Boston Properties Annual Report 2023

Plain-text annual report

ANNUAL REPORT 2022-23 BEXIMCO PHARMACEUTICALS LIMITED A B O U T U S ANNUAL REPORT 2022-23 BEXIMCO PHARMACEUTICALS LIMITED Annual Report 2022-23 | About Us | 1 S U T U O B 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. 2 | About Us | Annual Report 2022-23 Contents About Us The Company Purpose Journey Subsidiaries Products Global Footprint Manufacturing Capabilities Research and Development Global Accreditations International Media Coverage Performance Highlights Operational Highlights Financial Highlights Value Addition Key Financial Indicators Accolades and Awards Environmental, Social and Governance Environmental Environment, Health, and Safety Environmental Sustainability Measures Green Initiatives Protection of Health and Industrial Hygiene Social Human Resource Training and Development Corporate Events and CSR 59 61 Governance Board and Board Committees Executive Committee Proﬁ le of Directors Management Committee Statements and Reports 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 Audited Financials 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 APPENDIX 72 73 74 80 82 87 90 109 111 113 120 145 180 207 234 244 245 05 08 10 13 17 25 27 33 35 48 37 38 40 41 42 51 53 55 56 58 S U T U O B A About Us 4 | About Us | Annual Report 2022-23 4 | About Us | Annual Report 2022-23 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 initiated its operations by importing products from Bayer, Germany and Upjohn, USA, and selling them in the local market. In 1980, Beximco Pharma commenced the manufacturing of these products under licensing agreements and introduced its proprietary formulation brands in 1983. Since its modest beginnings, the Company has consistently progressed with remarkable success. 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 over 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 excellence, innovation, and performance. The Company has been awarded the National Export (Gold) trophy eight times in acknowledgment of its remarkable contributions to pharmaceutical exports. 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”). The Company holds 85.2% stake in Nuvista Pharma Limited (formerly Organon Bangladesh), a leading unlisted pharmaceutical company in Bangladesh specializing in hormone and steroid drugs. In October 2021, it acquired a controlling interest of 54.6% in Sanoﬁ Bangladesh Limited from the Sanoﬁ Group represented through May & Baker Limited and Fisons Limited. Subsequent to this acquisition the company was renamed as Synovia Pharma PLC. Beximco Pharma is listed on Dhaka and Chittagong Stock Exchanges of Bangladesh and the Alternative Investment Market (AIM) of London Stock Exchange. The Company as a group, employs more than 8,000 full time employees including professionals like pharmacists, doctors, engineers, chemists, microbiologists, accountants, lawyers, information technology specialists, and graduates from other disciplines. Annual Report 2022-23 | About Us | 5 Annual Report 2022-23 | About Us | 5 S U T U O B A S U T U O B A 6 | About Us | Annual Report 2022-23 6 | About Us | Annual Report 2022-23 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 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 Stock Exchange Listing 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, Bangladesh 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 Mirpur DOHS Cultural Centre (6th Floor) Road- 9, Mirpur DOHS, Pallabi, Dhaka-1216, Bangladesh Factory 48, Tongi Industrial Area Tongi, Gazipur, Bangladesh Associates BioCare Manufacturing Sdn Bhd Seri Iskandar Pharmaceutical Park 32600 Bota, Perak, Malaysia BEL Tower, 19 Dhanmondi, Road No 1 Dhaka-1205, Bangladesh FTI Consulting LLP 200 Aldersgate Aldersgate Street, London EC1A 4HD United Kingdom Bankers Janata Bank Ltd. AB Bank Ltd. First Security Islami Bank Ltd. Dhaka Bank Ltd. Agrani Bank Limited ODDO BHF SE, Germany Beximco Pharma API Limited 17 Dhanmondi, Road No. 2 Dhaka-1205, Bangladesh Annual Report 2022-23 | About Us | 7 Annual Report 2022-23 | About Us | 7 S U T U O B A S U T U O B A 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. 8 | About Us | Annual Report 2022-23 8 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S Strategic Goals Beximco Pharma pursues a set of strategic goals that reﬂ ect our commitment to making a positive impact on human health, attaining sustainable growth, delivering outstanding results, and fostering trust among all stakeholders. Commitment to Human Health and Well-Being We strive to promote health and wellbeing by providing access to modern and cost-effective medicines manufactured in strict compliance to cGMP guidelines. Continuous Improvement towards Operational Excellence We continue to focus on achieving excellence across all aspects of the business making signiﬁ cant investments in people, process and technology. Expand Geographic Footprint We aim to strategically expand our global presence and fortify our position in key markets. By leveraging our competitive generic drug skills, highly compliant manufacturing platform and forging strategic partnerships, we aim to build a portfolio of differentiated products and make them accessible to a broader spectrum of patients. Ensure Financial Resilience We remain steadfast in our commitment to drive long term growth and shareholders’ value through prioritization of strategic initiatives, optimization of resources and cost structures, and improving efﬁ ciency. Prioritize Sustainability in Operations We pledge to adhere to global standards and guidelines for environmental preservation, social responsibility, and good governance to ensure the sustainability of our operations. Empower Workforce Our people are our greatest asset. We are committed to nurturing an inclusive, diverse, and growth-focused culture. Through investments in employee development, empowerment, and well-being, we create an environment that encourages innovation and excellence. Annual Report 2022-23 | About Us | 9 Annual Report 2022-23 | About Us | 9 S U T U O B A S U T U O B A Journey 1976 Company incorporated 2003 Introduced anti-retroviral (ARV) drugs ﬁrst time in Bangladesh 1980 Started manufacturing products of Bayer AG, Germany and Upjohn Inc., USA, under license agreements 1983 Launched own formulation brands 1993 Commenced formulation product export to Russia 1985 Listed on Dhaka Stock Exchange 2005 Got listed on the Alternative Investment Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs 2006 Launched CFC free HFA inhalers ﬁrst time in Bangladesh 2008 • GMP accreditation from TGA, Australia • Gulf Central Committee for Drug Registration (GCC), as the ﬁrst Bangladeshi Company 2011 Received GMP accreditation from AGES, Austria (for European Union) 2013 Commenced ﬁrst time export to Europe 2014 • GMP accreditation from Taiwan Food & Drug Administration (TFDA) and Health Canada • Commenced export to Australia 10 | About Us | Annual Report 2022-23 10 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S • GMP approval from the U.S. FDA as the ﬁrst Bangladeshi company 2015-16 • Launched generic version of revolutionary hepatitis C drugs Sovaldi® and Harvoni® • Entered the Gulf pharma market (Kuwait) 2016-17 • Commenced export to the USA • First overseas collaboration with BioCare Manufacturing Sdn Bhd, Malaysia 2018-19 Won the Scrip Award in the category of ‘‘Community Partnership of the Year’’ • Won the Scrip Award in the category of “Best Company in an Emerging Market” • Oral solid dosage facility received WHO prequaliﬁcation • Acquired 85.22% stake in Nuvista Pharma PLC. 2017-18 2019-20 • GMP approval from German Regulatory Authority and Malta Medicines Authority (European Union) • Global Generics & Biosimilars Awards 2019 as “The Company of the Year, Asia-Paciﬁc” • Launched the world's ﬁrst generic remdesivir 2020-21 • Became exclusive distributor of Serum Institute of India for AstraZeneca/ Oxford's Covishield vaccine in Bangladesh • Acquired Sanoﬁ Bangladesh Limited (54.6% stake) • CPhI Pharma Award 2020 for“Innovation in response to COVID-19” • Launched the world’s ﬁrst generic version of Paxlovid (Nirmatrelvir+Ritonavir) • Received Marketing Authorizations for two products in the UK • Global Generics & Biosimilars Awards 2022: "Acquisition of the Year" 2021-22 • “The Company of the Year, Asia Paciﬁc” at the Global Generics and Biosimilar Awards 2021 • Launched the world's ﬁrst generic molnupiravir 2022-23 • Won National Export Trophy (Gold) for 2019-2020 and 2020-21; Honored for a record 8th time • Received product approvals from US FDA (three), TGA Australia (three) and Health Canda (one) • Received recognition as "Forbes Asia’s Best Under a Billion" company for 2022 Annual Report 2022-23 | About Us | 11 Annual Report 2022-23 | About Us | 11 S U T U O B A 12 | About Us | Annual Report 2022-23 12 | About Us | Annual Report 2022-23 A A A B B B O O O U U U T T T U U U S S S Subsidiaries Nuvista Pharma Limited (NPL/Nuvista Pharma) Nuvista Pharma Limited (formerly Organon Bangladesh Limited) was a subsidiary of Netherlands-based pharmaceutical giant Organon International. The Company has been operating in Bangladesh since 1964, with a local manufacturing facility at Tongi, Gazipur vicinity close to capital city, Dhaka. Following the divestment of Oraganon’s equity to the local management in 2006, the Company was renamed as Nuvista Pharma Limited. In 2018, Beximco Pharma acquired majority shareholdings (85.22%) in Nuvista Pharma Limited. Carrying the legacy of the quality and manufacturing excellence of Organon, the Company is currently producing hormones, steroids, and other general products in different dosage forms including tablets, capsules, injections, ophthalmic drops etc. Notably, the Company holds a dominant market position in the ﬁ eld of oral contraceptives and has a pioneering role in the hormone and steroid segments, showcasing its expertise in these areas. It currently employs around 1,300 employees of diverse professional backgrounds including pharmacists, doctors, engineers, chemists, microbiologists, accountants, business graduates and other white collar professionals. The Company has multiple brands enjoying market leadership in their respective market categories. Annual Report 2022-23 | About Us | 13 Annual Report 2022-23 | About Us | 13 Annual Report 2022-23 | About Us | 13 S U T U O B A Synovia Pharma PLC (SPP/Synovia Pharma) Synovia Pharma PLC (formerly Sanoﬁ Bangladesh Limited) has six glorious decades of operation in Bangladesh with an unwavering commitment to healthcare and a legacy of many pioneering brands. It 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 a concern of 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. On 01 October 2021, Beximco Pharma acquired 54.6% stake of the company held by Sanoﬁ Group represented through May & Baker Limited and Fisons Limited and renamed as Synovia Pharma PLC. 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 25 acres of land, located at Tongi, Gazipur. The facilities of the company has manufacturing capabilities across several drug technologies, including tablets, capsules, tropical, 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 26 katha land. In 2022, Synovia took on a new identity, stepping forward from the Sanoﬁ legacy. With a clear vision, Synovia aims to establish itself as a reputable and prominent pharmaceutical company dedicated to enhancing and enriching the lives of all those it serves. Currently, Synovia Pharma produces approximately 100 branded generic products and employs over 1000 people. The company 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. 14 | About Us | Annual Report 2022-23 14 | About Us | Annual Report 2022-23 A B O U T U S Annual Report 2022-23 | About Us | 15 Annual Report 2022-23 | About Us | 15 S U T U O B A 16 | About Us | Annual Report 2022-23 A B O U T U S Products Beximco Pharma currently produces more than 300 generics available in well over 500 presentations. It’s portfolio encompasses wide range of therapeutic categories namely antibiotics, analgesics, anti-diabetics, respiratory, cardiovascular, central nervous system, dermatology, gastrointestinal, anti-cancers etc. The Company has consistant leadership in several of its brands including Napa, Napa Extra, Neoﬂ oxin, Atova, Azmasol, Arlin, Bexitrol F, D-Rise, Bizoran, Amdocal, Remmo, Tofen, Tyclav etc. It has sound expertise with specialized and advanced drug delivery systems such as metered dose inhalers, dry powder inhalers, nasal sprays, sterile ophthalmic, lyophilized injectables, oral thin ﬁ lms, suppositories etc. Beximco Pharma continuously strives to focus on expanding and diversifying its product portfolio in order to ensure that people have access to newer and better treatment options at an affordable cost. The expanding portfolio, includes high value, differentiated, and difﬁ cult to copy products, which contributes as a growth driver to the Company. Alongside the formulation products, Beximco Pharma also produces several Active Pharmaceutical Ingredients (APIs) for its captive consumption as well as selling to other pharmaceutical manufacturers. The Company is now 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 Tablet Tablet Paracetamol 325 mg + Tramadol 37.5 mg Paracetamol 500 mg (with Actizorb technology) JOINTEC MAX Tablet Glucosamine 750 mg + Diacerein 50 mg RELENTUS DINOVO VOLIGEL XIDOLAC Tablet Tablet Cream Tablet Meltab Tizanidine 2 mg Naproxen 375 mg + Esomeprazole 20 mg, Naproxen 500 mg + Esomeprazole 20 mg Diclofenac Sodium 1% 50 mg Ketorolac Tromethamine 10 mg Ketorolac Tromethamine 10 mg Injection Ketorolac Tromethamine 30 mg / ml BUFLEX GLIPITA GLIPITA M Tablet Tablet Tablet GLIPITA M XR Tablet Nabumetone 500mg and 750mg Sitagliptin 50 mg, Sitagliptin 100 mg Sitagliptin 50 mg + Metfomin Hydrochloride 500 mg, Sitagliptin 50 mg + Metformin Hydrochloride 1000 mg Sitagliptin 50 mg + Metfomin Hydrochloride 500 mg XR, Sitagliptin 50 mg + Metformin Hydrochloride 1000 mg XR Annual Report 2022-23 | About Us | 17 Joint Supplement Muscle Relaxant NSAIDs Anti-Diabetic (OAD) S U T U O B A Anti-Diabetic (OAD) TRANETA TRANETA M JARDIAN JARDIMET EMPALINA Tablet Tablet Tablet Tablet Tablet INFORMET Tablet INFORMET XR Tablet 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 Metfomin Hydrochloride 500 mg, Metformin Hydrochloride 850 mg, Metformin Hydrochloride 1000 mg Metfomin Hydrochloride 500 mg XR, Metformin Hydrochloride 750 mg XR Anti-Diabetic (Insulin) GENSULIN Injection Human Insulin 100 IU / ml Injection SEMGLEE Preﬁ eld Pen Insulin Glargine 100IU/ML REGLUTIDE Injection Semaglutide inn 1.34 mg/ml Anti-Allergy AXODIN Tablet Fexofenadine HCl 120 mg, Fexofenadine HCl 180 mg Suspension Fexofenadine HCl 30 mg / 5 ml DUVENT TOFEN BILLI Tablet Syrup Tablet Syrup Tablet Rupatadine 10 mg Rupatadine 5 mg / 5 ml Ketotifen Fumarate 1mg Ketotifen Fumarate 1 mg / 5 ml Bilastine 20 mg Meltab Bilastine 10 mg Oral Solution Bilastine MONOCAST Tablet Sachet Montelukast 4 mg, Montelukast 5 mg, Montelukast 10 mg Montelukast 4 mg FIXONASE Nasal Spray Fluticasone Furoate 27.5 mcg / Actuation DYNASE Nasal Spray Azelastine hydrochloride 137 mcg + Fluticasone propionate 50 mcg / Actuation Cough & Cold DEXTRIM TUSPEL BURATUSS Anti-Hypertensives BIZORAN Syrup Syrup Tablet 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 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 AMDOCAL PLUS Tablet Amlodipine 5 mg + Atenolol 25 mg, Amlodipine 5 mg + Atenolol 50 mg CARNOVAS Tablet Nebivolol 2.5 mg, Nebivolol 5 mg, Nebivolol 10 mg 18 | About Us | Annual Report 2022-23 A B O U T U S Anti-Hypertensives LEVAMDOCAL Tablet Levamlodipine 1.25 mg, Levamlodipine 2.5 mg, Levamlodipine 5 mg BETAPRO Tablet 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 CARDOCAL NITROSOL PACET PROSAN PROSAN HZ Lipid Lowering ATOVA ATOVA EZ CIBRATE ROSUTIN Heart Failure VIVANTA Oral Anticoagulants Low Molecular Heparin Anti-Platelets Cerebral Vasotherapeutics Contrast Agent APIXA KINEXA CLEVEN ODREL PLUS TIGEL CITICOL LOPIDAM LOPIDAM Tablet Tablet Tablet Tablet Tablet Spray Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Injection 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 Cilnidipine 5 mg, Cilnidipine 10 mg Glyceryl Trinitrate 400 mcg Amiodarone Hydrochloride 100 mg, Amiodarone Hydrochloride 200 mg Losartan Potassium 25 mg, Losartan Potassium 50 mg Losartan Potassium 50 mg, Hydrochlorothiazide 12.5 mg Atorvastatin 10 mg, Atovastatin 20 mg, Atovastatin 40 mg Atorvastatin 10 mg+ Ezetimibe 10 mg, Atorvastatin 20 mg+ Ezetimibe 10 mg Ciproﬁ brate 100 mg Rosuvastatin 5 mg, Rosuvastatin 10 mg, Rosuvastatin 20 mg Sacubitril 24 mg+ Valsartan 26 mg, Sacubitril 49 mg+ Valsartan 51 mg, Sacubitril 97 mg+ Valsartan 103 mg, Apixaban 2.5 mg, Apixaban 5 mg Rivaroxaban 2.5 mg, Rivaroxaban 10 mg, Rivaroxaban 15 mg Enoxaparin Sodium 20 mg/0.2 ml, Enoxaparin Sodium 40 mg/0.4 ml, Enoxaparin Sodium 60 mg/0.6 ml, Enoxaparin Sodium 80 mg/0.8 ml Clopidogrel 75 mg + Aspirin 75 mg Ticagrelor 90 mg Injection Citicoline 500 mg/4 ml Injection Lopamidol 370 mg/ml IV Infusion Lopamidol 370 mg/ml Anti-Infectives ARLIN Tablet Linezolid 400 mg, Linezolid 600 mg Suspension Linezolid 100 mg / 5 ml TRIOCIM Injection Capsule Linezolide 2 mg / 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 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 Annual Report 2022-23 | About Us | 19 S U T U O B A Anti-Infectives TURBOCLAV Tablet Cefuroxime 250 mg + Clavulanic Acid 62.5 mg, Cefuroxime 500 mg + Clavulanic Acid 125 mg AZITHROCIN Tablet Azithromycin 250 mg, Azithromycin 500 mg Suspension Azithromycin 200 mg / 5 ml Injection Azithromycin 500 mg IV FILMET NEOFLOXIN Tablet Syrup Tablet Metronidazole 200 mg, Metronidazole 400 mg, Metronidazole 800 mg Metronidazole 200 mg / 5 ml Ciproﬂ oxacin 750 mg, Ciproﬂ oxacin 500 mg, Ciproﬂ oxacin 250 mg Injection Ciproﬂ oxacin 250 mg / 5 ml Suspension 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 BEMSIVIR EMORIVIR MULINA BEMSIVIR EMORIVIR Sachet Injection Tablet Injection Capsule Tablet Injection Injection Capsule Fosfomycin Trometamol 3 gm Meropenem Trihydrate 500 mg, Meropenem Trihydrate 1 gm Nirmatrelvir 150 mg + Ritonavir 100 mg Remdisivir Inn 100 mg, Remdisivir Inn 100mg Lyophilized Powder Monlupiravir 200 mg Lefamulin 600 mg Lefamulin 150 mg/15 ml Remdisivir Inn 100 mg Monlupiravir 200 mg Antacids PROGAVI Suspension Sodium Alginate 500 mg + Sodium Bicarbonate 213 mg + Calcium Carbonate 325 mg Anti-Ulcerants ACIFIX REMMO GASTALFET Tablet Tablet Tablet Rabeprazole 20 mg Esomeprazole 20 mg, Esomeprazole 40 mg Sucralfate 500 mg, Sucralfate 1000 mg Suspension Sucralfate 1 mg/ 5 ml Gastroprokinetics DEFLUX Tablet Domperidone 10 mg, Domperidone 10 mg Meltab Suspension Domperidone 5 mg / 5 ml Drops Tablet Tablet Domperidone 5 mg / ml Prucalopride Succinate 1 mg, Prucalopride Succinate 2 mg Flupentixol 0.5 mg + Melitracen 10 mg MOPRIDE CNS FRENXIT NERVALIN Capsule Pregabalin 25 mg, Pregabalin 50 mg, Pregabalin 75 mg Oral Solution Pregabalin 100 mg/5 ml NERVALIN CR XETRIL EMIJOY TAMONA Tablet Tablet Tablet Tablet 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 Hormones and Steroids 20 | About Us | Annual Report 2022-23 A B O U T U S Anti-Fungals OMASTIN Capsule Fluconazole 150 mg, Fluconazole 200 mg, Fluconazole 50 mg TERBEX Suspension Fluconazole 50 mg / 5 ml Injection Tablet Fluconazole 2 mg / ml Infusion Terbinaﬁ ne 250 Mg Cream (5 gm) Terbinaﬁ ne HCI 1% Cream (10 gm) Terbinaﬁ ne HCI 1% LULEXA Cream (10 gm) Luliconazole INN 10 mg/gm Cream (20 gm) RESOLVE Shampoo Steroids EXOVATE N Cream Luliconazole INN 10 mg/gm Ketoconazole 2% Clobetasol Propionate 0.05% + Neomycin 0.35% + Nystatin 1,00,00,000 Units Ointment Clobetasol Propionate 0.05% + Neomycin 0.35% + Nystatin 1,00,00,000 Units Respiratory AZMASOL MDI DPI Respules Respirator Solution BEXITROL-F MDI DPI MAXHALER DPI MDI SYMBION Salbutamol 100 mcg / Puff Salbutamol 200 mcg / Capsule Salbutamol 2.5 mg / 3 ml Ampoule Salbutamol 2.5 mg / 3 ml Ampoule, Salbutamol 5 mg / ml in amber glass bottle 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 Formoterol Fumarate 6 mcg + Budesonide 100 mcg, Formoterol Fumarate 6 mcg + Budesonide 200 mcg Formoterol Fumarate 4.5 mcg + Budesonide 80 mcg, Formoterol Fumarate 4.5 mcg + Budesonide 160 mcg MAXHALER Formoterol Fumarate Dihydrate 12 mcg + Budesonide 400 mcg TIORIVA DPI Tritropium Bromide 18 mcg UPTECH GO Device Device for MDI Adult Device for MDI Child IPRASOL MDI Salbutamol 100 mcg+ Ipratropium 20 mcg Respules Respirator Solution Salbutamol 2.5 mg+ Ipratropium 0.5 mg/ 3 ml Salbutamol 2.5 mg/ml+ Ipratropium 0.5 mg/ml FLOMYST F MDI ONRIVA PLUS ONRIVA TRIO DPI DPI TRIBREZ BILEXA Inhaler DPI 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 110 mcg + Glycopyrronium 50 mcg Indacaterol 150 mcg+ Glycopyrronium 50 mcg+ Mometasone Furoate 160 mcg Formoterol Fumarate BP5.5 mcg + Glycopyrro Fluticasone Furoate Inn 100 mcg & Vilantero 25 mcg Fluticasone Furoate Inn 200 mcg & Vilantero 25 mcg Annual Report 2022-23 | About Us | 21 S U T U O B A Respiratory BEXIHALER (MORA) Device Device for DPI PULMIDONE Tablet IV Fluids DEXAQUA DEXORIDE SALORIDE Injection Injection Injection PIRFENIDONE BP 267 MG PIRFENIDONE BP 801 MG Dextrose 10% W/V, Dextrose 5% W/V NaCl 0.9% W/V & Dextrose 5% W/V Sodium Chloride 0.09% W/V Ophthalmic ODYCIN D Eye Drops Moxiﬂ oxacin Hcl TEARON PF Eye Drops Polyethylene Glycol 400 0.4% + Propylene Glycol 0.3% TEARON FRESH Eye Drops Caboxymethyl Cellulose Sodium 1% NEOFLOXIN Eye Drops Ciproﬂ oxacin 0.3% NEOFLOXIN D Eye Drops Ciproﬂ oxacin 0.3% + Dexamethasone 0.1% Urogenital URAL-K MIRASOL UROFLO Bio-Similar OGIVRI Oncology XELOCIN Solution Tablet Capsule Lyophilized Powder Tablet Potassium Citrate 1500 mg + Citric Acid Monohydrate 250 mg / 5 ml Solution Mirabegron INN 25 mg, Mirabegron INN 50 mg Tamsulosin Hydrochloride 0.4 mg Trastuzumeb INN 440mg/Vial Capecitabine 500 mg PACLI TINICEV IV Infusion Paclitaxel 6 mg/ml Tablet Tablet Imaitnib 400 mg Tablet Imaitnib 100 mg Tablet Vitamins & Minerals BEXTRAM GOLD Tablet High Potency 32 Multivitamin-Mineral BEXTRAM SILVER D-RISE Tablet Capsule Tablet Chewable Tablet High Potency 30 Multivitamin-Mineral Cholecalciferol 20000 IU, Cholecalciferol 40000 IU Cholecalciferol 2000 IU Cholecalciferol 1000 IU Oral Solution Cholecalciferol 2000 IU/ ml HEMOFIX FZ Tablet Elemental Iron 48 mg (Ferrous Ascorbate), Folic Acid 0.5 mg And Elemental Zinc 22.5 mg Tab NEUROCARE Tablet Vitamin B1, B6, and B12 FERINTUS Injection Ferric Carboxymaltose 500 mg/10 ml, Ferric Carboxymaltose 100 mg/2 ml BECORAL D BECORAL DX Tablet Tablet Coral Calcium Coral Calcium 22 | About Us | Annual Report 2022-23 A B O U T U S Active Pharmaceutical Ingredients (APIs) APIXABAN DICLOFENAC LINAGLIPTIN PENICILLINS RIVAROXABAN ROSUVASTATIN SITAGLIPTIN Amoxicillin Floxacillin Flucloxacillin CLINICALLY PROVEN ANTI-HYPERTENSIVE Brand in Bangladesh Annual Report 2022-23 | About Us | 23 Annual Report 2022-23 | About Us | 23 S U T U O B A S U T U O B A Products launched in 2022-23 Beximco Pharma launched 14 generics in 23 different presentations in the domestic market during 2022-23. Mulina (Lefamulin) an anti-infective drug was introduced for the ﬁ rst time in Bangladesh. In the ﬁ rst quarter of 2023-24, the Company further strengthened its product basket with introduction of 15 new generics (22 presentations) in the domestic markets, 10 of them being ﬁ rst time in Bangladesh. 24 | About Us | Annual Report 2022-23 24 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S Global Footprint Beximco Pharma holds a signiﬁ cant position within the pharmaceutical landscape of our country’s over Taka 300 billion market. The combined efforts of the Company and its subsidiaries have resulted in a noteworthy market share of 11.1%. Our domestic sales are the cornerstone of our success, contributing to a substantial 93% of our consolidated revenue. This underscores the pivotal role played by our local market in driving our growth trajectory. Alongside our strong domestic presence, the Company remains resolute in its strategic approach to seize opportunities within the global generic drug sector. Our dedication to this approach has led to a steady growth in our global presence. Currently, we have a presence in more than 50 countries across all continents. This worldwide expansion showcases our determination to be a leading exporter. Our continued success in international markets has earned us the prestigious National Export Trophy (Gold) eight times, acknowledging our outstanding performance on the global platform. NNoortrthh AAmmemerricicaa North America CCICISS CCeennttraal l AAssiaa CIS Central Asia EEuuroropopepe Europe Central America & Caribbean Islands SSoSouutth h AAmmeerriccaa South America AAfrfriccaa Africa MMMiddddlele EEasastst Middle East AsiaAAsAsiiaa utSS South Asia AAuusstrraaliaiaa Australia Export Destinations SSouuthh AAsia Asia Paciﬁc + CIS Africa Europe NNortth AAmmerica Belarus Georgia Hong Kong Indonesia Kazakhstan Malaysia Moldova Mongolia Philippines Singapore Taiwan Thailand Timor-Leste Uzbekistan Cambodia Maldives Myanmar Nepal Sri Lanka Vietnam MMidddle East Jordan Oman United Arab Emirates Yemen Egypt Ethiopia Ghana Ivory Cost Kenya Lesotho Libya Mauritius Morocco Mozambique Namibia Nigeria Somalia South Africa Tanzania Zimbabwe Netherlands Turkey United Kingdom United States AAusstrralasia Fiji New Zealand LLattinn & Cenntrral AAmericaa Colombia Costa Rica Dominican Republic Ecuador El Salvador Guatemala Guyana Honduras Jamaica Mexico Netherlands Antilles Panama Paraguay Peru Suriname Annual Report 2022-23 | About Us | 25 Annual Report 2022-23 | About Us | 25 S U T U O B A S U T U O B A 26 | About Us | Annual Report 2022-23 26 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S Manufacturing Capabilities Company’s main manufacturing site is situated at Tongi, Gazipur spreading over an area of 23 acres which houses a number of self-contained 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. All manufacturing units in the plant are highly automated with equipment sourced from reputed suppliers based in Germany, USA, UK, Switzerland, China, India etc. Production Facilities Track I: Oral Solid Dosage, Semi-solid, Liquid, and Tropical Products Facility (Unit 3 Plant) In 2022, Beximco Pharma built a state-of-the-art oral solid dosage (OSD), semi solid, liquid, and topical dosage forms manufacturing facility, called Unit-3 plant. This impressive complex spans three levels, encompassing a substantial 95,000 square feet on each level. The facility operates with full automation and features state-of-the-art machinery sourced mostly from Europe. It meticulously maintains environmental conditions through a comprehensive building management system (BMS). Unit-3 also houses a fully automated quality assurance and quality control laboratory, laundry facilities, and a self-contained canteen, establishing itself as a self-sufﬁ cient hub for generic pharmaceutical production. The facility’s automatic management of temperature, humidity, air pressure, and air changes ensure compliance with regulatory requirements from entities like the US FDA, TGA Australia, UK MHRA, and Health Canada. It relies on 85 Air Handling units (AHU), 9 Makeup Air Units (MAU), and 19 Fan Coil Units (FCU), incorporating HEPA ﬁ lters with a 99.997% efﬁ ciency to ﬁ lter the air within the facility. The facility is capable of producing 5,000 million tablets & capsules and 130 million liquid bottles (extendable up to 9,000 million and 200 million ,respectively round the clock basis), 36 million creams and ointments and 25 million suppositories. Ophthalmic, Intravenous Fluids, Nasal Spray & Respiratory Products The Company operates advanced production facilities specializing in various medical products, including ophthalmic, nasal spray, intravenous ﬂ uids, insulin, non-steroidal respiratory medications, and injectables such as liquid injectables ampoule, pre-ﬁ lled syringes, and lyophilized injectables products. The ophthalmic products manufactured by the company are exported to international markets, including Europe, Canada, and the UK. The ophthalmic facility has the capacity to produce 4 million units annually. The other manufacturing capabilities encompass 10 million units of intravenous ﬂ uids (IV), 3 million units of insulin, 4.32 million ampoules, 3.6 million preﬁ lled syringes and lyophilized injectables, along with 0.65 million units of nasal spray. Annual Report 2022-23 | About Us | 27 Annual Report 2022-23 | About Us | 27 S U T U O B A S U T U O B A 28 | About Us | Annual Report 2022-23 28 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S Track II: Oral Solid Dosage (Unit 2) Facility The multi-story Oral Solid Dosage manufacturing facility, spanning 65,000 square feet, was established in 2000 to produce pharmaceuticals for regulated markets such as the USA, Europe, and countries in the Far East like Australia. It commenced operations in 2006, specializing in tablets and non-penicillin capsules. The facility boasts state-of-the-art technology and is approved by the US FDA. Products manufacturing in this unit are being exported to the regulated markets including USA , Australia and Canada. The facility is capable of producing 3,000 million tablets and 400 million capsules. Annual Report 2022-23 | About Us | 29 Annual Report 2022-23 | About Us | 29 S U T U O B A S U T U O B A Inhaler Facility (MDI and DPI) We produce Metered Dose Inhaler (MDI), Dry Power Inhaler (DPI) and multidose Dry Power Inhaler (mDPI) in 2 Inhaler facility. The facility uses state-of the-art technology from European sources like Switzerland, Germany, Italy & UK and are known for producing eco-friendly HFA-based inhalers since 2006. MDI plant has separate facility for steroids and non-steroids and is capable of using both single stage and double stage manufacturing facilities. It has mDPI German diskette technology. The facility is capable of producing 20 million cans of inhalers and 200 million pieces of DPI capsules. This capacity is further being expanded. A new unit is in the phase of completion with a further manufacturing capacity of 8 million units. Penicillin 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. The facility is capable of producing 42.24 million capsules and 3 million bottles per year. Active Pharmaceutical Ingredients (APIs) Beximco Pharma has manufacturing facility for multiple APIs such as Apixaban, Linagliptin, Rivaroxaban, Rosuvastatin, Sitagliptin, Penicillin, and Diclofenac in two plants. The current manufacturing capacity is around 22MT. Liqueﬁ ed Nitrogen The Company has a Liqueﬁ ed Nitrogen plant with capacity of 1.75 million litres of gas for internal use and external sales. 30 | About Us | Annual Report 2022-23 30 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S Energy, Utility, and Other Infrastructure Beximco Pharma is equipped with essential utility facilities to support its operations. These include a 12.5 MW captive power plant and a 10.6 MW DESCO power facility. The Company also manages 10 boilers, collectively capable of producing 26 tons of steam. Among these, ﬁ ve exhaust boilers are powered by generator exhaust gas, contributing to a total capacity of 6 tons. In terms of utilities consumption, the Company uses water at a rate of 312 m3 per hour, drawn through three borewell pumps. Chilled water, essential for various processes, is provided by 15 chillers at a rate of 5.5 TR (tons of refrigeration). Beximco Pharma has also taken steps towards responsible environmental management with on-site facilities. This includes an Efﬂ uent Treatment Plant (ETP) boasting a capacity of 605 square meters. Additionally, an Incinerator with a daily capacity of 250 kg ensures the proper disposal of waste generated from the Company’s operations. The Company has a Plant Engineering Services (PES) Department staffed with 200 Engineering professionals, provides engineering support to all facilities of the site. The core responsibility of PES is to ensure uninterrupted operation process with the highest output through timely maintenance. PES played an important role in providing uninterrupted utility supplies, power, water, air, and steam throughout the factory. The Company has a spacious 327,000 sq ft GMP-compliant warehousing facility. The facilities are managed by the Warehouse Department which perform functions such as goods receiving, quality inspections, shelf-life monitoring, storage, and inventory management. The warehouse is equipped with advanced HVAC and cooling systems to maintain temperatures from -15 to -25°C, 2-8°C, 8-15°C, and 15-25°C, tailored to product requirements. Temperature and humidity are continuously controlled via a computerized system. Our vehicles are equipped with temperature control systems for safe transport of sensitive materials and products. Annual Report 2022-23 | About Us | 31 Annual Report 2022-23 | About Us | 31 S U T U O B A S U T U O B A 32 | About Us | Annual Report 2022-23 32 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S 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. Beximco Pharma places a signiﬁ cant focus on Research and Development (R&D) to drive innovation and growth. Our R&D approach is responsive to market needs and incorporates cutting-edge technologies. The Company’s skilled multidisciplinary team of scientists develops complex and unique products, serving both domestic and international markets with stringent regulations. Our key strength lies in our ability to excel in creating a portfolio of differentiated products beyond conventional dosage forms including metered dose inhalers, dry powder inhalers, nasal sprays, dispersible tablets, preﬁ lled syringes, lyophilized injectables, sterile ophthalmic, etc. The R&D team has demonstrated their strong capacity for innovation and rapid response to health crises. Their successful introduction of generic versions of various COVID-related medications, such as the world’s ﬁ rst generic remdesivir and the Bexovid tablet, serves as clear evidence of their capabilities. This helped the Company earn CPhl Pharma Award 2020 for “Innovation in Response to COVID-19”. Beximco Pharma’s R&D represents a dedication to innovation, fostered by its state-of-the-art research lab. Through its responsive, diversiﬁ ed, and collaborative R&D initiatives, Beximco Pharmaceuticals stands as a dynamic contributor to healthcare solutions. In fostering a collaborative environment, we have established partnerships with accredited contract research organizations and research institutes. These collaborations extend to the undertaking of studies and research initiatives, encompassing bioequivalence testing and in-vitro studies. Our R&D facility spans an area of 20,000 sq. ft and encompasses three key sub-departments: Formulation Research Development (FRD), Analytical Development Lab (ADL), and Development Quality Assurance (DQA). Within these departments, a dedicated team of 106 scientists actively contributes to our research endeavors. In the realm of Formulation Development, our R&D boasts a range of specialized lab-scale equipment, such as high shear mixer granulators, Fluid Bed Dryers/Processor, automatic ﬁ lm coating machines, compression machines, Bi-layer compression machines, blister machines, and more. For analytical pursuits, our facility is equipped with state-of-the-art instruments, including HPLC, UPLC, Atomic absorption spectrophotometer, dissolution tester, Laser diffraction-based particle size analyzer, FTIR, GC-MS, Andresen Cascade impactor (ACl), Next-generation impactor (NGI), Oxford Laser equipment, DSC, Hot-stage microscope, among others. In the ﬁ scal year 2022-23, our R&D department achieved notable milestones in product development, generating a good number of products for the domestic as well as international markets including regulated market like the USA, Australia, and Canada. These accomplishments underscore our commitment to innovation, regulatory compliance, and the continual expansion of our product portfolio to meet the dynamic demands of both domestic and international markets. Annual Report 2022-23 | About Us | 33 Annual Report 2022-23 | About Us | 33 S U T U O B A 34 | About Us | Annual Report 2022-23 A A B B O O U U T T U U S S Global Accreditations • U.S. FDA • Therapeutic Goods Administration (TGA), Australia • German Regulatory Authority (Regierungspräsidiums Tübingen) • Gulf Central Committee (GCC) • World Health Organization (WHO) • ANVISA (Brazil) Annual Report 2022-23 | About Us | 35 Annual Report 2022-23 | About Us | 35 S T H G I L H G H I E C N A M R O F R E P Performance Highlights 36 | Performance Highlights | Annual Report 2022-23 Operational Highlights I I I I I I P P H P HH P P H PH E E E E G G RG G G G R R R R R H H H H F F F F F F L L L L OL O OI O O O I I I I R RG R R R R G G G M M M MH M M H H H H H T T AT T T T A A A A A S S S S NS S N N N C CC C C E E EE EE (cid:11)(cid:7)(cid:12)(cid:3)(cid:8)(cid:5)(cid:9)(cid:13)(cid:14)(cid:6)(cid:2)(cid:7)(cid:8)(cid:9)(cid:3)(cid:10) (cid:11)(cid:11)(cid:11)(cid:7)(cid:11)(cid:7)(cid:11)(cid:7)(cid:12)(cid:7)(cid:12)(cid:7)(cid:12)(cid:3)(cid:12)(cid:3)(cid:12)(cid:3)(cid:8)(cid:3)(cid:8)(cid:5)(cid:3)(cid:8)(cid:5)(cid:9)(cid:8)(cid:5)(cid:9)(cid:13)(cid:5)(cid:9)(cid:13)(cid:9)(cid:13)(cid:14)(cid:13)(cid:14)(cid:13)(cid:14)(cid:6)(cid:14)(cid:6)(cid:14)(cid:6)(cid:2)(cid:2)(cid:2)(cid:7)(cid:2)(cid:7)(cid:2)(cid:7)(cid:8)(cid:7)(cid:8)(cid:7)(cid:8)(cid:9)(cid:8)(cid:9)(cid:3)(cid:8)(cid:9)(cid:3)(cid:9)(cid:3)(cid:10)(cid:3)(cid:10)(cid:3)(cid:10)(cid:10)(cid:10) (cid:2)(cid:2)(cid:2)(cid:3)(cid:2)(cid:3)(cid:2)(cid:3)(cid:4)(cid:3)(cid:4)(cid:3)(cid:4)(cid:5)(cid:4)(cid:5)(cid:6)(cid:4)(cid:5)(cid:6)(cid:5)(cid:6)(cid:2)(cid:2)(cid:2)(cid:2)(cid:7)(cid:2)(cid:7)(cid:8)(cid:7)(cid:8)(cid:7)(cid:8)(cid:9)(cid:8)(cid:9)(cid:3)(cid:8)(cid:9)(cid:3)(cid:3)(cid:10)(cid:3)(cid:10)(cid:10)(cid:10) (cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:2)(cid:7)(cid:8)(cid:9)(cid:3)(cid:10) Annual Report 2022-23 | Performance Highlights | 37 Annual Report 2022-23 | Performance Highlights | 37 AAnnnnuual al RRepepoort t 202020222-223 3 | | PePerfrforormmaancnce e HHigghlhligghthts s | 3377 AnnuAnnA Perf Perfo Highlghlighlightghts hts | 3s | 37377 nual ual R al Rep Repo eport ort 2 23 | 3 | Pe ancemanc rform orma t 202 2022 ce H e Hig 22-2 2-23 S S T T H H G G I I L L H H G G H H I I E E C C N N A A M M R R O O F F R R E E P P Beximco Pharma (Consolidated) 2022-23 2021-22 Net sales BDT 39,266.7m 13.3% BDT 34,669.2m Domestic sales Export sales Gross Proﬁ t Proﬁ t before tax Proﬁ t after tax BDT 36,503.5m 14.1% BDT 31,984.1m BDT 2,763.2m 2.9% BDT 2,685.1m BDT 17,313.4 m 9.4% BDT 15,820.2m BDT 6,068.8m 9.2% BDT 6,686.9m BDT 4,524.5m 9.5% BDT 4,998.6m EPS BDT 10.34 9.9% BDT 11.48 NAVPS BDT 97.91 7.6% BDT 91.01 38 | Performance Highlights | Annual Report 2022-23 38 | Performance Highlights | Annual Report 2022-23 38 | Performance Highlights | | AAnnual Report 2022-23 I I H H G G H H L L I I G G H H T T S S P P E E R R F F O O R R M M A A N N C C E E Beximco Pharma (Stand-alone) 2021-22 2022-23 BDT 30,220.7m 9.2% BDT 32,991.9m Net sales BDT 27,553.6m 9.7% BDT 30,238.9m BDT 2,667.2m 3.2% BDT 2,753.0m BDT 13,712.8m 5.9% BDT 14,520.4m BDT 6,736.5m 12.5% BDT 5,897.3m BDT 5,161.3m 11.1% BDT 4,588.0m Domestic sales Export sales Gross Proﬁ t Proﬁ t before tax Proﬁ t after tax BDT 11.57 11.1% BDT 10.28 EPS BDT 90.37 7.5% BDT 97.15 NAVPS 35% Cash Dividend for 2022-23 Annual Report 2022-23 | Performance Highlights | 39 Annual Report 2022-23 | Performance Highlights | 39 Annual Report 2022-23 | Performance Highlights | 39 S S T T H H G G I I L L H H G G H H I I E E C C N N A A M M R R O O F F R R E E P P Value Addition Value Added: Sales & Other Income Bought-in-Materials & Services Applications: Salaries and Beneﬁ ts to Employees Interest to Lenders Duties & Taxes to Govt. Exchequer Dividend to Shareholders Retained by the Company Amount in Million Taka 2022-23 2021-22 Taka % Taka % 46,053 (22,186) 23,867 6,705 1,286 9,215 1,645 5,016 23,867 28.1% 5.4% 38.6% 6.9% 21.0% 100% 41,301 (19,074) 22,227 6,035 1,002 8,028 1,608 5,554 22,227 27.2% 4.5% 36.1% 7.2% 25.0% 100% 28.1% 27.2% 38.6% 36.1% 2022- 23 2021- 22 25.0% 21.0% 5.4% 4.5% 6.9% 7.2% Salaries and Beneﬁts to Employees Interest to lenders Duties & Taxes to Govt. Exchequer Dividend to Shareholders Retained by the Company 40 | Performance Highlights | Annual Report 2022-23 40 | Performance Highlights | Annual Report 2022-23 I I H H G G H H L L I I G G H H T T S S P P E E R R F F O O R R M M A A N N C C E E Key Financial Indicators Amount in Million Taka unless stated otherwise Net Revenue Profit Before Tax m 7 6 2 , 9 3 m 9 6 6 , 4 3 m 4 9 4 9 2 , m 2 1 6 , 5 2 m 7 1 8 , 2 2 m 7 1 7 , 7 1 m 7 8 6 , 6 m 8 7 3 , 6 m 9 6 0 , 6 m 6 4 9 3 , m 3 5 6 4 , m 1 6 3 , 3 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Profit After Tax Earning Per Share (Taka) m 6 6 1 , 5 m 9 9 9 , 4 m 4 2 5 , 4 m 4 4 5 , 3 m 0 4 0 , 3 m 3 3 5 , 2 9 4 . 1 1 8 4 . 1 1 4 3 . 0 1 8 4 . 7 8 8 . 7 5 2 . 6 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Dividend (%) NAV Per Share (Taka) % 5 3 % 5 3 % 5 3 1 9 7 9 . 1 0 1 9 . 1 0 3 8 . 2 1 0 8 . 6 9 2 7 . 8 7 6 6 . % 5 2 % 5 1 % 0 5 2 1 . 2017-18 2018-19 2019-20* 2020-21 2021-22 2022-23 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 * Includes 10% Stock Dividend Annual Report 2022-23 | Performance Highlights | 41 Annual Report 2022-23 | Performance Highlights | 41 S T H G I L H G H I E C N A M R O F R E P Accolades and Awards 42 | Performance Highlights | Annual Report 2022-23 I H G H L I G H T S P E R F O R M A N C E Annual Report 2022-23 | Performance Highlights | 43 S T H G I L H G H I E C N A M R O F R E P 44 | Performance Highlights | Annual Report 2022-23 I H G H L I G H T S P E R F O R M A N C E ICSB’s Corporate Governance Award (Gold) 2022 National Productivity and Quality Excellence Award 2021 Annual Report 2022-23 | Performance Highlights | 45 S T H G I L H G H I E C N A M R O F R E P 46 | Performance Highlights | Annual Report 2022-23 I H G H L I G H T S P E R F O R M A N C E Beximco Pharma on Forbes Asia’s “Best Under a Billion” Company list Rabbur Reza, COO of Beximco Pharma, received this prestigious recognition for the third consecutive time in a grand ceremony held in Manila, Philippines. Annual Report 2022-23 | Performance Highlights | 47 Annual Report 2022-23 | Performance Highlights | 47 S U T U O B A International Media Coverage Beximco Pharma Managing Director, Nazmul Hassan MP Interviewed by CNN 76,529 views Apr 27, 2023 Beximco Pharma is a global leader in the manufacturing of generic drugs, with its products sold around the world. Based in Bangladesh, the company has long understood the importance 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(cid:22)(cid:12)(cid:16)(cid:18)?(cid:13)(cid:2)(cid:2)(cid:5)(cid:8)(cid:9)(cid:10)*(cid:4)(cid:12)(cid:9)(cid:18)(cid:4)(cid:29)(cid:6)/(cid:8)(cid:26)(cid:15)(cid:2)(cid:4)0(cid:11)(cid:12)(cid:16)(cid:26)(cid:12)(cid:4)(cid:11)(cid:12)(cid:20)(cid:4)(cid:7)(cid:13)(cid:12)(cid:21)(cid:6)(cid:18)(cid:4)(cid:12)(cid:4)(cid:20)(cid:8)(cid:10)(cid:9)(cid:8)A(cid:4)(cid:15)(cid:12)(cid:9)(cid:14)(cid:4)(cid:16)(cid:2)(cid:13)(cid:6)(cid:4)(cid:8)(cid:9)(cid:4)(cid:14)(cid:11)(cid:12)(cid:14)(cid:27)5 Annual Report 2022-23 | Performance Highlights | 49 Annual Report 2022-23 | About Us | 49 S U T U O B A ENVIRONMENTAL, SOCIAL and GOVERNANCE (ESG) 50 | About Us | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I Environmental Beximco Pharma cares for the environment and recognizes its responsibility to protect and promote sustainable and eco-friendly practices. The Company is dedicated to ensuring a safe and healthy workplace, fostering environmental excellence in its operations, and meeting global Environmental, Health, and Safety (EHS) standards. We deliberately choose technologies that meet environmental standards and employ state-of-the-art machinery in our manufacturing processes. Our facilities and processes are designed to minimize the environmental impact of manufacturing activities. We responsibly control, dispose of, and manage liquid and solid wastes, as well as gaseous emissions generated from our operations. Adhering to relevant government regulations and industry standards, all our manufacturing facilities hold certiﬁ cations from the Department of Environment. To prioritize the health and safety of employees, contractors, visitors, and neighbours affected by our operations, to maintain a rigorous Occupational Health and Safety System. This includes a dedicated Environment, Health, and Safety (EHS) Department staffed with qualiﬁ ed personnel overseeing compliance. Environment, Health and Safety EHS Team Beximco Pharma has a strong EHS Committee comprising of senior-level management people dedicated to supervising environmental, health, and safety (EHS) issues and ensuring that agreed standards are followed. Their ongoing dedication is aimed at building an EHS excellence culture throughout the organisation. This Committee meets periodically to review the current operation, identify potential areas for improvement, and recommend remedial actions as needed. In addition to the EHS Committee, Beximco Pharma has established a Safety Committee, which includes representatives from both management and the workers. This group is crucial in monitoring and managing health and safety issues, acting as a channel to bring any relevant issues to the attention of management. Furthermore, they participate in activities aiming at raising awareness of safety issues throughout the Company’s facilities. Beximco Pharma’s internal team conducts annual audits concentrating on Environment, Health, and Safety. Any areas of improvement discovered during these audits are promptly conveyed to the relevant departments for necessary measures. This proactive strategy demonstrates the Company’s commitment to maintaining high standards of EHS performance and ensuring the well-being of its employees and the broader community. EHS Policy The EHS policy of Beximco Pharma is a comprehensive commitment aimed at ensuring the well-being of its workforce and minimizing the environmental impact of its operations. The key elements of this policy include: • EHS Compliance The Company is devoted to establishing itself as an EHS-compliant entity, unwaveringly adhering to the laws of the land and fulﬁ lling the requirements outlined by regulators. • Environmental Impact Reduction Beximco Pharma actively endeavors to reduce the impact of its activities on the environment. The goal is to prevent or minimize pollution and responsibly manage the use of natural resources. • Maintaining and Enhancing EHS Conditions Beximco Pharma is dedicated to providing, maintaining, and improving EHS conditions across all levels of its workplace. This involves a holistic approach to create a safe and healthy environment for its employees. • Training for EHS Implementation The Company emphasizes the importance of imparting necessary training to its employees for the effective implementation of EHS- related rules. This training is designed to improve safe working habits, attitude, and discipline among the workforce. Annual Report 2022-23 | Environmental, Social and Governance | 51 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I • Ensuring a Safe Working Environment Beximco Pharma is committed to ensuring a safe working environment and providing the necessary support to prevent injuries, safeguard employee health, and mitigate occupational hazards. • Encouraging Personal Accountability The Company fosters a culture of personal accountability among its associates. This involves encouraging and educating employees to take individual responsibility and share ideas for protecting the environment and creating a safe and healthy workplace. • Effective EHS Risk Management Beximco Pharma is committed to managing EHS risks effectively. This includes actively seeking and acting upon meaningful opportunities to reduce risks and continually improving its EHS performance. Beximco Pharma’s EHS policy reﬂ ects a comprehensive approach to workplace safety, environmental responsibility, and continual improvement in EHS performance, underlining the company’s commitment to the well-being of its workforce and the broader community. The policy is implemented through a comprehensive EHS Management System, overseen by governance that involves all levels of the Company. Our performance is monitored and regularly reviewed to ensure that our standards of conduct meet our expectations, and that the policy continues to be of value to our business as well as stakeholders. • Compliance to Laws and Regulations Our EHS operation is governed by the following Acts, Rules and Standards: • Environmental Conservation Act, 1995 • Environmental Conservation Rules, 2023 • Solid Waste Management Rules, 2021 • Air Emission Control Rules, 2022 • ISO 14001:2015-Environmental Management System • Bangladesh National Building Code, 2021 • Fire Prevention and Extinction Act, 2003 • Fire Prevention and Extinction Rules, 2014 • Bangladesh Explosive Act, 1995 • The Boiler Act, 1923 • Pressure Vessel Rules, 1995 • Occupational Health and Safety Administration • ISO 45001:2018-Occupational Health and Safety Management System • Bangladesh Labor Law, 2006 • Bangladesh Labor Rules, 2015 We actively comply with relevant government regulations and industry standards. All of our manufacturing facilities have certiﬁ cation and clearance from the appropriate authorities. 