Financial Analysis on

Beximco Pharmaceuticals Limited

Internship Report
May 11th, 2015
Ms. Sayla Sawat Siddiqui
Lecturer-III,
BRAC Business School,
BRAC University.

Subject: Submission of the Internship Report Titled “Financial Analysis on Beximco

Pharmaceuticals Limited”.

Dear Madam,

It is an immense pleasure for me to submit to you the internship report titled “Financial
Analysis on Beximco Pharmaceuticals Limited”. My main incentive was to prepare this
internship report according to your guidelines and in accordance with your directions. I have
tried my best to make the work as per your structures. I hope that I have done a satisfactory job
considering my level of experience and capability and have been able to relate the fundamental
things with realistic applications.

Moreover, I am extremely thankful for the opportunity that you gave me to express my ability
and I intently hope that you will like the work that I have done.

Sincerely,

----------------------------

MD. Erfanul Haque

ID: 11104098
Department: BRAC Business School (BBS)
BRAC University
There is an English proverb “Two heads are better than one” which means no one can obtain a
noble objective alone. This internship report is an accumulation of many people’s endeavor.
At the very beginning, I would like to convey my sincere appreciation to the almighty ALLAH
for giving me the strength and the ability to finish the task within the planned time. Then, I
would like to express my sincere gratitude to everyone who contributed towards preparing and
making this report successfully.
I would like to express my sincere and immense gratitude to my internship advisor, Ms. Sayla
Sawat Siddiqui, Lecturer-III of BRAC Business School, BRAC University. I am deeply
grateful to her whole hearted supervision during the internship period. Her valuable suggestions
and guideline helped me a lot to prepare the report in a well-organized manner.

I would also like to thank the authority of Beximco Pharmaceuticals Limited (BPL) for giving
me the opportunity to do my internship in their well-known organization and supplying me the
necessary information and published papers. I would like to thank Mr. Kamal Uddin Ahmed,
Manager, Accounts & Finance, Beximco Pharmaceuticals Limited, for his help and guidance
during my internship in BPL.
I am also grateful to the other officials and my intern friends at BPL who helped me while
preparing the report by giving their suggestions, assistance and supply of information, which
were valuable to me.
Title Page No.

Chapter 01: Introduction

1.1 Origin of the Report 01

1.2 Objective of the Report 01
1.3 Scope of the Report 01
1.4 Methodology of the Report 02
1.5 Limitation of the Report 02

Chapter 02: Industry Overview

2.1 About the Industry 03

2.2 Industry Outlook 05

Chapter 03: Company Overview

3.1 About the Company 08

3.2 Mission 09
3.3 Vision 09
3.4 Core Values 09
3.5 Key Milestones 11
3.6 Board & Management 12
3.7 Organizational Structure 13
3.8 Products 14
3.9 Accolades 16
3.10 Global Recognitions 16
3.11 R & D Capabilities 16
3.12 Global Footprint 17
3.13 Exports 17
3.14 Corporate Strategies 18
3.15 Corporate Social Responsibility 22
Title Page No.

Chapter 04: Job Description & Responsibilities

4.1 Overview of the Accounts & Finance Department 25

4.2 Job Description of the Sections 26
4.3 Hierarchy of the Accounts & Finance Department 29
4.4 Internship Experience & Job Responsibilities 30
4.5 Personal Observation 33
4.6 Recommendation 34

Chapter 05: Financial Analysis

5.1 Summary of the Analysis 35

5.2 Objective of the Analysis 36
5.3 Methodology of the Analysis 36
5.4 Limitation of the Analysis 37
5.A Current Investment Situation of Beximco Pharmaceuticals Limited 38
5.A.1 Investment Positives 38
5.A.2 Investment Concerns 39
5.A.3 Other Basic Attributes 39
5.B Industry Analysis 40
5.B.1 Introduction 40
5.B.2 Analysis & Comparison of Ratios 40
5.C Equity Analysis 60
5.C.1 Introduction 60
5.C.2 Steps of Equity Analysis 60

Chapter 06: Recommendation

6.1 Overview 78
6.2 Introduction to TOWS Analysis 78
6.3 TOWS Analysis on Beximco Pharmaceuticals Limited 79

Chapter 07: Conclusion 80

References 81

Appendix 86
Title Page No.

Figure 1: Market Size of the Pharmaceuticals Industry of Bangladesh 05

Figure 2: Market Shares of Ten (10) Major Players 06

Figure 3: Pharmaceuticals Export & Export Growth 06

Figure 4: Core Values of Beximco Pharmaceuticals Limited 09

Figure 5: Organizational Structure of Beximco Pharmaceuticals Limited 13

Figure 6: Corporate Strategies of Beximco Pharmaceuticals Limited 18

Figure 7: CSR Activities of Beximco Pharmaceuticals Limited 22

Figure 8: Sections of the Accounts & Finance Department 25

Figure 9: Hierarchy of the Accounts & Finance Department 29

Figure 10: The Sections of Most of My Job Responsibilities 31

Figure 11: Classification of Personal Observation 33

Figure 12: Parts of Financial Analysis 35

Figure 13: Steps of Equity Analysis 60

Figure 14: Elements Needed to Calculate Operating Cash Flow (OCF) 61

Figure 15: Steps of Project Cash Flow 67

Figure 16: Types of Per Share Price 75

Figure 17: Structure of TOWS Analysis 78

Title Page No.

Table 1: Key Milestones of Beximco Pharmaceuticals Limited 11

Table 2: Management Committee of Beximco Pharmaceuticals Limited 12

Table 3: Executive Committee of Beximco Pharmaceuticals Limited 12

Table 4: Blockbuster Products of Beximco Pharmaceuticals Limited 14

Table 5: Hi-Tech Products of Beximco Pharmaceuticals Limited 14

Table 6: Other Products of Beximco Pharmaceuticals Limited 15

Table 7: List of New Products of Beximco Pharmaceuticals Limited 15

Table 8: Basic Information Related to Beximco Pharmaceuticals Limited 39

Table 9: Structure of EBIT 62

Table 10: Calculation of Operating Cash Flow (OCF) 66

Table 11: Calculation of Project Cash Flow 71

Table 12: Calculation of Required Rate of Return 72

Table 13: Calculation of Net Present Value (NPV) 74

Table 14: Calculating Intrinsic Price 75

Table 15: Calculation of Average Market Price 75

Table 16: TOWS Analysis on Beximco Pharmaceuticals Limited 79

Title Page No.

Trend 1: Analysis & Comparison of Current Ratio 41

Trend 2: Analysis & Comparison of Acid-Test (Quick) Ratio 43

Trend 3: Analysis & Comparison of Inventory Turnover 44

Trend 4: Analysis & Comparison of Net Profit Margin 46

Trend 5: Analysis & Comparison of Asset Turnover 48

Trend 6: Analysis & Comparison of Return on Assets (ROA) 49

Trend 7: Analysis & Comparison of Return on Common Shareholder’s Equity 51

Trend 8: Analysis & Comparison on Earnings per Share (EPS) 52

Trend 9: Analysis & Comparison on Price-Earnings (P-E) Ratio 54

Trend 10: Analysis & Comparison on Debt to Total Assets Ratio 56

Trend 11: Analysis & Comparison on Debt to Equity Ratio 58

Trend 12: Comparison Between Intrinsic & Market Price 76

ANVISA: The Brazilian Health Surveillance Agency
API: Active Pharmaceutical Ingredient
AIDS: Acquired Immune Deficiency Syndrome
AGEs: Advanced Glycation End-Product
ANDA: Abbreviated New Drug Application
ARV: Anti-Retroviral
ADF: Asthma Drug Facility
A2I: Access to Information
AGM: Annual General Meeting
AIM: Alternative Investment Market
ASEAN: Association of Southeast Asian Nations
BBA: Bachelor of Business Administration
BBS: BRAC Business School
BDT: Bangladeshi Taka
BPL or Beximco Pharma: Beximco Pharmaceuticals Limited
BMD: Bone Mineral Density
BAIL: Bangladesh Antibiotic Industries Limited
BAPI: Bangladesh Association of Pharmaceutical Industry
cGMP: Current Good Manufacturing Practices
CSR: Corporate Social Responsibility
CFC: Chlorofluorocarbon
CIS: The Commonwealth of Independent States
CENABAST: Central Nacional de Abastecimiento
CRP: Centre for the Rehabilitation of the Paralyzed
COGS: Cost of Goods Sold
DSE: Dhaka Stock Exchange
EPB: Export Promotion Bureau
EU: European Union
EGM: Extraordinary General Meeting
EPS: Earnings Per Share
EBIT: Earnings Before Interest & Tax
GMP: Good Manufacturing Practice
GCC: Gulf Cooperation Council
GSK: GlaxoSmithKline
GDR: Global Depository Receipt
Health Canada: It is the department of the government of Canada with responsibility for
national public health.
HFA: High-Functioning Autism
INC.: Incorporation
IOC & BP: Industrial Operation Control & Business Planning
LIBOR: London Interbank Offered Rate
LDC: Least Developed Countries
LSE: London Stock Exchange
LC: Letter of Credit
MNC: Multinational Corporation
MW: Megawatt
MAMA: Mobile Alliance for Maternal Action
MoHFW: Ministry of Health and Family Welfare
MRR: Material Receiving Report
Ma Moni: Maternal and Newborn Health Program
NPV: Net Present Value
OSD: Oral Solid Dosage
OCF: Operating Cash Flow
Pharma: Pharmaceuticals Industry of Bangladesh
PF: Provident Fund
PCL: Pharmatek Chemicals Limited
PTG: Purchase Order Transfer Goods
P-E: Price-Earnings
RMG: Ready Made Garments
R & D: Research & Development
ROA: Return of Assets
ROE: Return on Common Shareholder’s Equity
SBU: Strategic Business Unit
SPL: Shuktara Printers Limited
TGA: Therapeutic Goods Administration
TFDA: Taiwan Food and Drug Administration
TRIPS: Trade-Related Intellectual Property Rights
TOWS Analysis: TOWS analysis is a process that requires management to think critically
of its operations. By identifying several action plans that could improve the company's
position, TOWS analysis allows management to choose those strategies that most
effectively capitalize on the available opportunities.
US or USA: United States of America
UKMHRA: United Kingdom Medicines & Healthcare Products Regulatory Agency
USFDA: United States Food & Drug Administration
USAID: United States Agency for International Development
UN: United Nations
USAID: United States Agency for International Development
UCD: Universal Children’s Day
VAT: Value Added Tax
WTO: World Trade Organization
WHO: World Health Organization
WPPF: Worker’s Profit Participation Fund
This internship report is based on my internship experience, academic knowledge and mostly
based on the secondary data. In my internship tenure, I have worked on the Accounts &
Finance department of Beximco Pharmaceuticals Limited (BPL). It was a great opportunity to
experience and gather knowledge about different aspects of an organization, specially the tasks
related to accounts and finance. Based on the suggestion of my academic supervisor, I have
chosen the topic “Financial Analysis on Beximco Pharmaceuticals Limited”. In the beginning,
this report discusses about the pharmaceuticals industry of Bangladesh and its current
situation. Than the report briefly discusses about Beximco Pharmaceuticals Limited as a
whole. After the overview, this report discusses about the Accounts & Finance department of
BPL in a nutshell and later on deliberates about my internship experience and job
responsibilities during the internship period and the strengths and weaknesses of the
department that I have observed during my stay at BPL. The report also mentions some
suggestions which will help the department and the organization as a whole to perform better
than before. In the financial analysis part, the report discusses about the current investment
situation of BPL where, the report mentions the positive and threatening aspects of investing
in BPL shares. Furthermore, I have conducted an industry analysis where I have deliberated
the financial ratios of BPL and compared it with its two (02) of the strongest competitors,
Square Pharmaceuticals Limited and Renata Limited. I have also came up with some reasons
behind the fluctuations of BPL’s ratios. Later on the financial analysis part, I have made an
equity analysis where I have mentioned the calculating procedure of Operating Cash Flow
(OCF), Project Cash Flow and Net Present Value (NPV). After that, I have calculated the
intrinsic and market price of the shares of BPL for the sake of comparison and later on came
up with the reasons behind the overvaluation of shares of BPL. Before concluding the report,
I have conducted a TOWS analysis through which I have recommended some overall actions
to BPL based on its current strengths, weaknesses, industry opportunities and industry threats.
 Chapter: 01

Introduction
The report was originated to make an analysis on the financial conditions of Beximco
Pharmaceuticals Limited (Beximco Pharma) for the fulfillment of the internship program
required for the completion of the degree Bachelor of Business Administration (BBA) under
BRAC Business School (BBS), BRAC University. The report was prepared under the academic
supervision of Ms. Sayla Sawat Siddiqui, Lecturer-III, BRAC Business School (BBS), BRAC
University and under the organizational supervision of Mr. Kamal Uddin Ahmed, Manager,
Accounts & Finance, Beximco Pharmaceuticals Limited.

General Objective:

This report is prepared to fulfill the degree Bachelor of Business Administration (BBA)
under BRAC Business School (BBS), BRAC University.

Specific Objective:

 To gain an idea on the pharmaceuticals industry of Bangladesh.

 To give a brief overview on Beximco Pharmaceuticals Limited.
 To conduct an industry analysis on Beximco Pharmaceuticals Limited and compare its
values with two (02) of its fears’ competitors for the tenure 2009-2013.
 To conduct an equity analysis on Beximco Pharmaceuticals Limited and to justify the
reasons behind the over or under valuation of its stock.
 To give an overall recommendation to Beximco Pharmaceuticals Limited through a
TOWS analysis.

This report gives a brief idea on Beximco Pharmaceuticals Limited and its operation. The
information provided in this report is based on personal observation, research and job
experience acquired during the internship tenure. This report mainly focuses on the financial
performance of Beximco Pharmaceuticals Limited and the analysis is made through reviewing
the financial statements of the company and literatures. It also gives an idea of the overall
pharmaceuticals industry of Bangladesh.

1
In order to prepare this report, only secondary data has been used. The sources that has been
used to collect necessary data is given below:

Annual reports of Beximco Pharmaceuticals Limited, Square Pharmaceuticals Limited and

Renata Limited for the tenure 2009-2013.
Websites of Beximco Pharmaceuticals Limited, Square Pharmaceuticals Limited and
Renata Limited.
Website of Dhaka Stock Exchange (DSE).
Different journals and articles on pharmaceuticals industry of Bangladesh and Beximco
Pharmaceuticals Limited.
Other internship reports on Beximco Pharmaceuticals Limited.
Online newspapers such as The Daily Star and The Financial Express.
Different websites.

All the comments made, conclusions reached and suggestions for possible improvement
provided are purely based on my level of understanding, knowledge and my way of
interpreting a particular statement.
Beximco Pharmaceutical Limited follows a policy of not disclosing all the information
needed to prepare my report for obvious reason.
Because of the lack of information, I have to make some assumptions that may cause few
errors or personal mistakes in the report.

2
 Chapter: 02

Industry overview
The pharmaceuticals industry in Bangladesh has progressed well over the last three (03)
decades and the country is nearly self-sufficient in pharmaceuticals with 98% of its demand
being met by domestic manufacturers.

At present, this is one of the most technologically advanced sectors in the country employing
probably the highest number of white collar professionals. Since the declaration of Drug Policy
in 1982, the sector has grown from TK 173 crore to more than TK 12,000 crore (or $1.5 billion)
today. The credit goes to the private sector for its significant investment in building capabilities
(both infrastructure and people) to bring this industry to compete in the global market place.

Bangladeshi medicines are also being exported to many countries in the world and leading
players are making expeditions into the most regulated market of Europe, US and Australia
which are known for strict regulation and highest quality standards. In view of the export
potential, pharma has been declared as the thrust sector in Bangladesh with an aim to diversify
the country’s export portfolio and lower its dependency on RMG (ready-made garments).

Pharma has received a lot of attention in recent times for its huge potential to become a major
export oriented sector. However, we need to keep in mind that unlike RMG, pharma is
fundamentally known for its largely knowledge-driven and technologically intensive industry
and this requires significant investment in R&D compared to other industries. A pharma
company’s success mostly depends on its intellectual capital where special skill-set is required
to deal with every stage if its operations.

Fortunately for Bangladesh, Drug Policy of 1982 created an opportunity for the local industry
to flourish and make it self-reliant whereby local companies increased their share of production
from 30% in 1970 to almost 90% today, which translates to a tremendous amount of foreign
currency savings for the country every year. Bangladesh is the only country among all LDC
countries which has a well-developed pharma industry that, over the time, could successfully
make the transition from being an import dependent to an exporting one. Although medicine
export from Bangladesh constitutes only a small percentage of total production, the sector has
over the few years, attracted overseas buyers and it has earned good reputation as a quality
drug manufacturer.

Leading pharma companies have already secured endorsements from major drug regulatory
agencies like UKMHRA, TGA, ANVISA, Health Canada etc. while two (02) of them, Beximco

3
Pharmaceuticals Limited and Square Pharmaceuticals Limited, have successfully completed
US FDA audit in January 2015 and are awaiting approval.

