims for export incentives are to be made after receipts of the export proceeds. Companies are allowed six-month time from the date of receipts of the export proceeds to claim incentives. Income from this source for the period 2020-21 was Taka 310 million as against Taka 140 million of 2019-20. The Cash Incentive on Export recorded a significant increase over the comparable prior period because of lower submission of application in the initial period of the introduction of the incentive scheme in 2019-20 fiscal year. Moreover, Company’s export is mostly on deferred payment basis. As such, application against the export of a particular year may be stretched over the next financial year. Income from cash incentive is dependent on the value of export made and the amount of proceeds remitted in a particular year. The Company earned a net amount of Taka 542 million as Vaccine Distribution Fee under a tripartite agreement with the Government of Bangladesh (GOB) and the Serum Institute of India Pvt. Ltd (‘SII’) for the supply of Oxford University /AstraZeneca SARS-CoV-2 AZD 1222 Vaccine in Bangladesh. The Company delivered seven million vaccines out of contracted thirty million doses during the reported period. Any future earning from this source is dependent on the delivery of the committed quantity of the vaccine under the agreement. Annual Report 2020-21 | Report of the Directors to the Shareholders | 75 We have royalty income from our subsidiary Nuvista Pharma and overseas partners for the sale of few selected products. The royalty earned from Nuvista Pharma has been eliminated as inter-company transactions in the consolidated financials. Royalty income linked to the volume of sale of the particular products. Forfeited PF Refund of Taka 11 million included in other income relates to the refund made by the Provident Fund Trusts as per directive of Financial Reporting Council (FRC) vide their notification No 179/FRC/FRM/Notification/2020/2 dated July 7, 2020. This represents the accumulated balance of the forfeited amount since 2015 and future income from this source will either be insignificant or none. The other items under the head “Other Income” are either insignificant or inherent to normal business operations. Profit and its Appropriation Directors propose the appropriation of profit as follows: Particulars Net Profit After Tax Adjustment for depreciation of Revalued Assets Profit Brought Forward Profit Available for Appropriation Proposed Dividend: Cash Dividend Stock Dividend Profit Carried Forward Amount in Taka’000 BPL (Stand-alone) 2020-21 4,943,488 7,180 18,906,148 23,856,816 (1,561,392) ---- 22,295,424 2019-20 3,363,400 8,114 16,548,524 19,920,038 (608,334) (405,556) 18,906,148 Dividend The Board of Directors recommends 35% Cash Dividend i.e. Tk. 3.50 per share for the year ended 30 June 2021 for onward approval at the Annual General Meeting. The Company has declared no interim dividend during the year. Risks and Concerns Every business operates in a volatile, uncertain, complex and ambiguous environment. Organizations thus are exposed to risks that might arise from internal or external sources. Recent pandemic has shattered global supply system and disrupted trade, communication and usual movements of people. Businesses, irrespective of nature, size and geographic location, have been adversely affected at varying degrees. The unpredicted and uncontrollable challenges of this type have brought the necessity of robust risk management into forefront. Beximco Pharma, like any other business or industry, is operating in a dynamic and competitive market and thus exposed to risks that may affect its business. The senior management of the Company oversees risk management processes on a continual basis. Management of risks involves identification and assessment of risks; setting standards on company’s risk appetite; and designing, implementing and monitoring policies to address various financial and non-financial risks. While the Company has robust policies and procedures in place at functional, operational and strategy level to mitigate risks from internal and external sources, there are uncertainties beyond control of the Company which might adversely affect its business and deter achievement of its targets. Economic Risks Any decline in economic growth could, as for any other industry, impact the future demand for pharmaceutical products. Thus company might not meet its expected growth in revenue. Bangladesh, however, maintained steady economic progress over the years with substantial uplift in all socio-economic indices and it is anticipated that trend will continue in the near future. Market Risk The Company has borrowings from local and overseas sources. Interest rates are variable and any significant rise in interest rates might impact the financial results of the Company. Foreign borrowings, in addition to interest rate are subject to foreign exchange risk. Company however, has strong revenue and cash flow stream to meet its financial obligations. Domestic interest rate remains 76 | Report of the Directors to the Shareholders | Annual Report 2020-21 more or less stable due to intervention by government. Moreover, government has capped the maximum lending interest rate at 9%, which mitigates the risk of any abrupt increase in the rate of interest. Additionally, the interest rate of major foreign loan is based on Euribor which is currently negative. The Company has growing export proceeds that give a natural hedge to partially neutralize the adverse impact of the exchange rate fluctuations. Government intervenes in the market through its monetary and fiscal measures to keep the forex market stable, which is another protection for the Company. Interest Rate and Foreign Exchange Risk Other market risks are interest rate risk and foreign exchange risk. The Company has borrowings from local sources and abroad. Local borrowings are on variable interest rate. Rise of interest rates will impact the financial results of the Company. However, considering the finance expenses in contrast with total revenue and expense of the Company, the impact is not that much. Moreover, this risk is greatly mitigated due to intervention of the Govt by capping the maximum interest rate which is currently 9%. Foreign borrowings are subject to both interest rate risks and foreign exchange risks. Rise of interest rates and appreciation of currency have adverse impact on company’s profitability. The Company’s main foreign loan is based on Euribor which is negative thus not to impact on borrowing costs. Exchange rate between USD and BDT remained broadly stable during the year under review. Moreover, the company, having export proceeds, has a natural hedging for a certain portion of foreign exchange transaction especially repayment against foreign loan and other overseas expenses. Government intervenes in the market through its monetary and fiscal measures to keep the market stable which is another projection for the Company. Due to absence of derivatives market in the country, the Company remain exposed to some foreign exchange risks mainly for its payment against import. However, impact shall not be severe considering the low volume of open foreign exchange exposure compared to total operations of the Company. Input price and Supply Chain Risk Pharmaceutical companies in Bangladesh are largely dependent on imported APIs. Any substantial increase in prices of materials and disruptions in the supply chain may affect the cost of production. Because of regulatory control and sensitivity to public health, prices of pharmaceutical products can’t be promptly adjusted responding to the rise in cost and thus the attainment of the profit target might be hindered. To mitigate the risk, Beximco Pharma imports 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 this therefore, reduces the individual supplier’s influence on procurement prices. Most of the suppliers have their local agent and the Company maintains close relationship with them. Moreover, 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 increased costs. Product Liability Risk Pharmaceutical products are usually exposed to high product quality risk. Each product is required to be manufactured and marketed through a stringent compliance procedure. Manufacturing of products requires the flexibility to accommodate the changing local and global regulatory needs. Any deviation from the standard may result in serious market reputational damages and might also create a regulatory barrier. Over the years, Beximco Pharma has been recognized locally and globally for its quality products and manufacturing excellence. Our manufacturing facilities are certified by leading global regulatory agencies. As such, Beximco Pharma is less exposed to product quality risk. Additionally, the Company has taken adequate insurance cover to minimize the product liability risk. Technology Risk The pharmaceutical industry is a technology and research driven industry. Failure to adapt to innovation and technological advancement might affect Company’s future growth. Beximco Pharma continues to invest in state-of-the-art manufacturing technologies, R&D and laboratory infrastructure to strengthen its manufacturing and innovation capabilities. It maintains close ties with leading global companies and organizations to remain updated on the changes taking place in the industry. Regulatory Risk Uncertainties emanating from significant changes in the pharmaceutical policy, regulations, tax regime or other business laws having a bearing on the pharmaceutical sector may also threaten the growth potential of the business. Government policy for the Pharmaceutical sector remains supportive of its growth. Existing fiscal and non-fiscal incentives enjoyed by the industry are expected to continue in the future. No significant changes in policy, regulation or tax regime that can adversely affect the business are foreseen. Annual Report 2020-21 | Report of the Directors to the Shareholders | 77 Retirement and Re-election of Directors Mr. Iqbal Ahmed and Mr. O. K. Chowdhury, 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. Ms. Reem H. Shamsuddoha and Ms. Quamrun Naher Ahmed have been appointed as Directors of the Company on December 19, 2020. As per Article 131 of the Articles of Association of the Company they retire and being eligible, offer themselves for re-election. Detailed bio-data of the Directors are available in the Directors’ Profile section of this Annual Report. Appointment of Independent Director In compliance to the provisions of Corporate Governance Code issued by Bangladesh Securities and Exchange Commission (BSEC) dated June 03, 2018, Dr. Md. Ibraheem Hosein Khan was appointed as Independent Director of the Company on January 17, 2021 for a period of 3 years, subject to the approval of the Shareholders in the Annual General Meeting. Proposal is placed for the approval of his appointment. Detailed bio-data of Mr. Khan is available in the Directors’ Profile section of this Annual Report. Auditors The existing Auditors, M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, BirUttam C. R. Datta Road, Dhaka-1205 who were appointed as Auditors of the Company in the 44th Annual General Meeting of the Company has carried out the audit for the year ended 30 June 2021. M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, BirUttam 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 2021-22. The Board after due consideration recommends for the reappointment of M. J. Abedin & Co., Chartered Accountants as auditors for the year 2021-22. 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 periodically reviews these transactions. The full disclosure of all related party transactions is 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 a defined benefit Plan (Gratuity) for employees irrespective of their positions. Company has a rigorous performance evaluation and appraisal system linked to KPIs. Employee salary and allowance 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 an 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, 2020. 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. 78 | Report of the Directors to the Shareholders | Annual Report 2020-21 • 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. • • • There is no significant doubt about the ability of the Company to continue as a going concern. Internal Control System is sound in design and has been effectively implemented and monitored. Interests of the minority shareholders have been duly protected. 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 2020-21 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 of the Directors Representation in the Board Attendance in Board Meeting Mr. A S F Rahman Mr. Salman F Rahman MP Mr. Nazmul Hassan MP Mr. Iqbal Ahmed Mr. O K Chowdhury Mr. A B Siddiqur Rahman Ms. Reem H. Shamsuddoha Ms. Quamrun Naher Ahmed Mr. Shah Monjurul Hoque Mr. Mamtaz Uddin Ahmed Dr. Md. Ibraheem Hosein Khan Chairman Vice Chairman Managing Director Director Director Director Director Director Independent Director (outgoing) Independent Director Independent Director 6 12 12 10 12 12 7 7 6 12 3 The Pattern of Shareholding The Shareholding of Directors, CEO, CFO, Company Secretary, Key Executives and their spouses and children are provided in Annexure- 3. Corporate Governance Compliance Report In accordance with the 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 Annual Report 2020-21 | Report of the Directors to the Shareholders | 79 Annexure-1 The Board of Directors Beximco Pharmaceuticals Limited Subject: Declaration on Financial Statements for the year ended on 30 June 2021 Dear Sirs, Pursuant to the condition No. 1(5) (xxvi) imposed vide the Commission’s Notification 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 2021 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 financial statements were made on a prudent and reasonable basis, in order for the financial 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 financial 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 financial statements is appropriate and there exists no material uncertainty related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. In this regard, we also certify that: We have reviewed the financial statements for the year ended on 30 June 2021 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. 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 Officer 80 | Report of the Directors to the Shareholders | Annual Report 2020-21 Annexure- 2 Key Operating and Financial Data 30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017 30-Jun-16 15,000,000 15,000,000 15,000,000 9,100,000 9,100,000 9,100,000 4,461,121 4,055,564 4,055,564 4,055,564 4,055,564 3,862,442 37,364,865 32,797,450 29,864,324 27,351,837 25,072,426 23,059,412 47,887,415 45,615,625 43,454,027 39,081,675 31,692,789 28,756,326 Taka in Thousand Authorized Capital Paid up Capital Shareholders’ Equity Fixed Assets (Gross) Net Asset Value (NAV) Per Share -Taka Market Price Per Share Price Earning Ratio (Time) 83.01 177.3 15.43 80.12 69.20 8.8 72.96 83.50 11.16 66.78 93.90 15.02 61.82 113.00 20.58 59.7 83.5 17.47 Number of Shareholders 55,248 56,101 56,177 57,982 62,741 67,679 Foreign Investors ICB including ICB Investors Account Sponsors, General Public & Other Institutions 71 871 71 882 77 881 90 879 92 874 83 878 54,306 55,148 55,219 57,013 61,775 66,718 Number of employees 5104 4,755 4,489 4,256 3,833 3,515 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. 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 Taka in Thousand 29,493,574 25,611,947 22,816,630 17,716,717 15,508,777 13,785,325 3,124,001 2,751,790 2,502,633 1,476,978 1,078,472 861,653 13,923,502 11,899,100 10,620,343 8,285,979 7,184,882 6,408,857 6,377,548 4,653,440 3,946,065 3,361,334 2,891,482 2,564,267 5,165,750 3,544,483 3,040,403 2,532,654 2,226,695 1,938,894 11.49 13.50 22 35% - 7.88 13.67 26 15% 10% 7.48 7.30 20 6.25 4.49 16 5.49 6.49 15 4.78 8.21 21 15% - 12.50% 12.50% - - 15%* 5%* Annual Report 2020-21 | Report of the Directors to the Shareholders | 81 Graphical View of Selected Growth Indicators SALES/TURNOVER EXPORT SALES Taka in million 4 9 4 , 9 2 2 1 6 , 5 2 7 1 8 , 2 2 7 1 7 , 7 1 9 0 5 , 5 1 5 8 7 , 3 1 4 2 1 , 3 2 5 7 , 2 3 0 5 , 2 7 7 4 , 1 8 7 0 , 1 2 6 8 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 NET PROFIT 6 6 1 5 , 4 4 5 , 3 0 4 0 , 3 3 3 5 , 2 7 2 2 2 , 9 3 9 1 , 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 EPS (TAKA) SHAREHOLDER’S EQUITY 9 4 . 1 1 8 8 . 7 8 4 . 7 5 2 . 6 9 4 . 5 8 7 . 4 5 6 3 , 7 3 7 9 7 , 2 3 4 6 8 , 9 2 2 5 3 , 7 2 2 7 0 , 5 2 9 5 0 , 3 2 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 82 | Report of the Directors to the Shareholders | Annual Report 2020-21 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. 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 Annexure-3 Shares held 24,897,715 3,189,926 10,345,757 965,206 1,308,505 9,058,888 9,080,095 14,657 - - - - - Annual Report 2020-21 | Report of the Directors to the Shareholders | 83 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 Annexure-4 (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) 1(3)(b)(i) 1(3)(b)(ii) 1(3)(b)(iii) 1(3)(b)(iv) 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 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 84 | Report of the Directors to the Shareholders | Annual Report 2020-21 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) 1(3)(b)(v) Practicing advocate at least in the High Court Division of Bangladesh Supreme Court or a CA/CMA/CFA/CCA/CPA or CS 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) 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) 1(5)(xiv) 1(5)(xv) 1(5)(xvi) 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 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 √ √ √ √ √ √ √ √ √ √ √ N/A N/A N/A √ √ √ √ √ √ √ √ √ √ N/A N/A √ √ √ √ √ Company operates in a single product segment. Annexure- 2 Annexure-3 Annual Report 2020-21 | Report of the Directors to the Shareholders | 85 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) Annexure-2 Annexure- 1 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) 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. 