52 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I Environmental Sustainability Measures Solid And Liquid Waste Managemnet The solid waste generated from the manufacturing operation is appropriately managed complying with 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 system to ensure zero discharge of hazardous solid waste to the environment that may harm the surrounding ecological system. Beximco Pharma has its own incineration plant, having a capacity of 250 kg per hour depending on caloriﬁ c value of the waste. The quality of gas discharged after puriﬁ cation by the scrubber system from the incinerator is well within acceptable standard set by the Department of Environment (DoE). Waste is burned in the primary chamber at 800o C. Gaseous emissions evolved from the primary chamber are burned in the secondary chamber at 1200o C to 1400o C. The height of the chimney is more than 30 meters from ground level as per regulations. 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 a treatment device to purify the vapor before discharging into the atmosphere. Quality of air emission from Incinerator, Boiler and Generator etc. are regularly monitored. 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 reagents and water from the cooling tower. The Company has adequate control over managing liquid waste and has its own efﬂ uent treatment plant facilities (PLC-based Membrane Bioreactor technology). Capacity of Treatment Plant is 605 m3/day. Liquid waste is collected in Equalization Tank and then transfer to chemical treatment. After chemical treatment water goes to Pre-Air Basin. The biological treatment of the wastewater takes place in the Pre-Air Basin. This basin contains countless microorganisms, such as aerobic type bacteria, that are able to break down the colloidal, organic contaminants dissolved in the wastewater. After that liquid waste passes to membrane bioreactor tank. Membrane bioreactor (MBR) is a combination of membrane processes like microﬁ ltration or ultraﬁ ltration with a biological wastewater treatment process, the activated sludge process. The pore size is 0.2 micron. Treated water quality complies with the standard value of local regulation and its quality surpasses the municipal regulation’s standard value. Sl. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Parameter Appearance pH Temperature Chemical Oxygen Demand (COD) Total Dissolved Solids Total Solids Total Suspended Solids Bio-Chemical Oxygen Demand (BOD, 5 days at 20o C) Dissolved Oxygen (DO) Chloride Sulphate Total Alkalinity Arsenic Phosphorus Zinc Manganese Copper Standard Speciﬁ cation* Actual Result Colourless to Straw colour liquid A Colourless liquid 6.0 to 9.0 NMT 40o C NMT 200 ppm NMT 2100 ppm NMT 2250 ppm NMT 150 ppm NMT 30 ppm 4.5 to 8.0 ppm NMT 600 ppm NMT 200 ppm NMT 300 ppm NMT 0.2 ppm NMT 8 ppm NMT 5 ppm NMT 2 ppm NMT 0.5 ppm 7.60 27.6o C 76 ppm 807 ppm 888 ppm 81 ppm 11.67 ppm 5.3 ppm 168.50 ppm 60 ppm 124 ppm 0.05 ppm 0.02 ppm 0.05 ppm 0.05 ppm 0.2 ppm *As per Environment Laws of Bangladesh Annual Report 2022-23 | Environmental, Social and Governance | 53 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Gaseous Emission Management Gaseous parameters in the surrounding areas, boiler outlet, generator outlet and incinerator chimney outlet are yearly monitored by Dhaka University of Engineering and Technology (DUET), which are within acceptable standard set by the Department of Environment (DoE). Test Location CO2 (%) CO (mg/Nm3) NOx (mg/Nm3) SO2 (mg/Nm3) Boiler Outlet Standard value (Fuel: Gas fuel) Boiler Outlet – 1 (Utility Building) Boiler Outlet – 2 (Vision Building) Generator Standard value (Fuel: Gas fuel) Power plant Building Generator Building Chimney Standard value (Fuel: Gas fuel) Incinerator Building Chimney NA 7 7.1 NA 6.2 NA 6.1 NA 0 9 NA 605 80 78 150 35 28 400 27 250 42 250 6 11 400 37 80 54 Ambient Air Emission Analysis report of the company also within acceptable standard set by the Department of Environment (DoE). Test Location Standard Factory Area CO2 (mg/m3) N/A 0.0 CO (mg/m3) 20 0.0025 NO2 (μg/m3) NO (μg/m3) SO2 (μg/m3) TVOC (μg/m3) PM10 (mg/m3) SPM (mg/m3) 80 0.0 N/A 0.0 80 0.0 N/A 8.0 150 61 N/A 53 ** Air Pollution (Control) Rules, 2022 Bangladesh Gazette; Ambient Air Quality Standards (Schedule-1) Noise and Odor 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 is regularly disinfected and scrubbers are installed in the main header of the gas emission line. Latest measures of Noise level around the factory is approximately 62 dBa against the standard of 75 dBa. Earthing Pit and Earth Arrester To eliminate the risk of electric shock, the metal body of all machinery is ‘earthed’ or ‘grounded,’ resulting in safer machine operation. The corporation put lightning arresters in each high-rise structure to safeguard them against lightning strikes. When dangerous lightning strikes, the arrester activates and directs the lightning to the earth, where it dissipates harmlessly. 54 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I Green Initiatives Paperless Quality Management System Beximco Pharma has successfully installed and validated electronic quality management systems (EQMS) and electronic document management systems (EDMS). Automation in quality management systems has made signiﬁ cant steps toward a greener environment. This solution has greatly decreased the demand for paper documentation by digitalizing and centralizing quality-related procedures. This change to electronic document records has not only reduced paper waste but decreased the carbon footprint connected with paper-based document preparation. Saving Water And Energy We endeavour to minimize the use of water and energy to help preserve these important resources. Below are some of our initiatives in this directions: • Re-use of water treated in efﬂ uent treatment plant for gardening, car washing and as water scrubber of incinerator. We also reuse wastewater of our WFI (water for injection) treatment plant for cleaning and washing. • Sensor-controlled water taps installed at different areas of the factory to reduce social water consumption. Also replaced conventional electrical bulb of the facility with LED bulb for lower energy consumption • Installation of economizer in the exhaust line of the boiler to warm the feed water of the boiler. Also set up a condensate recovery system to use condensate as a feed water of the boiler and thus saving energy • Harvesting rainwater for use in different purposes in the factory. • Using waste ethanol as fuel in secondary chamber of incinerator as well as in paint dilution. • Installation of solar panels on the rooftop of Unit-3 building. Which generates 20kw of electricity. • Day light saving is given consideration in the design of buildings. Our L&D center has been built using the steel sheets and glass Observation of World Environment Day Every year we plant trees in and around our facilities as a modest attempt to create a carbon sink zone. In observance of World Environment Day on 5th June 2023, Beximco Pharma planted Wooden Rose tree (local Name: Kath Golap) in factory premises by focusing on “Solutions to Plastic Pollution” under the campaign “Beat Plastic Pollution”. Indoor plants were also distributed among the employees to create environmental awareness. Annual Report 2022-23 | Environmental, Social and Governance | 55 Annual Report 2022-23 | Environmental, Social and Governance | 55 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Protection of Health and Industrial Hygiene Fire Safety System The Company has automated ﬁ re hydrant system with a reservoir capacity of 2,30,000 liters of water to ﬁ re emergencies of the whole facility. All buildings including production, warehouse, laboratory, etc. are covered by ﬁ re detection systems. Three ﬁ re detectors such as smoke, heat and multi detector are used to detect the parameter of ﬁ re. This year the ﬁ re detection system in our newly built Unit-3 facility has been fully activated, a total of 1710 numbers of detector have been installed inside the building. We also installed 301 number of ﬁ re hydrant point including hose box and hose pipe around our factory area 0.6 bar water pressure is always maintained in the hydrant point by the jockey pump. All factory personnel are required to participate in compulsory training sessions covering the operation of ﬁ reﬁ ghting equipment and basic ﬁ rst aid procedures. Speciﬁ cally, 46.68% of employees have received hands-on training in the practical use of ﬁ re extinguishers and ﬁ re hydrants.. We execute mock ﬁ re evacuation drills twice in a year in collaboration with Bangladesh Fire Service and the Civil Defence Department to train our people how to evacuate from the workplace and respond in the event of any emergency. We posted evacuation diagrams on each ﬂ oor of every building for easy evacuation from the workplace during any emergency. Total 59 numbers of evacuation diagram are posted in the whole facility. We also give training to the respective employees on emergency procedures and the use of their relevant evacuation diagram during emergency. 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 hazards by utilizing qualitative and quantitative analysis. Signiﬁ cant risks associated with the hazards are controlled by elimination, substitution, 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. No excessive heating area is present in the factory premises. All manufacturing areas including the warehouse are temperature controlled. Work permit is issued from EHS personnel for any non-routine jobs such as hot work, work at height, conﬁ ned/closed vessel entry, etc. to work more safely. Identify potential hazards & control the risk and appropriate PPE are considered before starting the non-routine job. Smoking is prohibited in all our operational and manufacturing premises. Eating or drinking is not permitted in the manufacturing areas and analytical labs where chemical exposures are possible. All employees are trained on different EHS issues including ﬁ reﬁ ghting, personal protective equipment, Emergency exit, 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, Nutritionist etc. Employees can consult with 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 hospitals and clinics for handling emergencies. We have an ambulance to send patients to the hospitals and clinics in emergency cases. First aid boxes are provided to each department of every facility and total 82 are numbers of ﬁ rst aid boxes are available at different points of the facilities. Employees from every department undergo training in ﬁ rst aid procedures and receive training in the Company’s personal hygiene practices and general safety protocols. 56 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I Celebration of National Occupational Health and Safety 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. Company celebrates the National Occupational Health & Safety Day on April 28 to build awareness about the health and safety of people at the workplace. This year also, we celebrated the day with festive mood with displays of banners, festoons etc. at different places of the factory premise with the theme “Ensure Good Working Environment, Build Smart Bangladesh.” Child Labor 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 2022-23 | Environmental, Social and Governance | 57 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Social Human Resources Work and Culture We ﬁ rmly acknowledge that our success hinges on the dedication and exceptional capabilities of our team members. Our devoted and highly skilled workforce stands as the primary asset in the pursuit of mission, consistently occupying a central position in our strategic approach. We ﬁ rmly believe that the key to our transformation lies in empowering our personnel. We foster and nurture a motivating workplace environment that empowers individuals and fuels their inspiration to perform at their best. Our workplace has evolved into a tight-knit community of colleagues, where employees take pride in their roles, their teams, and our organization. They enthusiastically celebrate their colleagues’ achievements and collaborate seamlessly across the Company. This unwavering commitment to our people-centric culture truly sets Beximco Pharma apart from the rest. Diversity, Equity, and Inclusion At present, Beximco Pharma boasts a workforce exceeding 5,500 individuals. Within this dynamic team, we harness the skills and knowledge of over 1,500 professionals spanning various disciplines such as pharmacists, chemists, physicians, biologists, engineers, microbiologists, legal experts, MBAs, and dedicated researchers. Our team is a harmonious blend, exhibiting signiﬁ cant diversity in terms of educational backgrounds, age, experience, and gender. We are committed to recruiting individuals from a wide spectrum of expertise, thereby enriching the collective strength of our workforce. e e y o p m E l l a t o T 9 8 4 4 5 5 7 4 4 0 1 5 7 7 3 5 6 0 7 5 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Our commitment to promoting gender diversity at Beximco Pharma is underscored by our proactive approach. When faced with equally qualiﬁ ed male and female candidates for a position, we prioritize the inclusion of female candidates. Currently, our workforce comprises 222 full-time permanent female employees, holding positions across various levels within the organization, with two of them contributing as members of the Company’s Management Committee. This dedication to fostering gender diversity is reﬂ ected in the steady increase in the number of female employees, rising from 138 as of June 30, 2018 to 222 as of June 30, 2023, spanning all organizational levels. We remain dedicated to creating an inclusive and diverse workplace that reﬂ ects the values of equality and opportunity. Talent Acquisition and Retention At Beximco Pharma, our Human Resources policy is centered around the core principles of attracting, retaining, and fostering top-tier talent within the industry. We are dedicated to achieving this by offering competitive compensation packages, comprehensive end- of-service beneﬁ ts, and abundant opportunities for career advancement within our organization. 58 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I Additionally, we place a strong emphasis on upholding fairness and equity in our selection and recruitment processes. Our unwavering commitment to inclusivity is reﬂ ected in our strict non-discrimination policy, which ensures that candidates are evaluated solely based on their qualiﬁ cations and merits, without regard to factors such as gender, religion, faith, color, or nationality. Annually, Beximco Pharma creates new opportunities for employment, and in the ﬁ scal year 2022-23, we extended a warm welcome to 746 individuals who joined our permanent workforce. This expansion resulted in the addition of a net of 273 skilled professionals, which reﬂ ects our dedication to assembling a team that plays a pivotal role in our shared success. Training and Development In the contemporary business landscape, characterized by intense competition and escalating complexity, the rapid pace of innovation, digital advancements, and constant shifts in rules, regulations, and standards pose ongoing challenges. Consequently, the shelf life of knowledge and skills has signiﬁ cantly shortened. Acknowledging the critical need to ensure our employees are well-prepared to excel in this dynamic and fast-paced work environment, learning and development have consistently maintained a paramount position in Beximco Pharma’s priorities. Understanding that staying ahead requires continuous adaptation, we are committed to providing our workforce with the necessary tools and resources to navigate and thrive amidst these evolving challenges. Quality Control Circles In pursuit of personal and organizational growth, Beximco Pharma actively promotes employee engagement in various developmental activities. A noteworthy initiative in this endeavor is the establishment of Quality Control Circles (QCC), where dedicated team members identify and solve challenges within their respective work areas. This initiative not only strengthens team bonds but also fosters innovation and a sense of ownership among employees. The QCC team has successfully developed several improvement projects, resulting in an estimated annual savings of approximately BDT 240 million. Furthermore, Beximco Pharma encourages employees to actively participate in national and international quality conventions. The Inhaler production team, in particular, achieved a remarkable feat by securing the ﬁ rst position with a perfect score of 100% at the National Quality Control Convention (NQCC). Taking their dedication to international platforms, the team also participated in a convention held in Beijing, China, where they clinched the prestigious Gold Award. This recognition exempliﬁ es the unwavering commitment and passion of our Quality Circle team in setting and maintaining exceptionally high standards. These achievements serve as a testament to the continuous pursuit of excellence within Beximco Pharma. Beximco Pharma’s participation in national and international quality convention: Year 2019 2020 2021 2022 2023 No. of team participated 3 1 3 4 14 Level National International National National National Award received PLATINUM Award received GOLD - 1 1 4 11 3 - 2 - 3 Specialized Training In the ﬁ scal year 2022-23, a total of 605 team members actively engaged in a comprehensive 8,754 man-hours of specialized Annual Report 2022-23 | Environmental, Social and Governance | 59 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I i i g n n a r T e e y o p m E l Overseas Virtual 269 685 1036 3075 1080 Overseas 312 Physical 0 1000 Local 767 Hours of Training 2022-2023 2021-2022 2020-2021 2019-2020 6805 8613 5248 training. These learning experiences spanned a diverse array of subjects, encompassing areas such as 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 initiatives served as valuable supplements to the ongoing customized programs provided by our dedicated training departments at both the factory and head ofﬁ ce levels throughout the year. The commitment to continuous learning and development underscores our dedication to ensuring that our team remains well-equipped and adaptable in the face of evolving challenges and opportunities. Learning Management System (LMS) Beximco Pharma has taken a signiﬁ cant step towards enhancing employee development with the recent introduction of the Skillsoft online Learning Management System. This platform is designed to facilitate the soft skills development of our workforce. Presently, 100 employees have been granted one-year access to the platform, resulting in a total of 466 hours dedicated to learning across 3,165 login sessions. This initiative reﬂ ects our commitment to providing accessible and effective tools for continuous learning, empowering our employees to reﬁ ne and expand their soft skills for personal and professional growth. Training on Manufacturing Excellence Annually, Beximco Pharma undertakes a thorough analysis of the training needs for its factory-based employees to ensure they acquire essential skills and stay abreast of industry updates. In the ﬁ scal year 2022-23, we dedicated 1,128 hours to classroom training, covering a spectrum of topics including manufacturing practices, documentation, validation, safety, and more. Safety training, speciﬁ cally, delved into personal protective equipment (PPE), ﬁ re prevention, ﬁ rst aid, and emergency procedures, with an extensively trained emergency response team in place. Our commitment to excellence extends to cleanroom behavior training conducted every three months for sterile product manufacturing. Additionally, we offer soft skills training, including leadership and communication, and practical training on procedures and protocols, encompassing 1,468 SOPs, 945 STPs, 301 Protocols, and 53 GTPs. This training extends to various categories, including new employees, auditors, and machine operators. In the 2022-2023 period, Beximco Pharma welcomed 143 permanent employees and 283 contractual employees for factory-based workstations, each undergoing a comprehensive training program covering basic Good Manufacturing Practices, safety procedures, on-the-job training, and instruction on Standard Operating Procedures. Newly recruited team members also receive training in essential soft skills, and upon successful completion of all mandatory modules, they are awarded certiﬁ cates signifying their readiness for their designated roles. For in-house auditors, a rigorous training program, comprising both theoretical and practical components, precedes their roles. Auditors undergo thorough training and examination processes to ensure their ability to conduct comprehensive inspections across various areas, identifying potential weaknesses. This meticulous approach is vital in upholding the highest standards, consistently ensuring product quality and patient safety. 60 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I The operation of our advanced machines demands a high level of skill and expertise. To empower our employees with the indispensable knowledge and proﬁ ciency required to handle these sophisticated machines effectively and safely, we have instituted a rigorous and comprehensive training program. This program includes a series of specialized courses and practical exercises, meticulously crafted to guarantee that machine operators not only meet but exceed the stringent standards set by Beximco Pharma for the operation of our state-of-the-art machinery. This commitment to ongoing training ensures that our workforce remains at the forefront of technological advancements, promoting efﬁ ciency, safety, and the overall excellence of our operations. To gauge the effectiveness of our courses, we employ structured questionnaires that provide valuable insights into the learning outcomes and overall impact. These assessments contribute to continuous improvement and reﬁ nement of our training programs, ensuring they align with the evolving needs of our workforce. In addition, our commitment to quality training is underscored by the careful selection of trainers. Individuals with proven expertise in their respective ﬁ elds are chosen to lead sessions. Before taking on this role, our trainers undergo a comprehensive ‘Train the Trainer’ program, equipping them with the skills and methodologies necessary to effectively impart knowledge and facilitate a conducive learning environment. This approach ensures that our training sessions are not only informative but also delivered by professionals who are adept at transferring their knowledge to our workforce. Corporate Events and CSR Medicine Donation to UN BPL donated medicines for the medical camp organized by UN Peace Keeping Unit in Mali. Sponsoring JAAGO Foundation An art competition for the underprivileged students to promote environmental awareness. Iftar for underprivileged students Annual Report 2022-23 | Environmental, Social and Governance | 61 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Scholarship Award 2022–23 The management of Beximco Pharma handed over certiﬁ cates, stipend money & laptops to the meritorious children of the factory employees for the year 2022-23. Observance of World Environment Day 2023 62 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I Sponsoring Leadership Summit Beximco Pharma was one of the Sponsors of the Bangladesh Leadership Summit organized by the Bangladesh Brand Forum on November 05, 2022. Scientiﬁ c Symposium on Changing Landscape of Lipid Management Launching program of Atova EZ (Atorvastatin & Ezetimibe combination) was arranged in association with Dept. of Cardiology, Sylhet MAG Osmani Medical College in Sylhet on August 5, 2022. The program included a scientiﬁ c symposium with Prof. Dr. Abdullah Al Shaﬁ Majumder, Former Director & Professor, NICVD as the keynote speaker. Renowned cardiologists, endocrinologists, nephrologists, and potential medicine specialists from different institutions of Sylhet were present as panel of experts. Clinical Study Dissemination Session Beximco Pharma sponsored the clinical study of BPL’s leading anti-hypertensive brand Bizoran (Olmesartan and Amlodipine) conducted by the cardiology study group of Bangladesh. The observational study was conducted in different areas of Bangladesh in which a total of 443 Bangladeshi adult patients with hypertension participated as the study population. The study ﬁ ndings have been published in the World Journal of Advanced Research and Reviews. Annual Report 2022-23 | Environmental, Social and Governance | 63 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Celebrating World Lung Day September 25, 2022 Scientiﬁ c Seminar on Updated Management of Asthma 5th International Endocrine Conference of BESCON Nervalin CR Scientiﬁ c Seminar Scientiﬁ c Session on Analgesia in Childbirth World Hypertension Day World Diabetes Day 64 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I World Asthma Day Breast Cancer Awareness Month World Mental Health Day Annual Report 2022-23 | Environmental, Social and Governance | 65 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Annual Sales and Marketing Conference The Annual Sales and Marketing Conference for the Acute Care division and Chronic Care division took placefrom March at Cox’s Bazar. The conference was attended by the entire sales team, SBM department, and other associated departments. Strategic Brieﬁ ng Session, Dubai The Director, Managers and Team leaders of SBM and Sales department of BPL attended a strategic brieﬁ ng session in Dubai. 66 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I National ASE Conference The National Area Sales Executives Conference held at a resort in Dhaka. CPhI 2022 Beximco Pharma’s stall at the CPhI 2022 held in Frankfurt, Germany. Sales Conference in Kenya Sales Conference of Sales Team of Kenya held in June 2023. Annual Report 2022-23 | Environmental, Social and Governance | 67 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Vision 2030 Workshop Beximco Pharmaceuticals organized a strategic workshop on ‘Vision 2030’ during December 02-03, 2022. All the senior management of BPL along with Chief Operating Ofﬁ cer, Rabbur Reza, were present there to discuss the Company’s long-term goals and expectations to create a globally competitive and prosperous company by 2030. a MasterControl Go Live operation MasterControl, renowned Quality globally Management System, was successfully implemented in Beximco Pharma and Synovia Pharma within an impressive four-month timeframe. This achievement highlights the collaborative efforts of Beximco and Synovia Teams, along with implementation partner SeerPharma, and MasterControl. 68 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I We strive to convert every possibility into a reality. We continue to develop capabilities and build scale in order to meet the challenges of the future. Annual Report 2022-23 | Environment, Social & Governance | 69 Annual Report 2022-23 | Environmental, Social and Governance | 69 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I A S F Rahman Chairman Salman F Rahman MP Vice Chairman 70 | Environmental, Social and Governance | Annual Report 2022-23 I I E E N N V V R R O O N N M M E E N N T T A A L L , , A A N N D D G G O O V V E E R R N N A A N N C C E E S S O O C C A A L L I I Governance Our Governance Structure The Board of Directors Audit Committee Nomination and Remuneration Committee Executive Committee Management Committee Board Composition Chairman Vice Chairman Managing Director Other Directors Independent Director Annual Report 2022-23 | Environmental, Social and Governance | 71 Annual Report 2022-23 | Environmental, Social and Governance | 71 E E E C C C N N N A A A N N N R R R E E E V V V O O O G G G D D D N N N A A A I I I L L L A A A C C C O O O S S S ,, , , , L L L A A A T T T N N N E E E M M M N N N O O O R R R V V V N N N E E E I I I Board and Board Committees 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 (NRC) Dr. Md. Ibraheem Hosein Khan Iqbal Ahmed Osman Kaiser Chowdhury Mohammad Asad Ullah, FCS Chairman Member Member Secretary 72 | Environmental, Social and Governance | Annual Report 2022-23 72 | Environmental, Social and Governance | Annual Report 2022-23 72 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I 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 Annual Report 2022-23 | Environmental, Social and Governance | 73 Annual Report 2022-23 | Environmental, Social and Governance | 73 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I 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 a member of the Board of Trustees of North South University Foundation, the ﬁ rst private university in Bangladesh. 74 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I 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. He is a keen promoter of sports and is the Chairman of Abahani Ltd, the premier sporting club of the country. He holds a degree from the University of Karachi. Annual Report 2022-23 | Environmental, Social and Governance | 75 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I 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 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. 76 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I 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 with an illustrious career, culminating in her last position as Additional Secretary in the Financial Institution Division of the Ministry of Finance. Having commenced her civil service journey at an entry level, she progressively ascended to senior administrative and policy roles. Throughout her career, Ms. Ahmed held signiﬁ cant positions in various ministries, including Shipping, Commerce, Home Affairs, and Fisheries & Livestock. She also served as a Director of Karmasangsthan Bank for over ﬁ ve years. Demonstrating a stellar academic track record, Ms. Ahmed holds 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. Ms. Quamrun Naher Ahmed is currently the Chairman of the National River Conservation Commission. She also serves as a Board member of IFIC Bank Limited, IFIC Securities Ltd., and IFIC Money Transfer (UK) Ltd. Her extensive experience, coupled with her academic and professional achievements, underscores her valuable contributions to various sectors and institutions. 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 2022-23 | Environmental, Social and Governance | 77 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I Mamtaz Uddin Ahmed Independent Director Professor Mamtaz Uddin Ahmed is the Treasurer of the University of Dhaka and Chairman of the Bureau of Business Research. He has over 36 years of teaching experience at university level and retired as a professor from the Department of Accounting and Information Systems, University of Dhaka in March 2023. Prof. Ahmed is an experienced board member. Besides Beximco Pharma and Nuvista Pharma, he is a Director of Ashuganj Power Station Company Ltd. His previous Board positions include Director of Chittagong Stock Exchange Ltd., Dhaka Stock Exchange Ltd., and Alhaj Textile Mills Ltd. Additionally, 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). He obtained his Bachelor and Masters in Accounting from the University of Dhaka. He is a Fellow Member of the Institute of Cost and Management Accountants of Bangladesh. Dr. Md. Ibraheem Hosein Khan Independent Director Dr. Md. Ibraheem Hosein Khan, a retired civil servant, concluded his distinguished career as the Secretary at the Ministry of Cultural Affairs within the Government of Bangladesh. His service to the Bangladesh Government included tenures in various departments, such as the Prime Minister’s Ofﬁ ce, Ministry of Land, and Ministry of Cultural Affairs. Notably, Dr. Khan also assumed the role of Administrator for the Dhaka South City Corporation. Academically, Dr. Khan holds a PhD from Jahangirnagar University in Dhaka. His educational journey includes two master’s and two bachelor’s degrees obtained from institutions in Bangladesh, Australia, and the United Kingdom. In addition to his notable government career, Dr. Khan currently serves as the Vice-Chairman of Fareast Islami Life Insurance Company Limited, a listed company on the Dhaka and Chittagong Stock Exchanges. His extensive experience and academic background underscore his valuable contributions to both public administration and the corporate sector. 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 is currently the president of ICSB for the term 2022-25 and held similar position on four previous terms. He is the only member of ICSB to receive gold medal twice for his outstanding contribution to the chartered secretarial profession. He is also a member of the board of directors of Bangladesh Institute of Capital Market (BICM). Mr. Mohammad Asad Ullah is a widely experienced person with long career in Company Secretarial functions. 78 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I 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 seasoned ﬁ nance professional with extensive experience in corporate ﬁ nance, restructuring, mergers and acquisitions, project management, and supply chain and operations management. Commencing his career as a Management Trainee at Beximco Group in 1990, he has held diverse roles within the group, demonstrating his versatility. In 2009, he assumed the position of Chief Financial Ofﬁ cer at Beximco Pharma. Additionally, Mr. Nawaz serves as a Director for Nuvista Pharma Ltd., Synovia Pharma PLC, and Beximco Pharma API Limited – all subsidiary companies of Beximco Pharma. He is also a Director of Fareast Islami Life Insurance Company Limited and Usmania Glass Sheet Factory Limited, both listed on the Dhaka and Chittagong Stock Exchanges. Mr. Nawaz is a qualiﬁ ed Cost and Management Accountant (CMA) from the Institute of Cost and Management Accountants of Bangladesh, currently a Fellow Member of the Institute. Furthermore, he earned an MBA from the Institute of Business Administration at the 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 2022-23 | Environmental, Social and Governance | 79 E C N A N R E V O G D N A I L A C O S , L A T N E M N O R V N E I 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 80 | Environmental, Social and Governance | Annual Report 2022-23 I E N V R O N M E N T A L , A N D G O V E R N A N C E S O C A L I 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 2022-23 | Environmental, Social and Governance | 81 S T R O P E R D N A S T N E M E T A T S Chairman’s Statement A S F Rahman Chairman Dear Shareholders, Amidst enduring challenges stemming from the ongoing Ukraine war and struggling global economy in the post covid period, Bangladesh economy passed through a challenging year marked with hefty devaluation of Taka against US dollar, a decrease in foreign currency reserves, a signiﬁ cant rise in energy costs and elevated domestic inﬂ ation. The persistent macroeconomic challenges experienced throughout the reporting period, which are still ongoing, made FY 2022-23 exceptionally demanding. I am delighted to announce that despite the formidable headwinds and tough trading conditions, we concluded the year with noteworthy progress, showcasing our resilience and capacity to endure. Upon reviewing the reports from the Directors and the Managing Director, you will note Beximco Pharma continued its growth 82 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D momentum in sales with an impressive 13.3% YoY increase driven primarily by strong performance in the domestic market. Alongside the sales, the Company recorded a 4.9% growth in its operating proﬁ t. The remarkable increase in the top line, however, had a marginal impact on the operating proﬁ t margin. This was primarily attributed to a decrease in the gross margin, mainly stemming from currency devaluation and inﬂ ation. Additionally, after-tax net proﬁ t declined largely because of the absence of a one-off income from vaccine distribution in the reporting period on completion of the contract. The Company fortiﬁ ed its position in the domestic market, introduced numerous new products, and expanded its footprint in overseas markets through increased approvals and registrations. The subsidiary, Nuvista Pharma, sustained positive sales momentum and maintained healthy progress. During the year, we successfully completed the integration of Synovia Pharma. We restructured its business and operating model to further expand and grow this important subsidiary. We have already seen the beneﬁ t of our efforts. Synovia Pharma, excelled in product launches, expanded its market research, and achieved remarkable sales growth during the year. Overall, these achievements underscore the Company’s resilience and success in navigating a complex business landscape. I am pleased to declare that, in line with the Company’s consistent track record of dividend payments, the Board of Directors has proposed a 35% cash dividend for the ﬁ nancial year 2022-23, mirroring the rate of dividend of the preceding year. This decision not only reafﬁ rms our commitment to providing returns to our shareholders but also underscores the robustness of our ﬁ nancial performance. As we present our operational and ﬁ nancial progress to date, we acknowledge the macroeconomic challenges affecting the global landscape. At national level, concerns include high inﬂ ation, depleting foreign currency reserves, the depreciation of the Taka, and the political uncertainty surrounding the upcoming 2024 election. Nevertheless, we ﬁ nd relief in the government’s ongoing commitment to prioritizing the manufacturing sector, particularly the pharmaceuticals and agriculture. Our ongoing focus, as always, remains on meeting the targets for the year and striving to surpass them, despite the challenges posed by the broader economic landscape. The Board has two important committees, namely the Audit Committee and the Nomination and Remuneration Committee (NRC). Mr. Mamtaz Uddin Ahmed, the Chairman of the Audit Committee and an Independent Director of the Board, has completed his three- year term. During his tenure, he played a vital role in discharge of the Board’s oversight function particularly in the area ﬁ nancial accounting and reporting. The Board of Directors has recommended his re-appointment as Independent Director for another three- year term. Other members of the Audit Committee and the NRC including its Chairman Dr. Md. Ibraheem Hosein Khan 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. I continue to be immensely impressed with the dedication, commitment and skills of our people. It is their efforts that drive the business forward, delivering an excellent performance and strong growth across our business. I thankfully acknowledge their contribution to the Company. We are grateful to our shareholders for extending, at all times, their invaluable support to the Company. I also express my gratitude to all our stakeholders particularly the doctors and other healthcare professionals, regulators, bankers, suppliers and the business partners for their continued co-operation. The success we have achieved so far was only possible because of the collective efforts of all concerned. Wishing you all a life ﬁ lled with happiness and good health. 