Boston Properties Annual Report 2022

Plain-text annual report

ANNUAL REPORT | 2021-22 BEXIMCO PHARMACEUTICALS LIMITED BEXIMCO PHARMACEUTICALS LIMITED A B O U T U S ANNUAL REPORT 2021-22 BEXIMCO PHARMACEUTICALS LIMITED S S S S U U U U U T T T T T U U U U U OO O O B B B B AA A A A A “Beximco Pharma aspires to become a globally admired generic pharmaceutical company, committed to enhancing human health and life.” Contents About Us The Company Purpose Journey Subsidiaries Products Markets Manufacturing Capabilities Research and Development Global Accreditations Board and Management Board and Board Committees Proﬁ le of Directors Executive Committee Management Committee Performance Highlights Financial Operational Value Addition Accolades and Awards Corporate Events and CSR Corporate Events CSR Initiatives Environment, Health, and Safety Human Resources Work and Culture Training and Development Board and Management Report Chairman’s Statement Report of the Managing Director Report of the Directors Report of the Audit Committee Report on the Activities of NRC Investor Relations Financial Statements Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) Beximco Pharmaceuticals Limited (Stand-alone) Nuvista Pharma Limited Synovia Pharma PLC. Beximco Pharma API Limited Notice of Annual General Meeting Proxy Form 64 70 71 72 77 80 97 99 101 107 132 163 190 219 229 231 05 09 10 13 17 25 27 32 33 35 36 42 44 46 49 50 51 54 59 S U T U O B A About Us 4 | The Company | Annual Report 2021-22 A A B B O O U U T T U U S S 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. Beximco Pharma began manufacturing of these products under licensing arrangement in 1980 and launched its own formulation brands in 1983. From that humble beginning, it has grown from strength to strength. Today, Beximco Pharma 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. Leveraging its state-of-the-art manufacturing facilities and research capabilities the Company earned its name as an admired manufacturer of high- quality generic medicines. The Company’s manufacturing facilities have been accredited by the leading global regulatory authorities. Beximco Pharma exports its medicines to more than 50 countries including the highly regulated markets of USA, Europe, Canada, and Australia. Beximco Pharma has received recognitions from different national and global organizations for its excellence, innovation and performance. The Company for its commendable contribution in pharmaceutical export won the National Export (Gold) trophy for 6 times. It is also 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 Paciﬁ c”), CPhI Pharma Awards 2020 (“Innovation in Response to COVID-19”), and Global Generics & Biosimilar Awards 2021 (“The Company of the Year, Asia Paciﬁ c”). Beximco Pharma’s acquisition of Sanoﬁ Bangladesh Limited in 2021 helped it win the Global Generics & Biosimilar Awards 2022 (“Acquisition of the Year”). Beximco Pharma is listed with Dhaka and Chittagong stock exchanges of Bangladesh and the Alternative Investment Market (AIM) of London Stock Exchange. The Company holds 85.2% ownership in Nuvista Pharma Limited (formerly Organon Bangladesh), a leading non-listed Bangladeshi pharmaceutical company specializing in hormone and steroid drugs. In October 2021, It acquired majority stake (54.6%) in Sanoﬁ Bangladesh Limited from Sanoﬁ Group represented through May & Baker Limited and Fisons Limited. The company was subsequently renamed as Synovia Pharma PLC. Beximco Pharma as a group employs more than 7,000 full time employees including professionals like pharmacists, doctors, engineers, chemists, microbiologists, accountants, lawyers, information technology specialists, and graduates from other disciplines. Annual Report 2021-22 | The Company | 5 S S U U T T U U O O B B A A 6 | The Company | Annual Report 2021-22 A A B B O O U U T T U U S S Corporate Information Registered Ofﬁce 17 Dhanmondi, Road No. 2 Dhaka- 1205, Bangladesh Phone: +880-2-58611891 Fax: +880-2-58613470 Factory Tongi Plant 126 Kathaldia, Auchpara, Tongi Gazipur, Bangladesh Stock Exchange Listing Dhaka Stock Exchange Chittagong Stock Exchange AIM of London Stock Exchange Legal Advisor Hoque & Associates House No. 11, Suite No. 201 Road No. 108, Gulshan-2 Dhaka-1212, Bangladesh Subsidiaries Nuvista Pharma Limited Mascot Plaza, 8th Floor 107/A, Sonargaon Janapath; Sector- 7 Uttara C.A, Dhaka - 1230, Bangladesh Factory 48, Tongi Industrial Area Tongi, Gazipur Associates BioCare Manufacturing Sdn Bhd Seri Iskandar Pharmaceutical Park 32600 Bota, Perak, Malaysia Operational Headquarters 19 Dhanmondi, 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 Auditors M. J. Abedin & Co. Chartered Accountants National Plaza (3rd Floor), 109, Bir Uttam C. R. Datta Road Dhaka- 1205, Bangladesh Synovia Pharma PLC. 6/2/A Segun Bagicha, Dhaka-1000, Bangladesh Factory Station Road Tongi, Gazipur 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 2021-22 | The Company | 7 S S SS U U UUU U T T T T T T T U U UUU U OOO OOOOOOO O O O B B B BB BBBB B B A A AAAAA A A 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. 8 | Purpose | Annual Report 2021-22 A B O U T U S Purpose 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 deﬁ ne 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 beneﬁ t 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 2021-22 | Purpose | 9 S S U U T T U U O O B B A A Journey 1976 1980 1983 1985 1993 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 Commenced formulation product export to Russia Commenced ﬁrst time export to Europe (cid:129) GMP accreditation from Taiwan Food & Drug Administration (TFDA) and Health Canada (cid:129) Commenced export to Australia 2013 2014 (cid:129) GMP approval from the U.S. FDA as the ﬁrst Bangladeshi company (cid:129) Launched generic version of revolutionary hepatitis C drugs Sovaldi® and Harvoni® (cid:129) Entered the Gulf pharma market (Kuwait) 2015-16 (cid:129) Commenced export to the USA (cid:129) First overseas collaboration with BioCare Manufacturing Sdn Bhd, Malaysia 2016-17 (cid:129) Won the Scrip Award in the category of “Best Company in an Emerging Market” (cid:129) Oral solid dosage facility received WHO prequaliﬁcation (cid:129) Acquired 85.22% stake in Nuvista Pharma PLC. 2017-18 10 | Journey | Annual Report 2021-22 A A B B O O U U T T U U S S 2003 2005 2006 2008 2011 Introduced anti-retroviral (ARV) drugs ﬁrst time in Bangladesh Got listed with the Alternative Investment Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs Launched CFC free HFA inhalers ﬁrst time in Bangladesh (cid:129) GMP accreditation from TGA, Australia (cid:129) Gulf Central Committee for Drug Registration (GCC), as the ﬁrst Bangladeshi Company Received GMP accreditation from AGES, Austria (for European Union) Won the Scrip Award in the category of ‘‘Community Partnership of the Year’’ 2018-19 (cid:129) GMP approval from German Regulatory Authority and Malta Medicines Authority (European Union) (cid:129) Global Generics & Biosimilars Awards 2019 as “The Company of the Year, Asia-Paciﬁc” (cid:129) Launched the world's ﬁrst generic remdesivir 2019-20 (cid:129) Became exclusive distributor of Serum Institute of India for AstraZeneca/ Oxford's Covishield vaccine in Bangladesh (cid:129) Acquired Sanoﬁ Bangladesh Limited (54.6% stake) (cid:129) CPhI Pharma Award 2020 for“Innovation in response to COVID-19” (cid:129) “The Company of the Year, Asia Paciﬁc” at the Global Generics and Biosimilar Awards 2021 (cid:129) Launched the world's ﬁrst generic molnupiravir 2020-21 (cid:129) Launched the world’s ﬁrst generic version of Paxlovid (Nirmatrelvir+Ritonavir) (cid:129) Received Marketing Authorizations for two products in the UK (cid:129) Global Generics & Biosimilars Awards 2022 :“Acquisition of the Year" 2021-22 Annual Report 2021-22 | Journey | 11 S S SS S U U U U T T T T U U U OO O O B B B A A A 12 | Subsidiaries | Annual Report 2021-22 A A B B O O U U T T U U S S Subsidiaries Nuvista Pharma Limited (NPL) Nuvista Pharma Limited 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 85.2% stake by Beximco Pharma in 2018, Nuvista Pharma became the subsidiary of the Company. Nuvista Pharma currently produces over 90 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, capsule and specialty products like hormone and steroid. The facilities are accumulated in a multistoried building covering 126,408 sft ﬂ oor area. NPL employs over 1300 people of diverged skills, academic and professional backgrounds. Annual Report 2021-22 | Subsidiaries | 13 S S U U T T U U O O B B A A 14 | Subsidiaries | Annual Report 2021-22 A A B B O O U U T T U U S S Synovia Pharma PLC (SPP) Synovia Pharma PLC (formerly Sanoﬁ Bangladesh Limited) was part of global biopharmaceutical company Sanoﬁ S.A. before being taken over by Beximco Pharma in 2021. The company 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 SPP held by Sanoﬁ Group represented through May & Baker Limited and Fisons Limited. The remaining 45.4% is held by Bangladesh Government through Bangladesh Chemical Industries Corporation (20%) and Ministry of Industries (25.4%). Synovia Pharma’s state-of-the-art manufacturing facilities, including a PIC/S certiﬁ able manufacturing facility for the leading antibiotic, cephalosporin, are spread over c25 acres of land, located at Tongi, Gazipur. The plant operated by SPP 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. Synovia Pharma has over 800 employees and produces approximately 100 branded generic products. SPP has a strong presence in cardiology, diabetes, oncology, dermatology and CNS. It also imports 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. Annual Report 2021-22| Subsidiaries | 15 S S U U T T U U O O B B A A 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. A B O U T U S 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 ﬁ lms, suppositories etc. creating strong differentiation for the Company. Many of its brands remain consistent leaders in their respective therapeutic categories. Napa, Napa Extra, Neoﬂ oxin, 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 difﬁ cult 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 Paracetamol 500 mg Suppository Paracetamol 125 mg, 250 mg And 500 mg CHILDREN'S NAPA Syrup Paracetamol 120 mg / 5 ml Suspension Paracetamol 120 mg / 5 ml NAPA IV NAPA ONE NAPA EXTRA Drops Injection Tablet Tablet Paracetamol 80 mg / m Paracetamol 10 mg / ml Paracetamol 1000mg Paracetamol 500 mg + Caffeine 65 mg NAPA EXTEND Tablet Paracetamol 665 mg Extended Release NAPADOL NAPA RAPID Joint Supplement JOINTEC MAX Muscle Relaxant RELENTUS NSAIDs DINOVO VOLIGEL XIDOLAC BUFLEX Oral Anti-Diabetic DIAPRO MR DIARYL GLIPITA GLIPITA M Tablet Tablet Tablet Tablet Tablet Cream Tablet Meltab Paracetamol 325 mg + Tramadol 37.5 mg Paracetamol 500 mg (with Actizorb technology) Glucosamine 750 mg + Diacerein 50 mg Tizanidine 2 mg Naproxen 375 mg + Esomeprazole 20 mg, Naproxen 500 mg + Esomeprazole 20 mg Diclofenac Sodium 50 mg Ketorolac Tromethamine 10 mg Ketorolac Tromethamine 10 mg Injection Ketorolac Tromethamine 30 mg / ml Tablet Tablet Tablet Tablet Tablet Nabumetone 500mg and 750mg Gliclazide 30 mg MR, Gliclazide 60 mg MR Glimepiride 1 mg, Glimepiride 2 mg, Glimepiride 3 mg Sitagliptin 50 mg, Sitagliptin 100 mg Sitagliptin 50 mg + Metfomin Hydrochloride 500 mg, Sitagliptin 50 mg + Metformin Hydrochloride 1000 mg Annual Report 2021-22 | Products | 17 S U T U O B A Oral Anti-Diabetic GLIPITA M XR TRANETA TRANETA M JARDIAN JARDIMET EMPALINA VIBOSE INFORMET Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet INFORMET XR Tablet Sitagliptin 50 mg + Metfomin Hydrochloride 500 mg XR, Sitagliptin 50 mg + Metformin Hydrochloride 1000 mg XR 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 Empagliﬂ ozin 10 mg, Empagliﬂ ozin 25 mg Empagliﬂ ozin 5 mg + Metformin Hydrochloride 500 mg Empagliﬂ ozin 10 mg+ Linagliptin 5 mg, Empagliﬂ ozin 25 mg+ Linagliptin 5 mg Voglibose 0.2 mg, Voglibose 0.3 mg Metfomin Hydrochloride 500 mg, Metformin Hydrochloride 850 mg, Metformin Hydrochloride 1000 mg Metfomin Hydrochloride 500 mg XR, Metformin Hydrochloride 750 mg XR Insulin GENSULIN SEMGLEE Injection Human Insulin 100 IU / ml Injection Preﬁ eld Pen Insulin Glargine 100IU/ML REGLUTIDE Injection Semaglutide inn 1.34 mg/ml Anti-Histamines ATRIZIN AXODIN DUVENT BEXIDAL 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 Tablet Rupatadine 10 mg Rupatadine 5 mg / 5 ml Mebhydrolin Napadisylate 50 mg Bilastine 20 mg MELTAB Bilastine 10 mg Oral Solution Bilastine Cough & Cold DEXTRIM TUSPEL BURATUSS MUCOSOL Anti-Hypertensives BIZORAN Syrup Syrup Tablet Syrup Drops Syrup Drops Tablet OLMESAN 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 Butamirate Citrate 50 mg Butamirate Citrate 7.5 mg/5 ml Butamirate Citrate 5 mg/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 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 18 | Products | Annual Report 2021-22 A B O U T U S Anti-Hypertensives AMDOCAL PLUS Tablet Tablet CARNOVAS Amlodipine 5 mg + Atenolol 25 mg, Amlodipine 5 mg + Atenolol 50 mg Nebivolol 2.5 mg, Nebivolol 5 mg, Nebivolol 10 mg CARNOVAS HZ Tablet Nebivolol 5 mg + Hydrochlorothiazide 12.5 mg VIVANTA BETAPRO Tablet Tablet Sacubitril 24 mg+ Valsartan 26 mg, Sacubitril 49 mg+ Valsartan 51 mg, Sacubitril 97 mg+ Valsartan 103 mg, Bisoprolol Hemifumarate 2.5 mg, Bisoprolol Hemifumarate 5 mg, Bisoprolol Hemifumarate 10 mg AMDOCAL PRO Tablet Bisoprolol Fumarate 2.5 mg + Amlodipine Besilate 5 mg ATOVA EZ TELMA TELMACAL TELMA PLUS Lipid Lowering ATOVA ROSUTIN Anti-Infectives ARLIN Tablet Tablet Tablet Tablet Tablet Tablet Tablet Atorvastatin 10 mg + Ezetimibe 10 mg, Atorvastatin 20 mg + Ezetimibe 10 mg, 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 Ceﬁ xime 200 mg, Ceﬁ xime 400 mg Suspension Ceﬁ xime 100 mg / 5 ml, Ceﬁ xime 200 mg / 5 ml TYCLAV Tablet Amoxicillin 250mg + Clavulanic Acid 125 mg, Amoxicillin 500 mg + Clavulanic Acid 125 mg, Amoxicillin 750 mg + Clavulanic Acid 125 mg Suspension Injection TURBOCLAV Tablet Amoxicillin 125 mg + Cavulanic Acid 31.25 mg / 5 ml, Amoxicillin 400 mg + Clavulanic Acid 57 mg / 5 ml Amoxicillin 1 Gm + Clavulanic Acid 200 mg, Amoxicillin 500 mg + Clavulanic Acid 100 mg Cefuroxime 250 mg + Clavulanic Acid 62.5 mg, Cefuroxime 500 mg + Clavulanic Acid 125 mg AZITHROCIN Tablet Azithromycin 250 mg, Azithromycin 500 mg Suspension Azithromycin 200 mg / 5 ml Injection Azithromycin 500 mg IV FILMET NEOFLOXIN Tablet Syrup Tablet Metronidazole 200 mg, Metronidazole 400 mg, Metronidazole 800 mg Metronidazole 200 mg / 5 ml Ciproﬂ oxacin 750 mg, Ciproﬂ oxacin 500 mg, Ciproﬂ oxacin 250 mg Injection Ciproﬂ oxacin 250 mg / 5 ml ARIXON Injection (IV) Ceftriaxone Sodium 250 mg, Ceftriaxone Sodium 500 mg, Ceftriaxone Sodium 1 gm, Ceftriaxone Sodium 2 gm Injection (IM) Ceftriaxone Sodium 250 mg, Ceftriaxone Sodium 500 mg, Ceftriaxone Sodium 1 gm FOSAMIN PENOMER BEXOVID REPLIVIR BALOXA Sachet Injection Tablet Tablet Tablet Fosfomycin Trometamol 3 gm Meropenem Trihydrate 500 mg, Meropenem Trihydrate 1 gm Nirmatrelvir 150 mg + Ritonavir 100 mg Entecavir o.5 mg, Entecavir 1 mg Baloxavir Marboxil 20 mg, Baloxavir Marboxil 40 mg Annual Report 2021-22 | Products | 19 S U T U O B A Anti-Infectives MULINA BEMSIVIR EMORIVIR VIRAFLU IVERA Tablet Injection Injection Capsule Tablet Tablet Antacids DIGECID PLUS PROGAVI Suspension Suspension Lefamulin 600 mg Lefamulin 150 mg/15 ml Remdisivir Inn 100 mg Monlupiravir 200 mg Favipiravir 200 mg Ivarmectine 6 mg, Ivarmectine 12mg, Magaldrate 480 mg + Simethicone 20 mg / 5 ml Sodium Alginate 500 mg + Sodium Bicarbonate 213 mg + Calcium Carbonate 325 mg 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 GASTALFET Tablet Sucralfate 500 mg, Sucralfate 1000 mg FAMOMAX Suspension Famotidine Enzymes ZYMET Pro Gastroprokinetics DEFLUX Capsule Tablet Pancreatin 325 mg Domperidone 10 mg, Domperidone 10 mg Meltab Suspension Domperidone 5 mg / 5 ml MOPRIDE Antispasmodic ROSTIL CNS FRENXIT NERVALIN NERVALIN CR XETRIL EMIJOY Hormones TAMONA Laxatives FRELAX SERELOSE Anti-Fungals OMASTIN Drops Tablet Capsule Tablet Tablet Capsule Tablet Tablet Tablet Tablet Domperidone 5 mg / ml Prucalopride Succinate 1 mg, Prucalopride Succinate 2 mg Mebeverine Hydrochloride 200 mg Mebeverine Hydrochloride 135 mg Flupentixol 0.5 mg + Melitracen 10 mg Pregabalin 25 mg, Pregabalin 50 mg, Pregabalin 75 mg Pregabalin 82.5 mg CR, Pregabalin 165 mg CR, Pregabalin 330 mg CR, Clonazepam .5 mg, Clonazepam 2 mg Chlordiazepoxide 5 mg + Amitriptyline Hcl 12.5 mg Tamoxifen Citrate 10 mg,Tamoxifen Citrate 20 mg Suspension Liquid Parafﬁ n 1.25 ml + Magnesium Hydrochloride 300 mg / 5 ml Solution Capsule Lactulose 3.35 gm / 5 ml Fluconazole 150 mg, Fluconazole 200 mg, Fluconazole 50 mg Suspension Fluconazole 50 mg / 5 ml Injection Fluconazole 2 mg / ml Infusion 20 | Products | Annual Report 2021-22 A B O U T U S Anti-Fungals TERBEX Respiratory AZMASOL Tablet Cream MDI Terbinaﬁ ne 250 mg Terbinaﬁ ne 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 GLYRIVA DPI Glycopyrronium Bromide 50 mcg / Capsule Respules Glycopyrronium Bromide 25 mcg / ml AERONID DECOMIT MDI MDI DECOMIT PLUS MDI SYMBION DPI Budesonide 200 mcg / puff 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 DPI Tritropium Bromide 18 mcg Nasal Spray Beclomethasone Dipropionate 100 mcg NASOMET Nasal Spray Mometasone Furoate 50 mcg / Actuation FIXONASE PERINASE DYNASE TOFEN IPRASOL MONOCAST Tablet Syrup MDI Respules Respirator Solution Tablet Sachet FLOMYST F MDI ONRIVA ONRIVA PLUS ONRIVA TRIO DPI DPI MDI Nasal Spray Fluticasone Furoate 27.5 mcg / Actuation Nasal Spray Fluticasone Propionate 50 mcg / Actuation Nasal Spray Azelastine hydrochloride 137 mcg + Fluticasone propionate 50 mcg / Actuation Ketotifen Fumarate 1mg Ketotifen 1 mg / 5 ml Salbutamol 100 mcg+ Ipratropium 20 mcg Salbutamol 2.5 mg+ Ipratropium 0.5 mg/ 3 ml Salbutamol 2.5 mg/ml+ Ipratropium 0.5 mg/ml Montelukast 4 mg, Montelukast 5 mg, Montelukast 10 mg Montelukast 4 mg Fluticasone Propionate 5 mcg + Formoterol Fumarate 50 mcg, Fluticasone Propionate 5 mcg + Formoterol Fumarate 125 mcg, Fluticasone Propionate 10 mcg + Formoterol Fumarate 250 mcg Indacaterol Maleate 75 mcg, Indacaterol Maleate 150 mcg Indacaterol 110 mcg + Glycopyrronium 50 mcg Indacaterol 150 mcg+ Glycopyrronium 50 mcg+ Mometasone Furoate 160 mcg FIXOLIN Tablet Doxofylline 200 mg, Doxofylline 400 mg Annual Report 2021-22 | Products | 21 S U T U O B A Respiratory MUCOMIST TRIBREZ IV Fluids DEXAQUA DEXORIDE SALORIDE Ophthalmic ODYCIN ODYCIN D TEARON Tablet Respirator Solution Inhaler Injection Injection Injection Eye Drops Eye Drops Eye Drops 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 Moxiﬂ oxacin 0.5% Moxiﬂ oxacin Hcl Polyethylene Glycol 400 0.4% + Propylene Glycol 0.3% TEARON FRESH Eye Drops Caboxymethyl Cellulose Sodium 1% VIVIS Urogenital URAL-K MIRASOL VESINAC UROFLO Capsule Solution Tablet Tablet Capsule Antioxidants & Minerals Potassium Citrate 1500 mg + Citric Acid Monohydrate 250 mg / 5 ml Solution Mirabegron INN 25 mg,Mirabegron INN 50 mg Solifenacin Succinate 5 mg, Solifenacin Succinate 10 mg Tamsulosin Hydrochloride 0.4 mg UROFLO PLUS Capsule Tamsulosin Hydrochloride 0.4 mg + Dutasteride 0.5 mg Oncology OGIVRI FULPHILA KANEVA XELOCIN TAXEDOL PACLI Lyophilized Powder Preﬁ eld Syringe Tablet Tablet IV Infusion IV Infusion Trastuzumeb INN 440mg/Vial Pegﬁ lgrastim Erlotinib 100 MG, Erlotinib 150 MG Capecitabine 500 mg Docetaxel Trihydrate 20 mg/vial, Docetaxel Trihydrate 80 mg/vial Paclitaxel 6 mg/ml Vitamins & Minerals BEXTRAM GOLD Tablet High Potency 32 Multivitamin-Mineral BEXTRAM SILVER Tablet High Potency 30 Multivitamin-Mineral BEXTRAM KIDZ Syrup Multivitamin & Cod Liver Oil D-RISE Capsule Cholecalciferol 20000 IU, Cholecalciferol 40000 IU HEMOFIX FZ NEUROCARE CALORATE Tablet Tablet Tablet Tablet Cholecalciferol 2000 IU Elemental Iron 48 mg (Ferrous Ascorbate), Folic Acid 0.5 mg And Elemental Zinc 22.5 mg Tab Vitamin B1, B6, and B12 Calcium Orotate 400 mg, Calcium Orotate 740 mg FERINTUS Injection Ferric Carboxymaltose 500 mg/10 ml, Ferric Carboxymaltose 100 mg/2 ml ZOLTERO Injection Zoledronic Acid 5 mg/100 ml BECORAL D BECORAL DX Tablet Tablet Coral Calcium Coral Calcium 22 | Products | Annual Report 2021-22 A B O U T U S Active Pharmaceutical Ingredients (APIs) APIXABAN LINAGLIPTIN RIVAROXABAN ROSUVASTATIN SITAGLIPTIN PENICILLINS DICLOFENAC Annual Report 2021-22 | Products | 23 S S U U T T U U O O B B A A Key Products Launched in 2021-2022 We launched 30 generics in 51 different presentations in the domestic market with 9 products introduced for the ﬁ rst time in Bangladesh. Beximco Pharma has the distinction of being the world’s ﬁ rst pharmaceutical company to launch the generic versions of Remdesivir injection (Bemsivir®), Molnupiravir capsules (Emorivir®) and Paxlovid (Nirmatrelvir+Ritonavir) tablets (Bexovid®) for COVID-19 treatment. 24 | Products | Annual Report 2021-22 A A B B O O U U T T U U S S Markets Beximco Pharma is a leading player of the country’s Taka 300 billion Pharma market with a combined 10.9% share held by the Company and its subsidiaries. Domestic sales accounts for 92% of our consolidated revenue and remain the key driver of our growth. Alongside ﬂ ourishing in the domestic market, the company remains centered on its strategy to take advantage of the generic drug opportunities in overseas markets and is steadily widening its global reach. It has over the years emerged as a dominant exporter with its footprints in over 50 countries across all continents. Beximco Pharma is the six-time winner of National Export Trophy (Gold) for its excellent export performance. North America er Central America & Caribbean Islands South America CIS Central Asia Europe Middle East Asia Africa Export Destinations South Asia Asia Paciﬁc + CIS Africa Europe North America Azerbaijan Belarus Georgia Hong Kong Indonesia Laos Malaysia Moldova Mongolia Philippines Russia Singapore Taiwan Thailand Uzbekistan Afghanistan Bhutan Cambodia Maldives Myanmar Nepal Pakistan Sri Lanka Vietnam Middle East Iraq Jordan Lebanon Oman UAE Yemen Botswana Burundi DR Congo Egypt Ethiopia Ghana Guinea Ivory Coast Kenya Lesotho Libya Mauritius Mali Morocco Mozambique Namibia Nigeria Somalia South Africa Sudan Tanzania Uganda Zambia Zimbabwe Austria Germany Kosovo Netherlands Romania A Canada USA Australasia Australia Fiji Kiribati Tonga N o r t h A m e r i c a 4 1 % A f ri s i a c a 2 2 2 3 % % Rest of the W Australia 2% orld 12 % Australia New Zealand Latin & Central America Belize Bolivia Chile Colombia Costa Rica Dominican Republic Ecuador El Salvador Guatemala Guyana Honduras Jamaica Mexico Netherlands Antilles Nicaragua Panama Paraguay Peru Suriname Trinidad & Tobago Venezuala Region Wise Export (2021-22) Annual Report 2021-22 | Markets | 25 S S U U T T U U O O B B A A 26 | Manufacturing Capabilities | Annual Report 2021-22 A A B B O O U U T T U U S S 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 ﬂ uids, liquids, ointments, creams, suppositories, ophthalmic drops, injectables, preﬁ lled 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 puriﬁ cation, efﬂ uent treatment, liquid nitrogen and steam generation plant/facilities. There is over 2,42,000 sq ft warehouse area to accommodate materials and ﬁ nished 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 2021-22 | Manufacturing Capabilities | 27 S S U U T T U U O O B B A A Current Production Capacity: Oral Solid Dosage (OSD) (cid:129) Tablets, Capsules, Powder for Suspension, Sachets and Oral Soluble Films (cid:129) Capacity: Tablets-11,800 million, Capsules-622 million, Powder for Suspension-9.5 million bottles, Sachets- 16 million and Oral Soluble Films- 0.52 million units Semi Solid and Liquid (SSL) (cid:129) Liquids, Cream & Ointment, Shampoo & Lotion and Suppository (cid:129) Capacity: Liquids-156 million bottles, Cream & Ointment-40 million Tubes, Suppository- 25 million pieces, and Shampoo & Lotion- 1.92 million bottles Sterile, Nasal Spray & Respiratory Solutions (cid:129) Intravenous ﬂ uid, Amino Acid, Insulin Nasal Spray and Respiratory Solutions (Non-Steroids), Nasal Spray and Respiratory Solutions (Steroids), Lyophilized Injection, Preﬁ lled Syringe and Ophthalmic products (cid:129) Capacity: Intravenous ﬂ uids-10 million bottles, Amino Acid- 2 million bottles, Insulin- 3 million vials and cartridges, Nasal Spray- 0.65 million and Respiratory Solutions- 1.44 million ampules, Lyophilized and Liquid Injection- 3 million vials, Preﬁ lled Syringe- 0.36 million units and Ophthalmic – 4 million LDPE containers 28 | Manufacturing Capabilities | Annual Report 2021-22 A A B B O O U U T T U U S S Inhalers Metered Dose Inhalers (MDI), Dry Powder Inhaler(DPI)/ Multi Dose Dry Powder Inhaler (mDPI) (cid:129) Capacity: MDI- 18.5 million Cans, sDPI- 109 million Capsules, mDPI- 0.25 million Capsules Penicillin (cid:129) Capsules and Dry Syrups (cid:129) Capacity: Capsules – 42.24 million and Dry Syrups- 3.06 million bottles Active Pharmaceutical Ingredients (APIs) (cid:129) Multiple APIs (cid:129) Capacity: 22MT Annual Report 2021-22 | Manufacturing Capabilities | 29 S S S U U U T T T U U U O O O B B B B A A A Unit 3 Our new manufacturing facility, Unit-3, spanning a production area of 300,000 square feet, for oral solids, semi-solids and liquid products is now fully operational. Facility employs top class European machinery and process equipment known for highest quality and safety standards. OSD operations spread over three ﬂ oors have eleven granulation, thirteen tablet compression, and eleven blister lines. There are ﬁ ve liquid production lines with separate manufacturing, storage, transfer, ﬁ lling and automatic packing facilities. There are also dedicated lines for cream and ointment, HDPE shampoo, sachet, thin ﬁ lms, effervescent tablets and dry syrup. Our modern Quality Control Laboratory employs advanced equipment and technologies to ensure that all our products are manufactured strictly in compliance with cGMP. Having a dedicated technical area of 250,000 sq ft, the Unit 3 employs advanced HVAC system with energy saving technologies to optimize energy use. The 15.75 MVA substation is the power backbone of the facility. It also has 73.5m3 water treatment plant with ultra-violet sterilization as well as European puriﬁ ed water generation and distribution system having a capacity of 25,000 liters per hour. 30 | Manufacturing Capabilities | Annual Report 2021-22 A A B B O O U U T T U U S S Annual Report 2021-22 | Manufacturing Capabilities | 31 T S N U E T M U E O G B A A N A M D N A D R A O B Research and Development Research and Development (R&D), as for any other pharmaceutical company, is an integral part of our business and is critical to the company’s value chain. Our R&D activities are closely focused on market needs and driven by technological progress. Beximco Pharma has a strong R&D team of highly qualiﬁ ed multidisciplinary scientists who are capable of developing technology driven, difﬁ cult to copy products, both for domestic and highly regulated markets. In the recent past we have demonstrated our ability to innovate and respond to health emergencies introducing generic versions of different covid related medicines including world’s ﬁ rst generic remdesivir. In recognition of our effort, we won CPhI Pharma Award 2020 for “Innovation in response to Covid-19”. Our key strength lies in our ability to excel in creating a portfolio of differentiated products beyond conventional dosage forms which include metered dose inhalers, dry powder inhalers, dispersible tablets, preﬁ lled syringes, lyophilized injectables, sterile ophthalmic, nasal sprays etc. We continue to pursue collaboration with universities and leading global MNCs for strengthening our capabilities in selected areas, especially biosimilars and vaccines. 32 | Research and Development | Annual Report 2021-22 B A O B A O R U D T U A S N D M A N A G E M E N T 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: (cid:129) U.S. FDA (cid:129) Therapeutic Goods Administration (TGA), Australia (cid:129) Malta Medicines Authority (European Union) (cid:129) German Regulatory Authority (Regierungspräsidiums Tübingen) (cid:129) Gulf Central Committee (GCC) (cid:129) World Health Organization (WHO) (cid:129) ANVISA (Brazil) Annual Report 2021-22 | Global Accreditations | 33 T T T TTTTTTT N NN N N N E E E EE E E EEEEEE M M MM M M MMM MM MMM MMMMMMM M M M M M E EEEEEEEEEEEE E E E E E E E G G G G G GGGG G A A A A A A A A A A N NNNNNNN N N N N N N N A A A A AA A A A AA A AAAAAAAAAA M MMMMMMMMM M M M M M M M M M D D D D D D DDD N NNN N N N N N N N N N N N N N N N A AAAAAAAAAAAA A A A A A A A A A A D D D D D D D D D D RRRRRRR R R R AAA AAAAAAAAAAA A A A A A A A A O O OO O O OO O OO O O O O O O O O BBB B B B B B B B Board and Management A S F Rahman Chairman Salman F Rahman MP Vice Chairman 34 | Board and Board Committees | Annual Report 2021-22 B B O O A A R R D D A A N N D D M M A A N N A A G G E E M M E E N N T T Board and Board Committee 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 Annual Report 2021-22 | Board and Board Committees | 35 T T T T TT T N NNNN N N N N N E E E EEEE EEE M M M MMM MMM M M M E E E E G G G A A A A N N N N N A A A A A M M M M M M D D DD D D N N N N N N N A A A D D DD D RRRR R R R A A A O O O O O BB B B B B B Proﬁ le of Directors 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 ﬁ rst private university in Bangladesh. 36 | Proﬁ le of Directors | Annual Report 2021-22 B BB B O O O O AA A A A R R R RRR D D D D D AA AAA A NN N N N DDDD D D MMMMM M AAAAA A N N N N NNNNNN N A A AA AA A A A A A GGG G G G G E E MM M MM M EE E E E N N NN N N T T T T T 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 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 2021-22 | Proﬁ le of Directors | 37 T N E M E G A N A M D N A D R A O B 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 Synovia Pharma PLC- 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. 38 | Proﬁ le of Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T 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 ﬁ ve 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 ﬁ elds including public administration, development management, law, accounts and ﬁ nance, 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 2021-22 | Proﬁ le of Directors | 39 T N E M E G A N A M D N A D R A O B 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 Ofﬁ ce, 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 qualiﬁ ed as Chartered Secretary from the Institute of Chartered Secretaries of Bangladesh (ICSB) and is a Fellow Member of the institute. He was four times President of ICSB. He is a widely experienced person with long career in Company Secretarial functions. 40 | Proﬁ le of Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T As our journey continues, we remain steadfast in our commitment to making a positive impact on patients’ lives by providing access to affordable medicines. T T N N E E M M E E G G A A N N A A M M D D N N A A D D R R A A O O B B Executive Committee Executive Committee comprises ﬁ ve members, two of whom are also members of the Board of Directors. Osman Kaiser Chowdhury Nazmul Hassan MP Rabbur Reza Mohammad Ali Nawaz Afsar Uddin Ahmed Member of the Board of Directors Managing Director Chief Operating Ofﬁ cer Chief Financial Ofﬁ cer Director, Commercial 42 | Executive Committee | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T Rabbur Reza Chief Operating Ofﬁ cer 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 Synovia Pharma PLC, 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 Ofﬁ cer Mr. Mohammad Ali Nawaz is a well-rounded ﬁ nance professional with extensive exposures in corporate ﬁ nance 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 Ofﬁ cer of Beximco Pharma in 2009. He is also a Director of Nuvista Pharma Ltd., Synovia Pharma PLC, and Beximco Pharma API Ltd. Mr. Nawaz qualiﬁ ed as a CMA from the institute of Cost and Management Accountants of Bangladesh, and is currently a Fellow Member of the Institute. He also obtained an MBA from the Institute of Business Administration, University of Dhaka. 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 2021-22 | Executive Committee | 43 T T T N N N E E EE M M M M E E E G G G A A A A N N N A A M M D D D N N N A A A A D D D R R R A A A A O O O B B Management Committee Nazmul Hassan MP Managing Director Osman Kaiser Chowdhury Member of the Board of Directors Rabbur Reza Chief Operating Ofﬁ cer Mohammad Ali Nawaz Chief Financial Ofﬁ cer Mohd. Tahir Siddique Director, Quality Rizvi Ul Kabir Director, Marketing Jamal Ahmed Choudhury Director, Accounts & Finance Ms. Roksana Hassan Executive Director, Financial Compliance Audit and Internal Control Mahfuzur Rahman Executive Director, API M A Arshad Bhuiyan General Manager Human Resource 44 | Management Committee | Annual Report 2021-22 B B O O A A R R D D A A NN N DDD D M MM M A A A N N A A A A A G G G G G E E E M M M E E E N N T T Afsar Uddin Ahmed Director, Commercial Lutfur Rahman Director, Manufacturing Zakaria Seraj Chowdhury Head of Distribution Services & Director, International Marketing Shamim Momtaz Director, Manufacturing Dr. Selina Akter Executive Director Department of Medical Affairs Shawkat Haider, Ph D Executive Director, Business Development & Corporate Affairs Md. Mehboobul Haque Executive Director Factory Administration Subodh Chandra Das Executive Director Research and Development Annual Report 2021-22 | Management Committee | 45 I I I S S T T H H G G I I I L L L H H H G G G H H H E E E C C N N A A M M R R O O F F R R R E E E P P P Beximco Pharma (Stand-alone) 2021-22 2020-21 BDT 30,220.7m 12.1% BDT 26,949.3m Net sales BDT 27,553.6m 15.6% BDT 23,825.3m Domestic sales Export sales Proﬁ t befor tax Proﬁ t after tax EPS NAVPS BDT 2,667.2m 14.6% BDT 3,124.0m BDT 6,736.5m 11.7% BDT 6,033.5m BDT 5,161.3m 4.4% BDT 4,943.5m BDT 11.57 BDT 11.08 BDT 90.37 BDT 82.28 35% cash dividend (BDT 3.5 per share) 46 | Financial | Annual Report 2021-22 P P P E E E R R R F F F O O O R R R M M A A N N C C C E E E H H G G H H L L I I G G H H T T S S I I Beximco Pharma (Consolidated) 2020-21 2021-22 BDT 29,493.6m BDT 34,669.2m 17.5% BDT 26,369.6m BDT 31,984.1m 21.3% Net sales revenue BDT 3,124.0m BDT 2,685.1m 14.0% BDT 6,377.5m BDT 6,686.9m 4.9% BDT 5,165.7m BDT 4,998.6m 3.2% BDT 11.49 BDT 11.48 BDT 83.01 BDT 91.01 Domestic sales revenue Export sales Proﬁ t befor tax Proﬁ t after tax EPS NAVPS Annual Report 2021-22 | Financial | 47 I S T H G I L H G H E C N A M R O F R E P Operational Highlights P P E E R R F F O O R R M M A A N N C C E E H H G G H H L L I I G G H H T TT T S S I I Annual Report 2021-22 | Operational | 49 I S T H G I L H G H E C N A M R O F R E P Value Addition For the Year Ended 30 June 2022 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 36.1% Duties & Taxes to Govt. Exchequer Taka in thousand Taka % 41,300,692 (19,073,145) 22,227,547 5,554,382 6,034,648 1,001,836 1,608,393 8,028,288 22,227,547 100 25.0 27.2 4.5 7.2 36.1 100 27.2% Salaries and Beneﬁts to Employees 25.0% 25 Retained by the Retaine Compa Company 2% 7.2% Dividend to Shareholders 4.5% Interest to Lenders 50 | Value Addition | Annual Report 2021-22 Accolades and Awards P P P E E E R R R F F F O O O RR R R M M M A A A N N N C C C E E E H H H G G G H H H L L L I I I G G G H H H T T T S S S I I I WINNER (cid:23441)(cid:23460)(cid:23479)(cid:23468)(cid:23474)(cid:23473)(cid:23460)(cid:23471)(cid:23395)(cid:23432)(cid:23483)(cid:23475)(cid:23474)(cid:23477)(cid:23479)(cid:23395)(cid:23447)(cid:23477)(cid:23474)(cid:23475)(cid:23467)(cid:23484)(cid:23395)(cid:23403)(cid:23434)(cid:23474)(cid:23471)(cid:23463)(cid:23404)(cid:23395) (cid:23433)(cid:23452)(cid:23395)(cid:23413)(cid:23411)(cid:23412)(cid:23419)(cid:23408)(cid:23412)(cid:23420) (cid:23465)(cid:23474)(cid:23477)(cid:23395)(cid:23479)(cid:23467)(cid:23464)(cid:23395)(cid:23477)(cid:23464)(cid:23462)(cid:23474)(cid:23477)(cid:23463)(cid:23395)(cid:23417)(cid:23479)(cid:23467)(cid:23395)(cid:23479)(cid:23468)(cid:23472)(cid:23464) Annual Report 2021-22 | Accolades and Awards | 51 I I S S T T H H G G I I L L H H G G H H E E C C N N A A M M R R O O F F R R E E P P 52 | Accolades and Awards | Annual Report 2021-22 P P P E E E R R R F F F O O O R R R M M M A A A N N N C C C E E E H H H G G G H H H L L L I I I G G G H H H T T T S S S I I I 46th International Convention on Quality Control Circles (ICQCC) Beximco Pharma received the “PAR EXCELLENCE” award at the 46th International Convention on Quality Control Circles (ICQCC) – 2021 held in India. Quality Circle Forum is a non-proﬁ t organization working to improve the quality of work, product as well as life of the employees. 900 teams from 15 different countries participated at the convention. Green Factory Award 2020 Beximco Pharma received Green Factory Award 2020 from the Ministry of Labour and Employment in recognition of its contribution to environmental protection. This award was given on the occasion of the birth centenary of Bangabandhu Sheikh Mujibur Rahman. 15 companies from different sectors received this year’s Green Factory Award. Annual Report 2021-22 | Accolades and Awards | 53 R S C D N A S T N E V E E T A R O P R O C Corporate Events and CSR Corporate Events Throughout the year the Company carried out different events and programs. Presented below are selected snapshots: Annual Sales and Marketing Conference 2022 Annual Sales and Marketing Conference, a yearly event of Sales and marketing team was held in March 2022 at Cox’s Bazar. Annual Strategy Brieﬁ ng Session 2022 Annual Strategy Brieﬁ ng Session of Marketing and Sales team was held in Dubai, UAE in January 2022, with COO of BPL leading the event. 54 | Corporate Events | Annual Report 2021-22 Finance Conference 2022 C O R P O R A T E E V E N T S A N D C S R The 12th Finance Conference of Accounts and Finance department was held in August 2022 at a local resort in Gazipur. The theme of this year’s conference was “Integration Challenges and Synergy Options”. Members of ﬁ nance and other cross functional teams of Beximco Pharma, Nuvista Pharma, and Synovia Pharma attended the two-day long program. Topics covered in the conference includes “Acquisition Goals and Better Business Value”, “Supply Chain Challenges in 2023”, “Integration Issues from Finance Perspective”, “Cultural Integration” and “Efﬁ ciency and Synergy in Supply Chain”. Handover of Cheque of Taka 21.9 million to Sramik Kallayn Foundation Beximco Pharma paid Taka 21.9 million to the Sramik Kallyan Foundation being its share to the WPPF of the Company. The cheque was handed over to honorable state minister for Labour and Employment, Begum Monnujan Suﬁ an in an informal ceremony held at Bangladesh secretariat. Another cheque representing the share of Nuvista Pharma’s contribution to the foundation was also handed over in the same occasion. Annual Report 2021-22 | Corporate Events | 55 R S C D N A S T N E V E E T A R O P R O C Free Vaccination program for Employees Over 2500 employees of Beximco Pharma participated in a ﬂ u vaccination drive called “Beat the Flu” at the company’s Head Ofﬁ ce and Factory. Awareness Program of Female Mental Health View of special Mental Health Awareness session organized by the Company for its female employees. 