1(6) 1(6) 1(7) 1(7)(a) 1(7)(b) 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) 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 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 subsidi- ary 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 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 86 | Report of the Directors to the Shareholders | Annual Report 2020-21 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) 3(3)(a) The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year 3(3)(a)(i) Financial statements do not contain anything which is materially untrue or misleading 3(3)(a)(ii) Financial statements present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws 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) 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) 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 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 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ - √ Annexure-1 - No such IPO/RPO/ Right Issue occurred during FY 2020-21. Annual Report 2020-21 | Report of the Directors to the Shareholders | 87 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) - - - - - - - - Audit Committee found no such issue or activity. No such instance occurred during the period. No such instance occurred during the period. No such instance happened during the period. 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) 6(2)(a) 6(2)(b) 6(2)(c) 6(2)(d) 6(2)(e) 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 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 6(2)(f) The Chairperson of the Committee may appoint external expert for advice or suggestion 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) 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 Inde- pendent 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 - - - - - √ √ √ √ √ √ √ √ - - √ √ √ √ √ √ √ - √ √ √ √ √ 88 | Report of the Directors to the Shareholders | Annual Report 2020-21 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) 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) 6(5)(c) 7 7(1)(i) 7(1)(ii) 7(1)(iii) 7(1)(iv) 7(1)(v) 7(1)(vi) 7(1)(vii) 7(1)(viii) 7(1)(ix) 7(2) 7(3) 8 8(1) 8(2) 8(3) 9 9(1) 9(2) 9(3) 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 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 Non-engagement in services determined by Audit Committee Not involved in audit or certification services on compliance of corporate governance Not involved in any other service that creates conflict of interest 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 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Annual Report 2020-21 | Report of the Directors to the Shareholders | 89 Annexure-5 90 | Report of the Directors to the Shareholders | Annual Report 2020-21 Report of the Audit Committee I am pleased to present the report of the Audit Committee of Beximco Pharmaceuticals Limited in compliance to the provisions of the Corporate Governance Codes issued by Bangladesh Securities and Exchange Commission (BSEC). A competent audit committee is important to insure accounting and reporting transparency and promote good governance. The Audit Committee of Beximco Pharma as a sub-committee of the Board plays a vital role in effective discharge of the Board’s oversight responsibilities. The Committee has distinct Terms of Reference (ToR) developed conforming to the Code of Corporate Governance which includes but not confined to overseeing the financial reporting process, evaluating internal control system, reviewing significant related party transactions, assessing potential conflict of interests, and reviewing the financial statements of the Company and its subsidiaries. This report gives a brief on the activities performed by the Audit Committee throughout the year. Changes in the Committee Mr. Shah Monjurul Hoque, an Independent Director of the Board and a member of the Audit Committee retired on completion of his tenure of office for two consecutive terms of three years each. Mr. Hoque was an important member of the committee and made appreciable contribution during his tenure. I express my heartfelt thanks for his valuable service. Ms. Reem H. Shamsuddoha a Director of the Board was nominated as a member of the Audit Committee on January 18, 2021 in replacement of Mr. Hoque. Following the changes the Committee has been reconstituted as below: Name Representation in the Board Position in the Committee Prof. Mamtaz Uddin Ahmed Independent Director Mr. Osman Kaiser Chowdhury, FCA Ms. Reem H. Shamsuddoha Director 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 during the period under review. Records of attendance in the meetings are as below: Name Representation in the Board Position in the Committee Attendance in Meeting Prof. Mamtaz Uddin Ahmed Mr. Shah Monjurul Hoque Independent Director Independent Director Chairman Member (outgoing) Mr. Osman Kaiser Chowdhury, FCA Ms. Reem H. Shamsuddoha Director Director Member Member Mr. Mohammad Asad Ullah, FCS * Ms. Reem H. Shamsuddoha replaced Mr. Shah Monjurul Hoque who retired on 17 January 2021 Company Secretary Secretary 4/4 2/4 4/4 2/4 4/4 Review of Financial Statements The Audit Committee reviewed the annual audited financial statements of the Company for the year 2020-21 in its meeting held on October 19, 2021. The annual financial reports of the subsidiary companies, namely Nuvista Pharma Limited and Beximco Pharma API Limited,were also placed for review and approval of the Committee during the meeting. Mr. Mohammad Ali Nawaz, the Chief Financial Officer (CFO) of the Company presented the annual accounts along with the independent auditor’s report. The Committee had detailed discussion with the representative of the management on different aspects of the financial statements particularly on compliance with IFRS/IAS, adequacy of disclosures made, consistency of the accounting policies applied and prudence of the estimates and judgements made in preparation of the financial statements. The Committee carefully examined the related party transactions carried out among different associated companies, including the subsidiaries. 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 Annual Report 2020-21 | Report of the Audit Committee | 91 Disclosures’. The Committee evaluated the report of the independent auditor on the annual financial statements and found no material audit observation. Besides the review of annual financials, the Committee met on three other occasions to review the interim un-audited financial statements of the Company and its subsidiaries. They carried out in-depth review of each of the quarterly financial statements with due care to ensure that the financial statements give a true and fair view of the state of affairs of the company and are free from any material error. During the evaluation process, relevant queries were raised and explanations were sought from the management on accuracy of the reported numbers and adequacy of the information disclosed in the financial statements. The Committee, where applicable, gave necessary feedback and guidance. In each case Committee being satisfied authorized for onward submission of the financial reports for the approval of Board. Other Reviews and Activities The Committee assessed the independence, objectivity and expertise of the independent auditors engaged to carry out the audit for the year ended 30 June 2021 and found their performance meeting the standard. Based on the evaluation, the Committee recommended for the re-appointment of the existing auditor for the year 2021-22. The Committee appraised the financial reporting process and the adequacy of the internal control system of the Company and found them satisfactory. They noted that internal audit team enjoy full, free and unrestricted access to all activities, records, property. They also noted that internal audit and compliance team has been further strengthened with professionally qualified personnel. The Committee noted no material deviations or non-compliance or adverse audit finding that calls for board or shareholders’ attention during the year under review. Mamtaz Uddin Ahmed Chairman Audit Committee 92 | Report of the Audit Committee | Annual Report 2020-21 Activities and Other Details of Nomination and Remuneration Committee (NRC) The Nomination and Remuneration Committee (NRC) is one of the two sub-committees of the Board formed in Compliance to the Corporate Governance Code issued by Bangladesh Securities and Exchange Commission. Composition of the NRC There have been some changes in the Committee during the year under review. Mr. Shah Monjurul Hoque, an Independent Director of the Board and the Chairman of the NRC retired from the Committee and the Board on completion of his tenure of office for two consecutive terms. Dr. Md. Ibraheem Hosein Khan an Independent Director of the Board has replaced Mr. Hoque. The Board has appointed Dr. Khan as the Chairman of the Committee. The Committee comprises as follows: Name Representation in the Board Position in the Committee Dr. Md. Ibraheem Hosein Khan Independent Director Mr. Iqbal Ahmed Mr. Osman Kaiser Chowdhury, FCA Director Director Mr. Mohammad Asad Ullah, FCS Company Secretary Chairman Member Member Secretary Summary of Activities of NRC The Nomination and Remuneration Committee (NRC) had one meeting during the year. Dr. Md. Ibrahim Hosein Khan, Chairman of the NRC, presided over the meeting. All the members, except Mr Iqbal Ahmed, attended the meeting. Mr. Md. Ali Nawaz, Chief Financial Officer, Mr. Jamal Ahmed Choudhury, Director (F&A), and Mr. M A Arshad Bhuiyan, General Manager, HRM attended the meeting as representatives of the management on invitation. The Committee dealt with two agendas namely, Employee Recruitment and Selection Process of the Company; and the Policy on Composition of Board and Appointment of Directors. The proceedings of the meeting were appropriately recorded. No member of the Committee received any remuneration other than the meeting attendance fee. Review of Employee Recruitment and Selection Process of the Company Head of HRM presented the process of recruiting and selecting employees for different positions and grades of the Company before the members of the Committee. The presentation outlined the method of assessing the HR needs; determining the qualification criteria; and the steps adopted to searching, screening, evaluating and recruiting appropriate candidate for positions at different tiers of the organization. The Company adopts objective, fair and unbiased evaluation criteria in the selection process. Recruitments are principally based on education, experience and defined skills for any particular position. The Committee conducted in-depth review of the existing policy and concluded that the current recruitment and selection process of the Company is well designed in terms of assessing the need, interacting with the potential candidates and hiring talented human resource for the Company. Review of Policy on Composition of Board and Appointment of Directors The Committee thoroughly reviewed the Company’s policy on Composition of Board and Appointment of Directors. Representative of management presented in detail the composition of the Board, policy on board diversity, evaluation criteria of the board members and their appointment process. The Committee noted that the policy is well defined and appropriately accommodates the statutory and regulatory requirements. They made few minor suggestions which were duly accommodated. In this context, the Committee evaluated the current composition of the Board and observed that the Board is well composed with adequate diversity in terms of age, experience, gender, etc. The current Board also adequately fulfills the condition of a minimum number of Independent Directors statutorily required to be included in the Board. Annual Report 2020-21 | Activities and Other Details of Nomination and Remuneration Committee (NRC) | 93 Nomination and Remuneration Policy The Company has a written policy on nomination and appointment of directors in the Board. The policy sets out the detail qualification and other eligibility norms for the members and the process of their nomination, which is rightly aligned with the Corporate Governance Code of Bangladesh Securities and Exchange Commission. While Directors, as per Bangladesh Companies Act, are to be elected by the shareholders in the annual general meeting, the Board of Directors makes the recommendation for appointment or re-appointment of Directors. NRC plays an important role in assisting the Board to identify persons fitting the qualifying criteria as a Director. The Person (s) identified for the proposed appointment as director is evaluated in terms of the requirements laid down in prevailing legislation; specific regulations applicable to the public listed companies both in Bangladesh and the United Kingdom; the Bylaws and the policies of the Company. NRC makes an independent evaluation of his/her experience, capability and competence to make a meaningful contribution as a Board member to achieve Company’s mission and goals. Additionally, to comply with the regulations of the Alternative Investment Market (AIM) of London Stock Exchange, a clearance from the Company’s Nominated Advisor (NOMAD) is required before the appointment of any director, including the Independent Director. NOMAD conducts independent third party verification of the eligible candidates before their appointment as Directors. The Company shall appoint adequate number of directors, including independent directors, and shall endeavor to nominate or appoint directors from diversified fields of experience and specialties. From the perspective of gender diversity, preference shall be given to the female candidates where male and female are found equally qualified for the membership of the Board. The Company does not make any discrimination in terms of religion, faith, color, gender or nationality while considering the appointment as a Director. All the Directors of the Board except the Managing Director are non-executive. The Company pays no remuneration to them other than the fees for attending the Board and other committee meetings. 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 a 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. 94 | Activities and Other Details of Nomination and Remuneration Committee (NRC) | Annual Report 2020-21 Investor Relations Communication with Shareholders and Investors Beximco Pharma recognizes the investors’ right to remain informed about the Company, its operating and financial results, and other material information that are relevant to their investment decisions. The country’s legislation and regulations sets out the rights and privileges of the shareholders and the nature, timing and means of communicating information to the shareholders and investors. The Company without failure complies with all regulatory provisions and communicates information in effective and timely manner. The Company regularly holds its Annual General Meeting as required by the Companies Act, 1994 to appraise the shareholders about the overall affairs of the Company. The AGM deals with specific agenda to be approved by the Shareholders. Interested shareholders may take part in the discussion and raise queries about the affairs of the Company. Extra-ordinary General Meeting (EGM) is also held in cases that require calling of a meeting. The board members and senior management of the Company remain present in those meetings to answer queries and address any concerns of the shareholders. Considering pandemic, like prior year, this year’s AGM will also be held on virtual platform. The Company updates the market with all price sensitive information as soon as it becomes available 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 senior management of the Company occasionally meets its overseas investors to update them about the business. The local and overseas fund managers and analysts also hold pre-arranged meeting at home and abroad with our top management to know the present and future potentials of the Company. During the year the meetings were held mostly online. Beximco Pharma has a distinct Company Secretarial Department adequately manned with qualified professionals to carry out the regulatory secretarial functions and to meet administrative enquiries from the shareholders and investors. There is also an investor relation team within accounting and finance function to deal with queries and information requests from investors, regulators etc. 