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considerable economic struggles, largely stemming from global events. Just as the world was beginning to recover from the outcome of the COVID-19 pandemic, the Ukraine-Russia conﬂ ict inﬂ icted severe strain on the global economy. This was marked by substantial trade disruptions and a surge in inﬂ ationary pressures. Since the beginning of the war, Bangladesh has experienced a signiﬁ cant devaluation of the Taka accompanied by a signiﬁ cant depletion of the foreign exchange reserves. The world is projected to experience a slowdown in growth due to rising interest rates and the consequences of geopolitical disruptions, which have triggered widespread economic turmoil. According to IQVIA, the pharmaceutical industry in Bangladesh continues to grow at a double-digit rate of 15.29% with a value of BDT 300 billion. The countries in the Asia-Paciﬁ c region will experience substantial volume growth of more than 10% by 2027. While the global pharmaceutical industry’s current value stands at around $1.48 trillion, it is forecasted to see a CAGR of 3-6%, ultimately reaching a market size of approximately $1.9 trillion in 2027. The global generic medicines market was valued at approximately $400 billion in 2022 maintaining a stable growth rate of 6.1%, and it is projected to contribute an additional $12 billion in growth by 2027. This can be attributed to the increasing number of ANDA approvals and the launch of generic medications. Despite facing the challenges, Beximco Pharma has managed to maintain a healthy double-digit growth. The ongoing economic instability has had a signiﬁ cant impact on the exchange rate, particularly concerning the US dollar and high inﬂ ation leading to a substantial increase in the costs associated with production and operations. Given that Bangladesh’s pharmaceutical industry predominantly relies on imported raw materials, we are now tackling with substantial price hikes across all inputs, thus putting immense pressure on our operational margins. Nevertheless, we responded to these difﬁ culties with coordinated efforts from every functions across the Company. We engaged in continuous negotiations with our partners and service providers to mitigate the effects of rising prices. Additionally, we implemented immediate cost control measures, streamlined our processes and resource allocations, and made prudent procurement decisions where applicable. During the period 2022-23, we launched 14 new generics in 23 different presentations in the domestic market, with Mulina (Lefamulin), an anti-infective drug, being introduced for the ﬁ rst time in Bangladesh. Additionally, we received a total of 33 new registrations of 19 generics (23 presentations) in 17 countries. This strategic approach enabled us to maintain a steady revenue stream even during periods of economic uncertainty. I am pleased to share that during the ﬁ rst quarter of 2023-24, Beximco Pharma launched 15 new generics in 22 presentations, which included 10 ﬁ rst time launches in Bangladesh. Forecasts concerning therapeutic areas with the highest projected spending in 2027 include oncology, immunology, and anti-diabetic interventions, followed by cardiovascular treatments. During this period, our anti-diabetic, cardiovascular and musculoskeletal therapeutic groups performed very well, maintaining steady growth of 22.2%,16.5% and 23.3%, respectively. We continued to lead in the CVS and analgesic markets in Bangladesh, while also being a major contributor to the growth of the anti-asthma & COPD market. Furthermore, our antiulcerant brand, REMMO, achieved 100 crore sales in Bangladesh with a growth of 39.7% thus, becoming our ﬁ fth brand to attain this achievement. We focused on optimizing operations to ensure cost-effective production and timely delivery to uphold our quality service. The collective synergy among all departments culminated in the prestigious National Export Award (Gold) 2020-21 being awarded to Beximco Pharma for the eighth time, a testament to the remarkable commitment and diligence of our entire workforce. Furthermore, we also received the Global Generics & Biosimilars (GGB) Awards 2022 in the category ‘Acquisition of the Year’ along with the ICSB’s Corporate Governance Award (Gold) 2022 and National Productivity, Quality Excellence Award 2021. In the coming years, one of the top uncertainties lies in the potential impact of economic variables on the ﬁ scal strategies of nations and the possible shifts in healthcare and pharmaceutical expenditure policies. I wish to convey my unwavering commitment to the promising future of our Company, even as we navigate through the volatile landscape of economic ambiguities. These are, without a doubt, testing times, yet it is precisely in moments of adversity that opportunities reveal themselves. The global demand for Annual Report 2022-23 | Statements and Reports | 87 S T R O P E R D N A S T N E M E T A T S cost-effective healthcare solutions continues to rise, and the signiﬁ cance of our role in supplying vital medicines to millions across the globe has never been more profound. We are proactively mitigating risks, broadening our supply chains, and optimizing our operations to withstand these challenges. As we persistently explore new markets and opportunities, we remain ﬁ rmly dedicated to our core values. United as a team, we possess the capacity to conquer the obstacles that lie ahead, emerge more robustly, and steer our company towards enduring growth and prosperity. Thank you for your continued support. Nazmul Hassan MP Managing Director 100 Crore Brand 88 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D Annual Report 2022-23 | Statements and Reports | 89 S T R O P E R D N A S T N E M E T A T S 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 2023 along with the report of the auditors thereon. General Economic Overview Bangladesh impacted by the global economic crisis resulting from the Ukraine war, experienced further challenges throughout the ﬁ scal period 2022-23, contributing to the ongoing destabilization of its macroeconomic landscape. The country was grappled with noteworthy surge in inﬂ ation, reaching its peak at 9.94 percent in May and concluding the year at 9.74 percent, a considerable rise from the previous year’s 7.56 percent. This elevated inﬂ ation exerted substantial pressure on real income, purchasing power, and the overall cost of living in Bangladesh. The depletion of the foreign exchange reserve to USD 24.75 billion as of June 30, 2023, from the previous year’s USD 41.83 billion coupled with a substantial gap between foreign currency earnings and expenses, resulted in highly volatile exchange rates throughout the year. The Bangladeshi Taka continued to depreciate against the US dollar, reaching BDT 109.50 against the US dollar as of June 30, 2023, marking a 17 percent increase from the previous year’s rate of BDT 93.5. In response to these challenges, the central bank initiated control measures, including restrictions on imports, particularly luxury and non-essential items. While these actions contributed to a reduction in the trade deﬁ cit, with import payments falling by 15.76 percent to USD 69.49 billion in FY 2022-23, down from USD 75.4 billion of the previous year, the central bank’s efforts to stabilize the market saw limited success. The dollar crisis has posed signiﬁ cant challenges for businesses. The government also took up several ﬁ scal and monetary measures to tame inﬂ ation. Despite economic headwinds, Bangladesh managed to achieve 6.0 percent growth in the FY 2022-23, slightly behind expected 6.5 percent. Anticipating persistent challenges, the World Bank projects Bangladesh’s growth to be 5.6 percent in FY 2023-24, accompanied by 9 percent average inﬂ ation. It foresees a re-acceleration of Bangladesh’s growth in FY 2024-25 as inﬂ ationary pressures ease, external conditions improve, and reform implementation gains momentum. For several years, Bangladesh maintained a 9 percent interest rate cap on bank lending. However, Bangladesh Bank has recently introduced a variable interest rate framework. Under this new policy, the interest rates on corporate borrowing are determined by adding a 3.75 percent premium to the six-month moving average treasury bill rate. This shift in lending policy increased the cost of borrowing which is expected to rise further. Additionally, the surge in benchmark rates for foreign loans like SOFR and EURIBOR adds to the challenges, making overseas borrowing more expensive. Legal and Regulatory Environment The government’s continued support for the pharmaceutical sector provides a glimmer of relief for the industry. Addressing the industry’s plea for price adjustments on controlled products, the regulatory authority approved upward adjustments for selected items, and these changes took effect from July 2022. The legal and regulatory environment, especially those affecting businesses and industries, has remained largely unchanged. Notably, Bangladesh has recently implemented a new Income Tax law with no signiﬁ cant change affecting the pharmaceutical industry. Review of Financial Performance Amidst challenging market conditions, Beximco Pharma achieved a remarkable 13.3% growth in consolidated sales to reach at Taka 39,266.7 million from Taka 34,669.2 million of prior year. Sales in the domestic market increased by an impressive 14.1%, predominantly from the organic growth of business, further solidifying our position in the core business segment. We attained an export revenue of Taka 2,763.2 million, a 2.9% up from the preceding year. The lower-than-expected export growth is attributed to economic downturns, supply chain disruptions, and geopolitical crises. We had to either cancel or defer part of our export orders considering economic, forex, and political crisis in some our export destinations. Our consolidated gross proﬁt rose 9.4% in FY 2022-23 to reach Taka 17,313.4 million. The Operating Proﬁ t increased by 4.9% to 7,216.2 million as against 6,881.7 million of comparable prior period. The post-tax proﬁ t stands at Taka 4,524.5 million as against Taka 4,998.6 million earned in 2021-22 representing 9.5% YoY decrease. The Gross proﬁ t margin in 2022-23 declined to 44.1% from 45.6%. Record depreciation of domestic currency against its principal foreign currency US Dollar, soaring energy cost, high inﬂ ation contributed to the increase in the cost of production and operation. Planned cost management strategies, improved product mix, 90 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D selective upward adjustment of product prices and leveraging effect of higher sales volume, however, has helped sustain the overall gross proﬁ t margin at this level. Although the Company managed to maintain its operating expenses at its current 26% level, Pre and Post-tax Proﬁ t has decreased primarily because, during the period July 2021 to June 2022, the Company earned a non-recurring pre- tax income of Taka 619 million as Vaccine Distribution Fee under a contractual agreement. As this particular contract has concluded, there has been no income from this source in the current reporting period. This along with the lower gross margin from escalating costs as aforesaid, have impacted the proﬁ t of the Company for the period under review. Sales and Proﬁ t Snapshot Sales Revenue Gross Proﬁ t Operating Proﬁ t Pre-Tax Proﬁ t Net Proﬁ t after Tax Earnings Per Share (Tk.) 2022-23 39,267 17,313 7,216 6,069 4,524 10.34 2021-22 34,669 15,820 6,882 6,687 4,999 11.48 Amount in Million Taka Growth 13.3% 9.4% 4.9% -9.2% -9.5% -9.9% Consolidated collection of cash from revenue and other sources increased by 9.1% to Taka 39,440.2 million. Net cash generated from Operating Activities rose by 16.7% to Taka 6,084.8 million from Taka 5,214.2 million. The net Operating Cashﬂ ow per Share increased to Taka 13.64 from Taka 11.69 of prior year. The Company used cash of Taka 2,410.8 million for acquisition of property, plant and equipment compared to TK 2,815.2 million of previous year. Long-term borrowing of Taka 1,763.2 million and short term borrowing of Taka 229.3 million was repaid during the year. Continuity of Other Income The Company reports Cash Incentives on exports on submission of claims fulﬁlling the eligibility criteria. Claims for export incentives are to be made after 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 ﬁnancials. 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 ﬂuctuation of exchanges rates between Taka and its counterpart currency. The Company generated dividend income totalling Taka 41.9 million, with Taka 40 million stemming from a subsidiary, which was subsequently eliminated in the consolidated statement of proﬁ t and loss. The residual dividend income of Taka 1.9 million has been accounted for within the category of other income. It is important to note that future dividend income is contingent upon the earnings of the respective companies and their decisions to declare dividends. Other items included under the head Other Income are either non-recurring or not material or inherent to the normal business operation. 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. Annual Report 2022-23 | Statements and Reports | 91 S T R O P E R D N A S T N E M E T A T S Risks Related to 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. 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 5,635 Proﬁ t Brought Forward Proﬁ t Available for Appropriation Proposed Dividend: Cash Dividend Proﬁ t Carried Forward 25,901,734 30,495,378 (1,561,392) 28,933,986 Amount in Taka’000 BPL (Stand-alone) 2022-23 4,588,009 2021-22 5,161,344 6,358 22,295,424 27,463,126 (1,561,392) 25,901,734 Dividend The Board of Directors recommends 35% Cash Dividend i.e. Tk. 3.50 per share for the year ended 30 June 2023 for onward approval at the Annual General Meeting. The Company has declared no interim dividend during the year. Contribution to National Exchequer In 2022-23, the Company contributed BDT 9,215 million to the Government exchequer as Value Added Tax (VAT), Supplementary Duty (SD), Corporate Tax and Custom Duty. This represents an increase of BDT 1186.9 million over the last year. Risks and Concerns Enterprises are susceptible to risks stemming from both internal and external sources. Just like any other business or industry, Beximco Pharma, operating in a dynamic and competitive market, faces exposure to risks that can impact its operations. Disruptive supply chains caused by the war in Ukraine on a global scale and rising inﬂ ation, heightened interest rates, volatile foreign exchange markets, and depleting foreign exchange reserves in the domestic context have presented the business with increased challenges and uncertainties. The unpredictable and uncontrollable nature of these challenges underscores the need for robust risk management. Beximco Pharma has in place comprehensive policies and procedures across functional, operational, and strategic levels to effectively manage and mitigate risks. Our experienced and capable executive team diligently identiﬁ es, assesses, and addresses a wide spectrum of risks that have the potential to impact our operational and ﬁ nancial objectives. The Company’s Board and management have a successful track record of continuously monitoring and reviewing risks over the years. Beximco Pharma proactively employs appropriate mitigation measures to prevent, eliminate, or reduce risks based on their nature and severity. While the Company has established a vigilant system and well-deﬁ ned procedures to address risks stemming from both internal and external sources, there remain uncertainties beyond the Company’s control that could inﬂ uence its goals. Economic Risks The pharmaceutical industry in Bangladesh primarily thrives on individual private spending, a factor closely linked to the country’s economic progress and the resulting enhancement of people’s purchasing power. Any downturn in economic growth or a surge in inﬂ ation could, akin to other industries, have repercussions on the future demand for pharmaceuticals. Additionally, global economic instability can exert an inﬂ uence on the sector, potentially affecting its growth and proﬁ tability. Bangladesh, much like numerous other nations, presently grapples with macroeconomic challenges, including high inﬂ ation, depreciation of the local currency, and sluggish economic growth. The government has introduced various measures to address 92 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D these issues. Despite these challenges, Bangladesh has consistently achieved signiﬁ cant economic progress in recent years, leading to marked improvements across various socio-economic indicators. It is anticipated that this positive trend will persist in the near future, enabling the country to overcome its current crisis. Furthermore, Bangladesh is on track to attain middle-income country status by 2026. This achievement is expected to bring about enhancements in the standard of living, education, and increased health awareness, buoyed by augmented purchasing power. Consequently, the demand for healthcare products is likely to rise signiﬁ cantly in the coming years. Market Risks Market risks primarily arise from economic and market conditions, encompassing the Company’s vulnerability to various economic and market variables. Among the key market risks are Interest Rate risk and Foreign Exchange risk. In Bangladesh, after a prolonged period of adhering to an interest rate cap, there has been a shift back to a variable interest rate model, determined by a ﬁ xed premium over a six-month weighted average interest rate on treasury bills. The upward trajectory of treasury bill rates has led to an increase in borrowing costs, with the potential for further escalation contingent on the money market situation. Moreover, international benchmark rates, such as Euribor and SOFR, have exhibited a pronounced upward trend during the reporting period, persisting at elevated levels. The Company faces the prospect of rising borrowing costs due to both the domestic and international trends in interest rates. Despite these challenges, the Company is actively working to minimize its reliance on borrowings, thereby mitigating its exposure to this facet of market risks. Concurrently, Bangladesh has experienced unsettling volatility in foreign exchange rates, attributed to an unfavorable gap between foreign exchange inﬂ ows and outﬂ ows, resulting in a substantial depletion of the country’s foreign exchange reserve and the depreciation of the Taka. The heightened volatility in forex markets has ampliﬁ ed the Company’s raw material costs in Taka terms, exerting a modest impact on its proﬁ t margin. While the Company partially hedges its exposure to forex risks through export proceeds earned in foreign currency, the absence of an active derivative market in the country exposes it to residual foreign exchange obligations. A detailed exploration of the Company’s exposure to these risks and its corresponding risk mitigation strategies can be found in Note Number 51.03 of the Financial Statements. 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 proﬁtability of the company. Moreover, disruptions in the supply chain network or situation like recent pandemic may also make the availability of materials difﬁcult 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 inﬂuence 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 a few of the APIs and the Company is strengthening its API manufacturing capacity. Operational Risks Operational risks are the probability of failure to meet business targets due to disruptions in business operations, manufacturing shutdown, production failure including challenges associated with equipment malfunctions, production errors, quality control issues, and process inefﬁ ciencies. To prevent production disruptions, the Company conducts routine inspections and carries out regular maintenance work. Additionally, the Company consistently invests in the balancing, modernization, rehabilitation, and expansion (BMRE) of its facilities. The Company has established alternative power arrangements, including captive power and power from the DESCO line, to ensure uninterrupted power supply to support production needs. Furthermore, the Company maintains a project engineering department staffed with 200 engineers, responsible for regular maintenance and ensuring a continuous supply of utilities to support manufacturing activities. The Company also sufﬁ ciently insures against its plant machinery, equipment, and operating assets as well as operating loss to be incurred due to disruption in the business. Regulatory and Compliance Risks Non-compliance with regulatory and compliance requirements will result in operational disruptions for the Company. Additionally, the challenges posed by the ever-changing legal and regulatory landscape, combined with evolving societal demands with especially from the environment and social fronts. Failure to adhere to these laws and regulations could lead to impairment of reputation, Annual Report 2022-23 | Statements and Reports | 93 S T R O P E R D N A S T N E M E T A T S imposition of substantial ﬁ nes or penalties, potential exposure to civil or criminal accountability. Beximco Pharma is subject to a broad spectrum of laws and regulations, including, but not limited to, areas such as product safety and claims, trademarks, patents, labor practices, environmental standards, ﬁ re safety, competition regulations, employee welfare and safety, corporate governance, reporting requirements related to stock market listing, employment regulations, and tax obligations, among others. The Company actively complies with all applicable rules and regulations. Further, policies of the Government of Bangladesh are supportive to the industry and pose no immediate risk. Cybersecurity & IT Systems In today’s interconnected digital landscape, incidents of cybersecurity breaches have become a paramount concern. These breaches encompass unauthorized access, manipulation, or theft of sensitive information, often resulting in data compromise. In parallel, there is a heightened risk of catastrophic loss within IT systems, jeopardizing the operational integrity of organizations. Like any other organization Beximco Pharma is also exposed to a spectrum of cybersecurity risks, including sophisticated cyber-attacks, phishing attempts, ransomware incidents, social engineering tactics, and potential vulnerabilities associated with third-party dependencies. This dynamic landscape necessitates a comprehensive understanding and strategic approach to fortify our defenses against potential breaches. Beximco Pharma is committed to safeguarding its digital assets from the evolving threat landscape in cyberspace. Understanding the pivotal role of cybersecurity in securing sensitive information, we maintain a vigilant and proactive stance. Driven by our unwavering commitment to excellence, Beximco Pharma employs a robust cybersecurity strategy, incorporating best practices in cybersecurity risk management. This includes cutting-edge technologies, ongoing employee training initiatives, and adaptive strategies. Our comprehensive approach involves periodic vulnerability assessments, advanced threat detection systems, secure network infrastructure, comprehensive testing, cybersecurity audits, business continuity planning, and robust disaster recovery planning. These measures collectively ensure a resilient defense against emerging threats. Our proactive stance, coupled with extensive employee training, empowers our team to swiftly identify, mitigate, and respond effectively, safeguarding our digital assets and maintaining the trust of our stakeholders. Manufacturing and Product Quality Failure to adhere to quality regulations, guidelines, and internal/external standards throughout the product’s lifecycle, resulting in potential safety concerns or product quality issues for consumers in the market. The development and production of our products are intricate processes subject to stringent regulation by governmental health authorities worldwide. Whether these products and their associated raw materials are manufactured in-house or by third-party entities, it is imperative that we rigorously adhere to both regulatory mandates and our own exacting quality benchmarks. This commitment is essential for delivering innovative therapies to patients facing unmet medical needs while safeguarding their well- being. Non-compliance with regulatory obligations has previously led to, and may continue to result in, adverse consequences such as warning letters, manufacturing suspensions, product seizures, legal injunctions, product recalls, difﬁ culties in obtaining product approvals, or even the exclusion of individuals or entities from participation in these activities. We have established and communicated clear quality standards that are implemented consistently across all our manufacturing facilities. These standards are integrated into our standard operating procedures, ensuring that quality is a fundamental aspect of our operations. To assess compliance with these standards, we conduct regular quality and GMP (good manufacturing practice) audits across our manufacturing sites. Furthermore, we prioritize the quality of our incoming materials by conducting supplier audits and inspections, particularly for critical suppliers and ingredients. To uphold our commitment to quality, we routinely track and report on key performance indicators related to quality. This comprehensive approach ensures that our products consistently meet the highest standards and deliver the quality our customers expect. Retirement and Re-election of Directors Mr. Salman Fazlur Rahman MP and Mr. Iqbal Ahmed, 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. 94 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D Re-appointment of the Independent Director In compliance with to the provisions of Corporate Governance Code issued by Bangladesh Securities and Exchange Commission (BSEC) dated June 03, 2018, the Board of Directors of the Company in its meeting held on 31st August 2023 re-appointed Prof. Mamtaz Uddin Ahmed, FCMA as Independent Director of the Company for further period of 3 years effective from 31.08.2023, subject to the approval of Shareholders in the Annual General Meeting. Detailed bio-data of Prof. Mamtaz Uddin Ahmed is available in the Directors’ Proﬁle section of this Annual Report. Auditors The existing Auditors, M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, BirUttam C. R. Datta Road, Dhaka-1205 who were appointed as Auditors of the Company in the 46th Annual General Meeting of the Company has carried out the audit for the year ended 30 June 2023. M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, BirUttam C.R. Datta Road, Dhaka-1205 The Auditors of the Company retires at this meeting and has expressed their willingness to continue in ofﬁce for the year 2023-24. The Board after due consideration recommends for the reappointment of M. J. Abedin & Co., Chartered Accountants as auditors for the year 2023-24. Related Party Disclosure The Company has a number of transactions between its subsidiaries and other related parties. The transactions are carried out on an arm’s length basis. The Audit Committee periodically reviews these transactions. The full disclosure of all related party transactions is provided in the notes to the accounts. Remuneration to Directors All the Directors in the Board except the Managing Director are non-executive and receive no remuneration or beneﬁts from the Company other than the Board Meeting attendance fee. The salary and other perquisites paid to the Managing Director for his service has been disclosed in the notes to the accounts. Compensation Policy for Top Executives The Company offers industry competitive compensation packages to the employees. Managing Director and all other senior management team members are full-time employees of the Company and receive ﬁxed monthly salary. They are also entitled to certain perquisites as per the terms of their employment contract. Additionally, Beximco Pharma has deﬁned contribution plan (Provident Fund) and a deﬁned beneﬁt Plan (Gratuity) for employees irrespective of their positions. Company has a rigorous performance evaluation and appraisal system linked to KPIs. Employee salary and allowance are reviewed once in every year and revised based on individual performance. The Nomination and Remuneration Committee is entrusted with the responsibility of reviewing and appraising the salary of the senior executives and making an appropriate recommendation to the board. Senior management is not entitled to any performance linked variable incentive scheme other than the beneﬁts of statutory Workers’ Proﬁt Participation Fund. Directors’ Statement on Financial Reports Directors are pleased to report the following: • The ﬁnancial statements together with the notes thereon have been drawn up in conformity with the Companies Act, 1994 and Securities and Exchange Rules, 2020. These statements present fairly the Company’s state of affairs, the result of its operations, cash ﬂow and changes in equity. • Proper books of accounts of the Company have been maintained. • Appropriate accounting policies have been consistently applied in preparation of the ﬁnancial statements and that the accounting estimates are based on reasonable and prudent judgment. • The International Accounting Standards (IASs), International Financial Reporting Standards (IFRSs) have been followed in preparation of the ﬁnancial statements. • 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 signiﬁcant doubt about the ability of the Company to continue as a going concern. Declaration by CEO and CFO Declaration by CEO and CFO on the Financial Statement of the Company is attached as Annexure- 1 Annual Report 2022-23 | Statements and Reports | 95 S T R O P E R D N A S T N E M E T A T S Key Operating and Financial Data The summarized key operating and ﬁnancial data for 2022-23 and immediately preceding ﬁve years is provided in Annexure- 2 Management Discussion and Analysis Detailed discussion on the Operating and Financial performance of the Company along with other disclosures as required under Corporate Governance Code issued by Bangladesh Securities and Exchange Commission through Notiﬁcation No. BSEC/ CMRRCD/2006-158/207/Admin/80 dated June 3, 2018 has been separately reported by the Managing Director. Board Meetings and Attendance Twelve Board meetings were held during the year under review. The attendance records of the Directors are as follows: Name of the Directors Representation in the Board Attendance in Board Meeting 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 12 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 Notiﬁcation No.BSEC/CMRRCD/2006-158/207/ Admin/80, dated 3 June 2018, Report on “Corporate Governance Compliance” is provided in Annexure- 4. On behalf of the Board, A S F Rahman Chairman 96 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D Annexure-1 The Board of Directors Beximco Pharmaceuticals Limited Subject: : Declaration on Financial Statements for the year ended on 30 June 2023 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 2023 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 2023 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 Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁ cer Annual Report 2022-23 | Statements and Reports | 97 S T R O P E R D N A S T N E M E T A T S Annexure- 2 Key Operating and Financial Data 30 June 2023 30 June 2022 30 June 2021 30 June 2020 30 June 2019 30 June 2018 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 15,000,000 9,100,000 4,461,121 4,461,121 4,461,121 4,055,564 4,055,564 4,055,564 47,619,665 44,636,004 37,364,865 32,797,450 29,864,324 27,351,837 59,041,189 57,035,893 47,887,415 45,615,625 43,454,027 39,081,675 Net Asset Value (NAV) Per Share -Taka Market Price Per Share Price Earnings Ratio (Times) 97.91 146.2 14.14 91.01 154.60 13.47 83.01 177.3 15.43 80.12 69.20 8.78 72.96 83.50 11.16 66.78 93.90 15.02 Number of Shareholders 54,662 54,446 55,248 56,101 56,177 57,982 Foreign Investors ICB including ICB Investors Account Sponsors, General Public & Other Institutions 62 843 69 873 71 871 71 882 77 881 90 879 53,757 53,504 54,306 55,148 55,219 57,013 Number of employees 5,706 5,377 5,104 4,755 4,489 4,256 Total Sales Export Sales Gross Proﬁ t Proﬁ t Before Tax Net Proﬁ t 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 Taka in Thousand 39,266,662 34,669,172 29,493,574 25,611,947 22,816,630 17,716,717 2,763,247 2,685,096 3,124,001 2,751,790 2,502,633 1,476,978 17,313,372 15,820,210 13,923,502 11,899,100 10,620,343 8,285,979 6,068,769 6,686,945 6,377,548 4,653,440 3,946,065 3,361,334 4,524,468 4,998,628 5,165,750 3,544,483 3,040,403 2,532,654 EPS/Restated EPS- Taka Net Operating Cash Flow Per Share New Product Launched-numbers Cash Dividend Stock Dividend 10.34 13.64 14 35% - 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 15% - 12.50% - 98 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D 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 14,345,757 965,206 1,308,505 9,058,888 9,080,095 14,657 - - - - - Annual Report 2022-23 | Statements and Reports | 99 S T R O P E R D N A S T N E M E T A T S Annexure-4 Corporate Governance Compliance Board of Directors (BOD) Beximco Pharma has a diversiﬁ ed and dynamic Board of Directors consisting of members from diverse age groups, professional backgrounds, gender, and ﬁ eld of expertise. Board’s Size [number of Board members to be 5 – 20] The Company appoints an adequate number of directors including independent directors to ensure the efﬁ cient functioning of the Board. Presently the Board of Directors of Beximco Pharma consists of 10 members. Independent Directors (ID) The Corporate Governance code requires that at least 1/5th of the Board members shall be the Independent Directors. Beximco Pharma complies with the code. Presently the Board of Directors of Beximco Pharma consists of 2 Independent Directors out of a total of 10 directors. Qualiﬁcation of Independent Director Beximco Pharma’s Independent Directors fulﬁ l all qualiﬁ cations set by the Corporate Governance Code. One of the Independent Directors is a retired professor from Faculty of Business, University of Dhaka. Another Independent Director is a retired Secretary lastly served in the Ministry of Cultural Affairs, Government of Bangladesh. Duality of Chairperson of the Board and MD or CEO As per Code of Corporate Governance, positions of Chairman of the Board and MD or CEO of the Company should be occupied by different persons. In Beximco Pharma, Chairman of the Board is Mr. Ahmed Sohail Fasihur Rahman who is a non-executive director and the leader of the Board. Mr. Nazmul Hassan is the Managing Director of the Company who is the leader of the Management. In the absence of the Chairperson of the Board, the remaining members elect a chairperson among non-executive directors for that Board’s meeting. Inclusions in Directors’ Report to Shareholders Directors’ Report to Shareholders have been furnished in page numbers from 90 to 96 of this Annual Report. Meetings of the Board of Directors Beximco Pharma conducts Board meetings as required by business proceedings and records the minutes of the meetings as per the provisions of the relevant Bangladesh Secretarial Standards (BSS). Code of Conduct for the Chairperson, other Board members and Chief Executive Ofﬁcer Beximco Pharmaceuticals Limited places utmost signiﬁ cance on the adherence to a Code of Conduct by its Chairperson, Board members, and Chief Executive Ofﬁ cer (CEO). It includes their ﬁ duciary duty to act in the best interests of the company, the disclosure of any potential conﬂ icts of interest, a commitment to openness and accountability, and compliance with all applicable laws and regulations directed by the Nomination and Remuneration Committee (NRC), Bangladesh Secretarial Standards (BSS), Institute of Chartered Secretaries of Bangladesh (ICSB). Beximco Pharmaceuticals Limited’s management practices adhere closely to the organization’s commitment to ethical governance, stakeholder conﬁ dence, and the assurance of the organization’s enduring success within the pharmaceutical industry. Governance of Board of Directors of Subsidiary Company The Board of Directors of two subsidiary companies have been structed to align the composition of the Board of BPL. One of the Independent directors of BPL has been appointed as a director of Synovia Pharma PLC and another Independent director is also a member of the Board of Nuvista Pharma Ltd. Further, minutes of Board meetings of subsidiary companies are placed at following Board meeting of Beximco Pharma for their review. Additionally, periodic accounts and ﬁ nancial statements of subsidiary companies are submitted in the meeting of Audit Committee of BPL for their review. 100 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D Managing Director (MD) or Chief Executive Ofﬁcer (CEO), Chief Financial Ofﬁcer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS) Appointment and Duties of MD or CEO and CFO Beximco Pharma has in place a Managing Director (MD), Chief Financial Ofﬁ cer (CFO), Chief Operating Ofﬁ cer (COO), Head of Internal Audit and Compliance (HIAC), and a Company Secretary (CS). All of these positions are held by separate individuals who are not holding executives in any other company except Company sectary also serves secretary of two other concerns (Beximco Limited and Shinepukur Ceramics Limited) of Beximco Group. Moreover, Managing Director, CFO and COO are also members of the boards of Nuvista Pharma Ltd. and Synovia Pharma PLC. All of these positions report to the Board of BPL, their appointments, responsibilities, and performance under the full authority of the Board of Directors. They also attend the meetings of the Board of BPL except COO. Duties of MD or CEO and CFO The MD and the CFO review and certify ﬁ nancial statements and their certiﬁ cate is disclosed in the annual report of the Company every year. Board Committee The Board has two important committees, namely the Audit Committee and the Nomination and Remuneration Committee (NRC): Audit Committee (AC) Beximco Pharma has an Audit Committee as a sub-committee of the Board. The Audit Committee is diligently fulﬁ lling its responsibilities and functions in accordance with the expectations outlined in the Corporate Governance code. A dedicated section in the Annual Report provides a comprehensive account of the Audit Committee’s activities, including details of the meetings conducted and the agenda items deliberated upon throughout the year. Nomination and Remuneration Committee (NRC) Beximco Pharma has another sub-committee of the Board, namely the Nomination and Remuneration Committee (NRC). Comprising three members, this committee operates in accordance with predeﬁ ned terms of reference approved by the Board. It diligently carries out its duties within the speciﬁ ed scope of responsibilities. The Annual Report features a dedicated section that provides comprehensive insights into the NRC’s activities, offering a detailed account of the meetings held and the agenda items deliberated throughout the year. External or Statutory Auditors M. J. Abedin & Co. Chartered Accountants, external auditing ﬁ rm for Beximco Pharmaceuticals Limited, is engaged to provide Audit services only. The Company restricts its external auditors from providing any other services to prevent conﬂ icts of interest and ensures that neither Auditors nor their families hold shares in the Company. Auditors’ representatives remain present in the Annual General Meeting. Maintaining a website by the Company The company maintains an ofﬁ cial website that is interconnected with the website of the stock exchanges. This website is active and operational well in advance of the listing date, ensuring the timely disclosure of essential information as mandated by the listing regulations of the respective stock exchange(s). Reporting and Compliance of Corporate Governance Beximco Pharma is committed to upholding the principles of the Code of Corporate Governance. The company’s adherence to corporate governance standards undergoes thorough assessment and certiﬁ cation by an independent professional ﬁ rm, and the compliance certiﬁ cate is made accessible to stakeholders in the Annual Report. Corporate Governance Compliance Report As per condition No. 1(5)(xxvii) Status of compliance with the conditions imposed by the Commissions Notiﬁcation No. BSEC/ CMRRCD/2006-158/207/Admin/80, dated 3 June 2018 issued under section 2CC of the Securities and Exchange Ordinance, 1969 Annual Report 2022-23 | Statements and Reports | 101 S T R O P E R D N A S T N E M E T A T S 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 (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 102 | Statements and Reports | Annual Report 2022-23 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ R E P O R T S S T A T E M E N T S A N D Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) 1(3)(b)(v) Practicing advocate at least in the High Court Division of Bangladesh Supreme Court or a CA/CMA/CFA/CCA/CPA or CS 1(3)(c) 1(3)(d) 1(4) 1(4)(a) 1(4)(b) 1(4)(c) 1(4)(d) 1(4)(e) 1(5) 1(5)(i) Having at least 10 (ten) years of experiences in any 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 2022-23 | Statements and Reports | 103 S T R O P E R D N A S T N E M E T A T S 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 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. 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 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 104 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D 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 2022-23 | Statements and Reports | 105 S T R O P E R D N A S T N E M E T A T S 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) 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: 6(5)(b)(i) 6(5)(b)(i)(a) Formulation of the nomination criteria and recommend a policy to the Board, relating to the remuneration of the directors, top level executive, considering the following: The level and composition of remuneration shall be reasonable and sufﬁ cient to attract, retain and motivate suitable directors 6(5)(b)(i)(b) Clear relationship among remuneration, performance & benchmarks - - - - - √ √ √ √ √ √ √ √ - - √ √ √ √ √ √ √ - √ √ √ √ √ 106 | Statements and Reports | Annual Report 2022-23 Condition No. Title Compliance Status (“√” in appropriate Column) Complied Not Complied Remarks (if any) R E P O R T S S T A T E M E N T S A N D 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 2022-23 | Statements and Reports | 107 S T R O P E R D N A S T N E M E T A T S Annexure-5 108 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D 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). The Audit Committee of Beximco Pharma is a sub-committee of the Board with distinct Terms of Reference (ToR) developed conforming to the Code of Corporate Governance. The Committee is responsible for ensuring that the ﬁ nancial statements provide a true and fair assessment of the Company’s condition and that a good monitoring mechanism inside the company is in place to ensure effective corporate governance. The Audit Committee’s fundamental responsibilities includes, but not restricted to overseeing the ﬁ nancial reporting process, monitoring accounting policies and principles, monitoring internal control risk management procedures, reviewing the statement of signiﬁ cant related party transactions, reviewing potential conﬂ ict of interests etc. As such, a competent audit committee is important to ensure accounting and reporting transparency and promote good governance. 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 Review of Quarterly Financial Statements The Committee held three meetings to review the interim ﬁnancial reports of the Company and its subsidiaries prior to their onward submission to the Board for approval. In each of the meetings, the Committee has thoroughly reviewed the ﬁ nancial statements, accounting policies, assumptions, materiality thresholds etc. for ensuring that the ﬁ nancial statements provide a true and fair assessment of the Company’s condition at that time. The Committee also held detailed discussion with the senior management on various aspects of the ﬁnancial statements to ensure accuracy, consistency and compliance of the reports in all material respects. Management representatives present in the meeting, replied to the questions and queries and provided adequate explanations on operational, ﬁnancial, accounting and reporting matters discussed in the meeting. The Committee, wherever applicable, gave necessary feedback and guidance in connection with reporting and disclosure. Review of Audited Financial Statements The Audit Committee held a meeting on October 16, 2023 to review the draft of the annual audited ﬁnancial reports of the Company and its subsidiaries prior to their submission to the Board of Directors for approval. All the members of the Audit Committee, the CFO and other Senior members of the Accounting and Finance team as well as the Auditor of the Company attended the meeting. 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, 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 ﬁnancial 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 ﬁnancial statements. The Committee also enquired about the deviations of earnings, some expenses, and cash ﬂ ows of the period under review from the prior year. The Management explained reasons to the satisfaction of the Committee. Annual Report 2022-23 | Statements and Reports | 109 S T R O P E R D N A S T N E M E T A T S The Committee also 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 ﬁnancial statements as per IAS 24: ‘Related Party Disclosures’. The Committee evaluated the report of the independent auditor on the annual ﬁnancial statements and found no material audit observation that warrants the Board’s attention. 