56 | Corporate Events | Annual Report 2021-22 HR Team Building Program C O R P O R A T E E V E N T S A N D C S R Partial view of team building event organized for BPL’s emplyees at Chandranath Mountain, Sitakundo, Chattogram Line of Sight (LOS) Program of HR “Line of Sight” program organized by Human Resource department to align individual goal with corporate goal Annual Report 2021-22 | Corporate Events | 57 R R S S C C D D N N A A S S T T N N E E V V E E E E T T A A R R O O P P R R O O C C At Beximco Pharma, it is not just about how many products we sell, but rather, it is about the lives we save 58 | Corporate Events | Annual Report 2021-22 CSR Initiatives As a responsible entity, Beximco Pharma conducts its business in a manner that protects and promotes the interest of the society. We undertake various voluntary programs beneﬁ cial to the society and provide support to the organizations that works for noble causes. Below are some of the CSR initiatives of the year under review: Medicine Donation to Sri Lanka C O R P O R A T E E V E N T S A N D C S R Beximco Pharma handed over medicines to the Bangladesh Association of Pharmaceutical Industries (BAPI) for supply to Sri Lanka at a ceremony graced by Dr. A.K. Abdul Momen MP, Honorable Minister, Ministry of Foreign Affairs, Mr. Zahid Maleque MP, Hon’ble Minister, Ministry of Health and Family Welfare, Prof. Sudharshan DS Seneviratne, the Sri Lankan High Commissioner of Bangladesh and Mr. Nazmul Hassan MP, Managing Director of Beximco Pharma. Donation of Remdesivir Beximco Pharma donated to supply Remdesivir injection free of cost to government hospitals across the country for COVID-19 treatment. Annual Report 2021-22 | CSR Initiatives | 59 R S C D N A S T N E V E E T A R O P R O C Donation to Begum Rokeya Nari-O-Shishu Shasthya Unnayan Sangstha (BERNOSSUS) Beximco Pharma donated medicines to Begum Rokeya Nari-O-Shishu Shasthya Unnayan Sangstha (BERNOSSUS) which is a nonproﬁ t health care development organization for women and children. The foundation is run by prominent physicians and social activists from Bangladesh and abroad. The primary mission of the foundation is to deliver health care, nutrition, health hygiene and wellness education for underprivileged women and children by female physicians and healthcare workers. Support to the Survivors of Fire Incidence in Chittagong Beximco Pharma in collaboration with JAAGO Foundation extended support to Chattogram ﬁ re victims and their families. Beximco Supports the ﬂ ood Victims of Sylhet Beximco Pharma handed over relief aid to the Deputy Commissioner of Sylhet for distribution among the ﬂ ood victims across the affected areas. 60 | CSR Initiatives | Annual Report 2021-22 C O R P O R A T E E V E N T S A N D C S R BPL Continues to Support Dnet Computer Literacy Centre To promote computer learning and information technology among the underprivileged students of Bangladesh, Beximco Pharma continued to support USA based Computer Literacy Program (CLP) being implemented by Dnet. CLP is an award winning non-formal model which helps students in rural schools receive hands-on computer literacy training free of charge. Dnet so far has established 263 CLC centers in 55 districts and trained over 700 teachers (16% female) to help students learn the basics of the modern world. International Conference on Genomics, Nanotech and Bioengineering-2022 (ICGNB-2022) Beximco Pharma was one of the key sponsors of the 2nd ICGNB-2022 conference hosted by North South University. The platform helped to exchange scientiﬁ c information in different ﬁ elds and offered scientists, researchers, and clinicians an excellent opportunity to present their research work. The 3-day international conference covered a wide range of topics including genomics, nanotech and bioengineering attended by scientists from Bangladesh and different countries. Donation of Essential Food Items Beximco Pharma collaborated with Jaago Foundation and Bidyanondo, two non-proﬁ t organizations of the country working for people living below the poverty line to distribute food packages through a donation campaign called “Food for All”. Annual Report 2021-22 | CSR Initiatives | 61 R R S S C C D D N N A A S S S T T N N E E V V E E E E T T A A R R O O P P R R O O C C 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. 62 62 | E| Envinvironro mennt,t, HeaH lthh ana d Sd SSafeafeafety ty ty | A| A| AAnnunnunnun alal al alaa RepReRepReportortortt 202020202020-20-20 212 62 | Environment, Health and Safety | Annual Report 2020-21 Media Spotlights C C O O R R P P O O R R A A T T E E E E V V E E N N T T S S A A N N D D C C S S R R Forbes featured Beximco Pharmaceuticals Ltd. where they recognized our quick response and persistence as a humanitarian ambassador during the peak time of COVID-19 pandemic. BPL was able to successfully utilize their resources and become the ﬁ rst pharmaceutical company in the world to introduce a generic version of Remdesivir and Molnupiravir. The worldwide media ﬁ rm also did an excellent job of describing our achievements, development, contributions to the society, and vision for the future. Forbes has beautifully captured the story highlighting Beximco’s immense contribution to improving access to affordable medicines. Bangladesh Pharmaceutical Industry Featured by CNN and Forbes To commemorate the Golden Jubilee of Bangladesh and Mujib Birth Centenary, CNN conducted the ‘Made in Bangladesh’ campaign monitored by the Steering Committee under the Ministry of Commerce and Bangladesh Foreign Trade Institute (BFTI). The holistic campaign was proposed by CNN to promote Bangladesh's various export industries and execute the country's export-oriented strategic growth plan. CNN featured the potential of Bangladesh’s pharma industry to manufacture high-quality generics at an extremely affordable price in times of need. “Our self-reliant pharmaceutical industry not only plays a vital role in promoting healthcare within the country, but it is also well set to expand its global footprint, providing access to affordable generics across continents.” -Nazmul Hassan MP, President, BAPI Annual Report 2021-22 | Media Spotlights | 63 Annual Report 2020-21 | Environment, Health and Safety | 63 Y T E F A S D N A H T L A E H , T N E M N O R V N E I Environment, Health and Safety We care Beximco Pharma is aware of its responsibilities to protect the environment and promoting sustainable eco-friendly operations. The Company strives to reduce ecological impact, create adequate facilities, and employs appropriate processes to keep the environmental effects of our operations to a practicable minimum level. Our criteria for sourcing and selecting the technology and processes includes adequate emphasis on factors that might potentially affect our ecosystem and prioritize those that are most eco- friendly. We were among the ﬁ rst few companies in the world who proactively converted all the CFC based inhalers to ozone benign HFA formulations winning global recognition for such an initiative. We have operating procedures in place, as described in subsequent sections, to dispose of the liquid and solid wastes and gaseous emissions in a controlled manner complying to the EHS standard. A safe and healthy workplace is in our priority agenda and 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. Compliance to Laws and Regulations As a manufacturing Company engaged in pharmaceutical sector, our EHS operation is governed the following Acts, Rules and Standards: (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) (cid:129) Environmental Conservation Act, 1995 Environmental Conservation Rules, 1997. Bangladesh Labor Law, 2006 Bangladesh Labour Rules, 2015 Fire Prevention and Extinction Act, 2003 Fire prevention and extinction rules, 2014 Bangladesh National Building Code, 2021 The Boiler Act, 1923 Bangladesh Explosive Act, 1995 Pressure Vessel Rules, 1995 Solid Waste Management Rules, 2021 Air Emission Control Rules, 2022 ISO14001:2015 - Environmental Management System. ISO 45001:2018 - Occupational Health and Safety Management Systems. (cid:129) Occupational Health and safety Administration We actively comply with relevant government regulations and industry standards. All of our manufacturing facilities have certiﬁ cation and clearance from the appropriate authorities. EHS Team The Company has established a high level EHS Committee with senior-level management employees to oversee EHS issues and ensure the implementation of the adopted standards. They are continually focused on improvement of the EHS culture within the organization. The Committee meets once quarterly for a review of the system in place, identifying potential improvement areas and suggesting remedial measures as appropriate. In addition to the EHS Committee, Beximco Pharma has a Safety Committee consisting of representatives of management and workers to monitor and manage the health and safety related issues and bring it to the attention of management. They also work to build awareness on safety matters across the facilities. 64 | Environment, Health, and Safety | Annual Report 2021-22 I E N V R O N M E N T , H E A L T H A N D S A F E T Y Beximco Pharma’s internal team conducts annual Environment, Health, and Safety audits and any areas of improvement identiﬁ ed through the audit are communicated to concerned department for appropriate measures. Solid, Liquid Waste and Gaseous Emission Control and Conduction Beximco Pharma has its own incineration unit, having a capacity of 250kg per hour depending on caloriﬁ c value of the products. The quality of gas discharged after puriﬁ cation from the incinerator is well within acceptable standard set by the Directorate of Environment (DoE).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. We installed High-Efﬁ ciency Particulate Air (HEPA) ﬁ lters and proper scrubber for enhanced protection in manufacturing areas. Dust particles collected from the ﬁ lters 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. 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 manufacturing operation generates a considerable amount of wastewater from washing and cleaning of machineries, empty bottles, utensils, ﬂ oors, etc., The other source of liquid waste consists of dissolved and suspended API, excipients, laboratory re- agents and water from the cooling tower. The Company has adequate control over managing the liquid waste and has its own efﬂ uent treatment plant. Treated water of ETP is reused in scrubber incinerator, Car Wash, Toilets, Garedning etc. No toxic wastewater is discharged into the outside drain without treatment. The settled sludge is incinerated. This year we have commenced operation of the new generation wastewater treatment facilities (PLC-based Membrane Bioreactor technology). The facility has a capacity of 605 m3/day which is sufﬁ cient to meet the wastewater treatment loads of the immediate future. Treated water quality complies with the standard value of local regulation and its quality surpasses the municipal regulation’s standard value. Result of the treated water tested on October 25, 2022 are as follows: Tests pH TDS Dissolved Oxygen COD BOD Arsenic Speciﬁ cation 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 7.48 883 5.3 60 11.67 0.05 Noise, Odor And Vibration 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 efﬁ cient and has very insigniﬁ cant effect in the sound level. Machine cover in required cases are also installed to mufﬂ e 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 57. Annual Report 2021-22 | Environment, Health, and Safety | 65 Y T E F A S D N A H T L A E H , T N E M N O R V N E I Fire Safety System A new automated ﬁ re hydrant system with a Jockey pump, an electric ﬁ re pump, and a diesel engine ﬁ reﬁ ghting pump was constructed on the factory’s south side to cover the whole facility. The reservoir for the ﬁ re hydrant system has a capacity of 230,000 liters. Two ﬁ re hydrant systems are linked, and in the event of an emergency, anybody may assist the entire site. We installed 854 various types of ﬁ re extinguishers around our industrial grounds, including ABC ﬁ re extinguishers, CO2 ﬁ re extinguishers, and Foam ﬁ re extinguishers. We have also set up two Fire Cabinets at the entry gates with ﬁ re blanket, ﬁ reman’s axe, ﬁ rst-aid kit, lock cutter, and other emergency response items inside. All areas in head ofﬁ ce and factories are provided with emergency exits along with proper signage, and where applicable, ﬂ ameproof appliances, ﬁ re doors etc. are used. Partitions are made with PU panel capable of retaining ﬁ re for a deﬁ nitive time period. Approximately 35% of personnel are trained to operate ﬁ reﬁ ghting equipment such as ﬁ re extinguishers and ﬁ re hydrants. Our trained ERCT (Emergency Response Core Team) personnel are capable to manage emergencies using a suitable ﬁ re extinguisher and an automatic ﬁ re hydrant system. We execute evacuation simulation drills twice a year in collaboration with Bangladesh Fire Service and the Civil Defense Department to train our people how to respond in the event of an emergency. Protection of Health and Industrial Hygiene Health Safety measures We enacted proper and effective health and safety guidelines in all our operational and manufacturing sites. Beximco Pharma identiﬁ es and assesses potential exposure to chemical and physical stresses utilizing qualitative and quantitative analysis. Signiﬁ cant risks to chemical and physical stresses are controlled by isolation, engineering control, administrative control and providing protective equipment. EHS aspects are considered before procurement of any equipment. EHS attribute is a part of User Speciﬁ cation Requirement (USR) of all equipment. All machines and moving parts are covered and interlocked through sensors to protect employees from physical injury. Proper work uniforms, lab coats, eye and ear protection are provided where required. We also identify, assess and control the factors that may lead to musculoskeletal or other ergonomically related disorders. Automation in most areas reduces work stress. Smoking is prohibited in all our operational and manufacturing premises. Eating or drinking is not permitted in the 66 | Environment, Health, and Safety | Annual Report 2021-22 I E N V R O N M E N T , manufacturing areas and analytical labs where chemical exposures are possible. All employees are trained on different EHS issues including ﬁ reﬁ ghting, personal protective equipment, First Aid and Material Safety Data Sheet (MSDS). Health Checkup and Doctors’ Consultation Each and every employee undergoes pre-employment and annual health check-ups organized by the Company. Company has contracted physicians specialized in Medicine, Gynecology, Child Health etc. Employees can consult them free of cost. We have a sick bay and employees can take advice from the qualiﬁ ed physicians engaged by the Company. There is an arrangement with the nearest clinics for handling emergencies. We have several ambulances to send patients to the hospitals and clinics in emergency cases. First aid boxes are provided to each department of every facility. All the employees are trained on Company’s general safety. Green Initiatives H E A L T H A N D S A F E T Y Tree Plantation As a modest attempt to create a carbon sink zone, this year we planted 3400 plants of different types around the boundary walls of the factory premises Saving Water and Energy We endeavor to minimize the use of water and energy to help preserve these important resources. We are gradually replacing all our water taps with sensor-controlled taps installed at different areas of the factory to reduce social water consumption. About 50% of this water of the water treatment plant is recycled and used for gardening, car washing and as water scrubber of incinerator. We also reuse wastewater of our WFI (water for injection) treatment plant to clean cooking utensils of canteen. Annual Report 2021-22 | Environment, Health, and Safety | 67 Y T E F A S D N A H T L A E H , T N E M N O R V N E I The unwavering commitment of our people-their energy and enthusiasm-remain the driving force that leads us towards achieving newer milestones. 68 | Environment, Health, and Safety | Annual Report 2021-22 Annual Report 2020-21 | Our People | 68 I E N V R O N M E N T , H E A L T H A N D S A F E T Y Beximco Pharma has put an Economizer in the exhaust line of the boiler to warm the feed water of the boiler and has also employed a condensate recovery system to use condensate as a feed water of the boiler, which saves energy. Daylight saving issue is given due consideration in the design of buildings and recently built Beximco Pharma’s Learning and Development Center has been designed using steel sheets and glass panels for maximum use of day light. Campaigns to Protect Environment and Promote Occupational Health & Safety Matters The Company conducts different campaigns for the employees as part of its continuous effort to create increased awareness about the importance of saving our earth and creating a healthy & safe workplace for all. Additionally, we also sponsor different social voluntary organizations who work for similar purposes. Observance of Occupational Health & safety Day Every year the Company celebrates the National Occupational Health & Safety Day on April 28 to build awareness about health and safety of people at workplace. This year also, we celebrated the day with festive mood with displays of banners, festoons etc. at different places of the factory premise. A discussion session was also arranged highlighting the importance of maintaining high health and safety standards in the organization. Observance of World Environment Day In observance of World Environment Day on June 5, Beximco Pharma planted “Golden Shower trees (Local name: Sonalu)” at its medicinal plant Garden in factory premises. Colorful T-shirts with slogans to save our resources, were distributed among the employees. Child Labor Compliance Beximco Pharma scrupulously adheres to all Bangladesh Labor Act requirements, including the stringent provisions pertaining to “Adolescent Employment.” There is no direct or indirect use of child labor in any area of the company. Annual Report 2021-22 | Environment, Health, and Safety | 69 S E V I T A I T I N I R H D N A S E C R U O S E R N A M U H Human Resources Work and Culture We always recognize that people are the cornerstone of our success. Our devoted and highly competent people are our key resource to accomplish our mission and consistently remain at the centre of our strategy. We believe our ability to transform ourselves is largely driven through empowering our people. We seek to provide a pleasant workplace environment to ensure that people are empowered, motivated and inspired to deliver their best. Here, the workplace has evolved to be a very close community of co-workers where employees take pride in their job, their team, and their company. They celebrate the successes of their peers and cooperate with others throughout the organization. This people focused culture, indeed, makes Beximco Pharma unique compared to many others. Beximco Pharma currently employs more than 5,000 people. Our strong pool of expertise consists of over 1,500 multidisciplinary professionals including pharmacists, chemists, doctors, biologists, engineers, microbiologists, lawyers, MBAs and researchers. Our people is well composed with adequate diversity in terms of education, age, experience, and gender. We try to hire people from diversiﬁ ed ﬁ elds of expertise. We focus on gender diversity and prefer female candidates where male and female are found equally qualiﬁ ed for any position. Currently, Beximco Pharma employs 226 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 2021-22, the number of female employees has risen by 8% over last year. Our HR policy is to employ, attract and retain the talented people in the industry and we provide competitive remuneration packages, end-service beneﬁ ts, and importantly, career progression in the organization. Female Employee 226 210 160 156 138 2017-18 2018-19 2019-20 2020-21 2021-22 The Company adopts objective, fair and unbiased evaluation criteria in the selection and recruitment process. The Company does not make any discrimination in terms of gender, religion, faith, color or nationality. Total Employee Net Addition to Head Counts 5104 5377 4755 4489 349 273 234 266 2018-19 2019-20 2020-21 2021-22 2018-19 2019-20 2020-21 2021-22 70 | Work and Culture | Annual Report 2021-22 H U M A N R E S O U R C E S A N D H R I N I T I A T I V E S Every year the Company is creating new employment opportunities and in FY 2021-22, we recruited 746 employees in permanent positions with a net addition of 273 people, beﬁ tting our business growth. Training and Development The business environment today is as competitive and complex as ever. With the continuing innovation, digital advancement, changes in rules, regulation and standards knowledge and skills are becoming short-lived. To equip our employees with the necessary skills to keep up with the ever-changing and fast-paced job environment learning and development had always been a priority at Beximco Pharma. Employee Training (man-hours) This year, bouncing back from the aftermaths of the pandemic, we revitalized its learning and development initiatives to update and upgrade the technical, management and business skills of our employees. This year-round, 1089 employees received 12000 man-hours of specialized trainings in a wide range of areas including Brand Management, Marketing management, women leadership, WHO GSD Implementation, Emotional intelligence, HR Analytics, Competency Assessment Framework, Technology Transfer, Data Science & Data management and Quality Control. These are in addition to the routine need based tailor-made programs that our dedicated training department at factory and head ofﬁ ce level conducts throughout the year. 8 4 2 5 0 0 0 1 6 3 0 1 7 6 7 5 8 6 3 1 6 8 2 1 3 5 7 0 3 Local Overseas-Physical Overseas-Virtual 2019-20 2020-21 2021-22 These apart, we have organized several awareness programs throughout the year including Awareness on Cyber securities, mental Health and Healthy diet. Workshop on building brands and creating unique brand strategies for existing products titled “Brand Fitness Gym” for SBM executives Annual Report 2021-22 | Training and Development | 71 T T R R R O O P P E E R R T T N N E E M M E E G G A A N N N A A A M M D D D N N A A D D D R R R A A O O B B Board and Management Report Chairman’s Statement A S F Rahman Chairman Dear Shareholders, At a time when domestic and global economy was struggling to recover from the devastating COVID-19 effect, the Ukraine war that began in the second half of the ﬁ nancial year further created an upheaval in the global economy affecting every country around the world. Despite such a difﬁ cult macro-economic condition, I am happy to report another successful year for Beximco Pharma with continued growth momentum. Upon review of Reports of the Directors and the Managing Director, you will note that we performed well in our operational and ﬁ nancial continuum with sales, Operating Proﬁ t and Pre-Tax Proﬁ t recording a growth over comparable previous period. In the operational area, we have further consolidated our domestic market position, launched a signiﬁ cant number of new products, and reinforced our overseas markets through more approvals and registrations. 72 | Chairman’s Statement | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T You will note from my last report, we set a milestone in the pharma industry of Bangladesh as we completed the acquisition of Sanoﬁ Bangladesh limited - our second acquisition since we took over Nuvista Pharma in 2018. Sanoﬁ Bangladesh Limited has been subsequently renamed as Synovia Pharma PLC. This year, we concentrated on its strategic integration and progressed as planned in this direction. Beximco Pharma won ‘Global Generics and Biosimilar Award 2022’ in the category of “Acquisition of the Year” for this successful acquisition. I remain conﬁ dent that re-organized and restructured Synovia Pharma in the immediate term will be better positioned in the market to meet our targets. We made signiﬁ cant investment to build the Unit- 3 manufacturing facility to support our growth and secure our future capacity needs. This project, besides relieving the capacity constraint, will create product diversiﬁ cation options. We will relocate some products manufactured in our old facilities to the new site, leaving the space for alternative use. The project is now complete and became operational. Manufacturing validation and transfer of products to the new facility are being done in phases. While we are happy with the operational and ﬁ nancial progress achieved, we are mindful of the macro-economic challenges the world is passing through. At the country level, the economic downturn, energy crisis, high inﬂ ation, depleting foreign currency reserve, depreciation of Taka against its principal foreign currency US Dollar, and the political uncertainty surrounding the election in 2023 remain issues of concern. However, the government’s continued policy to provide priority to the manufacturing sector, especially the pharmaceuticals and the agricultural sector, is a welcoming relief. Our focus, as always, will be on achieving the targets for the year and striving to exceed them. The Audit Committee and the Nomination and Remuneration Committee are two important committees of the Board. They carried out their respective responsibilities with the utmost sincerity and diligence. Members of the Board of Directors have extended their unceasing co-operation throughout the year. I convey my heartfelt gratitude to all of them. We have got a highly dedicated, capable, and very sincere pool of employees. The achievement we have made so far was only possible because of such a talented team. I thankfully acknowledge their contribution to the company. Finally, I am grateful to you, dear shareholders, for placing your trust on us and always extending your invaluable support. I wish you all a happy and healthy life. Thanking you A S F Rahman Chairman Annual Report 2021-22 | Chairman’s Statement | 73 T R O P E R T N E M E G A N A M D N A D R A O B †Pqvig¨v‡bi cÖwZ‡e`b wcÖq ‡kqvi‡nvìvie„›`, †`kxq Ges ˆewk¦K A_©bxwZ hLb †KvwfW-19 gnvgvixi AwfNvZ cywl‡q ax‡i ax‡i Ny‡i `vovw”Qj, wVK †mB mg‡q BD‡μb hy× ˆewk¦K A_©bxwZ‡K Avev‡iv wech©‡qi gy‡L ‡d‡j †`q| GB hy‡×i Kvi‡b we‡k¦i †QvU eo me A_©bxwZ GKwU bZzb P¨v‡j‡Äi gy‡L c‡o‡Q| mvgwóK A_©bxwZi Ggb cÖwZK~j cwiw¯’wZi g‡a¨I †ew·g‡Kv dvg©v Zvi μgvMZ cÖe„w×i aviv eRvq ivL‡Z mÿg n‡q‡Q, hv mwZ¨B ¯^w¯Í`vqK| cwiPvjbv cl©` I e¨e¯’vcbv cwiPvj‡Ki cÖwZ‡e`b †_‡K Avcbviv j¶¨ Ki‡eb †h e¨emv‡qi mvgwMÖK Kvh©μ‡gi m‡šÍvlRbK AMÖMwZi mv‡_ mv‡_ Avw_©K m~PKmg~‡niI D‡jøL‡hvM¨ DbœwZ n‡q‡Q| Avgv‡`i weμq, cwiPvjb gybvdv Ges Ki-c~e© gybvdv c~e©eZ©x eQ‡ii Zzjbvq e„w× ‡c‡q‡Q| Avgiv Af¨šÍixY evRv‡i Avgv‡`i Ae¯’vb AviI mymsnZ Kivi cvkvcvwk D‡jøL‡hvM¨ msL¨K bZyb Jla evRv‡i Avb‡Z †c‡iwQ| GKB mv‡_ bZyb Jla Aby‡gv`b I wbeÜ‡bi gva¨‡g AvšÍR©vwZK evRv‡i Avgv‡`i Ae¯’vb‡K AviI we¯Í„Z K‡iwQ| weMZ eQ‡ii cÖwZ‡e`‡b mv‡bvwd evsjv‡`k wjwg‡U‡Wi AwaMÖ‡Yi K_v Avwg Avcbv‡`i‡K AewnZ K‡iwQjvg| 2018 mv‡j bywf¯Ív dvg©v AwaMÖn‡Yi ci GwU Avgv‡`i wØZxq AwaMÖnY| Avgiv mv‡bvwd evsjv‡`k wjwg‡U‡Wi bvg cwieZ©b K‡i mvB‡bvwfqv dvg©v wcGjwm K‡iwQ| GB eQi Avgiv gyjZ †Kv¤úvbxi ‡KŠkjMZ GKxKi‡Yi j‡ÿ¨ KvR K‡iwQ Ges GB †ÿ‡Î cwiKíbv Abyhvqx AMÖMwZ mvwaZ n‡q‡Q| GB mdj AwaMÖn‡Yi Rb¨ †ew·g‡Kv dvg©v ÔGlobal Generics and Biosimilar Award 2022Õ (Acquisition of The Year) cyi¯‹vi AR©b K‡i‡Q| mvB‡bvwfqv dvg©vi e¨emvwqK I e¨e¯’vcbv KvVv‡gv cybwe©b¨vm Kiv n‡q‡Q| Avwg Avkvev`x cybM©wVZ mvB‡bvwfqv dvg©v evRv‡i Zvi Ae¯’vb mymsnZ K‡i Avgv‡`i wba©vwiZ jÿ¨ AR©‡b mg_© n‡e| Avcbviv AewnZ Av‡Qb ‡h Drcv`b mÿgZv e„w×i j‡ÿ¨ Avgiv Avgv‡`i m¤úªmvwiZ BDwbU-3 Drcv`b ¯’vcbvq D‡jøL‡hvM¨ cwigvb wewb‡qvM K‡iwQ| GB cÖKíwU Avgv‡`i Drcv`b mxgve×Zv `~ixKi‡Yi cvkvcvwk cY¨ ˆewPÎ¨Ki‡Y mnvqK n‡e| Avgv‡`i cy‡iv‡bv ¯’vcbvi wKQy cY¨ Avgiv bZyb ¯’vcbvq ¯’vbvšÍwiZ KiwQ| cÖKíwU eZ©gv‡b m¤úbœ n‡q‡Q Ges evwYR¨K Kvh©μg ïiæ n‡q‡Q| bZyb ¯’vcbvq g¨vbyd¨vKPvwis f¨vwj‡Wkb Ges ‡cÖvWv±m& UªvÝdvi ch©vqμ‡g m¤úbœ Kiv n‡”Q| Avgiv Avgv‡`i AR©‡b mš‘ó Ges GKB mv‡_ weivRgvb ˆewk¦K †cÖwÿ‡Z D™¢zZ A_©‰bwZK cwiw¯’wZi e¨vcv‡i m‡PZb| D”P g~j¨ùxwZ, μgn«vmgvb ˆe‡`wkK gy`ªvi wiRvf©, BDGm Wjv‡ii wecix‡Z UvKvi Aeg~j¨vqb, we`¨gvb R¡vjvwb msKU, A_©‰bwZK g›`v, Ges 2023 mv‡ji wbe©vPb wN‡i m¤¢ve¨ ivR‰bwZK Aw¯’wZkxjZv Avgv‡`i e¨emvwqK jÿ¨ AR©‡bi †ÿ‡Î m¤¢ve¨ SywK wn‡m‡e †_‡K hv‡”Q| Z‡e miKvi Drcv`b LvZ, we‡kl K‡i Jla Ges K…wl LvZ‡K we‡kl AMÖvwaKvi cÖ`vb K‡i Avm‡Q hv Avgv‡`i e¨emvwqK SywK jvN‡e mnvqK f~wgKv ivL‡Q| wba©vwiZ j¶¨gvÎv AR©‡b Avgv‡`i cÖ‡Póv eive‡ii g‡Zv GeQiI Ae¨vnZ _vK‡e| AwWU KwgwU Ges bwg‡bkb GÛ wigybv‡ikb KwgwU cl©‡`i `ywU ¸iæZ¡c~Y© KwgwU| KwgwUØ‡qi m`m¨MY 74 | Chairman’s Statement | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T `ÿZv I wbôvi mv‡_ Zv‡`i `vwqZ¡ cvjb K‡i‡Qb| GQvov cwiPvjbv cl©‡`i m`m¨MY mviv eQi Ry‡o Zv‡`i wbwiwew”Qbœ mn‡hvwMZv Ae¨vnZ ‡i‡L‡Qb| Avwg Zv‡`i mKj‡K Avgvi AvšÍwiK K…ZÁZv RvbvB| ‡Kv¤úvbxi my`ÿ I wb‡ew`ZcÖvY Kg©x evwnbx Avgv‡`i g~j PvwjKv kw³| Zv‡`i AK¬všÍ cwikÖ‡gi Kvi‡b Avgv‡`i AvR‡Ki AR©b m¤¢e n‡q‡Q| †Kv¤úvbxi Ae¨vnZ Dbœq‡b Zv‡`i Ae`v‡bi Rb¨ Avwg Zv‡`i cÖ‡Z¨K‡K Avgvi K…ZÁZv I ab¨ev` Rvbvw”Q| m¤§vwbZ †kqvi‡nvìvie„›`, Avcbviv memgq Avgv‡`i Dci Av¯’v †i‡L Avcbv‡`i mn‡hvwMZv Ae¨vnZ †i‡L‡Qb| Avwg Avcbv‡`i mKj‡K AvšÍwiK K…ZÁZv Ávcb KiwQ| Avwg mK‡ji myL I ¯^v”Q›`gq Rxeb Kvgbv KiwQ| ab¨ev`v‡šÍ, G Gm Gd ingvb †Pqvig¨vb Annual Report 2021-22 | Chairman’s Statement | 75 T R O P E R T N E M E G A N A M D N A D R A O B Nazmmul HHassassass n Mn MM MPPP ManMaM agaging DirD ecttoror B O A R D A N D M A N A G E M E N T R E P O R T Report of the Managing Director Bangladesh, absorbing the initial shock of COVID-19, was recovering well in the post-pandemic period until the global economy was again trembled by the incursion of the Ukraine war beginning in the second half of the ﬁ nancial year. Despite global headwinds and lingering post-pandemic challenges, Bangladesh posted an impressive GDP growth ranging between 6.9% to 7.2% according to different estimates with strong export and increased domestic demand. However, Bangladesh, like many other countries, faces global economic challenges stemming from the Ukraine war with a surge in import cost, energy crisis, sharp depreciation of domestic currency against United States dollar and high inﬂ ation from the second half of the FY2021-22. Widening Balance of Payment deﬁ cit brought down the foreign currency reserve to US $35.8 billion in October 2022 from a record US$48 billion in August 2021, weakening the macro-economic stability that the country has been enjoying for a long time. Monetary and ﬁ scal policies in advanced economies including continued interest rate hikes are leading the world towards a global recession. Against this backdrop of global economic slowdown, World Bank, IMF and ADB in their latest reports have lowered their growth forecast for Bangladesh as well as all other South Asian economies. According to IQVIA, the global pharma market was valued at $1.42 trillion in 2021, which is forecasted to reach $1.8 trillion by 2026, increasing at a rate of 3-6% annually. Biologic drugs continue to dominate with 7 of them in the top 10 list with Pﬁ zer’s mRNA vaccine for COVID-19 alone generating a whopping $36.9 billion followed by monoclonal antibody for rheumatoid arthritis Humira (Adalimumab) at $20.7 billion, and Moderna’s mRNA vaccine for COVID-19 at $17.7 billion. Global generic drugs market stood at $305 billion in 2021 and will continue to expand as patented drugs worth almost $200 billion will go off patent during 2022-23, a large part of it coming from blockbuster biologic drugs. Bangladesh pharmaceutical market currently valued over US $3 billion has been enjoying a double-digit growth for quite a long time. The industry maintained this historic trend in FY2021-22, although IQVIA report, the widely used data source for pharmaceuticals, erroneously shows a different result for Bangladesh market. However, Bangladesh’s health sector being primarily driven by private spending, economic downturn and lower purchasing power may slow down the future growth of this sector. Domestic and global macro-economic disruptions remain an added burden for all the industries, including pharmaceuticals. Review of Operations Sales, Products and Markets We concluded 2021-22 with remarkable progress in a challenging economic condition achieving 17.5% growth in our consolidated revenue. Our domestic sales, driven by organic growth coupled with the acquisition of Synovia Pharma, increased 21.3% y-o-y, outperforming the industry average. In the domestic market, we achieved the highest growth among the top ﬁ ve companies. Our domestic business was driven by our excellent performance in both chronic care and acute segments. This excellent performance is a testament to the strength of our core capabilities, strategic portfolio, and very importantly, resilience in the face of a crisis. However, the economic downturn and global supply chain disruptions largely caused our export decline by 14% and partly overshadowed our domestic performance. During the year under review, we launched 30 new products (51 presentations), 9 of them for the ﬁ rst time in Bangladesh. We continued to expand our export portfolio and completed 32 registrations for 28 products in 11 countries. Since my last report, we received 3 more ANDA approvals in the US market and Marketing Authorizations for two products in the UK. We also entered 4 new countries in the said period, including Morocco and Georgia. Integration of Synovia Pharma PLC (formerly Sanoﬁ Bangladesh Limited) After completion of the acquisition of Synovia Pharma, we concentrated on its integration to ﬁ t our business. As with our previous acquisition, our operating strategy for the acquired entity is to let it run with the highest autonomy supporting and aligning its business strategies to meet the acquisition goals. After acquisition, Synovia Pharma’s market reach has been extended through the use of Beximco Pharma’s countrywide distribution network. Sales and marketing teams have been strengthened and we have Annual Report 2021-22 | Report of the Managing Director | 77 T R O P E R T N E M E G A N A M D N A D R A O B redesigned their business model mirroring the winning strategies of Beximco Pharma. New ERP and other IT platforms have been rolled out across the organization, enabling the company to maintain its operational excellence. Accounting Policies and Estimates Bangladesh has adopted the International Financial Reporting Standards (IFRS)/International Accounting Standards (IAS). Beximco Pharma has been consistently applying these standards in preparation of its ﬁ nancial statements. Management has the discretion to decide on the accounting policies within the ﬁ nancial reporting framework and make estimates and provisions in preparing those ﬁ nancial statements. The Company’s accounting policies remain consistent with those of the previous year and there have been no changes in the accounting policies that could materially impact the ﬁ nancial 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 ﬁ nance functions are manned with adequate experienced professionals. Appropriate policies and procedures, as well as adequate review and control mechanisms are in place in every step of the ﬁ nancial reporting value chain to avoid, eliminate or reduce the risk of errors, omissions or material misstatements in the ﬁ nancial 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. Looking Forward The Company will continue to build a differentiated portfolio to meet the unmet needs of our patients. We have created a new ﬁ ll-n- ﬁ nish vaccine facility which is expected to be operational by FY2022-23 and negotiations are at the ﬁ nal stage with global vaccine producers for tech transfer. We will continue to seek more international collaborations in the areas of biosimilars and oncology, while expand our API portfolio of patented molecules to capitalize on the TRIPS advantages. As we have completed the acquisition of Sanoﬁ , later renamed Synovia, we believe its strong portfolio and sound operational experience will deﬁ nitely help accelerate our growth, complementing our existing portfolio in the domestic market. Over the last four decades, we have transformed people’s lives by providing access to affordable medicines and largely contributed to the country’s remarkable achievements in healthcare. As our journey continues, we remain steadfast in our commitment to making a positive impact on patients’ lives by building healthier communities. Despite all the uncertainties and the unforeseen challenges stemming from ongoing geopolitical tensions, we remain ﬁ rm on our strategic commitment to expand our businesses and stay ahead in the competition, doing our best to maintain the positive momentum. We believe our powerful business model and fully committed, agile workforce will propel us forward and continue to deliver results for our shareholders. Thank you for your continued support. Nazmul Hassan MP Managing Director 78 | Report of the Managing Director | Annual Report 2021-22 First Time in Bangladesh B B O O A A R R D D A A N N D D M M A A N N A A G G E E M M E E N N T T R R E E P P O O R R T T The combined force of our product development, manufacturing skills and also our marketing expertise will yield defi nitive results not just for investors but also for patients in need. T R O P E R T N E M E G A N A M D N A D R A O B Report of the Directors I am pleased to place before you the Directors’ Report and the Audited Accounts of the Company for the year ended 30 June 2022 along with the report of the auditors thereon. General Economic Overview Bangladesh economy at the beginning of FY2021-22 was showing strong signs of recovery from the onslaught of the pandemic until the wave of the Ukraine war created another global economic turmoil. Bangladesh registered around 7 percent GDP growth in FY2021- 22. Post pandemic period saw robust growth in exports, rise in investment, and increased domestic production and consumption. However, the economy that was taking a bright look suffered a setback and confronted further challenge from the stressed global economic conditions due to the war. Imports robustly increased because of growth-led demand and swelling cost. Outﬂ ow of foreign currency due to surge in imports sharply outweighed the inﬂ ows from the exports and remittance. Continuing balance of payment deﬁ cit put severe stress on Forex reserve and the Forex market became volatile, causing Taka to sharply depreciate from the beginning of FY2021-22. Bangladesh Taka depreciated by a record 25 percent against United States dollar in one-year time. Domestic Inﬂ ation also soared during the period. Government has taken up ﬁ scal, monetary, and regulatory measures to ease the forex crisis and tame domestic inﬂ ation. The country is also facing energy shortages due to high cost and depleting foreign currency reserve situation. In this context, the World Bank has revised its GDP growth forecast for Bangladesh to 6.1% from 6.7% for FY2022-23. The Asian Development Bank (ADB) has also downgraded its forecast to 6.6% for the same ﬁ scal year. Government’s supportive policy for the pharmaceutical sector, however, remains unchanged. In Bangladesh, 117 items of medicines are declared as essential category and their prices are controlled by the Directorate General of Drug Administration (DGDA). In response to an appeal from the industry, the DGDA considering a signiﬁ cant increase in the cost of inputs, approved upward price revision of some of these products, which came into effect in July 2022. This gave a little respite to the industry, struggling with eroding proﬁ t margin due to increased cost. Review of Financial Performance Amidst global economic disorders and challenging domestic market conditions, Beximco Pharma achieved remarkable 17.5% growth Sales and Proﬁt Snapshot 17.5% 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 13.6% 3.8% 4.9% 3.2% Sales Revenue Gross Proﬁt Operating Proﬁt Pre-Tax Proﬁt Net Proﬁt after Tax 2020 - 2021 2021 - 22 in consolidated sales to reach at Taka 34,669.2 million from Taka 29,493.6 million of prior year. Sales in the domestic market 80 | Report of the Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T increased