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. Reporting to the Shareholders Financial Reports and Reporting Calendar The Company publishes three quarterly financial reports prepared in a condensed form. These reports are un-audited. The Company’s Annual Audited Financial Accounts are however, audited by independent external auditors and prepared complying with international accounting standards and other statutory requirements. Such Reports are available in the Company’s website. Latest timing of release of the financial statements are: November-15 Januray-31 April-30 October-31 Q1 Q2 Q3 First Quarter Report Half Yearly Report Third Quarter Report Audited Financials Reports Annual Report 2020-21 | Investor Relations | 95 Website Communication: 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 investors’ relation segment of the website has been further reorganized for easy search of information and to make it convenient to the users. In addition to accessing information through website, investors and other report users may contact the Company for additional information. The contact details are available on the Company’s website. Five Year Dividend History Cash Dividend 35.0% 12.5% 12.5% 15.0% 15.0% 2016-17 2017-18 2018-19 2019-20* 2020-21 * In addition to Cash, 10% Stock Dividend was declared in 2019-20 96 | Investor Relations | Annual Report 2020-21 Stock Market Performance Dhaka Stock Exchange (DSE) Particulars 30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017 Share Price- Dhaka Share Price- AIM BDT 177.3 BDT 69.2 BDT 83.5 BDT 93.9 BDT 113.0 GBP 0.860 GBP 0.355 GBP 0.389 GBP 0.510 GBP 0.605 Market Capitalization- Dhaka Price BDT 79.1bn BDT 28.1bn BDT 33.9bn BDT 38.1bn BDT 45.8bn EPS- Taka P/E Ratio (Dhaka Price) Dividend (Cash) Stock Dividend 11.49 15.4 35% (Proposed) -- 7.88 8.8 15% 10% 7.48 11.2 15% - 6.25 15.0 12.5% - 5.49 20.6 12.5% - 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 Annual Report 2020-21 | Investor Relations | 97 Snapshots of 44th Annual General Meeting (Held on virtual platform) 98 | Investor Relations | Annual Report 2020-21 Dividend Policy Statement Introduction Bangladesh Securities and Exchange Commission (BSEC) through a Directive, made it mandatory for a listed company to formulate its Dividend Distribution Policy and disclose the policy in the company’s annual report and official website. In compliance to this directive, Beximco Pharmaceuticals Limited (“Beximco Pharma” or the “Company”) publishes this statement as a guiding framework for the shareholders with regards to the Company’s Dividend Policy. This statement provides a brief outline of the legal and regulatory provisions relating to dividend, key issues in dividend considerations and the procedure for the declaration, approval and payment of dividend. Relevant Laws and Regulations Different legal and regulatory provisions have bearings on dividend decisions of the Company. The paragraphs below provide a brief overview of the provisions relating to dividend: Companies Act The Companies Act 1994, the primary legislation regulating the affairs of a company, gives power to the directors to recommend the dividend to be declared by the company which is to be approved by the shareholders in the Annual General Meeting (AGM). The shareholders however, cannot approve any dividend more than what has been recommended by the directors. It also authorizes the directors to pay from time to time, interim dividends to the shareholders if so appears to be justified by the profits of the company. The directors may, before recommending any dividend, set aside out of the profits of the company, such sums as they deem appropriate, as reserve or reserves which shall at the discretion of the directors, be applied for meeting contingencies, or for equalizing dividends or for any other purpose of the company appropriate for utilization of such profits or may employ such profits in the business of the company or otherwise as they think fit. The law further provides that dividends are to be paid out of profits of the year or any other undistributed profits. Listing Regulations of Stock Exchanges There has been a number of listing regulations that have direct or indirect impact on dividend decisions of the company. Shares of a company is traded under different trading categories depending on payment or non-payment of dividend by a company. According to the regulations, a company shall be traded in the “Z Category” (a category with a longer trading settlement time and other restrictive conditions) if it fails to declare cash dividend for two consecutive years. Moreover, a company may among other reasons, be de-listed from the stock exchange if it fails to pay cash/stock dividend for a consecutive period of five years. The listing regulations also require a company to declare in its annual general meeting the reasons, if any for partial or non-distribution of profits as dividend and the plan for utilization of the undistributed profits if there be any. Income Tax Law Bangladesh Income Tax law, provides for additional tax charges to a listed company that retains more than 70% of its net after- tax profit earned in any year. According to the said provision if a company retains or transfers more than 70% of its after tax profit to reserve or any other fund, an additional 10% tax shall be payable on such retained or transferred fund. Moreover, in order to encourage cash dividend, the tax law requires that if in any income year, the stock dividend declared by a company exceeds the cash dividend, an additional 10% tax shall be imposed on the whole amount of stock dividend declared or distributed. Key Considerations in dividend decisions The company shall endeavour to maintain a consistent dividend over the year with appropriate consideration of factors relevant to such decisions. It is the Company’s practice to declare dividend on annual basis based on annual financial performance. However, the Board may also declare interim dividend based on periodic financial results. Historically the Company declared dividend in either cash or stock or in judicious combination of cash and stock. The company intends to pursue the same policy in future depending on the operating and financial context prevailing at that time. Multiple internal and external factors might affect Company’s dividend decisions. While recommending dividend the Board of directors shall consider among others: Annual Report 2020-21 | Dividend Policy Statement | 99 • Company’s current net earnings, accumulated distributable reserves/surplus and availability of free cash flow • Potential growth opportunities and investment requirements; assessment of benefits of retention vs pay-out • Legal and Regulatory compulsion and tax implication of retention and payout • Any debt/loan covenants restricting dividend announcements • Persuasion of a target capital structure • Cost of external finance • Policy on consistency of the dividend over reasonable and foreseeable future years Additionally, the Board may consider other factors or circumstances to decide on distribution of dividend for a particular year. Eligibility of shareholders for dividend Dividend is declared on the face value of each Equity Share. Unless otherwise stated, all holders of Equity Share and GDR (Global Depository Receipts) whose names appear on the registrar of the Company on the Record Date declared by the Company for entitlement of dividend, are eligible to get the dividend. Timing of Dividend Announcement and Payment Annual dividend decision is taken in the Board meeting to be held within 120 days from the date of closing of the financial year. Such decisions are based on the results of the audited financial statements. The dividend recommendations made by the directors are notified to the shareholders through stock exchanges, website and public announcements. Dividend recommended by the Directors are to be placed in the Annual General meeting of the Company for the Shareholders’ approval. Dividend are transferred to the respective shareholders’ account within 30 days from the date of its approval. Interim Dividend if any declared by the Company, are paid within 30 days from the Record Date fixed by the Company for the entitlement of such dividend. Policy Review and Amendment Apart from mandatory revision, modification or amendment as necessitated by the legal and regulatory requirements, the company shall review this policy on periodic basis and make necessary revision or amendment to keep the policy relevant and up to date. The Board of Directors of the company shall approve the revision and/or amendment as it deems fit. Disclaimer The above Policy Statement neither gives a guarantee of dividend to be declared by the Company nor does it constitute a commitment for any future dividend and thus be read as a general guidance on different dividend related issues. The policy upholds the Board’s absolute/complete liberty to recommend any dividend in deviation of the policy. 100 | Dividend Policy Statement | Annual Report 2020-21 Value Added Statement For the Year Ended 30 June 2021 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 35.9 Duties & Taxes to Govt. Exchequer Taka in thousand Taka % 34,901,684 (16,537,596) 18,364,088 4,496,664 4,799,451 858,685 1,608,393 6,600,895 18,364,088 100 24.5 26.1 4.7 8.8 35.9 100 26.1 Salaries and Beneﬁts to Employees 24.5 Retained by the Retaine Compa Company 8.8 Dividend to Shareholders 4.7 Interest to Lenders Annual Report 2020-21 | Value Added Statement | 101 The combined force of our product development, manufacturing skills and also our marketing expertise will yield definitive results not just for investors but also for patients in need. 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, 2021 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 21, 2021. The Financial Statements of Nuvista Pharma Limited was audited by A. Qasem & Co. Chartered Accountants, who through their report dated October 18, 2021 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, 2021, 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 2020 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 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. 36,211,375,594 as at June 30, 2021. Our audit included the following procedure: 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 • 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. 104 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 Risk Our response to the risk Valuation of Inventory The inventory of Tk. 7,142,863,477 as at June 30, 2021 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. 36 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 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 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. Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 105 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 2020 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 audit of the consolidated 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. 106 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994, The Securities and Exchange Rules 2020 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. Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC :N/A Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 107 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Financial Position As at June 30, 2021 Notes June 30, 2021 ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Right-of-use Assets Intangible Assets Goodwill Other Investments Other Non-current Assets Current Assets Inventories Spares & Supplies Accounts Receivable Loans, Advances and Deposits 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 / Unclaimed Dividend 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, 2020 37,069,663,021 35,000,809,631 240,163,919 1,275,560,330 546,691,213 3,751,551 2,686,377 38,475,237,847 36,211,375,594 319,884,849 1,380,693,809 546,691,213 16,592,382 — 13,770,846,179 13,049,078,919 7,142,863,477 661,722,724 2,873,844,874 2,416,948,496 675,466,608 5,944,769,057 775,528,787 3,305,451,434 2,388,313,122 635,016,519 52,246,084,026 50,118,741,940 37,030,558,202 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,121,824,646 13,767,206 24,179,782,862 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 20,058,799,733 334,306,627 302,329,006 37,364,864,829 32,797,449,613 5,531,540,789 1,206,717,094 2,335,257,766 1,989,565,929 9,349,678,408 5,023,181,128 1,401,406,013 1,965,048,180 619,399,363 118,137,390 222,506,334 5,963,327,323 1,651,590,390 2,144,053,434 2,167,683,499 11,357,965,004 7,398,361,360 1,454,311,995 1,397,817,066 739,512,826 82,075,347 285,886,410 52,246,084,026 50,118,741,940 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A 108 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year ended June 30, 2021 Notes July 2020- June 2021 July 2019 - June 2020 Amount in Taka Net 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 Profit Before Tax Income Tax Expenses Current Tax Deferred Tax Income/ (Expense) Profit After Tax Profit/(Loss) Attributable to: Owners of the Company Non-Controlling Interest Other Comprehensive Income/(Loss) Total Comprehensive Income Total Comprehensive Income Attributable to: Owners of the Company Non-Controlling Interest 22 23 26 27 28 29 30 31 29,493,573,869 (15,570,071,581) 13,923,502,288 (7,272,794,940) (896,648,965) (6,376,145,975) 6,650,707,348 908,275,284 (858,685,146) 6,700,297,486 (322,749,293) 6,377,548,193 (1,211,798,461) (1,386,678,310) 174,879,849 5,165,749,732 5,127,693,711 38,056,021 5,165,749,732 12,840,831 5,178,590,563 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 5,140,534,542 38,056,021 5,178,590,563 3,513,109,473 29,795,800 3,542,905,273 Earnings Per Share (EPS)/ Restated EPS 32 11.49 7.88 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 109 — — — — — — — — Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Changes in Equity For the Year Ended June 30, 2021 As at June 30, 2021 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, 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 Total Comprehensive Income: Profit for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Stock Dovidend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets — — — 405,556,440 — — — — — — — — — — — — — — — — 5,127,693,711 5,127,693,711 38,056,021 5,165,749,732 — 12,840,831 — 12,840,831 — 12,840,831 -— — — (608,334,668) (608,334,668) (6,078,400) (614,413,068) — (7,180,526) — 3,237,721 — — — (405,556,440) 7,180,526 — — — 3,237,721 — — — — — 3,237,721 Balance as on June 30, 2021 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,121,824,646 13,767,206 24,179,782,862 37,030,558,202 334,306,627 37,364,864,829 Net Asset Value (NAV) Per Share (Note-33) Tk. 83.01 As at 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 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 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-33) Tk. 80.12 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A 110 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Cash Flows For the Year ended June 30, 2021 Notes July 2020-June 2021 July 2019-June 2020 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 35 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 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 Flows Per Share 35 12 34 30,833,168,257 (22,500,770,314) 8,332,397,943 25,934,454,695 (18,467,458,543) 7,466,996,152 (861,452,888) 2,377,286 (1,450,058,386) 6,023,263,955 (1,012,519,091) 20,409,291 (932,399,131) 5,542,487,221 (2,520,682,923) (37,734,793) 32,831,171 940,700 — (2,524,645,845) (504,636,764) (2,375,180,232) (578,351,025) (3,458,168,021) 40,450,089 635,016,519 — 675,466,608 (2,243,555,782) (31,745,002) 3,646,251 1,427,930 323,364,536 (1,946,862,067) (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 13.50 13.67 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 111 Beximco Pharmaceuticals Limited and its Subsidiaries Notes to the Financial Statements As at and for the year ended June 30, 2021 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 Nuvista Pharma, formerly Organon (Bangladesh) Ltd., was a subsidiary of Netherlands based Organon International. The Company has been operating in Bangladesh since 1964, with a local manufacturing facility at Tongi, Dhaka. In the post-independent Bangladesh, it was incorporated as Organon (Bangladesh) Limited under Bangladesh Companies Act 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 2018, Beximco Pharmaceuticals Limited acquired majority shareholdings in Nuvista Pharma 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 (excepting 10 shares). 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, 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 2020, 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. 112 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 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 01,2020 to June 30,2021. 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 3,900,000 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 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, 2021. 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. 29,517,257 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. Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 113 Amount in Taka 4. Property Plant and Equipment As on June 30, 2021 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, 2020 Additions Transferred in & Capitalized Transferred from Right-of-use Assets Disposal during the Year 4,067,829,596 — — — — 7,822,270,536 8,243,322 298,207,642 — — 15,766,994,486 153,224,100 965,316,704 — (38,321,632) 330,453,956 21,758,200 1,558,986 — (896,228) 827,287,026 — — 4,275,000 (22,436,699) 616,852,214 36,310,323 2,848,259 — (2,195,320) 29,431,687,814 219,535,945 1,267,931,591 4,275,000 (63,849,879) 394,467,696 130,204,714 — (4,275,000) — 29,826,155,510 349,740,659 1,267,931,591 — (63,849,879) Cost as on June 30, 2021 4,067,829,596 8,128,721,500 16,847,213,658 352,874,914 809,125,327 653,815,476 30,859,580,471 520,397,410 31,379,977,881 Accumulated Depreciation As on July 01, 2020 Depreciation Charged Fair Value Depreciation Transferred from Right-of-use Assets Adjustment for Assets disposed off — — — — 2,180,089,177 188,605,759 2,363,364 — — 6,847,744,824 667,088,924 9,652,060 — (17,098,214) 159,947,178 17,065,904 — — (264,188) 613,234,361 52,082,266 — 1,211,250 (15,567,741) 419,332,553 32,205,427 — — (2,050,991) 10,220,348,093 957,048,280 12,015,424 1,211,250 (34,981,134) 154,303,777 47,420,034 — (1,211,250) — 10,374,651,870 1,004,468,314 12,015,424 — (34,981,134) Accumulated Depreciation as on June 30, 2021 — 2,371,058,300 7,507,387,594 176,748,894 650,960,136 449,486,989 11,155,641,913 200,512,561 11,356,154,474 Net Book Value June 30, 2021 4,067,829,596 5,757,663,200 9,339,826,064 176,126,020 158,165,191 204,328,487 19,703,938,558 319,884,849 20,023,823,407 Capital Work in Progress 16,507,437,036 — 16,507,437,036 Carrying Value as on June 30, 2021 Carrying Value as on June 30, 2020 36,211,375,594 319,884,849 36,531,260,443 35,000,809,631 240,163,919 35,240,973,550 4 (a). Right-of-use Assets At Cost Accumulated Depreciation 5. Intangible Assets Particulars Cost As on July 01, 2020 Addition / Transferred in & Capitalized As on June 30, 2021 Amortization As on July 01, 2020 Amortized During the year As on June 30, 2021 Balance as on June 30, 2021 June 30, 2021 520,397,410 200,512,561 319,884,849 Amount in Taka June 30, 2020 394,467,696 154,303,777 240,163,919 Product Development, Licensing and Marketing Rights ERP System Trade Name & Trade Marks Total 1,349,055,417 165,102,296 1,514,157,713 169,745,334 22,864,119 192,609,453 54,000,000 14,870,674 68,870,674 1,572,800,751 202,837,089 1,775,637,840 276,210,051 78,461,481 354,671,532 16,710,370 16,710,362 33,420,732 4,320,000 2,531,767 6,851,767 297,240,421 97,703,610 394,944,031 1,159,486,181 159,188,721 62,018,907 1,380,693,809 Balance as on June 30, 2020 1,072,845,366 153,034,964 49,680,000 1,275,560,330 114 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 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 indication of impairment of goodwill during the year. Amount in Taka 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) July 01, 2020 2,182,101 1,569,450 3,751,551 Unrealised Gain/(Loss) June 30, 2021 12,840,831 15,022,932 — 1,569,450 12,840,831 16,592,382 July 01,2020 June 30, 2021 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. as on June 30, 2021 was Tk. 89.50 (June 30, 2020: Tk.13.00). The fair value gain of Tk. 12,840,831 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 Amount in Taka June 30, 2021 June 30, 2020 1,299,682,358 1,128,728,172 340,572,871 294,258,178 3,234,868,408 3,089,296,983 1,134,669,306 960,326,569 82,829,613 79,764,262 22,520,999 64,584,938 69,468,235 15,232,992 947,955,660 322,872,990 7,142,863,477 5,944,769,057 553,939,317 660,313,987 16,841,919 14,209,600 90,941,488 101,005,200 661,722,724 775,528,787 Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 115 10. Accounts Receivable This consists of : Trade Receivable Other Receivable Amount in Taka June 30, 2021 June 30, 2020 2,725,572,936 3,088,509,497 148,271,938 216,941,937 2,873,844,874 3,305,451,434 Accounts Receivable is reported net of provision for bad debts of Tk. 10,054,213. It includes an amount of Tk. 840,777,271, equivalent USD 9,985,468 (June 30, 2020: Tk. 817,658,851, USD 9,710,913) 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.1,401,534,613 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.1,695,026,636 on 31 May 2021. 