The country certainly has huge potential in pharmaceutical export but need to be seriously
evaluated about the progress in terms of infrastructure development and achieving
competitiveness. The industry is yet to have any recognized bioequivalence testing facility
which is mandatory for product registration in developed markets and there is increasing
pressure from semi-regulated markets for such compliance. A central bioequivalence facility
in the country can largely benefit the industry by saving foreign currency as well as
significantly improve the quality of the medicines.

Bangladesh is always publicized for having the advantage under TRIPS waiver which allows
the LDC country to produce any patented drugs and even export to other LDC countries till
December 2015, but in reality this waiver period is almost over without any real benefit to the
industry. This is because of the lack of proper utilization of the benefits due to lack of proper
infrastructure such as API (active pharmaceutical ingredient) technology park for producing
bulk drugs, central bioequivalence testing lab, collaboration between industry and university
etc.
Lack of sufficient backward linkage remains a major challenge for our pharma industry.
Although we are producing some of the old and conventional APIs on a commercial scale, we
are far from manufacturing the new and patented drugs, and meeting the growing demand. API
constitutes a significant percentage of the total cost in medicine production which can run up
to 30-40% and, in many cases, even more. We must emphasize on improving our process and
synthetic chemistry skill in order to be more competitive in global market.
To build up the capabilities we must start from the university, we must improve our education
system with practice-oriented advanced courses having adequate laboratory facilities. There
should be more industry-university alliance and collaborative research between universities at
home and abroad to promote research in the fields of generic drugs, reverse engineering, and
also new drug development. If we cannot have the competence developed in the university
level, we cannot take this industry to the next level to compete in the global marketplace.
In 2015 alone, patented drugs worth $60 billion are going off patent which opens up
opportunities for generic manufacturers around the world. Bangladesh could be ideally
positioned to gain from generic drug opportunities with its cost advantages and skilled
manpower to gain further competitive advantages and build presence in the global generics.

4
Market Size:

Pharmaceuticals industry of Bangladesh is currently valued at BDT 120 billion and can
meet 98% of total domestic demand. During the last few years, leading drug manufacturers
have increased production capacity by 200% to 300%.
120
106
120
84
100
68
80 54
47
60

40

20

0
2008 2009 2010 2011 2012 2013

Size (BDT bn)

Figure 1: Market Size of the Pharmaceuticals Industry of Bangladesh

Market Players:

Currently there are 267 pharmaceutical companies in Bangladesh where 10 major players
hold almost 67.6% of the total market share and employing around 115,000 workers.
Square Pharmaceuticals Limited is the market leader in pharmaceuticals industry holding
almost 17% market shares followed by Incepta Pharmaceuticals Limited (9%) and Beximco
Pharmaceuticals Limited (8%).

5
 DRUG INT.

ACME
4% 6%
ACI
27% 6%
7% ARISTO PHARMA
7% ESKAYEF
14% 8%
RENATA
12% 9%
OPSONIN

BEXIMCO

INCEPTA

SQUARE

Figure 2: Market Shares of Ten (10) Major Players

Export:

Currently Bangladesh exports drugs to almost 86 countries and hope to export to 140
countries within the next few years. Export Promotion Bureau (EPB) data showed
pharmaceutical sector's earning at around BDT 542 million with more than 31 percent
increase in the first month of the financial year 2014-15.

6000 30%
16%
5000 24%

4000 8% 9% 20%

3000

2000 10%

1000 3272 3544 3856 4784 5533

0 0%
2009-10 2010-11 2011-12 2012-13 2013-14

Export (mn. TK.) Growth

Figure 3: Pharmaceuticals Export & Export Growth

6
API:

The industry imports around 70% of its raw materials from foreign sources. Two high
priority projects (establishing Active Pharmaceuticals Ingredient Park and National Control
Laboratory) are taken by the government for facilitating the pharmaceuticals sector.
Bangladesh currently needs to import API. Though the government has taken initiative for
setting up an API park a decade ago, the project is not yet completed. If the API Park
becomes operational, production cost will be cheaper which will give Bangladesh a
competitive edge in the international market. If Bangladesh can arrange Bio-equivalence
test for pharmaceutical products under local arrangement then the companies do not need
to go abroad for the tests and this will further drive the production cost as the tests are
conducted by paying high fees.

Government Policy:

The pharmaceuticals sector has been among the high-priority ones in Bangladesh export
policy since 2006. As per the budget of 2014-15, customs duty on 40 basic raw materials
used in medicine manufacturing are reduced to 5% from previous 10%-25% rate. Customs
duty on 14 items used in anti-cancer medicines have been withdrawn.

TRIPS Challenge:

The major challenge for the expansion of pharmaceuticals industry in Bangladesh is the
expected expiry of WTO or TRIPS (Trade Related Intellectual Property Rights) agreement
in 2016, which provides patent exemption for pharmaceutical products in Bangladesh as a
Least Developed Country (LDC).

7
 Chapter: 03

Company overview
Beximco Pharmaceuticals Limited (Beximco Pharma) is a leading manufacturer of medicines
and active pharmaceutical ingredients (APIs) based in Dhaka, Bangladesh and is a member of
Beximco Group. Incorporated in the late 70s, Beximco Pharma began as a distributor,
importing products from global MNCs like Bayer of Germany and Upjohn of USA and selling
them in the local market, which were later manufactured and distributed under licensing
arrangement. Over the years the company has grown from strength to strength and today it has
become a leading exporter of medicines in the country winning National Export (Gold) Trophy
a record four (04) times. Benchmarked to global standards, Company’s manufacturing facilities
have been recognized by the major global regulatory authorities, and it has so far expanded its
geographic footprint across all the continents. Beximco Pharma currently has a portfolio of
more than 500 products including all major beneficial categories, and it has successfully
differentiated itself by offering technology driven specialized products. With a dedicated
workforce of around 3,000 people, the simple principle on which it was founded remains the
same “producing high-quality generic drugs and making them affordable to our people.”
Since the very beginning, the company was highly successful in generating increased demand
for its products which eventually justified local production. It completed its registration in 1976
and started its operation in 1980 by manufacturing and marketing licensee products of Bayer
AG of Germany and Upjohn Inc. of USA. After its initial years of struggle it broke ground with
the launching of its own products in 1983. In 1985 Beximco Pharma was listed in Dhaka Stock
Exchange (DSE) as a public limited company. The journey continued and barrier after barrier
were crossed, challenges were faced and overcome to transform Beximco Pharma into what it
is at present. Now it has grown to become nation's one of the leading pharmaceutical
companies, supplying around 10% of the country's total medicine need. In the process, it was
enlisted in Chittagong and London Stock Exchange. Today Beximco Pharma manufactures and
markets its own branded generics for almost all diseases from AIDS to cancer, from infection
to asthma, from hypertension to diabetes for both national and international markets.
It manufactures a range of dosage forms including tablets, capsules, dry syrup, powder, cream,
ointment, suppositories, large volume intravenous fluids, metered dose inhalers etc. in several
world-class manufacturing plants, ensuring high quality standards complying with the World
Health Organization (WHO) approved current Good Manufacturing Practices (cGMP).
Beximco Pharma is also contract manufactures for major international brands of leading
multinational companies.

8
Beximco Pharma has a strong market focus and is anticipating continued future growth by
leveraging business capabilities and developing superior product brands and markets. In
particular, the company is very interested in developing a strong export market in USA and
Europe. To meet the future demand it has invested over US 50 million dollar to build a new
state-of-the-art manufacturing plant, confirming to USFDA and UKMHRA standards. This
new plant will also offer contract-manufacturing facility to leading pharmaceutical companies,
especially from Europe and US.

Beximco Pharma is committed to enhance human health and well-being by providing

contemporary and affordable medicines, manufactured in full compliance with global quality
standards. It continually strive to improve its core capabilities to address the unmet medical
needs of the patients and to deliver outstanding results for its shareholders.

Beximco Pharma 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.

Commitment to Quality

Customer Satisfaction

People Focus

Accountability

Corporate Social Responsibility

Figure 4: Core Values of Beximco Pharmaceuticals Limited

9
Commitment to Quality:

Beximco Pharma adopts industry best practices in all of its operations to ensure highest
quality standards of its products.

Customer Satisfaction:

It is committed to satisfy the needs of its customers, both internal and external.

People Focus:

It gives high priority on building capabilities of its employees and empower them to
realize their full potential.

Accountability:

It encourage transparency in everything they do and strictly adhere to the highest ethical
standards. It is accountable for its own actions and responsible for sustaining corporate
reputation.

Corporate Social Responsibility:

It actively takes part in initiatives that benefit the society and contribute to the welfare of
its people. It takes great care in managing its operations with high concern for safety and
environment.

10
Year Milestones

2013 First Bangladeshi company to export ophthalmic products to Europe

First Bangladeshi company to launch Salbutamol HFA inhaler (Azmasol®) in

2012
Singapore
Received GMP recognition from AGES, Austria (for European Union); only
2011 pharmaceutical company to win ‘National Export Trophy (Gold)’ for the fourth
time
The only pharmaceutical company in Bangladesh to enter the US market
2010
through acquisition of an Abbreviated New Drug Application (ANDA)

2009 Only Bangladeshi company to receive GMP approval from ANVISA, Brazil

First Bangladeshi company to receive GMP recognition from Therapeutic

Goods Administration (TGA), Australia, and Gulf Central Committee for Drug
2008
Registration, for GCC states; Technology transfer arrangement to manufacture
Roche’s ARV drug Saquinavir

2006 Launched CFC free HFA inhalers for the first time in Bangladesh

Only company in Bangladesh to be listed on the Alternative Investment

2005
Market (AIM) of London Stock Exchange (LSE) through issuance of GDRs

2003 First company to introduce anti-retroviral (ARV) drugs in Bangladesh

1993 Russia became the first export destination for formulation products

1992 Export operations started with APIs

1985 Listed on Dhaka Stock Exchange

1983 Launched own formulation brands

Started manufacturing products of Bayer AG, Germany and Upjohn Inc., USA,
1980
under license agreements

1976 Company incorporated

Table 1: Key Milestones of Beximco Pharmaceuticals Limited

11
 Management Committee

Name Designation

1. Nazmul Hassan MP Managing Director

2. Osman Kaiser Chowdhury Member of the Board of Directors
3. Rabbur Reza Chief Operating Officer
4. Ali Nawaz Chief Financial Officer
5. Afsar Uddin Ahmed Director, Commercial
6. Zakaria Seraj Chowdhury Director, International Marketing

7. Lutfur Rahman Director, Manufacturing

8. A R M Zahidur Rahman Executive Director, Production
9. Shamim Momtaz Executive Director, Manufacturing
10. Mohd. Tahir Siddique Executive Director, Quality
11. Jamal Ahmed Choudhury Executive Director, Accounts & Finance
12. Prabir Ghose Executive Director, Quality Assurance
Table 2: Management Committee of Beximco Pharmaceuticals Limited

Executive Committee

Name Designation

1. Osman Kaiser Chowdhury Member of the Board of Directors

2. Nazmul Hassan MP Managing Director
3. Rabbur Reza Chief Operating Officer
4. Ali Nawaz Chief Financial Officer
5. Afsar Uddin Ahmed Director, Commercial
Table 3: Executive Committee of Beximco Pharmaceuticals Limited

12
Figure 5: Organizational Structure of Beximco Pharmaceuticals Limited

13
 Blockbuster Products:

Product Name Description

Highest selling drug in Bangladesh Pharmaceutical Market
1. Napa
in terms of unit.
Highest selling drug in Bangladesh Pharmaceutical Market
2. Neoceptin-R
in terms of value.
Emerged as the most admired and highest selling nutritional
3. Bextrum / Bextrum Gold supplement in Bangladesh Pharmaceutical Market in just
one (01) year.
Highest selling cardiovascular drug in Bangladesh
4. Amdocal
Pharmaceutical Market in terms of value.
Highest selling oral anti-asthma drug in Bangladesh
5. Tofen
Pharmaceutical Market in terms of value.
Highest selling Metered Dose Inhaler brand in Bangladesh
6. Azmasol
Pharmaceutical Market in terms of value.
Table 4: Blockbuster Products of Beximco Pharmaceuticals Limited

Hi-Tech Products:

Inhalation Aerosol Suppository Nasal spray

1. Aeronid HFA Inhaler 1. Napa 125 Suppository 1. Nazolin Nasal Spray

2. Azmasol Inhaler 2. Napa 250 Suppository 2. Decomit Nasal Spray

3. Azmasol Refill Can 3. Napa 500 Suppository

4. Bexitrol Inhaler 4. Ultrafen 12.5 Suppository

5. Decomit 100 Inhaler 5. Ultrafen 50 Suppository

6. Decomit 50 Inhaler

7. Ipramid Inhaler
Table 5: Hi-Tech Products of Beximco Pharmaceuticals Limited

14
Other Popular Products:

Products Therapeutic class

1. Napa Paracetamol

2. Amdocal Angina & Ischaemic

3. Tycil Antibacterial

4. Arixon Antibacterial

5. Intracef Antibacterial

6. Neoflox Antibacterial
7. Atrizin Antibacterial

8. Pedemin Antibacterial
9. Filmet Antiprotozol

10. Neoceptin-R Antiulcerant

11. Bronkolas Bronchodilator
12. Neosten Skin

13. Aristovit-M Vitamin

Table 6: Other Products of Beximco Pharmaceuticals Limited

New Products:

Product Name
1. Adafil 11. Lopidam
2. Arlin 12. Metazine MR
3. Calorate 13. Metoprol XL
4. Calorate Kit 14. Navsol
5. Citicol 15. Nervalin
6. Diapro 16. Odeson
7. Feburic 17. Omastin IV
8. Hemofix 18. Tranexil
9. Hemofix FZ 19. Tyclav
10. Jointec Max 20. Voligel
Table 7: List of New Products of Beximco Pharmaceuticals Limited

15
 Asia’s Most Promising Brand:

Beximco Pharma has won the prestigious Asia’s Most Promising Brand award at the Asian
Brand and Leadership Summit 2013 held during 26-27 August, 2013 in Dubai. Beximco
Pharma ranked among Top 30 from 200 emerging brands in Asia. It also received
Industry’s number one (01) award in pharma category.

Nominated for Prestigious SCRIP Awards 2013:

The SCRIP Award is among the most prestigious awards in the pharmaceuticals industry
recognizing highly successful global companies. Beximco Pharma has been shortlisted for
the award from among hundreds of pharma companies around the world in the category of
“Management Team of the Year”.

Benchmarked to international standards, manufacturing facilities of Beximco Pharma has

been already approved by the regulatory authorities of Australia, Europe, Brazil and
Columbia, among others. Currently it has the highest number of international recognitions
in the country in pharmaceutical sector. Beximco Pharma also has the unique distinction as
the only Bangladeshi company to get listed on the AIM of London Stock Exchange.
Beximco Pharma, as in previous years, attended the biggest pharmaceutical expo CPhI
Worldwide, held during October 22-24, 2013 in Frankfurt, Germany. Beximco Pharma had
a stall for showcasing its products to prospective clients from all over the world.

R&D is key to success for any pharma company and Beximco Pharma has given top priority
in building and strengthening its capabilities to excel in formulating technologically complex
products. Its formulation R&D team develops a wide range of generic products including
difficult to copy formulations in defined specialty areas. Beximco Pharma has successfully
developed multi-layer tablet, sustained release formulation, dispersible tablet, CFC-free
inhalers, prefilled syringes, lyophilized injectable, sterile ophthalmic, oral thin films etc. The
team has provided a robust product flow with 23 products in the year, and six (6) of them were
launched for the first time in the country. Currently Beximco Pharma has a number of products
in the pipeline for submission in the regulated markets. Its research and development activities
are closely focused on market needs and driven by technological progress. A new, state-of-the-

16
art research lab is being set up to facilitate the development of innovative and difficult products
with a focus to create unique market opportunities.

As Beximco Pharma is expanding its global footprint, its position in many Asian and African
countries is now stronger than ever while its focus remains high on the regulated markets of
USA and EU for value added generics. Its export business registered an excellent growth of
43% over the previous year. Beximco Pharma has successfully filed three (03) ANDAs
(Abbreviated New Drug Application) with the US FDA (Food and Drug Administration) and
also made submission for Marketing Authorization in several EU countries. During the year it
registered 38 products in 14 countries, and became the first Bangladeshi company to enter the
European market with ophthalmic products. The company has a clear strategy to capitalize on
generic drug opportunities and it continues to expand its pipeline for submission in overseas
markets. At the moment, Beximco Pharma has the highest number of international
accreditations among local companies.

Beximco Pharma is the largest pharmaceutical exporter of Bangladesh. It was the first
pharmaceutical company in Bangladesh to receive ‘National Export Trophy (Gold)’ in 1994-
1995, which was the very first year for introduction of such award by the Government of
Bangladesh. Beximco Pharma has also been awarded ‘National Export Trophy (Gold)’ for two
(02) consecutive years 1998-1999 and 1999-2000. It is the only company which is the record
four (04) times winner of such award for its outstanding export performance. It is worth
mentioning that this award is the highest national recognition for excellence in export.