by 21.3% predominantly from the organic growth of business, and the acquisition. We attained an export revenue of Taka 2,685.1 million, a 14% decline from the preceding year because of supply chain disruptions, economic downturn and eco-political crisis in some of our export destinations. Our consolidated gross proﬁ t rose 13.6% in FY 2021-22 to reach at Taka 15,814.3 million. The pre-tax proﬁ t stands at Taka 6,686.9 million as against Taka 6,377.5 million earned in 2020-21 representing 4.9% YoY increase (11.7% on standalone basis). Our newly acquired Synovia Pharma has incurred a pre-tax loss of Taka 279.0 million during the post-acquisition nine-month period and thus pulled down the consolidated pre-tax proﬁ t growth in percentage terms. Net Proﬁ t after Tax however, declined by 3.2% to Taka 4,998.6 million on comparable terms, mainly because of one-off deferred tax beneﬁ t that accrued from the changes of income tax rates in previous year. In the context of rising material and freight costs, sharp depreciation of domestic currency and high inﬂ ation, the industry is facing increasing challenges as the prices of medicines are not readily ﬂ exible to absorb the increased cost. Moreover, the Unit- 3 manufacturing facility built to ease our capacity constraint and secure our future needs, has become operational this year. The depreciation and other operating costs are now being charged as manufacturing overheads following the accounting standards. All these combined has brought down our gross margin as a percentage of sales to 45.6% from 47.2% of the prior year. Collection of cash from revenue and other sources increased by 17.2% to Taka 36,126 million. However, net cash generated from Operating Activities declined by 13.4% to Taka 5,214.2 million from Taka 6,023.3 million of the prior year due to increased investment in working capital consequent to the devaluation of Taka, rise in material costs and domestic inﬂ ation. Further to aforesaid, the company needed to maintain additional inventory to protect against supply chain disruptions and to support business growth. Continuity of Other Income The Company reports Cash Incentives on Exports on submission of claims fulﬁ lling the eligibility criteria. Claims for export incentives are to be made after receipt of the export proceeds. Income from cash incentive depends on the value of export made and the amount of proceeds remitted in a particular year. Any change in the government’s incentive policy may affect earnings from this source. We earn royalty income from our subsidiary Nuvista Pharma and overseas partners for the sale of a few selected products. Income from this source is linked to the volume of sales of these products. Royalty earned from the subsidiary Nuvista Pharma has been eliminated as inter-company transactions in the consolidated ﬁ nancials. The Company distributed 8 million doses of Oxford/AstraZeneca COVID-19 vaccine during the reporting period, with a cumulative 15 million doses delivered under the tripartite agreement between the Serum Institute of India (SII), Government of Bangladesh (GOB) and Beximco Pharma. The Company recorded a net amount of Taka 619 million as Vaccine Distribution Fee in the reporting period. Given the broader availability of COVID-19 vaccines in Bangladesh, insigniﬁ cant rate of infection, and widespread lack of desire for a third dose from the general population, it is unlikely that GOB will seek to procure any further vaccine doses through this agreement for the foreseeable future. The Company recorded a net gain on foreign exchange mainly from upward translation of export receivables due to record depreciation of Taka. Future income from this source depends on ﬂ uctuation of exchanges rates between Taka and its counterpart currency. Other items included under the head Other Income are either non-recurring or not material or inherent to the normal business operation. Reconstitution of the Board of Synovia Pharma We have reconstituted the Board of Directors of Synovia Pharma PLC with Mr. Nazmul Hassan, Managing Director, Mr. Rabbur Reza, Chief operating Ofﬁ cer, and Mr. Ali Nawaz, Chief Financial Ofﬁ cer of Beximco Pharma in the Board. Mr. Reza has been appointed as Chief Executive Ofﬁ cer of Synovia Pharma in addition to his role as COO of Beximco Pharma. Dr. Md. Ibraheem Hosein Khan, an Independent Director of Beximco Pharma has also been nominated as a Director of Synovia Pharma complying to the requirement of Corporate Governance Code of Bangladesh Securities and Exchange Commission (BSEC). Annual Report 2021-22 | Report of the Directors | 81 T R O P E R T N E M E G A N A M D N A D R A O B Proﬁ t and its Appropriation Directors propose the appropriation of proﬁ t as follows: Particulars Net Proﬁ t After Tax Adjustment for depreciation of Revalued Assets Proﬁ t Brought Forward Proﬁ t Available for Appropriation Proposed Dividend: Cash Dividend Proﬁ t Carried Forward Amount in Taka’000 BPL (Stand-alone) 2021-22 5,161,344 6,358 22,295,424 27,463,126 (1,561,392) 25,901,734 2020-21 4,943,488 7,180 18,906,148 23,856,816 (1,561,392) 22,295,424 Dividend The Board of Directors recommends 35% Cash Dividend i.e. Tk. 3.50 per share for the year ended 30 June 2022 for onward approval at the Annual General Meeting. The Company has declared no interim dividend during the year. Risks and Concerns Enterprises are not free from risks that might arise both from internal and external fronts. Like any other business or industry, Beximco Pharmaceuticals operating in a dynamic and competitive market, is also exposed to risks that may affect its business. The war in Ukraine along with pandemic has left a devastating impact on global economy and business. The unpredictable and uncontrollable challenges of this type bring the necessity of robust risk management to the forefront. Beximco has robust policies and procedures in place at functional, operational and strategic level to mitigate risks. Our strong and experienced executive team identify, assess and address diverse risks that might affect its operational or ﬁ nancial targets. The board and the management of the Company over the years have managed successfully to monitor and review risks on a continual basis. Beximco Pharma takes appropriate mitigating measures to avoid, eliminate or reduce risks based on the variety and intensity of the risk. While the Company has an appropriate system of vigilance and established procedures to address the risks arising from internal or external sources, there are uncertainties beyond control of the Company which might affect its goals. Economic Risks The growth of pharmaceutical Industry in Bangladesh is predominantly driven by individual private spending which depends on the economic advancement and consequent increase in the purchasing power of the people. Any decline in economic growth could, as for any other industry, impact the future demand for pharmaceuticals. Global economic instability also has a bearing on the industry and may impact its growth and proﬁ tability. Bangladesh, like many other countries is currently facing challenges due to the Ukraine war and the stretching effect of the pandemic. The government has, taken up different measures to overcome the crisis. Bangladesh maintained a steady economic progress over the years with substantial uplift in all socio-economic indexes and it is anticipated that the trend will continue in the immediate future overcoming the current crisis. The country is going to be graduated as a middle-income country by 2026. Improvement in the standard of living, education and increased health awareness reinforced by added purchasing power is expected to trigger the demand for healthcare products in the coming years. Market Risk Interest Rate risk and Foreign Exchange risk are the two important market risks. The Company has foreign and domestic borrowing. Any Change in interest rate might impact the ﬁ nancial results of the Company. Foreign borrowings, in addition to interest rates, are subject to foreign exchange risk. The Company, however, has strong revenue and cash ﬂ ow stream to meet its ﬁ nancial obligations. The government has capped the maximum lending interest rate at 9%, which mitigates the risk of any abrupt increase in the rate 82 | Report of the Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T of interest. Additionally, the Company foreign borrowing in relation to its volume of business is not signiﬁ cant enough to materially impact its proﬁ tability. The exchange rate between Taka and US Dollar over the years remained more or less stable with the government intervening in the forex market. However, domestic currency in recent times has signiﬁ cantly depreciated against the US Dollar. The government has taken up different monetary, ﬁ scal, and regulatory measures to improve its foreign currency reserve. The Company has exports in US Dollar that give a natural hedge to partially neutralize the adverse impact of the exchange rate ﬂ uctuations. Input Price and Supply Chain Risk Bangladeshi pharmaceutical companies are heavily dependent on imported APIs. Any substantial increase in prices in the international market may affect future proﬁ tability of the company. Moreover, disruptions in the supply chain network or situation like recent pandemic may also make the availability of materials difﬁ cult and thus affecting the production. 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 inﬂ uence on procurement prices. Most of the suppliers have their local agent and the Company maintains close relationship with them. Due to the Company’s strong network of sourcing and procurement, it managed uninterrupted production during the pandemic time through ensuring availability of raw materials. Moreover, Beximco Pharma manufactures few of the APIs and the Company is strengthening its API manufacturing capacity. Product Liability Risk Pharmaceutical products are usually exposed to high quality control risk. Each product is required to be marketed through a stringent compliance procedure. Manufacturing of products require the ﬂ exibility to accommodate the changing local and global regulatory needs. Any deviation from the standard may result in serious market reputation damage and might also create a regulatory barrier. Over the years Beximco Pharma has been recognized locally and globally for quality standards and manufacturing excellence. Our manufacturing facilities are certiﬁ ed by leading global regulatory agencies. As such Beximco Pharma is exposed to less quality control 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. The company’s management values data security, automation of operations and technological advancement in the industry. The Company therefore continues to invest in state-of-the- art technologies, R&D and laboratory infrastructure to build 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 signiﬁ cant changes in the pharmaceutical policy, regulations, tax regime or other business laws having bearing on pharmaceutical sector may also threaten the growth potential of this business. However, policies of the Government of Bangladesh are supportive to the industry and pose no immediate risk. Retirement and Re-election of Directors Mr. A S F Rahman and Mr. A B Siddiqur Rahman, Directors of the Company retire by rotation as per Articles 126 and 127 of the Articles of Association of the Company and being eligible, offer themselves for re-election. Detailed bio-data of the Directors are available in the Directors’ Proﬁ le 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 45th Annual General Meeting of the Company has carried out the audit for the year ended 30 June 2022. M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, BirUttam C.R. Datta Road, Dhaka-1205, Annual Report 2021-22 | Report of the Directors | 83 T R O P E R T N E M E G A N A M D N A D R A O B the Auditors of the Company retires at this meeting and has expressed their willingness to continue in ofﬁ ce for the year 2022-23. The Board after due consideration recommends for the reappointment of M. J. Abedin & Co., Chartered Accountants as auditors for the year 2022-23. 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 beneﬁ ts 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 ﬁ xed monthly salary. They are also entitled to certain perquisites as per the terms of their employment contract. Additionally, Beximco Pharma has deﬁ ned contribution plan (Provident Fund) and a deﬁ ned beneﬁ t 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 beneﬁ ts of statutory Workers’ Proﬁ t Participation Fund. Directors’ Statement on Financial Reports Directors are pleased to report the following: • The ﬁ nancial 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 ﬂ ow and changes in equity. • Proper books of accounts of the Company have been maintained. • Appropriate accounting policies have been consistently applied in preparation of the ﬁ nancial 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 ﬁ nancial statements. • Internal Control System is sound in design and has been effectively implemented and monitored. • Interests of the minority shareholders have been duly protected. • There is no signiﬁ cant doubt about the ability of the Company to continue as a going concern. Declaration by CEO and CFO Declaration by CEO and CFO on the Financial Statement of the Company is attached as Annexure- 1 Key Operating and Financial Data The summarized key operating and ﬁ nancial data for 2021-22 and immediately preceding ﬁ ve 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 Notiﬁ cation No. BSEC/ CMRRCD/2006-158/207/Admin/80 dated June 3, 2018 has been separately reported by the Managing Director. 84 | Report of the Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T 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 A S F Rahman Salman F Rahman MP Nazmul Hassan MP Iqbal Ahmed O K Chowdhury A B Siddiqur Rahman Reem H. Shamsuddoha Quamrun Naher Ahmed Mamtaz Uddin Ahmed Dr. Md. Ibraheem Hosein Khan Chairman Vice Chairman Managing Director Director Director Director Director Director Independent Director Independent Director 12 12 12 10 12 12 12 12 12 12 The Pattern of Shareholding The Shareholding of Directors, CEO, CFO, Company Secretary, Key Executives and their spouses and children are provided in Annexure- 3. Corporate Governance Compliance Report In accordance with the requirement of Bangladesh Securities and Exchange Commission Notiﬁ cation 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 2021-22 | Report of the Directors | 85 T R O P E R T N E M E G A N A M D N A D R A O B Annexure-1 The Board of Directors Beximco Pharmaceuticals Limited Subject: Declaration on Financial Statements for the year ended on 30 June 2022 Dear Sirs, Pursuant to the condition No. 1(5) (xxvi) imposed vide the Commission’s Notiﬁ cation No. BSEC/CMRRCD/2016-158/207/Admin/80, Dated June 03, 2018 & under section 2CC of the Securities and Exchange Ordinance 1969, we do hereby declare that: 1. The Financial Statements of Beximco Pharmaceuticals Limited for the year ended on 30 June 2022 have been prepared in compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately disclosed; 2. The estimates and judgments related to the ﬁ nancial statements were made on a prudent and reasonable basis, in order for the ﬁ nancial statements to reveal a true and fair view; 3. The form and substance of transactions and the Company’s state of affairs have been reasonably and fairly presented in its ﬁ nancial statements; 4. To ensure above, the Company has taken proper and adequate care in installing a system of internal control and maintenance of accounting records; 5. Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed; and 6. The management’s use of the going concern basis of accounting in preparing the ﬁ nancial statements is appropriate and there exists no material uncertainty related to events or conditions that may cast signiﬁ cant doubt on the Company’s ability to continue as a going concern. In this regard, we also certify that: We have reviewed the ﬁ nancial statements for the year ended on 30 June 2022 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 Ofﬁ cer 86 | Report of the Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T Annexure- 2 Key Operating and Financial Data 30 June 2022 30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017 Taka in Thousand Authorized Capital Paid up Capital Shareholders’ Equity Fixed Assets (Gross) 15,000,000 15,000,000 15,000,000 15,000,000 9,100,000 9,100,000 4,461,121 4,461,121 4,055,564 4,055,564 4,055,564 4,055,564 44,636,004 37,364,865 32,797,450 29,864,324 27,351,837 25,072,426 57,035,893 47,887,415 45,615,625 43,454,027 39,081,675 31,692,789 Net Asset Value (NAV) Per Share -Taka Market Price Per Share Price Earnings Ratio (Times) 91.01 154.60 13.47 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 Number of Shareholders 54,446 55,248 56,101 56,177 57,982 62,741 Foreign Investors ICB including ICB Investors Account Sponsors, General Public & Other Institutions 69 873 71 871 71 882 77 881 90 879 92 874 53,504 54,306 55,148 55,219 57,013 61,775 Number of employees 5,377 5,104 4,755 4,489 4,256 3,833 Total Sales Export Sales Gross Proﬁ t Proﬁ t Before Tax Net Proﬁ t 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 Taka in Thousand 34,669,172 29,493,574 25,611,947 22,816,630 17,716,717 15,508,777 2,685,096 3,124,001 2,751,790 2,502,633 1,476,978 1,078,472 15,814,252 13,923,502 11,899,100 10,620,343 8,285,979 7,184,882 6,686,945 6,377,548 4,653,440 3,946,065 3,361,334 2,891,482 4,998,628 5,165,750 3,544,483 3,040,403 2,532,654 2,226,695 EPS/Restated EPS- Taka Net Operating Cash Flow Per Share New Product Launched-numbers Cash Dividend Stock Dividend 11.48 11.69 30 35% 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 15% - 12.50% 12.50% - - Annual Report 2021-22 | Report of the Directors | 87 T T R R O O P P E E R R T T N N E E M M E E G G A A N N A A M M D D N N A A D D R R A A O O B B Graphical View of Selected Growth Indicators TOTAL SALES EXPORT SALES Taka in million 9 6 6 , 4 3 3 4 9 4 , 9 2 2 2 1 6 , 5 2 2 7 1 8 , 2 2 2 7 1 7 , 7 1 9 0 5 , 5 1 55 5 5 8 6 6 , 2 2 4 2 1 1 , 3 3 222 2 5 7 7 , 2 2 3 0 00 0 5 5 , 2 2 7 77 7 4 44 4 4 , 1 8 8 88 7 7 0 0 0 0 0 , 1 2021 22 20021-22 00 2202022020-21 020 21 0019 20 222020019-20 20022018 19 0118-19 017 18 2222002020017-18 2022016 17 016-17 2021 22 220021-22 00 2202022020-21 020 21 019 20 2220220019-20 2022018 19 0118-19 017 18 2222002020017-18 2022016 17 016-17 NET PROFIT 9 9 9 9 , 4 4 6 6 1 1 , 5 5 4 4 5 5 , 3 3 0 4 0 0 , 3 3 3 33 3 5 5 , 2 2 7 22 2 2 2 2 2 , 2 2021 22 220021-22 00 2202022020-21 020 21 019 20 2220220019-20 2022018 19 0118-19 017 18 222200202017-18 2022016 17 016-17 TT EPS (TAKA) SHAREHOLDER’S EQUITY 8 4 . 1 1 9 4 . 1 1 8 8 8 . 7 7 8 4 4 . 7 7 5 55 2 2 . 6 6 999 9 4 4 4 . 5 6 3 6 , 4 4 4 5 6 3 , 7 3 3 7 9 7 , 2 3 3 4 6 8 , 9 2 2 2 5 3 , 7 2 2 2 7 0 , 5 2 2 2022016 17 016-17 2021 22 20021-22 88 | Report of the Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T 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 Ofﬁ cer, 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 2021-22 | Report of the Directors | 89 T R O P E R T N E M E G A N A M D N A D R A O B Corporate Governance Compliance Report As per condition No. 1(5)(xxvii) Status of compliance with the conditions imposed by the Commissions Notiﬁ cation 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) ﬁ nancial 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 Certiﬁ cate) holder, director or ofﬁ cer of any stock exchange Not a shareholder, director excepting independent director or ofﬁ cer 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 ﬁ rm or audit ﬁ rm engaged in internal audit services or audit ﬁ rm 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 Ofﬁ ce 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 ofﬁ cial 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 90 | Report of the Directors | Annual Report 2021-22 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 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 B O A R D A N D M A N A G E M E N T R E P O R T 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 ﬁ eld mentioned in clause (b) Qualiﬁ cation 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 deﬁ ne 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 2021-22 | Report of the Directors | 91 T R O P E R T N E M E G A N A M D N A D R A O B 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 ﬁ nancial performance or results and ﬁ nancial position as well as cash ﬂ ows for current ﬁ nancial year with immediate preceding ﬁ ve years explaining reasons thereof 1(5)(xxv)(d) Compare such ﬁ nancial performance or results and ﬁ nancial position as well as cash ﬂ ows with the peer industry scenario 1(5)(xxv)(e) Brieﬂ y explain the ﬁ nancial 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 ﬁ nancial statements, explaining such risk and concerns mitigation plan of the company Future plan or projection or forecast for company’s operation, performance and ﬁ nancial position Declaration or certiﬁ cation 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 certiﬁ cate 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 Ofﬁ cer 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 Ofﬁ cer (CEO), Chief Financial Ofﬁ cer (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 deﬁ ne 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 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 92 | Report of the Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T 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 ﬁ nancial 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 certiﬁ cation 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 “ﬁ nancially literate” and at least one to have 10 years of accounting/ ﬁ nancial management experience Vacancy in Audit Committee to be ﬁ iled 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 ﬁ nancial 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 ﬁ nancial 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 the year. Annual Report 2021-22 | Report of the Directors | 93 T R O P E R T N E M E G A N A M D N A D R A O B 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 ﬁ ll the vacancy in case of death, resignation, disqualiﬁ cation, 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 ﬁ nancial 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) 6(5)(b)(i) 6(5)(b)(i)(a) 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 conﬁ rmed 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: 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 sufﬁ cient to attract, retain and motivate suitable directors 6(5)(b)(i)(b) Clear relationship among remuneration, performance & benchmarks - - - - - √ √ √ √ √ √ √ √ - - √ √ √ √ √ √ √ - √ √ √ √ √ 94 | Report of the Directors | Annual Report 2021-22 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) B O A R D A N D M A N A G E M E N T R E P O R T 6(5)(b)(i)(c) Balance between ﬁ xed and incentive pay reﬂ ecting 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) Identiﬁ cation of qualiﬁ cation 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 certiﬁ cation services on compliance of corporate governance Not involved in any other service that creates conﬂ ict of interest No partner or his/her family or employees of the external audit ﬁ rms 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 ofﬁ cial 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 certiﬁ cate on Corporate Governance Code of the Commission shall be disclosed in the Annual Report The professional who will provide the certiﬁ cate 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 2021-22 | Report of the Directors | 95 T R O P E R T N E M E G A N A M D N A D R A O B Annexure-5 96 | Report of the Directors | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T Report of the Audit Committee I am pleased to present the report of the Audit Committee of Beximco Pharmaceuticals Limited in compliance to 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 conﬁ ned to overseeing the ﬁ nancial reporting process, evaluating internal control system, reviewing signiﬁ cant related party transactions, assessing potential conﬂ ict of interests, and reviewing the ﬁ nancial statements of the Company and its subsidiaries. This report gives a brief on the activities performed by the Audit Committee throughout the year. 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 Independent Director Osman Kaiser Chowdhury, FCA Reem H. Shamsuddoha Director Director Mohammad Asad Ullah, FCS Company Secretary Chairman Member Member Secretary 4/4 4/4 4/4 4/4 Review of Financial Statements The Audit Committee in its meeting held in October 2022 thoroughly reviewed the draft of the annual audited ﬁ nancial reports of the Company prior to their submission to the board of directors for approval. The annual accounts of the subsidiary companies, namely Nuvista Pharma Limited, Beximco Pharma API Limited and Synovia Pharma PLC, were also presented for review during the meeting. It may be mentioned that Synovia Pharma became a subsidiary of the company with effect from October 1, 2021. Representatives from the management of the Company placed the annual accounts of each individual company along with the independent auditor’s report thereon. They briefed the Committee on the operating results, the acquisition and its valuation, material accounting policies, consolidation process and the disclosures of relevant information in the annual accounts. Committee members discussed in detailed the different aspects of the ﬁ nancial statements, particularly on their 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 ﬁ nancial statements. The Committee carefully examined the related party transactions carried out among different associated companies, including the subsidiaries and found that the related party transactions were made on an arm’s length basis in the normal course of business. These have been appropriately disclosed in the ﬁ nancial statements as per IAS 24: ‘Related Party Disclosures’. The Committee evaluated the report of the independent auditor on the annual ﬁ nancial statements and found no material audit observation that warrants the Board’s attention. The Committee held three other meetings to review the interim ﬁ nancial reports of the company and its subsidiaries prior to their onward submission to the board for approval. In each of the cases, the committee held detailed discussion with the senior management on various aspects of the ﬁ nancial statements to ensure accuracy, consistency and compliance of the reports in all material respects. Management representatives present in the meeting, replied to the queries raised and provided adequate explanations on operational, ﬁ nancial, accounting and reporting matters discussed in the meeting. The Committee, wherever applicable, gave necessary feedback and guidance in connection with reporting and disclosure. Annual Report 2021-22 | Report of the Audit Committee | 97 T R O P E R T N E M E G A N A M D N A D R A O B 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 2022 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 2022-23. During the review period, the Committee also assessed the ﬁ nancial 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. The Committee noted no material deviations or non-compliance or adverse audit ﬁ nding that calls for the board or shareholders’ attention. Mamtaz Uddin Ahmed Chairman Audit Committee 98 | Report of the Audit Committee | Annual Report 2021-22 B O A R D A N D M A N A G E M E N T R E P O R T Report on the Activities of Nomination and Remuneration Committee (NRC) Nomination and Remuneration Committee (NRC) is one of the two sub-committees of the Board constituted in compliance to the Corporate Governance Code issued by Bangladesh Securities and Exchange Commission. The Committee has stipulated terms of reference approved by the Board and it conducts its activities conforming to the established scope. Beximco Pharma has a three- member NRC which includes one independent director. Composition of the NRC Present composition of the NRC is: Name Representation in the Board Position in the Committee Dr. Md. Ibraheem Hosein Khan Independent Director Iqbal Ahmed Osman Kaiser Chowdhury, FCA Director Director Mohammad Asad Ullah, FCS Company Secretary Chairman Member Member Secretary Summary of Activities of NRC The Nomination and Remuneration Committee (NRC) held one meeting during the year under review. All the members of the Committee except Mr Iqbal Ahmed attended the meeting. Mr. Md. Ali Nawaz, Chief Financial Ofﬁ cer, Mr. Jamal Ahmed Choudhury, Director, Accounts & Finance and Mr. M A Arshad Bhuiyan, General Manager, HRM attended as representatives of the management on invitation. NRC reviewed the employee development policies and plans of the Company. Mr. M A Arshad, Head of HRM gave a comprehensive presentation on the learning and development process at Beximco Pharma and the systematic approach adopted by the organization to equip its employees with the requisite expertise and skills. He described the training need assessment process, learning and development strategies, and the training programs the Company conducts across all functional areas of business. The Committee evaluated the continuous learning and development system instilled in the Company, its plan for a knowledge-based workforce and made speciﬁ c suggestions to further reinforce the continuing endeavors. Mr. ASF Rahman, Chairman and Mr. AB Siddiqur Rahman, a Director of the Company is retiring by rotation as per Articles of Association of the Company. The Committee, after discussion, proposed to the Board for consideration of their re-election. Directors of the Company receive fees for attending board and committee meetings. They are paid a fee of Taka 17,000 per meeting which was last adjusted in 2017. The Committee considered that this requires an upward change and therefore, proposed to the board to revise it to Taka 20,000 per meeting. Annual Report 2021-22 | Report on the Activities of NRC | 99 T R O P E R T N E M E G A N A M D N A D R A O B 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 qualiﬁ cation 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 ﬁ tting the qualifying criteria as a Director. The Person (s) identiﬁ ed for the proposed appointment as director is evaluated in terms of the requirements laid down in prevailing legislation; speciﬁ c 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 veriﬁ cation 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 diversiﬁ ed ﬁ elds 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 qualiﬁ ed 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 ﬁ xed 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. 100 | Report on the Activities of NRC | Annual Report 2021-22 I N V E S T O R R E L A T I O N S Investor Relations Communication with Shareholders and Investors Beximco Pharma is aware of the investors’ right to continue receiving information about the company, its operations, ﬁ nancial performance, and other signiﬁ cant information relevant for their investment decisions. The laws and regulations of the country deﬁ ne the privileges and rights of shareholders as well as the nature, timing, and method of disclosing information to the shareholders and investors. The shareholders and investors are kept well informed of the Company’s operation and performance through periodic updates of price sensitive information, publications of ﬁ nancial reports, investors’ meeting with the Company’s top executives and Annual General Meeting (AGM) of the Company. Any price sensitive information are immediately released through the stock exchanges and Company’s own website. In applicable cases such information are also published in the print media and online portals. The Company regularly holds AGM as required by the Companies Act, 1994 to inform the shareholders about the overall affairs of the Company and to obtain their consent on agenda placed in the meeting. Extra-ordinary General Meeting (EGM) are also held in cases that require calling of such meeting. The board members and senior management of the Company remains present in those meetings to answer queries and address any concerns of the shareholders and investors. This year, the AGM of the Company are being held virtually by using digital platform. The company’s senior management occasionally meets with enquiring investors, fund managers and analysts to discuss the current and future business of the Company. This year, ten such meetings were held virtually and physically. Beximco Pharma has a distinct Company Secretarial Department adequately manned with qualiﬁ ed 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 ﬁ nance function to deal with queries and information requests from investors, regulators etc. We, 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 The Company publishes unaudited ﬁ nancial statements for ﬁ rst, second and third quarters and full year Audited Financial Statements and release them through stock exchanges. Summary of the ﬁ nancial statements are also published through newspapers and online portals as required by law. The Company prepares annual report that contains detailed operational and ﬁ nancial information along with other statutory disclosures. All the reports are available in the Company’s website. Financial Reports and Reporting Calendar Latest timing of release of the ﬁ nancial statements are: U n - a u d i t e d U n - a u d i t e d U n - a u d i t e d A u d i t e d Q1 Q2 November January Q3 April Full Year October Annual Report 2021-22 | Investor Relations | 101 S N O I T A L E R R O T S E V N I 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 12.5% 15.0% 15.0% 35.0% 35.0% 2017-18 2018-19 2019-20* 2020-21 2021-22 * In addition to Cash, 10% Stock Dividend was declared in 2019-20 102 | Investor Relations | Annual Report 2021-22 I N V E S T O R R E L A T I O N S Stock Market Performance Dhaka Stock Exchange (DSE) Particulars 30 June 2022 30 June 2021 30 June 2020 30 June 2019 30 June 2018 Share Price- Dhaka Share Price- AIM BDT 154.6 BDT 177.3 BDT 69.2 BDT 83.5 BDT 93.9 GBP 0.705 GBP 0.860 GBP 0.355 GBP 0.389 GBP 0.510 Market Capitalization- Dhaka Price BDT 68.9bn BDT 79.1bn BDT 28.1bn BDT 33.9bn BDT 38.1bn EPS- Taka P/E Ratio (Dhaka Price) Dividend (Cash) Stock Dividend 11.48 13.5 35% (Proposed) -- 11.49 15.4 35% -- 7.88 8.8 15% 10% 7.48 11.2 15% - 6.25 15.0 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 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 ofﬁ cial 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: Annual Report 2021-22 | Investor Relations | 103 S N O I T A L E R R O T S E V N I 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 justiﬁ ed by the proﬁ ts of the company. The directors may, before recommending any dividend, set aside out of the proﬁ ts 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 proﬁ ts or may employ such proﬁ ts in the business of the company or otherwise as they think ﬁ t. The law further provides that dividends are to be paid out of proﬁ ts of the year or any other undistributed proﬁ ts. 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 ﬁ ve 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 proﬁ ts as dividend and the plan for utilization of the undistributed proﬁ ts 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 proﬁ t earned in any year. According to the said provision if a company retains or transfers more than 70% of its after tax proﬁ t 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 ﬁ nancial performance. However, the Board may also declare interim dividend based on periodic ﬁ nancial 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 ﬁ nancial 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: - Company’s current net earnings, accumulated distributable reserves/surplus and availability of free cash ﬂ ow - Potential growth opportunities and investment requirements; assessment of beneﬁ ts 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 ﬁ nance - 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 104 | Investor Relations | Annual Report 2021-22 I N V E S T O R R E L A T I O N S 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 ﬁ nancial year. Such decisions are based on the results of the audited ﬁ nancial statements. The dividend recommendations made by the directors are notiﬁ ed 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 ﬁ xed by the Company for the entitlement of such dividend. Policy Review and Amendment Apart from mandatory revision, modiﬁ cation 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 ﬁ t. 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. Annual Report 2021-22 | Investor Relations | 105 S N O I T A L E R R O T S E V N I Snapshots of 45th Annual General Meeting (Held on virtual platform) The 45th Annual General Meeting of the shareholders of Beximco Pharmaceuticals Limited held under virtual platform on December 23, 2021. 106 | Investor Relations | Annual Report 2021-22 F F i i n n a a n n c c i i a a l l S S t t a a t t e e m m e e n n t t s s Financial Statements Beximco Pharma and Its Subsidiaries (Consolidated) For the Year ended June 30, 2022 Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 107 s t n e m e t a t S l a i c n a n i F 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 ﬁ nancial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the Consolidated Statement of Financial Position as at June 30, 2022 and Consolidated Statement of Proﬁ t 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 signiﬁ cant 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. The newly acquired subsidiary Synovia Pharma PLC used to follow January-December accounting year. However Synovia Pharma prepared audited ﬁ nancial statements for the six month ending June 30, 2022 to align its accounting year with that of the parent company. We have audited the Financial statements of Beximco Pharma API Limited and expressed our unmodiﬁ ed opinion on those statements vide our report dated October 27, 2022. The Financial Statements of Nuvista Pharma Limited and Synovia Pharma PLC were audited by A. Qasem & Co. Chartered Accountants, who through their report dated October 13, 2022 and October 12,2022 respectively, have also expressed unmodiﬁ ed opinion on those statements. In our opinion, the accompanying consolidated ﬁ nancial statements of the Company give a true and fair view of the consolidated ﬁ nancial position of the Company as at June 30, 2022, and of its consolidated ﬁ nancial performance and its consolidated cash ﬂ ows 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 Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the ﬁ nancial statements in Bangladesh, and we have fulﬁ lled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufﬁ cient 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 signiﬁ cance in our audit of the consolidated ﬁ nancial statements of the current period. These matters were addressed in the context of our audit of the consolidated ﬁ nancial 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. 41,760,330,727 as at June 30, 2022. 