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 2023 and found their performance meeting the standard. Based on the evaluation, the Committee recommended the re-appointment of the existing auditor for the year 2023-24. During the review period, the Committee also assessed the ﬁnancial reporting process and the adequacy of the internal control system of the Company and found them satisfactory. They noted that internal audit team enjoy full, free, and unrestricted access to all activities, records, property. The Committee noted no material deviations or non-compliance or adverse audit ﬁnding that calls for the board or shareholders’ attention. Mamtaz Uddin Ahmed Chairman Audit Committee 110 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D 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 NRC held one meeting during the year under review with all the members of the Committee except Mr. Iqbal Ahmed attending. Mr. Md. Ali Nawaz, Chief Financial Ofﬁcer, Mr. Jamal Ahmed Choudhury, Director, Accounts & Finance and Mr. M A Arshad Bhuiyan, General Manager, HRM also attended the meeting as representatives of the management on invitation. The meeting dealt with several agenda including review of annual appraisal and compensation of employees, training activities and policies and review of the performance of the retiring directors. The meeting extensively deliberated on Beximco Pharma’s annual appraisal process and employee compensation policy. Mr. M A Arshad Bhuiyan, General Manager, HRM, provided a detailed overview of the company’s appraisal procedures. He emphasized that appraisals take into account various factors, including individual performance, achievement of Key Performance Indicators (KPIs), supervisor assessments, and the employee’s potential. Annual ﬁ nancial increments and promotions are directly tied to performance outcomes. Mr. Arshad conveyed that the Company considers inﬂ ation rates and its ﬁ nancial performance when determining the general increment rate for salary adjustments. Notably, he mentioned that, in response to the prevailing high inﬂ ationary conditions, the management is contemplating a higher percentage of increment for employees with comparatively lower salaries, this year. The Committee expressed appreciation of the Company’s appraisal process and endorsed the decision to offer a higher raise to the lower- paid employees to address the impact of inﬂ ation. The Committee assessed the Company’s training initiatives. Mr. Arshad highlighted key training activities undertaken throughout the year for employees at various levels. He reported to the Committee that, in order to foster cultural and organizational integration among the different subsidiaries and Beximco Pharma, the Company orchestrated diverse training and team-building events, involving employees from all three units. Additionally, he discussed several training and skill development programs such as Ignite, Skillsoft, and Quality Control Cycle (QCC) implemented across the organization to enhance skills, efﬁ ciency, and productivity. The Committee was also briefed on the regular and specialized in-house training programs conducted throughout the year. Furthermore, a substantial number of employees underwent external training in specialized ﬁ elds both domestically and internationally. Upon reviewing these initiatives, the Committee reached the conclusion that the current training activities and policies are well-crafted to foster the development, retention, and attraction of talented human resources for the Company. Annual Report 2022-23 | Statements and Reports | 111 S T R O P E R D N A S T N E M E T A T S The Committee was informed that Mr. Salman F Rahman, Vice Chairman and Mr. Iqbal Ahmed, a Director of the Company are 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. In addition to these, the Committee also considered the proposal for re-appoint of Prof. Mamtaz Uddin Ahmed, FCMA, an Independent Director of the Company, on completion of his three year term. It was informed that Prof. Mamtaz has given his consent to act as an Independent Director for another term. The Committee acknowledged Prof. Mamtaz’s signiﬁ cant contributions as a member of the Board and as the Chairman of the Audit Committee. They expressed satisfaction with the important role he played as an independent director. The Committee being satisﬁ ed forwarded the proposal to the Board for the reappointment of Prof Mamtaz Uddin Ahmed as an independent director for another term. 112 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D Investor Relations Communication with Shareholders and Investors Beximco Pharma concedes investors’ right to stay informed about the Company, including its operational and ﬁ nancial outcomes and other signiﬁ cant details relevant to their investment choices. The country’s legislation and regulations outline the rights and privileges of shareholders, along with the methods, timing, and channels for disseminating information to them. Shareholders and investors receive regular updates on the Company’s activities through the disclosure of price-sensitive information, ﬁ nancial reports, interactions with top executives, and the Annual General Meeting (AGM). Important information is swiftly communicated via stock exchanges and the Company’s website, and occasionally through print media and online platforms. Company’s policy on disclosing price sensitive and other material information is available on the website. The Company consistently adheres to all regulatory provisions and effectively communicates information in a timely manner. It conducts its Annual General Meeting in accordance with the Companies Act, 1994, providing shareholders with a comprehensive overview of the Company’s overall affairs. The AGM addresses speciﬁ c agendas that require approval from shareholders. Interested shareholders are encouraged to participate in discussions and inquire about the Company’s affairs. Additionally, Extraordinary General Meetings (EGMs) are convened, when necessary, with board members and senior management present to respond to queries and address shareholder concerns. Like prior year this year, the AGM is being conducted virtually through a digital platform. The Company’s leaders meet with international investors to provide updates on the business. Local and international fund managers and analysts also arrange meetings, both locally and abroad, with our senior management to understand the current and future prospects of the Company. Several of the meetings during the year took place online. The Company promptly shares all price-sensitive information with the market as soon as it becomes available, through stock exchanges and its own ofﬁ cial website. In relevant situations, such information is also disseminated through print media and online portals. Beximco Pharma has a dedicated Company Secretarial Department with qualiﬁ ed professionals responsible for regulatory secretarial functions and addressing administrative inquiries from shareholders and investors. Additionally, there is an investor relations team within the accounting and ﬁ nance function to handle queries and information requests from investors, regulators, and other stakeholders. Being the only Bangladeshi company listed on the Alternative Investment Market (AIM) of the London Stock Exchange, Beximco Pharma adheres to AIM regulations. The company has engaged SPARK Advisory Partners Limited as the Nominated Advisor (NOMAD), SP Angel Corporate Finance LLP as the designated Broker, and FTI Consulting LLP as the public relations agent. Analysts from SP Angel publish reports on the company for the beneﬁ t of investors. Reporting to the Shareholders The Company shares its ﬁ nancial updates at multiple intervals throughout the year. Unaudited quarterly ﬁ nancial statements are published in condensed form at the end of each of the ﬁ rst three quarters of the year. At the end of each ﬁ nancial year, the Company releases full-year audited ﬁ nancial statements. To ensure widespread access, these ﬁ nancial statements are shared on stock exchanges. In line with legal requirements, summarise versions are also made available in newspapers and online platforms. Additionally, the Company compiles an annual report, a detailed document covering various aspects of its operations and ﬁ nances, as well as other necessary disclosures. All these reports and statements are easily accessible to the stakeholders through the Company’s website. Annual Report 2022-23 | Statements and Reports | 113 S T R O P E R D N A S T N E M E T A T S 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 Website Communication The Company maintains online presence through its comprehensive website at www.beximcopharma.com. This digital platform serves as a repository of both historical narratives and up-to-date information pertaining to the Company and its operations. Carefully structured to address the information needs of a diverse array of stakeholders, the website undergoes regular updates to ensure the currency and relevance of its content. Notably, the investor relations section of the website has undergone a recent transformation, introducing a reorganized layout aimed at facilitating updated information for users to provide a more user-friendly experience, enabling stakeholders to navigate and extract pertinent information effortlessly. Beyond the wealth of information available on the website, the investors and other report users may contact the Company via its designated contact means provided in the website for additional information or or personalized assistance. 114 | Statements and Reports | Annual Report 2022-23 www.beximcopharma.com/investors R E P O R T S S T A T E M E N T S A N D Five Year Dividend History Cash Dividend 15% 15% 35% 35% 35% 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 * In addition to Cash, 10% Stock Dividend was declared in 2019-20 Stock Market Performance Dhaka Stock Exchange (DSE) Particulars 30 June 2023 30 June 2022 30 June 2021 30 June 2020 30 June 2019 Share Price- Dhaka Share Price- AIM BDT 146.2 GBP 0.355 BDT 154.6 BDT 177.3 BDT 69.2 BDT 83.5 GBP 0.705 GBP 0.860 GBP 0.355 GBP 0.389 Market Capitalization- Dhaka Price BDT 65.22 bn BDT 68.9bn BDT 79.1bn BDT 28.1bn BDT 33.9bn EPS- Taka P/E Ratio (Dhaka Price) Dividend (Cash) Stock Dividend 10.34 14.13 35% (Proposed) -- 11.48 13.5 35% -- 11.49 15.4 35% -- 7.88 8.8 15% 10% 7.48 11.2 15% - 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 Annual Report 2022-23 | Statements and Reports | 115 S T R O P E R D N A S T N E M E T A T S 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 ofﬁcial website. In compliance to this directive, Beximco Pharmaceuticals Limited (“Beximco Pharma” or the “Company”) publishes this statement as a guiding framework for the shareholders with regards to the Company’s Dividend Policy. This statement provides a brief outline of the legal and regulatory provisions relating to dividend, key issues in dividend considerations and the procedure for the declaration, approval and payment of dividend. Relevant Laws and Regulations Different legal and regulatory provisions have bearings on dividend decisions of the Company. The paragraphs below provide a brief overview of the provisions relating to dividend: Companies Act The Companies Act 1994, the primary legislation regulating the affairs of a company, gives power to the directors to recommend the dividend to be declared by the company which is to be approved by the shareholders in the Annual General Meeting (AGM). The shareholders however, cannot approve any dividend more than what has been recommended by the directors. It also authorizes the directors to pay from time to time, interim dividends to the shareholders if so appears to be justiﬁed by the proﬁts of the company. The directors may, before recommending any dividend, set aside out of the proﬁts of the company, such sums as they deem appropriate, as reserve or reserves which shall at the discretion of the directors, be applied for meeting contingencies, or for equalizing dividends or for any other purpose of the company appropriate for utilization of such proﬁts or may employ such proﬁts in the business of the company or otherwise as they think ﬁt. The law further provides that dividends are to be paid out of proﬁts of the year or any other undistributed proﬁts. Listing Regulations of Stock Exchanges There has been a number of listing regulations that have direct or indirect impact on dividend decisions of the company. Shares of a company is traded under different trading categories depending on payment or non-payment of dividend by a company. According to the regulations, a company shall be traded in the “Z Category” (a category with a longer trading settlement time and other restrictive conditions) if it fails to declare cash dividend for two consecutive years. Moreover, a company may among other reasons, be de-listed from the stock exchange if it fails to pay cash/stock dividend for a consecutive period of ﬁve years. The listing regulations also require a company to declare in its annual general meeting the reasons, if any for partial or non-distribution of proﬁts as dividend and the plan for utilization of the undistributed proﬁts if there be any. 116 | Statements and Reports | Annual Report 2022-23 R E P O R T S S T A T E M E N T S A N D Income Tax Law Bangladesh Income Tax law, provides for additional tax charges to a listed company that retains more than 70% of its net after- tax proﬁt earned in any year. According to the said provision if a company retains or transfers more than 70% of its after tax proﬁt to reserve or any other fund, an additional 10% tax shall be payable on such retained or transferred fund. Moreover, in order to encourage cash dividend, the tax law requires that if in any income year, the stock dividend declared by a company exceeds the cash dividend, an additional 10% tax shall be imposed on the whole amount of stock dividend declared or distributed. Key Considerations in dividend decisions The company shall endeavour to maintain a consistent dividend over the year with appropriate consideration of factors relevant to such decisions. It is the Company’s practice to declare dividend on annual basis based on annual ﬁnancial performance. However, the Board may also declare interim dividend based on periodic ﬁnancial results. Historically the Company declared dividend in either cash or stock or in judicious combination of cash and stock. The company intends to pursue the same policy in future depending on the operating and ﬁnancial context prevailing at that time. Multiple internal and external factors might affect Company’s dividend decisions. While recommending dividend the Board of directors shall consider among others: • Company’s current net earnings, accumulated distributable reserves/surplus and availability of free cash ﬂow • Potential growth opportunities and investment requirements; assessment of beneﬁts of retention vs pay-out • Legal and Regulatory compulsion and tax implication of retention and payout • Any debt/loan covenants restricting dividend announcements • Persuasion of a target capital structure • Cost of external ﬁnance • Policy on consistency of the dividend over reasonable and foreseeable future years Additionally, the Board may consider other factors or circumstances to decide on distribution of dividend for a particular year. Eligibility of shareholders for dividend Dividend is declared on the face value of each Equity Share. Unless otherwise stated, all holders of Equity Share and GDR (Global Depository Receipts) whose names appear on the registrar of the Company on the Record Date declared by the Company for entitlement of dividend, are eligible to get the dividend. Timing of Dividend Announcement and Payment Annual dividend decision is taken in the Board meeting to be held within 120 days from the date of closing of the ﬁnancial year. Such decisions are based on the results of the audited ﬁnancial statements. The dividend recommendations made by the directors are notiﬁed to the shareholders through stock exchanges, website and public announcements. Dividend recommended by the Directors are to be placed in the Annual General meeting of the Company for the Shareholders’ approval. Dividend are transferred to the respective shareholders’ account within 30 days from the date of its approval. Interim Dividend if any declared by the Company, are paid within 30 days from the Record Date ﬁxed by the Company for the entitlement of such dividend. Policy Review and Amendment Apart from mandatory revision, modiﬁcation or amendment as necessitated by the legal and regulatory requirements, the company shall review this policy on periodic basis and make necessary revision or amendment to keep the policy relevant and up to date. The Board of Directors of the company shall approve the revision and/or amendment as it deems ﬁt. Disclaimer The above Policy Statement neither gives a guarantee of dividend to be declared by the Company nor does it constitute a commitment for any future dividend and thus be read as a general guidance on different dividend related issues. The policy upholds the Board’s absolute/complete liberty to recommend any dividend in deviation of the policy. Annual Report 2022-23 | Statements and Reports | 117 S T R O P E R D N A S T N E M E T A T S Snapshots of 46th Annual General Meeting (Held on virtual platform) The 46th Annual General Meeting of the shareholders of Beximco Pharmaceuticals Limited held under virtual platform on December 22, 2022. 118 | Statements and Reports | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Audited Financials Annual Report 2022-23 | Audited Financials | 119 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 119 I S L A C N A N I F D E T I D U A Consolidated Financial Statements Beximco Pharma and Its Subsidiaries For the Year ended June 30, 2023 120 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated | Annual Report 2022-23 120 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Independent Auditor’s Report To the Shareholders of Beximco Pharmaceuticals Limited and its Subsidiaries Report on the Audit of the Consolidated Financial Statements Opinion We have audited the consolidated ﬁnancial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the Consolidated Statement of Financial Position as at June 30, 2023 and Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows for the year then ended, and notes to the Consolidated Financial Statements, including a summary of signiﬁcant accounting policies. The Accounting year of the subsidiary companies- Beximco Pharma API Limited, Nuvista Pharma Limited and Synovia Pharma PLC, ends on the same date as of the Company. We have audited the Financial statements of Beximco Pharma API Limited and expressed our unmodiﬁed opinion on those statements vide our report dated October 19, 2023. The Financial Statements of Nuvista Pharma Limited and Synovia Pharma PLC were audited by A. Qasem & Co. Chartered Accountants, who through their report dated September 24, 2023 have also expressed unmodiﬁed opinion on those statements. In our opinion, the accompanying consolidated ﬁnancial statements of the Company give a true and fair view of the consolidated ﬁnancial position of the Company as at June 30, 2023, and of its consolidated ﬁnancial performance and its consolidated cash ﬂows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 2020 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the ﬁnancial statements in Bangladesh, and we have fulﬁlled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in our audit of the consolidated ﬁnancial statements of the current period. These matters were addressed in the context of our audit of the consolidated ﬁnancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Risk Our response to the risk Valuation of Property, Plant and Equipment (PP&E) The carrying value of the PPE was Tk. 42,245,615,338 as at June 30, 2023. Expenditures are capitalized if they create new assets or enhance the existing assets, and expensed if they relate to repair or maintenance of the assets. Classiﬁcation of the expenditures involves judgment. The useful lives of PPE items are based on management’s estimates regarding the period during which the assets or its signiﬁcant components will be used. The estimates are based on historical experience and market practice and take into consideration the physical condition of the assets. Our audit included the following procedure: • We assessed whether the accounting policies in relation to the capitalization of expenditures are in compliance with IFRS and found them to be consistent. • We inspected a sample of invoices and L/C documents to determine whether the classiﬁcation between capital and revenue expenditure was appropriate. Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 121 I S L A C N A N I F D E T I D U A Risk Our response to the risk Valuation of Property, Plant and Equipment (PP&E) The valuation of PPE was identiﬁed as a key audit matter due to the signiﬁcance of this balance to the consolidated ﬁnancial statements and that there is signiﬁcant measurement uncertainty involved in this valuation. See Note No. 4 to the consolidated ﬁnancial statements • We evaluated whether the useful lives determined and applied by the management were in line with historical experience and the market practice. • We checked whether the depreciation of PPE items was commenced timely, by comparing the date of the reclassiﬁcation from capital work in progress to ready for use, with the date of the act of completion of the work. Valuation of Inventory The inventory of Tk. 12,133,277,975 as at June 30, 2023 was held at different locations across the country. We veriﬁed the appropriateness of management’s assumptions applied in calculating the value of the inventory by: Inventories are carried at the lower of cost and net realizable value. As a result, the management apply judgment in determining the appropriate values for slow-moving or obsolete items. Since the value of Inventory is signiﬁcant to the consolidated Financial Statements and there is signiﬁcant measurement uncertainty involved in this valuation, the valuation of inventory was signiﬁcant to our audit. See Note No. 8 to the consolidated ﬁnancial statements. • Evaluating the design and implementation of key inventory controls. • Attending inventory counts on sample basis and reconciling the count results to the inventory listing to test the completeness of data. • Reviewing the requirement of inventory provisioning and action there upon by the management. • Comparing the net realizable value obtained through a detailed review of sales subsequent to the year-end, to the cost price of a sample of inventories. Related party transactions The Company has related party transactions as described in Note No. 36 of the Consolidated Financial Statements. We focused on identiﬁcation of related parties and disclosure of related party transactions in accordance with relevant accounting standards. Our audit procedures amongst others included the following: • Evaluated the design and tested the operating effectiveness of controls over identiﬁcation and disclosure of related party transactions. • Evaluated the transactions among the related parties and tested material accounts balances. • Evaluated the disclosures in the Consolidated ﬁnancial statements in compliance with IAS 24. Other Information Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the consolidated ﬁnancial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report. Our opinion on the consolidated ﬁnancial statements does not cover the other information and we do not express any form of assurance conclusion thereon. 122 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I In connection with our audit of the consolidated ﬁnancial statements, our responsibility is to read the other information identiﬁed above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated ﬁnancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on such work we perform, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance. Responsibilities of Management and Those Charged with Governance for the consolidated Financial Statements and Internal Controls Management is responsible for the preparation and fair presentation of the consolidated ﬁnancial statements of the Company in accordance with IFRSs, The Companies Act 1994, The Securities and Exchange Rules 2020 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of consolidated ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated ﬁnancial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s ﬁnancial reporting process. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated ﬁnancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these consolidated ﬁnancial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated ﬁnancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consolidated ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated ﬁnancial statements, including the disclosures, and whether the consolidated ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufﬁcient appropriate audit evidence regarding the ﬁnancial information of the entities or business activities within the Company to express an opinion on the consolidated ﬁnancial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most signiﬁcance in the audit of the consolidated ﬁnancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest beneﬁts of such communication. Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 123 I S L A C N A N I F D E T I D U A Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994, The Securities and Exchange Rules 2020 and relevant notiﬁcations issued by Bangladesh Securities and Exchange Commission, we also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due veriﬁcation thereof; b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books; c) The Company’s consolidated Statement of Financial Position (Balance sheet) and consolidated Statement of Proﬁt or Loss and Other Comprehensive Income (Proﬁt & Loss Account) dealt with by this report are in agreement with the books of accounts and; d) The expenditures incurred and payment made were for the purpose of the Company’s business for the year. Dhaka October 19, 2023 M. J. ABEDIN & CO. Chartered Accountants Reg No. CAF-001-111 Hasan Mahmood FCA Enrollment No. 0564 DVC: N/A 124 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Financial Position As at June 30, 2023 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 Notes June 30, 2023 4 4( a ) 5 6 7 8 9 10 11 12 13 48,280,929,007 42,245,615,338 562,223,398 4,721,034,633 56,512,081 674,570,185 20,973,372 20,875,854,240 12,133,277,975 819,740,355 3,574,654,461 2,984,876,883 227,618,388 1,135,686,178 69,156,783,247 43,680,703,738 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,141,177,755 18,148,196 30,806,194,299 Amount in Taka June 30, 2022 47,728,777,460 41,593,480,364 618,891,376 4,729,838,408 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 Non-Controlling Interest 14 3,938,962,240 4,035,506,641 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 15 16 17 18 19 20 21 47,619,665,978 44,636,004,458 8,272,093,233 2,550,833,254 3,170,764,435 2,550,495,544 8,776,099,208 3,454,188,843 2,785,072,661 2,536,837,704 13,265,024,036 12,735,932,076 6,621,170,271 1,439,895,168 3,531,707,176 1,129,699,385 88,465,109 454,086,927 6,850,550,319 2,065,962,471 2,478,930,393 1,152,990,410 88,049,428 99,449,055 69,156,783,247 66,148,035,742 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 125 I S L A C N A N I F D E T I D U A Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income For the Year ended June 30, 2023 Notes July 2022- June 2023 July 2021- June 2022 Amount in Taka Net Revenue Cost of Goods Sold Gross Proﬁt Operating Expenses Administrative Expenses Selling, Marketing and Distribution Expenses Proﬁt from Operations Other Income Finance Cost Proﬁt Before Contribution to WPPF & Welfare Funds Contribution to WPPF & Welfare Funds Proﬁt Before Tax Income Tax Expenses Current Tax Deferred Tax Income/ (Expense) Proﬁt After Tax Proﬁt/(Loss) Attributable to: Owners of the Company Non-Controlling Interest Other Comprehensive Income/(Loss) Total Comprehensive Income Total Comprehensive Income Attributable to: Owners of the Company Non-Controlling Interest 22 23 26 27 28 29 30 31 39,266,662,237 (21,953,290,466) 34,669,172,052 (18,848,962,107) 17,313,371,771 15,820,209,945 (10,097,131,808) (1,180,124,415) (8,917,007,393) 7,216,239,963 452,657,744 (1,285,698,253) 6,383,199,454 (314,430,512) (8,938,466,002) (1,136,591,808) (7,801,874,194) 6,881,743,943 1,166,259,166 (1,001,835,523) 7,046,167,586 (359,222,585) 6,068,768,942 6,686,945,001 (1,544,300,452) (1,468,598,852) (75,701,600) 4,524,468,490 (1,688,316,804) (1,191,180,488) (497,136,316) 4,998,628,197 4,614,066,147 (89,597,657) 4,524,468,490 5,123,136,712 (124,508,515) 4,998,628,197 (2,383,527) 4,522,084,963 6,764,517 5,005,392,714 4,611,682,620 (89,597,657) 4,522,084,963 5,129,901,229 (124,508,515) 5,005,392,714 Earnings Per Share (EPS) 32 10.34 11.48 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A 126 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Changes in Equity For the Year Ended June 30, 2023 As at June 30, 2023 A U D I T E D F I N A N C A L S I 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, 2022 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 Total Comprehensive Income: Proﬁt for the Year Other Comprehensive Income/(Loss) Transferred from deferred tax Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - - - - - - - - - - (2,383,527) 28,647,841 - - 4,614,066,147 4,614,066,147 (89,597,657) 4,524,468,490 - - (2,383,527) 28,647,841 - - (2,383,527) 28,647,841 - - (1,561,392,312) (1,561,392,312) (6,946,744) (1,568,339,056) (5,634,546) 1,267,772 - - 5,634,546 - - 1,267,772 - - - 1,267,772 Balance as on June 30, 2023 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,141,177,755 18,148,196 30,806,194,299 43,680,703,738 3,938,962,240 47,619,665,978 Net Asset Value (NAV) Per Share (Note-33) As at June 30, 2022 Tk. 97.91 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: Proﬁt for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - - - - - - - - - - - - (6,358,656) 1,430,698 - - - 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 - - - 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 27,747,885,918 40,600,497,817 4,035,506,641 44,636,004,458 Net Asset Value (NAV) Per Share (Note-33) Tk. 91.01 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 127 I S L A C N A N I F D E T I D U A Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statement of Cash Flows For the Year ended June 30, 2023 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 Disposal of Intangible Assets Dividend Received Net Cash Used in Investing Activities Cash Flows from Financing Activities : Notes July 2022-June 2023 July 2021-June 2022 Amount in Taka 39,440,236,428 36,145,521,249 (30,943,666,211) (28,584,815,294) 8,496,570,217 7,560,705,955 (1,272,368,534) (1,002,350,838) 5,529,516 (1,144,944,341) 6,084,786,858 3,055,358 (1,347,234,025) 5,214,176,450 (2,410,765,411) (299,262,244) - 23,353,504 67,725,000 1,931,517 (2,815,211,828) (124,286,166) (4,766,635,704) 24,063,832 - 2,015,444 (2,617,017,634) (7,680,054,422) 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 (1,763,267,386) (229,380,048) (1,567,923,375) (3,560,570,809) (92,801,585) 1,168,673,821 59,813,942 1,135,686,178 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 13.64 11.69 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : N/A 128 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Beximco Pharmaceuticals Limited and its Subsidiaries Notes to the Financial Statements As at and for the year ended June 30, 2023 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). Company’s shares were ﬁrst listed on the Dhaka Stock Exchange in 1985 and subsequently on the Chittagong Stock Exchange in 1995. In 2005, BPL acquired Beximco Infusions Ltd., a publicly listed company specializing in the production and marketing of intravenous ﬂuids. To expand its global presence, BPL issued Global Depository Receipts (GDRs) and secured a listing on the Alternative Investment Market (AIM) of the London Stock Exchange. In 2018, BPL acquired 85.2% shares of Nuvista Pharma Limited (Nuvista Pharma/NPL) – an unlisted 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. Sanoﬁ Bangladesh Limited was subsequently renamed as Synovia Pharma PLC (Synovia Pharma/SPP). Bangladesh Government holds 45.4% shares of the company represented through the Bangladesh Chemical Industries Corporation (20%) and the Ministry of Industries (25.4%). SPP, like Nuvista Pharma, is an unlisted pharmaceutical company operating in Bangladesh. Shares of Beximco Pharma are traded on the Dhaka and Chittagong Stock Exchanges within Bangladesh, while its GDRs are traded on the AIM of the London Stock Exchange. The registered ofﬁce of the Company is located at House No. 17, Road No. 2, Dhanmondi R/A, Dhaka. The industrial units are located at Tongi and Kaliakoir of Gazipur district – vicinities close to the capital city Dhaka. The manufacturing facilities of the Company are certiﬁed by leading global regulatory authorities including United States Food and Drug Administration (USFDA). 1.2 The Subsidiaries Nuvista Pharma Limited (NPL) Nuvista Pharma, formerly Organon (Bangladesh) Ltd., was a subsidiary of Netherlands based Organon International. The Company has been operating in Bangladesh since 1964, with a local manufacturing facility at Tongi, Dhaka. Following the divestment of Organon’s equity to the local management in 2006, the company was renamed as Nuvista Pharma Limited. In 2018, Beximco Pharma acquired majority shareholdings in Nuvista Pharma and thus it became the immediate and ultimate parent of the company. NPL is an unlisted public limited 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 certiﬁable manufacturing facility for the leading antibiotic, cephalosporin, are spread over c25 acres of land, located at Tongi, Gazipur. SPP produces approximately 100 branded generic products predominantly for the local market. The company also imports ﬁnished 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 Beximco Pharma 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-ﬁbrinolytic, 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. Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 129 I S L A C N A N I F D E T I D U A 2. Basis of Preparation of Financial Statements 2.1 Statement of Compliance The ﬁnancial statements have been prepared in compliance with the requirements of the Companies Act 1994, the Securities & Exchange Rules 2020, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and other relevant local laws as applicable and in accordance with the International Financial Reporting Standards (IFRSs). 2.2 Basis of Measurement The ﬁnancial statements have been prepared on Historical Cost basis except for certain Property, Plant and Equipment measured at revalued amount. 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. 2.3 Reporting Period Accounting year of Beximco Pharmaceuticals Limited (BPL) and its subsidiaries Synovia Pharma PLC (SPP), Nuvista Pharma Limited (NPL) and Beximco Pharma API Limited (BPAL) begins on July 1 and ends on June 30. 2.4 Comparative Information The Company acquired majority stake in Synovia Pharma PLC (formerly Sanoﬁ Bangladesh Limited) with effect from October 1, 2021. Therefore, the comparative prior period ﬁgures (July 2021 – June 2022) as reported in the Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows include nine months’ ﬁnancials (October 2021-June 2022) of Synovia Pharma PLC. Figures for earlier year have been re-arranged wherever considered necessary to ensure better comparability with the current year. 3. Signiﬁcant Accounting Policies 3.1 Basis of Consolidation The ﬁnancial statements of the subsidiaries have been consolidated with those of Beximco Pharmaceuticals Limited in accordance with IFRS 10: Consolidated Financial Statements. The Company acquired 85.2% and 54.6% shares of Nuvista Pharma and Synovia Pharma PLC, respectively. These ownership interests are adequate enough to establish control over the companies 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 therefore, meets the conditions stated in IFRS 10: Consolidated Financial Statements to consider it as a subsidiary. 3.2 Inter-Company Transactions Assets, Liabilities, Equity, Income, Expenses and Cash Flows arising out of transactions between the Company and 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. Proﬁt or Loss and Other Comprehensive Income subsequent to the acquisitions have been allocated to the Owners of the Company and the NCIs in proportion to their respective shares and disclosed in the ﬁnancial statements. 3.4 Valuation of Goodwill Goodwill has been determined in accordance with IFRS 3: Business Combination. This represents the excess of the aggregate of Purchase Consideration and the acquisition-date fair value of NCI’s share in the identiﬁable net assets over the acquisition-date fair value of the identiﬁable net assets of the subsidiary. 3.5 Amortization of Intangible Asset Fair value of identiﬁable 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 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 2023 (includes provisional estimates for six months since its audited ﬁnancials as on December 31,2022) exceeds its investment by an amount of Tk. 26,838,893. 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. 130 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 4. Property Plant and Equipment As on June 30, 2023 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Ofﬁce Equipment Amount in Taka Total Property Plant & Equipment Cost As on July 01, 2022 Additions 7,468,877,096 16,536,450,073 28,647,334,497 666,140,804 932,927,311 1,080,834,236 55,332,564,017 423,531,349 13,553,756 124,689,726 121,365,419 - 38,468,331 721,608,581 Transferred in & Capitalized Transferred from Right-of-use Assets Disposal during the Year - - - 140,198,289 207,275,929 69,618,482 2,898,228 26,887,690 446,878,618 - - - 62,708,000 - 62,708,000 (511,210) (57,079,965) (45,975,506) (30,448,400) (100,985,576) (235,000,657) Cost as on June 30, 2023 7,892,408,445 16,689,690,908 28,922,220,187 811,149,199 968,085,139 1,045,204,681 56,328,758,559 Accumulated Depreciation As on July 01, 2022 Depreciation Charged Depreciation (Fair Value Adjustment) Transferred from Right-of-use Assets Adjustment for Assets disposed off Adjustment for policy conformity Accumulated Depreciation as on June 30, 2023 - - - - - 3,407,250,642 9,210,174,678 289,717,754 767,553,171 732,219,217 14,406,915,462 380,155,101 1,234,490,752 39,841,447 35,209,817 74,317,362 1,764,014,479 5,723,364 19,452,060 - - - - - 46,269,474 - - 25,175,424 46,269,474 (511,206) (55,996,182) (40,836,751) (29,029,070) (99,708,492) (226,081,701) (15,683,510) (48,492,874) (4,142,521) (7,576,791) (10,190,108) (86,085,804) - 3,776,934,391 10,359,628,434 284,579,929 812,426,601 696,637,979 15,930,207,334 Net Book Value June 30, 2023 7,892,408,445 12,912,756,517 18,562,591,753 526,569,270 155,658,538 348,566,702 40,398,551,225 Capital Work in Progress Carrying Value as on June 30, 2023 Carrying Value as on June 30, 2022 1,847,064,113 42,245,615,338 41,593,480,364 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 131 I S L A C N A N I F D E T I D U A 4 (a) . Right of use Assets As on June 30, 2023 Cost As on July 01, 2022 Additions Transferred to Freehold Assets Disposal During the Year Cost as on June 30, 2023 Accumulated Depreciation As on July 01, 2022 Depreciation Charged Transferred to Freehold Assets Adjustment of Assets Disposal off Particulars Property Vehicle Amount in Taka Total Right-of-use Assets 114,163,530 754,483,695 868,647,225 74,492,308 (62,708,000) (15,065,704) 74,492,308 (62,708,000) (15,065,704) 114,163,530 751,202,299 865,365,829 1,268,486 248,487,363 7,526,351 107,195,409 (46,269,474) (15,065,704) 249,755,849 114,721,760 (46,269,474) (15,065,704) Accumulated Depreciation as on June 30, 2023 8,794,837 294,347,594 303,142,431 Net Book Value June 30, 2023 105,368,693 456,854,705 562,223,398 Net Book Value June 30, 2022 112,895,044 505,996,332 618,891,376 5. Intangible Assets Particulars Cost As on July 01, 2022 Disposal during the Year Addition / Transferred in & Capitalized Marketing Rights, Brand &Product development ERP & Software Trade Name & Trade Marks Total 4,960,011,737 (67,725,000) 36,203,786 283,211,071 (16,657,377) 73,548,379 68,870,674 5,312,093,482 - - (84,382,377) 109,752,165 As on June 30, 2023 4,928,490,523 340,102,073 68,870,674 5,337,463,270 Amortization As on July 01, 2022 611,948,344 126,658,259 10,498,834 749,105,437 Amortized During the year 55,823,731 27,533,548 - 83,357,279 Amortization (Fair Value Adjustment) 129,120,000 - 30,200,000 159,320,000 Adjustment for retirement and disposal - (16,038,638) - (16,038,638) As on June 30, 2023 796,892,075 138,153,169 40,698,834 975,744,078 Net Book Value June 30, 2023 4,131,598,448 201,948,904 28,171,840 4,361,719,192 Capital Work in Progress Carrying Value as on June 30, 2023 359,315,441 4,721,034,633 Net Book Value June 30, 2022 4,348,063,393 156,552,812 58,371,840 4,562,988,045 Capital Work in Progress Carrying Value as on June 30, 2022 166,850,363 4,729,838,408 132 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Amount in Taka June 30, 2023 June 30, 2022 546,691,213 127,878,972 674,570,185 546,691,213 127,878,972 674,570,185 6. Goodwill Acquisition of 85.2% stake in Nuvista Pharma Limited Acquisition of 54.6% stake in Synovia Pharma PLC. 7. Other Investments Details June 30, 2023 June 30, 2022 Bangladesh Export Import Co. Ltd. Central Depository Bangladesh Ltd. (CDBL) Number of Share Value Number of Share 167,854 19,403,922 571,182 1,569,450 20,973,372 167,854 571,182 Value 21,787,449 1,569,450 23,356,899 a. The shares of Bangladesh Export Import Co. Ltd. are listed on Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. as on June 30, 2023 was Tk. 115.60 (June 30, 2022: Tk.129.80). The fair value Loss of Tk. 2,383,527 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. 8. Inventories This consists of : 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 : Spares & Accessories Stock of Stationery Literature & Other Materials Amount in Taka June 30, 2023 June 30, 2022 3,444,510,836 2,486,292,696 930,042,235 4,722,534,133 1,351,874,369 102,921,941 113,354,964 43,029,486 684,808,447 4,751,533,955 1,171,926,025 98,605,393 82,051,648 37,709,095 1,425,010,011 1,092,367,820 12,133,277,975 10,405,295,079 634,125,746 19,049,051 166,565,558 819,740,355 558,966,964 20,974,250 138,856,042 718,797,256 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 133 I S L A C N A N I F D E T I D U A 10. Accounts Receivable This consists of : Trade Receivable Other Receivable Amount in Taka June 30, 2023 June 30, 2022 3,369,995,799 2,963,143,615 204,658,662 179,673,579 3,574,654,461 3,142,817,194 Accounts Receivable is reported net of provision for bad debts of Tk. 16,163,830. It includes an amount of Tk. 1,071,490,950, equivalent USD 10,013,934 (June 30, 2022: Tk. 1,016,268,270, equivalent USD 11,821,851) 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. 1,435,857,890 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.1,445,757,890 on April 30, 2023. No amount was due from the directors, managing agent, managers and other ofﬁcers of the company and any of them severally or jointly with any other person. Aging of Trade Receivables : Amount due within 6 months Amount due for 6 months & above 11. Loans, Advances and Deposits This is unsecured, considered good and consists of as follows : Clearing & Forwarding VAT Claims Receivable Security Deposit & Earnest Money Lease Deposit Advance for Expenses including Capital Expenditure Bank Guarantee Margin Salary Advance / Loan Rent Advance Vehicle Advance Raw & Packing Material Prepaid Insurance Overseas Liaison Ofﬁce Others 3,153,725,178 2,841,350,572 216,270,621 121,793,043 3,369,995,799 2,963,143,615 Amount in Taka June 30, 2023 June 30, 2022 140,516,040 565,923,250 10,957,809 224,632,154 2,133,040 817,982,177 19,849,064 109,156,995 39,161,704 236,599,418 519,527,265 60,957,643 71,228,285 166,252,039 259,313,897 619,340,481 37,673,863 158,893,927 2,133,040 654,535,757 18,826,990 93,892,900 38,745,324 225,975,541 449,393,148 53,234,921 67,005,418 108,074,697 2,984,876,883 2,787,039,904 No amount was due from the directors, managing agent, managers and other ofﬁcers of the company and any of them severally or jointly with any other person, except as stated above. 134 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 12. Cash and Cash Equivalents This consists of : 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 5,951,250 Ordinary Shares issued in exchange of Shares of Beximco Infusions Ltd. 31,291,147 Ordinary Shares issued on conversion of Preference Shares Amount in Taka June 30, 2023 June 30, 2022 529,669,736 279,615,091 606,016,442 - 736,688,901 152,369,829 1,135,686,178 1,168,673,821 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 Pharma 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 on AIM of London Stock Exchange. C. Composition of Shareholding : Sponsors/Directors: A S F Rahman Salman F Rahman Other Directors and Associates June 30, 2023 June 30, 2022 Number of Shares % of Share Capital Number of Shares % of Share Capital 9,058,888 9,080,095 116,305,973 134,444,956 2.03 2.04 26.07 30.14 9,058,888 9,080,095 116,305,973 134,444,956 Other Shareholdings: Foreign Portfolio Investors (DSE/CSE) Holders of GDRs (excluding Board Director) Institutions (ICB, ICB Investors’ Accounts & Others) Individual Shareholders Total 44,433,722 84,386,054 106,355,109 76,492,248 311,667,133 446,112,089 9.96 18.92 23.83 17.15 69.86 43,246,139 84,386,054 97,533,003 86,501,937 311,667,133 100.00 446,112,089 100.00 2.03 2.04 26.07 30.14 9.69 18.92 21.86 19.39 69.86 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 135 I S L A C N A N I F D E T I D U A 14. Non-Controlling Interest a. NPL Non-Controlling Interest (Opening ) Proportionate proﬁt/(loss) Less: Cash Dividend b. SPP Non-Controlling Interest (Opening ) Non-controlling Interest at the date of acquisition Proportionate proﬁt/(loss) Less: Cash Dividend Total (NPL & SPP) 15. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Project Loan - ODDO BHF SE, Frankfurt, Germany Term Loan-Agrani Bank Lease Liability Term Loan-Dhaka Bank Lease Liability This consists of : Payable in one year Payable beyond one year June 30, 2023 Amount in Taka June 30, 2022 367,061,755 38,119,234 (6,946,744) 398,234,245 3,668,444,886 - (127,716,891) - 3,540,727,995 3,938,962,240 334,306,627 39,701,872 (6,946,744) 367,061,755 - 3,857,134,718 (164,210,387) (24,479,445) 3,668,444,886 4,035,506,641 236,117,255 1,915,856,341 393,116,228 5,743,430 2,550,833,254 670,863,306 2,313,748,864 456,761,583 12,815,090 3,454,188,843 146,521,840 393,116,228 539,638,068 160,579,032 456,761,583 617,340,615 16. Liability for Gratuity, Pension and WPPF & Welfare Funds Gratuity Payable Pension Payable Workers Proﬁt Participation and Welfare Fund 1,870,737,474 5,334,216 1,294,692,745 3,170,764,435 1,618,961,997 5,334,216 1,160,776,448 2,785,072,661 136 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I June 30, 2023 Amount in Taka June 30, 2022 4,474,809,399 4,817,103,014 505,552,356 497,141,234 269,132,312 874,534,970 - - 409,733,361 492,341,234 644,508,608 461,766,072 24,913,289 184,741 6,621,170,271 6,850,550,319 621,801,668 664,500,000 146,521,840 7,071,660 938,924,362 960,000,000 160,579,032 6,459,077 1,439,895,168 2,065,962,471 1,618,272,304 1,450,986,422 149,408,697 313,039,753 3,531,707,176 1,373,370,694 889,344,958 110,410,808 105,803,933 2,478,930,393 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 City bank Limited 18. Long Term Borrowings-Current Maturity This consists of : Project Loan - ODDO BHF SE, Frankfurt, Germany Term Loan-Agrani Bank Lease Liability Term Loan-Dhaka Bank 19. Creditors and Other Payables Goods & Services Provident Fund Advance Against Sales Others 20. Accrued Expenses This is unsecured, falling due within one year and consists of as follows : For Expenses Workers’ Proﬁt Participation and Welfare Funds -(current year) 815,268,873 314,430,512 1,129,699,385 793,767,825 359,222,585 1,152,990,410 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 137 I S L A C N A N I F D E T I D U A 21. Dividend Payable / Unclaimed Dividend The Dividend Payable/Unclaimed dividend as on June 30, 2023 consists of Tk. 15,477,101 relating to BPL’s dividend for the year 2021-22 which has been paid but not yet claimed. The remaining balance relates to dividend for prior years unclaimed to date. During the year an amount of Tk. 13,786,791 of the unclaimed dividend outstanding for more than 3 years has been paid to the Capital Market Stabilization Fund (CMSF) following the directives of the Bangladesh Securities and Exchange Commission. 