Beximco Pharma had always been highly proactive in exporting pharmaceuticals from
Bangladesh and was the pioneer in almost all export activities of the country such as,

Pioneer in Entering the CIS Countries.

First Pharmaceutical Company of Bangladesh to Enter Singapore, One of the Most
Stringent and Regulated Markets in Asia.
First and Only Bangladeshi Company to Supply Pharmaceuticals to Raffles Hospital, One
of the Most Prestigious Hospitals of the Region.
Only Company to Supply Specialized and High-Tech Products like Inhalers, Suppositories
and Nasal Sprays to Overseas Markets.

17
Beximco Pharma has made a huge contribution in fulfilling a national aspiration of turning an
import based country into an exporter of quality medicines, by marking its presence in 45
countries across the globe.

Distinguished Manufacturing Capability

Consistently Delivering High Quality Products

Adopting Innovation in Manufacturing Process

R & D Capability in Both Formulation and API

Domestic and Existing Export Markets

Professional Management Capability

Sales & Marketing Capability Focused on Brand Building

Global Strategy

National Wide Distribution Network

Relationship with The Doctors

Financial Strength

Strong Relationships

Figure 6: Corporate Strategies of Beximco Pharmaceuticals Limited

Distinguished Manufacturing Capability:

Located at Tongi, near the capital city Dhaka, Beximco Pharma’s manufacturing site is
spread over an area of 20 acres, which houses a number of self-contained production units
including oral solids, metered dose inhalers, intravenous fluids, liquids, ointments, creams,
suppositories, ophthalmic drops, injectable, nebulizer solutions etc. The bulk drug unit for
producing paracetamol is also located within this site. Company’s penicillin API and
formulation units are situated at Kaliakoir, a few kilometers from the main site. The plant
and machinery throughout the site have been designed by and procured mostly from
renowned European companies. Beximco Pharma has its own utility infrastructure to
ensure adequate generation and distribution of purified water at all times. The installed
capacity of power generation is 10 MW. There is also liquid nitrogen generation facility on
site.

18
Consistently Delivering High Quality Products:

Today the name “Beximco Pharma” has become synonymous with trust and reliability.
Quality is its relentless passion. Quality is embedded in its values and in all that it does.
Beximco Pharma’s business processes and practices are designed to achieve quality results
that would meet the expectations of patients and physicians by getting the highest quality
products, and of shareholders and stakeholders through achieving returns. Its three (03)
brands, Neoceptin R (Ranitidine), Napa (Paracetamol) and Amdocal are the top three (03)
selling brands in the Bangladesh pharmaceuticals industry.

Adopting Innovation in Manufacturing Process:

Beximco Pharma has always been the pioneer in adopting innovative technologies that
introduced both sophistication and scale in its business processes. It also focuses on
improving manufacturing efficiency to meet the challenge of maintaining the bottom line
of the business in an ever-changing competitive market place.

R&D Capability in Both Formulation and API:

R&D is another area where Beximco Pharma has already shown capability and led the
Bangladesh pharmaceuticals market in both formulation R&D and API R&D. Its
formulation R&D capability is proven not only by the consistent quality of its products but
also by its ability to introduce hi-tech, specialized products and dosage forms. The reverse
engineering capability of the R&D team has enabled it to introduce innovative new
products to serve the ailing people at home and abroad.

Domestic and Existing Export Markets:

Its past and present performances clearly suggest that it has plenty of scope to grow even
in the domestic as well as in its existing export markets. Beximco Pharma has already
identified some attractive niche markets where the investment is negligible as compared to
its expected returns in terms of profitability. Once the new OSD (Oral Solid Dosage) plant
is operational and it has the capacity, it will be able to capitalize on these opportunities and
increase its market share in the domestic market as well as in other existing export markets.

19
Professional Management Capability:

Beximco Pharma is the pioneer in implementing corporate governance to professionally

run a company in Bangladesh. It provides an environment which fosters creativity,
innovation, self-development and entrepreneurship.

Sales & Marketing Capability Focused on Brand Building:

The major source of competitive advantages of Beximco Pharma is its sales and marketing
team. Its marketing team is composed of innovative people from diverse discipline.
Because of the innovative and creative approach adopted by its marketing team, it has been
able to create many vibrant brands like Napa, Neoceptin-R, Amdocal, Neofloxin, Tycil,
Omastin, Azmasol, Bexitrol-F, Atova, Bextram Gold etc. In fact, the ability of its sales and
marketing team to differentiate its brands even in a crowded generic market is its major
competitive advantage.

Global Strategy:

Beximco Pharma always took the leading, proactive and pioneering role in exporting
pharmaceuticals from Bangladesh. Beximco Pharma began its international operations with
the export of API to Hong Kong in 1992 and formulation products to Russia in 1993. Since
then, Beximco Pharma has taken greater strides over the years to increase its footprints in
international markets. It successfully ventured into several new countries including South
Africa (through contract manufacturing) and Netherlands, and registered 45 products in
overseas markets. The current expansion of this overseas portfolio includes prioritizing and
directing marketing operations to focus more on highly regulated markets such as the
European Union (EU), USA, Australia and GCC member countries for value added
generics. Beximco Pharma is supplying different formulations from its portfolio to
renowned hospitals and institutions including Raffles Hospital, Heathway Medical Group
and K. K. Women and Children Hospital in Singapore, Asthma Drug Facility (ADF) in
France, CENABAST in Chile, and MEDS and Kenyatta National Hospital in Kenya.

National Wide Distribution Network:

Beximco Pharma has found to be performing much better than most others in the industry.
Its distribution network is relatively more extensive in comparison to the top industry
players. It covers whole Bangladesh which has an area of 147,570 square-km with over 160
million populations. Therefore, national wide distribution network serves a huge number
of target customers and end users (patients). National wide distribution network is

20
definitely a strong favorable key success factor for Beximco Pharma on its own and also
relative to its rivals.

Relationship with The Doctors:

When it comes to physician relationship management, Beximco Pharma is performing

better than most but is still not performing well enough to take the number one (01) position
in this respect. Square Pharmaceuticals Limited, Beximco Pharma’s biggest competitor has
taken the lead in this respect.

Financial Strength:

Beximco Pharma has considerable financial strength in comparison to most but Incepta
Pharmaceuticals Limited is not far behind while Square Pharmaceuticals Limited has
substantial financial strength as well. Relative financial strength is something that Beximco
Pharma should always try to monitor after all this the criteria on which corporations choose
financial decisions regarding its debt/equity mix (capital structure of a firm), maturity
structure (maturity of assets and liability), method of financing investment projects (project
appraisal or capital budgeting) and other decisions with a goal of maximizing the value of
the firm (the value of the shareholders wealth).

Strong Relationships:

Through Beximco Pharma’s eyes, at the core of every successful partnership is a

professional relationship based on mutual trust and respect. Beximco Pharma recognizes
and understands that its alliances and partnerships are a core component to accomplishing
its strategic global aspirations. Beximco Pharma believes that the right alliances can
contribute appreciably to the achievements of its partners as well as to its own vision and
sustainable growth. Beximco Pharma has a successful track record of partnerships and
alliances with global MNCs such as GSK, Aventis, Bayer AG, Upjohn Inc. and Ciba. The
company has successfully established its brand value within the medical community. The
company seeks to further reinforce its relationships with all major stakeholders in the
healthcare value chain. Beximco Pharma differentiates itself by providing value added,
academic services to the medical community in the form of seminars and conferences,
clinical meetings, scientific publications and so on. It is engaged in constant
communication with doctors to ensure prompt feedback and meet any requests for
academic services.

21
Corporate Social Responsibility (CSR) is an integral part of Beximco Pharma’s business. CSR
has been incorporated as one of the core values of the organization and the company actively
takes part in initiatives that benefit the society and contribute to the welfare of the people. Its
commitment to build a healthier tomorrow is largely based on CSR activities and Beximco
Pharma always strive to integrate those to business strategies. The company works together
with non-profit organizations, international development agencies, and various healthcare
institutes to improve people’s lives through research, information, and advocacy. As Beximco
Pharma writes its success story as an emerging generic drug company in the region, it realizes
that responsibility towards all its stakeholders’ increases in tandem. Some of its CSR activities
in recent years are outlined and described below:

Mobile Alliance for Maternal Action (MAMA)

Extending Support to Jaago Foundation

Support to Rana Plaza Victims

Free Medicines for UN Health Camps

Sponsoring Friendly Cricket Match

Sponsoring National Campaign on Healthy Living

World Heart Day 2013

World Osteoporosis Day 2013

World Diabetes Day 2013

Universal Children's Day 2013

Figure 7: CSR Activities of Beximco Pharmaceuticals Limited

Mobile Alliance for Maternal Action (MAMA):

Beximco Pharma continued extending its support to Mobile Alliance for Maternal Action
(MAMA) in Bangladesh, as its founding corporate partner. The United States Agency for
International Development (USAID) catalyzed the creation of a public-private alliance in
Bangladesh to support the execution of the service which aims to reach 500,000 pregnant
women and new mothers within three (03) years. Under the brand name ‘Aponjon’ this
delivers life-saving health messages to Bangladeshi women and their families using mobile
phones. The Ministry of Health and Family Welfare (MoHFW) and Access to Information

22
(A2I) Program at the Prime Minister’s Office are official partners of the initiative while
Global partners include Johnson & Johnson and United Nations Foundation, among others.

Extending Support to Jaago Foundation:

Jaago Foundation, the largest youth based volunteer organization in Bangladesh with more
than 10,000 volunteers, aims to bring about substantial improvement in the lives of
disadvantaged people with special emphasis on their literacy and nutrition. Jaago runs a
number of schools to provide free education to the children in slum areas, besides running
awareness campaigns on youth leadership, and other important social, environmental and
health issues. Beximco Pharma provides both financial and in-kind supports to Jaago’s
various health and education initiatives.

Support to Rana Plaza Victims:

CRP (Centre for the Rehabilitation of the Paralyzed) Bangladesh has been actively
providing full support for the victims of Rana Plaza disaster from the very beginning. More
than 1,000 people have died and more than 600 injured in this tragedy. Beximco Pharma
extended its support for the treatment of Rana Plaza victims and handed over a cheque of
TK 3.7 lac and donated large quantities of medicine to Valerie Taylor, Founder, CRP, Savar
at BPL’s Head Office.

Free Medicines for UN Health Camps:

Beximco Pharma helps the UN mission in different countries through providing free
medicines for running health camps. In 2013, Beximco Pharma provided all the medicines
free of cost for the health camp organized by the UN peace keeping mission in the Congo.

Sponsoring Friendly Cricket Match to Promote Maternal and Newborn Health:

Mushfiqur Rahim, a renowned player of Bangladesh’s national cricket team and also a
Brand Ambassador of USAID-supported Maternal and Newborn Health program (“Ma
Moni”) in Bangladesh, played a cricket match on April 4, 2013 with local cricketers in
Sylhet to raise fund and increase awareness about maternal health. Beximco Pharma
sponsored the cricket match as a part of its corporate social responsibility. The raised funds
will be used by “Save the Children” for treating mothers in rural areas who have
experienced health problems.

23
Sponsoring National Campaign on Healthy Living:

“Alchemy” is a nationwide healthy living campaign launched on March 6, 2013 to promote

physical and mental wellbeing of people. Alchemy is being promoted by campaign
specialists, health experts, trainers, and role models in Bangladesh. Beximco Pharma is one
of the key sponsors of this unique initiative in Bangladesh.

World Heart Day 2013:

Beximco Pharma celebrated the World Heart Day 2013 (September 29), a global awareness
day, which aims to promote preventative measures that reduce the risk of cardiovascular
diseases. On this occasion, Beximco Pharma together with Volunteer for Bangladesh
(volunteer wing of Jaago Foundation) and BD Cyclists (biggest cyclist group in the
country) arranged different programs to promote this year’s theme ‘Take the road to a
healthy heart’ which included distribution of awareness leaflets, a health camp, a TV
program with leading cardiologists, cycle rally, marathon walk etc.

World Osteoporosis Day 2013:

Beximco Pharma celebrated the World Osteoporosis Day with a number of programs under
this year’s global theme “Strong Women Make Stronger Women”. Beximco Pharma, for
the first time in the country, organized a special bone health check-up to measure Bone
Mineral Density (BMD) in order to instantly detect osteoporosis. Beximco Pharma also
arranged free health camp at jogger’s park in the city, distributing awareness leaflets among
people and organizing discussions with doctors in various medical institutes. The company
handed over medicines and WOD campaign materials to CRP founder Ms. Valerie Taylor
on this occasion.

World Diabetes Day 2013:

On the occasion of World Diabetes day 2013, Beximco Pharma arranged a number of
awareness programs in different areas of capital city which included free diabetes check,
providing leaflets, guide books etc. in association with Bangladesh Diabetic Samity.

Universal Children’s Day 2013:

Jaago Foundation celebrated the Universal Children’s Day (UCD) 2013 on November 30
at Banani playground. This annual event aims to promote children’s rights and their equal
access to education. Beximco Pharma was a sponsor of the daylong UCD carnival and also
arranged free health camp on this occasion.

24
 Chapter: 04

Job description & Responsibilities

The activities of the Accounts & Finance department of Beximco Pharma is carried over by
experienced and adequate person in each designation. The functions of this department are
divided into five (05) sections to maintain proper control. The sections are as follows:

Tax &
Payroll

Financial
Accounts Treasury
(Non-SBU)
Accounts & Finance
Department

Finance
IOC & BP Accounts
(SBU)

Figure 8: Sections of the Accounts & Finance Department

25
Job Description of Tax & Payroll Section:

 Monthly Payroll, Corporate and Individual Tax, Trust Fund Accounts and Final
Settlement of Outgoing Members.
 Preparation of Monthly Salary of Beximco Chemical Division (3000+).
 Disbursement of Monthly Utilities, Medical and Insurance Bills of Management Staffs.
 Disbursement of Monthly Expenses of Field Forces.
 Disbursement of Provident Fund and WPPF Loan.
 Updated of Motor Cycle Advance of Field Forces.
 Preparation of Final Settlement of Outgoing Employees.
 Calculation of Individual Income Tax and preparation yearly Income Tax Certificate.
 Preparation of Trust Fund Accounts (P.F. and WPPF).
 Assessment of the Company Income Tax of Beximco Chemical Division.
 Despatching work of AGM and EGM.

Job Description of Treasury Section:

 All Bank’s Loan Management.

 All Kinds of Lease Finance Management.
 Fund Related Book Keeping.
 Voucher Preparation, Checking, Code Validation and Posting.
 Daily Monitoring of Sales Collection and Reporting.
 Monitoring of Daily Fund Management.
 Export Collection Monitoring.
 Foreign Remittance against Export Expenses, GDR, Credit Cards and Others.
 All Types of Insurance Policy for Chemical Division.
 All Bank Accounts Reconciliation.
 Cheque Preparation and Disbursement.

26
Job Description of Finance Accounts (SBU) Section:

 Recording Financial Activities and Maintaining Books of Accounts.

 Report of Profitability and Statement of Affairs of the Company for Management.
 Portray the Business Profitability and Opportunity of Each Business Segment of
Chemical Division and Analyze the Reasons for any Deviation.
 Maintaining Historical Data of Company Assets (Fixed Assets).
 Conducting Annual Statutory Audit, Arranging Print of Annual Financial Report for
Shareholders and Conducting AGM and Other Meetings When Necessary.
 Preparation of Un-Audited Quarterly, Half Yearly Financial Reports and Arrangement
of Public Announcement of Such Accounts and Reports both in Country and
Alternative Market.
 Financial and Legal Compliance of Government Regulatory Bodies.

Job Description of IOC & BP Section:

 Standard Material Purchase Bills Processing, Import Costing, Inventory Valuation.

 Product Costing, Latest Material Purchase Rate Effect Analysis on Product
Profitability.
 Quarterly Product Profitability Analysis.
 Monthly Sales Performance Analysis.
 Budget and Forecasting.
 Budget Variance Analysis.
 VAT Regulatory Affairs.
 Accounts Related Services at Factory Premises.
 To Provide Support Services to Treasury, Tax-Payroll and Financial Reporting Section.
 To Provide Support Services or Information to Other Departments to Execute Operation
and Full-Fill Company Objective.