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. Classiﬁ cation 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 signiﬁ cant 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 identiﬁ ed as a key audit matter due to the signiﬁ cance of this balance to the consolidated ﬁ nancial statements and that there is signiﬁ cant measurement uncertainty involved in this valuation. See Note No. 4 to the consolidated ﬁ nancial 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 classiﬁ cation 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 reclassiﬁ cation from capital work in progress to ready for use, with the date of the act of completion of the work 108 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Risk Our response to the risk Valuation of Inventory The inventory of Tk. 10,405,295,079 as at June 30, 2022 was held at different locations across the country. We veriﬁ ed 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 signiﬁ cant to the consolidated Financial Statements and there is measurement uncertainty involved in this valuation, the valuation of inventory was signiﬁ cant to our audit. See Note No. 8 to the consolidated ﬁ nancial 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. Our audit procedures amongst others included the following: We focused on identiﬁ cation of related parties and disclosure of related party transactions in accordance with relevant accounting standards. • Evaluated the design and tested the operating effectiveness of controls over identiﬁ cation and disclosure of related party transactions. • Evaluated the transactions among the related parties and tested material accounts balances. • Evaluated the disclosures in the Consolidated ﬁ nancial 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 ﬁ nancial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report. Our opinion on the consolidated ﬁ nancial 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 ﬁ nancial statements, our responsibility is to read the other information identiﬁ ed above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated ﬁ nancial 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 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 109 s t n e m e t a t S l a i c n a n i F 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 ﬁ nancial 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 ﬁ nancial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated ﬁ nancial 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 ﬁ nancial reporting process. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated ﬁ nancial 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 inﬂ uence the economic decisions of users taken on the basis of these consolidated ﬁ nancial 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 ﬁ nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁ cient 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 signiﬁ cant 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 ﬁ nancial 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 ﬁ nancial statements, including the disclosures, and whether the consolidated ﬁ nancial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufﬁ cient appropriate audit evidence regarding the ﬁ nancial information of the entities or business activities within the Company to express an opinion on the consolidated ﬁ nancial 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 signiﬁ cant audit ﬁ ndings, including any signiﬁ cant deﬁ ciencies 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 signiﬁ cance in the audit of the consolidated ﬁ nancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest beneﬁ ts of such communication. 110 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994, The Securities and Exchange Rules 2020 and relevant notiﬁ cations 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 veriﬁ cation 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 Proﬁ t or Loss and Other Comprehensive Income (Proﬁ t & 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 27, 2022 M. J. ABEDIN & CO. Chartered Accountants Reg No. N/A Hasan Mahmood FCA Enrollment No: 0564 DVC:N/A Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 111 s t n e m e t a t S l a i c n a n i F Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Financial Position As at June 30, 2022 ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Right-of-use Assets Intangible Assets Deferred Tax Asset Goodwill Other Investments Current Assets Inventories Spares & Supplies Accounts Receivable Loans, Advances and Deposits Advance Income Tax 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, Pension 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, 2022 4 4(a) 5 6 7 8 9 10 11 12 13 47,728,777,460 41,760,330,727 618,891,376 4,562,988,045 88,640,228 674,570,185 23,356,899 18,419,258,282 10,405,295,079 718,797,256 3,142,817,194 2,787,039,904 196,635,028 1,168,673,821 66,148,035,742 40,600,497,817 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,116,896,688 20,531,723 27,747,885,918 Amount in Taka June 30, 2021 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 7,142,863,477 661,722,724 2,873,844,874 2,416,948,496 - 675,466,608 52,246,084,026 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 14 4,035,506,641 334,306,627 44,636,004,458 37,364,864,829 15 16 17 18 19 20 21 8,776,099,208 3,454,188,843 2,785,072,661 2,536,837,704 12,735,932,076 6,850,550,319 2,065,962,471 2,465,039,217 1,166,881,586 88,049,428 99,449,055 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 66,148,035,742 52,246,084,026 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A 112 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Proﬁ t or Loss and Other Comprehensive Income For the Year ended June 30, 2022 Notes July 2021- June 2022 July 2020- June 2021 Amount in Taka Net Revenue Cost of Goods Sold Gross Proﬁ t Operating Expenses Administrative Expenses Selling, Marketing and Distribution Expenses Proﬁ t from Operations Other Income Finance Cost Proﬁ t Before Contribution to WPPF & Welfare Funds Contribution to WPPF & Welfare Funds Proﬁ t Before Tax Income Tax Expenses Current Tax Deferred Tax Income/ (Expense) Proﬁ t After Tax Proﬁ t/(Loss) Attributable to: Owners of the Company Non-Controlling Interest 22 23 26 27 28 29 30 34,669,172,052 (18,854,919,733) 29,493,573,869 (15,570,071,581) 15,814,252,319 13,923,502,288 (8,912,966,372) (1,163,406,037) (7,749,560,335) (7,272,794,940) (896,648,965) (6,376,145,975) 6,901,285,947 6,650,707,348 1,146,717,162 (1,001,835,523) 7,046,167,586 (359,222,585) 6,686,945,001 (1,688,316,804) (1,191,180,488) (497,136,316) 4,998,628,197 908,275,284 (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 5,123,136,712 (124,508,515) 4,998,628,197 5,127,693,711 38,056,021 5,165,749,732 Other Comprehensive Income/(Loss) Total Comprehensive Income 31 6,764,517 5,005,392,714 12,840,831 5,178,590,563 Total Comprehensive Income Attributable to: Owners of the Company Non-Controlling Interest 5,129,901,229 (124,508,515) 5,005,392,714 5,140,534,542 38,056,021 5,178,590,563 Earnings Per Share (EPS) 32 11.48 11.49 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 113 s t n e m e t a t S l a i c n a n i F Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Changes in Equity For the Year Ended June 30, 2022 As at June 30, 2022 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, 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 NCI at the date of acquisition-SPP Total Comprehensive Income: Proﬁ t 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 Balance as on June 30, 2022 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3,857,134,718 3,857,134,718 - 5,123,136,712 5,123,136,712 (124,508,515) 4,998,628,197 6,764,517 - 6,764,517 - 6,764,517 - (1,561,392,312) (1,561,392,312) (31,426,189) (1,592,818,501) (6,358,656) 1,430,698 - - 6,358,656 - - 1,430,698 - - - 1,430,698 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,116,896,688 20,531,723 27,747,885,918 40,600,497,817 4,035,506,641 44,636,004,458 Net Asset Value (NAV) Per Share (Note-33) Tk. 91.01 As at June 30, 2021 Balance as on July 01, 2020 Total Comprehensive Income: Proﬁ t for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Stock Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets Balance as on June 30, 2021 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 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 - - - 405,556,440 - - - - - - - - - - - - - - - - - - - - - - - - (7,180,526) 3,237,721 - 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) (405,556,440) 7,180,526 - - - 3,237,721 - - - - - 3,237,721 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 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A 114 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Notes July 2021-June 2022 July 2020-June 2021 Amount in Taka Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Cash Flows For the Year ended June 30, 2022 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 Investment in Subsidiary Disposal of Property, Plant and Equipment Dividend Received Net Cash Used in Investing Activities Cash Flows from Financing Activities : 36,125,979,245 (28,565,273,290) 7,560,705,955 (1,002,350,838) 3,055,358 (1,347,234,025) 5,214,176,450 (2,931,097,076) (8,400,918) (4,766,635,704) 24,063,832 2,015,444 30,833,168,257 (22,500,770,314) 8,332,397,943 (861,452,888) 2,377,286 (1,450,058,386) 6,023,263,955 (2,520,682,923) (37,734,793) - 32,831,171 940,700 (7,680,054,422) (2,524,645,845) 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 2,730,647,211 1,507,676,748 (1,623,098,759) 2,615,225,200 149,347,228 973,963,625 45,362,968 1,168,673,821 (504,636,764) (2,375,180,232) (578,351,025) (3,458,168,021) 40,450,089 635,016,519 - 675,466,608 11.69 13.50 * Includes Cash and Cash Equivalents of Synovia Pharma PLC at the date of acquisition. The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 115 s t n e m e t a t S l a i c n a n i F Beximco Pharmaceuticals Limited and its Subsidiaries Notes to the Financial Statements As at and for the year ended June 30, 2022 1. The Reporting Entity 1.1 About the Company Beximco Pharmaceuticals Limited (Beximco Pharma/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 ﬂ uids and got enlisted with the Alternative Investment Market (AIM) of the London Stock Exchange through issuance of Global Depository Receipts (GDRs). Shares of the Company are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh. Its GDRs are traded in AIM of the London Stock Exchange. In 2018, BPL acquired 85.22% shares of Nuvista Pharma Limited (Nuvista Pharma/NPL)– a non-listed pharmaceutical company in Bangladesh specializing in hormones and steroid drugs. In October 2021, BPL acquired majority stake (54.6%) in Sanoﬁ Bangladesh Limited from Sanoﬁ Group represented through May & Baker Limited and Fisons Limited. The company was subsequently renamed as Synovia Pharma PLC (Synovia Pharma/SPP). Bangladesh Government holds 45.4% shares of the company represented through Bangladesh Chemical Industries Corporation (20%) and Ministry of Industries (25.4%). SPP is a non-listed pharmaceutical company based in Bangladesh. The corporate headquarters of Beximco Pharma is based in 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 certiﬁ ed by leading global regulatory authorities including United States Food and Drug Administration (USFDA). 1.2 The Subsidiaries Nuvista Pharma Limited (NPL) Nuvista Pharma, formerly Organon (Bangladesh) Ltd., was a subsidiary of Netherlands based Organon International. 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 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. In 2011, the company through amendments to its memorandum of association converted it into a public limited company. In 2018, Beximco Pharma acquired majority shareholdings in Nuvista Pharma and thus it became the immediate and ultimate parent of the company. Synovia Pharma PLC (SPP) Synovia Pharma PLC (formerly Sanoﬁ Bangladesh Limited) had been a part of Sanoﬁ S.A., a global biopharmaceutical company focused on human health. The company has been operating in Bangladesh since 1958 as part of the British chemical company, May & Baker. Following series of mergers, it was renamed as Sanoﬁ Bangladesh Limited in 2013 before being acquired by Beximco Pharma in 2021 and subsequently renamed as Synovia Pharma PLC. SPP’s state-of-the-art manufacturing facilities, including a PIC/S certiﬁ able manufacturing facility for the leading antibiotic, cephalosporin, are spread over c25 acres of land, located at Tongi, Gazipur. SPP has over 900 employees and produces approximately 100 branded generic products predominantly for the local market. The company also imports ﬁ nished formulation products for distribution and sale in Bangladesh. Beximco Pharma API Limited (BPAL) Beximco Pharma API Limited was formed with an intend to set up a facility at API Industrial Park to manufacture Active Pharmaceutical Ingredients (APIs) for domestic and international markets. It is a private limited company 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 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 and 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-ﬁ brinolytic, anti-infective, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold predominantly in the domestic market. SPP produces generic pharmaceutical products and has a strong presence in cardiology, diabetes, oncology, dermatology and CNS. SPP also imports certain global brands of Sanoﬁ including vaccines, insulins and chemotherapy drugs for sale in Bangladesh market. NPL and SPP also provide contract manufacturing services. 116 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 2. Basis of Preparation of Financial Statements 2.1 Statement of Compliance The ﬁ nancial 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 ﬁ nancial statements have been prepared on Historical Cost basis except for certain Property, Plant and Equipment measured at revalued amount. The Tangible and Intangible Assets and Liabilities of the acquired subsidiaries have 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 ﬂ ow statement has been prepared on cash basis. 2.3 Reporting Period Accounting year of Beximco Pharmaceuticals Limited (BPL) and its subsidiaries Nuvista Pharma Limited (NPL) and Beximco Pharma API Limited (BPAL) begins on July 1 and ends on June 30. Synovia Pharma PLC (SPP) used to follow January-December accounting year. Following acquisition by Beximco Pharma, the accounting year of SPP has been changed to July-June which shall come into effect from July 1, 2022. BPL acquired SPP on October 1, 2021 and as such consolidated ﬁ nancial statements covers nine months’ ﬁ nancials (October 1, 2021 to June 30, 2022) for SPP. Synovia Pharma carried out full year’s audit (January-December 2021) to comply with the regulatory requirement and facilitate tax submissions. The company had audited its ﬁ nancial statements at the date of acquisition covering January-September 2021 and subsequently carried out a half-yearly audit (January-June 2022) to align its accounting year with that of Beximco Pharma. Financials for the nine months has been consolidated based on the aforementioned audited statements. 2.4 Comparative Information The current reporting being the ﬁ rst year of acquisition of the subsidiary Synovia Pharma, no comparable prior year information for SPP is relevant for reporting in the consolidated ﬁ nancial statements. 3. Signiﬁ cant Accounting Policies 3.1 Basis of Consolidation The ﬁ nancial statements of the subsidiaries have been consolidated with those of Beximco Pharmaceuticals Limited in accordance with IFRS 10: Consolidated Financial Statements. The Company acquired 85.22% and 54.6% shares of the issued and paid up capital of Nuvista Pharma and Synovia Pharma, respectively. These ownership interests are adequate enough to establish control over NPL & SPP and thus BPL meets the conditions as stated in IFRS 10: Consolidated Financial Statements to consider NPL and SPP as subsidiaries. Beximco Pharma API Limited is fully owned by BPL and thus it 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 among the Company and its 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 have been measured at fair value of the net assets of the acquired companies in proportion to the shares held by the non-controlling shareholders. Proﬁ t or Loss and Other Comprehensive Income subsequent to the acquisitions have been allocated to the owners of the Company and to the NCIs in proportion to their respective share and disclosed in the ﬁ nancial 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 identiﬁ able net assets over the acquisition-date fair value of the identiﬁ able net assets of the subsidiary. 3.5 Amortization of Intangible Asset Fair value of identiﬁ able intangible assets of subsidiaries at acquisition are amortized over a period of 25 years. Other intangible assets are amortized over their estimated useful period. 3.6 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 Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 117 s t n e m e t a t S l a i c n a n i F 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 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. Beximco Pharma’s share of accumulated loss of BioCare as on 30 June 2022 (includes provisional estimates for six months since its audited ﬁ nancials as on December 31,2021) exceeds its investment by an amount of Tk. 33,458,283. Beximco Pharma has not recognized this loss 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. 3.7. Basis of Estimation of Fair Values at Acquisition The Company engaged PricewaterhouseCoopers Bangladesh Pvt. Ltd. to provide estimates of the Fair Value for the tangible assets and identiﬁ ed intangible assets of Synovia Pharma on acquisition date as per criteria set out in International Financial Reporting Standards-IFRS 3: Business Combination. Management has considered the report of the said independent ﬁ rm in allocating the total consideration paid for the acquisition among various classes of acquired assets in compliance of the requirement of IFRS 3. Tangible ﬁ xed assets other than land were valued using the depreciated replacement cost method. Depreciated replacement costs reﬂ ect adjustments for physical deterioration as well as functional and economic obsolescence. Land was valued at prevailing market price taking into consideration factors like location, size and industrial or other use, availability of infrastructure etc., among others. The intangible assets relating to Developed Products has been valued using the Multi-period Excess Earnings Method. 3.8. Acquisition related Costs All advisory, accounting, valuation, legal or other professional/consulting fees and general administrative costs related to the acquisition of business has been accounted for as expense. 118 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 4. Property Plant and Equipment As on June 30, 2022 Amount in Taka Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Ofﬁ ce Equipment Total Property Plant & Equipment Right-of-use Assets Total Cost As on July 01, 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 SPP’s assets (at cost) 1,010,047,500 952,490,521 1,099,807,163 126,346,894 Fair value adjustment (SPP) 2,391,000,000 48,000,000 98,000,000 - 153,183,693 402,456,266 91,358,324 - - - 282,370,491 3,471,062,569 140,256,509 3,611,319,078 - 2,537,000,000 - 2,537,000,000 51,054,159 698,052,442 360,555,764 1,058,608,206 7,254,054,359 10,253,459,155 96,202,893 24,214,260 96,105,405 17,724,036,072 - 17,724,036,072 - - - - 130,522,554 - 130,522,554 (130,522,554) - (53,601,745) (642,221) (30,934,830) (2,511,295) (87,690,091) (22,039,905) (109,729,996) Cost as on June 30, 2022 7,468,877,096 16,536,450,073 28,647,334,497 666,140,804 932,927,311 1,080,834,236 55,332,564,017 868,647,224 56,201,211,241 Additions Transferred in & Capitalized Transferred from Right-of-use Assets Disposal during the Year - - - - Accumulated Depreciation As on July 01, 2021 Accumulated balance (SPP) Depreciation Charged Depreciation (Fair value adjustment) Transferred from Right-of-use Assets Adjustment for Assets disposed off Accumulated Depreciation as on June 30, 2022 - - - - - - - 2,371,058,300 7,507,387,594 176,748,894 650,960,136 449,486,989 11,155,641,913 200,512,561 11,356,154,474 747,700,772 783,105,286 87,622,496 - 221,388,943 1,839,817,497 97,088,324 1,936,905,821 283,608,206 948,712,422 25,952,697 39,151,781 63,846,658 1,361,271,764 78,737,938 1,440,009,702 4,883,364 17,002,060 - - - - 104,543,070 - - 21,885,424 - 21,885,424 104,543,070 (104,543,070) - (46,032,684) (606,333) (27,101,816) (2,503,373) (76,244,206) (22,039,905) (98,284,111) 3,407,250,642 9,210,174,678 289,717,754 767,553,171 732,219,217 14,406,915,462 249,755,848 14,656,671,310 - - Net Book Value June 30, 2022 7,468,877,096 13,129,199,431 19,437,159,819 376,423,050 165,374,140 348,615,019 40,925,648,555 618,891,376 41,544,539,931 Capital Work in Progress Carrying Value as on June 30, 2022 Carrying Value as on June 30, 2021 4 (a). Right-of-use Assets At Cost Accumulated Depreciation 4 (b). Capital Work in Progress 834,682,172 - 834,682,172 41,760,330,727 618,891,376 42,379,222,103 36,211,375,594 319,884,849 36,531,260,443 June 30, 2022 868,647,224 (249,755,848) 618,891,376 Amount in Taka June 30, 2021 520,397,410 (200,512,561) 319,884,849 The unit 3 manufacturing facility of Beximco Pharma has been completed and now in ready-to-use status. The commercial operation has partially commenced during the reporting period. The plant will be fully commercially operational once the product/technology transfer, which is being done in phases, are complete. The Capital Work in Progress has been transferred to respective assets under Property, Plant and Equipment catagory and related deprecation has been charged accordingly. Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 119 s t n e m e t a t S l a i c n a n i F 5. Intangible Assets Particulars Cost As on July 01, 2021 Cost of SPP’s Assets at acquisition date Acquisition date Fair value of SPP’s Intangibles Addition / Transferred in & Capitalized Marketing Rights, Brand &Product development ERP & Software Trade Name & Trade Marks Total Amount in Taka 1,514,157,713 192,609,453 68,870,674 1,775,637,840 104,124,112 77,035,587 3,228,000,000 - 113,729,912 13,566,031 - - - 181,159,699 3,228,000,000 127,295,943 As on June 30, 2022 4,960,011,737 283,211,071 68,870,674 5,312,093,482 Amortization As on July 01, 2021 354,671,532 33,420,732 6,851,767 394,944,031 Accumulated balance of SPP at acquisition date 77,545,575 71,500,897 - 149,046,472 Amortized During the year As on June 30, 2022 179,731,237 21,736,630 3,647,067 205,114,934 611,948,344 126,658,259 10,498,834 749,105,437 Balance as on June 30, 2022 4,348,063,393 156,552,812 58,371,840 4,562,988,045 Balance as on June 30, 2021 1,159,486,181 159,188,721 62,018,907 1,380,693,809 6. Goodwill Acquisition of 85.22% stake in Nuvista Pharma Limited Acquisition of 54.6% stake in Synovia Pharma PLC.- Note (a) and (b) (a) Value of Goodwill from acquisition of SPP: Purchase Consideration* Share of Non-controlling Interest at acquisition date Less: Acquisition date Fair Value of Identiﬁ able Net Assets Amount in Taka June 30, 2022 June 30, 2021 546,691,213 127,878,972 546,691,213 - 674,570,185 546,691,213 4,766,635,704 3,857,134,718 8,623,770,422 (8,495,891,450) 127,878,972 *Purchase consideration includes share transfer fee of Taka 70,442,892 paid to the Registrar of Joint Stock Companies and Firms. 120 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 (b) Acquisition date Fair Value of Identiﬁ able Net Assets is arrived at as follows: F i n a n c i a l S t a t e m e n t s Assets: Land Buildings Plant and Machinery Furniture and Fixture Ofﬁ ce Equipment Capital Work in Progress Intangible Assets Right-of-Use Assets Deferred Tax Assets Current Assets Total Assets (A) Less Liabilities: Pension Fund Gratuity Fund Lease Liabilities Current Liabilities Total Liabilities (B) Fair Value of Identiﬁ able Net Assets (A-B) 7. Other Investments Datails Bangladesh Export Import Co. Ltd. Central Depository Bangladesh Ltd. (CDBL) Amount in Taka 3,401,047,500 252,789,749 414,701,877 38,724,398 60,981,548 117,321,809 3,260,113,227 43,168,185 37,074,071 4,444,075,602 12,069,997,966 5,334,216 105,759,453 33,716,290 3,429,296,557 3,574,106,516 8,495,891,450 June 30, 2022 June 30,2021 Number of Shares Value Number of Shares 167,854 21,787,449 571,182 1,569,450 23,356,899 167,854 571,182 Value 15,022,932 1,569,450 16,592,382 a. The shares of Bangladesh Export Import Co. Ltd. are listed with Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. as on June 30, 2022 was Tk. 129.80 (June 30, 2021: Tk.89.50). The fair value gain of Tk. 6,764,517 has been accounted for, as Other Comprehensive Income following IFRS 9:Financial Instruments. b. 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. Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 121 s t n e m e t a t S l a i c n a n i F 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 10. Accounts Receivable This consists of : Trade Receivable Other Receivable Amount in Taka June 30, 2022 June 30, 2021 2,486,292,696 1,299,682,358 684,808,447 340,572,871 4,751,533,955 3,234,868,408 1,171,926,025 1,134,669,306 98,605,393 82,051,648 37,709,095 82,829,613 79,764,262 22,520,999 1,092,367,820 947,955,660 10,405,295,079 7,142,863,477 558,966,964 553,939,317 20,974,250 138,856,042 16,841,919 90,941,488 718,797,256 661,722,724 2,963,143,615 2,725,572,936 179,673,579 148,271,938 3,142,817,194 2,873,844,874 Accounts Receivable is reported net of provision for bad debts of Tk. 28,354,845. It includes an amount of Tk. 1,016,268,270, equivalent USD 11,821,851 (June 30, 2021: Tk. 840,777,271, USD 9,985,468) 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. 1,020,929,771 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.1,270,079,144 on March 31, 2022. No amount was due from the directors, managing agent, managers and other ofﬁ cers of the company and any of them severally or jointly with any other person. Aging of Trade Receivable : Amount due within 6 months Amount due for 6 months & above Amount in Taka 2,841,350,572 2,658,627,358 121,793,043 66,945,578 2,963,143,615 2,725,572,936 122 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 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 Advance for Expenses including Capital Expenditure Bank Guarantee Margin Salary Advance / Loan Rent Advance Vehicle Advance Raw & Packing Material Prepaid Insurance Overseas Liaison Ofﬁ ce Others Amount in Taka June 30, 2022 June 30, 2021 259,313,897 619,340,481 37,673,863 249,538,566 488,144,349 25,777,861 158,893,927 167,929,080 2,133,040 2,650,135 654,535,757 423,936,402 18,826,990 93,892,900 38,745,324 225,975,541 449,393,148 53,234,921 67,005,418 20,831,185 186,444,554 34,886,833 148,885,137 460,856,879 36,030,920 58,207,996 108,074,697 112,828,599 2,787,039,904 2,416,948,496 No amount was due from the directors, managing agent, managers and other ofﬁ cers of the company and any of them severally or jointly with any other person, except as stated above. 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 & SND 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 279,615,091 164,562,735 736,688,901 152,369,829 470,765,642 40,138,231 1,168,673,821 675,466,608 10,000,000,000 10,000,000,000 5,000,000,000 5,000,000,000 15,000,000,000 15,000,000,000 517,757,500 517,757,500 3,570,939,420 3,570,939,420 5,951,250 Ordinary Shares issued in exchange of Shares of Beximco Infusions Ltd. 59,512,500 59,512,500 31,291,147 Ordinary Shares issued on conversion of Preference Shares 312,911,470 312,911,470 4,461,120,890 4,461,120,890 Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 123 s t n e m e t a t S l a i c n a n i F 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 14. Non-Controlling Interest a. Nuvista Pharma Non-Controlling Interest (Opening ) Proportionate proﬁ t/(loss) Less: Cash Dividend b. Synovia Pharma Non-Controlling Interest (Opening ) Non-controlling Interest at the date of acquisition Proportionate proﬁ t/(loss) Less: Cash Dividend June 30, 2022 June 30, 2021 Number of Shares % of Share Capital Number of Shares % of Share Capital 9,058,888 9,080,095 116,305,973 134,444,956 43,246,139 84,386,054 97,533,003 86,501,937 311,667,133 446,112,089 2.03 2.04 26.07 30.14 9.69 18.92 21.86 19.39 69.86 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 2.03 2.04 26.11 30.18 11.64 18.92 19.68 19.58 69.82 100.00 446,112,089 100.00 Amount in Taka June 30, 2022 June 30, 2021 334,306,627 302,329,006 39,701,872 38,056,021 (6,946,744) (6,078,400) 367,061,755 334,306,627 - 3,857,134,718 (164,210,387) (24,479,445) 3,668,444,886 - - - - - 4,035,506,641 334,306,627 124 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 15. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Project Loan - ODDO BHF Aktiengesellshaft, Frankfurt, Germany Term Loan- Agrani Bank Lease Liability Term Loan-Dhaka Bank Lease Liability This consists of as follows: Within one year More than one year 16. Liability for Gratuity, Pension and WPPF & Welfare Funds Gratuity Payable Pension Payable Workers Proﬁ t 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 Standard Chartered Bank Citibank Amount in Taka June 30, 2022 June 30, 2021 670,863,306 972,696,465 2,313,748,864 - 456,761,583 234,020,629 12,815,090 - 3,454,188,843 1,206,717,094 160,579,032 456,761,583 617,340,615 113,976,268 234,020,629 347,996,897 1,618,961,997 1,322,046,817 5,334,216 - 1,160,776,448 1,013,210,949 2,785,072,661 2,335,257,766 4,817,103,014 3,077,454,947 409,733,361 1,014,765,029 492,341,234 644,508,608 461,766,072 24,913,289 184,741 510,141,234 254,745,071 166,074,847 - - 6,850,550,319 5,023,181,128 18. Long Term Borrowings-Current Maturity This consists of as follows: Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany 938,924,362 1,287,429,745 Term Loan- Agrani Bank Lease Liability Term Loan-Dhaka Bank 960,000,000 160,579,032 6,459,077 - 113,976,268 - 2,065,962,471 1,401,406,013 Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 125 s t n e m e t a t S l a i c n a n i F 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’ Proﬁ t Participation and Welfare Funds -(current year) June 30, 2022 1,359,479,518 889,344,958 110,410,808 105,803,933 Amount in Taka June 30, 2021 769,204,884 800,770,806 298,396,187 96,676,303 2,465,039,217 1,965,048,180 807,659,001 359,222,585 1,166,881,586 296,650,070 322,749,293 619,399,363 21. Dividend Payable / Unclaimed Dividend The Dividend Payable/Unclaimed dividend as on June 30, 2022 includes Tk. 45,080,943 relating to BPL’s dividend for 2020-21 which has been paid but not yet claimed. 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) Finished Goods available Cost of Physician Sample transferred to Sample Stock Finished Goods (Closing) July 2021-June 2022 July 2020-June 2021 31,889,033,479 2,685,096,151 95,042,422 26,331,187,249 3,124,001,260 38,385,360 34,669,172,052 29,493,573,869 355,079,579 14,971,042,279 4,908,572,206 20,234,694,064 (684,808,447) 19,549,885,617 1,803,930,326 295,801,260 21,649,617,203 (308,404,774) (2,486,292,696) 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) 18,854,919,733 15,570,071,581 126 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 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 Certiﬁ cation 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 2021- June 2022 July 2020- June 2021 Amount in Taka 4,688,041,185 16,305,066,467 (6,022,065,373) 14,971,042,279 4,114,208,490 12,446,241,540 (4,452,367,327) 12,108,082,703 1,978,710,523 622,009,889 56,200,557 9,220,153 6,264,023 49,824,288 9,902,080 343,682,103 7,835,447 59,582,841 12,513,215 30,697,402 351,013,808 13,789,240 8,645,632 1,296,771,715 35,053,987 16,855,303 4,908,572,206 641,656,781 39,745,136 88,998,284 6,898,815 35,297,173 9,891,702 12,985,629 3,095,000 10,205,953 27,457,139 31,890,657 57,302,224 41,725,709 2,574,565 7,195,687 75,477,019 2,899,082 24,031,656 44,077,826 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 1,163,406,037 896,648,965 Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 127 s t n e m e t a t S l a i c n a n i F 27. Selling, Marketing and Distribution Expenses July 2021- June 2022 July 2020- June 2021 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 Clinincal Studies and Research Pharmacovigilance Literature and News Letter Registration & Renewals Export Insurance, Freight and C&F Expenses Distribution Commission Delivery Expense Depreciation & Amortization Security Expenses Bad Debts Other Expenses 28. Other Income Interest Income Dividend Royalty Cash Incentive on Export Exchange Rate Fluctuation Gain / (Loss) Vaccine Distribution Fee Forfeited PF refund Technical know how Fee Proﬁ t/(Loss) on Sale of Fixed Assets Miscellaneous Income 3,055,058,047 118,272,362 42,930,956 736,860,051 76,900,893 53,377,818 84,600,340 100,790,126 21,294,622 81,286,610 128,432,491 44,275,975 398,744,374 9,078,882 81,466,273 306,616,741 192,982,223 12,646,614 181,219,118 8,875,134 45,368,047 6,946,764 20,146,600 273,594,407 136,542,443 208,693,377 527,996,777 448,553,137 294,761,326 19,313,099 3,451,016 28,483,692 7,749,560,335 3,055,358 2,015,444 112,139,232 262,883,466 50,115,273 619,259,365 210,657 79,552,390 12,617,947 4,868,030 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 1,146,717,162 908,275,284 128 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 29. Finance Cost Interest on Bank Borrowings Interest on Lease Liability Interest on Loan from PF, WPPF & Welfare Fund Bank and Other Charges 30. Income Tax Expenses This consists of as follows : (a) Current Tax (b) Deferred Tax Expense / (Income) Deferred Tax Expense is arrived at as follows : i. Beximco Pharma Property, Plant & Equipment ( Difference in book value & Tax base) Deferred liability (Gratuity) Provision for 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 proﬁ t or Loss and Other Comprehensive Income ii. Nuvista Pharma Property, Plant & Equipment ( Difference in book value & Tax base) Deferred liability (Gratuity) Provision for Bad Debts Temporary Difference Tax rate Deferred tax liabilities Deferred tax on revaluation surplus Deferred tax liabilities at end of the year Deferred tax liabilities at beginning of the year Deferred Tax charged to proﬁ t or Loss and Other Comprehensive Income iii.Synovia Pharma Property, Plant & Equipment ( Difference in book value & Tax base) Deferred Liability (Gratuity & Pension) Provision for Bad Debts & Allowance for Inventory Carried forward loss Temporary Difference Tax rate Deferred Tax Liability/(Asset) at end of the period Deferred Tax Liability/(Asset) at beginning of the period Deferred tax charged to proﬁ t or loss and other comprehensive income July 2021- June 2022 July 2020- June 2021 Amount in Taka 678,750,473 47,069,776 199,775,709 76,239,565 1,001,835,523 578,560,598 36,342,986 190,970,118 52,811,444 858,685,146 1,191,180,488 497,136,316 1,386,678,310 (174,879,849) 1,688,316,804 1,211,798,461 12,125,676,008 (1,327,433,137) (10,647,866) 10,787,595,005 22.5% 2,427,208,876 1,871,974,397 555,234,479 1,430,698 556,665,177 445,608,322 (173,210,822) (2,460,877) 269,936,623 30.0% 80,980,987 28,647,841 109,628,828 117,591,532 (7,962,704) 206,672,792 (123,652,254) (141,975,425) (263,373,215) (322,328,102) 27.5% (88,640,228) (37,074,071) (51,566,157) 497,136,316 9,501,989,318 (1,173,933,757) (8,169,353) 8,319,886,208 22.5% 1,871,974,397 2,035,744,789 (163,770,392) 3,237,721 (160,532,671) 446,476,889 (148,113,060) (1,884,860) 296,478,969 30.0% 88,943,691 28,647,841 117,591,532 131,938,710 (14,347,178) - - - - - - - - - (174,879,849) Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 129 s t n e m e t a t S l a i c n a n i F 31. Other Comprehensive Income - Unrealized Gain/(Loss) Fair Value Gain/(Loss) on Investment in Listed Shares 32. Earnings Per Share (EPS) July 2021- June 2022 July 2020- June 2021 Amount in Taka 6,764,517 6,764,517 12,840,831 12,840,831 (a) Earnings attributable to the Owners of the Company (b) Weighted average number of Shares outstanding during the year 5,123,136,712 446,112,089 5,127,693,711 446,112,089 Earnings Per Share (EPS) 11.48 11.49 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 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) Amount in Taka June 30, 2022 June 30, 2021 66,148,035,742 52,246,084,026 (21,512,031,284) (14,881,219,197) (4,035,506,641) (334,306,627) 40,600,497,817 37,030,558,202 446,112,089 446,112,089 91.01 83.01 July 2021- June 2022 July 2020- June 2021 Amount in Taka 5,214,176,450 446,112,089 11.69 6,023,263,955 446,112,089 13.50 130 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 35. Reconciliation of Net Proﬁ t with Cash Flows from Operating Activities July 2021- June 2022 July 2020- June 2021 Amount in Taka Proﬁ t after Tax 4,998,628,197 5,165,749,732 Adjustment to reconcile net proﬁ t to net cash provided by operating activities : (a) Non-cash/ Non-operating Items : 2,466,830,964 1,132,466,191 Depreciation Amortization Gratuity & WPPF Deferred Tax Exchange rate ﬂ uctuation (Gain) / Loss on Foreign Currency Bank Loan Dividend (Proﬁ t) / Loss on sale of Fixed Assets Effect of exchange rate changes on Cash and Cash Equivalents (b) 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 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 36. Related Party Disclosures 1,461,895,126 205,114,934 341,842,995 497,136,316 20,837,952 (2,015,444) (12,617,947) (45,362,968) (2,251,282,711) (2,508,003,069) (57,074,532) 352,253,797 (32,996,258) 10,093,080 - (23,613,650) 131,115,200 (123,057,279) 5,214,176,450 1,016,483,738 97,703,610 191,204,332 (174,879,849) 6,857,486 (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 a. Following transactions were carried out with related parties in the normal course of business on arms length basis: Name of Related Party Nature of Transactions Value of Transaction Balance at year end I & I Services Ltd. Delivery of Products Distribution Commission 31,726,502,984 527,996,777 1,020,929,771 b. Related party transaction between the Company and its subsidiaries have been eliminated in the consolidation. 37. 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 2021-22. The dividend proposal is subject to shareholders’ approval at the forthcoming Annual General Meeting. b. Board of Directors of Nuvista Pharma has declared cash dividend @ 40%, i.e. Tk. 4.00 per share for the year 2021-22. The proposed dividend is subject to approval of the shareholders of NPL in the forthcoming Annual General Meeting. Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Dhaka October 27, 2022 Annual Report 2021-22 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 131 s s t t n n e e m m e e t t a a t t S S l l a a i i c c n n a a n n i i F F Beximco Pharmaceuticals Limited (Stand-alone) For the Year ended June 30, 2022 132 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Independent Auditor’s Report To the Shareholders of Beximco Pharmaceuticals Limited Report on the Audit of the Financial Statements Opinion We have audited the ﬁ nancial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the Statement of Financial Position as at 30 June 2022 and Statement of Proﬁ t 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 ﬁ nancial statements, including a summary of signiﬁ cant accounting policies. In our opinion, the accompanying ﬁ nancial statements of the Company give a true and fair view of the ﬁ nancial position of the Company as at 30 June 2022, and of its ﬁ nancial performance and its cash ﬂ ows 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 Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the ﬁ nancial statements in Bangladesh, and we have fulﬁ lled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufﬁ cient 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 signiﬁ cance in our audit of the ﬁ nancial statements of the current period. These matters were addressed in the context of our audit of the ﬁ nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Risk Our response to the risk Valuation of Property, Plant and Equipment (PPE) The carrying value of the PPE was Tk. 35,879,081,450 as at 30 June, 2022. 