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) 24. Materials Consumed This is made-up as follows : Opening Stock Purchase Closing Stock July 2022- June 2023 July 2021- June 2022 Amount in Taka 36,334,152,216 2,763,246,905 169,263,116 39,266,662,237 31,889,033,479 2,685,096,151 95,042,422 34,669,172,052 684,808,447 16,873,468,924 5,857,205,833 23,415,483,204 (930,042,235) 22,485,440,969 2,486,292,696 804,670,592 25,776,404,257 (378,602,955) (3,444,510,836) 21,953,290,466 355,079,579 14,971,042,279 4,902,614,580 20,228,736,438 (684,808,447) 19,543,927,991 1,803,930,326 295,801,260 21,643,659,577 (308,404,774) (2,486,292,696) 18,848,962,107 6,022,065,373 17,028,733,994 (6,177,330,443) 16,873,468,924 4,688,041,185 16,305,066,467 (6,022,065,373) 14,971,042,279 138 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 25. Factory Overhead Salaries and Allowances Repairs and Maintenance Insurance Premium Municipal Tax & Land Revenue Registration & Renewals Travelling & Conveyance Entertainment Research and Development Rent Printing & Stationery Telephone, Cellphone, Internet & Postage Toll Expense Electricity, Gas & Water Training & Conference Plant Certiﬁcation and Regulatory Approvals Depreciation Security Expenses Other Expenses 26. Administrative Expenses Salaries and 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 2022- June 2023 July 2021- June 2022 Amount in Taka 2,258,988,455 646,060,664 56,837,942 9,753,993 9,952,617 42,323,586 5,085,555 363,020,013 9,628,020 31,707,563 10,518,543 12,199,908 622,647,608 14,685,407 28,630,624 1,682,688,667 34,162,972 18,313,696 1,978,710,523 628,788,277 56,200,557 9,223,410 6,264,023 50,000,748 9,902,080 345,983,852 7,835,447 44,545,079 12,513,215 30,697,402 351,013,808 13,789,240 8,645,632 1,296,771,715 35,053,987 16,675,585 5,857,205,833 4,902,614,580 712,891,892 42,885,394 105,398,992 8,801,754 32,097,565 10,548,711 8,633,696 3,470,000 7,724,845 26,372,649 33,404,509 - 45,896,460 784,669 14,240,935 45,619,482 3,454,508 26,484,107 51,414,247 635,735,765 39,745,136 89,621,545 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 1,951,304 7,195,687 54,687,077 2,899,082 24,178,436 43,827,775 1,180,124,415 1,136,591,808 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 139 I S L A C N A N I F D E T I D U A 27. Selling, Marketing and Distribution Expenses Salaries and 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 July 2022- June 2023 July 2021- June 2022 Amount in Taka 3,419,024,044 3,061,082,335 160,024,069 92,388,180 858,858,287 85,799,736 55,221,661 120,811,372 70,471,632 25,227,242 101,986,509 200,581,827 39,316,350 444,472,514 3,868,099 65,708,828 473,358,232 259,522,132 9,933,118 208,365,155 11,122,460 52,643,478 2,910,043 24,633,191 362,269,143 148,250,914 143,725,244 613,597,539 491,888,971 332,194,989 20,398,163 3,055,087 15,379,184 118,272,362 49,953,940 736,860,051 76,900,893 45,627,054 84,600,340 113,042,771 21,294,622 81,286,612 128,432,491 44,275,975 395,734,497 15,502,443 54,330,763 324,066,346 171,917,335 12,646,614 181,219,118 8,875,134 49,179,523 6,946,764 20,146,600 297,847,820 137,201,570 208,693,377 527,996,777 448,553,137 328,798,251 19,313,099 3,451,016 27,824,564 8,917,007,393 7,801,874,194 140 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 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 Proﬁt/(Loss) on Sale of Fixed Assets Miscellaneous Income 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 : (a) Current Tax (b) Deferred Tax Expense Deferred Tax Expense is arrived at as follows : i. BPL 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 proﬁt or Loss and Other Comprehensive Income July 2022- June 2023 July 2021- June 2022 Amount in Taka 5,529,516 1,931,517 61,461,940 268,831,523 66,944,083 - 6,096,998 - 13,815,805 28,046,362 452,657,744 883,207,883 58,059,511 300,393,065 44,037,794 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 24,410,034 1,166,259,166 678,750,473 47,069,776 199,775,709 76,239,565 1,285,698,253 1,001,835,523 1,468,598,852 75,701,600 1,544,300,452 1,191,180,488 497,136,316 1,688,316,804 12,608,874,084 (1,554,826,488) (13,172,086) 12,125,676,008 (1,327,433,137) (10,647,866) 11,040,875,510 10,787,595,005 22.5% 2,484,196,990 2,427,208,876 56,988,114 1,267,772 58,255,886 22.5% 2,427,208,876 1,871,974,397 555,234,479 1,430,698 556,665,177 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 141 I S L A C N A N I F D E T I D U A ii. NPL Property, Plant & Equipment ( Difference in book value & Tax base) Deferred liability (Gratuity) Provision for Bad Debts Temporary Difference Tax rate Deferred Tax Liability Deferred tax on revaluation surplus Deferred tax liabilities at end of the year Deferred tax liabilities at beginning of the year Transferred to revaluation reserve Deferred Tax charged to proﬁt or Loss and Other Comprehensive Income iii.SPP 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 year Deferred Tax Liability/(Asset) at beginning of the year Deferred tax charged to proﬁt or loss and other comprehensive income Total (BPL, NPL &SPP) July 2022- June 2023 July 2021- June 2022 Amount in Taka 417,006,176 (193,019,251) (2,991,744) 220,995,181 30.0% 66,298,554 - 66,298,554 109,628,828 (28,647,841) (14,682,433) 195,693,431 (128,225,951) - (272,965,958) (205,498,478) 27.5% (56,512,081) (88,640,228) 32,128,147 75,701,600 445,608,322 (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 31. Other Comprehensive Income - Unrealized Gain/(Loss) Fair Value Gain/(Loss) on Investment in Listed Shares (2,383,527) (2,383,527) 6,764,517 6,764,517 32. Earnings Per Share (EPS) (a) Earnings attributable to the Owners of the Company (b) Weighted average number of Shares outstanding during the year 4,614,066,147 446,112,089 5,123,136,712 446,112,089 Earnings Per Share (EPS) 10.34 11.48 142 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 33. Net Asset Value (NAV) Per Share Total Assets Less Total Liabilities Less Non-controlling Interest Equity Attributable to the Owners of the Company Number of Ordinary Shares Net Asset Value (NAV) Per Share June 30, 2023 Amount in Taka June 30, 2022 69,156,783,247 (21,537,117,269) (3,938,962,240) 43,680,703,738 446,112,089 97.91 66,148,035,742 (21,512,031,284) (4,035,506,641) 40,600,497,817 446,112,089 91.01 34. Net Operating Cash Flows Per Share (NOCFPS) July 2022- June 2023 July 2021- June 2022 Net Cash Generated from Operating Activities Number of Ordinary Shares Net Operating Cash Flows Per Share (NOCFPS) 6,084,786,858 446,112,089 13.64 5,214,176,450 446,112,089 11.69 35. Reconciliation of Net Proﬁt with Cash Flows from Operating Activities Proﬁt after Tax 4,524,468,490 4,998,628,197 Adjustment to reconcile net proﬁt to net cash provided by operating activities : (a) Non-cash/ Non-operating Items : Depreciation Amortization Deferred Tax Exchange rate ﬂuctuation (Gain) / Loss on Foreign Currency Bank Loan Dividend Income (Proﬁt) / 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 Gratuity & WPPF Increase/(Decrease) in Creditors and Other Payables Increase/(Decrease) in Accrued Expenses Increase/(Decrease) in Income Tax Payable Net cash Generated from Operating Activities 2,294,487,968 1,817,825,859 242,677,279 75,701,600 233,844,494 (1,931,517) (13,815,805) (59,813,942) (734,169,600) (1,727,982,896) (100,943,099) (431,837,267) (30,983,360) (218,535,999) 385,691,774 1,059,575,776 (23,792,401) 354,637,872 6,084,786,858 2,124,987,969 1,461,895,126 205,114,934 497,136,316 20,837,952 (2,015,444) (12,617,947) (45,362,968) (1,909,439,716) (2,508,003,069) (57,074,532) 352,253,797 (32,996,258) 10,093,080 341,842,995 (9,722,474) 117,224,024 (123,057,279) 5,214,176,450 Annual Report 2022-23 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | 143 I S L A C N A N I F D E T I D U A 36. Related Party Disclosures a. Following transactions were carried out with related parties in the normal course of business on arms length basis: Name of Related Party Nature of Transactions Value of Transaction Balance at year end I & I Services Ltd. Delivery of Products Distribution Commission 35,252,390,952 613,597,539 1,435,857,890 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 2022-23. The dividend proposal is subject to shareholders’ approval in 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 2022-23. The proposed dividend is subject to approval of the shareholders of NPL in the forthcoming Annual General Meeting. c. Board of Directors of Synovia Pharma PLC (SPP) has declared 10% cash dividend (Tk. 10.00 per Share of Tk 100 each) for the year 2022-23. The proposed dividend is subject to approval of the shareholders of SPP in the forthcoming Annual General Meeting. Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Dhaka October 19, 2023 144 | Beximco Pharmaceuticals Ltd. and Its Subsidiaries (Consolidated) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Financial Statements Beximco Pharmaceuticals Limited For the Year ended June 30, 2023 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 145 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 145 I S L A C N A N I F D E T I D U A Independent Auditor’s Report To the Shareholders of Beximco Pharmaceuticals Limited Report on the Audit of the Financial Statements Opinion We have audited the ﬁnancial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the Statement of Financial Position as at 30 June 2023 and Statement of Proﬁt or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the ﬁnancial statements, including a summary of signiﬁcant accounting policies. In our opinion, the accompanying ﬁnancial statements of the Company give a true and fair view of the ﬁnancial position of the Company as at 30 June 2023, and of its ﬁnancial performance and its cash ﬂows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 2020 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the ﬁnancial statements in Bangladesh, and we have fulﬁlled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in our audit of the ﬁnancial statements of the current period. These matters were addressed in the context of our audit of the ﬁnancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Risk Our response to the risk Valuation of Property, Plant and Equipment (PP&E) The carrying value of the PPE was Tk. 36,136,306,483 as at 30 June, 2023. Our audit included the following procedure: Expenditures are capitalized if they create new assets or enhance the existing assets, and expensed if they relate to repair or maintenance of the assets. Classiﬁcation of the expenditures involves judgment. The useful lives of PPE items are based on management’s estimates regarding the period during which the assets or its signiﬁcant components will be used. The estimates are based on historical experience and market practice and take into consideration the physical condition of the assets. The valuation of PPE was identiﬁed as a key audit matter due to the signiﬁcance of this balance to the ﬁnancial statements and that there is signiﬁcant measurement uncertainty involved in this valuation. See Note No. 4 to the ﬁnancial statements • We assessed whether the accounting policies in relation to the capitalization of expenditures are in compliance with IFRS and found them to be consistent. • We inspected a sample of invoices and L/C documents to determine whether the classiﬁcation between capital and revenue expenditure was appropriate. • We evaluated whether the useful lives determined and applied by the management were in line with historical experience and the market practice. • We checked whether the depreciation of PPE items was commenced timely, by comparing the date of the reclassiﬁcation from capital work in progress to ready for use, with the date of the act of completion of the work. 146 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Risk Our response to the risk Valuation of Inventory The inventory of Tk. 9,951,338,526 as at 30 June, 2023 was held at different locations across the country. We veriﬁed the appropriateness of management’s assumptions applied in calculating the value of the inventory by: Inventories are carried at the lower of cost and net realizable value. As a result, the management apply judgment in determining the appropriate values for slow-moving or obsolete items. Since the value of Inventory is signiﬁcant to the Financial Statements and there is signiﬁcant measurement uncertainty involved in this valuation, the valuation of inventory was signiﬁcant to our audit. See Note No. 9 to the ﬁnancial statements • Evaluating the design and implementation of key inventory controls. • Attending inventory counts on sample basis and reconciling the count results to the inventory listing to test the completeness of data. • Reviewing the requirement of inventory provisioning and action there upon by the management. •Comparing the net realizable value obtained through a detailed review of sales subsequent to the year-end, to the cost price of a sample of inventories. Contingent Liability The Company is subject to a number of claims and litigations. The amounts of claims are signiﬁcant and estimates of the amounts of provisions or contingent liabilities are subject to management judgement. These claims and regulatory matters are uncertain in timing of resolutions and amount or consequences. These claims and litigation matters were a key audit matter due to the amounts involved, potential consequences and the inherent difﬁculty in assessing the outcome. The assessment of whether or not a liability should be recognized involves judgement from management. The Company also provided corporate guarantees to ﬁnancial 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 conﬁrmations in this regard from external counsel. We also validated the completeness and appropriateness of the related disclosures in Note No. 49 of the ﬁnancial statements. Related party transactions The Company has related party transactions with its subsidiaries and other related parties as described in Note No. 40 of the ﬁnancial statements. We focused on identiﬁcation of related parties and disclosure of related party transactions in accordance with relevant accounting standards. Our audit procedures amongst others included the following: • Evaluated the design and tested the operating effectiveness of controls over identiﬁcation and disclosure of related party transactions. • Evaluated the transactions among the related parties and tested material accounts balances. • Evaluated the disclosures in the ﬁnancial statements in compliance with IAS 24. Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 147 I S L A C N A N I F D E T I D U A Other Information Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the ﬁnancial statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report. Our opinion on the ﬁnancial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the ﬁnancial statements, our responsibility is to read the other information identiﬁed above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the ﬁnancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on such work we perform, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance. Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls Management is responsible for the preparation and fair presentation of the ﬁnancial statements of the Company in accordance with IFRSs, The Companies Act 1994, The Securities and Exchange Rules 2020 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁnancial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s ﬁnancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the ﬁnancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the ﬁnancial statements, including the disclosures, and whether the ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation. 148 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most signiﬁcance in the audit of the ﬁnancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest beneﬁts of such communication. Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994, The Securities and Exchange Rules 2020 and relevant notiﬁcations issued by Bangladesh Securities and Exchange Commission, we also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due veriﬁcation thereof; b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books; c) The Company’s Statement of Financial Position (Balance sheet) and Statement of Proﬁt or Loss and Other Comprehensive Income (Proﬁt & Loss Account) dealt with by this report are in agreement with the books of accounts and; d) The expenditures incurred and payment made were for the purpose of the Company’s business for the year. Dhaka October 19, 2023 M. J. ABEDIN & CO. Chartered Accountants Reg No. CAF-001-111 Hasan Mahmood FCA Enrollment No. 0564 DVC: 2310230564AS206358 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 149 I S L A C N A N I F D E T I D U A Beximco Pharmaceuticals Limited Statement of Financial Position As at June 30, 2023 ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Right-of-use Assets Intangible Assets Investment in Subsidiaries Investment in Associates Other Investments Current Assets Inventories Spares & Supplies Accounts Receivable Loans, Advances and Deposits Cash and Cash Equivalents TOTAL ASSETS EQUITY AND LIABILITIES Shareholders’ Equity Issued Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/(Loss) Retained Earnings Non-Current Liabilities Long Term Borrowings-Net of Current Maturity Liability for Gratuity and WPPF & Welfare Funds Deferred Tax Liability Current Liabilities and Provisions Short Term Borrowings Long Term Borrowings-Current Maturity Creditors and Other Payables Accrued Expenses Dividend Payable / Unclaimed Dividend Income Tax Payable TOTAL EQUITY AND LIABILITIES Notes June 30, 2023 44,680,252,471 36,136,306,483 517,752,778 1,064,072,514 6,911,821,604 29,325,720 20,973,372 Amount in Taka June 30, 2022 44,161,617,726 35,712,231,087 565,076,673 919,805,743 6,911,821,604 29,325,720 23,356,899 17,913,545,825 15,533,009,363 9,951,338,526 761,585,177 3,622,624,044 2,639,348,819 938,649,259 8,802,040,026 664,709,483 2,739,772,443 2,510,263,322 816,224,089 62,593,798,296 59,694,627,089 43,341,239,142 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,112,529,914 18,148,196 30,495,377,544 7,837,897,000 2,509,415,964 2,844,284,046 2,484,196,990 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 11,414,662,154 11,067,295,849 6,146,635,301 1,415,956,691 2,709,945,476 627,094,074 87,716,594 427,314,018 6,363,686,217 2,039,694,209 1,908,464,970 576,413,875 87,370,715 91,665,863 62,593,798,296 59,694,627,089 4 4 (b) 5 6 7 8 9 10 11 12 13 14(b) 15 4(c) 16 17 18 19 20 21 22 23 24 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS206358 150 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Beximco Pharmaceuticals Limited Statement of Proﬁt or Loss and Other Comprehensive Income For the Year ended June 30, 2023 Notes July 2022 - June 2023 July 2021 - June 2022 Amount in Taka Net Sales Revenue Cost of Goods Sold Gross Proﬁt Operating Expenses Administrative Expenses Selling, Marketing and Distribution Expenses Proﬁt from Operations Other Income Finance Cost Proﬁt Before Contribution to WPPF & Welfare Funds Contribution to WPPF & Welfare Funds Proﬁt Before Tax Income Tax Expenses Current Tax Deferred Tax Income/ (Expense) Proﬁt after Tax Other Comprehensive Income/(Loss) Total Comprehensive Income Earnings Per Share (EPS) 25 26 29 30 31 32 33 34 35 36 32,991,855,420 (18,471,417,294) 14,520,438,126 (7,913,668,032) (903,653,034) (7,010,014,998) 30,220,731,648 (16,507,965,726) 13,712,765,922 (7,118,937,516) (881,516,329) (6,237,421,187) 6,606,770,094 6,593,828,406 832,045,709 (1,246,616,832) 6,192,198,971 1,456,174,446 (976,632,093) 7,073,370,759 (294,866,618) (336,827,179) 5,897,332,353 6,736,543,580 (1,309,323,445) (1,251,067,559) (58,255,886) 4,588,008,908 (2,383,527) 4,585,625,381 (1,575,199,937) (1,018,534,760) (556,665,177) 5,161,343,643 6,764,517 5,168,108,160 10.28 11.57 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS206358 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 151 I S L A C N A N I F D E T I D U A Beximco Pharmaceuticals Limited Statement of Changes in Equity For the Year ended June 30, 2023 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Amount in Taka Revaluation Surplus Unrealized Gain/(Loss) Retained Earnings Total Balance as on July 01, 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 Total Comprehensive Income : Proﬁt for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - - - - - - - - 4,588,008,908 4,588,008,908 (2,383,527) - (2,383,527) - (1,561,392,312) (1,561,392,312) (5,634,546) 1,267,772 - - 5,634,546 - - 1,267,772 Balance as on June 30, 2023 4,461,120,890 5,269,474,690 1,689,636,958 294,950,950 1,112,529,914 18,148,196 30,495,377,544 43,341,239,142 Net Asset Value (NAV) Per Share (Note-37) For the Year ended June 30, 2022 97.15 Share Capital Share Premium Excess of Issue Price over Face Value of GDRs Capital Reserve on Merger Revaluation Surplus Unrealized Gain/(Loss) Retained Earnings Total Balance as on July 01, 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 : Proﬁt for the Year Other Comprehensive Income/(Loss) Transactions with the Shareholders: Cash Dividend Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets - - - - - - - - - - - - - - - - - - - - - - - - 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 - - 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 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 152 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS206358 A U D I T E D F I N A N C A L S I Beximco Pharmaceuticals Limited Statement of Cash Flows For the Year ended June 30, 2023 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 Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment Intangible Assets Synovia Acquisition Disposal of Property, Plant and Equipment Disposal of Intangible Assets Dividend Received Net Cash Used in Investing Activities Cash Flows from Financing Activities : Net Increase /(Decrease) in Long Term Borrowings Net Increase/(Decrease) in Short Term Borrowings Dividend Paid Net Cash (Used in) / from Financing Activities Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Effect of Exchange Rate Changes on Cash and Cash Equivalents Cash and Cash Equivalents at End of Year Net Operating Cash Flow Per Share Notes July 2022 - June 2023 July 2021 - June 2022 Amount in Taka 33,062,769,123 (25,132,310,268) 7,930,458,855 31,670,123,381 (24,518,915,859) 7,151,207,522 (1,233,059,791) 205,684 (915,419,404) 5,782,185,344 (976,632,093) 699,570 (1,147,310,332) 5,027,964,667 (2,028,517,002) (286,712,648) - 13,992,690 67,725,000 41,985,413 (2,191,526,547) (1,749,703,463) (217,050,916) (1,561,046,433) (3,527,800,812) 62,857,985 816,224,089 59,567,185 938,649,259 (2,712,188,566) (123,761,166) (4,766,635,704) 13,163,510 - 71,517,955 (7,517,903,971) 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 12.96 11.27 39 39 13 38 The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 19, 2023 and signed for and on behalf of the Board : Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS206358 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 153 I S L A C N A N I F D E T I D U A Beximco Pharmaceuticals Limited Notes to the Financial Statements As at and for the year ended June 30, 2023 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). Company’s shares were ﬁrst listed on the Dhaka Stock Exchange in 1985 and subsequently on the Chittagong Stock Exchange in 1995. In 2005, BPL acquired Beximco Infusions Ltd., a publicly listed company specializing in the production and marketing of intravenous ﬂuids. To expand its global presence, BPL issued Global Depository Receipts (GDRs) and secured a listing on the Alternative Investment Market (AIM) of the London Stock Exchange. In 2018, BPL acquired 85.2% shares of Nuvista Pharma Limited (Nuvista Pharma/NPL) – an unlisted 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. Sanoﬁ Bangladesh Limited was subsequently renamed as Synovia Pharma PLC (Synovia Pharma/SPP). Bangladesh Government holds 45.4% shares of the company represented through the Bangladesh Chemical Industries Corporation (20%) and the Ministry of Industries (25.4%). SPP, like Nuvista Pharma, is an unlisted pharmaceutical company operating in Bangladesh. Shares of Beximco Pharma are traded on the Dhaka and Chittagong Stock Exchanges within Bangladesh, while its GDRs are traded on the AIM of the London Stock Exchange. The registered ofﬁce of the Company is located at House No. 17, Road No. 2, Dhanmondi R/A, Dhaka. The industrial units are located at Tongi and Kaliakoir of Gazipur district – vicinities close to the capital city Dhaka. The manufacturing facilities of the Company are certiﬁed by leading global regulatory authorities including United States Food and Drug Administration (USFDA). 1.2. Nature of Business The Company is engaged in manufacturing and marketing of generic pharmaceuticals formulation products across diverse spectrum of therapeutic areas. The product portfolio includes a variety of dosage forms such as solid, liquid, creams and ointments, suppositories, metered dose inhalers, dry powder inhalers, nasal sprays, sterile items, lyophilized injectables, and large volume intravenous ﬂuids. Additionally, BPL is involved in the manufacturing of Active Pharmaceutical Ingredients (APIs) and extends contract manufacturing services to other companies. Products of the Company are sold in domestic and international markets. 2. Basis of Preparation of Financial Statements 2.1 Statement of Compliance The ﬁnancial statements have been prepared in compliance with the requirements of the Companies Act, 1994, the Securities & Exchange Rules 2020, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and other relevant local laws as applicable and in accordance with the International Financial Reporting Standards (IFRSs). 2.2 Reporting Framework and Compliance thereof The Financial Reporting Act, 2015 (FRA) was enacted in 2015. The Financial Reporting Council (FRC) under the FRA was formed in 2017 and since then it has 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 ﬁnancial statements have been prepared in accordance with IFRSs (including IASs) and the Companies Act, 1994. The title and format of these ﬁnancial 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 Act, 2023; The Value Added Tax and Supplementary Duty Act, 2012; The Value Added Tax and Supplementary Duty Rules, 2016; The Labour Act, 2006 with subsequent amendments in 2013; and Others laws as applicable. 2.3 Basis of Measurement The ﬁnancial statements have been prepared using Historical Cost Basis with exception of land, building and plant & machinery which was revalued on 31 December 2008. The investment in shares of listed company has been valued at year end quoted price. 154 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 2.4 Presentation of Financial Statements The presentation of the ﬁnancial statements is in accordance with the guidelines provided by IAS 1: Presentation of Financial Statements. The ﬁnancial statements comprise of: (a) Statement of Financial Position as at the end of the year June 30, 2023; (b) Statement of Proﬁt or Loss and Other Comprehensive Income for the year ended June 30, 2023; (c) Statement of Changes in Equity for the year ended June 30, 2023; (d) Statement of Cash Flows for the year ended June 30, 2023; and (e) notes, comprising summary of signiﬁcant accounting policies and explanatory information. 2.5. Reporting Period and Comparative Information The Financial statements cover a 12 months’ period starting from July 1, 2022 to June 30, 2023. The last audited ﬁnancial statements were prepared for the year ending June 30, 2022. 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 ﬁnancial statements have been authorized for issue by the Board of Directors on October 19, 2023. 2.7. Functional and Presentation Currency The ﬁnancial statements are prepared and presented in Bangladesh Currency (Taka), which is the Company’s functional currency. All ﬁnancial information presented has been rounded off to the nearest Taka except indicated otherwise. 2.8. Use of Estimates and Judgements The preparation of ﬁnancial statements in conformity with the IFRSs including IASs require management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, as well as for contingent assets and liabilities that require disclosure, during and at the date of the ﬁnancial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision of accounting estimates is recognized in the period in which the estimate is revised and in any future period affected. The key areas of estimation, uncertainty and critical judgements in applying accounting policies having signiﬁcant effect on the amounts recognized in the ﬁnancial statements, include depreciation, inventory valuation, accrued expenses, others payable, capitalization of assets and deferred liability for gratuity. 3. Signiﬁcant Accounting Policies The accounting principles and policies in respect of material items of ﬁnancial statements set out below have been applied consistently to all periods presented in these ﬁnancial statements. 3.1. Revenue from Contracts with Customers In compliance with the requirements of IFRS 15: Revenue from Contracts with Customers, revenue is recognized when the Company fulﬁlls the performance obligations in contract with the customers. It usually occurs when customers take possession of the products or goods are delivered at destination speciﬁed in the contracts and recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. Revenue from sale of goods is measured at the fair value of the consideration received or receivable net of returns and allowances, trade discounts, rebates, and Value Added Tax (VAT). 3.2. Property, Plant and Equipment (PP&E) 3.2.1. Recognition and Measurement This has been stated at cost or revalued amount less accumulated depreciation in compliance with the requirements of IAS 16: Property, Plant and Equipment. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties, and non-refundable taxes. 3.2.2. Maintenance Activities The Company incurs maintenance costs for all its major items of property, plant and equipment. Repair and maintenance costs are charged as expenses when incurred. Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 155 I S L A C N A N I F D E T I D U A 3.2.3. Depreciation Depreciation is provided to amortize the cost of the assets after commissioning, over the period of their expected useful lives, in accordance with the provisions of IAS 16: Property, Plant and Equipment. Depreciation is provided at the following rates on reducing balance basis: Building and Other Construction Plant and Machinery Furniture & Fixtures Transport & Vehicle Ofﬁce Equipment 2% - 10% 4% - 15% 7.5% - 10% 20% 10% - 15% 3.2.4. Retirements and Disposals On disposal of ﬁxed assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal is reﬂected in the income statement, which is determined with reference to the net book value of the assets and net sales proceeds. 3.3. Right-of-use Assets IFRS 16: Leases has introduced a single on-balance sheet lease accounting model for leases and replaces the previously adopted IAS 17: Leases. The standard requires that an asset acquired under a lease be recognized as Right- of- use Asset and the corresponding liability as lease liability. The lessee shall measure the lease liability at the present value of the future lease payment discounted using the interest rate implicit in the lease. The assets shall be depreciated over the lease period and the interest on the lease shall be charged as ﬁnance 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 proﬁt or loss account. 3.4. Intangible Assets Intangible assets are stated at cost less provisions for amortization and impairments. Licenses, patents, know-how and marketing rights acquired are recorded at cost. Additionally, the cost software for internal use is capitalized as intangible assets where the software supports a signiﬁcant business system, and the expenditure leads to the creation of a durable asset. Also, the research and development expenditures that are deﬁnite to yield beneﬁt to the Company are capitalized. All intangible assets are amortized over their estimated useful lives using the straight-line method. 3.5. Financial Instruments A ﬁnancial instrument is any contract that gives rise to a ﬁnancial asset for one entity and a ﬁnancial liability or equity instrument for another entity. Financial Instruments comprise Financial Assets and Financial Liabilities which are recognized, classiﬁed, measured, and reported following IFRS-9: Financial Instruments. 3.5.1. Financial assets Financial assets of the Company include cash and cash equivalents, accounts receivable, other receivables and investments in marketable securities. The Company initially recognizes receivable on the date they are originated. All others ﬁnancial assets are recognized initially on the date at which the Company becomes a party to the contractual provisions of the transaction. The Company derecognizes a ﬁnancial asset when, and only when the contractual rights or probabilities of receiving the cash ﬂows from the asset expire or it transfer the rights to receive the contractual cash ﬂows on the ﬁnancial asset in a transaction in which substantially all the risk and rewards of ownership of the ﬁnancial asset are transferred. 3.5.1. (a) Accounts Receivable Accounts receivable are created at invoiced amount less any provisions for doubtful debts. Provisions are made where there is evidence of a risk of non-payment, taking into account aging, previous experience and general economic conditions. When an accounts receivable is determined to be uncollectible it is written off, ﬁrstly against any provision available and then to the proﬁt and loss account. Subsequent recoveries of amounts previously provided for are credited to the proﬁt or loss account. 3.5.1. (b) Cash and Cash Equivalents Cash and cash equivalents include cash in hand, in transit and with banks on current and deposit accounts which are held and available for use by the Company without any restriction. There is insigniﬁcant risk of change in value of the same. 3.5.1. (c) Investment in Shares Investment in shares of listed company is valued at a price quoted in the stock exchange at year end. Investment in other shares is valued at cost. 156 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 3.5.2. Financial Liability Financial liabilities are recognized initially on the transaction date at which the Company becomes a party to the contractual provisions of the liability. The Company derecognizes a ﬁnancial liability when its contractual obligations are discharged or cancelled or expire. Financial liabilities include payable for expenses, liability for capital expenditure and other current liabilities. 3.6. Impairment 3.6.1. Financial Assets Accounts receivable and other receivables are assessed at each reporting date to determine whether there is any objective evidence of impairment. Financial assets are impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash ﬂows of that asset that can be estimated reliably. Objective evidence that ﬁnancial assets are impaired can include default or delinquency by a debtor, indications that a debtor or issuer will enter bankruptcy etc. 3.6.2. Non-Financial Assets An asset is impaired when its carrying amount exceeds its recoverable amount. The Company assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Carrying amount of the assets is reduced to its recoverable amount by recognizing an impairment loss if, and only if, the recoverable amount of the asset is less than its carrying amount. Impairment loss is recognized immediately in proﬁt or loss unless the asset is carried at revalued amount. Any impairment loss of a revalued asset shall be treated as a revaluation decrease. 3.7. Inventories Inventories are carried at the lower of cost and net realizable value as prescribed by IAS 2: Inventories. Cost is determined on weighted average basis. The cost of inventories comprises of expenditure incurred in the normal course of business in bringing the inventories to their present location and condition. Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale. 3.8. Provisions A provision is recognized in the statement of ﬁnancial position when the Company has a legal or constructive obligation as a result of a past event. It is probable that an outﬂow of economic beneﬁts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provision is ordinarily measured at the best estimate of the expenditure required to settle the present obligation at the date of statement of ﬁnancial position. Where the effect of time value of money is material, the amount of provision is measured at the present value of the expenditures expected to be required to settle the obligation. 3.9. Income Tax Expense Income tax expense comprises of current and deferred tax. Income tax expense is recognized in the Statement of Proﬁt or Loss and Other Comprehensive Income and accounted for in accordance with the requirements of IAS 12: Income Taxes. Current Tax Current tax is the expected tax payable on the taxable income for the year, and any adjustment to tax payable in respect of previous years. The Company qualiﬁes as a “Publicly Traded Company” and as such the applicable Tax Rate is 22.5%. However, the applicable Tax Rate for proﬁt generated from export is 12%. Additionally, income from certain other sources are taxed at rates different from the standard rate. Further details are available in Note: 34 Deferred Tax The Company has recognized deferred tax using balance sheet method in compliance with the provisions of IAS 12: Income Taxes. The Company’s policy of recognition of deferred tax assets/ liabilities is based on temporary differences (Taxable or deductible) between the carrying amount (Book value) of assets and liabilities reported in the Financial Statements and its tax base, and accordingly, deferred tax income/expenses are recognized as proﬁt or loss. A deferred tax asset is recognized to the extent where probable future taxable proﬁt will be available against which temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent the related tax beneﬁt is unrealizable. 3.10. Other Income Dividend Cash dividend income on investment in shares is recognized on approval of the said dividend by the declaring company in their annual general meeting. Stock dividend income (Bonus Shares) is not considered as revenue. Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 157 I S L A C N A N I F D E T I D U A 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 satisﬁed and the right to claim the incentive is established. Royalty Royalty income is accounted for on accrual basis on fulﬁllment of the terms laid down in the agreement between the contracting parties. Distribution Commission Income Distribution Commission Income is recognized on an accrual basis. 3.11. Borrowing Cost Borrowing costs are recognized as expenses in the period in which they are incurred except those that qualiﬁes for capitalization under IAS 23: Borrowing Costs. 3.12. Employee Beneﬁts The Company maintains both deﬁned contribution plan and deﬁned beneﬁt plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective deeds complying applicable laws. The Company has accounted for and disclosed employee beneﬁts in compliance with the provisions of IAS 19: Employee Beneﬁts. The cost of employee beneﬁts is charged off as revenue expenditure in the period to which the contributions relate. The Company’s employee beneﬁts include the following: 3.12.1. Deﬁned Contribution Plan (Provident Fund) The Company has a recognized provident fund scheme (Deﬁned Contribution Plan) for employees of the company eligible to be members of the fund in accordance with the rules of the provident fund constituted under an irrevocable trust. Employees contribute 10% of their basic salary to the provident fund along with the Company that makes an equal contribution. The Company recognizes contribution to deﬁned contribution plan as an expense when an employee has rendered services in exchange for such contribution. The legal and constructive obligation is limited to the amount it agrees to contribute to the fund. 3.12.2. Deﬁned Beneﬁt 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 Beneﬁts, such valuation is not likely to yield a result signiﬁcantly different from the current provision. 3.12.3. Contribution to Workers’ Proﬁt Participation and Welfare Funds (WPPF) This represents 5% of net proﬁt before tax (after charging such expenses) contributed by the Company as per provisions of the Bangladesh Labor (amendment) Act 2013 and is payable to workers as deﬁned in the said law. 3.12.4. Short-term Employee Beneﬁts Short-term Employee Beneﬁts include salary, bonus and other allowances. Obligations for such beneﬁts are measured on an undiscounted basis and are expensed as the related service is availed. 3.12.5. Insurance Scheme Employees of the Company are covered under insurance schemes. 3.13. Share Premium The Share Premium is utilizable in accordance with the provisions of the Companies Act, 1994 and as per direction of the Securities and Exchange Commission. 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. 158 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 3.15. Earnings per Share (EPS) This has been calculated in compliance with the requirements of IAS 33: Earnings Per Share dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. Diluted Earnings per Share No diluted EPS is required to be calculated for the year as there was no scope for dilution during the year under review. 3.16. Foreign Currency Transactions Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date. The monetary assets and liabilities, if any, denominated in foreign currencies at the ﬁnancial position date are translated at the applicable rates of exchanges ruling at that date. Exchange differences are charged off as revenue expenditure in compliance with the provisions of IAS 21: The Effects of Changes in Foreign Exchange Rates. 3.17. Statement of Cash Flows The Statement of Cash Flows has been prepared in accordance with the requirements of IAS 7: Statement of Cash Flows. The cash generated from operating activities has been reported using the Direct Method. 3.18. Events after The Reporting Period Events after the reporting period that provide additional information about the Company’s position at the date of Statement of Financial Position or those that indicate that the going concern assumption is not appropriate are reﬂected in the ﬁnancial statements. Events after reporting period that are not adjusting events are disclosed in the notes when material. Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 159 I S L A C N A N I F D E T I D U A 4 . Property, Plant and Equipment As on June 30, 2023 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Ofﬁce Equipment Amount in Taka Total Property Plant & Equipment Cost As on July 01, 2022 Additions Transferred from Right-of-use Asset Transferred in & Capitalized Disposal during the Year 3,343,741,442 309,024,540 - - - 15,170,175,656 1,905,236 - 123,288,931 - 26,056,751,981 81,028,605 - 114,500,800 (829,000) 483,024,431 115,682,565 - 18,778,132 (9,746,278) 776,181,432 - 62,708,000 - (22,899,200) 758,555,571 24,935,276 - 5,308,922 - 46,588,430,513 532,576,222 62,708,000 261,876,785 (33,474,478) Cost as on June 30, 2023 3,652,765,982 15,295,369,823 26,251,452,386 607,738,850 815,990,232 788,799,769 47,412,117,042 Accumulated Depreciation As on July 01, 2022 Depreciation Charged Transferred from Right-of-use Asset Adjustment for Assets Disposed off Accumulated Depreciation as on June 30, 2023 - - - - - 2,558,680,562 337,297,216 - - 7,669,003,574 1,125,070,985 - (653,434) 165,834,945 29,526,071 - (7,715,077) 637,478,804 27,456,664 46,269,474 (21,479,894) 459,779,614 44,725,839 - - 11,490,777,499 1,564,076,775 46,269,474 (29,848,405) 2,895,977,778 8,793,421,125 187,645,939 689,725,048 504,505,453 13,071,275,343 Net Book Value June 30, 2023 3,652,765,982 12,399,392,045 17,458,031,261 420,092,911 126,265,184 284,294,316 34,340,841,699 Capital Work in Progress 4 (a) Carrying Value as on June 30, 2023 As on June 30, 2022 Particulars Cost As on July 01, 2021 Additions Transferred from Right-of-use Asset Transferred in & Capitalized Disposal during the Year 1,795,464,784 36,136,306,483 Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Transport and Vehicle Ofﬁce Equipment Total Property Plant & Equipment 3,343,741,442 - - - - 7,801,663,669 146,850,857 - 7,221,661,130 - 15,543,388,034 400,709,986 - 10,160,501,871 (47,847,910) 300,331,969 87,932,769 - 95,401,914 (642,221) 664,903,347 - 130,522,554 - (19,244,469) 623,298,907 41,517,297 - 93,739,367 - 28,277,327,368 677,010,909 130,522,554 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 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 - - - - - 2,298,845,077 259,835,485 - - 6,859,650,317 849,632,109 - (40,278,852) 148,109,673 18,331,605 - (606,333) 520,577,823 28,180,786 104,543,070 (15,822,875) 423,208,721 36,570,893 - - 10,250,391,611 1,192,550,878 104,543,070 (56,708,060) 2,558,680,562 7,669,003,574 165,834,945 637,478,804 459,779,614 11,490,777,499 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 Capital Work in Progress 4 (a) Carrying Value as on June 30, 2022 614,578,073 35,712,231,087 160 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 4 (a). Capital Work in Progress is arrived at as follows : Opening Balance Addition during the year Transferred & Capitalized Building and Other Constructions Plant & Machinery Furniture & Fixture Ofﬁce Equipment Closing Balance June 30, 2023 Amount in Taka June 30, 2022 614,578,073 16,309,574,340 1,442,763,496 2,057,341,569 261,876,785 123,288,931 114,500,800 18,778,132 5,308,922 1,876,308,015 18,185,882,355 17,571,304,282 7,221,661,130 10,160,501,871 95,401,914 93,739,367 1,795,464,784 614,578,073 4 (b). Right of use Assets As on June 30, 2023 Cost As on July 01, 2022 Additions Transferred to Freehold Assets Cost as on June 30, 2023 Accumulated Depreciation As on July 01, 2022 Depreciation Charged Transferred to Freehold Assets Particulars Property Vehicle Total Right-of-use Assets 114,163,530 612,128,090 - - 67,077,308 (62,708,000) 726,291,620 67,077,308 (62,708,000) 114,163,530 616,497,398 730,660,928 1,268,486 159,946,461 161,214,947 7,526,351 90,436,326 (46,269,474) 97,962,677 (46,269,474) Accumulated Depreciation as on June 30, 2023 8,794,837 204,113,313 212,908,150 Net Book Value June 30, 2023 105,368,693 412,384,085 517,752,778 As on June 30, 2022 Particulars Cost As on July 01, 2021 Additions Transferred to Freehold Assets Cost as on June 30, 2022 Accumulated Depreciation As on July 01, 2021 Depreciation Charged Transferred to Freehold Assets Property Vehicle Total Right-of-use Assets - 520,397,410 114,163,530 222,253,234 520,397,410 336,416,764 - (130,522,554) (130,522,554) 114,163,530 612,128,090 726,291,620 - 200,512,561 200,512,561 1,268,486 63,976,970 65,245,456 - (104,543,070) (104,543,070) Accumulated Depreciation as on June 30, 2022 1,268,486 159,946,461 161,214,947 Net Book Value June 30, 2022 112,895,044 452,181,629 565,076,673 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 161 I S L A C N A N I F D E T I D U A 4 (c). Revaluation Surplus Opening Balance Adjustment for Depreciation on Revalued Assets Adjustment for Deferred Tax on Revalued Assets 5. Intangible Assets Amount in Taka June 30, 2023 June 30, 2022 1,116,896,688 1,121,824,646 (5,634,546) 1,267,772 (6,358,656) 1,430,698 1,112,529,914 1,116,896,688 Particulars Marketing Rights & Product Development ERP and Software Total Cost As on July 01, 2022 Disposal during the Year Addition / Transferred in & Capitalized As on June 30, 2023 Amortization As on July 01, 2022 Amortized During the year As on June 30, 2023 Net Book Value June 30, 2023 Capital Work in Progress 5 (a) Carrying Value as on June 30, 2023 Net Book Value June 30, 2022 Capital Work in Progress as on June 30, 2022 Carrying Value as on June 30, 2022 5 (a). Capital Work in Progress is arrived at as follows : Opening Balance Addition during the year Transferred & Capitalized Closing Balance 926,887,625 (67,725,000) 36,203,786 200,485,371 1,127,372,996 - (67,725,000) 58,043,784 94,247,570 895,366,411 258,529,155 1,153,895,566 320,973,012 51,383,493 372,356,505 53,444,604 374,417,616 23,337,384 74,720,877 76,781,988 449,138,493 523,009,906 181,747,167 704,757,073 523,009,906 181,747,167 1,064,072,514 359,315,441 605,914,613 147,040,767 752,955,380 605,914,613 147,040,767 919,805,743 166,850,363 June 30, 2023 June 30, 2022 166,850,363 164,695,027 228,668,864 115,885,248 395,519,227 280,580,275 36,203,786 113,729,912 359,315,441 166,850,363 162 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 6. Investment in Subsidiaries Nuvista Pharma Ltd. Beximco Pharma API Ltd. Synovia Pharma PLC A U D I T E D F I N A N C A L S I Amount in Taka June 30, 2023 June 30, 2022 2,125,186,000 2,125,186,000 19,999,900 19,999,900 4,766,635,704 4,766,635,704 6,911,821,604 6,911,821,604 a. The Company holds 10,013,474 shares representing 85.2% of the Paid Up Capital of Nuvista Pharma Ltd (NPL) and 1,963,241 shares representing 54.6% of the Paid Up Capital of Synovia Pharrma PLC (SPP). Beximco Pharma API Limited is a fully owned subsidiary. b. Investment in subsidiary is accounted for using cost method as per IAS 27: Separate Financial Statements, in preparing ﬁnancial statements of the Company. 