27
Job Description of Finance Accounts (Non-SBU):

 Provide Highly Responsible Support to the Top Management Through,

 Monthly Management and Yearly Audit Accounts.
 Other Information as and When Required.
 Recording of All Transactions of Shuktara Printers Ltd. (SPL), Pharmatek Chemicals
Ltd. (PCL). Bangladesh Antibiotic Industries Limited (BAIL) and I & I Services Ltd.
 Make Payment by Cash and Cheque,
 Daily Petty Cash Payment (BAIL and AFU).
 Monthly Disbursement of Factory Cash Salary, Daily Labour and Other Payment.
 Accounts Payable.
 Advance for Local Purchase.
 Deposit TDS by Treasury Challan.
 Reconciliation of Banks, Current Account with Sister Concern, Loan and Lease
Account, Share Investment Account, Local Purchase Advances, Accounts Receivable,
Inventory Ledger and Depot Wise Stock.
 Preparation of Sales Invoice for PCL, LC Costing, Stock Valuation and Maintaining
Inventory Ledger by Separate Software, COG’s Calculation, Monitoring Sales Rebate,
Preparation of Advice for Depots Payment, Monthly Sales and Stock Statement
(Finished goods) of Beximco Pharma.

28
 Ali Nawaz

Chief Financial Officer (CFO)

Jamal Ahmed Choudhury

Executive Director, Accounts & Finance

Tax & Payroll Treasury Financial IOC & BP Financial Accounts

Accounts (SBU) (Non-SBU)

MD. Abul Hossain MD. Shahidul Alam Kamal Uddin Ahmed MD. Fazlul Haque MD. Habibur Rahman

Sr. Manager, Accounts Manager, Treasury Manager, A & F Deputy Manager, A & F Sr. Asst. Manager, A & F

Figure 9: Hierarchy of the Accounts & Finance Department

29
Internship Experience:

I worked in the Accounts & Finance department as an intern for two (02) months in
Beximco Pharma. During my internship at BPL, I was not only got the work experience
which I expected but also the opportunity to take a close look at BPL's business as well as
its culture and values, which helped me to further understand how an established company
works. During this period of internship, I have experienced different aspects of the accounts
work, including the internal control, industrial costing, daily receives and payments system,
payroll accounts, LC monitoring, bill of entry, MRR, PTG file maintenance, budgeted
product price entry, payment clearance etc. Every day, I had different things to learn and
work on. My Supervisor and mentors reviewed my work during the internship. My
supervisor gave suggestions and feedback on my work almost every day, helping me to do
the work better. I also communicated with my fellow interns to listen to their suggestions
and comments on my work. In this process of learning, I gradually enriched my knowledge
in accounting and finance and improved my communication skills. In short, my internship
experience at BPL was fascinating, interesting and valuable.

30
Job Responsibilities:

As I have discussed already, the Accounts & Finance department of Beximco Pharma has
several sections. As an intern, I was exposed to several sections under several employees
but there are some certain sections where I was working most of the time for two (02)
months of my internship. Those sections are listed below:

Treasury

Financial Financial
Accounts Sections Accounts
(Non-SBU) (SBU)

IOC & BP

Figure 10: The Sections of Most of My Job Responsibilities

The activities that I have performed in this sections are given below:

 Treasury:

In this section, I worked under MD. Hafizur Rahman, Sr. Accounts Officer and in
guidance of him, I performed the following activities:
 Bank Reconciliation.
 Premium Calculation on Insurance Related Work.
 Collecting all the petty cash vouchers and handover it to the concerned people.

 Financial Accounts (SBU)

In this section, I worked under Mr. Kamal Uddin Ahmed, Manager, Accounts &
Finance and MD. Gias Uddin, Sr. Assistant Accounts Officer. Under their guidance, I
have performed the following activities:
 Checking of Depot Payment Vouchers and Material Purchase Vouchers.
 Voucher File Maintenance.

31
 IOC & BP:

In this section, I worked mostly under MD. Abul Bashar, Accounts Officer and Jashim
Ahmed Choudhury, Sr. Assistant Officer, Accounts. The activities that I have
performed are given below:
 Providing Assistance in Preparing Bank Vouchers.
 Providing Assistance in LC Opening Information Entry in Detail and Item Entry
based on Order Form and Pro-Forma Invoice.
 Motorcycle Ownership Reconciliation
 Making the Check List of VAT Document Received
 M.R.R, P.T.G etc. Invoice Maintenance.

 Financial Accounts (Non-SBU):

Here, I have worked under MD. Jahangir Alam, Sr. Accounts Officer. The activities are
listed below:
 Providing Assistance in Making Petty Cash Vouchers of Depots.
 Providing Assistance on Making Sales Report based on Depot.
 Calculation of Deposit Slip and Match with the Value of the Voucher.

32
During the internship tenure in Beximco Pharma, I have observed certain aspects which I have
divided it into two (02) parts, which is outlined below and explained afterwards:

Positive
Aspects

Negative
Aspects

Personal Observation

Figure 11: Classification of Personal Observation

Positive Aspects:

 Like all other successful companies, the work environment of Beximco Pharma is really
friendly and cooperative.
 The Accounts & Finance department of Beximco Pharma is full of people with
immense experience in their designated post and loyalty towards their company.
 Even though the salary structure of Beximco Pharma is not that high, people still wants
to stay in this organization because of job security and its extra facilities such as free
lunch and refreshment, transportation, overtime pay etc.

Negative Aspects:

 Even though the Accounts & Finance department of Beximco Pharma is full of
experienced people, they lack ambition and youth among them. As a result, the
department and the organization as a whole is not performing up to their benchmarks.
 As most of the employees in Beximco Pharma is working for a longer period of time,
they developed a certain disregard about company’s rules such as maintaining office
time, maintaining deadlines etc.

33
 In the Accounts & Finance department, there are at least two (02) people working for
each post which could have been done by one (01) person pretty easily. As a result,
unnecessary chaos in the department and most importantly the cost of the company is
increasing.
 The employees of Accounts & Finance department is not technologically sound
enough. As a result, the tasks which could have been done and stored in computers
pretty easily has been done manually in papers, which is increasing the stationary and
storage costs of the company at a big margin.

Beximco Pharma should impose certain effective rules to enforce punctuality. Through a
notice or an e-mail, the company should inform the employees about the consequences of
not maintaining the office time appropriately. Moreover, there should also be a provision
of reward for the employees for being punctual.
The Accounts & Finance department and Beximco Pharma as a whole, needs a portion of
young employees who will work with energy, ambition and aggressiveness. The
aggressiveness of the youth generation might help them to perform even better in the
domestic market.
Beximco Pharma needs to provide training to its existing employees about different
technologies and software’s which will help them to work more efficiently and to reduce
company’s costs.

34
 Chapter: 05

Financial Analysis
The financial analysis part of this report is divided into three (03) parts which are outlined and
discussed below:

Current
Investment
Industry Situation
Analysis

Equity
Analysis

Financial Analysis

Figure 12: Parts of Financial Analysis

Analysis 5.A: Current Investment Situation of Beximco Pharmaceuticals Limited:

It outlines the basic information that an investor primarily needs to know before investing
into the shares of Beximco Pharma. It contains the information related to Beximco Pharma
and the industry as a whole by analyzing which, an investor can forecast the probable
outcome of its shares in the near future. It also contains the current share price of the
company and other related information.

Analysis 5.B: Industry Analysis:

It contains an analysis where the ratios of Beximco Pharma, Square Pharmaceuticals

Limited and Renata Limited are calculated for the last five (05) years (2009-2013) and
compared with each other. The report discloses liquidity, profitability and solvency ratios.
After the comparison, the report reveals the industry situation of Beximco Pharma and
probable reasons behind its success or failure to maintain the ratios of the above mentioned
category.

35
 Analysis 5.C: Equity Analysis:

In the last part of the financial analysis, an equity analysis is done where necessary steps
are followed to calculate the intrinsic price of the shares of Beximco Pharma. To calculate
the intrinsic price, operating cash flow, project cash flow and net present value are
calculated by taking the necessary information from the company’s financial statements.
This analysis is mostly based on forecasted data. The average market price of the first
quarter of 2014 are taken to compare it with the intrinsic price an also to figure out whether
the share price is under or overvalued. Certain reasons are also disclosed to justify it’s under
or overvaluation of shares.

To know about the current investment situation of Beximco Pharma.

To know about the industry position of Beximco Pharma by analyzing its ratios of the last
five (05) years (2009-2013) and compare it with its competitors for a clear picture.
To know the market position of the shares of Beximco Pharma by calculating the intrinsic
price.
To learn how to implement different financial tools in real life analysis.

In order to prepare this financial analysis part, only secondary data has been used. The sources
that has been used to collect necessary data is given below:

Annual reports of Beximco Pharmaceuticals Limited, Square Pharmaceuticals Limited and

Renata Limited for the tenure 2009-2013.
Websites of Beximco Pharmaceuticals Limited, Square Pharmaceuticals Limited and
Renata Limited.
Website of Dhaka Stock Exchange (DSE).
Different journals and articles on Beximco Pharmaceuticals Limited.
Other internship reports on Beximco Pharmaceuticals Limited.
Online newspapers such as The Daily Star and The Financial Express.
Different websites.

36
All the comments made, conclusions reached and suggestions for possible improvement
provided are purely based on my level of understanding, knowledge and my way of
interpreting a particular statement.
Because of the lack of information, I have to make some assumptions that may cause few
errors or personal mistakes in the report.

37
Beximco Pharma holds third highest market share in local sales (approximately 7.78%).
The company’s growth rate in domestic sales is one of the highest in the industry and
beating the industry growth rate by some margin for last four (04) years.
In the first quarter of 2014, the company has launched 13 new products, registered 12
products in different overseas market including Costa Rica and Columbia. In 2013, it
launched 23 products in Bangladesh six (06) of which are introduced for the first time in
Bangladesh and penetrated the European market by start selling to Germany and Austria.
Received GMP (Good Manufacturing Practice) approval from Taiwan Food and Drug
Authority (Taiwan) and Health Canada (Canada) and is likely to get approval from USA as
well.
Beximco Pharma has 10MW electricity generation capacity installed and has the highest
number of international GMP accreditations in the country in pharmaceuticals sector.
In 2013, the company has spent around BDT 2,739 million and up to the third quarter of
2014, it spent around BDT 1,553 million for acquisition of property, plant and equipment,
which is an indication that the company might be going for capacity expansion. This may
accelerate the company’s sales growth both in foreign markets as well as in the domestic
market.
Beximco Pharma’s export sales in 2013 has risen by almost 43% and its export sales in the
last three (03) years is increasing at a higher rate.
Beximco Pharma has its own penicillin API unit situated in Kaliakoir and is one of the few
companies of Bangladesh which have its own API.

38
 The company lost some of its market share to Incepta Pharmaceuticals Limited.
Around 46% of Beximco Pharma’s cost of goods sold is imported which makes the
company vulnerable to currency fluctuation risk and the company indeed incurred BDT
17.2 million loss due to currency fluctuation.
The company has contingent liability of BDT 267.9 million which may affect the
company’s profitability if the company becomes bound to pay the sum mentioned above.
The company’s spending in R & D is very insignificant. This is a serious issue as after the
TRIPS become void the company has to pay royalty for selling the generic drugs which are
already patented thus increasing the cost of the company.
The company’s Economic Value Added is negative over the last 3 years period (2011-
2013) implying the company failed to cover its cost of capital.
The company has been utilizing almost 80% of its total capacity for the last 4 years. If the
company does not go for increasing their production capacity their total revenue will not
go up by a large margin.

Basic Information
Current Market Price (BDT) 48.60
Market Capitalization (BDT million) 18,245.442
Three (03) Month’s Return 16.82%
Three (03) Month’s AVG. Volume 2,619,245
One (01) Year Return 34.81%
No. of Shares Outstanding (million) 367.85
Free Float (Public & Institutional Holding) 61.93%
52 Weeks Range (BDT) 37.1-75
Forward P/E (x) 15.29
Trailing P/E (x) 15.94
Trailing Twelve (12) Month EPS (BDT) 4.01
Fair Value (BDT) 94.26
Credit Rating, CRISL AA- ST-2
Table 8: Basic Information Related to Beximco Pharmaceuticals Limited

39
Quantitative analysis of information contained in a company’s financial statements. Ratio
analysis is based on line items in financial statements like the balance sheet, income statement
and cash flow statement; the ratios of one item or a combination of items to another item or
combination are then calculated. Ratio analysis is used to evaluate various aspects of a
company’s operating and financial performance such as its efficiency, liquidity, profitability
and solvency. The trend of these ratios over time is studied to check whether they are improving
or deteriorating. Ratios are also compared across different companies in the same sector to see
how they stack up, and to get an idea of comparative valuations. Ratio analysis is a cornerstone
of fundamental analysis.

Liquidity Ratios:

Liquidity ratio refers to the ability of a company to interact its assets that is most readily
converted into cash. Assets are converted into cash in a short period of time that are
concerns to liquidity position. However, the ratio made in the relationship between cash
and current liability.

Analysis & Comparison:

 Current Ratio:

It is a liquidity ratio that measures an organization’s ability to pay short-term debts. The
ratio is mainly used to give an idea of the organization’s ability to pay back its short-
term liabilities (debt and payables) with its short-term assets (cash, inventory,
receivables). The higher the current ratio, the more capable the company is of paying
its obligations. A ratio under “1” suggests that the company would be unable to pay off
its obligations if they came due at that point. Higher current ratio definitely indicates
that the firm is highly liquid and able enough to meet the demands of the creditors.
Satisfactory current ratio actually varies from industry to industry but in general, if the
current ratio lies above “1”, it indicates that the business is healthy. If the current ratio

40
is below “1”, then it means that the current liabilities are higher than the current asset,
so the firm can face many difficulties while paying back their short term debts. On the
other hand, if the current ratio is too high then it indicates that the firm has problem in
working capital management. Low current ratio does not always mean that the firm is
at an alarming stage or very near to be bankrupt but of course it is better to maintain a
standard current ratio in order to be free from liquidity risk.

Formula:

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑹𝒂𝒕𝒊𝒐 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Ratio Trend:

3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2009 2010 2011 2012 2013
Beximco 2.98 2.46 2.70 2.67 2.03
Square 2.05 1.50 1.91 2.12 3.13
Renata 1.17 1.11 0.73 1.10 0.79

Trend 1: Analysis & Comparison of Current Ratio

Analysis:

By seeing the trend, we can clearly see that Beximco Pharma is in a healthy situation
as it is maintaining a current ratio way over “1”. After reaching to the highest rate in
2009, the ratio started to fluctuate and eventually began to deteriorate because of their
increase in current liabilities.

41
 Comparison:

The trend shows that, Beximco Pharma had their highest current ratio in 2009, Square
Pharmaceuticals Limited at 2013 and Renata Limited at 2009. For Beximco Pharma,
though the ratio gradually declined afterwards, it was not below “1”. So, it can be said
that they always maintain a good current ratio to pay off their debts in time. In recent
past years, Square Pharmaceuticals Limited has been maintaining a stable current ratio
which is very much required to maintain a healthy financial position. Moreover, they
are also maintaining the current ratio more than “1”, which is risk free and they are also
operating successfully without maintain any idle capacity. In case of Renata Limited,
they are maintaining a ratio around “1” but stumbled a bit in 2011 and 2013, as their
ratio went down below “1”. It signifies that Renata is facing trouble in recent times to
pay off their current liabilities.

Overall, we can comment that Beximco Pharma is in more stable position in

comparison to other two (02) companies and the companies are quite aware about their
liabilities and maintain their assets in ways to pay off their obligations in time.

 Acid-Test (Quick) Ratio:

This ratio assesses the capacity of an organization to recover its current liabilities by
using the organization’s quick assets. Assets which can be easily converted into cash
are known as quick assets. Quick ratio is also known as acid-test ratio and it excludes
the inventories as inventories are less liquid. Quick ratio less than “1” indicates that the
firm is currently unable to pay its current debts. A high quick ratio is not considered as
good always depending on the accounts receivables and current liabilities. If it happens
that the firm has huge account receivables which will be collected after a long time and
the current liabilities are lesser but needs to be paid instantly then the quick ratio will
be higher. However, the firm will be in a risky situation as there is liquidity crisis. On
the other hand, opposite thing can also happen.

Formula:

𝑨𝒄𝒊𝒅 − 𝑻𝒆𝒔𝒕 (𝑸𝒖𝒊𝒄𝒌) 𝑹𝒂𝒕𝒊𝒐

𝐶𝑎𝑠ℎ + 𝑆ℎ𝑜𝑟𝑡 − 𝑇𝑒𝑟𝑚 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 + 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 (𝑁𝑒𝑡)
=
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

42
Ratio Trend:

2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2009 2010 2011 2012 2013
Beximco 1.83 1.25 1.39 1.44 1.11
Square 0.90 0.85 0.76 0.89 1.71
Renata 0.35 0.35 0.23 0.39 0.26

Trend 2: Analysis & Comparison of Acid-Test (Quick) Ratio

Analysis:

In case of acid-test (quick) ratio, Beximco Pharma is also in a strong situation, as they
are maintaining a ratio over “1” but not too high. Like current ratio, the acid-test (quick)
ratio also reached to its peak in 2009 and began to decline in recent years due to gradual
increase in their current liabilities.

Comparison:

The trend shows that Beximco Pharma had highest quick ratio in 2009 which declined
gradually from 2010 but the ratio remained well above “1”, which is really satisfying
and indicates that they are in a good liquid position. Square Pharmaceuticals Limited
had the highest ratio in 2013. From, 2009 to 2012, the ratios were less than “1” which
is not satisfactory. In case of Renata Limited, the ratio was highest in 2012 but their
overall ratio is well below “1”, which indicates that they are unable to pay off their
current liabilities properly at the moment.