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. Classiﬁ cation 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 signiﬁ cant 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 identiﬁ ed as a key audit matter due to the signiﬁ cance of this balance to the ﬁ nancial statements and that there is signiﬁ cant measurement uncertainty involved in this valuation. See Note No. 4 to the ﬁ nancial 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 classiﬁ cation 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 reclassiﬁ cation from capital work in progress to ready for use, with the date of the act of completion of the work. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 133 s t n e m e t a t S l a i c n a n i F Risk Our response to the risk Valuation of Inventory The inventory of Tk. 8,802,040,026 as at 30 June, 2022 was held at different locations across the country. 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 signiﬁ cant to the Financial Statements and there is measurement uncertainty involved in this valuation, the valuation of inventory was signiﬁ cant to our audit. See Note No. 9 to the ﬁ nancial statements We veriﬁ ed the appropriateness of management’s assumptions applied in calculating the value of the inventory by: • 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 signiﬁ cant 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 difﬁ culty in assessing the outcome. The assessment of whether or not a liability should be recognized involves judgement from management. The Company also provided corporate guarantees to ﬁ nancial institutions in connection with working capital credit facilities predominantly for its subsidiaries. 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 conﬁ rmations in this regard from external counsel. We also validated the completeness and appropriateness of the related disclosures in Note No. 49 of the ﬁ nancial 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 ﬁ nancial statements. We focused on identiﬁ cation 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 identiﬁ cation and disclosure of related party transactions. • Evaluated the transactions among the related parties and tested material accounts balances. •Evaluated the disclosures compliance with IAS 24. in the ﬁ nancial statements in 134 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Other Information Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the ﬁ nancial 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 ﬁ nancial 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 ﬁ nancial statements, our responsibility is to read the other information identiﬁ ed above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the ﬁ nancial 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 ﬁ nancial 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 ﬁ nancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁ nancial 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 ﬁ nancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁ nancial 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 inﬂ uence the economic decisions of users taken on the basis of these ﬁ nancial 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 ﬁ nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁ cient 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 signiﬁ cant 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 ﬁ nancial 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 ﬁ nancial statements, including the disclosures, and whether the ﬁ nancial 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 signiﬁ cant audit ﬁ ndings, including any signiﬁ cant deﬁ ciencies in internal control that we identify during our audit. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 135 s t n e m e t a t S l a i c n a n i F 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 signiﬁ cance in the audit of the ﬁ nancial 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 beneﬁ ts 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 notiﬁ cations 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 veriﬁ cation 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 Proﬁ t or Loss and Other Comprehensive Income (Proﬁ t & 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 27, 2022 M. J. ABEDIN & CO. Chartered Accountants Reg No. N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS295927 136 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Amount in Taka June 30, 2021 37,713,988,877 34,501,205,124 319,884,849 701,794,902 2,145,185,900 29,325,720 16,592,382 Notes June 30, 2022 44,161,617,726 35,879,081,450 565,076,673 752,955,380 6,911,821,604 29,325,720 23,356,899 Beximco Pharmaceuticals Limited Statement of Financial Position As at June 30, 2022 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 4 4 (d) 5 6 7 8 9 10 11 12 13 14 15 4(c) 16 17 18 19 20 21 22 23 24 15,533,009,363 13,150,677,229 8,802,040,026 664,709,483 2,739,772,443 2,510,263,322 816,224,089 6,693,894,021 622,433,282 2,831,869,241 2,354,576,102 647,904,583 59,694,627,089 50,864,666,106 40,315,738,301 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,116,896,688 20,531,723 27,463,126,402 8,311,592,939 3,401,537,415 2,482,846,648 2,427,208,876 11,067,295,849 6,363,686,217 2,039,694,209 1,908,464,970 576,413,875 87,370,715 91,665,863 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 5,265,836,197 1,206,717,094 2,187,144,706 1,871,974,397 8,891,238,154 4,857,106,281 1,401,406,013 1,814,013,039 480,501,854 117,769,532 220,441,435 59,694,627,089 50,864,666,106 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS295927 Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 137 s t n e m e t a t S l a i c n a n i F Beximco Pharmaceuticals Limited Statement of Proﬁ t or Loss and Other Comprehensive Income For the Year ended June 30, 2022 Net Sales Revenue Cost of Goods Sold Gross Proﬁ t Operating Expenses Administrative Expenses Selling, Marketing and Distribution Expenses Proﬁ t from Operations Other Income Finance Cost Proﬁ t Before Contribution to WPPF & Welfare Funds Contribution to WPPF & Welfare Funds Proﬁ t Before Tax Income Tax Expenses Current Tax Deferred Tax Income/ (Expense) Proﬁ t after Tax Other Comprehensive Income/(Loss) Total Comprehensive Income Earnings Per Share (EPS) Notes July 2021 - June 2022 July 2020 - June 2021 Amount in Taka 25 26 29 30 31 32 33 30,220,731,648 26,949,351,606 (16,507,965,726) (14,347,382,048) 13,712,765,922 12,601,969,558 (7,118,937,516) (6,532,965,326) (881,516,329) (792,228,907) (6,237,421,187) (5,740,736,419) 6,593,828,406 6,069,004,232 1,456,174,446 (976,632,093) 7,073,370,759 1,108,048,355 (841,875,806) 6,335,176,781 (336,827,179) (301,675,085) 6,736,543,580 6,033,501,696 34 (1,575,199,937) (1,090,012,960) (1,018,534,760) (1,250,545,631) (556,665,177) 5,161,343,643 6,764,517 160,532,671 4,943,488,736 12,840,831 5,168,108,160 4,956,329,567 11.57 11.08 35 36 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS295927 138 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Beximco Pharmaceuticals Limited Statement of Changes in Equity For the Year ended June 30, 2022 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/ (Loss) Retained Earnings Total Amount in Taka Balance as on July 01, 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 Total Comprehensive Income : Proﬁ t 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 - - - - - - - - - - - - - - - - - - - - - - - (6,358,656) 1,430,698 - 5,161,343,643 5,161,343,643 6,764,517 - 6,764,517 - - - (1,561,392,312) (1,561,392,312) 6,358,656 - - 1,430,698 Balance as on June 30, 2022 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,116,896,688 20,531,723 27,463,126,402 40,315,738,301 Net Asset Value (NAV) Per Share (Note-37) 90.37 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 Total Comprehensive Income: Proﬁ t for the Year Other Comprehensive Income/(Loss) Transactions with the Sharehold Cash Dividend Stock Dividend 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) (7,180,526) 3,237,721 - - (405,556,440) 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 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS295927 Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 139 s t n e m e t a t S l a i c n a n i F Beximco Pharmaceuticals Limited Statement of Cash Flows For the Year ended June 30, 2022 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 Investment in Subsidiary Disposal of Property, Plant and Equipment Dividend Received Net Cash Used in Investing Activities Cash Flows from Financing Activities : Notes July 2021 - June 2022 July 2020 - June 2021 Amount in Taka 31,670,123,381 (24,518,915,859) 7,151,207,522 (976,632,093) 699,570 (1,147,310,332) 5,027,964,667 (2,828,073,814) (7,875,918) (4,766,635,704) 13,163,510 71,517,955 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 (7,517,903,971) (2,418,019,099) Net Increase /(Decrease) in Long Term Borrowings Net Increase/(Decrease) in Short Term Borrowings Dividend Paid Net Cash (Used in) / from Financing Activities Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Effect of Exchange Rate Changes on Cash and Cash Equivalents Cash and Cash Equivalents at End of Year Net Operating Cash Flow Per Share 39 13 38 2,698,107,035 1,506,579,936 (1,591,791,129) 2,612,895,842 122,956,538 647,904,583 45,362,968 816,224,089 (462,155,826) (2,130,424,341) (572,357,927) (3,164,938,094) 31,959,742 615,944,841 - 647,904,583 11.27 12.59 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 27, 2022 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Per our report of even date Dhaka October 27, 2022 M.J. Abedin & Co. Chartered Accountants Reg No :N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS295927 140 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Beximco Pharmaceuticals Limited Notes to the Financial Statements As at and for the year ended June 30, 2022 1. Reporting Entity 1.1. About the Company Beximco Pharmaceuticals Limited (Beximco Pharma/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 ﬂ uids 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 (Nuvista Pharma/NPL) – a non-listed pharmaceutical company in Bangladesh specializing in hormones and steroid drugs. In October 2021, BPL acquired majority stake (54.6%) in Sanoﬁ Bangladesh Limited from Sanoﬁ Group represented through May & Baker Limited and Fisons Limited. The company was subsequently renamed as Synovia Pharma PLC (Synovia Pharma/SPP). Bangladesh Government holds 45.4% shares of the company represented through Bangladesh Chemical Industries Corporation (20%) and Ministry of Industries (25.4%). SPP is a non-listed pharmaceutical company based in Bangladesh. Shares of Beximco Pharma are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh and its GDRs are traded in AIM of the London Stock Exchange. The registered ofﬁ ce 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 certiﬁ ed 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 and 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 ﬁ nancial 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 Reporting Framework and Compliance thereof The Financial Reporting Act, 2015 (FRA) was enacted in 2015. The Financial Reporting Council (FRC) under the FRA has been formed in 2017 and has since then adopted International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) as the applicable Financial Reporting Standards with effect from 2 November 2020. Accordingly, the ﬁ nancial statements have been prepared in accordance with IFRSs (including IASs) and the Companies Act, 1994. The title and format of these ﬁ nancial statements follow the requirements of IFRSs which are to some extent different from the requirement of the Companies Act, 1994. However, such differences are not material and in the view of management, IFRS format gives a better presentation to the shareholders. The Company also complied with the requirements of following laws and regulations from various Government bodies: Bangladesh Securities and Exchange Rules, 2020; The Income Tax Ordinance, 1984 with subsequent amendments; The Income Tax Rules, 1984 with subsequent amendments; The Value Added Tax and Supplementary Duty Act, 2012 with subsequent amendments; The Value Added Tax and Supplementary Duty Rules, 2016 with subsequent amendments; The Labour Law, 2006 with subsequent amendments in 2013; and Others as applicable. 2.3 Basis of Measurement The ﬁ nancial 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 ﬂ ow statement prepared on cash basis. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 141 s t n e m e t a t S l a i c n a n i F 2.4 Presentation of Financial Statements The presentation of the ﬁ nancial statements is in accordance with the guidelines provided by IAS 1: Presentation of Financial Statements. The ﬁ nancial statements comprises of: (a) Statement of Financial Position as at the end of the year June 30, 2022; (b) Statement of Proﬁ t or Loss and Other Comprehensive Income for the year ended June 30, 2022; (c) Statement of Changes in Equity for the year ended June 30, 2022; (d) Statement of Cash Flows for the year ended June 30, 2022; and (e) Notes, comprising summary of signiﬁ cant accounting policies and explanatory information. 2.5. Reporting Period and Comparative Information The Financial statements cover 12 months’ period starting from July 1, 2021 to June 30, 2022. The last audited ﬁ nancial statements were prepared for the year ending June 30, 2021. Figures for earlier year have been re-arranged wherever considered necessary to ensure better comparability with the current year. 2.6. Authorization for issue The ﬁ nancial statements have been authorized for issue by the Board of Directors October 27, 2022. 2.7. Functional and Presentation Currency The ﬁ nancial statements are prepared and presented in Bangladesh Currency (Taka), which is the Company’s functional currency. All ﬁ nancial information presented has been rounded off to the nearest Taka except where indicated otherwise. 2.8. Use of Estimates and Judgements The preparation of ﬁ nancial statements in conformity with the IFRSs including IASs require management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and for contingent assets and liabilities that require disclosure, during and at the date of the ﬁ nancial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. In particular, the key areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most signiﬁ cant effect on the amounts recognized in the ﬁ nancial statements include depreciation, inventory valuation, accrued expenses, others payable, capitalization of assets and deferred liability for gratuity. 3. Signiﬁ cant Accounting Policies The accounting principles and policies in respect of material items of ﬁ nancial statements set out below have been applied consistently to all periods presented in these ﬁ nancial 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 fulﬁ lls the performance obligations in contract with the customers. It usually occurs when customers take possession of the products or goods are delivered at destination speciﬁ ed 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 2% - 10% 4% - 15% Plant and Machinery 7.5% - 10% Furniture & Fixtures 20% Transport & Vehicle 10% - 15% Ofﬁ ce Equipment 142 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 3.2.4. Retirements and Disposals On disposal of ﬁ xed assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal is reﬂ ected 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 ﬁ nance expense. 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 proﬁ t 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 ﬁ xed assets where the software supports a signiﬁ cant business system and the expenditure leads to the creation of a durable asset. Also, the research and development expenditures that are deﬁ nite to yield beneﬁ t to the Company are capitalized. 3.5. Financial Instruments A ﬁ nancial instrument is any contract that gives rise to a ﬁ nancial asset of one entity and a ﬁ nancial liability or equity instrument of another entity. Financial Instruments comprise Financial Assets and Financial Liabilities which are recognized, classiﬁ ed, 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 ﬁ nancial 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 ﬁ nancial asset when, and only when the contractual rights or probabilities of receiving the cash ﬂ ows from the asset expire or it transfer the rights to receive the contractual cash ﬂ ows on the ﬁ nancial asset in a transaction in which substantially all the risk and rewards of ownership of the ﬁ nancial 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, ﬁ rstly against any provision available and then to the proﬁ t and loss account. Subsequent recoveries of amounts previously provided for are credited to the proﬁ t 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 insigniﬁ cant 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 ﬁ nancial liability when its contractual obligations are discharged or cancelled or expire. Finance liabilities include payable for expenses, liability for capital expenditure and other current liabilities. 3.6. Impairment 3.6.1. Financial Assets Accounts receivable and other receivables are assessed at each reporting date to determine whether there is any objective evidence of impairment. Financial assets are impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effects on the estimated future cash ﬂ ows of that asset, that can be estimated reliably. Objective evidence that ﬁ nancial assets are impaired can include default or delinquency by a debtor, indications that a debtor or issuer will enter bankruptcy etc. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 143 s t n e m e t a t S l a i c n a n i F 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 proﬁ t 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 ﬁ nancial position when the Company has a legal or constructive obligation as a result of a past event. It is probable that an outﬂ ow of economic beneﬁ ts 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 ﬁ nancial position. Where the effect of time value of money is material, the amount of provision is measured at the present value of the expenditures expected to be required to settle the obligation. 3.9. Income Tax Expense Income tax expense comprises of current and deferred tax. Income tax expense is recognized in the Statement of Proﬁ t 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 qualiﬁ es as a “Publicly Traded Company” and as such the applicable Tax Rate is 22.5%. However, applicable Tax Rate for proﬁ t generated from export is 12%. 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 proﬁ t or loss. A deferred tax asset is recognized to the extent that it is probable that future taxable proﬁ t 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 beneﬁ t 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 Incentives on Export Cash Incentives on Export is recognized when all conditions as laid down in the relevant incentive scheme including receipt of export remittances are satisﬁ ed and the right to claim the incentive is established. Royalty Royalty income is accounted for on accrual basis on fulﬁ llment of the terms laid down in the agreement between the contracting parties. Vaccine Distribution Fee Vaccine Distribution fee is recognized on delivery of Vaccine to the designated government warehouses across the country, fulﬁ lling 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 qualiﬁ es for capitalization under IAS 23: Borrowing Costs. 144 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 3.12. Employee Beneﬁ ts The Company maintains both deﬁ ned contribution plan and deﬁ ned beneﬁ t 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 beneﬁ ts in compliance with the provisions of IAS 19: Employee Beneﬁ ts. The cost of employee beneﬁ ts is charged off as revenue expenditure in the period to which the contributions relate. The Company’s employee beneﬁ ts include the following: 3.12.1. Deﬁ ned Contribution Plan (Provident Fund) The Company has a recognized provident fund scheme (Deﬁ ned 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 deﬁ ned contribution plan as an expense when an employee has rendered services in exchange for such contribution. The legal and constructive obligation is limited to the amount it agrees to contribute to the fund. 3.12.2. Deﬁ ned Beneﬁ t Plan (Gratuity) The Company has gratuity scheme duly approved by the National Board of Revenue. Though no valuation was done to quantify actuarial liabilities as per the IAS 19: Employee Beneﬁ ts, such valuation is not likely to yield a result signiﬁ cantly different from the current provision. 3.12.3. Contribution to Workers’ Proﬁ t Participation and Welfare Funds (WPPF) This represents 5% of net proﬁ t before tax contributed by the Company as per provisions of the Bangladesh Labor (amendment) Act 2013 and is payable to workers as deﬁ ned in the said law. 3.12.4. Short-term Employee Beneﬁ ts Short-term Employee Beneﬁ ts include salaries, bonuses, leave encashment, etc. Obligations for such beneﬁ ts 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 ﬁ nancial 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 reﬂ ected in the ﬁ nancial statements. Events after reporting period that are not adjusting events are disclosed in the notes when material. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 145 s t n e m e t a t S l a i c n a n i F 4 . Property, Plant and Equipment As on June 30, 2022 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Ofﬁ ce Equipment Total Property Plant & Equipment Right-of-use Assets Total Amont in Taka Cost As on July 01, 2021 Additions Transferred from Right-of-use Asset Transferred in & Capitalized Disposal during the Year 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 - - - - 146,850,857 400,709,986 87,932,769 - 41,517,297 677,010,909 336,416,764 1,013,427,673 - - - 130,522,554 - 130,522,554 (130,522,554) - 7,221,661,130 10,160,501,871 95,401,914 - 93,739,367 17,571,304,282 - (47,847,910) (642,221) (19,244,469) - (67,734,600) - - 17,571,304,282 (67,734,600) Cost as on June 30, 2022 3,343,741,442 15,170,175,656 26,056,751,981 483,024,431 776,181,432 758,555,571 46,588,430,513 726,291,620 47,314,722,133 Accumulated Depreciation As on July 01, 2021 Depreciation Charged Transferred from Right-of-use Asset Adjustment for Assets disposed off Accumulated Depreciation as on June 30, 2022 - - - - - 2,298,845,077 6,859,650,317 148,109,673 520,577,823 423,208,721 10,250,391,611 200,512,561 10,450,904,172 259,835,485 849,632,109 18,331,605 28,180,786 36,570,893 1,192,550,878 65,245,456 1,257,796,334 - - - - 104,543,070 (40,278,852) (606,333) (15,822,875) - - 104,543,070 (104,543,070) - (56,708,060) - (56,708,060) 2,558,680,562 7,669,003,574 165,834,945 637,478,804 459,779,614 11,490,777,499 161,214,947 11,651,992,446 Net Book Value June 30, 2022 3,343,741,442 12,611,495,094 18,387,748,407 317,189,486 138,702,628 298,775,957 35,097,653,014 565,076,673 35,662,729,687 Capital Work in Progress 4 (a) Carrying Value as on June 30, 2022 As on June 30, 2021 781,428,436 - 781,428,436 35,879,081,450 565,076,673 36,444,158,123 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Ofﬁ ce Equipment Total Property Plant & Equipment Right-of-use Assets Total Cost As on July 01, 2020 Additions Transferred in & Capitalized Disposal during the Year 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 - - - 3,694,494 119,455,263 18,597,471 298,207,642 965,316,704 1,558,986 - - 2,848,259 1,267,931,591 34,888,865 176,636,093 130,204,714 306,840,807 - (36,523,171) (896,228) (21,101,899) (253,700) (58,774,998) - - 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 6,272,267,313 133,699,879 498,744,471 394,798,590 9,416,167,354 153,092,527 9,569,259,881 182,187,976 602,682,764 14,673,982 36,081,381 28,519,516 864,145,619 47,420,034 911,565,653 - (15,299,760) (264,188) (14,248,029) (109,385) (29,921,362) - (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) Carrying Value as on June 30, 2021 16,474,269,367 - 16,474,269,367 34,501,205,124 319,884,849 34,821,089,973 146 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 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 Ofﬁ ce Equipment Intangible Assets Closing Balance 4 (b). Capital Work in Progress June 30, 2022 16,474,269,367 1,992,193,263 18,466,462,630 17,685,034,194 7,221,661,130 10,160,501,871 95,401,914 93,739,367 113,729,912 Amount in Taka June 30, 2021 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 2,848,259 165,102,296 781,428,436 16,474,269,367 The unit 3 manufacturing facility has been completed and now in ready-to-use status. The commercial operation has partially commenced during the reporting period. The plant will be fully commercially operational once the product/technology transfer, which is being done in phases, are complete. The Capital Work in Progress has been transferred to respective assets under Property, Plant and Equipment catagory and related deprecation has been charged accordingly. 4 (c). Revaluation Surplus Opening Balance Adjustment for depreciation on revalued assets Adjustment for Deferred Tax on revalued assets 4 (d). Right-of-use Assets At Cost Accumulated Depreciation 1,121,824,646 1,125,767,451 (6,358,656) 1,430,698 (7,180,526) 3,237,721 1,116,896,688 1,121,824,646 726,291,620 (161,214,947) 565,076,673 520,397,410 (200,512,561) 319,884,849 Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 147 s t n e m e t a t S l a i c n a n i F 5. Intangible Assets Particulars Marketing Rights & Product Development ERP and Software Amount in Taka Total Cost As on July 01, 2021 Addition / Transferred in & Capitalized As on June 30, 2022 Amortization As on July 01, 2021 Amortized During the year As on June 30, 2022 813,157,713 192,609,453 1,005,767,166 113,729,912 7,875,918 121,605,830 926,887,625 200,485,371 1,127,372,996 270,551,532 33,420,732 303,972,264 50,421,480 20,023,872 70,445,352 320,973,012 53,444,604 374,417,616 Carrying Value as on June 30, 2022 605,914,613 147,040,767 752,955,380 Carrying Value as on June 30, 2021 542,606,181 159,188,721 701,794,902 6. Investment in Subsidiaries June 30, 2022 June 30, 2021 Nuvista Pharma Ltd. Beximco Pharma API Ltd. Synovia Pharma PLC 2,125,186,000 2,125,186,000 19,999,900 19,999,900 4,766,635,704 - 6,911,821,604 2,145,185,900 a. The Company holds 10,013,474 shares representing 85.22% of the Paid Up Capital of Nuvista Pharma Ltd (NPL) while Beximco Pharma API Limited is a fully owned subsidiary. b. During the current ﬁ nancial year the Company acquired 1,963,241 shares representing 54.607% of the Paid Up Capital of Sanoﬁ Bangladesh Limited subsequently renamed as Synovia Pharma PLC (SPP) . c. Investment in subsidiary is accounted for using cost method as per IAS 27: Separate Financial Statements, in preparing ﬁ nancial 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. (BPL) 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 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 Bangladesh Export Import Co. Ltd. Central Depository Bangladesh Ltd. (CDBL) Amount in Taka June 30,2022 June 30,2021 Number of Shares Value Number of Shares Value 167,854 571,182 21,787,449 1,569,450 23,356,899 167,854 15,022,932 571,182 1,569,450 16,592,382 a. The shares of Bangladesh Export Import Co. Ltd. are listed with Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. as on June 30, 2022 was Tk. 129.80 (June 30, 2021: Tk.89.50). The fair value gain of Tk. 6,764,517 has been accounted for as Other Comprehensive Income following IFRS 9:Financial Instruments. b. 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. 148 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 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 F i n a n c i a l S t a t e m e n t s June 30, 2022 1,754,268,113 610,859,802 4,226,671,044 1,089,128,002 73,772,507 82,051,648 37,709,095 927,579,815 8,802,040,026 Amount in Taka June 30, 2021 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 6,693,894,021 543,228,366 20,974,250 100,506,867 664,709,483 545,385,920 16,841,919 60,205,443 622,433,282 2,475,650,151 264,122,292 2,657,960,805 173,908,436 2,739,772,443 2,831,869,241 Accounts Receivable is reported net of provision for bad debts of Tk. 10,647,866. It includes an amount of Tk. 1,016,268,270, euivalent USD 11,821,851 (June 30, 2021: Tk. 840,777,271, equivalent USD 9,985,468) 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. 1,020,929,770 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.1,270,079,144 on March 31, 2022. Additionally Tk 26,540,378, Tk 36,929,751 and Tk 729,830 is receivable from its subsidiary companies Nuvista Pharma Ltd., Synovia Pharma PLC and Beximco Pharma API Ltd., respectively. No amount was due from the directors, managing agent, managers and other ofﬁ cers of the company and any of them severally or jointly with any other person. Aging of Trade Receivable: Amount due within 6 months Amount due for 6 months & above 2,354,175,678 121,474,473 Amount in Taka 2,593,603,554 64,357,251 2,475,650,151 2,657,960,805 Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 149 s t n e m e t a t S l a i c n a n i F 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 Advance for Expenses including Capital Expenditure Bank Guarantee Margin Advance against Salary Rent Advance Vehicle Advance Raw & Packing Material Prepaid Insurance Overseas Liaison Ofﬁ ce Others June 30, 2022 259,313,897 563,667,556 37,673,863 105,873,150 2,133,040 611,453,338 18,826,990 91,220,656 38,745,324 154,557,458 439,514,602 36,757,137 67,005,418 83,520,893 Amount in Taka June 30, 2021 249,538,566 463,448,047 25,777,861 164,445,896 2,650,135 422,347,443 20,831,185 173,756,608 34,886,833 148,885,137 460,856,879 30,641,155 58,207,996 98,302,361 2,510,263,322 2,354,576,102 a. The maximum amount due from the employees during the year was Tk. 179,077,115 on November 2021 b. No amount was due from the directors, managing agent, managers and other ofﬁ cers 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 : 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 279,392,725 164,391,788 536,831,364 - 816,224,089 443,374,564 40,138,231 647,904,583 10,000,000,000 10,000,000,000 5,000,000,000 5,000,000,000 15,000,000,000 15,000,000,000 517,757,500 517,757,500 3,570,939,420 3,570,939,420 59,512,500 312,911,470 59,512,500 312,911,470 4,461,120,890 4,461,120,890 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. 150 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 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, 2022 June 30, 2021 Number of Shares % of Share Capital Number of Shares % of Share Capital 9,058,888 9,080,095 116,305,973 134,444,956 43,246,139 84,386,054 97,533,003 86,501,937 311,667,133 446,112,089 2.03 2.04 26.07 30.14 9.69 18.92 21.86 19.39 69.86 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 2.03 2.04 26.11 30.18 11.64 18.92 19.68 19.58 69.82 100.00 446,112,089 100.00 Range of Shareholdings In number of shares June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Number of Shareholders % of Holding Number of Shareholders % of Holding Number of Shares % of Holding Number of Shares % of Holding 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 41,440 76.11% 10,587 19.45% 1,042 560 209 113 70 166 221 38 54,446 1.91% 1.03% 0.38% 0.21% 0.13% 0.30% 0.41% 0.07% 100% 38,764 14,059 1,098 567 185 84 76 150 227 38 70.16% 4,189,826 25.45% 16,225,509 7,545,996 8,156,027 5,180,289 3,949,472 3,225,851 12,079,301 1.99% 1.03% 0.33% 0.15% 0.14% 0.27% 0.41% 0.94% 3.64% 1.69% 1.89% 1.16% 0.88% 0.72% 2.71% 5,274,349 19,890,718 7,895,652 8,078,197 4,575,664 2,947,573 3,495,456 11,069,746 1.18% 4.46% 1.77% 1.81% 1.03% 0.66% 0.81% 2.48% 66,057,769 14.80% 66,828,442 14.98% 0.07% 319,502,049 71.57% 316,056,292 70.83% 55,248 100% 446,112,089 100% 446,112,089 100% 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 ﬁ scal year were: Dhaka Stock Exchange Chittagong Stock Exchange AIM Tk. Tk. GBP June 30, 2022 June 30, 2021 154.60 155.30 0.705 177.30 176.60 0.860 f. Option on unissued Ordinary Shares : There is no option on unissued shares as on June 30, 2022. 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. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 151 s t n e m e t a t S l a i c n a n i F 16. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Term Loan-Agrani Bank Lease Liability Amount in Taka June 30, 2022 June 30, 2021 670,863,306 2,313,748,864 416,925,245 3,401,537,415 972,696,465 - 234,020,629 1,206,717,094 a. Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany This represents part of the foreign currency loan of US$ 51.559 million and Euro 19.05 million taken for the expansion and diversiﬁ cation project 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 ﬁ rst charge by way of hypothecation against machinery and equipment procured under the pertinent loans. b. Term Loan-Agrani Bank The Company availed a Term Loan of Taka 3,750 million from Agrani Bank Limited, Principal Branch Dhaka to partly ﬁ nance the acquisition of Synovia Pharma PLC (formerly Sanoﬁ Bangladesh Limited). c. Lease Liability This consists of as follows: Within one year More than one year 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 Addition Interest Received during the year Paid to Employees during the year June 30, 2022 Amount in Taka June 30, 2021 140,769,847 416,925,245 557,695,092 113,976,268 234,020,629 347,996,897 1,213,933,757 215,143,980 1,429,077,737 (44,326,225) 1,384,751,512 40,000,000 60,000,000 1,644,600 101,644,600 (44,326,225 ) 57,318,375 1,056,920,260 221,588,892 1,278,509,152 (64,575,395) 1,213,933,757 - 40,000,000 - 40,000,000 - 40,000,000 Closing Balance 1,327,433,137 1,173,933,757 b. Workers Proﬁ t Participation and Welfare Fund 1,155,413,511 2,482,846,648 1,013,210,949 2,187,144,706 152 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 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 Amount in Taka June 30, 2022 June 30, 2021 1,871,974,397 2,035,744,789 556,665,177 (1,430,698) (160,532,671) (3,237,721) 2,427,208,876 1,871,974,397 4,817,103,014 409,733,361 492,341,234 644,508,608 3,077,454,947 1,014,765,029 510,141,234 254,745,071 6,363,686,217 4,857,106,281 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 of Tk 50 Crore. c. The loan from Janata Bank and AB Bank is secured by hypothecation of ﬁ xed and ﬂ oating assets of the Company excepting the machinery and equipment ﬁ nanced 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 raw and packing materials. The facility is secured by second charge by way of hypothecation on present and future ﬁ xed and ﬂ oating assets of the Company excepting the machinery and equipment ﬁ nanced by ODDO BHF Aktiengesellshaft, Frankfurt, Germany. 20. Long Term Borrowings-Current Maturity Project Loan - ODDO BHF Aktiengesellschaft, Frankfurt, Germany Term Loan-Agrani Bank Lease Liability 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’ Proﬁ t Participation and Welfare Funds - (current year) 23. Dividend Payable / Unclaimed Dividend June 30, 2022 June 30, 2021 938,924,362 960,000,000 140,769,847 2,039,694,209 1,287,429,745 - 113,976,268 1,401,406,013 807,139,594 886,263,961 110,410,808 104,650,607 622,523,948 797,569,927 298,396,187 95,522,977 1,908,464,970 1,814,013,039 239,586,696 336,827,179 576,413,875 178,826,769 301,675,085 480,501,854 The Dividend Payable/Unclaimed dividend as on June 30, 2022 includes Tk. 45,080,943 relating to year 2020-21 which has been paid but not yet claimed. The remaining balance relates to dividend for prior years unclaimed to date. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 153 s t n e m e t a t S l a i c n a n i F 24. Income Tax Payable Opening Balance Provision for current year Short provision for prior years Income Tax Paid 25. Net Sales Revenue Domestic Sales Export Sales June 30, 2022 220,441,435 914,346,139 104,188,621 1,238,976,195 (1,147,310,332) 91,665,863 Amount in Taka June 30, 2021 263,148,692 1,250,545,631 - 1,513,694,323 (1,293,252,888) 220,441,435 July 2021 - June 2022 July 2020 - June 2021 27,553,566,457 2,667,165,191 30,220,731,648 23,825,350,346 3,124,001,260 26,949,351,606 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 Unit July 2021 - June 2022 July 2020 - June 2021 Quantity 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 Million pcs. Million pcs. Kg Liter 7,988.60 152.80 121,022 258,829 7,316.90 119.19 181,903 352,970 b. The value of Export Sales in equivalent US Dollar is 31,274,602 in 2021-22 as against US Dollar 37,106,411 in 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) Finished Goods Stock comprises 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 Total Value Unit Million pcs. Million pcs. Kg Taka 154 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 July 2021 - June 2022 July 2020 - June 2021 282,756,046 13,638,376,755 4,060,497,699 17,981,630,500 (610,859,802) 17,370,770,698 1,188,526,554 18,559,297,252 (297,063,413) (1,754,268,113) 16,507,965,726 249,838,762 11,428,162,801 3,446,781,489 15,124,783,052 (282,756,046) 14,842,027,006 972,564,349 15,814,591,355 (278,682,753) (1,188,526,554) 14,347,382,048 Quantity June 30, 2022 June 30, 2021 699.14 504.72 13.61 4,162 9.77 5,890 1,754,268,113 1,188,526,554 F i n a n c i a l S t a t e m e n t s 27. Materials Consumed This is made-up as follows : July 2021 - June 2022 July 2020 - June 2021 Amount in Taka Opening Stock Purchase Closing Stock 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 Certiﬁ cation and Regulatory Approvals Depreciation Security Expenses Other Expenses 4,173,915,422 14,854,032,886 (5,389,571,553) 13,638,376,755 3,915,389,246 11,686,688,977 (4,173,915,422) 11,428,162,801 1,484,594,001 432,152,866 40,024,639 5,687,728 6,264,023 39,995,731 3,314,819 303,847,832 7,835,447 30,189,536 11,175,180 249,432,471 248,709,658 11,097,180 8,645,632 1,138,305,681 27,415,344 11,809,931 4,060,497,699 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 a. Salary and Allowances include Company’s Contribution to provident fund amounting to Tk. 26,512,220 b. Repairs and Maintenance includes maintenance of ofﬁ ce, 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 471,393,956 26,468,207 71,324,489 5,265,798 27,053,843 8,227,022 4,404,963 2,100,000 6,309,245 22,413,302 25,736,959 57,302,224 41,725,709 1,951,304 4,598,977 44,022,872 2,203,200 18,858,186 40,156,073 881,516,329 439,818,179 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 a. Salary and Allowances include Company’s Contribution to provident fund amounting to Tk.9,472,426 b. Repairs and maintenance includes maintenance of ofﬁ ce, 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 of Tk. 5,045,526 ( in 2021 Tk. 1,015,336 ) e. Other expenses does not include any item exceeding 1% of total revenue. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 155 s t n e m e t a t S l a i c n a n i F 30. Selling, Marketing and Distribution Expenses Salary & Allowances Rent Repairs and Maintenance Travelling & Conveyance Entertainment Printing & Stationery Telephone, Cellphone, Internet & Postage Software & Licenses 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 July 2021 - June 2022 July 2020 - June 2021 Amount in Taka 2,278,252,477 2,111,616,016 113,663,438 33,389,342 597,509,675 71,270,659 41,365,401 61,501,956 27,436,672 20,261,165 66,845,465 112,510,501 31,351,563 376,783,020 835,673 45,784,860 261,461,875 141,621,329 12,646,614 153,209,813 5,639,310 25,219,903 6,946,764 20,146,600 234,061,330 135,590,529 208,027,169 527,996,777 448,553,137 145,913,133 19,313,099 2,875,000 9,436,938 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 a. Salary and Allowances include Company’s Contribution to provident fund amounting to Tk. 47,730,687 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 ofﬁ ce, 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. 