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 2,658,627,358 3,036,824,038 66,945,578 51,685,459 2,725,572,936 3,088,509,497 249,538,566 281,675,299 488,144,349 441,074,569 25,777,861 167,929,080 2,650,135 6,636,489 83,541,576 10,821,850 128,076,779 209,723,000 295,859,623 264,086,628 20,831,185 35,585,120 186,444,554 161,306,524 34,886,833 29,898,335 148,885,137 154,443,129 460,856,879 442,658,728 36,030,920 155,346,536 58,207,996 112,828,599 40,724,614 70,790,725 2,416,948,496 2,388,313,122 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. 116 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 12. Cash and Cash Equivalents This consists of as follows : a. Cash in Hand (including Imprest Cash) b. Cash at Bank : (i) Current & FC Account (ii) FDR Account 13. 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 Shares fully paid-up in cash 357,093,942 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 Amount in Taka June 30, 2021 June 30, 2020 164,562,735 170,478,822 470,765,642 40,138,231 426,156,203 38,381,494 675,466,608 635,016,519 10,000,000,000 5,000,000,000 10,000,000,000 5,000,000,000 15,000,000,000 15,000,000,000 517,757,500 3,570,939,420 59,512,500 312,911,470 517,757,500 3,165,382,980 59,512,500 312,911,470 4,461,120,890 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. 100,037,989 Shares have been issued as underlying shares for the GDRs listed with AIM of London Stock Exchange. C. Composition of Shareholding : Sponsors/Directors: A S F Rahman Salman F Rahman Other Directors and Associates Other Shareholdings: Foreign Portfolio Investors (DSE/CSE) Holders of GDRs (excluding Board Director) Institutions (ICB, ICB Investors’ Accounts & Others) Individual Shareholders Total June 30, 2021 June 30, 2020 Number of Shares % of Share Capital Number of Shares % of Share Capital 9,058,888 9,080,095 116,517,180 134,656,163 51,907,674 84,386,054 87,784,924 87,377,274 311,455,926 446,112,089 2.03 2.04 26.11 30.18 11.64 18.92 19.68 19.58 69.82 100.00 8,235,353 8,254,632 37,019,789 53,509,774 48,720,273 90,943,627 148,762,402 63,620,369 352,046,671 405,556,445 2.03 2.04 9.13 13.20 12.01 22.42 36.68 15.69 86.80 100.00 Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 117 14. Non-Controlling Interest Non-Controlling Interest (Opening ) Proportionate profit/loss (NPL) Less Cash Dividend (NPL) 15. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Lease Liability Dhaka Bank Limited Lease Liability This consists of as follows: Within one year Within two to five years 16. Liability for Gratuity and WPPF & Welfare Funds Gratuity Payable Workers Profit Participation and Welfare Fund 17. Short Term Borrowings Janata Bank Limited AB Bank Limited First Security Islamic Bank Limited Liability for UPAS Letter of Credit Dhaka Bank Limited 18. Long Term Borrowings-Current Maturity This consists of as follows: Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Lease Liability AB Bank Limited Dhaka Bank Limited June 30, 2021 302,329,006 38,056,021 (6,078,400) 334,306,627 Amount in Taka June 30, 2020 276,006,553 29,795,800 (3,473,347) 302,329,006 972,696,465 234,020,629 — 1,206,717,094 1,437,978,890 208,860,444 4,751,056 1,651,590,390 113,976,268 234,020,629 347,996,897 108,115,288 208,860,444 316,975,732 1,322,046,817 1,013,210,949 2,335,257,766 1,185,669,111 958,384,323 2,144,053,434 3,077,454,947 1,014,765,029 510,141,234 254,745,071 166,074,847 5,023,181,128 3,963,918,204 1,106,352,880 510,491,234 1,406,768,304 410,830,738 7,398,361,360 1,287,429,745 113,976,268 — — 1,401,406,013 937,110,252 108,115,288 377,802,906 31,283,549 1,454,311,995 118 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 19. Creditors and Other Payables Goods & Services Provident Fund Advance Against Sales Others 20. 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) June 30, 2021 769,204,884 800,770,806 298,396,187 96,676,303 Amount in Taka June 30, 2020 575,012,150 726,878,755 12,393,114 83,533,047 1,965,048,180 1,397,817,066 296,650,070 322,749,293 619,399,363 503,704,448 235,808,378 739,512,826 21. Dividend Payable / Unclaimed Dividend The Dividend Payable/Unclaimed dividend as on June 30, 2021 includes prior years’ dividend of Tk. 81,481,571 unclaimed to date. The unclaimed dividend reported under Creditors and Other Payables in the prior period has been reclassified in this financial statement. Subsequent to the Balance Sheet date an amount of Tk 64,297,249 has been paid to the Capital Market Stabilization Fund (CMSF) in compliance to BSEC directive no. BSEC/CMRRCD/2021-386/03 dated January 14, 2021. 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 ) Purchase (Imported and processed products) Finished Goods available Cost of Physician Sample transferred to Sample Stock Finished Goods (Closing) July 2020- June 2021 July 2019- June 2020 26,331,187,249 3,124,001,260 38,385,360 29,493,573,869 22,808,998,367 2,751,790,244 51,159,044 25,611,947,655 294,258,178 12,108,082,703 3,958,532,311 16,360,873,192 (340,572,871) 16,020,300,321 1,128,728,172 9,718,528 17,158,747,021 (288,993,082) (1,299,682,358) 455,530,899 10,054,371,739 3,623,979,789 14,133,882,427 (294,258,178) 13,839,624,249 1,255,181,983 — 15,094,806,232 (253,230,551) (1,128,728,172) 15,570,071,581 13,712,847,509 Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 119 24. Materials Consumed This is made-up as follows : Opening Stock Purchase Closing Stock 25. Factory Overhead Salary & Allowances Repairs and Maintenance Insurance Premium Municipal Tax & Land Revenue Registration & Renewals Travelling & Conveyance Entertainment Research and Development Rent Printing & Stationery Telephone, Cellphone, 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, Cellphone, Internet & Postage Electricity, Gas & Water Legal & Consultancy Business Acquisition Cost Company Secretarial, Regulatory Fee and AGM Expense Municipal Tax & Land Revenue Training & Conference Depreciation Meeting Fee Security Expenses Other Expenses July 2020- June 2021 July 2019- June 2020 Amount in Taka 4,114,208,490 12,446,241,540 (4,452,367,327) 12,108,082,703 3,854,012,150 10,314,568,079 (4,114,208,490) 10,054,371,739 1,533,120,357 446,218,960 39,656,024 9,759,175 17,174,084 34,900,276 4,199,173 313,009,068 13,524,226 32,694,658 10,791,816 235,447,825 296,679,254 9,614,915 15,156,941 910,223,457 27,880,157 8,481,945 3,958,532,311 504,500,078 27,676,800 68,232,587 6,299,916 28,167,143 7,455,924 6,803,770 2,420,000 6,376,660 16,306,564 10,632,552 18,208,232 37,042,133 1,333,030 2,825,669 34,843,193 3,416,000 14,112,817 99,995,897 896,648,965 1,345,684,174 391,224,077 36,933,338 9,034,338 19,443,939 27,128,815 2,801,983 272,389,951 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 3,623,979,789 458,035,801 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 — 34,599,077 700,698 6,630,474 35,015,790 2,301,650 11,209,371 77,025,630 792,951,709 120 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 27. Selling, Marketing and Distribution Expenses July 2020- June 2021 July 2019- June 2020 Amount in Taka Salary & Allowances Rent Repairs and Maintenance Travelling & Conveyance Entertainment Printing & Stationery Telephone, Cellphone, 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, Journals 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 28. Other Income Interest Income Dividend Income Royalty Cash Incentive on Export Exchange Rate Fluctuation Gain / (Loss) Vaccine Distribution Fee Forfeited PF Refund Profit/(Loss) on Sale of Fixed Assets Miscellaneous Income 2,439,081,146 90,481,862 38,956,827 643,683,075 66,513,698 41,586,524 77,159,670 33,596,270 21,142,416 82,002,039 127,964,742 34,805,887 361,952,879 7,220,379 51,707,425 274,549,019 146,192,749 11,036,539 152,775,395 10,988,156 42,891,362 6,488,050 27,087,836 254,964,214 140,902,326 158,409,899 437,367,829 385,580,530 169,120,696 20,158,622 3,499,431 16,278,483 6,376,145,975 2,377,286 940,700 40,529,949 309,745,032 (3,716,895) 542,265,041 10,722,438 3,962,426 1,449,307 908,275,284 2,092,122,649 82,034,461 15,310,108 567,898,731 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 5,496,654,323 20,409,291 1,427,930 151,552,031 139,620,667 13,196,829 — — (33,797,892) 1,149,448 293,558,304 Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 121 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. Other Comprehensive Income/(Loss) Fair Value Gain/(Loss) on Investment in Listed Shares 32. Earnings Per Share (EPS)/ Restated EPS July 2020- June 2021 July 2019- June 2020 Amount in Taka 578,560,598 36,342,986 190,970,118 52,811,444 858,685,146 787,650,804 28,711,869 166,837,043 30,604,369 1,013,804,085 1,386,678,310 (174,879,849) 1,211,798,461 1,086,668,418 22,288,436 1,108,956,854 12,840,831 12,840,831 (1,577,828) (1,577,828) (a) Earnings attributable to the Owners of the Company (b) Weighted average number of Shares outstanding during the year Earnings Per Share (EPS)/ Restated EPS 5,127,693,711 446,112,089 11.49 3,514,687,301 446,112,089 7.88 33. 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 June 30, 2021 June 30, 2020 52,246,084,026 (14,881,219,197) (334,306,627) 37,030,558,202 446,112,089 83.01 50,118,741,940 (17,321,292,327) (302,329,006) 32,495,120,607 405,556,445 80.12 34. Net Operating Cash Flows Per Share (NOCFPS) Net Cash Generated from Operating Activities Number of Ordinary Shares Net Operating Cash Flows Per Share (NOCFPS) July 2020- June 2021 July 2019- June 2020 6,023,263,955 446,112,089 13.50 5,542,487,221 405,556,445 13.67 122 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | Annual Report 2020-21 35. Reconciliation of Net Profit with Cash Flows from Operating Activities Profit after Tax 5,165,749,732 3,544,483,101 July 2020- June 2021 July 2019- June 2020 Amount in Taka 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 * (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 1,137,369,317 1,016,483,738 97,703,610 191,204,332 6,857,486 (174,879,849) (4,903,126) (940,700) (3,962,426) — (274,951,968) (1,198,094,420) 113,806,063 431,606,560 — (28,635,374) 2,686,377 587,172,366 (120,113,463) (63,380,076) 6,023,263,955 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) 557,614,819 (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 5,542,487,221 *The Company used Janata Bank’s applicable (US Dollar-Taka) exchange rate as on June 30, 2021 which remained unchanged with the exchange rate as on June 30, 2020. As such, there was no effect of exchange rate on Cash and Cash Equivalents. 36. 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 Nature of Transactions Value of Transaction Balance at year end (i) I & I Services Ltd. Delivery of Products Distribution Commission 27,348,232,493 437,367,829 1,401,534,613 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 Chief Financial Officer Dhaka October 21, 2021 Annual Report 2020-21 | Consolidated Financial Statements- Beximco Pharmaceuticals Ltd. and Its Subsidiaries | 123 Financial Statements Beximco Pharmaceuticals Limited 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 30 June 2021 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 30 June 2021, 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 2020 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 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. 34,501,205,124 as at 30 June, 2021. Our audit included the following procedure: 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 • 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. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 125 Risk Our response to the risk Valuation of Inventory The inventory of Tk. 6,693,894,021 as at 30 June, 2021 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 Liability 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. 126 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 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 2020 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. 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. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 127 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 2020 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. Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110310564AS841233 128 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 Beximco Pharmaceuticals Limited Statement of Financial Position As at June 30, 2021 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 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 / Unclaimed Dividend Income Tax Payable TOTAL EQUITY AND LIABILITIES Notes June 30, 2021 June 30, 2020 Amount in Taka 4 4 (c) 5 6 7 8 9 10 11 12 13 14 15 4(b) 16 17 18 19 20 21 22 23 24 37,713,988,877 34,501,205,124 319,884,849 701,794,902 2,145,185,900 29,325,720 16,592,382 36,240,980,000 33,244,656,330 237,100,169 580,960,330 2,145,185,900 29,325,720 3,751,551 13,150,677,229 12,438,793,173 6,693,894,021 622,433,282 2,831,869,241 2,354,576,102 647,904,583 5,528,438,165 735,703,950 3,213,666,345 2,345,039,872 615,944,841 50,864,666,106 48,679,773,173 36,707,591,755 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,121,824,646 13,767,206 23,856,816,415 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 5,265,836,197 5,692,973,418 1,206,717,094 2,187,144,706 1,871,974,397 1,641,924,046 2,015,304,583 2,035,744,789 8,891,238,154 10,630,440,620 4,857,106,281 1,401,406,013 1,814,013,039 480,501,854 117,769,532 220,441,435 6,987,530,622 1,421,497,401 1,267,069,842 609,401,272 81,792,791 263,148,692 50,864,666,106 48,679,773,173 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110310564AS841233 Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 129 Beximco Pharmaceuticals Limited Statement of Profit or Loss and Other Comprehensive Income For the Year ended June 30, 2021 Notes July 2020 - June 2021 July 2019 - June 2020 Amount in Taka 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 Profit Before Tax Income Tax Expenses Current Tax Deferred Tax Income/ (Expense) Profit after Tax Other Comprehensive Income/(Loss) Total Comprehensive Income Earnings Per Share (EPS)/ Restated EPS 25 26 29 30 31 32 33 34 35 36 26,949,351,606 (14,347,382,048) 12,601,969,558 (6,532,965,326) (792,228,907) (5,740,736,419) 23,557,775,896 (12,753,521,901) 10,804,253,995 (5,690,899,854) (699,940,325) (4,990,959,529) 6,069,004,232 5,113,354,141 1,108,048,355 (841,875,806) 6,335,176,781 445,556,500 (957,931,515) 4,600,979,126 (301,675,085) (219,094,244) 6,033,501,696 4,381,884,882 (1,090,012,960) (1,250,545,631) 160,532,671 4,943,488,736 12,840,831 4,956,329,567 (1,018,485,009) (983,282,880) (35,202,129) 3,363,399,873 (1,577,828) 3,361,822,045 11.08 7.54 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110310564AS841233 130 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 Beximco Pharmaceuticals Limited Statement of Changes in Equity For the Year ended June 30, 2021 Balance as on July 01, 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 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 Total Comprehensive Income Profit for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Stock Dovidend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets — — — 405,556,440 — — — — — — — — — — — — — — — — — — — — — — 4,943,488,736 4,943,488,736 — 12,840,831 — 12,840,831 — — — (608,334,668) (608,334,668) — (405,556,440) 7,180,526 — — — 3,237,721 (7,180,526) 3,237,721 — — Balance as on June 30, 2021 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,121,824,646 13,767,206 23,856,816,415 36,707,591,755 Net Asset Value (NAV) Per Share (Note-37) 82.28 For the Year ended June 30, 2020 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 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 Total Comprehensive Income 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 — — — — — — — — — — — — — — — — — — — — — — 3,363,399,873 3,363,399,873 — (1,577,828) — (1,577,828) — — (608,334,668) (608,334,668) (8,114,071) 2,028,518 — — 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 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110310564AS841233 Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 131 Beximco Pharmaceuticals Limited Statement of Cash Flows For the Year ended June 30, 2021 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 39 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 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 Flows Per Share 39 13 38 Notes July 2020 - June 2021 July 2019 - June 2020 Amount in Taka 28,403,792,004 (20,656,123,661) 7,747,668,343 (841,875,806) 2,377,286 (1,293,252,888) 5,614,916,935 (2,463,893,877) (22,864,119) 32,751,038 35,987,859 — (2,418,019,099) (462,155,826) (2,130,424,341) (572,357,927) (3,164,938,094) 31,959,742 615,944,841 — 647,904,583 24,096,145,079 (17,060,430,359) 7,035,714,720 (957,931,515) 20,409,291 (887,432,426) 5,210,760,070 (2,224,544,487) (31,745,002) 3,572,001 21,454,903 323,364,536 (1,907,898,049) (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 12.59 12.85 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 21, 2021 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Officer Per our report of even date Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110310564AS841233 132 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 Beximco Pharmaceuticals Limited Notes to the Financial Statements As at and for the year ended June 30, 2021 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. 