Overall, Beximco Pharma is in a strong position in comparison with the other two (02)
organizations as Beximco Pharma have maintained a very promising ratio over the
years. It indicates that, they are in a prime position to pay off their current debts with
their current liquid assets at the moment.

43
 Inventory Turnover:

Sufficient amount of inventory is must to do successful business. This ratio basically

shows that over a period, how many times the inventories are sold and renovated.
Generally, a company with high inventory turnover ratio is assumed as strong one.
When the inventory level is very high, the ratio will be low which means poor sales and
the inventories are kept idle in the warehouse. Definitely, it is bad for future growth of
the company. The turnover ratio for perishable good is normally very high as these are
sold out quickly. Although high inventory turnover ratio is desirable, sometimes it may
indicate ineffective buying.

Formula:

𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑆𝑜𝑙𝑑

𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

Ratio Trend:

5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2009 2010 2011 2012 2013
Beximco 1.59 1.79 1.92 2.07 2.33
Square 3.05 3.24 3.21 3.61 4.45
Renata 1.79 2.02 2.15 2.03 1.86

Trend 3: Analysis & Comparison of Inventory Turnover

Analysis:

In case of inventory turnover, Beximco Pharma is maintaining a moderate ratio.

Organization’s inventory turnover reached to its highest level 2013 and gradually
increasing from 2009, which is a positive sign. Still we can say that their sales in not
that impressive at the moment to reduce its inventory level.

44
 Comparison:

The trend shows that, Beximco Pharma has a highest ratio in 2013 but possess the
lowest turnover ratios most of the years compared to its competitors. On the other hand,
Square Pharmaceuticals Limited in maintaining a very impressive ratio that reached to
its peak position in 2013. In case of Renata Limited, they also have failed to maintain
a good ratio because of their excessive inventory keeping and in 2011 the ratio reached
to its company highest.

Overall, Beximco Pharma is maintaining a stable inventory turnover but their financial
statements signifies that they have a huge unused inventories which increased the cost
and reduced their profit. So, they need to be careful in maintaining sufficient inventories
(but not excessive) to meet up the needs.

Overall Review on Liquidity Ratios:

Beximco Pharma is maintaining more or less a strong position in all the liquidity ratios that I
have discussed. They are really in a strong position in current ratio and acid-test (quick) ratio
but a bit moderate in terms of inventory turnover. They may be facing certain problems because
of inflation, which is increasing the price of raw materials and eventually their accounts
payables and also because of the increase in government regulations, which is increasing their
tax payables. Because of that, they may be facing problems in maintaining a healthy liquidity
ratios in recent years.

45
Profitability Ratios:

Profitability ratios designate an organization's overall efficiency and performance. It

measures how to use of organization’s assets and control of its expenses to generate an
acceptable rate of return.

 Net Profit Margin:

A ratio of profitability calculated as net income divided by revenues, or net profit

divided by sales. It measures how much out of every dollar of sales a company actually
earns. This is also known as profit margin. Higher the profit margin, better the condition
of the firm. Higher profit margin means that higher portion is remaining as profit after
the selling activity takes place. So it also indicates towards efficient expense controlling
ability. Increased earnings are good, but an increase in sales does not mean that the
profit margin of a company is improving. For instance, if a company has costs that have
increased at a greater rate than sales, it leads to a lower profit margin. This is an
indication that costs need to be under better control.

Formula:

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕 𝑴𝒂𝒓𝒈𝒊𝒏 =
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 (𝑅𝑒𝑣𝑒𝑛𝑢𝑒)

Ratio Trend:

20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2009 2010 2011 2012 2013
Beximco 13.00% 16.00% 15.00% 14.00% 13.00%
Square 16.00% 17.00% 16.00% 18.00% 19.00%
Renata 15.00% 17.00% 17.00% 16.00% 16.00%

Trend 4: Analysis & Comparison of Net Profit Margin

46
 Analysis:

Beximco Pharma has maintained a pretty good net profit margin in the last five (05)
years but it is declining gradually. The ratio reached to its highest in the year 2010 but
reducing afterwards due to increase in cost.

Comparison:

The trend shows that, Beximco Pharma is having a gradual decline in their net profit
margin in recent years (2011-2013). Though the rate was seen to be improving in 2010,
it again declined afterwards. Square Pharmaceuticals Limited is seen to be in the most
satisfactory situation compared to its competitors. It has been maintain the most stable
performance and the rate is also higher in every years. In case of Renata Limited, we
can see that the rate reached to its highest in 2010 and remained highest 2011 but
declined afterwards. Still their ratio is better than Beximco Pharma and closer to Square
Pharmaceuticals Limited on average.

Overall, Beximco Pharma is maintaining a steady ratio but it is not in an improving

trend compared to its competitor Square Pharmaceuticals Limited. From all these three
(03) companies comparison, it is quite clear that Beximco Pharma needs to pay more
attention in increasing their sales and reducing the costs in order to compete and run
their operations successfully.

 Asset Turnover:

Asset Turnover measures how much sales revenue is gathered in against each dollar of
assets. It indicates the efficiency of asset management of a firm. Higher the ratio, higher
the efficiency of the firm. If a company can generate more sales with fewer assets it has
a higher turnover ratio which tells it is a good company because it is using its assets
efficiently. A lower turnover ratio tells that the company is not using its assets
optimally.

Formula:

𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
𝑨𝒔𝒔𝒆𝒕 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑠𝑠𝑒𝑡𝑠

47
Ratio Trend:

1.20
1.00
0.80
0.60
0.40
0.20
0.00
2009 2010 2011 2012 2013
Beximco 0.28 0.31 0.36 0.39 0.40
Square 0.94 0.90 0.85 0.90 0.92
Renata 1.11 1.13 1.02 0.88 0.78

Trend 5: Analysis & Comparison of Asset Turnover

Analysis:

We can see from the trend that Beximco Pharma is maintaining a poor asset turnover
ratio. Though the ratio is increasing gradually and reached its highest in 2013, still it is
not good enough to compete in such a competitive industry. This rate signifies their
lack of efficiency in asset management.

Comparison:

In comparison to its competitors, Beximco Pharma is not in a good position in terms of

asset turnover. Same goes for Square Pharmaceuticals Limited as they are also
maintaining a turnover less than “1” for past few years which indicates less satisfactory
asset management. However, Renata Limited has a satisfactory turnover ratio in
comparison to its competitors but still it is declining in recent years.
Overall, the asset turnover of Beximco Pharma is increasing steadily but it is not good
enough to compete. They are not in a good position in case of generating revenues
against each dollar of asset. They need to start using their assets optimally to ensure
generate large amount of profits.

48
 Return on Assets (ROA):

Return on asset is an indicator of how profitable a company is relative to its total assets.
ROA gives an idea of how competent management is at using its assets to generate
earnings. It is calculated by dividing a company's annual earnings by its average total
assets, ROA is displayed as a percentage. Sometimes this is referred to as "return on
investment". The assets of the company are comprised of both debt and equity. Both of
these types of financing are used to fund the operations of the company. The ROA
figure gives investors an idea of how effectively the company is converting the money
it has to invest into net income. The higher the ROA number, the better, because the
company is earning more money on less investment.

Formula:

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝑨𝒔𝒔𝒆𝒕𝒔 (𝑹𝑶𝑨) =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

Ratio Trend:

20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2009 2010 2011 2012 2013
Beximco 4.00% 5.00% 5.00% 6.00% 5.00%
Square 15.00% 15.00% 14.00% 16.00% 17.00%
Renata 17.00% 19.00% 17.00% 14.00% 12.00%

Trend 6: Analysis & Comparison of Return on Assets (ROA)

Analysis:

The return on assets for Beximco Pharma has been decent in the last five (05) years but
not overwhelming. The rate reached its peak in 2012 but gone down in 2013 because
of the reduction on net assets.

49
 Comparison:

Among the three (03) organizations, Beximco Pharma has the lowest return on assets.
They had some improvement in 2012 but declined in 2013. Although the fluctuation
margin is not that high but still a lot of improvement needs to be done. On the other
hand, Square Pharmaceuticals Limited and Renata Limited’s trend shows that its
performance is quite good and in a stable position. Both the companies are generating
more profits in comparison to their assets.
Overall, the graph interprets that, Beximco Pharma’s rate is on a declining trend which
is a matter of much concern. It indicates that they are generating lowest amount of
return from their investments in assets. So, in order to compete with other competitors,
Beximco Pharma needs to be more effective in converting the money it has invested
into net income.

 Return on Common Shareholder’s Equity:

Return on Equity or ROE is the ratio of net income to total shareholder’s equity. It
measures how much a firm earns from the shareholders’ equity. It also shows the firm’s
efficiency at generating profits from every dollar of equity capital. Increasing ROE
indicates improved performance. In accounting sense, ROE is the true bottom line of
performance measurement.

Formula:

𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝑪𝒐𝒎𝒎𝒐𝒏 𝑺𝒉𝒂𝒓𝒆𝒉𝒐𝒍𝒅𝒆𝒓′𝒔 𝑬𝒒𝒖𝒊𝒕𝒚 (𝑹𝑶𝑬)

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 − 𝑃𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑑 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠
=
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐶𝑜𝑚𝑚𝑜𝑛 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′𝑠 𝐸𝑞𝑢𝑖𝑡𝑦

50
Ratio Trend:

90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
2009 2010 2011 2012 2013
Beximco 58.56 78.31 72.41 74.26 73.65
Square 0.20 0.21 0.18 0.20 0.21
Renata 0.31 0.33 0.31 0.27 0.24

Trend 7: Analysis & Comparison of Return on Common Shareholder’s Equity

Analysis:

Beximco Pharma is generating a high profit in every dollar of equity capital. The ratio
reached to its peak in 2010 but starts to decline in a steady rate afterwards. Still the rate
is really very high in comparison to other competitors due to their large net income.

Comparison:

The trend shows, Beximco Pharma had the highest return on equity in every year
compared to its competitors. So, it generated the highest return from their shareholders’
equity. However from 2011, it started decreasing which is not a good sign for the
management. On the other hand, Square Pharmaceuticals Limited and Renata Limited
do not have high returns but maintaining a stable rate of return. They seems to have the
lowest percentage of returns consistently. Their performance is very poor throughout
the past few years indicating a lower return generated from shareholders’ equity.
Overall, Beximco Pharma is dominating in this ratio as they are generating higher return
from shareholder’s equity.

51
 Earnings per Share (EPS):

Earnings per share or EPS expresses the earned profit against each share. It is
considered as an important tool while measuring a company’s stock performance.
Investors often judge organizations with the EPS and always prefer a high EPS.
However, always high EPS does not mean that the firm is doing well because the net
income can be manipulative which makes the EPS overestimated. Often organizations
does these in order to attract more public investments. So, relying only on EPS is never
a wise decision. Another important point is, same EPS of two (02) firms do not indicate
that the firms are equally strong; here we need to judge which firm has earned same
EPS by less investment. The firm which has done so is in better position and more
efficient than the other.

Formula:

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑬𝒂𝒓𝒏𝒊𝒏𝒈𝒔 𝑷𝒆𝒓 𝑺𝒉𝒂𝒓𝒆 (𝑬𝑷𝑺) =
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑜𝑚𝑚𝑜𝑛 𝑆ℎ𝑎𝑟𝑒𝑠 𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔

Ratio Trend:

400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00
2009 2010 2011 2012 2013
Beximco 3.50 4.18 3.93 3.77 4.01
Square 106.43 9.56 7.82 8.74 10.26
Renata 333.90 37.74 38.51 35.34 39.38

Trend 8: Analysis & Comparison on Earnings per Share (EPS)

Analysis:

Beximco Pharma is having more or less a steady EPS. It may not be too high but could
be useful and reliable for investors as often high EPS signifies manipulation on net
income. The EPS of Beximco Pharmaceuticals Limited reached to its highest in 2010

52
 but declined in a small number in 2011 and 2012. However, the ratio is in upward trend
in 2013, which is a positive sign for the company.

Comparison:

The trend shows, Renata Limited had the highest earning per share indicating their huge
earnings on less investment. Their net income was high compared to their number of
shares outstanding. In case of Square Pharmaceuticals Limited, EPS were really high
in 2009 as their net income and number of shares both increased at that time but
afterwards EPS felt down drastically due to issue of huge number of new shares by the
company. Beximco Pharma had the highest EPS in 2010 and the lowest in 2009. They
are consistently having very low EPS compared to Renata Limited and Square
Pharmaceuticals Limited.
Overall, even though by looking at the trend, the EPS of Beximco Pharma does not look
that impressive, still in my opinion, it is quite a decent rate and maybe a reliable one
for the investors too. I think it is quite a high ratio considering their investment in
comparison with their competitors.

 Price-Earnings (P-E) Ratio:

A valuation ratio of a company's current share price compared to it’s per share earnings.
The P-E ratio actually represents the expectation of investors about the firm. Higher P-
E means that investors have high expectations about the firm’s future growth and that’s
why they are interested to invest. P-E ratio also sometimes indicates how much the
investors are willing to pay for each dollar of earnings. So, in this case it is referred as
multiple. The average P-E ratio is 20-25 times. Comparing P-E ratio within firms of
same industry gives the idea of which firm is performing well.
Formula:

𝑀𝑎𝑟𝑘𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝑆𝑡𝑜𝑐𝑘

𝑷𝒓𝒊𝒄𝒆 − 𝑬𝒂𝒓𝒏𝒊𝒏𝒈𝒔 (𝑷 − 𝑬) 𝑹𝒂𝒕𝒊𝒐 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐸𝑃𝑆)

53
Ratio Trend:

400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00
2009 2010 2011 2012 2013
Beximco 44.51 32.32 23.82 14.83 11.77
Square 33.65 342.26 30.35 20.43 26.02
Renata 3.61 34.29 31.29 20.93 18.33

Trend 9: Analysis & Comparison on Price-Earnings (P-E) Ratio

Analysis:

It is visible that Beximco Pharma is maintaining a low P-E ratio is recent past. The rate
reached to its highest level in 2009 but drastically declined afterwards and came down
to 11.77 in 2013, which is way lesser than the benchmark of 20-25. Declining market
share price could be the reason behind the low P-E ratio.

Comparison:

Trend shows that, over the last five (05) years, the P-E ratio of Square Pharmaceuticals
Limited has been quite high which means that investors have great interest on its stock.
This is because Square Pharmaceuticals Limited is a well reputed organization and has
a unique brand image. The ratio was highest in 2010 and lowest but within the standard
in 2012. Renata Limited is seen to have the highest rate in 2010 and the trend shows
that the rate is decreasing which is not a very good sign for the company’s stock. In
case of Beximco Pharma, they were maintaining a healthy ratio till 2011 but declined
really quickly in 2012 and 2013, which is really alarming for the company of their
standards.

Overall, even though the investors still prefer to invest in Beximco Pharma in
comparison to their other competitors, the ratio is declining rapidly in the recent past

54
 and also way below the standard. If the ratio is not improved very soon than, it may put
a negative impact on investors towards the company.

Overall Review on Profitability Ratios:

The profitability ratios of Beximco Pharma is not that impressive like the liquidity ratios.
Except, return on common shareholder’s equity, they are struggling to maintain an impressive
figure in rest of the profitability ratios. May be extreme competition from the competitors like
Square Pharmaceuticals Limited is the reason behind their performance decline. Moreover, too
much focus on export is one more reason behind their downfall in this ratios as the local
competitors are taking most of their market shares because of their lack of performance in the
local market. As a result, they are losing customers in Bangladesh and large amount of profits.

55
Solvency Ratios:

A key metric used to measure an enterprise’s ability to meet its debt and other obligations.
The solvency ratio indicates whether a company’s cash flow is sufficient to meet its short-
term and long-term liabilities. The lower a company's solvency ratio, the greater the
probability that it will default on its debt obligations.

 Debt to Total Assets Ratio:

This ratio finds out how much of the total asset is funded through debt. A debt ratio
greater than “1” indicates that a company has more debt than assets and it is more
dependent to its creditors for necessary financing. Meanwhile, a debt ratio of less than
“1” indicates that a company has more assets than debt. The higher this ratio, the more
leveraged the company and the greater its financial risk. Although higher debt is not a
problem if interest payments are made on time, but if it is not then definitely a great
risk for the firm.

Formula:

𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡
𝑫𝒆𝒃𝒕 𝒕𝒐 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔 𝑹𝒂𝒕𝒊𝒐 =
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
Ratio Trend:

0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
2009 2010 2011 2012 2013
Beximco 0.17 0.17 0.15 0.12 0.14
Square 0.12 0.17 0.11 0.09 0.04
Renata 0.21 0.22 0.31 0.21 0.28

Trend 10: Analysis & Comparison on Debt to Total Assets Ratio

56
 Analysis:

We can see from the trend that Beximco Pharma is maintaining an impressive debt to
assets ratio, which is pretty less than “1”. The ratio was highest in 2009 and 2010, which
was reduced is the later years. It signifies that, the company has more assets than debt.