7. Investment in Associates This represents 3,900,000 Ordinary Shares of Malaysian Ringgit (RM) 1 each issued by BioCare Manufacturing Sdn Bhd (“BioCare”), Malaysia. Beximco Pharma received 30% of the equity share of the Malaysian based company for providing full technical support to set up a manufacturing facility to produce specialized pharmaceutical products in Seri Iskandar Pharmaceutical Park, Perak, Malaysia. BioCare is considered to be an associate of BPL as per IAS 28: Investment in Associates and Joint Ventures. The Company follows Cost method for the investment as per IAS 27: Separate Financial Statements. 8. Other Investments Bangladesh Export Import Co. Ltd. Central Depository Bangladesh Ltd. (CDBL) Amount in Taka June 30, 2023 June 30, 2022 Number of Share Value Number of Share Value 167,854 19,403,922 167,854 21,787,449 571,182 1,569,450 571,182 1,569,450 20,973,372 23,356,899 a. The shares of Bangladesh Export Import Co. Ltd. are listed on Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. as on June 30, 2023 was Tk. 115.60 (June 30, 2022: Tk.129.80). The fair value Loss of Tk. 2,383,527 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. 9. Inventories This consists of: Finished Goods Work in Process Raw Materials Packing Materials Laboratory Chemicals Physician Samples R & D Materials Materials in Transit June 30, 2023 June 30, 2022 2,654,584,197 1,754,268,113 803,580,144 3,987,274,966 1,206,041,708 102,921,941 113,354,964 43,029,486 1,040,551,120 9,951,338,526 610,859,802 4,226,671,044 1,089,128,002 73,772,507 82,051,648 37,709,095 927,579,815 8,802,040,026 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 163 I S L A C N A N I F D E T I D U A 10. Spares & Supplies This consists of: Spares & Accessories Stock of Stationery Literature & Other Materials 11. Accounts Receivable This consists of : Trade Receivable Other Receivable Amount in Taka June 30, 2023 June 30, 2022 605,606,518 19,049,051 136,929,608 761,585,177 543,228,366 20,974,250 100,506,867 664,709,483 3,145,804,428 2,475,650,151 476,819,616 264,122,292 3,622,624,044 2,739,772,443 Accounts Receivable is reported net of provision for bad debts of Tk. 13,172,086. It includes an amount of Tk. 1,071,490,950, equivalent USD 10,013,934 (June 30, 2022: Tk. 1,016,268,270, equivalent USD 11,821,851) 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. 1,435,857,890 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.1,445,757,890 on April 30, 2023. Additionally, Tk 14,531,441, Tk 160,092,598 and Tk 745,350 are 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 ofﬁcers of the company and any of them severally or jointly with any other person. Aging of Trade Receivables : Amount due within 6 months Amount due for 6 months & above 12. Loans, Advances and Deposits This is unsecured, considered good and consists of : 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 Ofﬁce Others 2,984,345,190 161,459,238 Amount in Taka 2,354,175,678 121,474,473 3,145,804,428 2,475,650,151 140,516,040 508,850,046 10,957,809 171,677,678 2,133,040 775,239,192 19,849,064 106,942,014 39,161,704 142,172,413 464,428,527 46,340,198 71,228,285 139,852,809 259,313,897 563,667,556 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 2,639,348,819 2,510,263,322 a. The maximum amount due from the employees during the year was Tk. 107,987,586 on November 2022 b. No amount was due from the directors, managing agent, managers and other ofﬁcers of the company and any of them severally or jointly with any other person, except as stated above. 164 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 13. Cash and Cash Equivalents This consists of: a. Cash in Hand (including Imprest Cash) b. Cash at Bank : Current & FC 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 June 30, 2023 Amount in Taka June 30, 2022 529,658,970 279,392,725 408,990,289 938,649,259 536,831,364 816,224,089 10,000,000,000 10,000,000,000 5,000,000,000 5,000,000,000 15,000,000,000 15,000,000,000 b. Issued, Subscribed and Paid-up : June 30, 2023 June 30, 2022 51,775,750 Shares fully Paid-up in Cash 357,093,942 Ordinary Shares issued as Stock Dividend 5,951,250 Ordinary Shares issued in exchange of Shares of Beximco Infusions Ltd. 31,291,147 Ordinary Shares issued on conversion of Preference Shares 517,757,500 517,757,500 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 Pharma 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 on AIM of London Stock Exchange. c. Composition of Shareholding : Sponsors/Directors: A S F Rahman Salman F Rahman Other Directors and Associates Other Shareholdings: Foreign Portfolio Investors (DSE/CSE) Holders of GDRs (excluding Board Director) Institutions (ICB, ICB Investors’ Accounts & Others) Individual Shareholders Total June 30, 2023 June 30, 2022 Number of Shares % of Share Capital Number of Shares % of Share Capital 9,058,888 9,080,095 116,305,973 134,444,956 44,433,722 84,386,054 106,355,109 76,492,248 311,667,133 446,112,089 2.03 2.04 26.07 30.14 9.96 18.92 23.83 17.15 69.86 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 2.03 2.04 26.07 30.14 9.69 18.92 21.86 19.39 69.86 100.00 446,112,089 100.00 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 165 I S L A C N A N I F D E T I D U A d. Distribution Schedule of Ordinary Shares: Range of Shareholdings In number of shares 1 to 499 500 to 5,000 5,001 to 10,000 10,001 to 20,000 20,001 to 30,000 30,001 to 40,000 40,001 to 50,000 50,001 to 100,000 100,001 to 1,000,000 Over 1,000,000 June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Number of Shareholders % of Holding Number of Shareholders % of Holding Number of Shares % of Holding Number of Shares % of Holding 41,903 76.66% 10,465 19.15% 76.11% 4,268,126 19.45% 15,819,525 984 530 201 126 67 154 208 24 1.80% 0.97% 0.37% 0.23% 0.12% 0.28% 0.38% 0.04% 100% 41,440 10,587 1,042 560 209 113 70 166 221 38 0.96% 3.56% 1.61% 1.73% 1.13% 0.99% 0.68% 2.56% 4,189,826 16,225,509 7,545,996 8,156,027 5,180,289 3,949,472 3,225,851 12,079,301 0.94% 3.64% 1.69% 1.89% 1.16% 0.88% 0.72% 2.71% 7,194,582 7,699,156 5,035,520 4,415,006 3,028,518 11,436,351 1.91% 1.03% 0.38% 0.21% 0.13% 0.30% 0.41% 64,445,367 14.45% 66,057,769 14.80% 0.07% 322,769,938 72.35% 319,502,049 71.57% 54,446 100% 446,112,089 100% 446,112,089 100% Total 54,662 e. Market Price of Ordinary Shares: The shares of the Company are listed on Dhaka and Chittagong Stock Exchanges of Bangladesh while its GDRs on AIM of London Stock Exchange. Price of each Share/ GDR on the last working day of the ﬁscal year were: Dhaka Stock Exchange Chittagong Stock Exchange AIM June 30, 2023 June 30, 2022 Tk. Tk. GBP 146.20 145.70 0.355 154.60 155.30 0.705 f. Option on unissued Ordinary Shares : There is no option on unissued shares as on June 30, 2023. 15. Excess of Issue Price over Face Value of GDRs This represents excess of issue price of GDRs over the face value of underlying 28,175,750 ordinary shares issued against the same number of GDRs less GDRs issue expenses. 16. Long Term Borrowings - Net of Current Maturity This is arrived at as follows : Project Loan - ODDO BHF SE, Frankfurt, Germany Term Loan-Agrani Bank Lease Liability June 30, 2023 Amount in Taka June 30, 2022 236,117,255 670,863,306 1,915,856,341 2,313,748,864 357,442,368 2,509,415,964 416,925,245 3,401,537,415 a. Project Loan - ODDO BHF SE, Frankfurt, Germany This represents part of foreign currency loan of Euro 19.05 million taken for the expansion and diversiﬁcation project being implemented by the Company. Interest for this loan is 6 month’s EURIBOR plus 1.30% per annum. The loan is secured negative pledge against machinery and equipment procured under the pertinent loan. b. Term Loan-Agrani Bank The Company availed a Term Loan of Taka 3,750 million from Agrani Bank Limited to partly ﬁnance the acquisition of Synovia Pharma PLC. The Loan is secured by a lien on the aquired shares of Synovia Pharma plc. 166 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I c. Lease Liability This consists of: Payable in one year Payable beyond 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 Transfer In Interest Received during the year Paid to Employees during the year June 30, 2023 Amount in Taka June 30, 2022 129,655,023 357,442,368 487,097,391 140,769,847 416,925,245 557,695,092 1,384,751,512 1,213,933,757 238,017,009 215,143,980 1,622,768,521 1,429,077,737 (59,933,297) (44,326,225) 1,562,835,224 1,384,751,512 57,318,375 10,000,000 623,658 67,942,033 (59,933,297) 8,008,736 40,000,000 60,000,000 1,644,600 101,644,600 (44,326,225) 57,318,375 Closing Balance 1,554,826,488 1,327,433,137 b. Workers Proﬁt Participation and Welfare Fund 1,289,457,558 2,844,284,046 1,155,413,511 2,482,846,648 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 2,427,208,876 1,871,974,397 58,255,886 (1,267,772) 556,665,177 (1,430,698) 2,484,196,990 2,427,208,876 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 167 I S L A C N A N I F D E T I D U A 19. Short Term Borrowings Janata Bank Limited AB Bank Limited First Security Islamic Bank Limited Loan from Nuvista Pharma Liability for UPAS Letter of Credit Amount in Taka June 30, 2023 June 30, 2022 4,474,809,399 4,817,103,014 505,552,356 497,141,234 400,000,000 269,132,312 409,733,361 492,341,234 - 644,508,608 6,146,635,301 6,363,686,217 a. Short term borrowings from Janata Bank represents revolving credit facilities renewable annually. 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 ﬁxed and ﬂoating assets of the Company excepting the machinery and equipment ﬁnanced by ODDO BHF SE, 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 ﬁxed and ﬂoating assets of the Company excepting the machinery and equipment ﬁnanced by ODDO BHF SE, Frankfurt, Germany. e. Applicable Interest rate on working capital borrowings during the year was 9% compounding quarterly while the short term borrowing from the subsidiary Nuvista Pharma carries 8% interest paybale quarterly. 20. Long Term Borrowings-Current Maturity Project Loan - ODDO BHF SE, 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: For Expenses Workers’ Proﬁt Participation and Welfare Funds - (current year) 23. Dividend Payable / Unclaimed Dividend 621,801,668 664,500,000 129,655,023 938,924,362 960,000,000 140,769,847 1,415,956,691 2,039,694,209 801,452,349 1,450,986,422 149,408,697 308,098,008 807,139,594 886,263,961 110,410,808 104,650,607 2,709,945,476 1,908,464,970 332,227,456 294,866,618 627,094,074 239,586,696 336,827,179 576,413,875 The Dividend Payable/Unclaimed dividend as on June 30, 2023 consists of Tk. 15,477,101 relating to year 2021-22 which has been paid but not yet claimed. The remaining balance relates to dividend for prior years unclaimed to date. During the year an amount of Tk. 13,786,791 of the unclaimed dividend outstanding for more than 3 years has been paid to the Capital Market Stabilization Fund (CMSF) following the directives of the Bangladesh Securities and Exchange Commission. 168 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 24. Income Tax Payable Opening Balance Provision for current year Short provision for prior year(s) Income Tax Paid A U D I T E D F I N A N C A L S I Amount in Taka June 30, 2023 June 30, 2022 91,665,863 1,239,940,051 11,127,508 1,342,733,422 (915,419,404) 427,314,018 220,441,435 914,346,139 104,188,621 1,238,976,195 (1,147,310,332) 91,665,863 25. Net Sales Revenue July 2022 - June 2023 July 2021 - June 2022 Domestic Sales Export Sales 30,238,890,754 27,553,566,457 2,752,964,666 2,667,165,191 32,991,855,420 30,220,731,648 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 Quantity Unit July 2022 - June 2023 July 2021 - June 2022 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 7,672.74 144.87 67,532 179,448 7,988.60 152.80 121,022 258,829 b. The value of Export Sales in equivalent US Dollar is 27,330,603 in 2022-23 as against US Dollar 31,274,602 in 2021-22. 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 Unit Million pcs. Million pcs. Kg 610,859,802 14,992,146,672 4,935,917,537 20,538,924,011 (803,580,144) 19,735,343,867 1,754,268,113 21,489,611,980 (363,610,489) (2,654,584,197) 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) 18,471,417,294 16,507,965,726 Quantity June 30, 2023 June 30, 2022 1,152.63 13.98 13,913 699.14 13.61 4,162 Total Value Taka 2,654,584,197 1,754,268,113 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 169 I S L A C N A N I F D E T I D U A 27. Materials Consumed This is made-up as follows : Opening Stock Purchase Closing Stock 28. Factory Overhead Salaries and Allowances Repairs and Maintenance Insurance Premium Municipal Tax & Land Revenue Registration & Renewals Travelling & Conveyance Entertainment Research and Development Rent Printing & Stationery Telephone, Cellphone, Internet & Postage Toll Expense Electricity, Gas & Water Training & Conference Plant Certiﬁcation and Regulatory Approvals Depreciation Security Expenses Other Expenses July 2022 - June 2023 July 2021 - June 2022 Amount in Taka 5,389,571,553 4,173,915,422 14,898,813,734 14,854,032,886 (5,296,238,615) (5,389,571,553) 14,992,146,672 13,638,376,755 1,665,111,045 1,484,594,001 429,242,602 42,328,137 5,960,026 8,470,371 35,736,593 1,043,698 432,152,866 40,024,639 5,687,728 6,264,023 39,995,731 3,314,819 318,736,340 303,847,832 9,628,020 21,034,294 8,854,188 280,195,247 476,067,335 12,216,914 28,630,624 7,835,447 30,189,536 11,175,180 249,432,471 248,709,658 11,097,180 8,645,632 1,560,048,243 1,138,305,681 24,916,985 7,696,875 27,415,344 11,809,931 4,935,917,537 4,060,497,699 a. Salaries and Allowances include Company’s Contribution to provident fund amounting to Tk. 32,191,727 b. Repairs and Maintenance includes maintenance of ofﬁce, premises, vehicles, building, equipment and other infrastructures. Also included therein, imported stores and spares that has been consumed during the year. c. Other expenses does not include any item exceeding 1% of total revenue. 170 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 29. Administrative Expenses Salaries and Allowances Rent Repairs & 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 & AGM Expense Municipal Tax & Land Revenue Training & Conference Depreciation Meeting Fee Security Expenses Other Expenses July 2022 - June 2023 July 2021 - June 2022 Amount in Taka 525,328,018 471,393,956 27,191,452 79,568,159 5,872,324 29,821,643 8,842,194 3,984,294 2,200,000 4,486,544 20,740,321 27,972,378 - 45,510,222 565,340 12,840,870 40,796,484 2,505,800 19,938,432 45,488,559 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 40,156,073 903,653,034 881,516,329 a. Salaries and Allowances include Company’s Contribution to provident fund amounting to Tk.10,886,301 b. Repairs & maintenance includes maintenance of ofﬁce, premises, vehicles, building, equipment and other infrastructures. c. Meeting Fee is paid to the Directors for attending Board and other Committee Meetings. d. Other expenses does not include any item exceeding 1% of total revenue. Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 171 I S L A C N A N I F D E T I D U A 30. Selling, Marketing and Distribution Expenses Salaries and Allowances Rent Repairs & 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 & 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 2022 - June 2023 July 2021 - June 2022 Amount in Taka 2,498,739,741 2,278,252,477 151,801,583 51,332,512 661,523,842 79,309,202 52,486,520 89,590,784 31,653,863 24,607,743 82,785,246 182,172,504 27,066,247 423,097,133 440,081 55,498,404 330,962,450 182,943,502 9,933,118 170,392,623 7,538,568 27,098,354 2,910,043 24,633,191 275,783,634 144,905,253 143,336,060 613,597,539 491,888,971 135,915,602 20,398,163 2,524,220 13,148,302 113,663,438 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 7,010,014,998 6,237,421,187 a. Salaries and Allowances include Company’s Contribution to provident fund amounting to Tk. 53,051,780 b. Distribution Commission is paid to I & I Services Ltd., a “ Related Party” for rendering distribution services throughout the country. c. Repairs and Maintenance includes maintenance of ofﬁce, premises, vehicles, building, equipment and other infrastructures. d. Sample Expense includes VAT on sample. e. Other expenses does not include any item exceeding 1% of total revenue. 172 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 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 Proﬁt/(Loss) on Sale of Fixed Assets (Note 41) July 2022 - June 2023 July 2021 - June 2022 Amount in Taka 205,684 41,985,413 88,455,727 355,890,287 267,842,723 66,693,332 - 605,926 - 10,366,617 832,045,709 699,570 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 1,456,174,446 a. The Distribution Commission is received from the subsidiary company Nuvista Pharma Limited & Synovia Pharma PLC for the delivery of products using BPL’s distribution network across the country as per the agreement entered into between the companies on an arm’s length basis. b. Government provides 10% incentives on net FOB value of export of ﬁnished pharmaceutical formulation products subject to fulﬁllment of certain conditions. The incentive claimed during the reporting period has been accrued and accounted for. Further details are available in Note 3.10. c. Exchange rate ﬂuctuation losses has been netted off with the exchange rate ﬂuctuation gains. An exchange loss of Tk. 233,844,494 has arisen from the translation of outstanding foreign currency loan translated at the exchange rate prevailing on the ﬁnancial 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 852,970,585 52,360,188 300,393,065 40,892,994 1,246,616,832 662,823,473 42,741,408 199,775,709 71,291,503 976,632,093 This represents statutory contribution by the Company as per Bangladesh Labour Act 2013. The amount is computed @ 5% of net proﬁt before tax (after charging such contribution). Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 173 I S L A C N A N I F D E T I D U A 34. Income Tax Expenses This consists of as follows : a. Current Tax Provision for current year Short provision for prior year(s) b. Deferred Tax Expense Total Deferred Tax Expense 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 proﬁt or Loss and Other Comprehensive Income July 2022 - June 2023 July 2021 - June 2022 Amount in Taka 1,239,940,051 11,127,508 1,251,067,559 58,255,886 1,309,323,445 914,346,139 104,188,621 1,018,534,760 556,665,177 1,575,199,937 12,608,874,084 (1,554,826,488) (13,172,086) 12,125,676,008 (1,327,433,137) (10,647,866) 11,040,875,510 10,787,595,005 22.5% 2,484,196,990 2,427,208,876 56,988,114 1,267,772 58,255,886 22.5% 2,427,208,876 1,871,974,397 555,234,479 1,430,698 556,665,177 Reconciliation of Effective tax rate Proﬁt before Tax Applicable Tax Effect of lower rate on Export Proﬁt excluding Cash Incentive Effect of lower rate on cash incentive Effect of lower rate on dividend income Effect of permanent disallowances Short provision of prior year Deferred tax impact Income Tax Expense a. Export Proﬁts are subject to 12% Tax rate 2022-23 2021-22 % Tk. % Tk. 5,897,332,353 6,736,543,580 22.50% 1,326,899,779 22.50% 1,515,722,306 -1.03% -0.57% -0.02% 1.10% 0.19% 0.02% (60,689,630) (33,480,340) (1,049,635) 65,107,667 11,127,508 1,408,096 -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 22.20% 1,309,323,445 23.38% 1,575,199,937 b. 10% Tax deductible at source on the cash incentives are treated as ﬁnal tax liability on such income as per the Income Tax regulations. c. Dividend Income is taxable @ 20% 35. Other Comprehensive Income - Unrealized Gain/(Loss) Fair Value Gain/(Loss) on Investment in Listed Shares July 2022 - June 2023 July 2021 - June 2022 (2,383,527) (2,383,527) 6,764,517 6,764,517 174 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I July 2022 - June 2023 July 2021 - June 2022 Amount in Taka 36. Earnings Per Share (EPS) a. Earnings attributable to the Ordinary Shareholder 4,588,008,908 5,161,343,643 b. Weighted average number of shares outstanding during the year (Note 3.15) 446,112,089 446,112,089 Earnings Per Share (EPS) 10.28 11.57 37. Net Asset Value (NAV) Per Share Total Assets Less Total Liabilities Net Assets Number of Shares Net Asset Value (NAV) Per Share June 30, 2023 June 30, 2022 62,593,798,296 59,694,627,089 (19,252,559,154) (19,378,888,788) 43,341,239,142 40,315,738,301 446,112,089 446,112,089 97.15 90.37 July 2022 - June 2023 July 2021 - June 2022 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) 5,782,185,344 5,027,964,667 446,112,089 446,112,089 12.96 11.27 39. Reconciliation of Net Proﬁt with Cash Flows from Operating Activities Proﬁt after Tax 4,588,008,908 5,161,343,643 Adjustment to reconcile net proﬁt to net cash provided by operating activities : Non-cash/ Non-operating items: Depreciation Amortization Deferred tax Exchange rate ﬂuctuation (Gain)/loss Dividend Income (Proﬁt) /Loss on sale of Fixed Assets Effect of exchange rate changes on Cash and Cash Equivalents Changes in working Capital (Increase)/Decrease in Inventories (Increase)/Decrease in Spares & Supplies (Increase)/Decrease in Accounts Receivable (Increase)/Decrease in Loans, Advances & Deposits Increase/(Decrease) Gratuity & WPPF Increase/(Decrease) in Creditors and Other Payables Increase/(Decrease) in Accrued Expenses Increase/(Decrease) in Income Tax Payable Net cash Generated from Operating Activities 1,916,941,494 1,662,039,452 74,720,877 58,255,886 233,844,494 (41,985,413) (10,366,617) (59,567,185) 1,786,726,922 1,257,796,334 70,445,352 556,665,177 20,837,952 (71,517,955) (2,136,970) (45,362,968) (722,765,058) (1,920,105,898) (1,149,298,500) (96,875,694) (882,851,601) (149,784,517) 361,437,398 808,279,502 50,680,199 335,648,155 (2,108,146,005) (42,276,201) 92,096,798 (204,141,220) 295,701,942 79,522,339 95,912,021 (128,775,572) 5,782,185,344 5,027,964,667 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 175 I S L A C N A N I F D E T I D U A 40. Related Party Disclosures Following transactions were carried out with related parties in the normal course of business on arms length basis: Balance at year end 1,435,857,890 Balance Type Dr. Cr. 400,000,000 400,000,000 Name of Related Parties Nature of Transactions Value of Transaction a. I & I Services Ltd. b. Nuvista Pharma Ltd c. Synovia Pharma PLC Delivery of Products Distribution Commission Short Term Borrowings Toll Manufacturing Expenses Cost of Services Royalty Dividend Distribution Commission Toll Manufacturing Cost of Goods & Services Purchase Distribution Commission 35,252,390,952 613,597,539 41,989,696 62,452,672 26,993,787 40,053,896 179,845,848 246,862,902 213,239,237 176,044,439 14,531,441 Dr. 160,092,598 Dr. Dr. d. Beximco Pharma API Limited Short Term Advance 15,520 745,350 The Companies are subject to common control from same source. 41. Particulars of Disposal of Property, Plant and Equipment The following assets were disposed off during the year ended June 30, 2023: Particulars of Assets Cost Accumulated Depreciation Written Down Value Sales Price Proﬁt / (Loss) Mode of Disposal Plant & Machinery Furniture & Fixtures Transport & Vehicle Total 829,000 9,746,278 22,899,200 33,474,478 653,434 7,715,077 21,479,894 29,848,405 175,566 33,750 (141,816) Negotiation 2,031,201 613,750 (1,417,451) Negotiation 1,419,306 13,345,190 11,925,884 Negotiation 3,626,073 13,992,690 10,366,617 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 490,733,754 54,492,264 19,552,942 65,796,520 12,603,543 14,291,454 657,470,477 a. The above includes salary, allowances, and perquisites amounting Tk. 73,621,099 paid to the Managing Director. b. No remuneration is paid to the Directors of the Board other than the meeting attendance fees. c. No amount of money was expended by the Company for compensating any member of the Board for any special services rendered. 176 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 43. Production Capacity and Utilization Item Unit June 2023 June 2022 July 22 to June 23 July 21 to June 2022 Production Capacity Actual Production and Capacity Utilization Quantity Quantity Quantity % Quantity % Tablet, Capsule, Suppository & DPI Million Pcs 7,592.49 6,481.61 8,033.38 105.81% 7,962.28 122.84% Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin Million Pcs 153.05 148.74 141.25 92.29% 151.39 101.78% Active Pharmaceuticals Ingredient Matric Ton 22.00 22.00 3.42 15.55% 4.48 20.36% 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, 2023. 45. Claim not Acknowledged as Debt There was no claim against the Company not acknowledged as debt as on June 30,2023. 46. Un-availed Credit Facilities There is no credit facilities available to the company under any contract, not availed of as on June 30, 2023 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$) Taka 123,991,836 11,298,051 12,563,824,151 1,157,076,104 Foreign Currency (US$) Taka 30,770,017 3,106,545,786 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. Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 177 I S L A C N A N I F D E T I D U A 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 ﬁled 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 ﬁled appeal to the honorable High Court against this verdict. Additionally, there are claims of custom duty aggregating Tk. 22,507,358 against the indemnity bonds issued by the Company in connection with import of certain plant and machinery. The company has ﬁled 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 ﬁnal 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 150 Crore for Synovia Pharma. Both the companies are subsidiaries of Beximco Pharma. The liabilities are primarily securied by ﬁxed and ﬂoating 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. 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 2022-23. The dividend proposal is subject to shareholders’ approval in 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 2022-23. The proposed dividend is subject to approval of the shareholders of NPL in the forthcoming Annual General Meeting. c. Board of Directors of Synovia Pharma PLC (SPP) has declared 10% cash dividend (Tk. 10.00 per Share of Tk 100 each) for the year 2022-23. The proposed dividend is subject to approval of the shareholders of SPP 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 ﬁnancial statements or notes thereto. 51. Financial Risk Management The management of company has overall responsibility for the establishment and oversight of the company’s risk management framework. Risk management policies, procedures and systems are reviewed regularly to reﬂect changes in market conditions and the company’s activities. The company has exposure to the following risks for its use of ﬁnancial instruments. Credit risk Liquidity risk Market risk 51.01 Credit Risk Credit risk is the risk of a ﬁnancial loss to the company if a customer or counterparty to a ﬁnancial instrument fails to meet its contractual obligations and arises principally from the company’s receivables. Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. As at June 30, 2023 substantial part of the receivables are those from its related company and subject to insigniﬁcant credit risk. Risk exposures from other ﬁnancial assets. i.e. Cash at bank and other external receivables are nominal. 51.02 Liquidity Risk Liquidity risk is the risk that the company will not be able to meet its ﬁnancial obligations as they fall due. The Company’s approach to managing liquidity (cash and cash equivalents) is to ensure as far as possible, that it will always have sufﬁcient liquidity to meet its liabilities when due under both normal and stressed conditions without incurring unacceptable losses or risking damage to the Company’s reputation. Typically, the Company ensures that it has sufﬁcient cash and cash equivalent to meet expected operational expenses including ﬁnancial obligations through preparation of the cash ﬂow forecast with due consideration of timeline of payment of the ﬁnancial obligation and accordingly arrange for sufﬁcient liquidity/fund to make the expected payment within due date. In extreme stressed conditions the Company may avail support from the related companies in the form of short-term ﬁnancing. 178 | Beximco Pharmaceuticals Limited (Stand-alone) | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 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 ﬁnancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters. a. Currency risk The Company is exposed to currency risk on export revenues and import of raw material, machinery and equipment. Most of the Company’s foreign currency transactions are denominated in USD. Additionally, it has EURO denominated overseas loan. Beximco Pharma has consistent export revenue earned in foreign currency predominantly in US Dollar. These are utilized for the payment of its foreign currency obligation including paying for imports of materials. This partly contributes to minimize the currency risk associated with payments in foreign currency. b. Interest rate risk Interest rate risk pertains to the potential impact of ﬂuctuating interest rates on a Company’s borrowing costs. An increase in interest rate can lead to increased expenses associated with borrowing, which can, in turn, affect the Company’s overall proﬁtability. For several years, Bangladesh maintained a 9% interest rate cap for corporate loans. However, Bangladesh Bank has recently introduced a variable interest rate on lending. Under this new framework, the interest on borrowed funds is determined by adding a 3% premium to the six-month weighted average treasury bill rate. This transition in lending policy has introduced a higher degree of volatility in interest rates. Moreover, benchmark rates for foreign loans, such as SOFR and EURIBOR, have seen signiﬁcant increases, making overseas borrowing more costly and exposing the Company to greater interest rate risk. To mitigate these risks, the Company continuously monitors the situation and engages in negotiations to secure favorable arrangement to minimize its exposure to interest rate ﬂuctuations. The company possesses a robust capacity to consistently generate cash ﬂows from its operational activities, enabling it to avoid unplanned borrowing requirements. Additionally, the Company has established arrangements with banks to facilitate real- time transfer of sales proceeds into its overdraft account via the RTGS system, thereby minimizing borrowing costs. The foreign currency loan is subject to ﬂoating rates of interest. The company has not entered into any type of derivative instrument in order to hedge interest rate risk as at the reporting date. Osman Kaiser Chowdhury Director Nazmul Hassan Managing Director Mohammad Ali Nawaz Chief Financial Ofﬁcer Dhaka October 19, 2023 Annual Report 2022-23 | Beximco Pharmaceuticals Limited (Stand-alone) | 179 I S L A C N A N I F D E T I D U A Financial Statements Nuvista Pharma Limited For the Year ended June 30, 2023 180 | Nuvista Pharma Limited | Annual Report 2022-23 180 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I DIRECTORS’ REPORT I am delighted to present, on behalf of the Board of the Company, the Directors’ Report and the audited ﬁnancial statements for the year ending on June 30, 2023, along with the accompanying report from the Auditors. Fiscal year 2022-23 has been exceptionally challenging, marked by macro-economic instability stemming from the global and local crisis. The economy of Bangladesh was adversely impacted and encountered unprecedented challenges, including the depletion of foreign currency reserves, resulting in a signiﬁcant depreciation of the domestic currency against the US Dollar. Following a record 25% depreciation in 2021-22, the Taka suffered an additional 17% decline in 2022-23, reaching Taka 109.50 against one US Dollar. The country was also grappled with increased energy costs and high inﬂation. I am pleased to report that despite the challenging business conditions, Nuvista Pharma has made commendable progress, successfully achieving its operational targets and delivering positive results. Financial Performance The Company achieved a net Sale of TK. 3,033.7 million in FY 2022-23 as against Tk. 2,802.4 million in FY 2021-22, registering a notable 8.3% year-on-year growth. The Gross Proﬁt increased by 3.2% to reach at TK. 1,485.0 million as against Tk. 1,439.6 million of the prior year. Gross proﬁt as a percentage of sales however declined to 48.9% from the previous year’s 51.4%, predominantly because of the impact of sharp devaluation of Taka, rise in energy cost and elevated domestic inﬂation. The Company earned Operating Proﬁt of Tk. 394.9 million compared to Tk. 463.4 million in the corresponding prior period. The pre-tax and post-tax proﬁt stood at Tk. 391.3 million and Tk. 264.3 million respectively. The reduced gross proﬁt margin resulted in a negative growth in our pre and post-tax proﬁt in comparable terms. The sustained remarkable growth since acquisition, supported by robust cash ﬂows, enabled Nuvista Pharma to become a leverage-free company with a strengthened balance sheet. This year the Company generated a Net Operating Cash Flow (NOCFPS) of Tk. 441.9 million, a substantial increase compared to Tk. 243.3 million in the previous year. The Net Asset Value (NAV) per share also increased to Tk. 130.2 from Tk. 109.3 per share. The detailed audited ﬁnancial statements of the Company for the year ended June 30, 2023 is placed along with this report for your approval. Proﬁt and its Appropriation Net Proﬁt before tax Provision for tax Net Proﬁt after tax Unappropriated proﬁt from previous year Payment of dividend Proﬁt available for appropriation Recommended for appropriation: Proposed dividend Retained Earnings after proposed dividend Year ended 30 June 2023 Year ended 30 June 2022 Amount in Taka 391,277,889 (127,021,592) 264,256,297 965,366,749 (47,000,640) 1,182,622,406 (47,000,640) 1,135,621,766 447,908,117 (137,073,804) 310,834,313 701,533,076 (47,000,640) 965,366,749 (47,000,640) 918,366,109 Dividend The Board of Directors recommends 40% cash dividend i.e. Taka 4.00 per share for the year ended 30 June 2023 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 Annual Report 2022-23 | Nuvista Pharma Limited | 181 I S L A C N A N I F D E T I D U A Reappointment of Managing Director Mr. S. M. Rabbur Reza, the Managing Director of the Company completed his 5 years term on May 12, 2023. The Board of Directors has reappointed Mr. Reza for another period of 5 years with effect from May 13, 2023. The matter of his reappointment is now placed for approval of the shareholders in this AGM. Retirement and Re-Election of Director Mr. Mohammad Ali Nawaz, Director of the Company retires by rotation as per Article 125 and 126 of the Articles of Association of the Company and being eligible, offers himself for re-election as Director. The Board recommends for his reappointment as Director of the Company and the proposal is now placed for your approval. Auditors The existing auditors A. Qasem & Co., Chartered Accountants, who were appointed as auditors of the Company in the 48th AGM of the Company carried out the audit for the year ended 30 June 2023. A. Qasem & Co., Chartered Accountants, the auditors of the Company retires at this meeting and have expressed their willingness to continue in ofﬁce for the year ended on 30 June 2024 subject to the approval of the shareholders in the 49th 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 2024. On behalf of the Board, Nazmul Hassan MP Chairman 24 September, 2023 182 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Independent Auditor’s Report To the Shareholders of Nuvista Pharma Limited Report on the Audit of the Financial Statements Opinion We have audited the ﬁnancial statements of Nuvista Pharma Limited (the Company), which comprise the statement of ﬁnancial position as at 30 June 2023, and the statement of proﬁt or loss and other comprehensive income, statement of changes in equity and statement of cash ﬂows for the year then ended, and notes to the ﬁnancial statements, including a summary of signiﬁcant accounting policies. In our opinion, the accompanying ﬁnancial statements give a true and fair view of the ﬁnancial position of the Company as at 30 June 2023, and its ﬁnancial performance and its cash ﬂows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirement that are relevant to our audit of the ﬁnancial statements in Bangladesh, and we have fulﬁlled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation of ﬁnancial statements that give a true and fair view in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁnancial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s ﬁnancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: - - - Identify and assess the risks of material misstatement of the ﬁnancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Annual Report 2022-23 | Nuvista Pharma Limited | 183 I S L A C N A N I F D E T I D U A - - Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the ﬁnancial statements, including the disclosures, and whether the ﬁnancial statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements In accordance with the Companies Act 1994, we also report the following: (a) (b) (c) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit and made due veriﬁcation thereof; in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books; and the statement of ﬁnancial position and statement of proﬁt or loss and other comprehensive income dealt with by the report are in agreement with the books of account and returns. A. Qasem & Co. Chartered Accountants RJSC Registration No.: 2-PC7202 _____________________________ Mohammad Motaleb Hossain, FCA Partner Enrolment Number: 0950 DVC: 2309240950AS614141 Dhaka, 24 September 2023 184 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Amount in Taka 30 June 2022 1,058,252,911 7,547,385 13,011,840 1,078,812,136 591,585,003 102,889,638 72,751,430 - 180,824,117 948,050,188 2,026,862,324 Notes 30 June 2023 1,093,178,051 26,116,398 11,524,773 1,130,819,222 613,750,701 79,194,346 95,634,587 400,000,000 137,201,008 1,325,780,642 2,456,599,864 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 117,501,600 1,412,207,911 1,529,709,511 117,501,600 1,166,304,413 1,283,806,013 5,743,430 193,019,251 66,298,554 265,061,235 252,918,126 222,857,737 107,227,051 26,772,909 52,053,295 661,829,118 926,890,353 12,815,090 173,210,822 109,628,828 295,654,740 146,988,152 136,174,578 100,392,374 7,783,192 56,063,275 447,401,571 743,056,311 2,456,599,864 2,026,862,324 Nuvista Pharma Limited Statement of ﬁnancial position As at 30 June 2023 ASSETS Non-current assets Property, plant and equipment Capital work-in-progress Intangible assets Total non-current assets Current assets Inventories Accounts receivable Loans, advances and deposits Short term investment 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 The annexed notes 1 to 35 form an integral part of these ﬁnancial statements. Nazmul Hassan Chairman S. M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director As per our report of same date Dhaka, 24 September 2023 A. Qasem & Co. Chartered Accountants RJSC Registration No.: 2-PC7202 Mohammad Motaleb Hossain FCA Enrolment Number: 0950 DVC: 2309240950AS614141 Annual Report 2022-23 | Nuvista Pharma Limited | 185 I S L A C N A N I F D E T I D U A Nuvista Pharma Limited Statement of proﬁt or loss and other comprehensive income For the year ended 30 June 2023 Revenue Cost of goods sold Gross proﬁt General and administration expenses Selling and distribution expenses Proﬁt from operations Non-operating income Interest expenses Proﬁt before tax and WPPF Contribution to WPPF Proﬁt before tax Income tax expense Current tax Deferred tax income/(expense) Proﬁt after tax Other comprehensive income Notes 30 June 2023 22 23 24 25 26 27 28 28 3,033,677,226 (1,548,646,950) 1,485,030,276 (138,619,310) (951,502,812) 394,908,154 31,711,678 (15,778,049) 410,841,783 (19,563,894) 391,277,889 (141,704,025) 14,682,433 (127,021,592) 264,256,297 - Amount in Taka 30 June 2022 2,802,357,818 (1,362,782,151) 1,439,575,667 (115,250,781) (860,919,037) 463,405,849 11,855,910 (4,958,236) 470,303,523 (22,395,406) 447,908,117 (145,036,508) 7,962,704 (137,073,804) 310,834,313 - Total comprehensive income for the year 264,256,297 310,834,313 Earnings Per Share (EPS) 22.49 26.45 The annexed notes 1 to 35 form an integral part of these ﬁnancial statements. As per our report of same date Nazmul Hassan Chairman S. M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director As per our report of same date Dhaka, 24 September 2023 A. Qasem & Co. Chartered Accountants RJSC Registration No.: 2-PC7202 Mohammad Motaleb Hossain FCA Enrolment Number: 0950 DVC: 2309240950AS614141 186 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Nuvista Pharma Limited Statement of changes in equity For the year ended 30 June 2023 Particulars Share capital General reserve Share premium Pre- incorporation proﬁt Revaluation reserve Retained earnings Total reserves and surplus Total Reserves and surplus Amount in Taka Balance as at 1 July 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 Transferred from deferred tax Dividend paid Proﬁt after tax for the year ended 30 June 2023 28,647,841 28,647,841 28,647,841 (47,000,640) (47,000,640) (47,000,640) 264,256,297 264,256,297 264,256,297 Balance as at 30 June 2023 117,501,600 7,511,991 30,844,170 243,737 190,985,607 1,182,622,406 1,412,207,911 1,529,709,511 Number of shares Net assets value per share 11,750,160 130.19 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 Proﬁt 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 Number of shares Net assets value per share 12.0 13.0 13.1 13.0 13.2 13.0 13.0 11,750,160 109.26 The annexed notes 1 to 35 form an integral part of these ﬁnancial statements. Annual Report 2022-23 | Nuvista Pharma Limited | 187 I S L A C N A N I F D E T I D U A Nuvista Pharma Limited Statement of cash ﬂows For the year ended 30 June 2023 A. Cash ﬂows 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 ﬂows from investing activities Purchase of property, plant and equipment Short term investment Proceeds from disposal of property, plant and equipment Net cash used in investing activities C. Cash ﬂows from ﬁnancing activities Proceeds from/(payment to) long term bank borrowings Proceeds from/(payment to) short term bank borrowings Dividend paid Net cash (used in)/from ﬁnancing activities D. Net increase/(decrease) in cash and cash equivalents (A+B+C) E. Opening cash and cash equivalents F. Effect of exchange rate ﬂuctuation on cash and cash equivalents Notes 30 June 2023 30 June 2022 Amount in Taka 3,068,159,879 2,771,904,931 (2,511,261,552) (2,386,536,146) 556,898,327 385,368,785 19 & 27 (11,926,377) 19,612,039 (5,473,551) 2,679,248 26 20 14 17 (122,714,308) (139,318,215) 441,869,681 243,256,267 (142,605,253) (400,000,000) (43,346,746) - 4,938,230 6,577,717 (537,667,023) (36,769,029) (7,071,660) 12,815,090 105,929,974 (46,930,838) (19,086,695) (46,898,461) 51,927,476 (53,170,066) (43,869,866) 153,317,172 180,824,117 27,506,945 246,757 - G. Closing cash and cash equivalents (D+E+F) 137,201,008 180,824,117 Net operating cash ﬂows per share 37.61 20.70 Number of shares 11,750,160 11,750,160 The annexed notes 1 to 35 form an integral part of these ﬁnancial statements. 188 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Nuvista Pharma Limited Notes to the ﬁnancial statements As at and for the year ended 30 June 2023 1. Reporting entity 1.1 Nuvista Pharma Limited (“the Company”) was originally a subsidiary of Netherlands-based Organon International. The Company has been operating in Bangladesh since 1964, with a local manufacturing facility at Tongi, Dhaka. In the post-independent Bangladesh, it was incorporated as Organon (Bangladesh) Limited under Bangladesh Companies Act as a private limited company. Following the divestment of Oraganon’s equity to the local management in 2006, the Company was renamed as Nuvista Pharma Limited. In 2011, the Company, through amendments to its Memorandum and Articles of Association, became a public Limited Company under the Companies Act 1994. In 2018, Beximco Pharmaceuticals Limited, a public limited company listed with Bangladesh Stock Exchanges and AIM of London Stock Exchange, acquired majority shareholdings in Nuvista Pharma Limited. Beximco Pharma, through this acquisition, became the immediate and ultimate parent of Nuvista Pharma with 85.22% of Nuvista’s equity. Government of Bangladesh holds 12.92% shares of the Company while the rest is held by other local shareholders. 