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 2020, 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 31 December 2008, investment in shares of listed company valued at year end quoted price and the cash flow statement 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 comprises of: (a) Statement of Financial Position as at the end of the year June 30, 2021; (b) Statement of Profit or Loss and Other Comprehensive Income for the year ended June 30, 2021; (c) Statement of Changes in Equity for the year ended June 30, 2021; (d) Statement of Cash Flows for the year ended June 30, 2021; 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, 2020 to June 30, 2021. The last audited financial statements were prepared for the year ending June 30, 2020. 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 October 21, 2021. 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. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 133 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 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 assets acquired under lease are reported as “Right-of-use Assets” 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. 134 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 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 uncollectible 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 or 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. Financial 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. 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. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 135 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 22.5%. However, profit generated from export is subject to a reduced 11.25%. Additionally, certain other income are also liable to lower tax 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 reported in the Financial Statements and its tax base, and accordingly, deferred tax income/expenses are recognized as profit or loss. 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 the said dividend. Stock dividend income (Bonus Shares) is not considered as revenue. Cash Incentive on Export Cash Incentive on Export is 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 incentive is established. Royalty Royalty income is accounted for on accrual basis on fulfillment of the terms laid down in the agreement between the contracting parties. Interest Income Interest income is recognized on accrual basis. Vaccine Distribution Fee Vaccine Distribution fee is recognized on delivery of Vaccine to the designated government warehouses across the country, fulfilling the terms and conditions of the agreement. The income is reported net of relevant expenses. 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 complying applicable laws. 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 recognized 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 fund 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. 136 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 3.12.2. Defined Benefit Plan (Gratuity) The Company took initiatives to convert its unfunded gratuity scheme to funded gratuity, which was subsequently approved by the National Board of Revenue. 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 Act 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 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. 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 Flows 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. 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. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 137 4 . Property, Plant and Equipment As on June 30, 2021 Amount in Taka Particulars Cost As on July 01, 2020 Additions Transferred in & Capitalized Disposal during the Year 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 3,343,741,442 — — — 7,499,761,533 3,694,494 298,207,642 — 14,495,139,238 119,455,263 965,316,704 (36,523,171) 281,071,740 18,597,471 1,558,986 (896,228) 686,005,246 — — (21,101,899) 585,815,483 34,888,865 2,848,259 (253,700) 26,891,534,682 176,636,093 1,267,931,591 (58,774,998) 390,192,696 130,204,714 — — 27,281,727,378 306,840,807 1,267,931,591 (58,774,998) Cost as on June 30, 2021 3,343,741,442 7,801,663,669 15,543,388,034 300,331,969 664,903,347 623,298,907 28,277,327,368 520,397,410 28,797,724,778 Accumulated Depreciation As on July 01, 2020 Depreciation Charged Adjustment for Assets disposed off Accumulated Depreciation as on June 30, 2021 — — — 2,116,657,101 182,187,976 — 6,272,267,313 602,682,764 (15,299,760) 133,699,879 14,673,982 (264,188) 498,744,471 36,081,381 (14,248,029) 394,798,590 28,519,516 (109,385) 9,416,167,354 864,145,619 (29,921,362) 153,092,527 47,420,034 — 9,569,259,881 911,565,653 (29,921,362) — 2,298,845,077 6,859,650,317 148,109,673 520,577,823 423,208,721 10,250,391,611 200,512,561 10,450,904,172 Net Book Value June 30, 2021 3,343,741,442 5,502,818,592 8,683,737,717 152,222,296 144,325,524 200,090,186 18,026,935,757 319,884,849 18,346,820,606 Capital Work in Progress 4 (a) 16,474,269,367 — 16,474,269,367 Carrying Value as on June 30, 2021 34,501,205,124 319,884,849 34,821,089,973 As on June 30, 2020 Particulars Cost As on July 01, 2019 Additions Transferred in & Capitalized Disposal during the Year 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 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) Cost as on June 30, 2020 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) 15,769,289,002 — 15,769,289,002 Carrying Value as on June 30, 2020 33,244,656,330 237,100,169 33,481,756,499 138 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 4 (a) Capital Work in Progress is arrived at as follows : Opening Balance Addition during the year Transferred & Capitalized Building and Other Constructions Plant & Machinery Furniture & Fixture Office Equipment Intangible Assets June 30, 2021 Amount in Taka June 30, 2020 15,769,289,002 2,138,014,252 17,907,303,254 1,433,033,887 298,207,642 965,316,704 1,558,986 2,848,259 165,102,296 13,724,933,841 2,044,355,161 15,769,289,002 — — — — — — Closing balance 16,474,269,367 15,769,289,002 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 Particulars Cost As on July 01, 2020 Addition / Transferred in & Capitalized As on June 30, 2021 Amortization As on July 01, 2020 Amortized During the year As on June 30, 2021 1,125,767,451 (7,180,526) 3,237,721 1,121,824,646 1,131,853,004 (8,114,071) 2,028,518 1,125,767,451 520,397,410 (200,512,561) 319,884,849 390,192,696 (153,092,527) 237,100,169 Product Development, Licensing and Marketing Rights ERP System Total 648,055,417 165,102,296 813,157,713 169,745,334 22,864,119 192,609,453 817,800,751 187,966,415 1,005,767,166 220,130,051 50,421,481 270,551,532 16,710,370 16,710,362 33,420,732 236,840,421 67,131,843 303,972,264 Carrying Value as on June 30, 2021 542,606,181 159,188,721 701,794,902 Carrying Value as on June 30, 2020 427,925,366 153,034,964 580,960,330 Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 139 6. Investment in Subsidiaries Nuvista Pharma Ltd. Beximco Pharma API Ltd. June 30, 2021 2,125,186,000 19,999,900 2,145,185,900 Amount in Taka June 30, 2020 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 aforsaid 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: Seperate Financial Statements, in preparing financial statements of the Company. 7. Investment in Associates This represents value of 3,900,000 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, 2020 Unrealised Gain/ (Loss) 2,182,101 1,569,450 3,751,551 12,840,831 — 12,840,831 June 30, 2021 15,022,932 1,569,450 16,592,382 July 01, 2020 June 30, 2021 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. as on June 30, 2021 was Tk. 89.50 (June 30, 2020: Tk.13.00). The fair value gain of Tk. 12,840,831 has been accounted for as Other Comprehensive Income following IFRS9: 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. 140 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 9. 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 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 June 30, 2021 Amount in Taka June 30, 2020 1,188,526,554 282,756,046 3,007,666,959 1,104,206,746 62,041,717 79,764,262 22,520,999 946,410,738 6,693,894,021 972,564,349 249,838,762 2,955,008,164 921,692,743 38,688,339 69,468,235 15,232,992 305,944,581 5,528,438,165 545,385,920 16,841,919 60,205,443 622,433,282 649,953,543 14,209,600 71,540,807 735,703,950 2,657,960,805 173,908,436 2,831,869,241 2,978,567,354 235,098,991 3,213,666,345 Accounts Receivable is reported net of provision for bad debts of Tk. 8,169,353. It includes an amount of Tk. 840,777,271, equivalent USD 9,985,468 (June 30, 2020: Tk. 817,658,851, USD 9,710,913) 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.1,401,534,613 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.1,695,026,636 on 31 May 2021. Additionally an amount of Tk 24,956,668 and Tk 679,830 is receivable from its 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 2,593,603,554 64,357,251 2,657,960,805 2,930,309,371 48,257,983 2,978,567,354 Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 141 12. Loans, Advances and Deposits This is unsecured, considered good and consists of as follows : Clearing & Forwarding VAT Claims Receivable Security Deposit & Earnest Money Lease Deposit Capital Expenditure/ Project Expenses Bank Guarantee Margin Advance against Salary Rent Advance Motor Cycle Raw & Packing Material Prepaid Insurance Overseas Liaison Office Others Amount in Taka June 30, 2021 June 30, 2020 249,538,566 463,448,047 25,777,861 164,445,896 2,650,135 128,076,779 294,270,664 20,831,185 173,756,608 34,886,833 148,885,137 460,856,879 30,641,155 58,207,996 98,302,361 281,675,299 419,480,062 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 2,354,576,102 2,345,039,872 a. The maximum amount due from the employees during the year was Tk. 175,745,823 on 31 December, 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. 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 : 164,391,788 170,283,669 443,374,564 40,138,231 407,279,678 38,381,494 647,904,583 615,944,841 1,000,000,000 Ordinary Shares of Tk. 10 each 50,000,000 fully convertible 5 % Preference Shares of Tk. 100 each 10,000,000,000 5,000,000,000 15,000,000,000 10,000,000,000 5,000,000,000 15,000,000,000 b. Issued, Subscribed and Paid-up : 51,775,750 Shares fully paid-up in cash 357,093,942 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 517,757,500 3,570,939,420 59,512,500 312,911,470 4,461,120,890 517,757,500 3,165,382,980 59,512,500 312,911,470 4,055,564,450 142 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 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. 100,037,989 Shares have been issued as underlying shares for the GDRs listed with AIM of London Stock Exchange. c. Composition of Shareholding : Sponsors / Directors A S F Rahman Salman F Rahman Other Directors and Associates Other Shareholdings: Foreign Portfolio Investors (DSE/CSE) Holders of GDRs (excluding Board Director) Institutions (ICB, ICB Investors’ Accounts & Others) Individual Shareholders Total d. Distribution Schedule of Ordinary Shares: June 30, 2021 June 30, 2020 Number of Shares % of Share Capital Number of Shares % of Share Capital 9,058,888 9,080,095 116,517,180 134,656,163 51,907,674 84,386,054 87,784,924 87,377,274 311,455,926 446,112,089 2.03 2.04 26.11 30.18 11.64 18.92 19.68 19.58 69.82 100.00 8,235,353 8,254,632 37,019,789 53,509,774 48,720,273 90,943,627 148,762,402 63,620,369 352,046,671 405,556,445 2.03 2.04 9.13 13.20 12.01 22.42 36.68 15.69 86.80 100.00 Range of Shareholdings Number of Shareholders % of Holding Number of Shareholders % of Holding Number of Shares % of Holding Number of Shares % of Holding June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 1 to 499 500 to 5,000 5,001 to 10,000 10,001 to 20,000 20,001 to 30,000 30,001 to 40,000 40,001 to 50,000 50,001 to 100,000 100,001 to 1,000,000 Over 1,000,000 Total 38,764 14,059 1,098 567 185 84 76 150 227 38 55,248 70.16% 25.45% 1.99% 1.03% 0.33% 0.15% 0.14% 0.27% 0.41% 0.07% 100% 41,587 12,340 1,059 484 159 81 58 129 162 42 56,101 74.13% 22.00% 1.89% 0.86% 0.28% 0.14% 0.10% 0.23% 0.29% 0.07% 100% 5,274,349 1.18% 6,052,732 19,890,718 4.46% 18,684,552 7,895,652 8,078,197 4,575,664 2,947,573 3,595,456 11,069,746 1.77% 1.81% 1.03% 0.66% 0.81% 2.48% 7,555,392 6,983,130 4,044,868 2,832,929 2,666,648 9,472,994 66,828,442 14.98% 50,405,277 316,056,292 70.83% 296,857,923 446,212,089 100% 405,556,445 1.49% 4.61% 1.86% 1.72% 1.00% 0.70% 0.66% 2.34% 12.43% 73.20% 100% 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 Tk. Tk. GBP June 30, 2021 June 30, 2020 177.30 176.60 0.860 69.20 69.10 0.355 f. Option on unissued Ordinary Shares : There is no option on unissued shares as on June 30, 2021. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 143 15. 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. 16. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Lease Liability a. Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany June 30, 2021 Amount in Taka June 30, 2020 972,696,465 234,020,629 1,206,717,094 1,437,978,890 203,945,156 1,641,924,046 This represents part of the foreign currency loan of US$ 51.559 million and Euro 20.222 million taken for the expansion and diversification project being implemented by the Company. Interest of US$ loan is 6 month’s USD LIBOR plus 2.25% while the same for Euro loan is 6 month’s EURIBOR plus 1.30% per annum. Both the loans are secured by exclusive first charge by way of hypothecation against the machinery and equipment to be procured under the pertinent loans. b. Lease Liability This consists of as follows: Within one year Within two to five years 17. Liability for Gratuity and WPPF & Welfare Funds a. Gratuity Payable Opening Balance Provisions during the year Paid to Employees during the year Investment - Gratuity Fund Opening Balance Payment during the year 113,976,268 234,020,629 347,996,897 106,584,243 203,945,156 310,529,399 1,056,920,260 221,588,892 1,278,509,152 (64,575,395) 1,213,933,757 — (40,000,000) (40,000,000) 933,437,744 184,425,140 1,117,862,884 (60,942,624) 1,056,920,260 — — — Closing balance at end of the Year 1,173,933,757 1,056,920,260 b. Workers Profit Participation and Welfare Fund 1,013,210,949 2,187,144,706 958,384,323 2,015,304,583 144 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 18. Deferred Tax Liability Opening Balance Addition during the Year : Deferred Tax on Assets -Note : 34 Adjustment for Deferred Tax on revalued amount Closing Balance 19. Short Term Borrowings Janata Bank Limited AB Bank Limited First Security Islamic Bank Limited Liability for UPAS Letter of Credit June 30, 2021 Amount in Taka June 30, 2020 2,035,744,789 2,002,571,178 (160,532,671) (3,237,721) 35,202,129 (2,028,518) 1,871,974,397 2,035,744,789 3,077,454,947 1,014,765,029 510,141,234 254,745,071 4,857,106,281 3,963,918,204 1,106,352,880 510,491,234 1,406,768,304 6,987,530,622 a. Short term borrowings from Janata Bank represents revolving credit facilities renewable annually. The borrowing carries 9% interest. b. Loan from AB Bank represents a revolving overdraft limit to Tk 50 Crore and a Time loan of Tk. 60 crore payable in monthly installments. 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 Aktiengesellshaft, Frankfurt, Germany. d. The borrowing from First Security Islamic Bank Ltd represents a Bai-Murabaha (Hypo) Credit facility of Tk.50 crore for purchasing of 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 excepting the machinery and equipment financed by ODDO BHF Aktiengesellshaft, Frankfurt, Germany. 20. Long Term Borrowings-Current Maturity Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Lease Liability AB Bank Limited 21. Creditors and Other Payables Goods & Services Provident Fund Advance Against Sales Others 22. 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) 1,287,429,745 113,976,268 — 937,110,252 106,584,243 377,802,906 1,401,406,013 1,421,497,401 622,523,948 797,569,927 298,396,187 95,522,977 485,464,404 726,878,755 12,393,114 42,333,569 1,814,013,039 1,267,069,842 178,826,769 301,675,085 480,501,854 390,307,028 219,094,244 609,401,272 Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 145 23. Dividend Payable / Unclaimed Dividend The Dividend Payable/Unclaimed dividend as on June 30, 2021 includes prior years’ dividend of Tk. 81,113,713 unclaimed to date. The unclaimed dividend reported under Creditors and Other Payables in the prior period has been reclassified in this financial statement. Subsequent to the Balance Sheet date an amount of Tk 64,297,249 has been paid to the Capital Market Stabilization Fund (CMSF) in compliance to BSEC directive no. BSEC/CMRRCD/2021-386/03 dated January 14, 2021. 