Comparison:

The trend shows that, Renata Limited had an increase in debt financing for the past few
years. In 2011, they had the highest rate 0.31 of debt financing. From Square
Pharmaceuticals Limited’s trend we can see that, in 2010 it had the highest rate and
now gradually they are focusing on decreasing their debt ratio which is a good sign in
a sense that they are now relying less on their creditors for financing. On the other hand,
Beximco Pharma had their highest rate in 2009 and 2010, but they tactfully handled
that situation to decrease their debt financing in past few years. However, there is still
room for Beximco Pharma to improve its ratio in comparison to Square
Pharmaceuticals Limited.

Overall, Beximco Pharma is maintaining a steady debt to total assets ratio which is on
the declining tread. It is a positive sign for the company but in order to compete with
Square Pharmaceuticals Limited, they need to reduce their ratio even more as Square
Pharmaceuticals Limited managed to reduce is ratio to 0.04 in 2013.

 Debt to Equity Ratio:

The debt-to-equity ratio is a measure of the relationship between the capital invested
by creditors and the capital contributed by the shareholders. Lower value of debt-to-
equity ratio is favorable indicating less risk. Higher debt-to-equity ratio is unfavorable
because it means that the business relies more on external lenders thus it is at higher
risk, especially at higher interest rates. A debt-to-equity ratio of “1” means that half of
the assets of that business is financed by debt and half by shareholders' equity. A value
higher than “1” means more assets are financed by debt than those financed by money
of shareholders' and vice versa. An increasing trend in of debt-to-equity ratio is also
alarming because it means that the percentage of assets of a business which are financed
by the debts is increasing. Higher debt can lead to both higher gain and risk, so firms
should be very careful while taking financial leverage.

57
Formula:

𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡
𝑫𝒆𝒃𝒕 𝒕𝒐 𝑬𝒒𝒖𝒊𝒕𝒚 𝑹𝒂𝒕𝒊𝒐 =
𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦

Ratio Trend:

0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
2009 2010 2011 2012 2013
Beximco 0.31 0.22 0.21 0.16 0.20
Square 0.15 0.24 0.14 0.11 0.05
Renata 0.40 0.42 0.65 0.43 0.60

Trend 11: Analysis & Comparison on Debt to Equity Ratio

Analysis:

The ratio shows that, Beximco Pharma is maintaining a good debt to equity ratio, which
is far less than “1”. It shows that on 2009 it went to the highest but afterwards, it
gradually declined in recent years. It signifies that the shareholder’s contribution is
increasing in comparison to debts.

Comparison:

The trend from graph shows that, Renata Limited is gradually having an increase in its
debt financing. In 2011, the ratio reached to its company highest, which is a matter of
concern as they are relying more on external lenders and it can be a threat if interest
rate increases. They should be careful about their financing now. The performance trend
of Square Pharmaceuticals Limited is lower than both of its big competitors. So, it can
be said to have a good position in the industry regarding its low debt financing as it is
facing lower risk. On the other hand, Beximco Pharma is maintaining their debt
financing position quite good for the past few years and it has also reduced than
previous years.

58
 Overall, Beximco Pharma is maintaining a satisfying debt to equity ratio, which is a
positive sign for the company. It signifies that they are less exposed to external investors
and thus possesses less risk.

Overall Review on Solvency Ratios:

In terms of solvency ratios, Beximco Pharma is maintaining a good ratio. They are less exposed
to external investors and have more assets than debt. The reason behind their impressiveness
in this ratios because they are mostly earns through exports. So they are earning large amount
of revenue through foreign currency, which helps them to clarify their debts and procure more
assets. However in recent years, their solvency ratios are in a declining trend and becoming
less impressive if we compare it with Square Pharmaceuticals Limited’s ratios, which is an
alarming situation for the company. It is may be because of the cash crisis that the company is
facing in recent times.

59
Equity analysis is the study of equities or stocks for the purpose of investments. The purpose
is to study companies, analyze financials and look at quantitative and qualitative aspects,
helping investors of varying degrees to make an informed decision. In simpler terms, equity
analysis is the act of gathering the following information:

Information that helps investors to decide where to put their money.

Information that traders require to understand whether to enter or exit a market position.
Information that financiers (bankers and firms) need to evaluate companies.

Calculating
OCF

Calculating
Project Cash
Flow

Calculating
NPV

Calculating
Per Share
Price

Comparison
&
Justifications

Figure 13: Steps of Equity Analysis

60
For this analysis, I have collected the annual report of Beximco Pharma of the last five (05)
years, from which, I have taken the “Balance Sheet” and “Statement of Comprehensive
Income” of the organization. Based on the last five (05) years financial statements (2009-2013)
of the organization, I have forecasted their financial standings for its next five (05) years
probable financial standings (2014-2018).

To justify this analysis, it is important to disclose all the necessary terms and calculations of
each step for proper understanding. The brief discussion of the steps mentioned in the above
figure is given below:

Step 01: Calculating Operating Cash Flow (OCF):

To calculate operating cash flow of Beximco Pharma, I basically needed three (03) elements
from their financial statements from the year 2009-2013 to forecast for next five (05) years
(2014-2018). The elements are outlined in the figure and then discussed below:

EBIT

Operating
Cash Flow

Taxes Depreciation

Figure 14: Elements Needed to Calculate Operating Cash Flow (OCF)

61
 Earnings before Interest & Tax (EBIT):

To calculate EBIT, Beximco Pharma followed a certain structure in their “Statement of

Comprehensive Income”, which is given and discussed below:

Terms Value
Net Sales Revenue xxx
(-) Cost of Goods Sold xxx
(=) Gross Profit xxx
(-) Operating Expenses xxx
(=) Profit From Operations xxx
(+) Other Income xxx
(-) Financial Cost xxx
(=) Profit Before Contribution to WPPF & Welfare Funds xxx
(-) Contribution to WPPF & Welfare Funds xxx
(=) EBIT xxx
Table 9: Structure of EBIT

 Calculation of Forecasted Net Sales Revenue:

Phase 01: I have calculated the net sales revenue growth of Beximco Pharma of each year

within the time frame of 2010-2013.

Formula:

𝑁𝑆𝑅 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟) − 𝑁𝑆𝑅 ( 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟)

𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔 𝑹𝒆𝒗𝒆𝒏𝒖𝒆 𝑮𝒓𝒐𝒘𝒕𝒉 =
𝑁𝑆𝑅 ( 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟)
Where,
NSR = Net Sales Revenue
Phase 02: Than I have made an average of the growth of net sales revenue within the time

frame of 2010-2013.

Formula:

𝑜𝑓 𝐸𝑎𝑐ℎ 𝑌𝑒𝑎𝑟 ′𝑠 𝐺𝑟𝑜𝑤𝑡ℎ

𝑨𝑽𝑮. 𝒐𝒇 𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔 𝑹𝒆𝒗𝒆𝒏𝒖𝒆 𝑮𝒓𝒐𝒘𝒕𝒉 =
4

62
 Phase 03: Lastly, I have forecasted the net sales revenue for the years 2014-2018 by using

the formula below:

Formula:

𝑭𝒐𝒓𝒆𝒄𝒂𝒔𝒕𝒆𝒅 𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔 𝑹𝒆𝒗𝒆𝒏𝒖𝒆 = {𝑃0 ∗ 1 + 𝑔 }

Where,
P0 = Net Sales Revenue (Previous Year)
g = AVG. of Net Sales Revenue Growth

 Calculation of Other Forecasted Income & Expenses:

Phase 01: Firstly, I have calculated the percentage of the rest of the income and expenses

situated in the “Statement of Comprehensive Income” of Beximco Pharma of each year

within the time frame of 2009-2013.
Formula:

𝐼𝑛𝑐𝑜𝑚𝑒 𝑜𝑟 𝐸𝑥𝑝. (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)

𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑰𝒏𝒄𝒐𝒎𝒆 𝒐𝒓 𝑬𝒙𝒑. =
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)

Phase 02: Than I have made an average of the percentage of all the income and expenses

situated in the “Statement of Comprehensive Income” within the time frame of 2009-2013.

Formula:

𝑜𝑓 𝐸𝑎𝑐ℎ 𝑌𝑒𝑎𝑟 ′𝑠 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒

𝑨𝑽𝑮. 𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑰𝒏𝒄𝒐𝒎𝒆 𝒐𝒓 𝑬𝒙𝒑. =
5
Phase 03: Lastly, I have forecasted the all the income and expenses of the “Statement of

Comprehensive Income” for the years 2014-2018 by using the formula below:

Formula:

𝑭𝒐𝒓𝒆𝒄𝒂𝒔𝒕𝒆𝒅 𝑰𝒏𝒄𝒐𝒎𝒆 𝒐𝒓 𝑬𝒙𝒑. = (𝑃0 ∗ 𝐴𝑉𝐺. 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝐼𝑛𝑐𝑜𝑚𝑒 𝑜𝑟 𝐸𝑥𝑝. )

Where,
P0 = Net Sales Revenue (Previous Year)

 Calculation of EBIT:

By calculating the forecasted net sales revenue and other income and expenses, I have
calculated the EBIT by following the structure of Table 9.

63
Depreciation:

Phase 01: Firstly, I have collected the depreciation value the last five (05) years (2009-

2013) from the annual report of Beximco Pharma. Then, with the help of the value of non-
current assets of the balance sheet, I have calculated the percentage of depreciation by using
the formula below:

Formula:

𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)

𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑫𝒆𝒑𝒓𝒆𝒄𝒊𝒂𝒕𝒊𝒐𝒏 =
𝑁𝑜𝑛 − 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)

Phase 02: Than, I made an average of the percentage of depreciation for the years 2009-

2013 by using the following formula:

Formula:

𝑜𝑓 𝐸𝑎𝑐ℎ 𝑌𝑒𝑎𝑟 ′𝑠 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒

𝑨𝑽𝑮. 𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑫𝒆𝒑𝒓𝒆𝒄𝒊𝒂𝒕𝒊𝒐𝒏 =
5
Phase 03: Lastly, I have forecasted the depreciation value for the time period of 2014-

2018 by using the formula below:

Formula:

𝑭𝒐𝒓𝒆𝒄𝒂𝒔𝒕𝒆𝒅 𝑫𝒆𝒑𝒓𝒆𝒄𝒊𝒂𝒕𝒊𝒐𝒏 = (𝑃1 ∗ 𝐴𝑉𝐺. 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛)

Where,

P1 = Non-Current Assets (Current Year)

Taxes:

Phase 01: Firstly, I have collected the value of current tax from the “Statement of

Comprehensive Income” of Beximco Pharma for the years 2009-2013. Then, I have
calculated the percentage of current tax of each year by using the following formula:

Formula:

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑇𝑎𝑥
𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑻𝒂𝒙 =
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)

64
Phase 02: Than, I made an average of the percentage of current tax for the years 2009-2013

by using the following formula:

Formula:

𝑜𝑓 𝐸𝑎𝑐ℎ 𝑌𝑒𝑎𝑟 ′𝑠 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒

𝑨𝑽𝑮. 𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑻𝒂𝒙 =
5
Phase 03: Lastly, I have forecasted the current tax for the time period of 2014-2018 by

using the formula below:

Formula:

𝑭𝒐𝒓𝒆𝒄𝒂𝒔𝒕𝒆𝒅 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑻𝒂𝒙 = (𝑃0 ∗ 𝐴𝑉𝐺. 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑇𝑎𝑥)

Where,

P0 = Net Sales Revenue (Previous Year)

65
Calculation of Operating Cash Flow (OCF):

After computing the three (03) elements needed (EBIT, Depreciation and Taxes), I have calculated the operating cash flow for the next five (05)
years (2014-2018). The calculation is shown below:

Forecasted Data

Items 2014 2015 2016 2017 2018

EBIT 4,354,040,710 5,285,306,020 6,415,755,293 7,787,991,049 9,453,727,864

(+) Depreciation 462,400,324 501,343,027 543,565,430 589,343,745 638,977,445

(-) Taxes 243,725,636 295,854,967 359,133,996 435,947,479 529,190,238

(=) Operating Cash Flow 4,572,715,398 5,490,794,080 6,600,186,727 7,941,387,315 9,563,515,071

Table 10: Calculation of Operating Cash Flow (OCF)

66
Step 02: Calculating Project Cash Flow:

To calculate the project cash flow of Beximco Pharma, I also needed three (03) elements from
the financial statements. The elements are outlined in the figure below and discussed
afterwards:

Operating
Cash Flow

Project
Cash Flow
Change in
Capital
Net Working
Spending
Capital

Figure 15: Steps of Project Cash Flow

Operating Cash Flow (OCF):

Operating cash flow (OCF) is already calculated for the forecasted years (2014-2018) in
Table 10.

Change in Net Working Capital:

Phase 01: To figure out the net working capital and then capital spending, it is imminent to

figure out the average growth of total assets and liabilities and also the average percentages
of current and non-current assets and liabilities to calculate the forecasted value of these
terms for the years 2014-2018. The computation procedure of this terms are given on the
following page:

67
 Forecasted Amount of Total Assets & Total Equity & Liabilities:

 From the balance sheet of Beximco Pharma, I have collected the value of total assets
and total equity and liabilities for the years 2009-2013. After that, I have calculated the
growth of the total assets and total equity and liabilities of each year (2010-2013) by
using the following formula:

Formula:

𝑃1 − 𝑃0
𝑮𝒓𝒐𝒘𝒕𝒉 𝒐𝒇 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔 & 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 =
𝑃0
Where,
P0 = Total Assets or Total Equity and Liabilities (Previous Year)
P1 = Total Assets or Total Equity and Liabilities (Current Year)
 After calculating the growth, I have made an average of it by using the following
formula:

Formula:

𝑜𝑓 𝐺𝑟𝑜𝑤𝑡ℎ 𝑜𝑓 𝐸𝑎𝑐ℎ 𝑌𝑒𝑎𝑟

𝑨𝑽𝑮. 𝑮𝒓𝒐𝒘𝒕𝒉 𝒐𝒇 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔 & 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 =
4

 Lastly, I have calculated the forecasted value of total assets and total equity and
liabilities for the time frame 2014-2018 by using the following formula:

 Formula:

𝑭𝒐𝒓𝒄𝒂𝒔𝒕𝒆𝒅 𝑨𝒎𝒐𝒖𝒏𝒕 𝒐𝒇 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔 & 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔

= {𝑃0 ∗ 1 + 𝐴𝑉𝐺. 𝐺𝑟𝑜𝑤𝑡ℎ 𝑜𝑓 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 & 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 }
Where,
P0 = Total Assets or Total Equity and Liabilities (Previous Year)

 Forecasted Amount of Current & Non-Current Assets:

 Firstly, I have calculated the percentage of current and non-current assets in total assets
by using the formula below:

Formula:

𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒐𝒓 𝑵𝒐𝒏 − 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑜𝑟 𝑁𝑜𝑛 − 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)
=
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)

68
  Then, I have made an average of the percentage of current or nor-current assets by using
the formula below:

Formula:

𝑨𝑽𝑮. 𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒐𝒓 𝑵𝒐𝒏 − 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔

𝑜𝑓 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝐸𝑎𝑐ℎ 𝑌𝑒𝑎𝑟
=
5

 Lastly, I have forecasted the amount of current or non-current assets for the years 2014-
2018 by using the formula below:

 Formula:

𝑭𝒐𝒓𝒆𝒄𝒂𝒔𝒕𝒆𝒅 𝑨𝒎𝒐𝒖𝒏𝒕 𝒐𝒇 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒐𝒓 𝑵𝒐𝒏 − 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔

= (𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡𝑒𝑑 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 ∗ 𝐴𝑉𝐺. % 𝑜𝑓 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑜𝑟 𝑁𝑜𝑛
− 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠)

 Forecasted Amount of Different Sections of Liabilities & Equity:

 Firstly, I have calculated the percentage of current and non-current liabilities and equity
in total equity and liabilities by using the formula below:

Formula:

𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 𝒐𝒓 𝑬𝒒𝒖𝒊𝒕𝒚

𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑜𝑟 𝐸𝑞𝑢𝑖𝑡𝑦 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)
=
𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦 & 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)

 Then, I have made an average of the percentage of current and non-current liabilities
and equity by using the formula below:

Formula:

𝑨𝑽𝑮. 𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒐𝒇 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 𝒐𝒓 𝑬𝒒𝒖𝒊𝒕𝒚

𝑜𝑓 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑜𝑟 𝐸𝑞𝑢𝑖𝑡𝑦
=
5

69
 Lastly, I have forecasted the amount of current and non-current liabilities and equity
for the years 2014-2018 by using the formula below:

Formula:

𝑭𝒐𝒓𝒆𝒄𝒂𝒔𝒕𝒆𝒅 𝑨𝒎𝒐𝒖𝒏𝒕 𝒐𝒇 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 𝒐𝒓 𝑬𝒒𝒖𝒊𝒕𝒚