1.2 The registered ofﬁce of the Company is located at 17 Dhanmondi R/A, Road No. 2, Dhaka-1205, Bangladesh. Its operational headquarters is located at Mirpur DOHS Cultural Center (6th. Floor), Road No. 9, Mirpur DOHS, Pallabi, Dhaka-1216, Bangladesh. 1.3 The Company produces various pharmaceutical products including oral contraceptives, hormone, steroid, anti-histamine, anti- ﬁbrinolytic, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold in the domestic and international markets. The Company also provides toll manufacturing services to other pharmaceutical companies. 2. Basis of preparation 2.1 Statement of compliance The ﬁnancial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations. 2.2 Date of authorisation These ﬁnancial statements are authorised for issue by the Company’s Board of Directors on 24 September 2023. 2.3 Basis of measurement The ﬁnancial statements have been prepared on the historical cost basis except revaluation of certain property, plant and equipment. 2.4 Functional and presentational currency These ﬁnancial statements are prepared in Bangladeshi Taka (Taka/Tk.), which is the Company’s functional currency. All ﬁnancial information has been presented in Taka and rounded off to the nearest integer. 2.5 Use of estimates and judgments The preparation of ﬁnancial statements requires management to make judgment, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an on going basis. 2.6 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 ﬁnancial statements. The current resources and credit facilities of the Company are sufﬁcient to meet the present requirements of its existing business. Annual Report 2022-23 | Nuvista Pharma Limited | 189 I S L A C N A N I F D E T I D U A 2.7 Statement of cash ﬂows Statement of cash ﬂows has been prepared in accordance with as per IAS 7: “Statement of cash ﬂows” under direct method. 2.8 Reporting period These ﬁnancial statements cover one year from 1 July 2022 to 30 June 2023. 3. Signiﬁcant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these ﬁnancial statements. 3.1 Share capital Share capital represents the total amount of shareholders capital that has been paid in full by the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to time. 3.2 Leases IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Company, as a lessee, recognizes 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 Ofﬁce rent As per IFRS 16, a contract is a lease if the contract conveys the right to control the use of an identiﬁed asset. As per terms of the agreement of ofﬁce rent, lessor has the right to control the use of ofﬁce building. Furthermore, the lessee and lessor each has the right to terminate the lease by giving 180 days notice period without permission from the other party with no penalty clause. As a result, the contract does not meet the criteria of lease as deﬁned under IFRS 16. 3.3 Staff gratuity fund The Company operates 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 Beneﬁts, such valuation is not likely to yield a result signiﬁcantly 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 beneﬁts associated with the asset will ﬂow to the entity and the cost of the item can be measured reliably. Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the assets, bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management. 190 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 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 beneﬁts embodied within the part will ﬂow to the Company and its costs can be measured reliably. The costs of the day to day servicing of property, plant and equipment are recognized in the Statement of proﬁt or loss and other comprehensive income as incurred. 3.5.3 Depreciation Depreciation is recognized in the Statement of proﬁt or loss and other comprehensive income on a straight line basis over the estimated useful lives of each item of property, plant and equipment. Depreciation on property, plant and equipment is charged from the month of acquisition. In case of disposals, depreciation is charged up to the immediate previous month of disposal. No depreciation is charged on leasehold land and capital work-in-progress. Depreciation is calculated and charged on all other property, plant and equipment at the following rates on cost or valuation, considering the estimated useful lives of the assets: Factory building and warehouse Motor vehicles Plant, machinery and equipment IT equipment Furniture and ﬁxtures 2.5% 20%-25% 5% -15% 30% 6% -7% Gain or loss on sale of property, plant and equipment is recognized in the Statement of proﬁt or loss and other comprehensive income as per provision of IAS 16: “Property, plant and equipment”. 3.6 Intangible assets Intangible assets represent rights, titles and assigned trademark. Acquired intangible asset is initially 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 ﬁnancial position date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of the asset or its cash-generating unit exceeds its recoverable amount. Impairment losses, if any, are recognized in the Statement of proﬁt or loss and other comprehensive income. For the assets that have indeﬁnite useful life, the recoverable amount is estimated at each Statement of ﬁnancial position date. No indication of impairment was observed in the year ended 30 June 2023. 3.7.2 Calculation of recoverable amount The recoverable amount of an asset is the greater of net selling price and value in use. Net selling price is the selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Value in use is the estimated future cash ﬂows that are discounted to their present value using discount rate that reﬂects the current market assessment of the time value of money and the risk speciﬁc to the asset. For an asset that does not generate signiﬁcantly independent cash inﬂows, the recoverable amount is determined for the cash generating unit to which the asset belongs. 3.7.3 Reversal of impairment An impairment loss 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, if no impairment loss had been recognized for the asset in prior years. There was no reversal of impairment in the year ended 30 June 2023. Annual Report 2022-23 | Nuvista Pharma Limited | 191 I S L A C N A N I F D E T I D U A 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 proﬁt or loss and other comprehensive income for the year comprises current and deferred tax. Tax is recognized in the Statement of proﬁt 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. 3.9.1 Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the Statement of ﬁnancial position date, and any adjustment to tax payable in respect of previous years. 3.9.2 Deferred tax Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither accounting nor taxable proﬁt other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of 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 proﬁts 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 beneﬁt will be realized. 3.10 Inventories Inventories include raw materials, raw materials in transit, work-in-process, ﬁnished goods and spare parts. These are valued at the lower of cost and net 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 ﬁnancial assets, ﬁnancial liabilities and some contracts to buy or sell non-ﬁnancial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 contains three principal classiﬁcation categories for ﬁnancial assets such as measured at amortized cost, Fair Value through Other Comprehensive Income (FVOCI) and Fair Value through Proﬁt or Loss (FVTPL). The classiﬁcation of ﬁnancial assets under IFRS 9 is generally based on the business model in which a ﬁnancial asset is managed and the contractual cash ﬂow characteristics. IFRS 9 replaces the previous ﬁnancial assets categories deﬁned under IAS 39. IFRS 9 largely retains the existing requirements in IAS 39 for the classiﬁcation and measurement of ﬁnancial liabilities. 3.12 Foreign currency 3.12.1 Foreign currency transactions Foreign currency transactions are converted into equivalent Taka at the ruling exchange rates on the respective dates of such transactions and subsequently retranslated using the rate at the date of settlement. 3.12.2 Foreign currency translations Monetary assets and liabilities denominated in foreign currencies have been converted into Taka at the exchange rate ruling at the year end. 192 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 3.12.3 Translation gains and losses Foreign exchange difference arising on translation are recognized in the Statement of proﬁt or loss and other comprehensive income. 3.13 Provisions A provision is recognized in the Statement of ﬁnancial position when the Company has a legal or constructive obligation as a result of past events, and it is probable that an outﬂow of economic beneﬁts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 3.14 Revenue from contracts with customers Revenue is measured based on the consideration speciﬁed in a contract with a customer. The Company 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 signiﬁcant payment terms, and the related revenue recognition policies: - Identify the contract with a customer, - Identify the performance obligations in the contract, - Determine the transaction price, - Allocate the transaction price to the performance obligations in the contract and - Recognize revenue when the entity satisﬁes a performance obligation. 3.15 Interest expenses Interest expense comprises interest expense on overdraft, import loan, demand loan, ﬁnance lease and term loan. All interest expenses are recognized in the Statement of proﬁt or loss and other comprehensive income when it accrues. 3.16 Workers’ Proﬁt Participation Fund (WPPF) The Company provides 5% of its net proﬁt before tax (after charging such expense) as WPPF in accordance with Bangladesh Labor Act 2006. 3.17 Events after the reporting period Events after the reporting period that provide additional information about the Company’s position at the reporting date are reﬂected in the ﬁnancial statements. Events after the reporting period that are not adjusting events are disclosed in the notes when material. 3.18 General Previous year’s ﬁgures have been rearranged/reclassiﬁed wherever considered necessary to conform to current year’s presentation. Annual Report 2022-23 | Nuvista Pharma Limited | 193 I S L A C N A N I F D E T I D U A 4 . Property, plant and equipment Particulars Land Factory building Factory warehouse Plant and machinery Motor vehicles IT equipment Other equipments Furniture & ﬁxtures Amount in Taka Total Cost or valuation As at 1 July 2022 Addition/transfer during the year Adjustment/disposal As at 30 June 2023 Accumulated depreciation As at 1 July 2022 Charge during the year Adjustment/disposal As at 30 June 2023 Net book value 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 - - 4,503,388 - - - 25,774,822 2,898,228 14,002,266 26,518,562 50,840,350 124,537,616 - (7,549,200) (2,585,213) (5,249,690) (14,854,500) (30,238,603) 275,608,713 243,685,166 21,077,823 536,982,735 152,094,907 41,891,013 726,245,259 89,329,774 2,086,915,390 - - - - 66,100,702 4,919,623 237,025,391 130,074,367 26,526,720 438,606,602 31,110,061 934,363,466 5,976,526 526,946 21,539,194 7,753,153 3,654,136 43,208,483 3,081,329 85,739,767 - - - (7,549,176) (2,316,653) (4,341,633) (12,158,432) (26,365,894) 72,077,228 5,446,569 258,564,585 130,278,344 27,864,203 477,473,452 22,032,958 993,737,339 As at 30 June 2023 275,608,713 171,607,938 15,631,254 278,418,150 21,816,563 14,026,810 248,771,807 67,296,816 1,093,178,051 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 4.1 Allocation of depreciation: Factory overhead (Note 23.3) General and administration expenses (Note 24) Selling and distribution expenses (Note 25) 30 June 2023 30 June 2022 74,289,770 74,443,171 2,897,606 1,968,906 8,552,391 11,184,711 85,739,767 87,596,788 4.2 Revalued assets The Company revalued its land in 1976, 2006 and 2010. The Company’s plant, machinery and equipment was revalued once in 2006 when Organon (Bangladesh) Limited divested its shares. Thus the land, plant, machinery and equipment represents revalued amount. 194 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 5. Capital work-in-progress Factory building Plant and machinery Furniture & ﬁxtures Other equipments IT equipment Motor vehicles Intangible assets 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 (Note 25) Balance as at 30 June Net carrying value as at 30 June As at 1 July 2022 Addition during the year Transfer to property, plant and equipment - 7,544,085 - 3,300 - - - 4,503,388 34,242,920 50,840,350 26,515,262 14,002,266 2,898,228 10,104,215 4,503,388 25,774,822 50,840,350 26,518,562 14,002,266 2,898,228 - 7,547,385 143,106,629 124,537,616 Amount in Taka As at 30 June 2023 - 16,012,183 - - - - 10,104,215 26,116,398 Amount in Taka As at 30 June 2023 30 June 2022 14,870,674 - - 14,870,674 14,870,674 14,870,674 1,858,834 1,487,067 3,345,901 371,767 1,487,067 1,858,834 11,524,773 13,011,840 This represents rights, titles and assigned trademark of ovestin brand purchased from Merck Sharp & Dohme B. V., the Netherlands on 1 April 2021 and is amortized over 10 years. 7. Inventories Stocks Finished goods Work-in-process Raw materials Packing materials Materials-in-transit Stores Spares and accessories Laboratory consumables Literature, brochure and other materials 148,047,552 73,278,156 291,441,216 47,097,880 6,056,793 154,016,608 50,867,317 294,335,371 37,618,353 659,581 565,921,597 537,497,230 18,193,154 - 29,635,950 15,439,501 299,097 38,349,175 47,829,104 54,087,773 613,750,701 591,585,003 Annual Report 2022-23 | Nuvista Pharma Limited | 195 I S L A C N A N I F D E T I D U A 8. Accounts receivable Trade receivables Other receivables Ageing of the trade receivables is as follows: Receivables due below six months Receivables due over six months Amount in Taka As at 30 June 2023 30 June 2022 71,105,457 8,088,889 79,194,346 101,333,448 1,556,190 102,889,638 71,069,044 101,014,878 36,413 318,570 71,105,457 101,333,448 Trade receivables is net off provision for bad debts Tk. 2,991,744. Receivables are unsecured but considered good. 9. Loans, advances and deposits Motor cycle and car loan General loan Advance for expenses Security deposits VAT Prepaid insurance and rent LC margin Others 10. Short term investment 24,293,694 2,214,981 2,648,455 12,420,559 23,101,095 4,913,638 22,351,773 3,690,392 95,634,587 20,839,130 1,850,981 2,683,454 3,478,251 26,594,909 5,644,596 9,878,546 1,781,563 72,751,430 The Company has invested its surplus fund with Beximco Pharmaceuticals Limited under corporate loan agreement at a competitive interest rate which was approved by the Board of Directors. The applicable interest rate on the investment during the year was 8%. 11. Cash and cash equivalents Cash in hand Cash in foreign currency account Cash at other bank accounts 8,651 1,227,784 135,964,573 137,201,008 196,446 2,272,087 178,355,584 180,824,117 196 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Amount in Taka As at 30 June 2023 30 June 2022 12. Share capital Authorized 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 Shareholding position Beximco Pharmaceuticals Limited Govt. of Bangladesh (Ministry of Industries) Other shareholders 1,710,000 1,710,000 117,501,600 117,501,600 Nominal value (Taka) Percentage of holding (%) 30 June 2023 30 June 2022 30 June 2023 30 June 2022 100,134,740 100,134,740 15,186,000 15,186,000 2,180,860 2,180,860 117,501,600 117,501,600 85.22 12.92 1.86 100 85.22 12.92 1.86 100 12.1 In 2012, the Company raised its paid-up capital from Tk. 9,791,800 to Tk. 58,750,800 by issuing 4,895,900 rights share to the existing shareholders on the basis of 5R:1 (i.e. ﬁve rights share against each share held). Subsequently 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 each share held). 13. Reserves and surplus General reserve Share premium (Note 13.1) Pre-incorporation proﬁt Revaluation reserve (Note 13.2) Retained earnings 13.1 Share premium Amount in Taka As at 30 June 2023 30 June 2022 7,511,991 30,844,170 243,737 190,985,607 1,182,622,406 1,412,207,911 7,511,991 30,844,170 243,737 162,337,766 965,366,749 1,166,304,413 This represents the amount received on 48,959 ordinary shares issued in 1997 at a premium of Tk. 630 each. 13.2 Revaluation reserve Revaluation reserve relates to surplus arising from revaluation of land. Annual Report 2022-23 | Nuvista Pharma Limited | 197 I S L A C N A N I F D E T I D U A 14. Long term bank borrowings Dhaka Bank Limited (Note 14.1) Less: Current portion (Note 17) Amount in Taka As at 30 June 2023 30 June 2022 12,815,090 (7,071,660) 5,743,430 19,274,167 (6,459,077) 12,815,090 14.1 All borrowings-short and long term are secured by a registered mortgage of factory land and buildings along with hypothecation of ﬁxed and ﬂoating assets of the Company. Additionally, there is a corporate guarantee issued by Beximco Pharmaceuticals Limited. 15. Gratuity payable A. Liability for gratuity Balance as at 1 July Add : Provision made during the year Add : Liability for transferred employees Less: Payments to outgoing employees B. Gratuity investment Balance as at 1 July Add : Amount paid to the Fund Add: Interest income on gratuity investment Less: Payments to outgoing employees Net gratuity payable (A-B) 16. Deferred tax liabilities Balance as at 1 July Transferred to revaluation reserve (Note 16.1) Deferred tax expense/(income) (Note 28) Balance as at 30 June 180,145,272 40,010,531 - 220,155,803 (15,167,856) 204,987,947 6,934,450 20,000,000 202,102 (15,167,856) 11,968,696 193,019,251 148,113,060 32,314,278 5,520,350 185,947,688 (5,802,416) 180,145,272 - 12,500,000 236,866 (5,802,416) 6,934,450 173,210,822 109,628,828 117,591,532 (28,647,841) (14,682,433) - (7,962,704) 66,298,554 109,628,828 16.1 Deferred tax liabilities recognised earlier on revalued land has been reversed in the current year since the Company has no intention to dispose of the land and its carrying value will not be recovered through disposal. 198 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Amount in Taka As at 30 June 2023 30 June 2022 17. Short term bank borrowings Bank overdrafts Dhaka Bank Limited (Limit Tk. 200,000,000) 22,821,049 34,516,939 Short term bank loans Dhaka Bank Limited Current portion of long term bank borrowings (Note 14) 223,025,417 106,012,136 7,071,660 252,918,126 6,459,077 146,988,152 Details of collateral securities against Short term bank borrowings are given in note no. 14. Short term bank borrowings carrying interest @ 8%-9% per annumn. 18. Trade payables Trade payables This represents amount due against supply of goods and services. 19. Liabilities for expenses Accrued expenses Audit fees Accrued interest 20. Income tax payable Balance as at 1 July Add: Less: Income tax provision for current year Provision for prior years AIT and treasury deposits for current year For prior years Balance as at 30 June 21. Other liabilities Salary and allowances Provident fund dues Workers’ proﬁt participation fund Tax deducted at source VAT payable Advance against sales Unclaimed dividend Others 222,857,737 222,857,737 136,174,578 136,174,578 102,526,608 450,000 4,250,443 107,227,051 99,568,603 425,000 398,771 100,392,374 7,783,192 134,858,390 6,845,635 (120,300,664) (2,413,644) 26,772,909 2,064,899 143,091,029 1,945,479 (109,340,155) (29,978,060) 7,783,192 1,165,858 3,788,419 19,563,894 72,081 23,426,631 3,190,088 539,838 306,486 52,053,295 2,150,695 3,080,997 22,395,406 1,811,832 23,831,849 - 470,036 2,322,460 56,063,275 Annual Report 2022-23 | Nuvista Pharma Limited | 199 I S L A C N A N I F D E T I D U A 22. Revenue Domestic sales Export sales Toll income Quantitative details of sales July 2022-June 2023 July 2021-June 2022 Amount in Taka 2,953,314,794 2,740,596,167 10,282,239 70,080,193 17,930,960 43,830,691 3,033,677,226 2,802,357,818 Unit Tabs Caps Amps, Suspensions and Cream Bottles Quantity Quantity 349,933,889 41,318,955 16,442,714 11,345 434,218,178 41,777,416 15,634,554 8,118 July 2022-June 2023 July 2021-June 2022 Amount in Taka 154,016,608 1,554,938,840 1,708,955,448 (12,260,946) (148,047,552) 111,155,804 1,416,984,316 1,528,140,120 (11,341,361) (154,016,608) 1,548,646,950 1,362,782,151 50,867,317 929,443,680 647,905,999 57,816,825 810,601,118 599,433,690 1,628,216,996 1,467,851,633 (73,278,156) (50,867,317) 1,554,938,840 1,416,984,316 23. Cost of goods sold Opening stock of ﬁnished goods Cost of production (Note 23.1) Cost of goods available for sale Cost of physician sample Closing stock of ﬁnished goods 23.1 Cost of production Opening work-in-process Materials consumed (Note 23.2) Factory overhead (Note 23.3) Closing work-in-process 200 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 23.2 Materials consumed Opening stock Purchase Closing stock Item wise quantity and value of ﬁnished goods stock are as follows : Stock as at June 30, 2023 Tabs Caps Amps, Suspensions and Cream Bottles Stock as at June 30, 2022 Tabs Caps Amps & Suspensions Bottles Unit pcs. pcs. pcs. pcs. Unit pcs. pcs. pcs. pcs. July 2022-June 2023 July 2021-June 2022 Amount in Taka 331,953,724 936,029,052 (338,539,096) 929,443,680 278,451,905 864,102,937 (331,953,724) 810,601,118 Quantity Value (Taka) 50,502,931 4,477,527 919,373 12,207 97,362,405 19,006,969 28,967,369 2,710,809 148,047,552 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 Annual Report 2022-23 | Nuvista Pharma Limited | 201 I S L A C N A N I F D E T I D U A July 2022-June 2023 July 2021-June 2022 Amount in Taka 23.3 Factory overhead Salaries and allowances Power and fuel Factory supplies Software and hardware expenses Canteen expenses Insurance Repair and maintenance Security services Toll manufacturing charges Store materials consumed Product development cost Uniform Printing and stationery Entertainment Vehicle repair, maintenance and running cost Local authority taxes Travelling & conveyance Overseas travelling expenses Depreciation (Note 4.1) Other expenses 241,798,930 77,088,749 43,649,291 1,963,277 18,095,980 5,180,755 56,236,985 2,331,816 10,372,480 54,155,243 42,155,691 3,363,407 2,185,283 2,003,871 4,764,815 2,490,732 2,376,100 102,793 74,289,770 3,300,031 647,905,999 Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 2,645,366. 24. General and administration expenses Salaries and allowances Directors’ fees Ofﬁce rent Local travelling expenses Entertainment Vehicle repair, maintenance and running cost Postage, telephone, cellphone and internet Printing and stationery Repairs and maintenance Software and hardware expenses Utilities Canteen expenses Insurance premium Statutory audit fees Legal and professional expenses Meeting and seminars Overseas travelling expenses Security services Depreciation (Note 4.1) Other expenses 79,827,750 456,000 15,693,942 1,492,483 1,141,625 7,179,899 2,538,684 1,256,892 4,467,213 7,556,200 2,169,353 6,311,178 144,426 450,000 294,500 1,011,542 239,779 949,982 2,897,606 2,540,256 217,552,063 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 1,393,719 176,460 - 74,443,171 3,138,969 599,433,690 69,957,063 273,600 11,740,350 1,412,838 1,149,162 5,880,749 2,416,201 1,187,849 3,342,312 4,273,121 2,331,589 4,037,583 102,198 425,000 340,500 2,100,431 - 146,780 1,968,906 2,164,549 a. Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 1,321,978. b. Directors’ fees relates to Board meeting attendance fee paid to Directors. 138,619,310 115,250,781 202 | Nuvista Pharma Limited | Annual Report 2022-23 25. Selling and distribution expenses July 2022-June 2023 July 2021-June 2022 Amount in Taka A U D I T E D F I N A N C A L S I Salaries and allowances Travelling expenses - local 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 Training expenses Market survey and research Registration and renewals Insurance premium Export Insurance, freight and C&F expenses Ofﬁce rent Bad debts Utilities Overseas travelling expenses Amortization (Note 6) Depreciation (Note 4.1) Other expenses 416,966,810 110,457,569 3,916,076 17,515,633 19,827,301 7,558,223 12,336,942 22,455,070 1,558,012 9,144,659 3,583,892 26,993,787 45,066,414 179,845,848 9,646,404 7,638,469 2,813,841 10,126,049 12,688,237 2,041,587 4,096,845 713,456 1,902,383 1,832,557 389,184 7,764,072 530,867 619,499 41,750 1,487,067 8,552,391 1,391,918 951,502,812 368,318,221 100,679,981 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 3,295,291 700,535 783,309 2,579,234 666,208 4,608,924 576,016 1,033,457 - 1,487,067 11,184,711 1,146,717 860,919,037 a. Salaries and allowances include Company’s contribution to provident fund amounting to Tk. 10,194,425. b. Sample expense includes VAT on sample. 26. Non-operating income Gain on disposal of property, plant and equipment Rental income Cash incentive on export Interest on Short term investment Other interest income Exchange rate ﬂuctuation gain Sale of miscellaneous items Forfeited PF refund (Note: 26.1) 1,065,521 866,400 988,800 22,377,778 5,323,150 250,751 784,460 54,818 31,711,678 5,732,021 866,400 1,729,100 - 2,679,248 188,985 608,800 51,356 11,855,910 26.1 Forfeited PF refund In compliance with the FRC circular number 179/FRC/FRM/Notiﬁcation/2020/2, dated 07 July 2020, the Company has recovered the forfeited provident fund from the Provident Fund Trust. Annual Report 2022-23 | Nuvista Pharma Limited | 203 I S L A C N A N I F D E T I D U A 27. Interest expenses Interest on Long term bank borrowings Short term bank borrowings Bank charges 28. Income tax expense Current tax (Note 20) 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 Transferred to revaluation reserve Deferred tax charged to proﬁt or loss and other comprehensive income July 2022-June 2023 July 2021-June 2022 Amount in Taka 1,446,863 13,969,716 361,470 599,439 4,055,776 303,021 15,778,049 4,958,236 141,704,025 145,036,508 (14,682,433) (7,962,704) 127,021,592 137,073,804 417,006,176 445,608,322 (193,019,251) (173,210,822) (2,991,744) (2,460,877) 220,995,181 269,936,623 30.00% 66,298,554 - 30.00% 80,980,987 28,647,841 66,298,554 109,628,828 109,628,828 117,591,532 (28,647,841) - (14,682,433) (7,962,704) Reconciliation of effective tax rate 2022-23 2021-22 % Taka % Proﬁt before tax Applicable tax rate Effect of lower rate on export proﬁt 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 30.00% -0.06% -0.05% 0.83% 3.75% 1.75% -3.75% 32.46% 391,277,889 117,383,367 (239,247) (197,760) 3,229,597 14,682,433 6,845,635 (14,682,433) 127,021,592 30.00% -0.26% -0.08% 0.56% 1.73% 0.43% -1.78% 30.60% Taka 447,908,117 134,372,435 (1,185,798) (345,820) 2,508,933 7,741,279 1,945,479 (7,962,704) 137,073,804 204 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 29. Reconciliation of net proﬁt with cash ﬂows from operating activities Proﬁt after tax 264,256,297 310,834,313 Adjustments to reconcile net proﬁt to net cash with operating activities: July 2022-June 2023 July 2021-June 2022 Amount in Taka Non-cash expenses Depreciation Amortization Effect of exchange rate ﬂuctuation on cash and cash equivalents Deferred tax Non-operating items Proﬁt on sale of property, plant and equipment Changes in working capital (Increase)/decrease in inventories (Increase)/decrease in accounts receivable (Increase)/decrease in loans, advances and deposits Increase/(decrease) Provision for staff gratuity Increase/(decrease) in trade payable Increase/(decrease)in liabilities for expenses and other liabilities Increase/(decrease) in income tax payable Net cash generated from operating activities 85,739,767 1,487,067 (246,757) (14,682,433) 72,297,644 (1,065,521) (1,065,521) (22,165,698) 23,695,292 (22,883,157) 19,808,429 86,683,159 2,253,519 18,989,717 106,381,261 441,869,681 87,596,788 1,487,067 - (7,962,704) 81,121,151 (5,732,021) (5,732,021) (103,326,105) (33,897,528) (10,344,036) 25,097,762 (24,397,534) (1,818,028) 5,718,293 (142,967,176) 243,256,267 30. Capacity utilization Amps, Suspensions and Cream Tablets Capsules Installed capacity Unit Actual production Unit 21,622,400 1,322,390,400 56,044,880 19,180,165 457,938,539 37,462,971 Actual Utilization % 88.71% 34.63% 66.84% Capacity utilization is calculated based on single shift production. Actual production includes product manufactured for third parties but does not include NPL’s products manufactured at third party plants on toll manufacturing basis. Annual Report 2022-23 | Nuvista Pharma Limited | 205 I S L A C N A N I F D E T I D U A 31. Foreign currency payments and receipts Particulars Payments: Import of raw, chemicals and packing materials Import of machinery, spare parts and others Receipts: Export sales July 2022-June 2023 July 2021-June 2022 Foreign currency (Equivalent USD) Taka Taka 5,454,275 601,056,712 402,030 43,713,687 644,770,399 657,737,659 21,596,947 679,334,606 133,861 13,472,327 17,930,960 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 2023 Balance type Beximco Pharmaceuticals Limited Immediate and ultimate parent Toll income Short term investment Investment income Advance ofﬁce rent Royalty expenses Cost of services/goods 41,989,696 400,000,000 22,377,778 2,424,240 26,993,787 77,150,475 419,052,198 Dr. Distribution commission 179,845,848 33,583,639 Cr. Dividend paid Oracle EBS-Software 40,053,896 10,104,215 33. Capital expenditure commitment There was no capital expenditure contracted but not incurred or provided for at 30 June 2023. 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. Events after reporting period The Board in its meeting dated 24 September 2023 recommended that 40% cash dividend i.e. Tk. 4.00 per share, totaling Tk. 47,000,640 be paid for the year 2022-23. 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 206 | Nuvista Pharma Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Financial Statements Synovia Pharma PLC For the Year ended June 30, 2023 Annual Report 2022-23 | Synovia Pharma PLC. | 207 Annual Report 2022-23 | Synovia Pharma PLC. | 207 I S L A C N A N I F D E T I D U A Directors’ Report I am delighted to present, on behalf of the Board of Synovia Pharma PLC, the Directors’ Report and the audited ﬁnancial statements for the year ending on June 30, 2023, along with the accompanying report from the Auditors. This marks the second reporting year since Beximco Pharma took over the management and control of the Company at the end of 2021. The Company successfully navigated the initial challenges, realigned its strategies, restructured its business and operating model, and seamlessly completed the integration with the group to achieve its renewed objectives. However, the global macro-economic turmoil that began with the start of the Ukraine war posed a new challenge to the struggling global economy which made ﬁscal year 2022-23 exceptionally challenging. Bangladesh like many other economies passed through a turbulent year. Sharp devaluation of domestic currency against US Dollar, signiﬁcant rise in energy cost, high inﬂation and depleting foreign currency reserve, collectively contributed to a difﬁcult business conditions and slower economic growth. I am very happy to share that, despite the challenges, Synovia Pharma ended a fruitful year with commendable progress in all key areas. We advanced as per plan towards successful accomplishment of our strategic goals to strengthen the shareholders’ value. Financial Performance As you are aware, the Company changed its ﬁnancial year from January-December to July-June to align with the group’s ﬁnancial reporting calendar and comply with the regulatory requirement. During Fiscal year July 2022-June 2023, the Company earned a net revenue of Taka 3,530.0 million with a robust 51% growth when compared with 12-month period of January-December 2021. Our gross margin improved to 36% from 32% of comparable previous period. Leveraging effect of higher sales, upward price adjustment of few selected products, acquisition synergies, reduction of expiry loses, and efﬁcient cost management strategies helped elevation of our gross margin level despite increase in cost of production and operation. Moreover, during the reporting period we managed to signiﬁcantly reduce the operating, pre-tax and post-tax losses. Key Financial Highlights Revenue Gross proﬁt Operating proﬁt Loss After Tax Earnings Per Share (EPS) Jul-22 to Jun- 23 % of sales Jan-21 to Dec-21 % of sales FY 2022-23 vs. FY 2021 % Amount in Thousand Taka 3,529,982 100.0% 2,336,295 100.0% 1,266,516 (69,873) (189,294) (52.7) 35.9% -2.0% -5.4% 754,636 32.3% (259,968) -11.1% 1,193,688 511,880 190,095 51.1% 67.8% 73.1% (306,266) -13.1% 116,972 38.2% (85.2) 33 38.2% The notable ﬁnancial progress made during the reporting period continues as we ended the ﬁrst quarter of the new ﬁnancial year with a positive bottom line along with impressive sales growth. While we are optimistic about the Company’s ﬁnancial recovery in the near term, we acknowledge that the current macro-economic headwinds remain a concern. The detailed audited ﬁnancial statements of the Company for the year ended June 30, 2023 is placed along with this report for your approval. Proﬁt/(Loss) and Its Appropriation: Particulars Jul-22 to Jun-23 Jan-22 to Jun-22 Jan-21 to Dec-21 12 Months 6 Months 12 Months Amount in Thousand Taka Net Proﬁt/(Loss) Before Income Tax Less: Provision for Income Tax Net Proﬁt After Tax Other Comprehensive Income/Expense Add: Proﬁt Brought forward from previous year Proﬁt Available for Appropriation Proposed Dividend Un-appropriate Proﬁt Carried Forward (81,338) (107,955) (189,293) 1,424,810 1,235,517 (35,952) 1,199,565 (113,927) (10,294) (124,221) 1,549,031 1,424,810 1,424,810 (238,834) (67,432) (306,266) 6,920 1,848,377 1,549,031 - 1,549,031 208 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Dividend The Board of Directors has reviewed the ﬁnancial performance of the Company for the year ended 30 June 2023. After due consideration of the current business status, future investment plans and the cash ﬂow position of the Company, the Board proposes to pay 10% Cash Dividend for the period under review. The proposal is placed in this meeting for the approval of the shareholders. Board Composition: The Board currently consists of following 6 (six) members including one Independent Director: Name Mr. Md. Saidur Rahman Mr. Nazmul Hassan, MP Mr. S. M. Rabbur Reza Mr. Mohammad Ali Nawaz Mr. Md. Nuruzzaman Position in the Board Director and Chairman Director Director and Chief Executive Ofﬁcer Director Director Dr. Md. Ibraheem Hosein Khan Independent Director Attendance in Board Meeting 2* 4 4 4 4 4 * Mr. Md. Saidur Rahman became the Chairman of the Board with effect from 4th Jan’23 replacing Mr. Shah Imdadul Haque, who attended previous two meetings during the year Retirement and Re-appointment of Directors: Mr. S. M. Rabbur Reza and Mr. Mohammad Ali Nawaz, Directors of the Board, retire by rotation as per Article 52 and 93 of the Articles of Association of the Company. Both Mr. S. M. Rabbur Reza and Mr. Mohammad Ali Nawaz being eligible, have offered themselves for re-election. The proposal of their re-election as 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 58th Annual General Meeting of the Company has carried out audit for the period up to 30th June 2023. M/s. A. Qasem & Co. Chartered Accountants, the Auditors of the Company, retire at this meeting and has expressed their willingness to continue ofﬁce for the year 2023-2024. After due consideration, the Board recommended the reappointment of A. Qasem & Co. Chartered Accountants as the auditors for the FY 2023-24. Md. Saidur Rahman Chairman Annual Report 2022-23 | Synovia Pharma PLC. | 209 I S L A C N A N I F D E T I D U A 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 ﬁnancial statements of Synovia Pharma PLC (“the Company”), which comprise the Statement of Financial Position as at 30 June 2023, and the Statement of Proﬁt or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year ended 30 June 2023, and notes to the ﬁnancial statements including a summary of signiﬁcant accounting policies. In our opinion, the accompanying ﬁnancial statements give true and fair view, in all material respects, the ﬁnancial position of the company as at 30 June 2023, and its ﬁnancial performance and its cash ﬂows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), and comply with the Companies Act, 1994 and other applicable laws and regulations. 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 ﬁnancial statements in Bangladesh, and we have fulﬁlled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the ﬁnancial statements of the Company in accordance with IFRSs, the Companies Act, 1994 and other applicable laws and regulations, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁnancial statements 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 ﬁnancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements 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 inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the ﬁnancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 210 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the ﬁnancial statements, including the disclosures, and whether the ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we identify during our audit. 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 ﬁnancial position and statements of proﬁt 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: 2310291259AS248456 Place: Dhaka Date: 24 September 2023 Annual Report 2022-23 | Synovia Pharma PLC. | 211 I S L A C N A N I F D E T I D U A Synovia Pharma PLC Statement of ﬁnancial position As at 30 June 2023 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 share holders of the Company Share capital Share premium Reserves and surplus Retained earnings Liabilities Non-current liabilities Liability for Pension fund 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 Dividend payable Total liabilities Total equity and liabilities Footnotes: Notes 30-June-23 30-June-22 Amount in Taka 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18.a 18.b 19 20 21 22 1,811,470,233 44,470,619 39,397,344 56,512,081 1,697,815,188 53,814,702 31,660,826 88,640,228 1,951,850,277 1,871,930,944 1,626,343,926 271,806,701 249,893,477 227,618,388 59,833,796 2,435,496,288 4,387,346,565 1,065,757,823 428,658,632 204,025,153 196,635,027 171,599,695 2,066,676,330 3,938,607,274 359,520,400 633,804,683 3,786,810 1,235,514,960 359,520,400 633,804,683 3,786,810 1,424,808,834 2,232,626,853 2,421,920,727 5,334,216 128,126,922 35,673,860 5,334,216 123,680,975 39,836,338 169,134,998 168,851,529 16,866,817 628,688,504 992,187,495 347,633,221 208,677 19,809,186 346,335,027 489,678,689 491,803,439 208,677 1,985,584,714 1,347,835,018 2,154,719,712 1,516,686,547 4,387,346,565 3,938,607,274 1. Auditor’s report in page 1 and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁnancial statements. Md. Saidur Rahman Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁcer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka 212 | Synovia Pharma PLC. | Annual Report 2022-23 Date: 24 September 2023 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2310291259AS248456 A U D I T E D F I N A N C A L S I Synovia Pharma PLC Statement of Proﬁt or Loss and Other Comprehensive Income For the year ended 30 June 2023 Notes For the year ended 30 June 2023 For the six month period January-June 2022 Amount in Taka For the year ended 31 December 2021 23 24 25 26 27 28 11 7 Revenue Cost of sales Gross proﬁt Administrative expenses Selling, marketing and distribution expenses Operating proﬁt Finance cost Other income Proﬁt before contribution to WPPF Contribution to WPPF Proﬁt/(loss) before tax Tax expenses Current tax Deferred tax Proﬁt/(loss) after tax Other comprehensive income/(expenses) Actuarial gain/(loss) on Gratuity & Pension Deferred tax on actuarial valuation Other comprehensive income, net of tax 3,529,982,189 (2,263,466,454) 1,426,761,942 (883,382,641) 2,336,294,610 (1,581,658,754) 1,266,515,735 543,379,301 754,635,856 (139,980,541) (1,196,408,608) (85,691,636) (572,599,104) (217,889,028) (796,714,805) (69,873,414) (114,911,439) (259,967,977) (45,681,150) 34,216,105 (13,724,162) 14,708,467 (28,376,273) 49,510,070 (81,338,459) (113,927,134) (238,834,180) - - - (81,338,459) (113,927,134) (238,834,180) (75,827,268) (32,128,147) (107,955,415) (28,137,982) 17,843,783 (10,294,199) (56,236,195) (11,195,678) (67,431,873) (189,293,874) (124,221,333) (306,266,053) - - - - - - 9,545,134 (2,624,912) 6,920,222 Total comprehensive income (189,293,874) (124,221,333) (299,345,831) Earnings Per Share (EPS) 30 (52.65) (34.55) (85.19) Footnotes: 1. Auditor’s report in page 1 and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁnancial statements. Md. Saidur Rahman Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁcer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka Date: 24 September 2023 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2310291259AS248456 Annual Report 2022-23 | Synovia Pharma PLC. | 213 I S L A C N A N I F D E T I D U A Synovia Pharma PLC Statement of Changes in Equity For the year ended 30 June 2023 Particulars Share Capital Share Premium Account Other Reserve Retained Earnings Total Amount in Taka Balance as at 1 July 2022 Dividend paid for 2021 Total comprehensive income for the period from July 01, 2022 to June 30, 2023 359,520,400 633,804,683 3,786,810 1,424,808,834 2,421,920,727 - - - - - - - - (189,293,874) (189,293,874) Balance as at 30 June 2023 359,520,400 633,804,683 3,786,810 1,235,514,960 2,232,626,853 Net assets value (NAV) per share (Note-31) 621.00 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 Footnotes: 1. Auditor’s report in page 1 and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁnancial statements. 723.21 Md. Saidur Rahman Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁcer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka Date: 24 September 2023 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2310291259AS248456 214 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Synovia Pharma PLC Statement of Cash Flows For the year ended 30 June 2023 Notes For the year ended 30 June 2023 For the six month period January- June 2022 Amount in Taka For the year ended 31 December 2021 A. 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 ﬂows from /(used in) operating activities B. Cash ﬂows from investing activities: Acquisition of property, plant and equipment Intangible assets 27 28 11 4 6 3,718,665,876 1,554,336,072 2,441,925,370 (3,701,340,147) (1,647,260,642) (2,985,877,700) 17,325,729 (92,924,570) (543,952,330) (49,760,144) (13,724,162) (28,376,273) 682 101,577 1,740,043 (106,810,629) (139,244,361) (39,325,095) (114,325,728) (145,872,250) (684,914,288) (232,228,156) (12,549,596) (25,169,848) (126,783,949) (525,000) - (1,958,714) 10,482,510 Disposal of property, plant and equipment 4, 28 4,422,584 Net cash from/(used in) investing activities (240,355,168) (25,694,848) (118,260,153) C. Cash ﬂows from ﬁnancing activities: Short term loan Lease payment Dividend paid 19 18 22 282,353,477 (14,519,847) 163,606,535 171,644,560 (7,679,180) (10,101,402) - (53,911,680) - Net cash ﬂows from/(used in) ﬁnancing activities 267,833,630 102,015,675 161,543,158 D. Net increase in cash (A+B+C) E. Opening cash and cash equivalents F. Closing cash and cash equivalents (D+E) (111,765,899) (69,551,423) (643,631,283) 171,599,695 59,833,796 241,151,118 882,782,401 171,599,695 241,151,118 Net operating cash ﬂows per share 32 (38.73) (40.57) (190.51) Footnotes: 1. Auditor’s report in page 1 and 2 2. The accompanying notes 1 to 42 form an integral part of these ﬁnancial statements. Md. Saidur Rahman Chairman Synovia Pharma PLC S.M. Rabbur Reza Chief Executive Ofﬁcer Synovia Pharma PLC Mohammad Ali Nawaz Director Synovia Pharma PLC Md. Golam Rabbani Akondo Company Secretary Synovia Pharma PLC Place: Dhaka Date: 24 September 2023 A. Qasem & Co. Chartered Accountants RJSC Firm Registration Number: 2-PC7202 Ziaur Rahman Zia, FCA (Partner) Enrolment Number: 1259 DVC: 2310291259AS248456 Annual Report 2022-23 | Synovia Pharma PLC. | 215 I S L A C N A N I F D E T I D U A Synovia Pharma PLC Notes to the ﬁnancial Statements As at and for the year ended 30 June 2023 1. Corporate information 1.1 Reporting entity Synovia Pharma PLC (Synovia Pharma/SPP/the “Company”) is a public limited company incorporated in Bangladesh having registered ofﬁce 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. Later, 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. Subsequent to the acquisition, it has been renamed as Synovia Pharma PLC. The Company is now operating as a subsidiary of Beximco Pharmaceuticals Limited. Government of Peoples Republic of Bangladesh holds 45.4% shares of the Company represented through Bangladesh Chemical Industries Corporation (20%) and Ministry of Industries (25.4%). 1.2 Nature of activity Synovia Pharma produces generic pharmaceutical products with strong presence in cardiology, diabetes, oncology, dermatology and CNS. The Company also imports certain global brands of Sanoﬁ including vaccine, insulin and chemotherapy drugs for sale in the Bangladesh market. It also provides contract manufacturing services to other pharmaceutical companies. 2. Basis of preparation 2.1 Statement of compliance The Financial Statements have been prepared in compliance with the requirements of the Companies Act 1994 and the International Financial Reporting Standards (IFRS) as applicable in Bangladesh. Other relevant laws and regulations complied with includes: * Income Tax Act 2023; * Value Added Tax and Supplementary Duty Act, 2012; * Value Added Tax and Supplementary Duty Rules, 2016; * Financial Reporting Act 2015. 2.2 Basis of measurement These ﬁnancial statements have been prepared under historical cost convention following going concern principle. 