24. Income Tax Payable Opening Balance Provision for the year Income Tax Paid 25. Net Sales Revenue Domestic Sales Export Sales June 30, 2021 263,148,692 1,250,545,631 1,513,694,323 (1,293,252,888) 220,441,435 Amount in Taka June 30, 2020 167,298,238 983,282,880 1,150,581,118 (887,432,426) 263,148,692 Amount in Taka July 2020 - June 2021 July 2019 - June 2020 23,825,350,346 20,805,985,652 3,124,001,260 2,751,790,244 26,949,351,606 23,557,775,896 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 Active Pharmaceutical Ingredients Liquid Nitrogen Unit Million pcs. Million pcs. Kg Liter Quantity July 2020 - June 2021 July 2019 - June 2020 7,316.90 119.19 181,903 352,970 6,778.75 114.54 190,552 438,734 b. The value of Export Sales in equivalent US Dollar is 37,106,411 in 2020-21 as against US Dollar 32,745,911 in 2019-20. 146 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 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, 2021 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, 2020 Tablet, Capsule, Suppository & DPI Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable and Inhaler Active Pharmaceutical Ingredients Unit Million pcs. Million pcs. Kg Unit Million pcs. Million pcs. Kg 27. Materials Consumed This is made-up as follows : Opening Stock Purchase Closing Stock July 2020 - June 2021 July 2019 - June 2020 Amount in Taka 249,838,762 11,428,162,801 3,446,781,489 420,135,832 9,491,277,964 3,153,943,937 15,124,783,052 13,065,357,733 (282,756,046) 14,842,027,006 972,564,349 15,814,591,355 (278,682,753) (1,188,526,554) (249,838,762) 12,815,518,971 1,155,804,007 13,971,322,978 (245,236,728) (972,564,349) 14,347,382,048 12,753,521,901 Quantity 504.72 9.77 5,890 Quantity 451.57 7.23 5,674 Value (Tk.) 640,992,836 529,368,303 18,165,415 1,188,526,554 Value (Tk.) 535,160,110 421,235,247 16,168,992 972,564,349 3,915,389,246 11,686,688,977 (4,173,915,422) 11,428,162,801 3,690,300,531 9,716,366,679 (3,915,389,246) 9,491,277,964 Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 147 28. Factory Overhead Salary & Allowances Repairs and Maintenance Insurance Premium Municipal Tax & Land Revenue Registration & Renewals Travelling & Conveyance Entertainment Research and Development Rent Printing & Stationery Telephone, Cellphone, Internet & Postage Toll Expense Electricity, Gas & Water Training & Conference Plant Certification and Regulatory Approvals Depreciation Security Expenses Other Expenses July 2020 - June 2021 July 2019 - June 2020 Amount in Taka 1,328,827,639 316,507,536 34,761,486 8,898,435 17,174,084 34,900,276 2,644,001 280,881,455 13,524,226 31,165,292 10,791,816 257,499,789 227,941,467 9,614,915 15,156,941 824,966,915 25,624,559 5,900,657 3,446,781,489 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 3,153,943,937 a. Salary and Allowances include Company’s Contribution to provident fund amounting to Tk. 23,447,314 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. Other expenses does not include any item exceeding 1% of total revenue. 29. Administrative Expenses Salary & Allowances Rent Repairs and Maintenance Registration & Renewals Travelling & Conveyance Entertainment Printing & Stationery Audit Fee Telephone, Cellphone, Internet & Postage Electricity, Gas & Water Legal & Consultancy Business Acquisition Cost Company Secretarial, Regulatory Fee and AGM Expense Municipal Tax & Land Revenue Training & Conference Depreciation Meeting Fee Security Expenses Other Expenses 439,818,179 16,222,800 56,771,422 6,299,916 26,851,992 6,498,289 5,725,309 2,000,000 4,272,321 14,078,915 10,456,662 18,208,232 37,042,133 353,080 783,336 31,904,798 3,128,000 14,112,817 97,700,706 792,228,907 402,132,499 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 — 34,599,077 237,016 4,853,033 32,019,171 2,013,650 11,209,371 75,935,608 699,940,325 a. Salary and Allowances include Company’s Contribution to provident fund amounting to Tk.8,644,309 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. 1,015,336 ( in 2020 Tk.10,163,463) e. Other expenses does not include any item exceeding 1% of total revenue. 148 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 30. Selling, Marketing and Distribution Expenses July 2020 - June 2021 July 2019 - June 2020 Amount in Taka Salary & Allowances Rent Repairs and Maintenance Travelling & Conveyance Entertainment Printing & Stationery Telephone, Cellphone, Internet & Postage Software & Licences Electricity, Gas & Water Market Research & New Products Training & Conference Insurance Premium Sample Expense Advertisement Field Operation Events, Programs & Campaign 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 2,111,616,016 82,752,962 31,561,657 552,791,027 64,055,502 39,958,791 65,439,973 33,596,270 20,107,493 71,595,632 120,555,180 32,094,000 347,209,107 1,769,732 44,864,430 266,667,446 139,998,190 11,036,539 135,410,431 8,047,595 23,398,324 6,488,050 27,087,836 221,415,292 139,697,491 158,409,899 437,367,829 385,580,530 121,825,781 20,158,622 3,025,000 15,153,792 5,740,736,419 1,814,891,870 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 4,990,959,529 a. Salary and Allowances include Company’s Contribution to provident fund amounting to Tk. 42,188,361 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. Other expenses does not include any item exceeding 1% of total revenue. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 149 31. Other Income Interest Income Dividend Income Royalty Distribution Commission Income Cash Incentive on Export Exchange Rate Fluctuation Gain / (Loss) Vaccine Distribution Fee Forfeited PF Refund Profit/(Loss) on Sale of Fixed Assets (Note 41) July 2020 - June 2021 July 2019 - June 2020 Amount in Taka 2,377,286 35,987,859 69,272,533 139,631,437 309,745,032 (3,716,895) 542,265,041 8,588,660 3,897,402 1,108,048,355 20,409,291 21,454,903 172,940,165 111,757,229 139,620,667 13,196,829 — — (33,822,584) 445,556,500 a. Royalty income of Taka 28,742,584 comes from licensing of BPL products 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 losses has been netted off with the exchange rate fluctuation gains. An exchange loss of Tk. 6,857,486 has arisen from the the translation of outstanding foreign currency loan from ODDO BHF Aktiengesellshaft, Frankfurt, Germany translated at the exchange rate prevailing on the financial position date. e. Beximco Pharma entered into a tripartite agreement with the Government of Bangladesh (GOB) and the Serum Institute of India Pvt. Ltd (“SII”), for the supply of 30 million doses of Oxford University/AstraZeneca SARS-CoV-2 vaccine, AZD1222, in Bangladesh. The Company delivered 7 million vaccine during the reported year. As per agreement, the Company is to receive fees for the import, storage and delivery of the vaccine to the GOB warehouses across the country. The Company is also responsible for replenish any quantity of loss arising from the cold chain disruptions at its own cost. Any future earning from this source is dependent on the delivery of the committed quantity of vaccine under the agreement. Income from Vaccine distribution is reported net of related expenses. f. In compliance to FRC circular no. 179/FRC/FRM/Notification/2020/2 dated July 7, 2020 the Company has recovered the forfeited PF contribution from the Provident Fund Trust which has been reported as Forfeited PF Refund. 32. Finance Cost Interest on Bank Borrowings Interest on Lease Finance Interest on Loan from PF, WPPF & Welfare Fund Other Bank Charges 562,867,528 35,970,714 190,970,118 52,067,446 841,875,806 733,669,187 27,790,746 166,837,043 29,634,539 957,931,515 150 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 33. Contribution to WPPF & Welfare Funds This represents statutory contribution by the Company as per Bangladesh Labour Act 2013. The amount is computed @ 5% of net profit before tax (after charging such contribution). 34. Income Tax Expenses This consists of as follows : a. Current Tax Tax provision for current Year (Note 3.9) b. Deferred Tax Expense 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 Deferred tax on Revaluation Surplus Deferred Tax charged to profit or Loss and Other Comprehensive Income July 2020 - June 2021 Amount in Taka July 2019 - June 2020 1,250,545,631 983,282,880 (160,532,671) 35,202,129 1,090,012,960 1,018,485,009 9,501,989,318 9,205,043,771 (1,173,933,757) (1,056,920,260) (8,169,353) (5,144,353) 8,319,886,208 8,142,979,158 22.5% 25% 1,871,974,397 2,035,744,789 2,035,744,789 2,002,571,178 (163,770,392) 3,237,721 (160,532,671) 33,173,611 2,028,518 35,202,129 Reconciliation of Effective tax rate 2020-21 2019-20 % Tk. % Tk. Profit before Tax Applicable Tax 6,033,501,696 22.50% 1,357,537,882 Effect of lower rate on Export Profit excluding Cash Incentive -1.56% (94,206,509) Effect of lower rate on cash incentive Effect of lower rate on dividend income Effect of permanent disallowances Deferred tax impact for changing tax rate & others -0.64% (38,718,129) -0.01% 0.86% (899,696) 51,624,342 -3.07% (185,324,930) 25.00% -2.20% -0.48% -0.02% 0.94% 0.00% 4,381,884,882 1,095,471,221 (96,362,751) (20,943,100) (1,072,745) 41,392,384 — Income Tax Expense 18.07% 1,090,012,960 23.24% 1,018,485,009 a. Export Profits are subject to 11.25% Tax rate b. 10% Tax deductible at source on the cash incentives are treated as final tax liability on such income as per the Income Tax regulations c. Dividend Income is taxable @ 20% Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 151 35. Other Comprehensive Income/(Loss) Fair Value Gain/(Loss) on Investment in Listed Shares Note 8 ( a ) 36. Earnings Per Share (EPS)/ Restated EPS July 2020 - June 2021 July 2019 - June 2020 Amount in Taka 12,840,831 12,840,831 (1,577,828) (1,577,828) a. Earnings attributable to the ordinary shareholders Tk. 4,943,488,736 b. Weighted average number of shares outstanding during the year (Note 3.15) Earnings Per Share (EPS) Tk. 446,112,089 11.08 3,363,399,873 446,112,089 7.54 37. Net Asset Value (NAV) Per Share Total Assets Less Total Liabilities Net Assets Number of Shares Net Asset Value (NAV) Per Share June 30, 2021 June 30, 2020 50,864,666,106 (14,157,074,351) 36,707,591,755 446,112,089 82.28 48,679,773,173 (16,323,414,038) 32,356,359,135 405,556,445 79.78 July 2020 - June 2021 July 2019 - June 2020 38. Net Operating Cash Flows Per Share (NOCFPS) Net Cash Generated from Operating Activities Number of Ordinary Shares Net Operating Cash Flows Per Share (NOCFPS) 5,614,916,935 446,112,089 12.59 5,210,760,070 405,556,445 12.85 152 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 July 2020 - June 2021 July 2019 - June 2020 Amount in Taka 39. Reconciliation of Net Profit with Cash Flows from Operating Activities Profit after Tax 4,943,488,736 3,363,399,873 Adjustment to reconcile net profit to net cash provided by operating activities : Non-cash Expenses : Depreciation Amortization Gratuity & WPPF Exchange rate fluctuation (Gain)/loss 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 996,862,434 911,565,653 67,131,843 171,840,123 6,857,486 (160,532,671) (39,885,261) (35,987,859) (3,897,402) — (285,548,974) (1,165,455,856) 113,270,668 381,797,104 (9,536,230) 565,982,015 (128,899,418) (42,707,257) 5,614,916,935 1,267,944,433 914,833,448 60,906,370 266,403,789 (9,401,302) 35,202,129 10,399,024 (21,454,903) 33,822,584 (1,968,657) 569,016,740 45,111,006 (20,362,634) 112,224,252 (71,999,051) 294,969,732 113,222,981 95,850,454 5,210,760,070 *The Company used Janata Bank’s applicable (US Dollar-Taka) exchange rate as on June 30, 2021 which remained unchanged with the exchange rate as on June 30, 2020. As such, there was no effect of exchange rate on Cash and Cash Equivalents. 40. Related Party Disclosures 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 Value of Transaction Balance at year end Balance Type a. I & I Services Ltd. b. Nuvista Pharma Ltd Delivery of Products Distribution Commission Toll Manufacturing Cost of services Royalty Dividend Distribution commission c. Beximco Pharma API Limited Short Term Advance 27,348,232,493 437,367,829 27,882,074 56,571,923 28,742,584 35,047,159 139,631,437 135,470 1,401,534,613 1,379,979 4,449,651 5,875,790 — 14,631,227 679,830 Dr. Cr. Dr. Dr. Dr. Dr. Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 153 41. Particulars of Disposal of Property, Plant and Equipment The following assets were disposed off during the year ended June 30, 2021: Particulars of Assets Plant & Machinery Office Equipment Furniture & Fixtures Transport & Vehicle Cost Accumulated Depreciation Written Down Value Sales Price Profit / (Loss) Mode of Disposal 36,523,171 15,299,760 21,223,411 21,133,368 (90,043) Negotiation 253,700 896,228 109,385 264,188 144,315 632,040 143,772 632,040 (543) Negotiation — Negotiation 21,101,899 14,248,029 6,853,870 10,841,858 3,987,988 Negotiation Tk. 58,774,998 29,921,362 28,853,636 32,751,038 3,897,402 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 433,526,806 36,377,866 16,770,675 42,705,419 16,741,931 14,919,803 561,042,500 a. The above includes salary, allowances, and perquisites amounting Tk. 64,468,438 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 and Capacity Utilization June 2021 June 2020 July 2020 to June 2021 July 2019 to June 2020 Quantity Quantity Quantity % Quantity % Tablet, Capsule, Suppository & DPI Million Pcs 5,885.53 5,842.87 7,093.47 120.52% 6,586.29 112.72% Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin Million Pcs 102.70 100.98 115.36 112.33% 115.39 114.27% Active Pharmaceuticals Ingredient (API) Matric Ton 22.00 — 4.61 20.95% — — Production does not include goods manufactured under contract manufacturing arrangement from third party manufacturing sites. 44. Capital Expenditure Commitment There was no capital expenditure contracted but not incurred or provided for at June 30, 2021. 154 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 45. Claim not Acknowledged as Debt There was no claim against the Company not acknowledged as debt as on June 30,2021. 46. Un-availed Credit Facilities ODDO BHF Aktiengesellshaft, Frankfurt, Germany approved an ECA term loan of Euro 20.22 million to partially finance the machinery and equipment for the expansion project being implemented by the Company. An amount of Euro 13.25 million has been disbursed as on Balance Sheet date. The remaining Euro 6.97 million is disbursable against procurement of the machinery & equipment. 47. Foreign Currency Payments & Receipts: Payments : Materials, Spares and Capital Machinery Foreign Currency Loans, Fees & Expenses Receipts : Export Sales & Others Foreign Currency (Equivalent US$) Taka 117,646,013 9,990,687,199 17,504,877 1,474,594,231 38,467,352 3,238,247,158 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 has Tk. 144,113,691 against the Company. The Company own the verdict of the Appellate Tribunal in its favor. The concerned authority has 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 a. The Board of Directors of the Company recommended 35% cash dividend (i.e. Tk. 3.50 per share) for the year 2020-21. The dividend proposal is subject to shareholders’ approval at the forthcoming Annual General Meeting. b. The Board of Directors of Nuvista Pharma Limited (NPL) has declared cash dividend @ 40% ( i.e. Tk. 4.00 per share) for the year 2020-21. The proposed dividend is subject to approval of the shareholders of NPL in the forthcoming Annual General Meeting. c. Subsequent to the Balance Sheet date Beximco Pharma completed the acquisition of 54.6% stakes in Sanofi Bangladesh Ltd. at a consideration of approximately Taka 469.62 crore (equivalent £39.35 million) pending final closing adjustments, if any. 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 Annual Report 2020-21 | Financial Statements- Beximco Pharmaceuticals Limited | 155 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, 2021 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. 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 21, 2021 156 | Financial Statements- Beximco Pharmaceuticals Limited | Annual Report 2020-21 Financial Statements 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 2021 together with the Auditors’ Report thereon. Operating Performance We concluded year 2020-21 with remarkable success amidst the disruptions created by the ongoing pandemic. The economic and business environment remained challenging throughout the financial year, especially in the first and fourth quarter, when Bangladesh faced two surges of COVID-19 upsetting the life and livelihood of the people. However, gaining experience from the past and relying on our strength of resilience, we reimagined and redesigned our operating and business strategies to exploit the maximum business potentials. We adjusted our customer interaction model to stay closer to them than ever before. During this time, we stepped up our contact with our core specialty doctors through digital channels, face-to-face visit and with other scientific activities on virtual digital platforms. We re-aligned our manufacturing and other support functions to fit to the challenging condition consequent to which we managed uninterrupted production and supply of our products to the market. Thanks to the Company’s employee-friendly policies giving highest priority on the health and safety of the people and unceasing support that encouraged them to contribute their fullest, resulting in improved business and operational performance. Our sales revenue increased by a significant 24.04% to reach a new height of Tk. 2,572.1 million in 2020-21 as against Tk. 2,073.6 million of preceding year. Most of our key therapeutic segments registered faster growth than the industry. During the year, we added 10 new products in our portfolio and got encouraging market response. They contributed Tk. 71.5 million in sales in the first year of introduction, which shows their strong growth potential. The new products that we launched in 2019-20 continued to perform well in their respective market categories and contributed Tk. 217.3 million in 2020-21. Also in 2020-21, we generated Tk. 66.3 million from rendering toll services to other pharmaceutical companies. The Company earned an after-tax net profit of Tk. 299.7 million in 2020-21 as against Tk. 243.8 million in 2019-20, marking a significant 22.93% growth. Impressive achievement of sales, improved gross margin predominantly because of the revenue mix and leverage effect of higher sales, and proper containment of operating expenses helped to attain the growth in net profit. The Net Operating Cash Flows (NOCFPS) and the Net Asset Value (NAV) per share increased to Tk. 34.8 and Tk. 86.8 in 2020-21 from Tk. 28.2 and Tk. 64.8 respectively, of the previous year. 