= (𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡𝑒𝑑 𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦 & 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
∗ 𝐴𝑉𝐺. % 𝑜𝑓 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑜𝑟 𝐸𝑞𝑢𝑖𝑡𝑦)

Phase 02: As all the necessary calculations are done, I started to calculate the net working

capital by using the following formula:

Formula:

𝑵𝒆𝒕 𝑾𝒐𝒓𝒌𝒊𝒏𝒈 𝑪𝒂𝒑𝒊𝒕𝒂𝒍 = {𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟) −

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)}

Phase 03: After computing the net working capital, I have calculated the change in net

working capital by following the formula below:

Formula:

𝑪𝒉𝒂𝒏𝒈𝒆 𝒊𝒏 𝑵𝒆𝒕 𝑾𝒐𝒓𝒌𝒊𝒏𝒈 𝑪𝒂𝒑𝒊𝒕𝒂𝒍

= {𝑁𝑒𝑡 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟)
− 𝑁𝑒𝑡 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 (𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟)}

Capital Spending:

Capital spending is calculated by using the following formula:

Formula:

𝑪𝒂𝒑𝒊𝒕𝒂𝒍 𝑺𝒑𝒆𝒏𝒅𝒊𝒏𝒈
= {𝑁𝑜𝑛 − 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 (𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟) − 𝑁𝑜𝑛
− 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 (𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟)}

70
Calculation of Project Cash Flow:

After computing the three (03) elements needed (Operating Cash Flow, Change in Net Working Capital and Capital Spending), I have calculated
the project cash flow for the next five (05) years (2014-2018). The calculation is given below:

Forecasted Data

Items 2014 2015 2016 2017 2018

Operating Cash Flow 4,572,715,398 5,490,794,080 6,600,186,727 7,941,387,315 9,563,515,071

(-) Change in Net Working Capital 1,268,050,758 487,532,310 528,591,594 573,108,833 621,375,251

(-) Capital Spending 1,654,752,956 1,703,075,283 1,846,505,883 2,002,016,006 2,170,622,973

(=) Project Cash Flow 1,649,911,683 3,300,186,488 4,225,089,251 5,366,262,476 6,711,516,847

Table 11: Calculation of Project Cash Flow

71
Step 03: Calculating Net Present Value (NPV):

Phase 01: To calculate the net present value, it was necessary to compute the required rate of

return (Ke). The formula through which I have calculated the required rate of return (K e) is
given below:

Formula:

𝑲𝒆 = 𝑅𝑓 + 𝑅𝑚 − 𝑅𝑓 ∗ 𝛽

Where,

Ke = Required Rate of Return

Rf = Risk Free Rate

Rm = Return on Market Portfolio

β = Systematic Risk

The calculation of required rate of return is given below. All the values used in the formula
below is directly taken from “Stock Bangladesh Website”.

Required Rate of Return (Ke)

Formula Calculation Value
Rf + (Rm – Rf) × β 0.05 + (0.078 – 0.05) × 1.09 Ke = 0.08 or 8%
Table 12: Calculation of Required Rate of Return

Phase 02: After computing the required rate of return (Ke), I have calculated the cash flows

needed to calculate net present value (NPV) by using the following formula:

Formula:

𝑃𝑟𝑜𝑗𝑒𝑐𝑡 𝐶𝑎𝑠ℎ 𝐹𝑙𝑜𝑤

𝑪𝒂𝒔𝒉 𝑭𝒍𝒐𝒘𝒔 =
(1 + 𝑖)𝑛

Where,

i = Required Rate of Return

n = Time Period

72
Phase 03: After computing each year’s cash flows, I have calculated the net present value of

the forecasted years (2014-2018) using the formula below:

Formula:

𝑵𝒆𝒕 𝑷𝒓𝒆𝒔𝒆𝒏𝒕 𝑽𝒂𝒍𝒖𝒆 (𝑵𝑷𝑽) = 𝑜𝑓 𝐶𝑎𝑠ℎ 𝐼𝑛𝑓𝑙𝑜𝑤𝑠 − 𝑜𝑓 𝐶𝑎𝑠ℎ 𝑂𝑢𝑡𝑓𝑙𝑜𝑤𝑠

73
Calculation of Net Present Value (NPV):

After computing all necessary elements, I have calculated the net present value (NPV) for the next five (05) years (2014-2018). The calculation is
given below:

Forecasted Data

Items 2014 2015 2016 2017 2018

Project Cash Flow 1,649,911,683 3,300,186,488 4,225,089,251 5,366,262,476 6,711,516,847

(÷) (1+i)n (1+0.08)1 = 1.08 (1+0.08)2 = 1.17 (1+0.08)3 = 1.26 (1+0.08)4 = 1.36 (1+0.08)5 = 1.47

(=) Cash Flows 1,527,696,003 2,829,377,990 3,354,012,068 3,944,363,118 4,608,580,584

Net Present Value (NPV) (1,527,696,003 + 2,829,377,990 + 3,354,012,068 + 3,944,363,118 + 4,608,580,584) = 16,264,029,764

Table 13: Calculation of Net Present Value (NPV)

74
Step 04: Calculating Per Share Price:

In order to compare afterwards, I have calculated two (02) types of per share price which is
listed below and calculation procedure is shown afterwards:

Intrinsic
Price
Per Share
Price
Market
Paice

Figure 16: Types of Per Share Price

Intrinsic Price:

Based on Forecasted Data

Items Value

Net Present Value (NPV) 16,264,029,764

(÷) Number of Share Outstanding 367,851,652

Intrinsic Price 44.00 TK

Table 14: Calculating Intrinsic Price

Market Price:

Based on DSE Data

Month & Year Price (Average Per Month)

January, 2014 51.81 TK

February, 2014 52.36 TK
March, 2014 50.48 TK

Average Market Price 51.55 TK

Table 15: Calculation of Average Market Price

75
Step 05: Comparison & Justifications:

Comparison between Intrinsic & Market Price:

52.00
50.00
48.00
TAKA

46.00
44.00
42.00
40.00
INTRINSIC PRICE MARKET PRICE

Intrinsic Price Market Price

Beximco Pharma 44.00 51.55

Trend 12: Comparison Between Intrinsic & Market Price

Analysis of the Trend

The trend signifies the intrinsic price on the left and the market price on the right. It shows
us that the market price is TK 51.55, which is significantly higher than the intrinsic price
of TK 44.00. So, we can reach to an outcome that the shares of Beximco Pharma is
overpriced.

Justification of Shares being Overpriced:

 Loan From German Bank:

Beximco Pharma has secured about $51.60 million from Frankfurt-based BHF-Bank
Aktiengesellshaft to expand its production. The loan will come to an interest rate of
2.25 percent a year in addition to LIBOR (London Interbank Offered Rate), which is
lower than the local interest rate. The loan will be guaranteed by Hamburg-based Euler
Hermes, a German export credit agency. Moreover, Beximco Pharma has also received
approval from the Board of Investment of Bangladesh to raise the fund, which will be
utilized to partially finance a new plant and machinery purchase. So this particular news
has positively impacted the investors which eventually increased the price of the share
of the company.

76
 Increase in Exports:

Beximco Pharma has announced the initiation of export to Australia, with the launch of
Pantoprazole, a drug for treating gastrointestinal disorder. This is the first time a
pharmaceutical product from Bangladesh has been exported in Australia. This export
inauguration with increase their revenue even more, which eventually attracts the
investors. As a result, the market share price increased.

 GMP Approvals from Regulatory Authorities:

Beximco Pharma has received good manufacturing practice (GMP) accreditation for its
oral solid inhaler and sterile eye drop facilities from the Taiwan Food and Drug
Administration (TFDA). Not only that, they also received GMP approval from the
Canadian regulatory authority, Health Canada, which makes them the first Bangladeshi
company to receive GMP accreditation from not only Health Canada but also from
TFDA. This prestigious and notable achievements opens a new marketing opportunity
for Beximco Pharma’s products in the ASEAN market, including Taiwan and also in
Canada, which are some of the most advanced pharmaceutical markets in the world. So
expansion of markets for such honors encourages to investors to invest in Beximco
Pharma’s shares.

 Capacity Expansion Program:

In order to overcome the capacity bottlenecks and expand its product portfolio,
Beximco Pharma has recently undertaken a huge expansion program. The expansion
was financed through issuance of fully convertible preference shares worth BDT 4.1
billion, which worked as an influencing factor in their share being overpriced.

77
 Chapter: 06

Recommendation
After sufficient research for making this report, I can clearly say that Beximco Pharma is the
leading manufacturer and exporter of finished formulations and active pharmaceutical
ingredients (APIs) of this industry. It is the largest private sector industrial conglomerate in
Bangladesh. They have significant strengths which makes them more enormous as a business
but like any other companies, the do possess certain weaknesses. As pharmaceuticals industry
is one of the most flourishing industry of our country, it creates significant opportunities for
the companies like Beximco Pharma but also creates massive threats in terms of product
differentiation and competition. As an intern, I have been involved into the daily activities of
Beximco Pharma for two (02) months and through my own personal observation, I have figured
out some certain aspects which goes in favor of them and some which goes against them.
Through a TOWS analysis, I will identify its strengths, weaknesses, opportunities and threats
and then by combining all these elements, I will provide an overall recommendation.

TOWS analysis is a process that requires management to think critically of its operations. By
identifying several action plans that could improve the company's position, TOWS analysis
allows management to choose those strategies that most effectively capitalize on the available
opportunities.

Figure 17: Structure of TOWS Analysis

78
 Internal Strengths Internal Weaknesses
S-1: High Quality Products with Innovation & W-1: Lack of Working Capital
Product Differentiation. W-2: Lack of Backward Linkage

TOWS
S-2: Innovative Marketing Strategies & Aggressive
W-3: Dependency in Exports Than Domestic
Product Promotion.
Market
S-3: Loyalty of Customers and Vendors
W-4: Higher Per Unit Cost of Medicines
S-4: Efficient Quality Control System
W-5: Higher Selling Price in Domestic Market.
S-5: Leader in Export of Medicines
External Opportunities S to O O to W
O-1: Growing Demand for Effective Medicines S-1 to O-1: Beximco Pharma should serve the O-4 to W-4: Beximco Pharma should capitalize the
O-2: Technological Advancement growing market of proper and effective medicines
through its innovative high quality products. low cost production facility in Bangladesh in order
O-3: Rapid Growth of Pharmaceuticals Industry
S-2 to O-2: Beximco Pharma should use the to reduce it’s per unit cost of medicines.
O-4: Low Cost of Production in Bangladesh technological advancement to promote its products
O-5: BAPI Eyes Expansion of Pharmaceutical more aggressively and innovatively.
Markets By Exporting into New Countries
External Threats S to T W to T
T-1: Intense Competition & Losing Market Share. S-1 to T-1: Beximco Pharma should maintain its W-2 to T-3: By increasing the backward linkage,
T-2: Expiration of TRIPS Waiver in 2016 high quality of products to reduce the effect of high
competition and also to regain the market share that Beximco Pharma should reduce its exposure to the
T-3: Fluctuation of Exchange Rates in Case of Raw it has lost.
fluctuation of interest rates for raw material import,
Material Import S-4 to T-4: Beximco Pharma should use its efficient
which will also help the company to reduce its per
T-4: Government & International Regulations quality control system as a medium to force the
unit costs and selling price.
T-5: Rising Trend of Material Price regulatory authorities to lenient its regulations.

Table 16: TOWS Analysis on Beximco Pharmaceuticals Limited

79
 Chapter: 07

Conclusion
Beximco Pharmaceuticals Limited is a leading edge pharmaceutical company and is a member
of the Beximco Group, the largest private sector industrial conglomerate in Bangladesh.
Beximco Pharma is also the largest exporter of pharmaceuticals from Bangladesh, spreading
its presence in many developing and developed countries across the globe. BPL has
successfully made its footmark in the global market when it made its debut on the London
Stock Exchange as the first Bangladeshi company to be listed in the world's most prestigious
bourse. This milestone event has widened the responsibility, accountability and transparency
of the company beyond geographical border. Beximco Pharma is committed to be a participant
in health care and to help change millions of lives for the better health through providing
effective and high quality medicines and related health care services to the people who need
them. The core business of the company is manufacturing, marketing and distribution of
generic human pharmaceuticals products. The company believe in scientific excellence and
invest in research and development to provide innovative, differentiated medicines that address
the unmet medical needs. Beximco Pharma is committed to economic, social and
environmental sustainability and extend the expectation to its suppliers. It embraces a diverse
workforce in a unique corporate culture. It has developed a very competent sales team, which
promotes the specialties throughout the country. The company has a clear vision to become a
leading research based dosage form manufacturing company with global presence within a
short period of time.

Industrial analysis is a part of financial statement analysis through which the performance of a
company’s past and present position is measured. Most importantly, it gives an idea about the
company’s performance in the future. Industry analysis involves the calculation of statistical
relationship between data and it is a very popular technique of financial statement analysis.
Equity analysis is also a necessary tool through which the current position of the company’s
shares are evaluated. Throughout my analysis, I came to know about the financial strengths,
operational and management efficacy of BPL, Square Pharmaceuticals Limited and Renata
Limited. I have realized BPL’s position compared to its competitors and I have seen that it is
performing well. It is financially solvent but still there are some threats which need to be
handled properly to survive and have more successful position in the industry. Through an
equity analysis, I have also seen the position of BPL’s shares price (both market and intrinsic
price) and through additional research, I came up reasons behind its overvalued shares. Overall
its shares are doing really well in the market and but like any other great companies, BPL
should work and analyze even more to improve its situation even further.

80
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85
Appendix
 Current Ratio of Beximco Pharmaceuticals Ltd.
Items 2009 2010 2011 2012 2013
Current Assets:
Inventories 1,722,953,284.00 1,983,809,444.00 2,291,844,631.00 2,433,987,981.00 2,411,881,986.00
Spares & Supplies 242,034,855.00 276,520,188.00 325,881,244.00 396,175,790.00 433,352,407.00
Accounts Receivable 694,111,730.00 821,356,439.00 978,224,317.00 1,162,404,807.00 1,249,434,697.00
Loans, Advances & Deposits 699,204,450.00 779,129,620.00 840,320,705.00 965,276,373.00 1,186,637,111.00
Short Term Investments 2,500,000,000.00 859,403,704.00 2,193,423,560.00 2,686,598,326.00 3,026,383,161.00
Cash & Cash Equivalents 1,058,433,574.00 1,471,448,436.00 518,768,296.00 552,978,676.00 595,732,966.00
Total Current Assets 6,916,737,893.00 6,191,667,831.00 7,148,462,753.00 8,197,421,953.00 8,903,422,328.00
Current Liabilities:
Short Term Borrowings 1,451,326,354.00 1,639,961,052.00 1,642,216,008.00 1,526,449,918.00 2,776,266,125.00
Long Term Borrowings-
308,820,056.00 348,860,443.00 363,744,181.00 664,712,728.00 754,903,558.00
Current Maturity
Creditors & Other Payables 409,898,122.00 432,315,660.00 523,798,136.00 470,097,685.00 383,170,553.00
Accrued Expenses 79,094,905.00 90,512,178.00 101,559,917.00 128,598,961.00 141,582,304.00
Dividend Payable 1,727,724.00 1,507,899.00 1,361,452.00 1,020,948.00 973,367.00
Income Tax Payable 70,584,481.00 - 15,482,294.00 274,064,529.00 325,685,371.00
Total Current Liabilities 2,321,451,642.00 2,513,157,232.00 2,648,161,988.00 3,064,944,769.00 4,382,581,278.00

Current Ratio 2.98 2.46 2.70 2.67 2.03

86
 Acid-Test Ratio of Beximco Pharmaceuticals Ltd.
Items 2009 2010 2011 2012 2013
Cash & Cash Equivalents 1,058,433,574.00 1,471,448,436.00 518,768,296.00 552,978,676.00 595,732,966.00
(+) Short Term Investments 2,500,000,000.00 859,403,704.00 2,193,423,560.00 2,686,598,326.00 3,026,383,161.00
(+) Accounts Receivable
694,111,730.00 821,356,439.00 978,224,317.00 1,162,404,807.00 1,249,434,697.00
(Net)
(/) Current Liabilities 2,321,451,642.00 2,513,157,232.00 2,648,161,988.00 3,064,944,769.00 4,382,581,278.00

Acid-Test Ratio 1.83 1.25 1.39 1.44 1.11

Inventory Turnover of Beximco Pharmaceuticals Ltd.