6,237,421,187 5,740,736,419 156 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 31. Other Income Interest Income Dividend Royalty Distribution Commission Income Cash Incentive on Export Exchange Rate Fluctuation Gain / (Loss) Vaccine Distribution Fee Forfeited PF refund Technical know how fee Proﬁ t/(Loss) on Sale of Fixed Assets (Note 41) July 2021 -June 2022 July 2020 -June 2021 Amount in Taka 699,570 71,517,955 149,208,374 222,559,867 261,154,366 49,926,288 619,259,365 159,301 79,552,390 2,136,970 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 1,456,174,446 1,108,048,355 a. Vaccine Distribution Fee is received against the delivery of Oxford University/AstraZeneca SARS-CoV-2 vaccine, AZD1222 as per the tripartite agreement with the Government of Bangladesh (GOB) and the Serum Institute of India Pvt. Ltd (“SII”). Income from Vaccine Distribution Fee is reported net of related expenses. b. The Distribution Commission is received from the subsidiary companies Nuvista Pharma Limited and Synovia Pharma PLC for the delivery of products using BPL’s distribution network across the country as per the agreement entered into with the companies on an arm’s length basis. c. Government provides 10% incentives on net FOB value of export of ﬁ nished pharmaceutical formulation products subject to fulﬁ llment 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 ﬂ uctuation losses has been netted off with the exchange rate ﬂ uctuation gains. An exchange loss of Tk. 20,837,952 has arisen from the translation of outstanding foreign currency loan from ODDO BHF Aktiengesellshaft, Frankfurt, Germany translated at the exchange rate prevailing on the ﬁ nancial position date. 32. Finance Cost Interest on Bank Borrowings Interest on Lease Finance Interest on Loan from PF, WPPF & Welfare Fund Bank and Other Charges 33. Contribution to WPPF & Welfare Funds July 2021 -June 2022 July 2020 -June 2021 Amount in Taka 662,823,473 42,741,408 199,775,709 71,291,503 976,632,093 562,867,528 35,970,714 190,970,118 52,067,446 841,875,806 This represents statutory contribution by the Company as per Bangladesh Labour Act 2013. The amount is computed @ 5% of net proﬁ t before tax (after charging such contribution). Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 157 s t n e m e t a t S l a i c n a n i F 34. Income Tax Expenses This consists of as follows : a. Current Tax Tax provision for current Year Income tax short provision b. Deferred Tax Expense / (Income) Total Deferred Tax Expense / (Income) is arrived at as follows : Property, Plant & Equipment ( Difference in book value & Tax base) Deferred liability (Gratuity) Provision for 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 proﬁ t or Loss and Other Comprehensive Income July 2021 -June 2022 July 2020 - June 2021 Amount in Taka 914,346,139 104,188,621 1,250,545,631 - 1,018,534,760 1,250,545,631 556,665,177 (160,532,671) 1,575,199,937 1,090,012,960 12,125,676,008 9,501,989,318 (1,327,433,137) (1,173,933,757) (10,647,866) (8,169,353) 10,787,595,005 8,319,886,208 22.5% 2,427,208,876 1,871,974,397 555,234,479 1,430,698 556,665,177 22.5% 1,871,974,397 2,035,744,789 (163,770,392) 3,237,721 (160,532,671) Reconciliation of Effective tax rate Proﬁ t before Tax Applicable Tax Effect of lower rate on Export Proﬁ t excluding Cash Incentive Effect of lower rate on cash incentive Effect of lower rate on dividend income Effect of permanent disallowances Short provision of prior year Deferred tax impact Income Tax Expense a. Export Proﬁ ts are subject to 12% Tax rate 2021-22 2020-21 % Tk. % Tk. 6,736,543,580 22.50% 1,515,722,306 -0.97% -0.48% -0.03% 0.79% 1.55% 0.03% (65,093,147) (32,644,296) (1,787,949) 52,924,459 104,188,621 1,889,943 23.38% 1,575,199,937 22.50% -1.56% -0.64% -0.01% 0.86% 0.00% -3.07% 18.07% 6,033,501,696 1,357,537,882 (94,206,509) (38,718,129) (899,696) 51,624,342 - (185,324,930) 1,090,012,960 b. 10% Tax deductible at source on the cash incentives are treated as ﬁ nal tax liability on such income as per the Income Tax regulations. c. Dividend Income is taxable @ 20% 35. Other Comprehensive Income - Unrealized Gain/(Loss) Fair Value Gain/(Loss) on Investment in Listed Shares Amount in Taka July 2021 -June 2022 July 2020 -June 2021 6,764,517 6,764,517 12,840,831 12,840,831 158 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 36. Earnings Per Share (EPS) July 2021 -June 2022 July 2020 -June 2021 Amount in Taka a. Earnings attributable to the ordinary shareholders b. Weighted average number of shares outstanding during the year (Note 3.15) Earnings Per Share (EPS) 5,161,343,643 446,112,089 11.57 4,943,488,736 446,112,089 11.08 37. Net Asset Value (NAV) Per Share Total Assets Less Total Liabilities Net Assets Number of Shares Net Asset Value (NAV) Per Share 38. Net Operating Cash Flow Per Share (NOCFPS) Net Cash Generated from Operating Activities Number of Ordinary Shares Net Operating Cash Flows Per Share (NOCFPS) June 30, 2022 June 30, 2021 59,694,627,089 (19,378,888,788) 40,315,738,301 446,112,089 90.37 50,864,666,106 (14,157,074,351) 36,707,591,755 446,112,089 82.28 July 2021 -June 2022 July 2020 -June 2021 5,027,964,667 446,112,089 11.27 5,614,916,935 446,112,089 12.59 39. Reconciliation of Net Proﬁ t with Cash Flows from Operating Activities July 2021 - June 2022 July 2020 - June 2021 Proﬁ t after Tax 5,161,343,643 4,943,488,736 Adjustment to reconcile net proﬁ t to net cash provided by operating activities : Non-cash/ Non-operating items: Depreciation Amortization Gratuity & WPPF Deferred tax Exchange rate ﬂ uctuation (Gain)/loss Dividend Income (Proﬁ t) /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 2,082,428,864 1,257,796,334 70,445,352 295,701,942 556,665,177 20,837,952 (71,517,955) (2,136,970) (45,362,968) 956,977,173 911,565,653 67,131,843 171,840,123 (160,532,671) 6,857,486 (35,987,859) (3,897,402) - (2,215,807,840) (285,548,974) (2,108,146,005) (42,276,201) 92,096,798 (204,141,220) 79,522,339 95,912,021 (128,775,572) (1,165,455,856) 113,270,668 381,797,104 (9,536,230) 565,982,015 (128,899,418) (42,707,258) Net cash Generated from Operating Activities 5,027,964,667 5,614,916,935 Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 159 s t n e m e t a t S l a i c n a n i F 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 c. Synovia Pharma PLC Delivery of Products Distribution Commission Toll Manufacturing Cost of Services Royalty Dividend Distribution Commission Toll Manufacturing Cost of Goods & Services purchase Dividend Distribution Commission d. Beximco Pharma API Limited Short Term Advance The Companies are subject to common control from same source. 31,726,502,984 527,996,777 28,912,990 58,761,237 37,069,142 40,053,896 152,747,023 121,481,156 107,979,512 29,448,615 69,812,844 50,000 1,020,929,771 Dr. 26,540,378 Dr. 36,929,751 Dr. 729,830 Dr. 41. Particulars of Disposal of Property, Plant and Equipment The following assets were disposed off during the year ended June 30, 2022: Particulars of Assets Cost Accumulated Depreciation Written Down Value Sales Price Proﬁ t / (Loss) Mode of Disposal Plant & Machinery Furniture & Fixtures Transport & Vehicle Tk. 47,847,910 642,221 19,244,469 67,734,600 40,278,852 7,569,058 3,535,000 (4,034,058) 606,333 15,822,875 56,708,060 35,888 36,227 339 3,421,594 9,592,283 6,170,689 11,026,540 13,163,510 2,136,970 Negotiation Negotiation Negotiation 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 466,129,751 47,002,387 18,305,734 46,952,209 12,816,076 11,475,178 602,681,335 a. The above includes salary, allowances, and perquisites amounting Tk. 71,852,248 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. 160 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 43. Production Capacity and Utilization Item Unit Production Capacity Actual Production and Capacity Utilization June 2022 June 21 July 21 to June 22 July 20 to June 2021 Quantity Quantity Quantity % Quantity % Tablet, Capsule, Suppository & DPI Million Pcs 6,481.61 5,885.53 7,962.28 122.84% 7,093.47 120.52% Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin Million Pcs 148.74 102.70 151.39 101.78% 115.36 112.33% Active Pharmaceuticals Ingredient Matric Ton 22.00 22.00 4.48 20.36% 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, 2022. 45. Claim not Acknowledged as Debt There was no claim against the Company not acknowledged as debt as on June 30,2022. 46. Un-availed Credit Facilities There is no credit facilities available to the company under any contract, not availed of as on June 30, 2022 other than trade credit available in the ordinary course of business. 47. Foreign Currency Payments & Receipts : Payments : Materials, Spares and Capital Machinery Foreign Currency Loans, Fees & Expenses Receipts : Export Sales & Others Foreign Currency (Equivalent US$) 116,761,400 20,537,797 Taka 10,121,755,005 1,752,550,996 30,846,371 2,642,465,551 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 a. The Company has contingent liabilities aggregating Tk. 150,788,789 relating to disputed income tax claims for the year 1999, 2007, 2008 and 2010. The Company has ﬁ led Income Tax Reference cases with the High Court Division of the Supreme Court against these claims. b. There is also a disputed VAT claim aggregating Tk. 144,113,691 against the Company. The Company won the verdict of the Appellate Tribunal in its favor. The concerned authority has ﬁ led appeal to the honorable High Court against this verdict. Additionally, there are claims of custom duty aggregating Tk. 22,507,358 against the indemnity bonds issued by the Company in connection with import of certain plant and machinery. The company has ﬁ led writ petitions with the honorable High Court against these claims. Liability if any, arises on disposal of the cases, the Company shall provide for such liability in the year of ﬁ nal disposal. c. The Company has provided corporate guarantees to Dhaka Bank Limited for funded and non-funded working capital facilities upto Taka 105 Crore for Nuvista Pharma and Taka 100 Crore for Synovia Pharma. Both the companies are subsidiaries of Beximco Pharma. The liabilities are primarily secured by ﬁ xed and ﬂ oating assets of the respective companies. Additionally, Beximco Pharma also issued corporate guarantees to Agrani Bank Limited for non-funded facilities upto Taka 20 Crore and Taka 15 Crore in favour of Pharmatek Chemicals Limited and Shuktara Printers Limited,respectively- two exclusive material suppliers of the Company and its subsidiaries. Annual Report 2021-22 | Beximco Pharmaceuticals Limited (Stand-alone) | 161 s t n e m e t a t S l a i c n a n i F 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 2021-22. The dividend proposal is subject to shareholders’ approval at the forthcoming Annual General Meeting. b. Board of Directors of Nuvista Pharma Limited (NPL) has declared cash dividend @ 40%, i.e. Tk. 4.00 per share for the year 2021-22. The proposed dividend is subject to approval of the shareholders of NPL in the forthcoming Annual General Meeting. Excepting above, no circumstances have arisen since the date of Statement of Financial Position which would require adjustment to, or disclosure in, the ﬁ nancial statements or notes thereto. 51. Financial Risk Management The management of Company has overall responsibility for the establishment and oversight of the Company’s risk management framework. Risk management policies, procedures and systems are reviewed regularly to reﬂ ect changes in market conditions and the Company’s activities. The Company has exposure to the following risks for its use of ﬁ nancial instruments. Credit risk Liquidity risk Market risk 51.01 Credit Risk Credit risk is the risk of a ﬁ nancial loss to the Company if a customer or counterparty to a ﬁ nancial 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, 2022 substantial part of the receivables are those from its related company and subject to insigniﬁ cant credit risk. Risk exposures from other ﬁ nancial assets. i.e. Cash at bank and other external receivables are nominal. 51.02 Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its ﬁ nancial 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 sufﬁ cient 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 sufﬁ cient cash and cash equivalent to meet expected operational expenses including ﬁ nancial obligations through preparation of the cash ﬂ ow forecast with due consideration of time line of payment of the ﬁ nancial obligation and accordingly arrange for sufﬁ cient 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 ﬁ nancing. 51.03 Market Risk Market risk is the risk that any change in market prices such as foreign exchange rates and interest will affect the Company’s income or the value of its holdings ﬁ nancial 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 60% 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 proﬁ tability. 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 ﬁ nancing costs. With its strong ability to generate cash ﬂ ows 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 ﬂ oating 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 Dhaka October 27, 2022 Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer 162 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2021-22 F F i i n n a a n n c c i i a a l l S S t t a a t t e e m m e e n n t t s s Nuvista Pharma Limited For the Year ended June 30, 2022 Annual Report 2021-22 | Nuvista Pharma Limited | 163 s t n e m e t a t S l a i c n a n i F NUVISTA PHARMA LIMITED REPORT OF THE DIRECTORS 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 2022 together with the Auditor’s Report thereon. Operating Performance The global economy, while recovering from the devastating effect of the COVID-19 pandemic, faced another setback because of the Ukraine war. The eco-political instability affected Bangladesh as it did to many other countries around the world. The economy that was bouncing back from the onslaught of the pandemic was severely hindered with a surge in import cost, energy crisis, sharp depreciation of domestic currency and record high inﬂ ation. Amidst adverse macroeconomic conditions, Nuvista Pharma showed its resilience and delivered admirable results. Our sales revenue increased by 8.95% reaching to Taka 2,802.4 million in FY 2021-22 against Taka 2,572.1 million of preceding year. The Company earned a pre-tax proﬁ t of Taka 447.9 million registering 6.3% increase over Taka 421.5 million of FY 2020-21. Net proﬁ t after tax was Taka 310.83 million in FY 2021-22 with a moderate 3.72% growth over the comparable prior period. Earnings Per Share (EPS) and The Net Assets Value (NAV) also increased to Taka 26.45 and Taka 109.26 respectively. The Net Operating Cash Flows (NOCFPS) per share, however, decreased to Taka 20.70 (2020-21: Taka 34.76) due to increased investment in inventories to support inventory to maintain adequate stock level. During the year under review, we set a new milestone as we shipped our ﬁ rst ever export consignment to Yemen. This is a modest beginning towards our goal to widen our market horizon. We strengthened our R&D initiatives to build a robust and innovative product pipeline. We enriched our product portfolio introducing nine new generics, four of which were launched for the ﬁ rst time in Bangladesh. Our unceasing sales and marketing efforts and focused strategies further reinforced our brand image and all of our key therapeutic segments achieved their targeted growth. Proﬁ t and its Appropriation Year ended 30 June 2022 Year ended 30 June 2021 Amount in Taka Net Proﬁ t before tax Provision for tax Net Proﬁ t after tax Unappropriated proﬁ t from previous year Payment of dividend Proﬁ t available for appropriation Recommended for appropriation: Proposed dividend Retained Earnings after proposed dividend 447,908,117 (137,073,804) 310,834,313 701,533,076 (47,000,640) 965,366,749 (47,000,640) 918,366,109 421,484,155 (121,785,501) 299,698,654 442,959,982 (41,125,560) 701,533,076 (47,000,640) 654,532,436 Dividend The Board of Directors recommends 40% cash dividend i.e. Tk. 4.00 per share for the year ended 30 June 2022 subject to the approval of the Shareholders in the Annual General Meeting (AGM) of the Company. Composition of Board of Directors Mr. Nazmul Hassan MP Mr. S. M. Rabbur Reza Mr. Mohammad Ali Nawaz Mr. Mohammad Salauddin Prof. Mamtaz Uddin Ahmed : Chairman and Director : Managing Director : Director : Nominee Director, Ministry of Industries : Independent Director 164 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Retirement and Re-Election of Director Mr. Nazmul Hassan, MP, 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 of the shareholders in the AGM. Auditors The existing auditors A. Qasem & Co., Chartered Accountants, who were appointed as auditors of the Company in the 47th AGM of the Company carried out the audit for the year ended 30 June 2022. A. Qasem & Co., Chartered Accountants, the auditors of the Company retires at this meeting and have expressed their willingness to continue in ofﬁ ce for the year ended on 30 June 2023 subject to the approval of the shareholders in the 48th 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 2023. On behalf of the Board, Nazmul Hassan MP Chairman 13 October, 2022 Annual Report 2021-22 | Nuvista Pharma Limited | 165 s t n e m e t a t S l a i c n a n i F Independent Auditor’s Report To the Shareholders of Nuvista Pharma Limited Report on the Audit of the Financial Statements Opinion We have audited the ﬁ nancial statements of Nuvista Pharma Limited (the Company), which comprise the statement of ﬁ nancial position as at 30 June 2022, and the statement of proﬁ t or loss and other comprehensive income, statement of changes in equity and statement of cash ﬂ ows for the year then ended, and notes to the ﬁ nancial statements, including a summary of signiﬁ cant accounting policies. In our opinion, the accompanying ﬁ nancial statements give a true and fair view of the ﬁ nancial position of the Company as at 30 June 2022, and its ﬁ nancial performance and its cash ﬂ ows 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 ﬁ nancial statements in Bangladesh, and we have fulﬁ lled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufﬁ cient 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 ﬁ nancial 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 ﬁ nancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁ nancial 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 ﬁ nancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁ nancial 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 inﬂ uence the economic decisions of users taken on the basis of these ﬁ nancial 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 ﬁ nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁ cient 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. 166 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s - - 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 signiﬁ cant 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 ﬁ nancial 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 ﬁ nancial statements, including the disclosures, and whether the ﬁ nancial 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 signiﬁ cant audit ﬁ ndings, including any signiﬁ cant deﬁ ciencies 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 veriﬁ cation 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 ﬁ nancial position and statement of proﬁ t 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 Registration No.: 2-PC7202 _____________________________ Mohammad Motaleb Hossain FCA Enrolment Number: 0950 DVC: 2210200950AS448233 Dhaka, 13 October 2022 Annual Report 2021-22 | Nuvista Pharma Limited | 167 s t n e m e t a t S l a i c n a n i F Nuvista Pharma Limited Statement of ﬁ nancial position As at 30 June 2022 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 Long term bank borrowings Gratuity payable Deferred tax liabilities Total non-current liabilities Current liabilities Short term bank borrowings Trade payables Liabilities for expenses Income tax payable Other liabilities Total current liabilities Total liabilities Total equity and liabilities Notes 30 June 2022 1,058,252,911 7,547,385 13,011,840 Amount in Taka 30 June 2021 1,094,483,583 13,167,670 14,498,907 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1,078,812,136 1,122,150,160 591,585,003 102,889,638 72,751,430 180,824,117 948,050,188 488,258,898 68,992,110 62,372,394 27,506,945 647,130,347 2,026,862,324 1,769,280,507 117,501,600 1,166,304,413 1,283,806,013 117,501,600 902,470,740 1,019,972,340 12,815,090 173,210,822 109,628,828 295,654,740 146,988,152 122,283,402 100,392,374 7,783,192 69,954,451 447,401,571 - 148,113,060 117,591,532 265,704,592 166,074,847 146,680,936 96,229,644 2,064,899 72,553,249 483,603,575 743,056,311 749,308,167 2,026,862,324 1,769,280,507 The annexed notes 1 to 36 form an integral part of these ﬁ nancial statements. Nazmul Hassan Chairman Dhaka 13 October 2022 S. M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director As per our report of same date A. Qasem & Co. Chartered Accountants RJSC Registration No.: 2-PC7202 Mohammad Motaleb Hossain FCA Enrolment Number: 0950 DVC: 2210200950AS448233 168 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Nuvista Pharma Limited Statement of proﬁ t or loss and other comprehensive income For the year ended 30 June 2022 Revenue Cost of goods sold Gross proﬁ t General and administration expenses Selling and distribution expenses Proﬁ t from operations Non-operating income Interest expenses Proﬁ t before tax and WPPF Contribution to WPPF Proﬁ t before tax Income tax expense Current tax Deferred tax income/(expense) Proﬁ t after tax Other comprehensive income Notes 30 June 2022 Amount in Taka 30 June 2021 21 22 23 24 25 26 27 27 2,802,357,818 2,572,104,337 (1,362,782,151) (1,238,556,183) 1,439,575,667 1,333,548,154 (115,250,781) (860,919,037) 463,405,849 11,855,910 (4,958,236) 470,303,523 (22,395,406) 447,908,117 (104,244,983) (773,583,577) 455,719,594 3,648,109 (16,809,340) 442,558,363 (21,074,208) 421,484,155 (145,036,508) (136,132,679) 7,962,704 (137,073,804) 310,834,313 - 14,347,178 (121,785,501) 299,698,654 - Total comprehensive income for the year 310,834,313 299,698,654 Earnings Per Share (EPS) 26.45 25.51 The annexed notes 1 to 36 form an integral part of these ﬁ nancial statements. Nazmul Hassan Chairman Dhaka 13 October 2022 S. M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director As per our report of same date A. Qasem & Co. Chartered Accountants RJSC Registration No.: 2-PC7202 Mohammad Motaleb Hossain FCA Enrolment Number: 0950 DVC: 2210200950AS448233 Annual Report 2021-22 | Nuvista Pharma Limited | 169 s t n e m e t a t S l a i c n a n i F Nuvista Pharma Limited Statement of changes in equity For the year ended 30 June 2022 Particulars Share capital General reserve Share premium Pre- incorporation proﬁ t Revaluation reserve Retained earnings Total reserves and surplus Total Reserves and surplus Balance as at 1 July 2020 117,501,600 7,511,991 30,844,170 243,737 162,337,766 442,959,982 643,897,646 761,399,246 Dividend paid Proﬁ t after tax for the year ended 30 June 2021 - - - - - - - - - (41,125,560) (41,125,560) (41,125,560) - 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 Amount in Taka Number of shares Net assets value per share 11,750,160 86.80 Balance as at 1 July 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 Dividend paid Proﬁ t after tax for the year ended 30 June 2022 - - - - - - - - - (47,000,640) (47,000,640) (47,000,640) - 310,834,313 310,834,313 310,834,313 Balance as at 30 June 2022 117,501,600 7,511,991 30,844,170 243,737 162,337,766 965,366,749 1,166,304,413 1,283,806,013 Notes 11.0 12.0 12.1 12.0 12.2 12.0 12.0 Number of shares Net assets value per share The annexed notes 1 to 36 form an integral part of these ﬁ nancial statements. 11,750,160 109.26 170 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Nuvista Pharma Limited Statement of cash ﬂ ows For the year ended 30 June 2022 A. Cash ﬂ ows from operating activities Cash receipts from customers and others Cash paid to suppliers and employees Cash generated from operation Interest paid Interest received Income tax paid Net cash generated from operating activities B. Cash ﬂ ows 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 ﬂ ows from ﬁ nancing activities Proceeds from/(payment to) long term bank borrowings Payment to short term bank borrowings Payment for lease liability Dividend paid Net cash used in ﬁ nancing activities 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) Notes 30 June 2022 30 June 2021 Amount in Taka 2,771,904,931 2,618,368,138 (2,386,536,146) (2,033,598,933) 385,368,785 584,769,205 18 & 26 (5,473,551) (19,577,082) 25 19 13 16 2,679,248 - (139,318,215) (156,805,498) 243,256,267 408,386,625 (43,346,746) (56,789,046) - (14,870,674) 6,577,717 80,133 (36,769,029) (71,579,587) 12,815,090 (36,034,605) (19,086,695) (244,755,891) - (6,446,333) (46,898,461) (41,040,257) (53,170,066) (328,277,086) 153,317,172 27,506,945 180,824,117 8,529,952 18,976,993 27,506,945 Net operating cash ﬂ ows per share 20.70 34.76 Number of shares 11,750,160 11,750,160 The annexed notes 1 to 36 form an integral part of these ﬁ nancial statements. Annual Report 2021-22 | Nuvista Pharma Limited | 171 s t n e m e t a t S l a i c n a n i F Nuvista Pharma Limited Notes to the ﬁ nancial statements As at and for the year ended 30 June 2022 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 ofﬁ ce of the Company is located at Plot no. 107/A, Mascot Plaza (8th ﬂ oor), 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-ﬁ brinolytic, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold in the domestic and international markets. The Company also provides toll manufacturing services to other pharmaceutical companies. 2. Basis of preparation 2.1 Statement of compliance The ﬁ nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations. 2.2 Date of authorisation These ﬁ nancial statements are authorised for issue by the Company’s Board of Directors on 13 October 2022. 2.3 Basis of measurement The ﬁ nancial statements have been prepared on the historical cost basis except revaluation of certain property, plant and equipment. 2.4 Functional and presentational currency These ﬁ nancial statements are prepared in Bangladeshi Taka (Taka/Tk.), which is the Company’s functional currency. All ﬁ nancial information has been presented in Taka and rounded off to the nearest integer. 2.5 Use of estimates and judgments The preparation of ﬁ nancial 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. 2.6 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 ﬁ nancial statements. The current resources and credit facilities of the Company are sufﬁ cient to meet the present requirements of its existing business. 2.7 Statement of cash ﬂ ows Statement of cash ﬂ ows has been prepared in accordance with as per IAS 7: “Statement of cash ﬂ ows” under direct method. 172 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 2.8 Reporting period These ﬁ nancial statements cover one year from 1 July 2021 to 30 June 2022. 3. Signiﬁ cant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these ﬁ nancial 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 recognized right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. The Company recognizes 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 Ofﬁ ce rent As per IFRS 16, a contract is a lease if the contract conveys the right to control the use of an identiﬁ ed asset. As per terms of the agreement of ofﬁ ce 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 ofﬁ ce 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 deﬁ ned under IFRS 16. 3.3 Staff gratuity fund The Company operates a funded gratuity scheme which was approved by the National Board of Revenue. 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. Though no valuation was done to quantify actuarial liabilities as per IAS 19: Employee Beneﬁ ts, such valuation is not likely to yield a result signiﬁ cantly different from the current provision. 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 recognized as an asset if it is probable that future economic beneﬁ ts associated with the asset will ﬂ ow 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 recognized in the carrying amount of the item if it is probable that the future economic beneﬁ ts embodied within the part will ﬂ ow to the Company and its costs can be measured reliably. The costs of the day to day servicing of property, plant and equipment are recognized in the Statement of proﬁ t or loss and other comprehensive income as incurred. Annual Report 2021-22 | Nuvista Pharma Limited | 173 s t n e m e t a t S l a i c n a n i F 3.5.3 Depreciation Depreciation is recognized in the Statement of proﬁ t 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 ﬁ xtures and ﬁ ttings Furniture and ﬁ ttings 2.5% 20%-25% 5% -15% 30% 7% 6% Gain or loss on sale of property, plant and equipment is recognized in the Statement of proﬁ t 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 capitalized 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. Amortization 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 ﬁ nancial 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 recognized in the Statement of proﬁ t or loss and other comprehensive income. For the assets that have indeﬁ nite useful life, the recoverable amount is estimated at each Statement of ﬁ nancial position date. No indication of impairment was observed in the year ended 30 June 2022. 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 ﬂ ows are discounted to their present value using discount rate that reﬂ ects the current market assessment of the time value of money and the risk speciﬁ c to the asset. For an asset that does not generate signiﬁ cantly independent cash inﬂ ows, the recoverable amount is determined for the cash generating unit to which the asset belongs. 3.7.3 Reversal of impairment An impairment loss recognized 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 recognized. 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 recognized for the asset in prior years. There was no reversal of impairment in the year ended 30 June 2022. 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. 3.9 Taxation Tax on the Statement of proﬁ t or loss and other comprehensive income for the year comprises current and deferred tax. Tax is recognized in the statement of proﬁ t or loss and other comprehensive income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. 174 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 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 ﬁ nancial 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 ﬁ nancial 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 proﬁ t 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 realization 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 recognized only to the extent that it is probable that future taxable proﬁ ts will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that is no longer probable that the related tax beneﬁ t will be realized. 3.10 Inventories Inventories include raw materials, raw materials in transit, work-in-process, ﬁ nished goods and spare parts. These are valued at the lower of cost and net realizable 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 realizable 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 recognizing and measuring ﬁ nancial assets, ﬁ nancial liabilities and some contracts to buy or sell non-ﬁ nancial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 contains three principal classiﬁ cation categories for ﬁ nancial assets such as measured at amortized cost, Fair Value through Other Comprehensive Income (FVOCI) and Fair Value through Proﬁ t or Loss (FVTPL). The classiﬁ cation of ﬁ nancial assets under IFRS 9 is generally based on the business model in which a ﬁ nancial asset is managed and the contractual cash ﬂ ow characteristics. IFRS 9 replaces the previous ﬁ nancial assets categories deﬁ ned under IAS 39. IFRS 9 largely retains the existing requirements in IAS 39 for the classiﬁ cation and measurement of ﬁ nancial 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 recognized in the Statement of proﬁ t or loss and other comprehensive income. 3.13 Provisions A provision is recognized in the Statement of ﬁ nancial position when the Company has a legal or constructive obligation as a result of past events, and it is probable that an outﬂ ow of economic beneﬁ ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Annual Report 2021-22 | Nuvista Pharma Limited | 175 s t n e m e t a t S l a i c n a n i F 3.14 Revenue from Contracts with Customers Revenue is measured based on the consideration speciﬁ ed in a contract with a customer. The Company recognizes 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 signiﬁ cant 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 - Recognize revenue when the entity satisﬁ es a performance obligation. 3.15 Interest expenses Interest expense comprises interest expense on overdraft, import loan, demand loan, ﬁ nance lease and term loan. All interest expenses are recognized in the Statement of proﬁ t or loss and other comprehensive income when it accrues. 3.16 Workers’ Proﬁ t Participation Fund (WPPF) The Company provides 5% of its net proﬁ t before tax (after charging such expense) as WPPF in accordance with Bangladesh Labor 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 ﬁ nancial statements of the Company. 3.18 Events after the reporting period Events after the reporting period that provide additional information about the Company’s position at the reporting date are reﬂ ected in the ﬁ nancial statements. Events after the reporting period that are not adjusting events are disclosed in the notes when material. 3.19 General Previous year’s ﬁ gures have been rearranged/reclassiﬁ ed wherever considered necessary to conform to current year’s presentation. 176 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 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 ﬁ xtures and ﬁ ttings Furniture ﬁ ttings Total Cost or valuation As at 1 July 2021 Addition/transfer during the year Adjustment/disposal As at 30 June 2022 Accumulated depreciation As at 1 July 2021 Charge during the year Adjustment/disposal As at 30 June 2022 Net book value 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 - - - - 726,501 16,444,533 24,214,260 2,366,038 7,233,149 800,979 51,785,460 - (1,653,835) (11,690,361) (2,408,645) (4,100,000) - (19,852,841) 275,608,713 239,181,778 21,077,823 511,207,913 156,745,879 30,473,960 704,976,387 53,343,924 1,992,616,377 - - - - 60,133,558 4,398,732 216,060,846 130,382,313 26,278,268 400,307,237 28,639,221 866,200,175 5,967,144 520,891 22,618,377 10,970,995 2,649,176 42,399,365 2,470,840 87,596,788 - - (1,653,832) (11,278,941) (2,400,724) (4,100,000) - (19,433,497) 66,100,702 4,919,623 237,025,391 130,074,367 26,526,720 438,606,602 31,110,061 934,363,466 As at 30 June 2022 275,608,713 173,081,076 16,158,200 274,182,522 26,671,512 3,947,240 266,369,785 22,233,863 1,058,252,911 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 4.1 Depreciation charge has been allocated as under: Factory overhead included in cost of goods sold (Note 22.3) General and administration expenses (Note 23) Selling and distribution expenses (Note 24) 4.2 Disclosure for revalued assets 30 June 2022 74,443,171 1,968,906 11,184,711 87,596,788 Amount in Taka 30 June 2021 73,241,118 2,938,395 16,723,148 92,902,661 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 ﬁ rst 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 2021-22 | Nuvista Pharma Limited | 177 s t n e m e t a t S l a i c n a n i F 5. Capital work-in-progress Factory Building Factory Warehouse Plant and machinery Furniture As at 1 July 2021 Addition during the year Transfer to property, plant and equipment Amount in Taka As at 30 June 2022 - - - - 726,501 726,501 - - 11,665,571 12,323,047 16,444,533 7,544,085 - 800,979 800,979 - 3,300 - - Equipment and Electric ﬁ xture and ﬁ ttings 1,502,099 5,734,350 7,233,149 Computer and IT equipment Motor Vehicles - - 2,366,038 2,366,038 24,214,260 24,214,260 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 13,167,670 46,165,175 51,785,460 7,547,385 Amount in Taka As at 30 June 2022 30 June 2021 14,870,674 - - 14,870,674 14,870,674 14,870,674 371,767 1,487,067 1,858,834 13,011,840 - 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. 178 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 7. Inventories Stocks Finished goods Semi-ﬁ nished 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 8. Trade receivables Trade receivables Other 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. 2,460,877. 9. Loans, advances and deposits Motor cycle and car loan General loan Advance against operating expenses Security deposits VAT Prepaid insurance and rent LC margin Others Amount in Taka As at 30 June 2022 30 June 2021 154,016,608 50,867,317 269,502,485 24,832,886 37,618,353 659,581 111,155,804 57,816,825 227,201,449 20,787,896 30,462,560 1,544,922 537,497,230 448,969,456 15,385,676 299,097 38,349,175 53,825 8,458,918 299,097 30,436,948 94,479 54,087,773 39,289,442 591,585,003 488,258,898 101,333,448 1,556,190 68,992,110 - 102,889,638 68,992,110 318,570 101,014,878 2,588,327 66,403,783 101,333,448 68,992,110 20,839,130 1,850,981 2,683,454 3,478,251 26,594,909 5,644,596 9,878,546 1,781,563 10,931,774 1,756,172 1,588,959 3,483,184 24,696,302 5,389,765 14,120,004 406,234 72,751,430 62,372,394 Annual Report 2021-22 | Nuvista Pharma Limited | 179 s t n e m e t a t S l a i c n a n i F 10. Cash and cash equivalents Cash in hand Cash at banks Eastern Bank Limited The City Bank Limited Dhaka Bank Limited-SND Dhaka Bank Limited IFIC Bank Limited Shimanto Bank Limited Janata Bank Limited Janata Bank Limited-ERQ National Bank Limited 11. Share capital Authorized Amount in Taka As at 30 June 2022 30 June 2021 196,446 115,867 73,694 591,818 152,369,829 310 19,864,090 28,975 5,059,802 2,272,087 367,066 75,189 520,407 - 655 19,945,406 33,240 6,627,594 - 188,587 180,627,671 27,391,078 180,824,117 27,506,945 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 11,750,160 1,710,000 1,710,000 117,501,600 117,501,600 Shareholding position Beximco Pharmaceuticals Limited Government of Bangladesh Other shareholders Nominal value (Taka) Percentage of holding (%) 30 June 2022 100,134,740 15,186,000 2,180,860 117,501,600 30 June 2021 30 June 2022 30 June 2021 100,134,740 15,186,000 2,180,860 117,501,600 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. ﬁ ve 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). 180 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 12. Reserves and surplus General reserve Share premium (Note 12.1) Pre-incorporation proﬁ t Revaluation reserve (Note 12.2) Retained earnings 12.1 Share premium This represents the amount received on 48,959 ordinary shares @ Tk. 630 each issued in 1997. 12.2 Revaluation reserve This represents revaluation surplus on revaluation of land made during 2006 and 2010. 13. Long term bank borrowings Dhaka Bank Limited (Note 13.1) Less: Current portion (Note 16) 13.1 Dhaka Bank Limited Term loan ﬁ nanced by Dhaka Bank Limited for motor vehicles. 13.2 Collateral All loans are secured by a registered mortgage on speciﬁ c factory land and buildings of the Company. Amount in Taka As at 30 June 2022 30 June 2021 7,511,991 7,511,991 30,844,170 30,844,170 243,737 243,737 162,337,766 162,337,766 965,366,749 701,533,076 1,166,304,413 902,470,740 19,274,167 (6,459,077) 12,815,090 - - - 13.3 Security The loan is secured by hypothecation of ﬁ xed and ﬂ oating assets of the Company including plant and machinery, equipment, furniture and ﬁ xture, inventories and receivables. Additionally, there is a corporate guarantee issued by Beximco Pharmaceuticals Limited. 