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 2021 Year ended 30 June 2020 Amount in Taka 421,484,155 (121,785,501) 299,698,654 442,959,982 (41,125,560) 701,533,076 (47,000,640) 654,532,436 334,282,670 (90,471,845) 243,810,825 222,649,477 (23,500,320) 442,959,982 (41,125,560) 401,834,422 Dividend The Board of Directors recommends 40% cash dividend i.e. Tk. 4.00 per share for the year ended 30 June 2021 to the Shareholders subject to the approval of the Shareholders in the Annual General Meeting (AGM) of the Company. 158 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 Composition of Board of Directors The Board of Directors is composed of: Mr. Nazmul Hassan, MP : Chairman and Director Mr. S. M. Rabbur Reza : Managing Director Mr. Mohammad Ali Nawaz : Director Mr. Md. Golam Yahia : Nominee Director, Ministry of Industries Prof. Mamtaz Uddin Ahmed : Independent Director Retirement and Re-Election of Director Mr. Mohammad Ali Nawaz, Director of the Company retires by rotation as per Article 125 and 126 of the Articles of Association of the Company and being eligible, offer himself for re-election as Director and is placed for approval by the shareholders in the AGM. Auditors The existing auditors A. Qasem & Co., Chartered Accountants, who were appointed as auditors of the Company in the 46th AGM of the Company carried out the audit for the year ended 30 June 2021. 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 2022 subject to the approval of the shareholders in the 47th 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 2022. On behalf of the Board, Nazmul Hassan, MP Chairman 18 October 2021 Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 159 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 2021, 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 2021, 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. — 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. 160 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 -— 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) 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; (b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books; 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 and returns. A. Qasem & Co. Chartered Accountants RJSC Firm Registration No.: 2-PC7202 Mohammad Motaleb Hossain, FCA Enrolment Number: 0950 DVC: 2110270950AS148231 Dhaka, 18 October 2021 Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 161 Nuvista Pharma Limited Statement of financial position As at 30 June 2021 Notes 30 June 2021 ASSETS Non-current assets Property, plant and equipment Capital work-in-progress Intangible assets Total non-current assets Current assets Inventories Trade receivables Loans, advances and deposits Cash and cash equivalents Total current assets Total assets EQUITY AND LIABILITIES Shareholders’ equity Share capital Reserves and surplus Total equity Non-current liabilities Lease liabilities - long term portion Long term bank borrowings Gratuity payable Deferred tax liabilities Total non-current liabilities Current liabilities Lease liabilities - current portion Short term bank borrowings Trade payables Liabilities for expenses Income tax payable Other liabilities Total current liabilities Total liabilities Total equity and liabilities 4 5 6 7 8 9 10 11 12 13 14 15 16 13 17 18 19 20 21 Amount in Taka 30 June 2020 1,144,501,502 180,908 — 1,144,682,410 456,155,729 111,672,826 45,959,627 18,976,993 632,765,175 1,094,483,583 13,167,670 14,498,907 1,122,150,160 488,258,898 68,992,110 62,372,394 27,506,945 647,130,347 1,769,280,507 1,777,447,585 117,501,600 902,470,740 1,019,972,340 — — 148,113,060 117,591,532 265,704,592 — 166,074,847 146,680,936 96,229,644 2,064,899 72,553,249 483,603,575 749,308,167 1,769,280,507 117,501,600 643,897,646 761,399,246 4,915,288 4,751,056 128,748,851 131,938,710 270,353,905 1,531,045 442,114,287 115,882,471 106,386,071 22,737,718 57,042,842 745,694,434 1,016,048,339 1,777,447,585 The annexed notes 1 to 35 form an integral part of these financial statements. Nazmul Hassan Chairman S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director As per our report of same date Dhaka, 18 October 2021 A. Qasem & Co. Chartered Accountants RJSC Firm Registration No.: 2-PC7202 Mohammad Motaleb Hossain, FCA Enrolment Number: 0950 DVC: 2110270950AS148231 162 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 Nuvista Pharma Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2021 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 2021 22 23 24 25 26 27 20 16 2,572,104,337 (1,238,556,183) 1,333,548,154 (104,244,983) (773,583,577) 455,719,594 3,648,109 (16,809,340) 442,558,363 (21,074,208) 421,484,155 (136,132,679) 14,347,178 (121,785,501) 299,698,654 — Amount in Taka 30 June 2020 2,073,588,946 (966,727,371) 1,106,861,575 (92,526,184) (608,640,157) 405,695,234 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 — Total comprehensive income for the year 299,698,654 243,810,825 Earnings Per Share (EPS) 25.51 20.75 The annexed notes 1 to 35 form an integral part of these financial statements. As per our report of same date Nazmul Hassan Chairman S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director As per our report of same date Dhaka, 18 October 2021 A. Qasem & Co. Chartered Accountants RJSC Firm Registration No.: 2-PC7202 Mohammad Motaleb Hossain, FCA Enrolment Number: 0950 DVC: 2110270950AS148231 Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 163 Nuvista Pharma Limited Statement of changes in equity For the year ended 30 June 2021 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 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 Number of shares Net assets value per share Balance as at 1 July 2020 Dividend paid 117,501,600 7,511,991 30,844,170 243,737 162,337,766 442,959,982 643,897,646 761,399,246 (41,125,560) (41,125,560) (41,125,560) 11,750,160 64.80 Profit after tax for the year ended 30 June 2021 — — — — — 299,698,654 299,698,654 299,698,654 Balance as at 30 June 2021 117,501,600 7,511,991 30,844,170 243,737 162,337,766 701,533,076 902,470,740 1,019,972,340 Notes 11 12 12.1 12 12.2 12 12 Number of shares Net assets value per share The annexed notes 1 to 35 form an integral part of these financial statements. 11,750,160 86.80 164 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 Nuvista Pharma Limited Statement of cash flows For the year ended 30 June 2021 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 Purchase of property, plant and equipment Purchase of intangible assets Proceeds from disposal of property, plant and equipment Net cash used in investing activities C. Cash flows from financing activities Notes 30 June 2021 30 June 2020 Amount in Taka 2,618,368,138 1,994,406,632 (2,033,598,933) (1,563,184,360) 584,769,205 (19,577,082) (156,805,498) 408,386,625 431,222,272 (54,587,576) (44,966,705) 331,667,991 19 & 27 20 (56,789,046) (14,870,674) 80,133 (19,011,295) — 74,250 (71,579,587) (18,937,045) Proceeds from/(payment to) long term bank borrowings Proceeds from/(payment to) short term bank borrowings Payment for lease liability Dividend paid 14 17 13 (36,034,605) (244,755,891) (6,446,333) (41,040,257) (38,459,361) (257,170,269) (2,826,903) (23,450,146) Net cash (used in)/from financing activities (328,277,086) (321,906,679) D. Net increase/(decrease) in cash and cash equivalents (A+B+C) E. Opening cash and cash equivalents F. Closing cash and cash equivalents (D+E) 8,529,952 18,976,993 27,506,945 (9,175,733) 28,152,726 18,976,993 Net operating cash flow per share 34.76 28.23 Number of shares 11,750,160 11,750,160 The annexed notes 1 to 35 form an integral part of these financial statements. Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 165 Nuvista Pharma Limited Notes to the financial statements As at and for the year ended 30 June 2021 1. Reporting entity 1.1 Nuvista Pharma Limited (“the Company”) was originally a subsidiary of Netherlands-based Organon International. The Company has been operating in Bangladesh since 1964, with a local manufacturing facility at Tongi, Dhaka. In the post-independent Bangladesh, it was incorporated as Organon (Bangladesh) Limited under Bangladesh Companies Act as a private limited company. Following the divestment of Oraganon’s equity to the local management in 2006, the Company was renamed as Nuvista Pharma Limited. In 2011, the Company, through amendments to its Memorandum and Articles of Association, became a public Limited Company under the Companies Act 1994. In 2018, Beximco Pharmaceuticals Limited, a public limited company listed with Bangladesh Stock Exchanges and AIM of London Stock Exchange, acquired majority shareholdings in Nuvista Pharma Limited. Beximco Pharma, through this acquisition, became the immediate and ultimate parent of Nuvista Pharma with 85.22% of Nuvista’s equity. Government of Bangladesh holds 12.92% shares of the Company while the rest is held by other local shareholders. 1.2 The registered office of the Company is located at 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, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold in the domestic 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. 2.2 Basis of measurement The financial statements have been prepared on the historical cost basis except revaluation of certain property, plant and equipment. 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 2020 to 30 June 2021. 166 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 3. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements. 3.1 Share capital Share 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. 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 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 contract does not meet the criteria of lease as defined under IFRS 16. 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. Subsequent to the Balance Sheet date the Company has initiated the process to convert the unfunded gratuity scheme to funded gratuity. 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 and is funded by contributions from employees and from the Company @ 10% of the basic pay. These contributions are invested separately from the Company’s business. 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. Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 167 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 Intangible assets Intangible assets represent rights, titles and assigned trademark. Acquired intangible asset is initially capitalised at cost which includes the purchase price and other directly attributable costs. It is subsequently carried at cost less accumulated amortization and any accumulated impairment losses. Amortisation is calculated to write off the cost of intangible assets using the straight-line method over its estimated useful life. 3.7 Impairment 3.7.1 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 2021. 3.7.2 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. 3.7.3 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 2021. 3.8 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. 168 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 3.9 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. 3.9.1 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. 3.9.2 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. 3.10 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. 3.11 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. 3.12 Foreign currency 3.12.1 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. 3.12.2 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. 3.12.3 Translation gains and losses Foreign exchange difference arising on translation are recognised in the Statement of profit or loss and other comprehensive income. Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 169 3.13 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. 3.14 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. 3.15 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. 3.16 Workers’ Profit Participation Fund (WPPF) The Company provides 5% of its net profit before tax (after charging such expense) as WPPF in accordance with Bangladesh Labour Act 2006. 3.17 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 2023. This standard, however, has no material issue that might affect the reported financial statements of the Company. 3.18 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. 3.19 General Previous year’s figures have been rearranged/reclassified wherever considered necessary to conform to current year’s presentation. 170 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 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 2020 Addition/transfer during the year Adjustment/disposal As at 30 June 2021 Accumulated depreciation As at 1 July 2020 Charge during the year Adjustment/disposal As at 30 June 2021 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 — — 2,391,184 2,157,644 17,558,672 — 1,421,458 16,210,165 3,160,729 42,899,852 — — (1,798,461) (1,334,800) (1,941,620) — — (5,074,881) 275,608,713 239,181,778 20,351,322 496,417,215 144,221,980 30,516,567 701,843,238 52,542,945 1,960,683,758 — 54,201,286 3,913,221 194,701,848 115,701,140 24,533,963 359,058,528 26,247,299 778,357,285 — — 5,932,272 485,511 23,157,451 16,000,885 3,685,911 41,248,709 2,391,922 92,902,661 — — (1,798,453) (1,319,712) (1,941,606) — — (5,059,771) — 60,133,558 4,398,732 216,060,846 130,382,313 26,278,268 400,307,237 28,639,221 866,200,175 As at 30 June 2021 275,608,713 179,048,220 15,952,590 280,356,369 13,839,667 4,238,299 301,536,001 23,903,724 1,094,483,583 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 4.1 Depreciation charge has been allocated as under Factory overhead 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 30 June 2021 30 June 2020 73,241,118 2,938,395 16,723,148 92,902,661 80,197,666 2,996,619 12,802,897 95,997,182 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. Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 171 5. Capital work-in-progress Factory Building Factory Warehouse Plant and machinery Furniture Equipment & Electric fixture and fittings Computer and IT equipment 6. Intangible assets Cost Balance as at 1 July Addition during the year Balance as at 30 June Amortization Balance as at 1 July Amortized during the year Balance as at 30 June Net carrying value as at 30 June As at 1 July 2020 180,908 180,908 Addition during the year 2,391,184 2,157,644 29,043,335 3,160,729 17,712,264 1,421,458 55,886,614 Transfer to property, plant and equipment 2,391,184 2,157,644 17,558,672 3,160,729 16,210,165 1,421,458 42,899,852 Amount in Taka As at 30 June 2021 — — 11,665,571 — 1,502,099 — 13,167,670 Amount in Taka 30 June 2021 30 June 2020 — 14,870,674 14,870,674 — 371,767 371,767 14,498,907 — — — — — — — This represents rights, titles and assigned trademark of ovestin brand purchased from Merck Sharp & Dohme B. V., the Netherlands on 1 April 2021 and is amortized over 10 years. 7. Inventories Stocks Finished goods Semi-finished and Work-in-process Raw materials Chemicals Packing materials Materials-in-transit Stores Spares and accessories Laboratory consumables Literature, brochure and other materials Spares-in-transit 172 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 111,155,804 57,816,825 227,201,449 20,787,896 30,462,560 1,544,922 448,969,456 8,458,918 299,097 30,436,948 94,479 39,289,442 156,163,823 44,419,416 134,288,819 25,896,599 38,633,826 16,928,409 416,330,892 9,928,538 313,561 29,150,832 431,906 39,824,837 488,258,898 456,155,729 8. Trade receivables Ageing of the trade receivables is as follows: Receivables due over six months Receivables due below six months Above receivables are unsecured and considered good. Trade receivables is net off provision for bad debts Tk. 1,884,860. 9. Loans, advances and deposits Car loan General loan Advance against operating expenses Security deposits VAT Prepaid insurance LC margin Others 10. Cash and cash equivalents Cash in hand Cash at banks Eastern Bank Limited The City Bank Limited Dhaka Bank Limited IFIC Bank Limited Shimanto Bank Limited Janata Bank Limited National Bank Limited 30 June 2021 Amount in Taka 30 June 2020 2,588,327 66,403,783 68,992,110 3,427,476 108,245,350 111,672,826 10,931,774 1,756,172 1,588,959 3,483,184 24,696,302 5,389,765 14,120,004 406,234 62,372,394 4,346,942 1,920,061 892,511 6,580,740 21,594,507 5,261,738 4,265,999 1,097,129 45,959,627 115,867 100,468 75,189 520,407 655 19,945,406 33,240 6,627,594 188,587 27,391,078 27,506,945 64,569 415,483 655 13,559,470 28,160 4,493,168 315,020 18,876,525 18,976,993 Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 173 Amount in Taka 30 June 2021 30 June 2020 11.Share capital Authorised 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 1,710,000 117,501,600 117,501,600 11,750,160 Shareholding position Beximco Pharmaceuticals Limited Government of Bangladesh Other shareholders Nominal value (Taka) Percentage of holding (%) 30 June 2021 30 June 2020 30 June 2021 30 June 2020 100,134,740 100,134,740 15,186,000 2,180,860 15,186,000 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 30 June 2021 30 June 2020 7,511,991 30,844,170 243,737 162,337,766 701,533,076 902,470,740 7,511,991 30,844,170 243,737 162,337,766 442,959,982 643,897,646 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. 