2.3 Consistency The accounting principles, policies and estimates used in the preparation of the ﬁnancial statements for the year ended June 30, 2023 are in consistent with those applied in preparing the ﬁnancial statements for the six month period January-June 2022 and for the year ended 31 December 2021. 2.4 Functional and presentation currency Financial statements have been prepared in Bangladeshi Taka /BDT, which is the Company’s functional and presentation currency. 2.5 Reporting period Synovia Pharma’s ﬁnancial year begins on July 1 and ends by June 30. The ﬁnancial statements thus have been prepared for one year period ending in June 2023. 2.6 Comparatives and reclassiﬁcation Comparative information have been disclosed in respect of the six month period January-June 2022 and for the year ended 31 December 2021 for all numerical information in the ﬁnancial statements and also the narrative and descriptive information when it is relevant for understanding of the current year’s ﬁnancial statements. To facilitate comparison, certain relevant balances pertaining to the previous year have been rearranged/ reclassiﬁed whenever considered necessary to conform to current year’s presentation. 2.7 Statement of cash ﬂows Statement of cash ﬂows is prepared in accordance with IAS 7 “Statement of Cash Flows” and the cash ﬂow from the operating activities are shown under the direct method. 216 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 2.8 Use of accounting judgements, estimates and assumptions The preparation of ﬁnancial 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. 2.8.1 Signiﬁcant accounting judgements In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most signiﬁcant effect on the amounts recognized in the ﬁnancial 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. 2.8.2 Signiﬁcant estimates and assumptions The key assumptions underlying the judgements and estimates made and the related uncertainties may pose signiﬁcant risk requiring a material adjustment to the carrying amounts of assets and liabilities in future period. Described below are key assumptions and estimates used in the ﬁnancial statements: 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 is disclosed in note-9. Deferred Taxes Deferred tax assets are recognized to the extent that probable taxable proﬁt will be available against which the assets can be utilized. Signiﬁcant 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 proﬁts, together with future tax planning strategies. Further details on deferred taxes are disclosed in Note 7. 2.9 Authorization for issue The ﬁnancial statements were authorized for issue by the Board of Directors on 24 September 2023. 2.10 Going Concern There are no signiﬁcant uncertainties regarding events and conditions that could risk the Company’s ability to continue its operations as a going concern. As a result, it has been deemed appropriate to prepare the ﬁnancial statements on the basis of the going concern principle. 3. Summary of signiﬁcant accounting policies 3.1 Property, plant and equipment i. Recognition and measurement Items of property, plant and equipment are reported at cost less accumulated depreciation except land which is reported at cost. Cost includes expenditures that are directly attributable to the acquisition of the property, plant and equipment. ii. Subsequent costs The costs of the day-to-day servicing of property, plant and equipment are recognized in the statement of proﬁt or loss and other comprehensive income. Cost of replacing or upgrading of an item of the property, plant and equipment is recognized in the carrying amount of an item if it is probable that the future economic beneﬁts embodied within the item will ﬂow to the company and its cost can be measured reliably. Annual Report 2022-23 | Synovia Pharma PLC. | 217 I S L A C N A N I F D E T I D U A iii. Depreciation Depreciation is recognized in the statement of proﬁt or loss and other comprehensive income using 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 Ofﬁce equipment Computer and accessories Furniture and ﬁxtures Motor vehicles Information systems & software Rate % 5-10 10 6.67 10 33.33 10 20-25 20 3.2 Intangible assets (Valuation of brand names and software) Initially the company recognized brand names as intangible assets with indeﬁnite useful life. Later, in 2021,brand names has been reassessed and its useful life has been changed from indeﬁnite to ﬁnite useful life in accordance with IAS 8. The carrying value of brand name was Taka 26,578,537 at the beginning of 2021 and it is being amortized over a remaining period of 9 years. 3.3 Leases Synovia Pharma PLC (SPP) as a lessee SPP 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 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 using prevailing interest rate for the leases. 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 ﬁnancial position comprise cash at banks and short-term deposits, which are subject to an insigniﬁcant risk of changes in value. 3.6 Financial instruments IFRS 9 sets out requirements for recognizing and measuring ﬁnancial assets, ﬁnancial liabilities and some contracts to buy or sell non- ﬁnancial items. IFRS 9 largely retains the existing requirements in IAS 39 for the classiﬁcation and measurement of ﬁnancial liabilities. However, it eliminates the previous IAS 39 categories for ﬁnancial assets of held to maturity, loans and receivables and available for sale. The adoption of IFRS 9 has not had a signiﬁcant effect on Company’s accounting policies. Financial assets Under IFRS 9, on initial recognition, a ﬁnancial asset is classiﬁed 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 Proﬁt or Loss (FVTPL). The classiﬁcation of ﬁnancial assets under IFRS 9 is generally based on the business model in which a ﬁnancial asset is managed and its contractual cash ﬂow characteristics. Company’s ﬁnancial assets consists mainly of trade and other receivables. 218 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 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 non-recoverability of any amount so recognized. Financial liabilities The Company recognizes all ﬁnancial liabilities on the trade date which is the date the Company becomes a party to the contractual provisions of the instrument. It derecognizes a ﬁnancial liability when the contractual obligations are discharged, cancelled or expired. Financial liabilities comprise trade creditors and other ﬁnancial obligations. Trade and other payables The Company recognizes a ﬁnancial liability when its contractual obligations arising from past events are certain and the settlement of which is expected to result in an outﬂow of resources embodying economic beneﬁts from the Company. The carrying amount of the trade and other payables approximates its fair value due to its short term nature. 3.7 Impairment of assets Impairment of ﬁnancial 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 reﬂects 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. The maximum exposure to credit risk at the reporting date is the carrying value of each class of ﬁnancial assets. The Company does not hold collateral as security against the trade credits arising in the normal course of business. Impairment of tangible assets At each statement of ﬁnancial position date the Company reviews the carrying amounts of its tangible ﬁxed 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 indeﬁnite useful life derived from the valuation of brand names. In 2021 ﬁnancial year, intangible asset for brand valuation has been reassessed and its useful life has been changed from indeﬁnite to ﬁnite useful life in accordance with IAS 8. 3.8 Revenue recognition under IFRS 15 Under IFRS 15, revenue is measured based on the consideration speciﬁed in a contract with a customer. The Company recognizes revenue when it satisﬁes 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 ﬁxed 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. 3.9 Earnings per share The Company presented Earnings Per Share (EPS) in accordance with IAS - 33 Earning Per Share which has been shown on the face of the statement of proﬁt or loss and other comprehensive income. Basic EPS is calculated by dividing the net proﬁt with weighted average number of shares outstanding throughout the year. Diluted earning per share (DEPS) is not applicable for these ﬁnancial statements as there were no equity instruments with potential dilution. Annual Report 2022-23 | Synovia Pharma PLC. | 219 I S L A C N A N I F D E T I D U A 3.10 Employee beneﬁts The Company maintains both deﬁned contribution plan and deﬁned beneﬁt plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective trust deeds and rules. Deﬁned contribution plan (provident fund) A deﬁned contribution plan is a post-employment beneﬁt plan under which an entity pays ﬁxed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contribution to deﬁned contribution plans are recognized as an employee beneﬁt expense in proﬁt 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. 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. Deﬁned contribution plan (Contribution to Workers Participation Fund and Welfare Fund) The Company is required to provide 5% of net proﬁt before tax after charging such expense as contribution to Workers Participation and Welfare Fund in accordance with Bangladesh Labour Act, 2006 (as amended up to date). Deﬁned beneﬁt plan (gratuity and pension fund) A deﬁned beneﬁt plan is a post-employment beneﬁt plan other than a deﬁned contribution plan. The employee Gratuity and Pension plans are considered as deﬁned beneﬁt plans as they meet the recognition criteria. The company’s obligation is to provide the agreed beneﬁts to current and former employees. Short-term employee beneﬁts Short-term employee beneﬁt 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 proﬁt 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, 2023. Deferred tax Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes. 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 proﬁts 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 beneﬁt 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. The year-end balances of monetary assets and liabilities that are denominated in foreign currencies, are translated at the rates prevailing on the statement of ﬁnancial position date as per IAS 21. 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 signiﬁcant inﬂuence over the other party in making ﬁnancial 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 ﬁnancial statements under Note-35. 220 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 3.14 Financial instruments risk management objectives and policies The Company’s principal ﬁnancial liabilities comprise trade and other payables. The main purpose of these ﬁnancial liabilities is to ﬁnance the operations. The Company’s principal ﬁnancial 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 ﬂows of a ﬁnancial instrument will ﬂuctuate 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 ﬁnancial 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 ﬂoating interest rates. b. Foreign currency risk The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to payable to suppliers for import of raw-materials and cash at bank in foreign currency. c. Other price risk, such as equity price risk and commodity risk The Company has no exposure to the risk of changes in other price, such as equity price and commodity price volatility. Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a ﬁnancial instrument or customer contract, leading to a ﬁnancial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its ﬁnancing activities, including deposits with banks and ﬁnancial 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 efﬁcient use of working capital. The Company assessed the concentration of risk with respect to ﬁnancing and concluded it to be low. 3.15 Events after the reporting period Events after the reporting period are the events that occur between the end of the reporting period and the date when the ﬁnancial statements are authorized for issue. These events can be classiﬁed into two categories: Adjusting Events: These are events that provide further evidence of conditions that existed at the end of the reporting period and, therefore, require adjustments to the ﬁnancial statements. Adjusting events affect the recognition and measurement of assets and liabilities. Non-Adjusting Events: These are events that are indicative of conditions that arose after the reporting period and, therefore, do not require adjustments to the ﬁnancial statements. Non-adjusting events are disclosed in the notes to the ﬁnancial statements. 3.16 General a) All ﬁnancial information presented has been rounded to the nearest Taka; b) Previous year’s ﬁgures and head of accounts in the ﬁnancial statements have been re-arranged to conﬁrm to current year’s presentation wherever necessary. Annual Report 2022-23 | Synovia Pharma PLC. | 221 I S L A C N A N I F D E T I D U A 4. Property, plant and equipment As on June 30, 2023 Particulars Cost As on July 01, 2022 Additions Transferred and capitalized Disposal during the year Cost as on June 30, 2023 Accumulated Depreciation As on July 01, 2022 Depreciation charged Adjustment for assets disposed off Accumulated depreciation as on June 30, 2023 Land Building and other constructions Plant and machinery Furniture and ﬁxtures Ofﬁce equipment Total Amount in Taka 1,010,047,500 990,490,085 1,170,833,045 129,772,449 291,804,703 3,592,947,782 114,506,809 11,648,520 43,661,121 5,682,854 13,533,055 189,032,359 - - 12,405,970 40,481,745 - 7,576,502 60,464,217 (511,210) (51,001,275) (21,374,728) (98,400,363) (171,287,576) 1,124,554,309 1,014,033,365 1,203,974,636 114,080,575 214,513,897 3,671,156,782 - - - - (764,985,458) (817,167,857) (92,772,748) (245,912,884) (1,920,838,947) (36,354,413) (44,672,090) (7,234,047) (25,937,387) (114,197,937) 511,206 51,001,115 20,963,242 97,391,839 169,867,402 (800,828,665) (810,838,832) (79,043,553) (174,458,432) (1,865,169,482) Net book value June 30, 2023 1,124,554,309 213,204,700 393,135,804 35,037,022 40,055,465 1,805,987,300 Capital work in progress 4 (a) 5,482,933 Carrying value as on June 30, 2023 1,124,554,309 213,204,700 393,135,804 35,037,022 40,055,465 1,811,470,233 As on June 30, 2022 Particulars Land Building and Other Constructions Plant and Machinery Furniture and Fixtures Ofﬁce Equipment Total Cost As on January 01, 2022 Additions Transferred and capitalized Disposal during the year Cost as on June 30, 2022 Accumulated depreciation As on January 01, 2022 Depreciation charged Adjustment for assets disposed off Accumulated depreciation as on June 30, 2022 1,010,047,500 967,684,442 1,139,649,406 126,887,494 286,928,956 3,531,197,798 - - - 6,332,836 5,865,249 2,884,955 4,875,747 19,958,787 16,472,807 25,318,390 - - - - - - 41,791,197 - 1,010,047,500 990,490,085 1,170,833,045 129,772,449 291,804,703 3,592,947,782 - - - - (753,388,053) (794,476,661) (89,323,599) (230,742,801) (1,867,931,114) (11,597,405) (22,691,196) (3,449,149) (15,170,083) (52,907,833) - - - - (764,985,458) (817,167,857) (92,772,748) (245,912,884) (1,920,838,947) Net book value June 30, 2022 1,010,047,500 225,504,627 353,665,188 36,999,701 45,891,819 1,672,108,835 Capital work in progress 4 (a) Carrying value as on June 30, 2022 222 | Synovia Pharma PLC. | Annual Report 2022-23 25,706,353 1,697,815,188 4 (a) Capital work in progress is arrived at as follows: Opening balance Addition during the year Transferred and capitalized Building and other constructions Plant and machinery Ofﬁce equipment Intangible Assets Closing balance 5. Right-of-use Assets Opening balance Additions Transferred and capitalized Disposal during the year Cost as on June 30, 2023 Opening balance Depreciation charged Adjustment for assets disposed off Accumulated depreciation as on June 30, 2023 A U D I T E D F I N A N C A L S I Amount in Taka 30 June 2023 30 June 2022 25,706,353 43,195,797 68,902,150 67,451,601 5,211,060 72,662,661 (12,405,970) (40,481,745) (7,576,502) (2,955,000) (16,472,807) (25,318,390) - (5,165,111) (63,419,217) (46,956,308) 5,482,933 25,706,353 142,355,604 142,355,604 7,415,000 - (15,065,704) - - - 134,704,900 142,355,604 (88,540,902) (16,759,083) 15,065,704 (79,203,139) (9,337,763) - (90,234,281) (88,540,902) Net book value June 30, 2023 44,470,619 53,814,702 6. Intangible assets Particulars Brand Valuation ERP and softwares Total Cost Opening balance Additions Transferred and capitalized Retirement and disposal As on June 30, 2023 Amortization Opening balance Amortized during the year Adjustment for retirement and disposal As on June 30, 2023 104,124,112 - - - 104,124,112 (81,975,331) (2,953,171) - 82,725,701 12,549,596 2,955,000 (16,657,377) 186,849,813 12,549,596 2,955,000 (16,657,377) 81,572,920 185,697,032 (73,213,655) (155,188,986) (4,196,164) 16,038,634 (7,149,335) 16,038,634 (84,928,502) (61,371,185) (146,299,687) Carrying value as on June 30, 2023 19,195,610 20,201,735 39,397,344 Carrying value as on June 30, 2022 22,148,780 9,512,046 31,660,826 Annual Report 2022-23 | Synovia Pharma PLC. | 223 I S L A C N A N I F D E T I D U A 7. Deferred tax asset Opening balance Deferred tax (expenses)/income Closing balance of net deferred tax asset (Note-33.b) 88,640,228 (32,128,147) 56,512,081 70,796,445 17,843,783 88,640,228 Amount in Taka 30 June 2023 30 June 2022 8. Inventories Raw materials Packing materials Work-in-progress Material-in-transit Finished goods Spares and suppliers 9. Trade and other receivables Trade receivables Other receivables Aging of Trade receivables: Amount due within 6 months Amount due over 6 months Accounts receivable is reported net of provision for bad debts of TK. 17,086,228. 10. Advances, deposits and prepayments VAT Security deposits Motor vehicle advance Advance to suppliers Prepaid insurance Advance for expenses Others 11. Advance income tax Opening balance Provision made during the year Paid during the year Closing balance 12. Cash and cash equivalents Cash at Bank Cash at Depot 224 | Synovia Pharma PLC. | Annual Report 2022-23 443,817,951 98,734,781 53,183,935 378,402,098 641,879,087 10,326,074 255,360,426 45,179,670 23,081,328 164,128,424 578,007,975 - 1,626,343,926 1,065,757,823 255,585,525 16,221,176 271,806,701 418,311,797 10,346,835 428,658,632 200,810,555 54,774,970 255,585,525 418,311,797 - 418,311,797 33,972,109 40,533,917 70,133,311 32,746,965 9,703,807 40,094,530 22,708,838 29,078,016 49,542,526 50,578,953 - 10,833,188 40,398,965 23,593,505 249,893,477 204,025,153 196,635,027 (75,827,268) 106,810,629 227,618,388 185,447,914 (28,137,982) 39,325,095 196,635,027 21,605,978 38,227,818 59,833,796 171,599,695 - 171,599,695 13. Share capital a) Authorized capital A U D I T E D F I N A N C A L S I Amounts in Taka 30 June 2023 30 June 2022 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) c) Shareholding position Beximco Pharmaceuticals Limited. Ministry of Industries Bangladesh Chemical Industries Corporation Other Shareholders 14. Share premium 602,700 602,700 179,496,700 179,421,000 179,496,700 179,421,000 358,917,700 358,917,700 359,520,400 359,520,400 Shareholding Quantity % 1,963,241 54.61% 196,324,100 196,324,100 911,767 25.36% 91,176,700 91,176,700 717,679 19.96% 71,767,900 71,767,900 2,517 0.07% 251,700 251,700 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 Limited 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. 15. Reserves and surplus Non-distributable special reserve (note 15.1) Capital reserve 3,777,710 3,777,710 9,100 9,100 3,786,810 3,786,810 15.1 This represents 90% of cumulative post tax proﬁt of certain categories of income up to the year 1992 as deﬁned and directed by Bangladesh Bank. Annual Report 2022-23 | Synovia Pharma PLC. | 225 I S L A C N A N I F D E T I D U A 16. Long term liability for pension fund a. Pension Payable Opening balance Provision made during the year Accrued Interest 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 30 June 2023 Amount in Taka 30 June 2022 6,452,939 - - (568,524) - 5,884,415 6,684,836 - - (231,897) - 6,452,939 1,118,723 - - (568,524) 550,199 1,350,620 - - (231,897) 1,118,723 Closing balance 5,334,216 5,334,216 During the transfer of ownership by Sanoﬁ Group, the eligible current and ex-employees except 14 members of the fund expressed their desire to settle their pension beneﬁts and the Board of Trustees of the Pension Fund accordingly paid Pension beneﬁts fully and ﬁnally to each of them. Of the remaining 14 members, eight have expressed their intention to close their account. Company’s provision is considered adequate to meet the obligation of all the remaining members and as such no provision has been made on this account during the ﬁnancial period. 17. Long term liability for gratuity and WPPF funds a. Gratuity Payable Opening balance Provision made during the year Accrued Interest Paid to employees during the year b. Investment/Plan asset Opening balance Transfer during the year Interest income Paid to employees during the year 222,065,152 17,040,500 4,093,721 (6,998,829) 236,200,544 103,747,114 12,466,803 4,093,721 (6,998,829) 113,308,809 199,282,939 24,933,606 - (2,151,393) 222,065,152 80,964,901 24,933,606 - (2,151,393) 103,747,114 Closing balance 122,891,735 118,318,038 c. Liability for workers’ proﬁt participation fund Opening balance Loan recovery Paid during the year Closing balance Total Liability for WPPF represents excess provision made in previous periods. 226 | Synovia Pharma PLC. | Annual Report 2022-23 5,362,937 371,000 (498,750) 5,235,187 5,217,687 145,250 - 5,362,937 128,126,922 123,680,975 18. Long term borrowings Long term borrowings consist of: a. Lease liabilities- long term maturity b. Lease liabilities- current maturity Total lease liability is arrived at as follows: Opening balance Addition during the year Payment during the year Closing Balance 19 Short term borrowings 19.1 Bank overdraft Standard Chartered Bank Citibank Dhaka Bank 19.2 Short term loan Dhaka Bank Limited A U D I T E D F I N A N C A L S I Amount in Taka 30 June 2023 30 June 2022 35,673,860 16,866,817 52,540,677 59,645,523 7,415,000 (14,519,847) 52,540,676 - - 509,965,518 509,965,518 118,722,986 118,722,986 39,836,338 19,809,185 59,645,523 67,324,703 - (7,679,180) 59,645,523 24,913,289 184,741 321,236,997 346,335,027 - - Closing balance 628,688,504 346,335,027 Short Term Borrowing from Dhaka Bank Limited represents revolving credit facilities (Overdraft Facilities) renewable annually. The borrowing carries 9% Interest. The loan is secured against hypothecation of ﬂoating assets of the Company and a corporate guarantee by parent company, Beximco Pharmaceuticals Limited. 20. Trade and other payables Payable for goods and services 21. Accrued expenses For expenses 22. Dividend payable Opening balance Dividend declared during the year Paid for the year Closing balance 992,187,495 992,187,495 489,678,689 489,678,689 347,633,221 347,633,221 491,803,439 491,803,439 208,677 - - 208,677 192,297 53,928,060 (53,911,680) 208,677 Annual Report 2022-23 | Synovia Pharma PLC. | 227 I S L A C N A N I F D E T I D U A 23. Revenue Locally manufactured product Imported ﬁnished product Toll manufactured income 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 ﬁnished goods Finished goods available Finished goods purchased Cost of sample Closing ﬁnished goods 24.1 Materials consumed Opening stock Purchase Goods available for use Closing stock 24.2 Factory overhead Salary and allowances Depreciation and amortization Printing and stationery Repairs and maintenance Telephone, cellphone, internet and postage Travelling and conveyance Toll expense Electricity, gas and water Entertainment Insurance premium Municipal tax Training and conference Security expenses Research and development Registration and renewal Other Expenses For the year ended 30 June 2023 For the six month period January-June 2022 Amount in Taka For the year ended 31 December 2021 2,104,696,765 1,037,249,903 388,035,521 - 816,831,755 433,118,008 176,812,179 - 1,268,065,964 665,778,406 385,634,691 16,815,549 3,529,982,189 1,426,761,942 2,336,294,610 23,081,328 951,878,572 603,622,529 1,578,582,429 (53,183,935) 1,525,398,494 578,007,975 2,103,406,469 804,670,592 (2,731,520) (641,879,087) 2,263,466,454 18,709,237 342,020,748 324,907,295 685,637,280 (23,081,328) 662,555,952 556,966,127 1,219,522,079 241,868,537 - (578,007,975) 10,632,569 674,464,215 533,521,110 1,218,617,894 (18,709,237) 1,199,908,657 390,053,623 1,589,962,280 548,662,601 - (556,966,127) 883,382,641 1,581,658,754 300,540,096 1,193,891,208 1,494,431,304 (542,552,732) 216,110,165 426,450,679 642,560,844 (300,540,096) 137,931,207 752,643,173 890,574,380 (216,110,165) 951,878,572 342,020,748 674,464,215 333,982,500 89,738,288 8,487,986 56,048,451 1,664,355 4,108,100 10,484,779 69,491,524 2,037,986 9,329,050 1,303,235 2,468,493 6,914,171 2,127,982 1,482,246 3,953,383 603,622,529 190,673,349 41,792,317 8,532,027 34,245,023 876,725 6,533,479 3,241,178 18,554,010 2,641,451 7,523,442 894,061 3,016,733 3,173,140 924,778 630,617 1,654,965 283,584,871 77,225,122 15,931,800 55,866,607 1,720,395 13,502,465 1,102,710 47,708,238 3,629,809 16,643,384 1,857,447 1,269,307 8,886,124 1,376,971 1,233,433 1,982,427 324,907,295 533,521,110 a. Salary and allowance include Company’s contribution to Provident fund amounting to Tk. 5,494,852 and Gratuity fund amounting to Tk. 4,320,551 b. Repairs and maintenance includes maintenance of ofﬁce, premises, vehicle, building, equipment and other infrastructures. 228 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 25. Administrative expenses Salary and allowances Depreciation and amortization Printing and stationery Repairs and maintenance Telephone, cellphone, internet and postage Legal and consultancy Travelling and conveyance Audit fees Electricity, gas and water Entertainment Registration and renewal Training and conference Municipal tax Rent Meeting fees Security expenses AGM expense Other expenses For the year ended 30 June 2023 For the six month period January-June 2022 Amount in Taka For the year ended 31 December 2021 101,424,946 4,093,187 3,392,510 6,627,521 699,617 5,122,111 543,660 800,000 3,462,975 564,892 2,929,430 388,523 219,329 - 492,708 5,595,693 386,238 3,237,201 139,980,541 53,299,145 5,438,321 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 85,691,636 120,883,335 13,027,913 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 - 16,179,894 217,889,028 a. Salary and allowance includes Company’s contribution to provident fund amounting to Tk. 1,693,232 and gratuity fund amounting to Tk. 1,201,298 b. Repairs and maintenance includes maintenance of ofﬁce, premises, vehicle, building, equipment and other infrastructures. 26. Selling, marketing and distribution expenses Salary and allowances Software and licenses Depreciation and amortization Printing and stationery Repairs and maintenance Telephone, cellphone, internet and postage Travelling and conveyance Trade subscription Entertainment Advertisement Insurance premium Registration and renewal Training and conference Salesforce logistics Rent Sample expense Literature and news letter Sales promotion expenses Events, programs and campaign Field operation Brand development Market research and new products Distribution commission Other expenses 501,759,481 38,817,769 44,274,880 693,554 30,929,619 18,532,351 86,835,126 - 2,574,458 614,177 10,417,546 1,443,278 6,674,009 3,090,054 458,414 3,859,748 41,419,095 18,145,231 132,749,378 1,065,765 69,020,407 6,150,865 176,044,438 838,965 295,415,956 44,042,374 17,662,793 1,474,502 2,483,904 7,633,690 30,821,855 - 866,468 1,111,000 6,851,653 683,232 2,245,987 1,311,476 - 2,109,856 10,750,476 7,741,574 47,894,915 - 19,314,238 2,349,892 69,812,844 20,419 471,127,649 21,238,484 34,325,120 2,464,229 8,125,239 10,569,292 42,267,299 1,239,525 3,052,381 3,432,891 13,636,740 238,900 10,336,778 2,836,220 2,820,712 2,027,618 13,502,937 10,512,863 49,284,478 - 17,335,292 4,731,338 - 71,608,820 1,196,408,608 572,599,104 796,714,805 a. Salary and allowance includes Company’s contribution to provident fund amounting to Tk. 12,626,918 and gratuity fund amounting to Tk. 11,518,651 b. Repairs and maintenance includes maintenance of ofﬁce, premises, vehicle, building, equipment and other infrastructures. c. Sample expenses include VAT on sample. Annual Report 2022-23 | Synovia Pharma PLC. | 229 I S L A C N A N I F D E T I D U A 27. Finance cost Interest on bank borrowings Net interest cost-actuarial valuation Interest on ﬁnance lease obligation Bank charges 28. Other income Interest income Proﬁt/(loss) on sale of ﬁxed assets Forfeited PF refund Rental income Forfeited PF refund For the year ended 30 June 2023 For the six month period January-June 2022 Amount in Taka For the year ended 31 December 2021 37,198,497 - 5,699,323 2,783,330 45,681,150 7,072,392 - 3,040,790 3,610,980 13,724,162 6,719,310 12,494,600 4,237,494 4,924,869 28,376,273 682 101,577 2,383,667 5,436,254 26,395,502 34,216,105 - - 14,606,890 14,708,467 1,740,043 10,482,510 3,946,097 33,341,420 49,510,070 In compliance to FRC circular no.179/FRC/FRM/Notiﬁcation /2020/2 dated July 7, 2020 the company has recovered the forfeited PF contribution from the Provident Fund Trust which has been reported as forfeited PF refund. 29. Contingent liability 1. There are contingent liabilities aggregating Tk. 364,473,968 for disputed VAT claims lying with honorable High Court. The Company has provisioned for Tk. 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 ﬁnal disposal. 2. The Company provided bank guarantees for a total amount of Tk. 18,670,102 in favor of “Titas Gas Transmission Distribution Company” and “Green Delta Insurance Company Limited” in connection with operation of the business. Amount in Taka For the year ended 30 June 2023 For the six month period January- June 2022 (189,293,874) (124,221,333) 3,595,204 (52.65) 3,595,204 (34.55) 30. Earnings per share (EPS) Earnings attributable to the ordinary shareholders Number of share Earnings per share (EPS) 230 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Amount in Taka For the year ended 30 June 2023 For the six month period January- June 2022 4,387,346,565 (2,154,719,712) 3,938,607,274 (1,516,686,547) 2,232,626,853 2,421,920,727 3,595,204 621.00 3,595,204 673.65 31. Net asset value (NAV) per share Total assets Less :Total liabilities Net assets Number of shares Net asset value (NAV) per share 32. Net operating cash ﬂows per share (NOCFPS) Net cash generated from operating activities Number of ordinary share Net operating cash ﬂows per share (NOCFPS) (139,244,361) (145,872,250) 3,595,204 (38.73) 3,595,204 (40.57) 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 differences Tax rate Deferred Tax Liability/(Asset) at end of the period Deferred Tax Liability/(Asset) at beginning of the period Deferred Tax Expense/(Income) (75,827,268) (28,137,982) 195,693,431 (128,225,951) - (272,965,958) (205,498,478) 27.50% (56,512,081) (88,640,228) 206,672,792 (123,652,254) (141,975,425) (263,373,215) (322,328,102) 27.50% (88,640,228) (70,796,445) 32,128,147 (17,843,783) Reconciliation of Effective tax rate: Loss before tax Applicable Tax (27.5%) Effect of permanent disallowance Effect of minimum tax Effect of other income Deferred tax impact Income Tax Expense July 2022- June 2023 Jan 2022-June 2022 % Tk % Tk - 2.97% 60.54% 6.72% 29.76% 81,338,459 - 3,209,980 65,358,337 7,258,951 32,128,147 - 16.02% 257.32% - -173.34% 113,927,134 - 1,649,241 26,488,742 - (17,843,783) 100.00% 107,955,415 100.00% 10,294,200 Annual Report 2022-23 | Synovia Pharma PLC. | 231 I S L A C N A N I F D E T I D U A 34. Reconciliation of Net Proﬁt with Cash Flows from Operating Activities: Proﬁt after tax (189,293,874) (124,221,333) Adjustment to reconcile net proﬁt to net cash Generated from Operating Activities : Amount in Taka For the year ended 30 June 2023 For the six month period January- June 2022 Non-cash/Non-operating items: Depreciation Amortization Gain on disposal of ﬁxed assets Deferred Tax 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 Net Cash Generated from Operating Activities 35. Related party disclosures 167,850,835 130,957,020 7,149,335 (2,383,667) 47,049,650 62,245,597 2,647,834 - 32,128,147 (17,843,783) (117,801,320) (68,700,567) (560,586,103) 15,275,534 156,851,931 100,094,113 (45,868,324) 11,174,559 502,508,806 (199,889,160) (144,170,218) 15,686,251 4,445,947 145,249 (30,983,361) (11,187,113) (139,244,361) (145,872,250) During the period ended 30 June 2023, the Company entered into the following transactions with its related party: Name of Related Parties Nature of Transactions Toll income Value of Transaction 246,862,902 Balance as of 30 June 2023 Balance Type Beximco Pharmaceuticals Limited Cost of goods and services 213,239,237 160,092,598 Cr. Distribution Commission 176,044,439 36. Foreign currency payment & receipts: The Company made payments of USD 13,262,900 equivalent to Tk. 1,458,919,018 in connection with import of materials, ﬁnished products, machinery, spares and IT related services during the reporting period. 232 | Synovia Pharma PLC. | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 37. Factory capacity July 2022- June 2023 Capacity Production Utilization (%) Tablet , Capsule & suppository Dry syrup, Injectables & Cream Pcs Pcs 653,833,333 671,450,267 16,968,333 21,055,064 103% 124% Capacity utilization is calculated based on single shift production. Actual produciton includes product manufactured for third parties but does not include SPP’s products manufactured at third party plants on toll manufacturing basis. 38. Capital management and Capital commitments 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. Capital commitment There is no capital commitment at the date of the statement of ﬁnancial position. 39. Directors’ remuneration No remuneration has been paid to the Directors other than the fee for attending board meetings. 40. Receivable from Directors There is no receivable from the directors at the date of the statement of ﬁnancial position. 41. Employee details The number of full time employees as on 30 June 2023 was 1,010 (June 2022: 824) 42. Events after the reporting period: The Board of Directors of the Company recommended 10% cash dividend (i.e. TK. 10/- per share of TK. 100 each) for the year 2022-23. The Dividend proposal is subject to shareholders’ approval at the forthcoming Annual General Meeting. Annual Report 2022-23 | Synovia Pharma PLC. | 233 I S L A C N A N I F D E T I D U A Financial Statements Beximco Pharma API Limited For the Year ended June 30, 2023 234 | Beximco Pharma API Limited | Annual Report 2022-23 234 | Beximco Pharma API Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I DIRECTORS’ REPORT 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, 2023 along with the report of the auditors thereon. OPERATION You are aware that 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. We have started looking for technology partners and dialogue is going on with several global API players. As soon as the technology partner is ﬁnalized and economic situation improves in Bangladesh, we shall commence project works. Since there was no commercial operation, no operating expense incurred except a few regulatory expenses as reported in the ﬁnancial 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 2023. M. J. Abedin & Co., Chartered Accountants, National Plaza, 109, Bir Uttam C.R. Datta Road, Dhaka-1205, the Auditors of the Company has expressed their willingness to continue in ofﬁce for the year 2023-24. 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 2023-24. On behalf of the Board Nazmul Hassan MP Chairman Annual Report 2022-23 | Beximco Pharma API Limited | 235 I S L A C N A N I F D E T I D U A Independent Auditors’ Report To the Shareholders of Beximco Pharma API Limited Report on the Audit of the Financial Statements Opinion We have audited the ﬁnancial statements of Beximco Pharma API Limited, which comprise the statement of ﬁnancial position as at 30 June 2023, and statement of proﬁt or loss and other comprehensive income, statement of changes in equity and statement of cash ﬂows for the year then ended, and notes to the ﬁnancial statements, including a summary of signiﬁcant accounting policies. In our opinion, the accompanying ﬁnancial statements give a true and fair view of the ﬁnancial position of the Company as at 30 June 2023 and of its ﬁnancial performance and its cash ﬂows for the year then ended in accordance with international Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the ﬁnancial statements, and we have fulﬁlled our other ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. Responsibilities of Management and those Charged with Governance for the Financial Statements. Management is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with, International Financial Reporting Standards (IFRSs), the Companies Act 1994, other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁnancial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s ﬁnancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decision of users taken on the basis of these ﬁnancial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional Skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the ﬁnancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidences that is sufﬁcient and appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidences obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidences obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the ﬁnancial statements, including the disclosures, and whether the ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation. 236 | Beximco Pharma API Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I • Obtain sufﬁcient appropriate audit evidence regarding the ﬁnancial information of the business activities of the company to express an opinion on the ﬁnancial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 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 veriﬁcation thereof; b) In our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our examination of these books and; c) The statement of Financial Position (Balance Sheet) and Statement of Proﬁt or Loss and Other Comprehensive Income (Proﬁt and Loss Account) dealt with by the report are in agreement with the books. Dhaka October 19, 2023 M. J. ABEDIN & CO. Chartered Accountants Reg No. CAF-001-111 Hasan Mahmood FCA Enrollment No. 0564 DVC: 2310230564AS237512 Annual Report 2022-23 | Beximco Pharma API Limited | 237 I S L A C N A N I F D E T I D U A Beximco Pharma API Limited Statement of Financial Position As at June 30, 2023 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, 2023 June 30, 2022 Amount in Taka 4 5 20,000,000 20,000,000 20,000,000 20,000,000 2,115 2,115 25,920 25,920 20,002,115 20,025,920 18,083,439 20,000,000 (1,916,561) 1,918,676 745,350 1,153,326 20,000 18,122,764 20,000,000 (1,877,236) 1,903,156 729,830 1,153,326 20,000 TOTAL EQUITY AND LIABILITIES 20,002,115 20,025,920 The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS237512 238 | Beximco Pharma API Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Beximco Pharma API Limited Statement of Proﬁt or Loss and Other Comprehensive Income For the Year ended June 30, 2023 Revenue Cost of Revenue Gross Operating Proﬁt/(Loss) Notes July 2022 - June 2023 July 2021 - June 2022 Amount in Taka - - - - - - Administrative Expenses 6 (39,325) (79,160) Proﬁt/(Loss) from Operations Income Tax Expense Net Proﬁt/(Loss) after Tax Other Comprehensive Income (39,325) - (39,325) (79,160) - (79,160) - - Total Comprehensive Income/(Loss) for the Year (39,325) (79,160) Earnings Per Share (EPS) (0.02) (0.04) The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS237512 Annual Report 2022-23 | Beximco Pharma API Limited | 239 I S L A C N A N I F D E T I D U A Beximco Pharma API Limited Statement of Changes in Equity For the Year ended June 30, 2023 As at June 30, 2023 Balance as on July 01,2022 Particulars Share Capital Retained Earnings Total 20,000,000 (1,877,236) 18,122,764 Amount in Taka Net Loss for the Year - (39,325) (39,325) Balance as on June 30, 2023 20,000,000 (1,916,561) 18,083,439 Net Asset Value (NAV) Per Share 9.04 As at June 30, 2022 Balance as on July 01,2021 20,000,000 (1,798,076) 18,201,924 Particulars Share Capital Retained Earnings Total Amount in Taka 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 The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS237512 240 | Beximco Pharma API Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I Beximco Pharma API Limited Statement of Cash Flows For the Year ended June 30, 2023 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 July 2022 - June 2023 July 2021 - June 2022 Amount in Taka 15,520 (39,325) (23,805) 50,000 (79,160) (29,160) - - - - Increase / (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year (23,805) 25,920 2,115 (29,160) 55,080 25,920 Net Operating Cash Flows Per Share (0.01) (0.01) The Notes are an integral part of the Financial Statements. S.M. Rabbur Reza Managing Director Mohammad Ali Nawaz Director Per our report of even date Dhaka October 19, 2023 M.J. Abedin & Co. Chartered Accountants Reg No : CAF-001-111 Hasan Mahmood FCA Enrollment No : 0564 DVC : 2310230564AS237512 Annual Report 2022-23 | Beximco Pharma API Limited | 241 I S L A C N A N I F D E T I D U A Beximco Pharma API Limited Notes to the Financial Statements As at and for the year ended June 30, 2023 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 ﬁnancial statements have been prepared under historical cost convention which does not take into consideration the effect of inﬂation. 2.2 Statement of Compliance The ﬁnancial statements have been prepared in compliance with the requirements of the Companies Act, 1994 and International Financial Reporting Standards (IFRSs), and other relevant and applicable local laws and regulations. 2.3 Presentation of Financial Statements The ﬁnancial statements comprise of: a) Statement of Financial Position as at June 30, 2023; b) Statement of Proﬁt or Loss and other Comprehensive Income for the year ended June 30, 2023; c) Statement of Changes in Shareholders’ Equity for the year ended June 30, 2023; d) Statement of Cash Flows for the year ended June 30, 2023 and e) Notes, comprising summary of signiﬁcant accounting policies and explanatory information. 2.4 Reporting Period Financial Statements of the company cover the period of 12 months from July 01, 2022 to June 30, 2023. 3. Functional and Presentation Currency The ﬁnancial statements are prepared and presented in Bangladesh Currency (Taka), which is the company’s functional currency. All ﬁnancial information presented has been rounded off to the nearest Taka. 242 | Beximco Pharma API Limited | Annual Report 2022-23 A U D I T E D F I N A N C A L S I 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 19, 2023 June 30, 2023 Amount in Taka June 30, 2022 2,115 2,115 25,920 25,920 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 99.999 0.001 100 Amount in Taka July 2022 - June 2023 July 2021 - June 2022 15,520 20,000 805 3,000 39,325 55,470 20,000 690 3,000 79,160 Mohammad Ali Nawaz Director Annual Report 2022-23 | Beximco Pharma API Limited | 243 I S M L G A A C E N H A T N F I F O D E E C T I I T D O U N A Notice of Annual General Meeting BEXIMCO PHARMACEUTICALS LIMITED 17, Dhanmondi R/A, Road No. 2, Dhaka-1205 NOTICE OF THE 47TH ANNUAL GENERAL MEETING Notice is hereby given that the 47th Annual General Meeting of the Shareholders of Beximco Pharmaceuticals Limited will be held under Virtual Platform on Thursday, the 28th December, 2023 at 10.30 a.m. to transact the following business: 1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended on 30th June, 2023 together with reports AGENDA of the Auditors and the Directors thereon. 2. To declare 35% cash dividend. 3. To elect Directors. 4. To approve the re-appointment of Independent Director. 5. To appoint Auditors for the year 2023-24 and to ﬁx their remuneration. 6. To appoint Corporate Governance Compliance Auditors for the year 2023-24 and to ﬁx their remuneration. By order of the Board, Dated: November 05, 2023 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. 13 November, 2023 will be entitled to attend at the Annual General Meeting and to receive the dividend. (2) A Member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Ofﬁce of the Company, not later than 48 hours before the time ﬁxed for the meeting. (3) Annual Report for the year 2022-23 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 24 (Twenty-four) hours before commencement of the AGM and also during the AGM. For logging into the system, the Shareholders need to put their 16-digit Beneﬁcial Owner (BO) ID/Folio Number and other credential as proof by visiting the said link. (5) We encourage the Shareholders to login into the system prior to the meeting. Please allow ample time to login and establish your connectivity. For any IT related guidance, Shareholders may contact vide email : monir@beximco.net or mazibur@beximco.net . 244 | Notice of Annual General Meeting | Annual Report 2022-23 244 | Beximco Pharma API Limited | Annual Report 2022-23 A P R U O D X I T Y E D F O F R I N M A N C A L S I 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 47th Annual General Meeting of the Company to be held on Thursday, 28th December, 2023 at 10.30 a.m. under virtual platform and at any adjournment thereof. As witness my hand this……………………………..day of December, 2023. Signed by the said in presence………………………………………………………… Revenue Stamp Tk. 100.00 ………………………………….. ……………………………………………….................................. (Signature of Proxy) Signature of Shareholder(s) Dated: ……………………….. Register Folio / BOID No.: ………………………………………………….. …………………………..... (Signature of Witness) Dated: …………………………… Note: A member entitled to attend and vote at the Annual General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Ofﬁce of the Company not later than 48 hours before the time ﬁxed for the meeting. Signature Veriﬁed Authorised Signatory ………………………………… Annual Report 2022-23 | Proxy Form | 245 Annual Report 2022-23 | Beximco Pharma API Limited | 245 I S L A C N A N I F D E T I D U A 246 | Beximco Pharma API Limited | Annual Report 2022-23 www.beximcopharma.com Follow us Like us Watch BEXIMCO PHARMACEUTICALS LIMITED

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