14. Gratuity payable A. Liability for gratuity Balance as at 1 July Add : Provision made during the year Add : Liability for transferred employees Less: Payments made during the year B. Gratuity investment Balance as at 1 July Add : Amount paid to the Fund Add: Interest income on gratuity investment Less: Payments made during the year Amount in Taka As at 30 June 2022 30 June 2021 148,113,060 32,314,278 5,520,350 128,748,851 29,392,589 - 185,947,688 158,141,440 (5,802,416) (10,028,380) 180,145,272 148,113,060 - 12,500,000 236,866 (5,802,416) 6,934,450 - - - - - Net gratuity payable (A-B) 173,210,822 148,113,060 Annual Report 2021-22 | Nuvista Pharma Limited | 181 s t n e m e t a t S l a i c n a n i F 15. Deferred tax liabilities Balance as at 1 July Deferred tax expense/(income) (Note 27) Balance as at 30 June 16. Short term bank borrowings Bank overdrafts Dhaka Bank Limited (Limit Tk. 200,000,000) Short term bank loans Dhaka Bank Limited Current portion of long term loan (Note 13) Amount in Taka As at 30 June 2022 30 June 2021 117,591,532 131,938,710 (7,962,704) (14,347,178) 109,628,828 117,591,532 34,516,939 22,608,979 106,012,136 143,465,868 6,459,077 - 146,988,152 166,074,847 Collateral and security given against short-term ﬁ nance are a part of overall ﬁ nancing arrangement with Dhaka Bank Limited as indicated in note 13. The interest rate is 9.0% per annum and is payable on quarterly rests. 17. Trade payables Trade payables This represents amount due against purchase of raw, chemical and packing materials. 18. Liabilities for expenses Accrued expenses Audit fees Accrued interest 19. Income tax payable Balance as at 1 July Add: Income tax provision for current year Provision for prior years Less: AIT and treasury deposits for current year For prior years Balance as at 30 June 182 | Nuvista Pharma Limited | Annual Report 2021-22 Amount in Taka As at 30 June 2022 30 June 2021 122,283,402 146,680,936 122,283,402 146,680,936 99,568,603 94,915,558 425,000 398,771 400,000 914,086 100,392,374 96,229,644 2,064,899 22,737,718 143,091,029 136,132,679 1,945,479 - (109,340,155) (106,851,067) (29,978,060) (49,954,431) 7,783,192 2,064,899 F i n a n c i a l S t a t e m e n t s Amount in Taka As at 30 June 2022 30 June 2021 2,150,695 3,080,997 4,531,928 3,200,879 22,395,406 21,074,208 - 1,317,699 23,831,849 22,136,988 1,811,832 2,322,460 1,921,355 3,371,107 13,891,176 14,631,227 470,036 367,858 69,954,451 72,553,249 July 2021-June 2022 July 2020-June 2021 Amount in Taka 2,740,596,167 2,505,836,903 17,930,960 43,830,691 - 66,267,434 2,802,357,818 2,572,104,337 20. Other liabilities Salary and allowances Provident fund dues Workers’ proﬁ t participation fund Tax deducted at source VAT payable Tax on salaries Final settlement of staff Commission payable Unpaid dividend 21. Revenue Domestic sales Export sales Toll income Quantitative details of sales 22. Cost of goods sold Opening stock of ﬁ nished goods Purchases (imported and processed products) Cost of production (Note 22.1) Cost of goods available for sale Cost of physician sample Closing stock of ﬁ nished goods Unit Tabs Caps Amps & Suspensions Bottles Quantity Quantity 434,218,178 41,777,416 15,634,554 8,118 710,009,655 39,326,286 14,050,488 3,319 July 2021-June 2022 July 2020-June 2021 Amount in Taka 111,155,804 - 1,416,984,316 1,528,140,120 (11,341,361) (154,016,608) 156,163,823 9,718,528 1,194,139,965 1,360,022,316 (10,310,329) (111,155,804) 1,362,782,151 1,238,556,183 Annual Report 2021-22 | Nuvista Pharma Limited | 183 s t n e m e t a t S l a i c n a n i F 22.1 Cost of production Opening stock of semi-ﬁ nished and WIP Materials consumed (Note 22.2) Factory overhead (Note 22.3) Closing stock of semi-ﬁ nished and WIP 22.2 Materials consumed Opening stock Purchase Closing stock July 2021-June 2022 July 2020-June 2021 Amount in Taka 57,816,825 810,601,118 599,433,690 44,419,416 679,919,902 527,617,472 1,467,851,633 1,251,956,790 (50,867,317) (57,816,825) 1,416,984,316 1,194,139,965 278,451,905 864,102,937 (331,953,724) 810,601,118 198,819,244 759,552,563 (278,451,905) 679,919,902 The above cost of goods sold includes Tk. 10,043,868 which is related to export sales. Item wise quantity and value of ﬁ nished goods stock are as follows : Stock as June 30, 2022 Tabs Caps Amps & Suspensions Bottle Stock as June 30, 2021 Tabs Caps Amps & Suspensions Bottle Unit pcs. pcs. pcs. pcs. Unit pcs. pcs. pcs. pcs. Quantity Value (Taka) 55,264,143 9,334,386 1,801,840 30,273 86,154,901 31,803,410 29,335,671 6,722,626 154,016,608 Quantity Value (Taka) 34,666,898 5,765,220 1,270,207 40,430 62,743,742 18,016,722 21,417,183 8,978,157 111,155,804 184 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s July 2021-June 2022 July 2020-June 2021 Amount in Taka 22.3 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 Factory staff uniform Printing and stationery Entertainment Vehicle repair, maintenance and running cost Local authority taxes Other expenses Depreciation (Note 4.1) 217,552,063 71,105,220 40,079,383 1,727,182 14,990,002 4,788,602 51,274,033 2,243,972 9,116,702 56,507,079 39,834,271 3,277,516 1,639,324 1,866,206 4,279,816 1,390,462 3,318,686 74,443,171 599,433,690 189,823,190 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 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 Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 2,426,831. 23. General and administration expenses Salaries and allowances Directors fees (Note 30) Ofﬁ ce rent Local travelling expenses Entertainment Vehicle repair, maintenance and running cost Postage, telephone, cellphone and internet Printing and stationery Repairs and maintenance Ofﬁ ce 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) 69,497,145 273,600 11,740,350 1,412,838 1,149,162 5,257,488 2,416,201 1,187,849 1,950,489 1,391,823 4,273,121 2,331,589 4,037,583 623,261 356,646 205,470 425,000 340,500 2,100,431 2,311,329 1,968,906 Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 1,192,173. 115,250,781 104,244,983 Annual Report 2021-22 | Nuvista Pharma Limited | 185 s t n e m e t a t S l a i c n a n i F 24. Selling and distribution expenses July 2021-June 2022 July 2020-June 2021 Amount in Taka Salaries and allowances 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, cellphone and internet Printing and stationery Medical expenses Training expenses Market survey and research Registration and renewals Insurance premium Export Insurance, freight and C&F expenses Ofﬁ ce rent Bad debts Utilities Other expenses Amortization of intangible assets Depreciation (Note 4.1) 366,083,876 100,679,981 3,449,835 16,218,149 18,851,461 6,784,385 10,869,884 19,811,924 1,313,769 8,545,903 3,235,824 37,069,142 39,533,077 152,747,023 8,726,102 5,677,709 8,243,209 8,666,858 12,305,833 1,809,279 2,234,345 3,295,291 700,535 783,309 2,579,234 666,208 4,608,924 576,016 1,033,457 1,146,717 1,487,067 11,184,711 860,919,037 323,220,113 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 a. Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 9,456,390. b. Literature, brochure and printed materials includes Tk. 621,681 for export sales. 25. Non-operating income Gain on disposal of property, plant and equipment Rental income Cash incentive on export Interest income Exchange rate ﬂ uctuation gain Sale of miscellaneous items Forfeited PF refund (Note: 25.1) 25.1 Forfeited PF refund 5,732,021 866,400 1,729,100 2,679,248 188,985 608,800 51,356 11,855,910 65,024 866,400 - - - 582,907 2,133,778 3,648,109 In compliance with the FRC circular number 179/FRC/FRM/Notiﬁ cation/2020/2, dated 07 July 2020, the Company has recovered the forfeited provident fund from the Provident Fund Trust. 186 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 26. Interest expenses Interest on Long term loan Short term ﬁ nance Finance lease Bank charges Bank charges includes Tk. 11,439 which is related to export sales. 27. Income tax expense Current tax (Note 19) Deferred tax (income)/expense Deferred tax (income)/ expense is arrived as follows: Property, plant & equipment (Difference in book value and tax base) Gratuity payable Allowance for expected credit loss Temporary Difference Tax rate Deferred tax liabilities Deferred tax on revaluation surplus Deferred tax liabilities at end of the year Deferred tax liabilities at beginning of the year Deferred tax charged to proﬁ t or loss and other comprehensive income July 2021-June 2022 July 2020-June 2021 Amount in Taka 599,439 4,055,776 - 303,021 4,958,236 688,716 15,004,354 372,272 743,998 16,809,340 145,036,508 (7,962,704) 137,073,804 136,132,679 (14,347,178) 121,785,501 445,608,322 (173,210,822) (2,460,877) 269,936,623 30.00% 80,980,987 28,647,841 109,628,828 117,591,532 (7,962,704) 446,476,889 (148,113,060) (1,884,860) 296,478,969 30.00% 88,943,691 28,647,841 117,591,532 131,938,710 (14,347,178) Reconciliation of effective tax rate 2021-22 2020-21 Proﬁ t before tax Applicable tax rate Effect of lower rate on export proﬁ t Effect of lower rate on cash incentive Effect of non deductible expenses Effect of temporary difference Tax impact of prior year adjustment Deferred tax impact % Taka % Taka 30.00% -0.26% -0.08% 0.56% 1.73% 0.43% -1.78% 30.60% 447,908,117 134,372,435 (1,185,798) (345,820) 2,508,933 7,741,279 1,945,479 (7,962,704) 30.00% - - 0.52% 1.78% - -3.40% 421,484,155 126,445,247 - - 2,196,706 7,490,726 - (14,347,178) 137,073,804 28.89% 121,785,501 Annual Report 2021-22 | Nuvista Pharma Limited | 187 s t n e m e t a t S l a i c n a n i F 28. Reconciliation of net proﬁ t with cash ﬂ ows from operating activities July 2021-June 2022 July 2020-June 2021 Amount in Taka Proﬁ t after tax 310,834,313 299,698,654 Adjustments to reconcile net proﬁ t to net cash with operating activities: Non-cash expenses: Depreciation Amortization Provision for staff gratuity Deferred tax Non-operating items: Proﬁ t on sale of property, plant and equipment Changes in working capital: Increase in inventories (Increase)/decrease in accounts receivable Increase in loans, advances and deposits (Decrease)/Increase in trade payable Decrease in liabilities for expenses and other liabilities Increase/(decrease) in income tax payable Net cash generated from operating activities 29. Capacity utilization Amps and Suspensions Tablet Capsule 30. Remuneration and fees to directors This relates to Board meeting attendance fee paid to Directors. 31. Payments made in foreign currency 87,596,788 1,487,067 25,097,762 (7,962,704) 106,218,913 (5,732,021) (5,732,021) (103,326,105) (33,897,528) (10,344,036) (24,397,534) (1,818,028) 5,718,293 (168,064,938) 243,256,267 92,902,661 371,767 19,364,209 (14,347,178) 98,291,459 (65,024) (65,024) (32,103,169) 42,680,716 (16,412,767) 46,223,570 (9,253,995) (20,672,819) 10,461,536 408,386,625 Installed capacity Unit Actual production Unit Actual Utilization % 19,822,400 1,322,390,400 56,044,880 16,226,403 462,960,606 46,946,857 82% 35% 84% Particulars July 2021-June 2022 July 2020-June 2021 Foreign currency (Equivalent USD) Taka Taka Import of raw, chemicals and packing materials Import of machinery and spare parts 7,276,651 244,786 657,737,659 21,596,947 679,334,606 521,323,600 37,381,755 558,705,355 188 | Nuvista Pharma Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 32. Related party disclosures Following transactions were carried out with related parties in the normal course of business on arms length basis: Name of related party Relationship Nature of transactions Value of transaction Balance as at 30 June 2022 Balance type Beximco Pharmaceuticals Limited Immediate and ultimate parent Toll income 28,912,990 887,304 Royalty expenses 37,069,142 3,797,762 Cost of services 58,761,237 9,738,745 Dividend paid 40,053,896 - Dr. Cr. Cr. Distribution commission 152,747,023 13,891,175 Cr. 33. Capital expenditure commitment There was no capital expenditure contracted but not incurred or provided for at 30 June 2022. 34. 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. 35. Number of employees engaged The number of employees engaged for the whole period or part thereof who received a total remuneration of Tk. 36,000 and above were 1,324 (June 2021: 1,281). 36. Events after reporting period The Board in its meeting dated 13 October 2022 recommended that 40% cash dividend i.e. Tk. 4.00 per share, totaling Tk. 47,000,640 be paid for the year 2021-22. 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 2021-22 | Nuvista Pharma Limited | 189 s s t t n n e e m m e e t t a a t t S S l l a a i i c c n n a a n n i i F F Synovia Pharma PLC. For the six month period January - June 2022 190 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Report of the Directors to the shareholders Of Synovia Pharma PLC On behalf of the Board of Synovia Pharma PLC, I am pleased to present the Directors’ Report and the audited ﬁ nancial statements of the Company for the period January- December 2021 and January-June 2022 along with the reports of the Auditors’ thereon. Financial result and proﬁ t appropriation: Particulars Net Profit (Loss) Before Income Tax Less: Provision for Income Tax Net Profit After Tax Other Comprehensive Income/Expense Add: Profit Broght forward from previous year Profit Available for Appropriation ProposedDividend Un-appropriate Profit Carried Forward Amount in Thousand Taka Jan to Jun’22 (113,927) Jan to Dec’21 (238,834) Jan to Dec’20 277,590 (10,294) (124,221) 1,549,031 1,424,810 (67,432) (306,266) 6,920 1,848,377 1,549,031 - 1,424,810 1,549,031 (53,034) 224,556 (138,846) 1,816,595 1,902,305 (53,928) 1,848,377 Dividend The Board of Directors reviewed the ﬁ nancial performance of the Company for the period January- December 2021 and January- June 2022. After due consideration of the current business status, future investment plans and the cash ﬂ ow position of the Company, the Board proposes to pay no Dividend for the period under review. The proposal is placed in this meeting for the approval of the shareholders. Change of Accounting Year As per section 2(35) of Income Tax Ordinance 1984, subject to few exceptions, the Accounting year of a company shall have to be July-June. As a multinational company, Sanoﬁ Bangladesh Limited was allowed to maintain January- December Accounting year keeping uniformity with its parent company. Following acquisition by Beximco Pharma, the status of the Company has changed and Sanoﬁ Bangladesh Limited is now a national company. Additionally, to comply with the provisions of section 186 of the Companies Act 1994, the Accounting Year of a subsidiary needs to be similar to that of the holding Company. Beximco Pharmaceuticals Limited being the new parent company of Synovia Pharma, its accounting needed to be aligned with that of Beximco Pharma who follows July-June Accounting Year. In the above context, Accounting Year of Synovia Pharma PLC has been changed to July-June from January- December with effect from July 2022. Directors The Board currently consists of following 6 (six) members including one Independent Director: Name Mr. Shah Md. Imdadul Haque Mr. Md. Nuruzzaman Mr. Nazmul Hassan, MP Mr. S. M. Rabbur Reza Mr. Mohammad Ali Nawaz Position in the Board : Director and Chairman : Director : Director : Director and Chief Executive Ofﬁ cer : Director Dr. Md. Ibraheem Hosein Khan : Independent Director Annual Report 2021-22 | Synovia Pharma PLC. | 191 s t n e m e t a t S l a i c n a n i F Retirement and Re-election of Directors Mr. Shah Md. Imdadul Haque and Mr. Nazmul Hasan, MP, Directors of the Board, retire by rotation as per Article 52 and 93 of the Article of Association of the Company. Both Mr. Haque and Mr. Hassan being eligible, have offered themselves for re-election in the Board. The re-election of Directors is now placed for the approval of the Shareholders. Auditors: M/s. A. Qasem & Co. Chartered Accountants, Pink City Shopping Mall, Plot #15, Road #103, Gulshan Avenue, Dhaka – 1212 who were appointed as Auditors of the Company in the 57th Annual General Meeting of the Company has carried out audit for the period up to 30th June 2022. M/s. A. Qasem & Co. Chartered Accountants, the Auditors of the Company, retires at this meeting and has expressed their willingness to continue ofﬁ ce for the year 2022-2023. After due consideration the Board recommended for the reappointment of A. Qasem & Co. Chartered Accountants as the auditors for the FY 2022-23. For and on behalf of the Board of Directors of Synovia Pharma PLC. Shah Md. Imdadul Haque Chairman 192 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s INDEPENDENT AUDITOR’S REPORT To the shareholders of Synovia Pharma PLC Report on the Audit of the Financial Statements Opinion We have audited the accompanying ﬁ nancial statements of Synovia Pharma PLC (“the Company”), which comprise the Statement of Financial Position as at 30 June 2022, and the Statement of Proﬁ t or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the period from 01 Janaury 2022 to 30 June 2022, and notes to the ﬁ nancial statements including a summary of signiﬁ cant accounting policies. In our opinion, the accompanying ﬁ nancial statements present fairly, in all material respects, the ﬁ nancial position of the company as at 30 June 2022, and its ﬁ nancial performance and its cash ﬂ ows for the year than ended in accordance with International Financial Reporting Standards (IFRSs). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISA). 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 ﬁ nancial statements in Bangladesh, and we have fulﬁ lled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufﬁ cient 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 the ﬁ nancial statements of the Company in accordance with IFRSs and for such internal control as management determines is necessary to enable the preparation of ﬁ nancial statements that are free from material misstatement, whether due to fraud or error. The Companies Act, 1994 require the Management to ensure effective internal audit, internal control and risk management functions of the Company. In preparing the ﬁ nancial statements of the Company, 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 ﬁ nancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁ nancial statements of the Company 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 inﬂ uence the economic decisions of users taken on the basis of these ﬁ nancial statements. As part of the audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the ﬁ nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁ cient 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. Annual Report 2021-22 | Synovia Pharma PLC. | 193 s t n e m e t a t S l a i c n a n i F • 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 signiﬁ cant 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 ﬁ nancial 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 ﬁ nancial statements, including the disclosures, and whether the ﬁ nancial 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 signiﬁ cant audit ﬁ ndings, including any signiﬁ cant deﬁ ciencies 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 explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; 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 these books; and c) the statements of ﬁ nancial position and statements of proﬁ t or loss and other comprehensive income dealt with by the report are in agreement with the books of accounts and returns. A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 ____________________ Ziaur Rahman Zia, FCA Partner Enrolment Number: 1259 DVC: 2211061259AS352619 Place: Dhaka Date: 12 October 2022 194 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Notes 30-Jun-22 31-Dec-21 Amounts in Taka 4 4.b 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1,697,815,188 53,814,702 31,660,826 88,640,228 1,730,718,286 63,152,466 28,618,547 70,796,445 1,871,930,944 1,893,285,744 1,065,757,823 428,658,632 204,025,153 196,635,027 171,599,695 1,081,033,357 528,752,745 215,199,712 185,447,914 241,151,118 2,066,676,330 2,251,584,846 3,938,607,274 4,144,870,590 359,520,400 633,804,683 3,786,810 1,424,808,834 359,520,400 633,804,683 3,786,810 1,602,958,227 2,421,920,727 2,600,070,120 5,334,216 123,680,975 39,836,338 5,334,216 123,535,725 54,228,741 168,851,529 183,098,682 19,809,186 346,335,027 489,678,689 491,803,439 208,677 13,095,962 182,728,492 689,567,849 476,117,188 192,297 1,347,835,018 1,361,701,788 1,516,686,547 1,544,800,470 3,938,607,274 4,144,870,590 Synovia Pharma PLC Statement of ﬁ nancial position As at 30 June 2022 Assets Non-current assets Property, plant and equipment Right of use assets Intangible assets Deferred tax asset Current assets Inventories Trade and other receivables Advances, deposits and prepayments Advance income tax Cash and cash equivalents Total assets Equity Equity attributable to holders of the Company Share capital Share premium Reserves and surplus Retained earnings Liabilities Non-current Liabilities Long term liability for pension fund Long term liability for gratuity and WPPF funds Long term borrowings-net of current maturity Current liabilities Long term borrowings-current maturity Short Term Borrowings Trade and other payables Accrued expenses Unpaid dividend Total liabilities Total equity and liabilities Footnotes: 1. Auditor’s report in page 1and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁ nancial statements. Shah Md. Imdadul Haque Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁ cer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka Date: 12 October 2022 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2211061259AS352619 Annual Report 2021-22 | Synovia Pharma PLC. | 195 s t n e m e t a t S l a i c n a n i F Synovia Pharma PLC Statement of Comprehensive Income For the six month period January- June 2022 Sales Cost of sales Gross proﬁ t Administrative expenses Selling, marketing and distribution expenses Operating proﬁ t Finance cost Other income Proﬁ t before contribution to WPPF Contribution to workers’ proﬁ t participation fund Proﬁ t before taxation Tax expenses Current tax Deferred tax Proﬁ t after taxation Other comprehensive income/(expenses) Actuarial (loss)/gain on gratuity & pension Deferred tax on acturial valuation Other comprehensive income, net of tax Notes For the six month period January-June 2022 For the year ended 31 December 2021 Amounts in Taka 23 24 25 26 27 28 10 6 1,426,761,942 (888,062,295) 538,699,647 (105,987,096) (560,497,117) (127,784,566) 2,336,294,610 (1,582,936,725) 753,357,885 (263,496,798) (767,493,982) (277,632,895) (13,724,162) 27,581,594 (28,376,273) 67,174,988 (113,927,134) (238,834,180) - - (113,927,134) (238,834,180) (28,137,982) 17,843,783 (10,294,199) (56,236,195) (11,195,678) (67,431,873) (124,221,333) (306,266,053) - - - 9,545,134 (2,624,912) 6,920,222 Total comprehensive income (124,221,333) (299,345,831) Earnings Per Share (EPS) 30 (34.55) (85.19) Footnotes: 1. Auditor’s report in page 1and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁ nancial statements. Shah Md. Imdadul Haque Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁ cer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka Date: 12 October 2022 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2211061259AS352619 196 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Synovia Pharma PLC Statement of Changes in Equity For the six month period January- June 2022 Particulars Share Capital Share Premium Account Other Reserve Retained Earnings Total Amounts in Taka Balance as at 1 January 2022 Dividend paid for 2020 Total comprehensive income for the period from Jan 01 to June 30, 2022 359,520,400 633,804,683 3,786,810 1,602,958,227 2,600,070,120 - - - - - - (53,928,060) (53,928,060) (124,221,333) (124,221,333) Balance as at 30 June 2022 359,520,400 633,804,683 3,786,810 1,424,808,834 2,421,920,727 Net assets value (NAV) per share (Note-31) 673.65 Balance as at 1 January 2021 Dividend paid for 2020 Total comprehensive income for the year 2021 359,520,400 633,804,683 3,786,810 1,902,304,058 2,899,415,951 - - - - - - - - (299,345,831) (299,345,831) Balance as at 31 December 2021 359,520,400 633,804,683 3,786,810 1,602,958,227 2,600,070,120 Net asset value (NAV) per share (Note-31) 723.21 Footnotes: 1. Auditor’s report in page 1and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁ nancial statements. Shah Md. Imdadul Haque Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁ cer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka Date: 12 October 2022 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2211061259AS352619 Annual Report 2021-22 | Synovia Pharma PLC. | 197 s t n e m e t a t S l a i c n a n i F Synovia Pharma PLC Statement of Cash Flows For the six month period January- June 2022 A. Cash ﬂ ows 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 ﬂ ows from operating activities B. Cash ﬂ ows from investing activities: Acquisition of Property, Plant and Equipment Intangible Assets Disposal of Property, Plant and Equipment Net cash used in investing activities C. Cash ﬂ ows from ﬁ nancing activities: Short term loan Lease payment Dividend paid Net cash ﬂ ows from/(used in) ﬁ nancing activities D. E. F. Net increase in cash (A+B+C) Opening cash and cash equivalents Closing cash and cash equivalents (D+E) Net operating cash ﬂ ows per share Notes For the six month period January- June 2022 For the year ended 31 December 2021 Amounts in Taka 1,554,336,072 2,441,925,370 (1,647,260,642) (2,985,877,700) (92,924,570) (543,952,330) (13,724,162) (28,376,273) 101,577 1,740,043 (39,325,095) (114,325,728) (145,872,250) (684,914,288) (25,169,848) (126,783,949) (525,000) - (1,958,714) 10,482,510 (25,694,848) (118,260,153) 163,606,535 (7,679,180) 171,644,560 (10,101,402) (53,911,680) - 102,015,675 161,543,158 (69,551,423) (641,631,283) 241,151,118 171,599,695 882,782,401 241,151,118 (40.57) (190.51) 27 28 10 4 5 28 19 17 22 32 Footnotes: 1. Auditor’s report in page 1and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁ nancial statements. Shah Md. Imdadul Haque Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁ cer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka Date: 12 October 2022 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2211061259AS352619 198 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Synovia Pharma PLC Notes to the Financial Statements For the six month period January- June 2022 1. Corporate information Reporting entity Synovia Pharma PLC (Synovia Pharma/SPP/the “Company”) is a public limited company incorporated in Bangladesh having registered ofﬁ ce in 6/2/A, Segun Bagicha, Dhaka 1000. The Company has been operating in Bangladesh since 1958 as part of the British chemical company, May & Baker. Following series of mergers, it was renamed as Sanoﬁ Bangladesh Limited in 2013. In October 2021, Beximco Pharmaceuticals Limited acquired 54.6% stake of Sanoﬁ Bangladesh Limited held by the Sanoﬁ Group represented through May & Baker and Fisons Limited. Following the acquisition, it has been renamed as Synovia Pharma PLC. The Company is now operating as a subsidiary of Beximco Pharmaceuticals Limited. Bangladesh Government holds 45.4% shares of the Company represented through Bangladesh Chemical Industries Corporation (20%) and Ministry of Industries (25.4%). SPP produces generic pharmaceutical products and has a strong presence in cardiology, diabetes, oncology, dermatology and CNS. SPP also imports certain global brands of Sanoﬁ including vaccines, insulins and chemotherapy drugs for sale in the Bangladesh market. 2. Basis of preparation 2.1 Statement of compliance These ﬁ nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws in Bangladesh. 2.2 Basis of measurement These ﬁ nancial statements have been prepared under historical cost convention following going concern principle. 2.3 Consistency The accounting policies and methods of computation used in preparation of ﬁ nancial statements for the period from 01 January to 30 June 2022 are consistent with those policies and methods adopted in preparing the ﬁ nancial statements for the year ended 31 December 2021. 2.4 Functional currency and level of precision These ﬁ nancial statements have been prepared in Bangladeshi Taka, which is the Company’s functional currency. All ﬁ nancial information presented has been rounded to the nearest Taka. 2.5 Reporting period The ﬁ nancial statements have been prepared for a period of six months covering January-June, 2022. The Company used to follow January-December accounting year which has been changed to July-June to align with the accounting year of the parent company as well as to comply with the provisions of Income Tax Ordinance 1984 and the Companies Act 1994. The Board of Directors in its 200th meeting held on 22 November 2021 approved the change of the Accounting Year of the Company, to be effective from July 1, 2022. 2.6 Comparatives and reclassiﬁ cation The current ﬁ nancial statements cover a period of 6 month starting from 01 January 2022 to 30 June 2022. The six- month audited ﬁ nancial statements became necessary as the Company will follow July-June ﬁ scal year with effect from 01 July 2022. The last audited ﬁ nancial statements were prepared for a period of 12 month covering 01 January 2021 to 31 December 2021. Therefore, the ﬁ nancial statements for the current period are not entirely comparable. To facilitate comparison, certain relevant balances pertaining to the previous year have been rearranged/ reclassiﬁ ed wherever considered necessary to conform to current period’s presentation. Annual Report 2021-22 | Synovia Pharma PLC. | 199 s t n e m e t a t S l a i c n a n i F 2.7 Statement of cash ﬂ ows Statement of cash ﬂ ows is prepared in accordance with IAS 7 “Statement of Cash Flows” and the cash ﬂ ow from the operating activities are shown under the direct method. 2.8 Use of accounting judgements, estimates and assumptions The preparation of ﬁ nancial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. Signiﬁ cant accounting judgements In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most signiﬁ cant effect on the amounts recognized in the ﬁ nancial statements: Determining the lease term of contracts – Company as lessee The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. Signiﬁ cant estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signiﬁ cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next ﬁ nancial year, are described below: Provision for expected credit losses of trade receivables The Company uses a provision matrix to calculate expected credit loss (ECL) for trade receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns. The provision matrix is initially based on historically observed default rates and then calibrated to adjust the historical credit loss experience with forward-looking information. The information about the ECL on the trade receivables are disclosed in note-8. Taxes Deferred tax assets are recognized to the extent that probable taxable proﬁ t will be available against which the assets can be utilized. Signiﬁ cant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable proﬁ ts, together with future tax planning strategies. Further details on deferred taxes are disclosed in Note 6. Leases - Estimating the incremental borrowing rate The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore, reﬂ ects what the Company ‘would have to pay’, which requires estimation. Further details on leases are disclosed in Note 4.b and Note 17. 2.9 Authorization for issue The ﬁ nancial statements were authorized for issue by the Board of Directors on 12 October 2022. 200 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 2.10 Standards issued but not yet effective The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s ﬁ nancial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. However, this is not an exhaustive list of all the standards issued, the following are the standards which according to the assessment of the Company is most likely to be applicable but are not expected to have a signiﬁ cant impact on the Company’s ﬁ nancial statements. A. Amendments To References To Conceptual Framework in IFRS Standards B. IFRS 17 Insurance Contracts C. Amendments to IAS 1: Classiﬁ cation of Liabilities as Current or Non-current The amendments are effective for annual reporting periods beginning on or after 01 January 2023 and must be applied retrospectively. The Company is currently assessing the impact the amendments will have on current practice. 3. Summary of signiﬁ cant accounting policies 3.1 Property, plant and equipment i. Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation except land which is measured at cost. Cost includes expenditures that are directly attributable to the acquisition of the property, plant and equipment. ii. Subsequent costs The cost of replacing or upgrading part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic beneﬁ ts embodied within the part will ﬂ ow to the company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in the statement of proﬁ t or loss and other comprehensive income. iii. Depreciation Depreciation is recognized in the statement of proﬁ t or loss and other comprehensive income on the straight-line method. Land is not depreciated. Depreciation on additions made during the period is charged from the month in which the newly acquired assets are ready for use. The depreciation rates per annum applicable to different categories of property, plant and equipment and software are as follows: Asset category Building Air conditioner Plant and machinery Laboratory equipment Ofﬁ ce equipment Computer and accessories Furniture and ﬁ xtures Motor vehicles Information systems & software Rate % 5-10 10 6.67 20 10 33.33 10 20-25 20 Annual Report 2021-22 | Synovia Pharma PLC. | 201 s t n e m e t a t S l a i c n a n i F 3.2 Intangible assets (Valuation of brand names and software) As per requirement of IAS 38, intangible assets have been divided into two categories; (i) intangible assets with deﬁ nite useful life and (ii) intangible asset with indeﬁ nite useful life. As per provision of IFRS 3 and IAS 38, brand names identiﬁ ed as intangible assets with indeﬁ nite useful life and their individual value is assessable. Valuation of brand names consisting exclusively of products of the Company has been made under provision and guideline of IAS-38. 5% proﬁ t margin was applied on projected sales of 3 years from the year 2022 to 2024. The corporate tax @ 30% prevailing at the statement of ﬁ nancial position date was applied to arrive at the after tax sales forecast. Valuation of brand name, consisting exclusively of products of the Company has been made under provisions and guideline of IAS 38. In 2021 ﬁ nancial year, intangible asset for brand valuation has been reassessed and its useful life has been changed from indeﬁ nite to ﬁ nite useful life in accordance with IAS 8. The carrying value of brand amounting to Taka 26,578,537 will be amortized over a remaining period of 9 years. 3.3 Leases IFRS 16 is applied using the modiﬁ ed retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17 and IFRIC 4. Synovia Pharma PLC (SPP) as a lessee SPP 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 and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. 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. In addition, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using incremental borrowing rate. SPP presents right of use assets and lease liabilities as separate captions in the statement of ﬁ nancial position. 3.4 Inventories Raw materials are valued at weighted average cost. Finished goods and work-in-progress are valued at the lower of cost and net realizable value including allocation of production overheads that relate to bringing the inventories to their ready to sale condition. 3.5 Cash and cash equivalents Cash and cash equivalents in the statement of ﬁ nancial position comprise cash at banks and on hand and short-term deposits, which are subject to an insigniﬁ cant risk of changes in value. 3.6 Financial instruments IFRS 9 sets out requirements for recognizing and measuring ﬁ nancial assets, ﬁ nancial liabilities and some contracts to buy or sell non-ﬁ nancial items. IFRS 9 largely retains the existing requirements in IAS 39 for the classiﬁ cation and measurement of ﬁ nancial liabilities. However, it eliminates the previous IAS 39 categories for ﬁ nancial assets of held to maturity, loans and receivables and available for sale. The adoption of IFRS 9 has not had a signiﬁ cant effect on Company’s accounting policies. Financial assets Under IFRS 9, on initial recognition, a ﬁ nancial asset is classiﬁ ed as measured at: amortized cost; Fair Value through Other Comprehensive Income (FVOCI) – debt investment; Fair Value through Other Comprehensive Income (FVOCI) – equity investment; or Fair Value Through Proﬁ t or Loss (FVTPL). The classiﬁ cation of ﬁ nancial assets under IFRS 9 is generally based on the business model in which a ﬁ nancial asset is managed and its contractual cash ﬂ ow characteristics. Company’s ﬁ nancial assets consists mainly of trade and other receivables. 202 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Trade and other receivables Trade and other receivables are initially recognized at cost which is the fair value of the consideration given in return. After initial recognition, these are carried at cost less impairment losses, if any, due to uncollectible of any amount so recognized. Financial liabilities The company recognizes all ﬁ nancial liabilities on the trade date which is the date the company becomes a party to the contractual provisions of the instrument. The company derecognizes a ﬁ nancial liability when its contractual obligations are discharged, cancelled or expired. Financial liabilities comprise trade creditors and other ﬁ nancial obligations. Trade and other payables The Company recognizes a ﬁ nancial liability when its contractual obligations arising from past events are certain and the settlement of which is expected to result in an outﬂ ow from the Company of resources embodying economic beneﬁ ts. The carrying amount of the trade and other payables is approximate of its fair value due to its short term nature. 3.7 Impairment of assets Impairment of ﬁ nancial assets (expected credit loss) An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reﬂ ects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity. The maximum exposure to credit risk at the reporting date is the carrying value of each class of ﬁ nancial assets. The Company does not hold collateral as security. Impairment of tangible assets At each statement of ﬁ nancial position date the Company reviews the carrying amounts of its tangible ﬁ xed assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the irrecoverable amount of the such loss is recognized as expenses. Impairment of intangible assets Impairment test has been performed on the intangible assets with indeﬁ nite useful life derived from the valuation of brand names. In 2021 ﬁ nancial year, intangible asset for brand valuation has been reassessed and its useful life has been changed from indeﬁ nite to ﬁ nite useful life in accordance with IAS 8. 