174 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 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) 14.1 Dhaka Bank Limited 30 June 2021 Amount in Taka 30 June 2020 — — — 1,531,045 4,915,288 6,446,333 — — — 36,034,605 (31,283,549) 4,751,056 Term loans financed by Dhaka Bank Limited for setting up the new Oral Solids facility and equipment at the factory which was fully repaid in current year. 14.2 Collateral All loans are secured by a registered mortgage on specific factory land and buildings of the Company. 14.3 Security The loan is secured by hypothecation of fixed and floating assets of the Company including plant and machinery, equipment, furniture and fixture, inventories and receivables. Additionally, there is a corporate guarantee issued by Beximco Pharmaceuticals Limited. 15. 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 128,748,851 29,392,589 — 158,141,440 (10,028,380) 148,113,060 106,585,224 22,766,607 12,455,838 141,807,669 (13,058,818) 128,748,851 Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 175 16. Deferred tax liabilities Deferred tax liabilities arrived at as follows: Year: 2020-2021 Property, plant and equipment Gratuity payable Allowance for expected credit loss Temporary difference Carrying amount on statement of financial position date Tax base 818,874,870 372,397,981 (148,113,060) (1,884,860) — — 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 Year: 2019-2020 Property, plant and equipment Gratuity payable Allowance for expected credit loss Temporary difference Carrying amount on statement of financial position date Tax base 868,892,789 420,915,448 (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(b): Deferred tax Liabilities on revaluation surplus Net deferred tax liabilities Amount in Taka Taxable/ (deductible) temporary difference 446,476,889 (148,113,060) (1,884,860) 296,478,969 30.0% 15.0% (88,943,691) (28,647,841) (117,591,532) Taxable/ (deductible) temporary difference 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) Deferred tax recognised in the statement of profit or loss and other comprehensive income in 2020-2021 (a-b) 14,347,178 Deferred tax recognised in the statement of profit or loss and other comprehensive income in 2019-2020 12,913,693 176 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 17. Short term bank borrowings Bank overdrafts Dhaka Bank Limited (Limit Tk. 200,000,000) 22,608,979 77,213,282 Amount in Taka 30 June 2021 30 June 2020 Short term bank loans Dhaka Bank Limited Current portion of long term loan (Note 14) 143,465,868 333,617,456 — 166,074,847 31,283,549 442,114,287 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% per annum and is payable on quarterly rests. 18. Trade payables Trade payables This represents amount due against purchase of raw, chemical and packing materials. 19. Liabilities for expenses Accrued expenses Audit fees Accrued interest 20. Income tax payable 146,680,936 146,680,936 115,882,471 115,882,471 94,915,558 400,000 914,086 96,229,644 102,329,243 375,000 3,681,828 106,386,071 Balance as at 1 July Add: Provision for the year Less: AIT and treasury deposits during the year Balance as at 30 June 22,737,718 136,132,679 (156,805,498) 2,064,899 (35,681,115) 103,385,538 (44,966,705) 22,737,718 21. Other liabilities Salary and allowances Provident fund dues Workers’ profit participation fund Tax deducted at source Net VAT payable Tax on salaries Final settlement of staff Commission payable Unpaid dividend 4,531,928 3,200,879 21,074,208 1,317,699 22,136,988 1,921,355 3,371,107 14,631,227 367,858 72,553,249 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 Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 177 22. Revenue Net sales revenue Toll income Quantitative details of sales July 2020-June 2021 July 2019-June 2020 Amount in Taka 2,505,836,903 66,267,434 2,572,104,337 2,003,012,715 70,576,231 2,073,588,946 Unit Tabs Caps Amps & Suspensions Bottles Quantity 710,009,655 39,326,286 14,050,488 3,319 Quantity 378,685,916 32,207,937 13,145,696 — 23. Cost of goods sold Opening stock of finished goods Purchases (imported and processed products) Cost of production (Note 23.1) Cost of goods available for sale Cost of physician sample Closing stock of finished goods 23.1 Cost of production Opening stock of semi-finished and WIP Materials consumed (Note 23.2) Factory overhead (Note 23.3) Closing stock of semi-finished and WIP 156,163,823 9,718,528 1,194,139,965 1,360,022,316 (10,310,329) (111,155,804) 1,238,556,183 44,419,416 679,919,902 527,617,472 1,251,956,790 (57,816,825) 1,194,139,965 99,377,976 — 1,031,507,041 1,130,885,017 (7,993,823) (156,163,823) 966,727,371 35,395,067 563,093,775 477,437,615 1,075,926,457 (44,419,416) 1,031,507,041 178 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 23.2 Materials consumed Opening stock Purchase Closing stock Item wise quantity and value of finished goods stock are as follows : Unit pcs. pcs. pcs. Unit pcs. pcs. pcs. pcs. Stock as June 30, 2020 Tabs Caps Amps & Suspensions Stock as June 30, 2021 Tabs Caps Amps & Suspensions Bottle 23.3 Factory overhead 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) July 2020-June 2021 July 2019-June 2020 Amount in Taka 198,819,244 759,552,563 (278,451,905) 679,919,902 163,711,619 598,201,400 (198,819,244) 563,093,775 Quantity Value (Taka) 59,388,662 11,548,926 1,416,442 89,677,866 42,908,358 23,577,599 156,163,823 Quantity Value (Taka) 34,666,898 5,765,220 1,270,207 40,430 189,823,190 68,737,787 32,904,388 1,561,254 11,833,646 4,894,538 42,563,382 2,255,598 5,830,110 48,681,459 32,127,613 — 2,635,882 1,529,366 1,555,172 4,000,941 860,740 2,581,288 73,241,118 527,617,472 62,743,742 18,016,722 21,417,183 8,978,157 111,155,804 170,579,565 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. 2,203,286. Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 179 24. General and administration expenses July 2020-June 2021 July 2019-June 2020 Amount in Taka Salaries and allowances Directors’ fees (Note 29) Office rent Overseas travelling expenses Local travelling expenses Entertainment Vehicle repair, maintenance and running cost Postage, telephone, cell phone 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 Other expenses Depreciation (Note 4.1) 60,785,836 288,000 11,454,000 — 1,315,151 957,635 4,216,010 2,104,339 1,078,461 1,909,231 1,376,625 3,959,299 2,227,649 3,599,911 979,950 296,152 207,495 400,000 145,000 2,042,333 1,963,511 2,938,395 104,244,983 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 Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 1,151,006. 180 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 25. Selling and distribution expenses Salaries and allowances Overseas travelling expenses Local travelling expenses Entertainment Samples Sales promotion expenses Brand development Product launch expenses Sales force logistic Employee welfare 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, cell phone and internet Printing and stationery Medical expenses Training expenses Market survey and research Registration and renewals Insurance premium Office rent Bad debts Utilities Other expenses Amortization of intangible assets Depreciation (Note 4.1) July 2020-June 2021 July 2019-June 2020 Amount in Taka 323,220,113 — 90,892,048 2,458,196 14,743,772 17,364,964 6,194,559 9,769,607 19,493,038 2,227,756 6,842,995 2,940,561 28,742,584 33,548,922 139,631,437 7,881,573 4,367,730 5,450,647 7,395,170 11,719,697 1,627,733 2,017,261 3,041,832 636,800 1,204,835 2,711,887 7,728,900 474,431 1,034,923 1,124,691 371,767 16,723,148 773,583,577 275,653,657 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 Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 8,102,350. 26. Non-operating income Gain on disposal of property, plant and equipment Rental income Sale of miscellaneous items Forfeited PF refund (Note: 26.1) 26.1 Forfeited PF refund 65,024 866,400 582,907 2,133,778 3,648,109 24,692 866,400 283,048 — 1,174,140 In compliance with the FRC circular number 179/FRC/FRM/Notification/2020/2, dated 07 July 2020, the Company has recovered the forfeited provident fund from the Provident Fund Trust. Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 181 27. Interest expenses Interest on Long term loan Short term finance Finance lease Bank charges 28. Capacity utilisation Amps & Suspensions Tablet Capsule July 2020-June 2021 July 2019-June 2020 Amount in Taka 688,716 15,004,354 372,272 743,998 16,809,340 Actual production Unit 13,257,582 646,357,034 37,359,176 13,290,514 40,691,103 921,123 969,830 55,872,570 Actual Utilisation % 67% 49% 67% Installed capacity Unit 19,822,400 1,322,390,400 56,044,880 29. Remuneration and fees to directors This relates to Board meeting attendance fee paid to Directors. 30. Payments made in foreign currency Particulars July 2020-June 2021 July 2019-June 2020 Foreign currency (Equivalent USD) Taka Taka Import of raw, chemicals and packing materials Import of machinery and spare parts 6,095,178 437,516 521,323,600 37,381,755 558,705,355 359,506,535 13,228,851 372,735,386 31. 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 Nature of transactions Value of transaction Balance at year end Transaction Type Beximco Pharmaceuticals Limited Immediate and ultimate parent Toll income 27,882,074 1,379,979 Royalty expenses 28,742,584 5,875,790 Cost of services 56,571,923 4,449,651 Dividend paid 35,047,159 — Distribution commission 139,631,437 14,631,227 Dr. Cr. Cr. Cr. 182 | Financial Statements- Nuvista Pharma Limited | Annual Report 2020-21 32. Capital expenditure commitment There was no capital expenditure contracted but not incurred or provided for at 30 June 2021. 33. Contingent liabilities 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. If any liability arises on disposal of the cases, the Company shall provide for such liability in the year of disposal. 34. 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 1,281 (June 2020: 1,142). 35. Events after reporting date The Board in its meeting dated 18 October 2021 recommended that 40% cash dividend i.e. Tk. 4.00 per share, totalling Tk. 47,000,640 be paid for the year 2020-21. The dividend proposal is subject to shareholders’ approval at the forthcoming annual general meeting. Nazmul Hassan Chairman S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Annual Report 2020-21 | Financial Statements- Nuvista Pharma Limited | 183 Financial Statements 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, 2021 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 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. Because of extended effect of Covid-19 Pandemic this process got delayed and yet to be completed. Moreover, the volatility in the global API market has created some nervousness among the API manufacturers. That is why we have decided to go slow cautiously to avoid any mistake. The project decision has been intentionally put on hold at this moment due to said reason. Once the situation normalizes, project will start rolling again. We shall keep you updated of further development in due course. 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 Mamtaz Uddin Ahmed, 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 2021. 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 2021-22. 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 2021- 22. On behalf of the Board Chairman Annual Report 2020-21 | Financial Statements- Beximco Pharma API Limited | 185 Independent Auditor’s 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 30 June 2021, 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 30 June 2021 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 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 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 to 186 | Financial Statements- Beximco Pharma API Limited | Annual Report 2020-21 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 October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110280564AS311814 Annual Report 2020-21 | Financial Statements- Beximco Pharma API Limited | 187 Beximco Pharma API Limited Statement of Financial Position As at June 30, 2021 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 and Provisions Short Term Advance Creditors and Other Payables Audit Fees Payable Amount in Taka Notes June 30, 2021 June 30, 2020 4 5 20,000,000 20,000,000 20,000,000 20,000,000 55,080 55,080 94,685 94,685 20,055,080 20,094,685 18,201,924 20,000,000 (1,798,076) 1,853,156 679,830 1,153,326 20,000 18,376,999 20,000,000 (1,623,001) 1,717,686 544,360 1,153,326 20,000 TOTAL EQUITY AND LIABILITIES 20,055,080 20,094,685 The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date. Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110280564AS311814 188 | Financial Statements- Beximco Pharma API Limited | Annual Report 2020-21 Beximco Pharma API Limited Statement of Profit or Loss and Other Comprehensive Income For the Year ended June 30, 2021 Revenue Cost of Revenue Gross Profit/(Loss) Administrative Expenses Profit/(Loss) from Operations Income Tax Expense Net Profit/(Loss) after Tax Other Comprehensive Income Amount in Taka Notes July 2020 - June 2021 July 2019 - June 2020 6 — — — (175,075) (175,075) — (175,075) — — — (485,200) (485,200) — (485,200) — — Total Comprehensive Income/(Loss) for the Year (175,075) (485,200) Earnings Per Share (0.09) (0.24) The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date. Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110280564AS311814 Annual Report 2020-21 | Financial Statements- Beximco Pharma API Limited | 189 Beximco Pharma API Limited Statement of Changes in Equity For the Year ended June 30, 2021 As at June 30, 2021 Amount in Taka Particulars Share Capital Retained Earnings Total Balance as on July 01,2020 Net Loss for the Year Balance as on June 30, 2021 Number of Shares Net Assets value per shares As at June 30, 2020 20,000,000 — (1,623,001) (175,075) 20,000,000 (1,798,076) 18,376,999 (175,075) 18,201,924 2,000,000 9.10 Particulars Share Capital Retained Earnings Total 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 20,000,000 20,000,000 (1,137,801) (485,200) (1,623,001) 18,862,199 (485,200) 18,376,999 2,000,000 9.19 The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date. Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110280564AS311814 190 | Financial Statements- Beximco Pharma API Limited | Annual Report 2020-21 Beximco Pharma API Limited Statement of Cash Flows For the Year ended June 30, 2021 Cash Flows from Operating Activities: Cash receipts from customers and others Payments for expenses & others Net Cash Generated / (Used in) From Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Net Operating Cash Flows Per Share The Notes are an integral part of the Financial Statements. Amount in Taka July 2020 - June 2021 July 2019 - June 2020 135,470 (175,075) (39,605) — — (39,605) 94,685 55,080 (0.02) 544,360 (485,200) 59,160 — — 59,160 35,525 94,685 0.03 S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date. Dhaka October 21, 2021 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2110280564AS311814 Annual Report 2020-21 | Financial Statements- Beximco Pharma API Limited | 191 Beximco Pharma API Limited Notes to the Financial Statements As at and for the year ended June 30, 2021 1. Reporting Entity 1.01 Statutory Background of the Company Beximco Pharma API Limited was incorporated in Bangladesh on 12 December, 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, 2021; b) Statement of Profit or Loss and other Comprehensive Income for the year ended June 30, 2021; c) Statement of Changes in Shareholders’ Equity for the year ended June 30, 2021; d) Statement of Cash Flows for the year ended June 30, 2021 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, 2020 to June 30, 2021. 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. 192 | Financial Statements- Beximco Pharma API Limited | Annual Report 2020-21 4. Cash and Cash Equivalents This represents Cash at Bank with Current Account (IFIC Bank Limited, Dhanmondi Branch) 55,080 94,685 June 30, 2021 Amount in Taka June 30, 2020 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 Number of Shares 6. Administrative Expenses Legal Expenses Audit Fees Bank Charges Entertainment Other Expenses S.M. Rabbur Reza Managing Director Dhaka October 21, 2021 55,080 94,685 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 2020 - June 2021 July 2019 - June 2020 30,890 20,000 1,185 — 123,000 175,075 — 20,000 840 328,460 135,900 485,200 Mohammad Ali Nawaz Director Annual Report 2020-21 | Financial Statements- Beximco Pharma API Limited | 193 Notice of Annual General Meeting BEXIMCO PHARMACEUTICALS LIMITED 17, Dhanmondi R/A, Road No. 2, Dhaka-1205 NOTICE OF THE 45TH ANNUAL GENERAL MEETING Notice is hereby given that the 45th Annual General Meeting of the Shareholders of Beximco Pharmaceuticals Limited will be held under Virtual Platform on Thursday, the 23rd December, 2021 at 10.30 a.m. to transact the following business: AGENDA 1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended on 30th June, 2021 together with reports of the Auditors and the Directors thereon. 2. To declare 35% cash dividend. 3. To elect Directors. 4. To approve the appointment of Independent Director. 5. To appoint Auditors for the year 2021-22 and to fix their remuneration. 6. To appoint Corporate Governance Compliance Auditors for the year 2021-22 and to fix their remuneration. By order of the Board, Dated: November 15, 2021 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. 22 November, 2021, 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 2020-21 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 into 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 . 194 | Notice of Annual General Meeting | Annual Report 2020-21 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 45th Annual General Meeting of the Company to be held on Thursday, 23rd December, 2021 at 10.30 a.m. under virtual platform and at any adjournment thereof. As witness my hand this……………………………..day of December, 2021. 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 ………………………………… Annual Report 2020-21 | Proxy Form | 195 www.beximcopharma.com Follow us Like us Watch BEXIMCO PHARMACEUTICALS LIMITED

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