3.8 Revenue recognition under IFRS 15 Under IFRS 15, revenue is measured based on the consideration speciﬁ ed in a contract with a customer. The Company recognizes revenue when it satisﬁ es a performance obligation by transferring control over goods or services to a customer. The Company considers the terms of the contract with the customers and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include ﬁ xed amounts, variable amounts, or both. Revenue from various services rendered is recognized when invoices are raised to customers on completion of the performance obligation of delivery of the goods or services. When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognized by reference to the stage of completion of the transaction at the end of the year . When the outcome of a transaction involving the rendering of services can not be estimated reliably, revenue is recognized only to the extent of the expenses recognized that are recoverable. Annual Report 2021-22 | Synovia Pharma PLC. | 203 s t n e m e t a t S l a i c n a n i F 3.9 Earnings per share The Company presented Earnings Per Share(EPS) inaccordance with IAS-33 Earning Per Share which has been shownon the face of the statement of proﬁ t or loss and other comprehensive income. Basic EPS is calculated by dividing the net proﬁ t with weighted average number of shares outstanding through the year. 3.10 Employee beneﬁ ts The Company maintains both deﬁ ned contribution plan and deﬁ ned beneﬁ t plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective trust deeds and rules. Deﬁ ned contribution plan (provident fund) A deﬁ ned contribution plan is a post-employment beneﬁ t plan under which an entity pays ﬁ xed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contribution to deﬁ ned contribution plans are recognized as an employee beneﬁ t expense in proﬁ t or loss in the period during which related services are rendered by employees. Advance contributions, if any, are recognized as an asset to the extent that a cash refund or a reduction in future payment is available. Contributions to a deﬁ ned contribution plan that are due more than 12 months after the end of the period, if any, in which employees render the services are discounted to the present value. In accordance with the Bangladesh Labour Act, 2006, every permanent worker, after completion of his probationary period of his service in the Company, subscribes to the provident fund, unless otherwise agreed upon, in every month for a sum, and the employer contributes to it an equal amount. Deﬁ ned contribution plan (Contribution to Workers Participation Fund and Welfare Fund) The Company is required to provide 5% of net proﬁ t before tax after charging such expense as contribution to Workers Participation Fund and Welfare Fund in accordance with Bangladesh Labour Act, 2006 (as amended up to date). Deﬁ ned beneﬁ t plan (gratuity and pension fund) A deﬁ ned beneﬁ t plan is a post-employment beneﬁ t plan other than a deﬁ ned contribution plan. The employee gratuity plan is considered as deﬁ ned beneﬁ t plan as it meets the recognition criteria. The company’s obligation is to provide the agreed beneﬁ ts to current and former employees. Short-term employee beneﬁ ts Short-term employee beneﬁ t obligations are measured on an undiscounted basis and are expensed as the related service is provided. 3.11 Taxation Current tax Income tax expense is recognized in the statement of proﬁ t or loss. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. The applicable tax rate is 27.5% for the Company as per Finance Act, 2022. Deferred tax Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for ﬁ nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they are reversed, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally 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 recognized to the extent that it is probable that future taxable proﬁ ts will be available against which temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax beneﬁ t will be realized. Tax rate of 27.5% has been applied to calculate the deferred taxes. 3.12 Foreign currency transactions Foreign currency transactions are translated into Taka at the rates ruling on the dates of transactions and year end balances of monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing on the statement of ﬁ nancial position date as per IAS 21. 204 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 3.13 Related party transactions As per IAS-24, parties are considered to be related if one of the party has the ability to control the other party or exercise signiﬁ cant inﬂ uence over the other party in making ﬁ nancial and operating decisions. The Company has carried out transactions in the ordinary course of business at an arm’s length basis at commercial rates with related parties. Related party disclosures have been provided in the ﬁ nancial statements under Note-35. 3.14 Financial instruments risk management objectives and policies The Company’s principal ﬁ nancial liabilities comprise trade and other payables. The main purpose of these ﬁ nancial liabilities is to ﬁ nance the operations. The Company’s principal ﬁ nancial assets include trade receivables, and cash and short-term deposits that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. Market risk Market risk is the risk that the fair value or future cash ﬂ ows of a ﬁ nancial instrument will ﬂ uctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, debt and equity investments and derivative ﬁ nancial instruments. a. Interest rate risk The Company’s exposure to the risk of changes in market interest rates is to the extent of the debt obligations i.e. bank borrowings with ﬂ oating interest rates. b. Foreign currency risk The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the receivable from and payable to group undertaking, which are current. Foreign currency risk is hedged. c. Other price risk, such as equity price risk and commodity risk The Company’s exposure to the risk of changes in other price, such as equity price and commodity price volatility is nil. Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a ﬁ nancial instrument or customer contract, leading to a ﬁ nancial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its ﬁ nancing activities, including deposits with banks and ﬁ nancial institutions. Carrying amount represents the maximum exposure to credit risk. Liquidity risk The Company monitors its risk of a shortage of funds using a liquidity forecast. The Company’s objective is to maintain continuity of funding through efﬁ cient use of working capital. The Company assessed the concentration of risk with respect to ﬁ nancing and concluded it to be low. 3.15 Events after the reporting period Events after the reporting period that provide additional information about the Group’s position at the reporting date or those that indicate the going concern assumption is not appropriate are reﬂ ected in the ﬁ nancial statements. Amounts recognized in the ﬁ nancial statements are adjusted for events after the reporting period that provide evidence of conditions that existed at the end of the reporting period. No adjustment is given in the ﬁ nancial statements for events after the reporting period that are indicative of conditions that arose after the reporting period. Material non-adjusting events are disclosed in the ﬁ nancial statements. Annual Report 2021-22 | Synovia Pharma PLC. | 205 s t n e m e t a t S l a i c n a n i F 4 . Property, Plant & Equipment As at June 30, 2022 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Ofﬁ ce Equipment Total Property Plant & Equipment Right-of-use Assets Total Amount in Taka Cost As on Jan 01, 2022 1,010,047,500 967,684,442 1,139,649,406 126,887,494 286,928,956 3,531,197,798 142,355,604 3,673,553,402 Additions during the period Transferred in & Capitalized during the period - - 6,332,836 5,865,249 2,884,955 4,875,747 19,958,787 16,472,807 25,318,390 - - 41,791,197 - - 19,958,787 41,791,197 Cost as on Jun 30, 2022 1,010,047,500 990,490,085 1,170,833,045 129,772,449 291,804,703 3,592,947,782 142,355,604 3,735,303,386 Accumulated Depreciation As on Jan 01, 2022 Depreciation Charged Accumulated Depreciation as on Jun 30, 2022 - - - (753,388,053) (794,476,661) (89,323,599) (230,742,801) (1,867,931,114) (79,203,138) (1,947,134,252) (11,597,405) (22,691,196) (3,449,149) (15,170,083) (52,907,833) (9,337,764) (62,245,597) (764,985,458) (817,167,857) (92,772,748) (245,912,884) (1,920,838,947) (88,540,902) (2,009,379,849) Net book value Jun 30, 2022 1,010,047,500 225,504,627 353,665,188 36,999,701 45,891,819 1,672,108,835 53,814,702 1,725,923,537 Capital Work in Progress 4 (a) Carrying value as on Jun 30, 2022 As on December 31, 2021 25,706,353 - 25,706,353 1,697,815,188 53,814,702 1,751,629,890 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Ofﬁ ce Equipment Total Property Plant & Equipment Right-of-use Assets Total Cost As on Jan 01, 2021 Additions 1,010,047,500 934,457,825 1,079,958,844 124,925,253 238,136,655 3,387,526,077 150,020,261 3,537,546,338 - 14,369,349 23,941,679 1,962,241 49,846,509 90,119,778 39,286,450 129,406,228 Transferred in & Capitalized - 18,857,268 35,851,533 - - 54,708,801 - 54,708,801 Diposal during the year Cost as on Dec 31, 2021 Accumulated Depreciation As on Jan 01, 2021 Depreciation Charged - - (102,650) - (1,054,208) (1,156,858) (46,951,107) (48,107,965) 1,010,047,500 967,684,442 1,139,649,406 126,887,494 286,928,956 3,531,197,798 142,355,604 3,673,553,402 - (731,429,342) (750,533,528) (82,555,388) (199,272,304) (1,763,790,562) (111,852,755) (1,875,643,317) - (21,958,711) (44,045,782) (6,768,211) (32,524,695) (105,297,398) (14,301,476) (119,598,874) Adjustment for Assets disposed off - 102,649 - 1,054,198 1,156,847 46,951,093 48,107,940 Accumulated Depreciation as on Dec 31, 2021 - (753,388,053) (794,476,661) (89,323,599) (230,742,801) (1,867,931,113) (79,203,138) (1,947,134,251) Net book value Dec 31, 2021 1,010,047,500 214,296,389 345,172,745 37,563,895 56,186,155 1,663,266,685 63,152,466 1,726,419,151 Capital Work in Progress 4 (a) 67,451,601 - 67,451,601 Carrying value as on December 31, 2021 1,730,718,286 63,152,466 1,793,870,753 206 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 4.a Capital Work in Progress is arrived at as follows: Opening Balance Addition during the year Transferred & Capitalized Building and Other Constructions Plant and Machinery Intangible Assets Closing balance 4.b Right-of-use Assets At Cost Accumulated Depreciation 5. Intangilbe Assets Particulars Cost As on Jan 01, 2022 Additions Transferred in & Capitalized As on Jun 30, 2022 Amortization/ Impairment As on Jan 01, 2022 Amortized During the year As on Jun 30, 2022 Amount in Taka Jun 30, 2022 Dec 31, 2021 67,451,601 5,211,060 72,662,661 (46,956,310) (16,472,807) (25,318,390) 85,496,230 36,664,172 122,160,402 (54,708,801) (18,857,268) (35,851,533) (5,165,113) - 25,706,353 67,451,601 142,355,604 (88,540,902) 53,814,702 142,355,604 (79,203,138) 63,152,466 Brand Valuation ERP System Total 104,124,112 77,035,588 181,159,700 - - 525,000 5,165,113 525,000 5,165,113 104,124,112 82,725,701 186,849,813 (80,498,746) (72,042,406) (152,541,152) (1,476,585) (1,171,249) (2,647,834) (81,975,331) (73,213,655) (155,188,987) Carrying Value as on Jun 30, 2022 22,148,780 9,512,046 31,660,826 Carrying Value as on Dec 31, 2021 23,625,366 4,993,181 28,618,547 Annual Report 2021-22 | Synovia Pharma PLC. | 207 s t n e m e t a t S l a i c n a n i F 6. Deferred tax asset Balance as at 1 January Deferred tax on actuarial valuation (Equity Impact) Deferred tax (expenses)/income Closing balance of net deferred tax asset Amount in Taka 30-Jun-22 31-Dec-21 70,796,445 - 17,843,783 88,640,228 84,617,035 (2,624,912) (11,195,678) 70,796,445 As per International Accounting Standards-12, Income Taxes, para 12.74, the company has offset deferred tax assets and liabilities as the entity has legally enforceable right to offset deferred tax assets and liabilities relate to income taxes levied by the same tax authority. IAS 12, Income Taxes, para 61a deferred tax on actuarial gain loss is recognized in other comprehensive income as actuarial gain or loss on deﬁ ned beneﬁ t plans is recognized in other comprehensive income. 7. Inventories Raw materials Packing materials Work-in-progress Material-in-transit Finished goods 255,360,426 184,057,824 45,179,670 23,081,328 32,052,341 18,709,237 164,128,424 289,247,828 578,007,975 556,966,127 1,065,757,823 1,081,033,357 As per International Accounting Standards -2, Inventories, para 36 (a), the company measured inventories at the lower of cost or net realizable value. 8. Trade and other receivables Trade receivables Other receivables As at closing date, the ageing analysis of trade receivables is, as follows: Amount due within 6 months 418,311,797 524,062,876 10,346,835 4,689,869 428,658,632 528,752,745 418,311,797 524,062,876 418,311,797 524,062,876 208 | Synovia Pharma PLC. | Annual Report 2021-22 9. Advances, deposits and prepayments Advance against salary VAT Security deposits Motor vechicle Prepaid Insurance Expenses Others 10. Advance income tax Opening balance Provision made during the year Paid during the year Closing balance 11. Cash and cash equivalents Cash at Bank Current & FC account 12. Share capital a) Authorized capital F i n a n c i a l S t a t e m e n t s Amount in Taka 30-Jun-22 31-Dec-21 821,263 29,078,016 49,542,526 50,578,953 10,833,188 40,398,965 22,772,242 468,600 4,072,752 43,778,869 56,876,333 9,408,373 42,105,679 58,489,106 204,025,153 215,199,712 185,447,914 127,358,381 (28,137,982) (56,236,195) 39,325,095 114,325,728 196,635,027 185,447,914 171,599,695 241,151,118 171,599,695 241,151,118 360,000,000 360,000,000 360,000,000 360,000,000 The authorized capital of the Company is Tk. 360,000,000 divided into 3,600,000 shares of Tk. 100 each. b) Issued, subscribed and fully paid-up Issued for cash: 6,027 shares of Taka 100 each Issued for consideration other than cash: Share holder of Ex Fisons Limited (1,794,967 share @ Tk 100 per share) Share holder of Ex Aventis Limited (1,794,210 share @ Tk 100 per share) 602,700 602,700 179,496,700 179,496,700 179,421,000 179,421,000 358,917,700 358,917,700 359,520,400 359,520,400 Annual Report 2021-22 | Synovia Pharma PLC. | 209 s t n e m e t a t S l a i c n a n i F c) Shareholding position Beximco Pharmaceutical Ltd. Ministry of Industries of Bangladesh Govt. Bangladesh Chemical Industries Corporation Other Shareholders 13. Share premium Shareholding (June 30, 2022) Quantity 1,963,241 911,767 717,679 2,517 % 54.607% 25.361% 19.962% 0.070% Amount in Taka 30-Jun-22 31-Dec-21 196,324,100 91,176,700 71,767,900 251,700 196,324,100 91,176,700 71,767,900 251,700 3,595,204 100% 359,520,400 359,520,400 Share premium (1,794,210 share @ Tk. 353.25 per share) 633,804,683 633,804,683 633,804,683 633,804,683 Fisons issued 1,794,210 shares in consideration other than cash to Aventis shareholders against net asset of Tk. 813,239,469. Each share having a par value of Tk. 100 were issued at Tk.453.25 thus resulting a premium of Tk. 353.25 per share. 14. Reserves and surplus Non-distributable special reserve (note 14.1) Capital reserve 3,777,710 3,777,710 9,100 9,100 3,786,810 3,786,810 14.1 This represents 90% of cumulative post tax proﬁ t of certain categories of income up to the year 1992 as deﬁ ned and directed by Bangladesh Bank. 15. Long term liability for pension fund a. Pension Payable Opening balance Provision made during the year Interest expense Paid to employees during the year Actuarial adjustment loss/ (gain) b. Investment/Plan asset Opening balance Transfer during the year Interest income Paid to employees during the year Closing balance 210 | Synovia Pharma PLC. | Annual Report 2021-22 6,684,836 - - (231,897) - 374,095,392 12,104,682 2,602,642 (356,387,631) (25,730,249) 6,452,939 6,684,836 1,350,620 - - (231,897) 1,118,723 5,334,216 141,830,927 213,304,682 2,602,642 (356,387,631) 1,350,620 5,334,216 F i n a n c i a l S t a t e m e n t s 16. Long term liability for gratuity and WPPF funds a. Gratuity Payable Opening balance Provision made during the year Interest expense Paid to employees during the year Settlement cost/ (credit) Actuarial adjustment loss/ (gain) b. Investment/Plan asset Opening balance Transfer during the year Interest income Paid to employees during the year Closing balance c. Liability for workers’ proﬁ t participation fund Opening balance WPPF loan balance collected through salary Paid during the year Closing balance Total Amount in Taka 30-Jun-22 31-Dec-21 199,282,939 24,933,606 - (2,151,393) - - 503,302,194 53,047,462 4,676,161 (312,319,345) (65,608,648) 16,185,115 222,065,152 199,282,939 80,964,901 24,933,606 - (2,151,393) 303,674,479 84,933,606 4,676,161 (312,319,345) 103,747,114 80,964,901 118,318,038 118,318,038 5,217,687 145,250 - 5,362,937 19,943,176 - (14,725,489) 5,217,687 123,680,975 123,535,725 The Company operates two deﬁ ned beneﬁ t plans, namely, management staff pension fund and employees’ gratuity fund. Management of the funds is entrusted to two separate board of trustees that operates the funds under two sets of trust deeds. 17. Long term borrowings-net of current maturity Lease liability (long term portion) Total lease liability is arrived at as follows: Opening balance Addition during the year Payment during the year Closing Balance Maturity wise presentation Long term lease liabilities Short term lease liabilities 39,836,338 39,836,338 54,228,741 54,228,741 67,324,703 - (7,679,180) 59,645,523 38,139,655 39,286,450 (10,101,402) 67,324,703 39,836,338 19,809,185 59,645,523 54,228,741 13,095,962 67,324,703 Annual Report 2021-22 | Synovia Pharma PLC. | 211 s t n e m e t a t S l a i c n a n i F 18. Long term borrowings-current maturity Lease liability (short term portion) 19. Short Term Borrowings Bank overdraft Standard Chartered Bank Citibank Dhaka Bank Short term loan Dhaka Bank Limited Closing balance Amount in Taka 30-Jun-22 31-Dec-21 19,809,186 19,809,186 13,095,962 13,095,962 24,913,289 28,597,428 184,741 184,741 321,236,997 103,267,273 346,335,027 132,049,442 - - 50,679,050 50,679,050 346,335,027 182,728,492 Short Term Borrowing from Dhaka Bank Limited represents revolving credit facilities (Overdraft Facilities) renewable annually. The borrowing carries 9% Interest. The loan is secured agaisnt hypothecation of ﬂ oating assets of the Company and a corporate guarantee by parent company, Beximco Pharmacuiticals Limited. 20. Trade and other payables Payable for goods and services 21. Accrued Expenses For expenses 22. Unpaid dividend Opening balance Dividend declared during the year Paid for the year Closing balance 212 | Synovia Pharma PLC. | Annual Report 2021-22 489,678,689 689,567,849 489,678,689 689,567,849 491,803,439 476,117,188 491,803,439 476,117,188 192,297 192,297 53,928,060 (53,911,680) - - 208,677 192,297 23. Sales Domestic Toll service Export 24. Cost of sales Opening work-in-process Materials consumed (Note-24.1) Factory overheads (Note-24.2) Total Manufacturing cost Closing work-in-process Cost of goods Manufactured Opening ﬁ nished goods Finished goods available Finished goods purchased Closing ﬁ nished goods 24.1 Materials consumed Opening stock Purchase Goods available for use Closing stock 24.2 Factory overheads Salary & Allowances Depreciation and amortization Printing and stationery Repairs and maintenance Telephone,cellphone,Internet & postage Travelling and conveyance Toll Expense Electricity, gas and water Entertainment Insurance premium Municipal Tax Training & conference Security Expenses Other Expenses F i n a n c i a l S t a t e m e n t s Amount in Taka For the six month period January-June 2022 For the year ended 31 December 2021 1,249,949,763 176,812,179 - 1,933,844,370 385,634,691 16,815,549 1,426,761,942 2,336,294,610 18,709,237 342,020,748 329,586,949 690,316,934 (23,081,328) 667,235,606 556,966,127 1,224,201,733 241,868,537 (578,007,975) 10,632,569 674,464,215 534,799,081 1,219,895,865 (18,709,237) 1,201,186,628 390,053,623 1,591,240,251 548,662,601 (556,966,127) 888,062,295 1,582,936,725 216,110,165 426,450,679 642,560,844 (300,540,096) 137,931,207 752,643,173 890,574,380 (216,110,165) 342,020,748 674,464,215 190,673,349 41,792,317 23,569,789 24,811,693 876,725 6,533,479 3,241,178 18,554,010 2,641,451 7,523,442 1,524,678 3,016,733 3,173,140 1,654,965 329,586,949 283,584,871 77,225,122 35,931,800 38,521,549 1,720,395 13,502,465 1,102,710 47,708,238 3,629,809 16,643,384 3,090,880 1,269,307 8,886,124 1,982,427 534,799,081 Annual Report 2021-22 | Synovia Pharma PLC. | 213 s t n e m e t a t S l a i c n a n i F 25. Administrative expenses Remuneration to employees Depreciation and amortization Printing and stationery Repairs and maintenance Telephone,cellphone,Internet & postage Legal and consultancy Travelling and conveyance Audit fees Electricity, gas and water Entertainment Registration & Renewals Training & conference Rent Meeting fees Security charges Other Expenses 26. Selling, marketing and distribution expenses Remuneration to employees Software & licences Depreciation and amortization Printing and stationery Repairs and maintenance Postage and telephone Travelling and transportation Trade subscription Entertainment Advertisement Insurance premium Registration & Renewals Training & conference Salesforce logistics Rent Samples expenses Sales promotion expenses Events, programs & campaigns Field operation Brand development Market research expenses Distribution Commission Other Expenses For the six month period January-June 2022 For the year ended 31 December 2021 Amount in Taka 62,157,651 16,875,275 4,463,152 3,410,965 1,026,242 6,868,133 3,289,699 550,000 1,778,624 381,555 1,024,767 496,279 - 253,532 3,378,304 32,918 143,891,135 35,627,883 8,964,229 3,767,638 1,541,639 27,393,517 5,929,285 750,000 3,560,592 755,503 1,379,972 114,553 6,151,353 308,941 7,180,664 16,179,894 105,987,096 263,496,798 286,557,450 52,235,847 6,225,839 7,285,978 1,172,428 7,633,690 30,821,855 659,127 866,468 1,111,000 6,851,653 24,105 2,245,987 - - 5,119,733 7,741,574 27,808,002 17,077,036 26,876,190 2,349,892 69,812,844 20,419 560,497,117 448,119,849 37,625,431 11,725,150 10,625,857 2,413,731 10,569,292 42,267,299 1,239,525 3,052,381 3,432,891 13,636,740 238,900 10,336,778 336,220 2,820,712 2,027,618 10,512,863 28,327,627 21,006,732 30,838,229 4,731,337 - 71,608,820 767,493,982 214 | Synovia Pharma PLC. | Annual Report 2021-22 26 (a) Remuneration to employees for Retirement beneﬁ t plan. Remuneration to employees reported under factory overhead, administrative expenses, selling and distribution expenses include Company’s annual contribution to the following retirement beneﬁ t plans: Amount in Taka For the six month period January-June 2022 For the year ended 31 December 2021 F i n a n c i a l S t a t e m e n t s Deﬁ ned beneﬁ t plans - Gratuity & pension Deﬁ ned contribution plan - Provident fund 27. Finance cost Interest on bank borrowings Net Interest cost-Actuarial Valuation Interest on ﬁ nance lease obligation Bank Charges 28. Other income Interest income Group contribution for ITS transformation Miscellaneous income Proﬁ t/(loss) on sale of Fixed Assets Forfeited PF refund Rental income Forfeited PF refund 24,933,606 9,084,929 34,018,535 65,152,144 21,016,823 86,168,967 7,072,392 - 3,040,790 3,610,980 13,724,162 6,719,310 12,494,600 4,237,494 4,924,869 28,376,273 101,577 8,193,473 4,679,654 - - 14,606,890 27,581,594 1,740,043 16,386,947 1,277,971 10,482,510 3,946,097 33,341,420 67,174,988 In compliance to FRC circular no.179/FRC/FRM/Notiﬁ cation /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. 29. Contingent liability 1. There are contingent liabilities aggregating Taka 372,315,102 for disputed VAT claims lying with honorable High Court. The Company has provisioned for Taka 49,124,874 in connection with aforesaid. Liability if any, arises in excess of the provisioned amount on disposal of the cases, shall be accounted for in the year of their ﬁ nal disposal. 2. The Company provided bank guarantees for a total amount of Taka 18,669,102 in favor of “Titas Gas Transmission and Distribution Company Limited” and “Green Delta Insurance Company Limited” in connection with operation of the business. Annual Report 2021-22 | Synovia Pharma PLC. | 215 s t n e m e t a t S l a i c n a n i F 30. Earnings per share (EPS) Amount in Taka For the six month period January-June 2022 For the year ended 31 December 2021 Earnings attributable to the ordinary shareholders (124,221,333) (306,266,053) Number of shares Earnings per share (EPS) 31. Net asset value (NAV) per share Total assets Less :Total liabilities Net assets Number of shares 3,595,204 3,595,204 (34.55) (85.19) 3,938,607,274 4,144,870,590 (1,516,686,547) (1,544,800,470) 2,421,920,727 2,600,070,120 3,595,204 3,595,204 Net asset value (NAV) per share 673.65 723.21 32. Net operating cash ﬂ ows per share (NOCFPS) Net cash generated from operating activities Number of ordinary share (145,872,250) (684,914,288) 3,595,204 3,595,204 Net operating cash ﬂ ows per share (NOCFPS) (40.57) (190.51) 33. Income tax expenses This consists of as follows : a. Current tax Tax provision for current year b. Deferred tax expense Deferred tax expense is arrived at as follows : Property, Plant & Equipment ( Difference in book value & Tax base) Deferred Liability (Gratuity & Pension) Allowance for Bad Debts, Inventory, Sales return provision Carry forward loss Temporary difference Tax rate Deferred Tax Liability/(Asset) at end of the period Deferred tax on actuarial valuation (Equity Impact) Deferred Tax Liability/(Asset) at end of the period Deferred Tax Liability/(Asset) at beginning of the period Change in Deferred Tax Liability (28,137,982) (56,236,195) 206,672,792 (123,652,254) (141,975,425) (263,373,215) (322,328,102) 27.5% (88,640,228) - (88,640,228) (70,796,445) (17,843,783) 222,557,297 (123,652,254) (151,819,863) (214,071,932) (266,986,752) 27.5% (73,421,357) 2,624,912 (70,796,445) (84,617,035) 11,195,678 Deferred Tax Expense/(Income) (17,843,783) 11,195,678 216 | Synovia Pharma PLC. | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s 34. Reconciliation of Net Proﬁ t with Cash Flows from Operating Activities Amount in Taka For the six month period January-June 2022 For the year ended 31 December 2021 Proﬁ t after tax (124,221,333) (306,266,053) Adjustment to reconcile net proﬁ t to net cash Generated from Operating Activities : Non-cash/Non-operating items: Depreciation Amortization Gain on disposal of ﬁ xed assets Deferred Tax Gratuity, Pension & WPPF Changes in Working Capital Inventories Trade and other receivables Advance, deposits and prepayments Trade and other payables Accrued expenses Gratuity, Pension & WPPF Advance income tax 47,049,650 (188,128,934) 62,245,597 119,598,874 2,647,834 4,979,282 - (10,482,484) (17,843,783) 11,195,678 - (313,420,283) (68,700,567) (190,519,302) 15,275,534 (443,423,251) 100,094,113 50,678,325 11,174,559 (17,501,985) (199,889,160) 199,573,381 15,686,251 78,243,761 145,249 - (11,187,113) (58,089,533) Net Cash Generated from Operating Activities (145,872,250) (684,914,288) 35. Related party disclosures During the period ended 30 June 2022, the Company entered into the following transactions with its related party: Name of Related Parties Nature of Transactions Value of Transaction Balance as of 30 June 2022 Balance Type Beximco Pharmaceuticals Limited Toll income 121,481,156 Cost of goods purchase/ expense Cost of service Dividend paid for 2020 Distribution Commission 62,979,512 45,000,000 29,448,615 69,812,844 36,929,751 Cr. 36. Foreign currency payment & receipts: The Company made payments of USD 7,333,930 equivalent to Taka 685,722,498 in connection with import of materials, ﬁ nished products, machinery, spares and IT related services during the reporting period. Annual Report 2021-22 | Synovia Pharma PLC. | 217 s t n e m e t a t S l a i c n a n i F 37. Factory capacity Amount in Taka For the six month period January-June 2022 For the year ended 31 December 2021 Jan- June 2022 Capacity Production Utilization (%) Tablet , Capsule & suppository Dry syrup, Injectables & Cream Million Pcs Million Pcs 322,067,958 244,492,766 8,444,500 8,290,133 76% 98% 38. Capital management For the purpose of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves and surplus attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. Further details on capital are disclosed in Note 12, 13 and 14. 39. Capital commitments There is no capital commitment at the statement of ﬁ nancial position date. 40. Directors’ remuneration No remuneration has been paid to the Directors other than the fee for attending board meetings. 41. Receivable from Directors There is no receivable from the directors at statement of ﬁ nancial position date. 42. Employee details The number of full time employees as on 30 June 2022 was 824 (December 2021: 927) 218 | Synovia Pharma PLC. | Annual Report 2021-22 F F i i n n a a n n c c i i a a l l S S t t a a t t e e m m e e n n t t s s Beximco Pharma API Limited For the Year ended June 30, 2022 Annual Report 2021-22 | Beximco Pharma API Limited | 219 s t n e m e t a t S l a i c n a n i F Beximco Pharma API Limited DIRECTORS’ REPORT to the Shareholders I am pleased to place before you the Directors’ Report and the Audited Financial Statements of Beximco Pharma API Limited for the year ended 30 June, 2022 along with the report of the auditors thereon. OPERATION The Company was formed to set up API manufacturing facility at the API Industrial Park, Gajaria, Munshigang. API Industrial Park had 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. The Company was allotted 2 (two) plots in the API Park which are now fully developed to start construction. The volatility in the global API market has created some uncertainty among the API manufacturers of the country. That is why we have decided to go slow cautiously to avoid any risk. The project decision has been intentionally put on hold at this moment due to said reason. Since there was no commercial operation, no operating expense incurred except few insigniﬁ cant regulatory expense as reported in the ﬁ nancial statements. 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 2022. 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 ofﬁ ce for the year 2022-23. 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 2022-23. On behalf of the Board Chairman 220 | Beximco Pharma API Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Independent Auditors’ Report To the Shareholders of Beximco Pharma API Limited Report on the Audit of the Financial Statements Opinion We have audited the ﬁ nancial statements of Beximco Pharma API Limited, which comprise the statement of ﬁ nancial position as at 30 June 2022, and statement of proﬁ t or loss and other comprehensive income, statement of changes in equity and statement of cash ﬂ ows for the year then ended, and notes to the ﬁ nancial statements, including a summary of signiﬁ cant accounting policies. In our opinion, the accompanying ﬁ nancial statements give a true and fair view of the ﬁ nancial position of the Company as at 30 June 2022 and of its ﬁ nancial performance and its cash ﬂ ows 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 ﬁ nancial statements, and we have fulﬁ lled our other ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is sufﬁ cient 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 ﬁ nancial 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 ﬁ nancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁ nancial 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 ﬁ nancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁ nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂ uence the economic decision of users taken on the basis of these ﬁ nancial 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 ﬁ nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidences that is sufﬁ cient 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 signiﬁ cant 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 ﬁ nancial 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 ﬁ nancial statements, including the disclosures, and whether the ﬁ nancial 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 signiﬁ cant audit ﬁ ndings, including any signiﬁ cant deﬁ ciencies in internal control that we identify during our audit. Annual Report 2021-22 | Beximco Pharma API Limited | 221 s t n e m e t a t S l a i c n a n i F Report on other Legal and Regulatory Requirements In accordance with the requirements of 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 veriﬁ cation 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 Proﬁ t or Loss and Other Comprehensive Income (Proﬁ t and Loss Account) dealt with by the report are in agreement with the books. Dhaka October 27, 2022 M. J. Abedin & Co. Chartered Accountants Reg No: N/A Hasan Mahmood, FCA Enrollment No: 0564 DVC: 2210300564AS706531 222 | Beximco Pharma API Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Beximco Pharma API Limited Statement of Financial Position As at June 30, 2022 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 Notes June 30, 2022 Amount in Taka June 30, 2021 4 5 20,000,000 20,000,000 20,000,000 20,000,000 25,920 25,920 55,080 55,080 20,025,920 20,055,080 18,122,764 20,000,000 (1,877,236) 1,903,156 729,830 1,153,326 20,000 18,201,924 20,000,000 (1,798,076) 1,853,156 679,830 1,153,326 20,000 TOTAL EQUITY AND LIABILITIES 20,025,920 20,055,080 The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Dhaka October 27, 2022 Mohammad Ali Nawaz Director Per our report of even date. M. J. Abedin & Co. Chartered Accountants Reg No : N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS706531 Annual Report 2021-22 | Beximco Pharma API Limited | 223 s t n e m e t a t S l a i c n a n i F Beximco Pharma API Limited Statement of Proﬁ t or Loss and Other Comprehensive Income For the Year ended June 30, 2022 Notes July 2021 - June 2022 July 2020 - June 2021 Amount in Taka Revenue Cost of Revenue Gross Operating Proﬁ t/(Loss) - - - - - - Administrative Expenses 6 (79,160) (175,075) Proﬁ t/(Loss) from Operations Income Tax Expense Net Proﬁ t/(Loss) after Tax Other Comprehensive Income (79,160) - (79,160) (175,075) - (175,075) - - Total Comprehensive Income/(Loss) for the Year (79,160) (175,075) Earnings Per Share(EPS) (0.04) (0.09) The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Dhaka October 27, 2022 Mohammad Ali Nawaz Director Per our report of even date. M. J. Abedin & Co. Chartered Accountants Reg No : N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS706531 224 | Beximco Pharma API Limited | Annual Report 2021-22 Beximco Pharma API Limited Statement of Changes in Equity For the Year ended June 30, 2022 As at June 30, 2022 F i n a n c i a l S t a t e m e n t s Amount in Taka Balance as on July 01,2021 20,000,000 (1,798,076) 18,201,924 Particulars Share Capital Retained Earnings Total Net Loss for the Year - (79,160) (79,160) Balance as on June 30, 2022 20,000,000 (1,877,236) 18,122,764 Net Asset Value (NAV) Per Share 9.06 As at June 30, 2021 Balance as on July 01,2020 20,000,000 (1,623,001) 18,376,999 Particulars Share Capital Retained Earnings Total Net Loss for the Year (175,075) (175,075) Balance as on June 30, 2021 20,000,000 (1,798,076) 18,201,924 Net Asset Value (NAV) Per Share 9.10 The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Dhaka October 27, 2022 Mohammad Ali Nawaz Director Per our report of even date. M. J. Abedin & Co. Chartered Accountants Reg No : N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS706531 Annual Report 2021-22 | Beximco Pharma API Limited | 225 s t n e m e t a t S l a i c n a n i F Beximco Pharma API Limited Statement of Cash Flows For the Year ended June 30, 2022 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. July 2021 - June 2022 July 2020 - June 2021 Amount in Taka 50,000 (79,160) (29,160) - - (29,160) 55,080 25,920 (0.01) 135,470 (175,075) (39,605) - - (39,605) 94,685 55,080 (0.02) S.M. Rabbur Reza Managing Director Dhaka October 27, 2022 Mohammad Ali Nawaz Director Per our report of even date. M. J. Abedin & Co. Chartered Accountants Reg No : N/A Hasan Mahmood FCA Enrollment No : 0564 DVC : 2210300564AS706531 226 | Beximco Pharma API Limited | Annual Report 2021-22 F i n a n c i a l S t a t e m e n t s Beximco Pharma API Limited Notes to the Financial Statements As at and for the year ended June 30, 2022 1. Reporting Entity 1.1 Statutory Background of the Company Beximco Pharma API Limited is incorporated in Bangladesh as a Private Limited Company under the Companies Act, 1994. The Company is a fully owned subsidiary of Beximco Pharmaceuticals Limited (BPL). 1.2 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 2.1 Basis of Measurement The ﬁ nancial statements have been prepared under historical cost convention which does not take into consideration the effect of inﬂ ation. 2.2 Statement of Compliance The ﬁ nancial 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. 2.3 Presentation of Financial Statements The ﬁ nancial statements comprise of: a) Statement of Financial Position as at June 30, 2022; b) Statement of Proﬁ t or Loss and other Comprehensive Income for the year ended June 30, 2022; c) Statement of Changes in Shareholders’ Equity for the year ended June 30, 2022; d) Statement of Cash Flows for the year ended June 30, 2022 and e) Notes, comprising summary of signiﬁ cant accounting policies and explanatory information. 2.4 Reporting Period Financial Statements of the company cover the period of 12 months from July 01,2021 to June 30,2022. 3. Functional and Presentation Currency The ﬁ nancial statements are prepared and presented in Bangladesh Currency (Taka), which is the company’s functional currency. All ﬁ nancial information presented has been rounded off to the nearest Taka. Annual Report 2021-22 | Beximco Pharma API Limited | 227 s t n e m e t a t S l a i c n a n i F 4. Cash and Cash Equivalents This represents of as follows: Cash at Bank 5. Issued Share Capital A. Authorized: 100,000,000 Ordinary Shares of Tk. 10 each B. Issued and Paid-up: 2,000,000 Ordinary Shares of Tk. 10 each paid in cash C. Composition of Shareholding of Ordinary Shares Beximco Pharmaceuticals Limited S.M. Rabbur Reza Total 6. Administrative Expenses Legal Expenses Audit Fees Bank Charges Other Expenses S.M. Rabbur Reza Managing Director Dhaka October 27, 2022 228 | Beximco Pharma API Limited | Annual Report 2021-22 June 30, 2022 Amount in Taka June 30, 2021 25,920 25,920 55,080 55,080 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 99.995 0.005 100 July 2021 - June 2022 July 2020 - June 2021 Amount in Taka 55,470 20,000 690 3,000 79,160 30,890 20,000 1,185 123,000 175,075 Mohammad Ali Nawaz Director N o t i c e o f A n n u a l G e n e r a l M e e t i n g Notice of Annual General Meeting BEXIMCO PHARMACEUTICALS LIMITED 17, Dhanmondi R/A, Road No. 2, Dhaka-1205 NOTICE OF THE 46TH ANNUAL GENERAL MEETING Notice is hereby given that the 46th Annual General Meeting of the Shareholders of Beximco Pharmaceuticals Limited will be held under Virtual Platform on Thursday, the 22nd December, 2022 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, 2022 together with reports of the Auditors and the Directors thereon. 2. To declare 35% cash dividend. 3. To elect Directors. 4. To appoint Auditors for the year 2022-23 and to ﬁ x their remuneration. 5. To appoint Corporate Governance Compliance Auditors for the year 2022-23 and to ﬁ x their remuneration. By order of the Board, Dated: November 15, 2022 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. 21 November, 2022, 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 Ofﬁ ce of the Company, not later than 48 hours before the time ﬁ xed for the meeting. (3) Annual Report for the year 2021-22 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 Beneﬁ cial 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. Annual Report 2021-22 | Notice of Annual General Meeting | 229 g n i t e e M l a r e n e G l a u n n A f o e c i t o N P r o x y F o r m 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 here by appoint Mr./Ms./Miss…………………… ………………………………………………………...............of…………………………………………………………… …………………………as my proxy to attend and vote for me on my behalf at the 46th Annual General Meeting of the Company to be held on Thursday, 22nd December, 2022 at 10.30 a.m. under virtual platform and at any adjournment thereof. As witness my hand this……………………………..day of December, 2022. 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 Ofﬁ ce of the Company not later than 48 hours before the time ﬁ xed for the meeting. Signature Veriﬁ ed Authorised Signatory ………………………………… 231 | Proxy Form | Annual Report 2021-22 www.beximcopharma.com Follow us Like us Watch BEXIMCO PHARMACEUTICALS LIMITED

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