Items 2009 2010 2011 2012 2013

Cost of Goods Sold 2,566,206,626.00 3,317,640,254.00 4,103,709,021.00 4,899,713,857.00 5,651,898,878.00

Inventory (Current Period) 1,722,953,284.00 1,983,809,444.00 2,291,844,631.00 2,433,987,981.00 2,411,881,986.00
Inventory (Previous Period) 1,505,288,093.00 1,722,953,284.00 1,983,809,444.00 2,291,844,631.00 2,433,987,981.00
Average Inventory 1,614,120,688.50 1,853,381,364.00 2,137,827,037.50 2,362,916,306.00 2,422,934,983.50

Inventory Turnover 1.59 1.79 1.92 2.07 2.33

87
 Profit Margin of Beximco Pharmaceuticals Limited
Items 2009 2010 2011 2012 2013
Net Income 624,740,307.00 1,051,648,808.00 1,198,525,342.00 1,319,389,328.00 1,406,104,399.00
Net Sales 4,868,254,915.00 6,490,847,353.00 7,890,241,843.00 9,289,115,284.00 10,490,699,094.00

Profit Margin 13% 16% 15% 14% 13%

Asset Turnover of Beximco Pharmaceuticals Ltd.

Items 2009 2010 2011 2012 2013

Net Sales 4,868,254,915.00 6,490,847,353.00 7,890,241,843.00 9,289,115,284.00 10,490,699,094.00

Total Assets (Current Period) 19,891,933,422.00 21,372,399,509.00 23,033,340,533.00 24,589,810,592.00 27,470,751,802.00
Total Assets (Previous Period) 14,819,665,441.00 19,891,933,422.00 21,372,399,509.00 23,033,340,533.00 24,589,810,592.00
Average Assets 17,355,799,431.50 20,632,166,465.50 22,202,870,021.00 23,811,575,562.50 26,030,281,197.00

Asset Turnover 0.28 0.31 0.36 0.39 0.40

88
 Return on Assets of Beximco Pharmaceuticals Ltd.
Items 2009 2010 2011 2012 2013

Net Income 624,740,307.00 1,051,648,808.00 1,198,525,342.00 1,319,389,328.00 1,406,104,399.00

Total Assets (Current Period) 19,891,933,422.00 21,372,399,509.00 23,033,340,533.00 24,589,810,592.00 27,470,751,802.00
Total Assets (Previous Period) 14,819,665,441.00 19,891,933,422.00 21,372,399,509.00 23,033,340,533.00 24,589,810,592.00
Average Assets 17,355,799,431.50 20,632,166,465.50 22,202,870,021.00 23,811,575,562.50 26,030,281,197.00

Return on Assets 4% 5% 5% 6% 5%

Earnings Per Share (EPS) of Beximco Pharmaceuticals Ltd.

Item 2009 2010 2011 2012 2013

Earnings Per Share (EPS) 3.50 4.18 3.93 3.77 4.01

Return on Common Stockholder's Equity of Beximco Pharmaceuticals Ltd.

Items 2009 2010 2011 2012 2013
Net Income 624,740,307.00 1,051,648,808.00 1,198,525,342.00 1,319,389,328.00 1,406,104,399.00
(-) Preferred Dividends - - - - -
Common Stockholder's Equity (Current Year) 10,885,707.00 15,974,086.00 17,128,128.00 18,408,162.00 19,775,552.00
Common Stockholder's Equity (Previous Year) 10,450,202.00 10,885,707.00 15,974,086.00 17,128,128.00 18,408,162.00
Average Common Stockholder's Equity 10,667,954.50 13,429,896.50 16,551,107.00 17,768,145.00 19,091,857.00

Return on Common Stockholder's Equity 58.56 78.31 72.41 74.26 73.65

89
 Price-Earnings (P-E) Ratio of Beximco Pharmaceuticals Ltd.
Item 2009 2010 2011 2012 2013

Market Price Per Share of Stock 155.80 135.10 93.60 55.90 47.20

Earnings Per Share (EPS) 3.50 4.18 3.93 3.77 4.01

Price-Earnings (P-E) Ratio 44.51 32.32 23.82 14.83 11.77

Debt to Equity Ratio of Beximco Pharmaceuticals Ltd.

Items 2009 2010 2011 2012 2013
Debts:
Short Term Borrowings 1,451,326,354.00 1,639,961,052.00 1,642,216,008.00 1,526,449,918.00 2,776,266,125.00
Long Term Borrowings 1,924,933,065.00 1,902,150,733.00 1,890,074,651.00 1,469,621,611.00 1,151,400,702.00
Total Debt 3,376,259,419.00 3,542,111,785.00 3,532,290,659.00 2,996,071,529.00 3,927,666,827.00

Total Shareholder's Equity 10,885,706,614.00 15,974,086,451.00 17,128,128,177.00 18,408,161,859.00 19,775,552,465.00

Debt to Equity Ratio 0.31 0.22 0.21 0.16 0.20

90
 Debt to Total Assets Ratio of Beximco Pharmaceuticals Ltd.
Items 2009 2010 2011 2012 2013
Debts:
Short Term Borrowings 1,451,326,354.00 1,639,961,052.00 1,642,216,008.00 1,526,449,918.00 2,776,266,125.00
Long Term Borrowings 1,924,933,065.00 1,902,150,733.00 1,890,074,651.00 1,469,621,611.00 1,151,400,702.00
Total Debt 3,376,259,419.00 3,542,111,785.00 3,532,290,659.00 2,996,071,529.00 3,927,666,827.00
Assets:
Non-Current Assets 12,975,195,529.00 15,180,731,678.00 15,884,877,780.00 16,392,388,639.00 18,567,329,474.00
Current Assets 6,916,737,893.00 6,191,667,831.00 7,148,462,753.00 8,197,421,953.00 8,903,422,328.00
Total Assets 19,891,933,422.00 21,372,399,509.00 23,033,340,533.00 24,589,810,592.00 27,470,751,802.00

Debt to Total Assets Ratio 0.17 0.17 0.15 0.12 0.14

91
 Current Ratio of Square Pharmaceuticals Ltd.
Items 2009-10 2010-11 2011-12 2012-13 2013-14
Current Assets:
Inventories 2,207,078,082.00 2,541,688,329.00 3,178,672,614.00 3,091,263,712.00 2,737,085,779.00
Trade Debtors 508,249,174.00 772,421,345.00 819,002,633.00 812,741,029.00 766,634,978.00
Advances, Deposits &
358,250,076.00 523,991,079.00 694,844,720.00 952,411,276.00 671,749,541.00
Prepayments
Short Term Loan 1,220,736,941.00 2,813,811,332.00 1,717,273,322.00 1,108,757,914.00 1,161,185,776.00
Margin Against BTB Letter of
- - 1,091,148,736.00 - -
Credit
Cash & Cash Equivalents 258,727,695.00 370,301,755.00 747,628,997.00 981,187,836.00 2,162,717,207.00
Total Current Assets 4,553,041,968.00 7,022,213,840.00 8,248,571,022.00 6,946,361,767.00 7,499,373,281.00

Current Liabilities:
Short Term Bank Loans 736,443,848.00 2,627,483,864.00 2,237,495,956.00 1,302,048,378.00 131,104,817.00
Long Term Loans-Current
462,090,211.00 478,199,933.00 477,141,480.00 540,421,336.00 461,433,822.00
Portion
Trade Creditors 394,715,915.00 733,369,218.00 531,295,427.00 7,034,721.00 217,855,755.00
Liabilities for Expenses 56,463,570.00 79,499,584.00 114,515,510.00 173,261,777.00 20,518,598.00
Liabilities for Other Finance 567,030,857.00 749,636,827.00 954,941,984.00 1,252,641,218.00 1,563,624,134.00
Total Current Liabilities 2,216,744,401.00 4,668,189,426.00 4,315,390,357.00 3,275,407,430.00 2,394,537,126.00

Current Ratio 2.05 1.50 1.91 2.12 3.13

92
 Acid-Test Ratio of Square Pharmaceuticals Ltd.
Items 2009-10 2010-11 2011-12 2012-13 2013-14
Cash & Cash Equivalents 258,727,695.00 370,301,755.00 747,628,997.00 981,187,836.00 2,162,717,207.00
(+) Short Term Loan 1,220,736,941.00 2,813,811,332.00 1,717,273,322.00 1,108,757,914.00 1,161,185,776.00
(+) Trade Debtors (Net) 508,249,174.00 772,421,345.00 819,002,633.00 812,741,029.00 766,634,978.00
(/) Current Liabilities 2,216,744,401.00 4,668,189,426.00 4,315,390,357.00 3,275,407,430.00 2,394,537,126.00

Acid-Test Ratio 0.90 0.85 0.76 0.89 1.71

Inventory Turnover of Square Pharmaceuticals Ltd.

Items 2009-10 2010-11 2011-12 2012-13 2013-14

Cost of Goods Sold 6,561,288,485.00 7,703,661,010.00 9,167,253,620.00 11,308,857,708.00 12,960,738,683.00

Inventory (Current Period) 2,207,078,082.00 2,541,688,329.00 3,178,672,614.00 3,091,263,712.00 2,737,085,779.00
Inventory (Previous Period) 2,098,755,231.00 2,207,078,082.00 2,541,688,329.00 3,178,672,614.00 3,091,263,712.00
Average Inventory 2,152,916,656.50 2,374,383,205.50 2,860,180,471.50 3,134,968,163.00 2,914,174,745.50

Inventory Turnover 3.05 3.24 3.21 3.61 4.45

93
 Profit Margin of Square Pharmaceuticals Limited
Items 2009-10 2010-11 2011-12 2012-13 2013-14
Net Income 2,159,536,317.00 2,624,537,639.00 3,037,696,965.00 4,106,630,847.00 5,081,928,495.00
Net Sales 13,279,141,757.00 15,576,487,536.00 18,592,856,236.00 23,360,199,256.00 26,945,687,557.00

Profit Margin 16% 17% 16% 18% 19%

Asset Turnover of Square Pharmaceuticals Ltd.

Items 2009-10 2010-11 2011-12 2012-13 2013-14

Net Sales 13,279,141,757.00 15,576,487,536.00 18,592,856,236.00 23,360,199,256.00 26,945,687,557.00

Total Assets (Current Period) 15,029,500,278.00 19,444,409,654.00 24,562,168,660.00 27,551,671,215.00 31,046,074,531.00
Total Assets (Previous Period) 13,251,242,856.00 15,029,500,278.00 19,444,409,654.00 24,562,168,660.00 27,551,671,215.00
Average Assets 14,140,371,567.00 17,236,954,966.00 22,003,289,157.00 26,056,919,937.50 29,298,872,873.00

Asset Turnover 0.94 0.90 0.85 0.90 0.92

94
 Return on Assets of Square Pharmaceuticals Ltd.
Items 2009-10 2010-11 2011-12 2012-13 2013-14

Net Income 2,159,536,317.00 2,624,537,639.00 3,037,696,965.00 4,106,630,847.00 5,081,928,495.00

Total Assets (Current Period) 15,029,500,278.00 19,444,409,654.00 24,562,168,660.00 27,551,671,215.00 31,046,074,531.00
Total Assets (Previous Period) 13,251,242,856.00 15,029,500,278.00 19,444,409,654.00 24,562,168,660.00 27,551,671,215.00
Average Assets 14,140,371,567.00 17,236,954,966.00 22,003,289,157.00 26,056,919,937.50 29,298,872,873.00

Return on Assets 15% 15% 14% 16% 17%

Earnings Per Share (EPS) of Square Pharmaceuticals Ltd.

Item 2009-10 2010-11 2011-12 2012-13 2013-14

Earnings Per Share (EPS) 106.43 9.56 7.82 8.74 10.26

Return on Common Stockholder's Equity of Square Pharmaceuticals Ltd.

Items 2009-10 2010-11 2011-12 2012-13 2013-14
Net Income 2,159,536,317.00 2,624,537,639.00 3,037,696,965.00 4,106,630,847.00 5,081,928,495.00
(-) Preferred Dividends - - - - -
Common Stockholder's Equity (Current Year) 11,721,331,851.00 13,817,708,990.00 19,251,480,428.00 22,586,225,346.00 26,739,581,929.00
Common Stockholder's Equity (Previous Year) 10,044,685,134.00 11,721,331,851.00 13,817,708,990.00 19,251,480,428.00 22,586,225,346.00
Average Common Stockholder's Equity 10,883,008,492.50 12,769,520,420.50 16,534,594,709.00 20,918,852,887.00 24,662,903,637.50

Return on Common Stockholder's Equity 20% 21% 18% 20% 21%

95
 Price-Earnings (P-E) Ratio of Square Pharmaceuticals Ltd.
Item 2009-10 2010-11 2011-12 2012-13 2013-14

Market Price Per Share of Stock 3581.00 3272.00 237.30 178.60 267.00

Earnings Per Share (EPS) 106.43 9.56 7.82 8.74 10.26

Price-Earnings (P-E) Ratio 33.65 342.26 30.35 20.43 26.02

Debt to Equity Ratio of Square Pharmaceuticals Ltd.

Items 2009-10 2010-11 2011-12 2012-13 2013-14
Debts:
Short Term Bank Loans 736,443,848.00 2,627,483,864.00 2,237,495,956.00 1,302,048,378.00 131,104,817.00
Long Term Loans 1,032,633,110.00 655,645,734.00 508,778,060.00 1,106,327,183.00 1,183,627,923.00
Total Debt 1,769,076,958.00 3,283,129,598.00 2,746,274,016.00 2,408,375,561.00 1,314,732,740.00

Total Shareholder's Equity 11,721,331,851.00 13,817,708,990.00 19,251,480,428.00 22,586,225,346.00 26,739,581,929.00

Debt to Equity Ratio 0.15 0.24 0.14 0.11 0.05

96
 Debt to Total Assets Ratio of Square Pharmaceuticals Ltd.
Items 2009-10 2010-11 2011-12 2012-13 2013-14
Debts:
Short Term Bank Loans 736,443,848.00 2,627,483,864.00 2,237,495,956.00 1,302,048,378.00 131,104,817.00
Long Term Loans 1,032,633,110.00 655,645,734.00 508,778,060.00 1,106,327,183.00 1,183,627,923.00
Total Debt 1,769,076,958.00 3,283,129,598.00 2,746,274,016.00 2,408,375,561.00 1,314,732,740.00
Assets:
Non-Current Assets 10,643,410,336.00 12,422,195,814.00 16,313,597,638.00 20,605,309,448.00 23,546,701,250.00
Current Assets 4,553,041,968.00 7,022,213,840.00 8,248,571,022.00 6,946,361,767.00 7,499,373,281.00
Total Assets 15,196,452,304.00 19,444,409,654.00 24,562,168,660.00 27,551,671,215.00 31,046,074,531.00

Debt to Total Assets Ratio 0.12 0.17 0.11 0.09 0.04

97
 Current Ratio of Renata Limited
Items 2009 2010 2011 2012 2013
Current Assets:
Inventories 1,075,310,581.00 1,295,855,164.00 1,585,100,179.00 1,986,744,883.00 2,657,779,255.00
Trade & Other Receivables 343,870,341.00 478,364,475.00 640,195,291.00 843,231,267.00 1,142,685,421.00
Advances, Deposits & Prepayments 80,677,337.00 110,721,962.00 97,564,211.00 148,951,592.00 167,985,236.00
Cash & Cash Equivalents 143,248,172.00 178,384,225.00 141,265,972.00 331,292,974.00 240,262,887.00
Total Current Assets 1,643,106,431.00 2,063,325,826.00 2,464,125,653.00 3,310,220,716.00 4,208,712,799.00
Current Liabilities:
Short Term Bank Loan 794,424,620.00 1,129,414,884.00 2,402,992,758.00 1,812,605,178.00 3,041,324,251.00
Trade Payables 27,896,925.00 31,752,362.00 50,168,661.00 41,207,200.00 64,986,063.00
Accruals 171,928,847.00 220,862,988.00 326,941,029.00 272,566,530.00 263,876,962.00
Provision & Other Liabilities 237,310,646.00 278,932,990.00 343,920,388.00 340,461,110.00 353,179,625.00
Unclaimed Dividend 3,961,604.00 5,164,759.00 6,551,459.00 7,907,075.00 9,915,749.00
Provision for Taxation 174,203,958.00 185,076,625.00 255,275,989.00 402,110,091.00 370,595,092.00
Long Term Loan-Current Position - - - 133,333,333.00 229,743,333.00
Non-Convertible Bond-Current Position - - - - 1,000,000,000.00
Total Current Liabilities 1,409,726,600.00 1,851,204,608.00 3,385,850,284.00 3,010,190,517.00 5,333,621,075.00

Current Ratio 1.17 1.11 0.73 1.10 0.79

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 Acid-Test Ratio of Renata Limited
Items 2009 2010 2011 2012 2013
Cash & Cash Equivalents 143,248,172.00 178,384,225.00 141,265,972.00 331,292,974.00 240,262,887.00
(+) Trade & Other Receivables
343,870,341.00 478,364,475.00 640,195,291.00 843,231,267.00 1,142,685,421.00
(Net)
(/) Current Liabilities 1,409,726,600.00 1,851,204,608.00 3,385,850,284.00 3,010,190,517.00 5,333,621,075.00

Acid-Test Ratio 0.35 0.35 0.23 0.39 0.26

Inventory Turnover of Renata Limited

Items 2009 2010 2011 2012 2013

Cost of Goods Sold 1,820,496,777.00 2,405,361,976.00 3,099,355,955.00 3,619,613,644.00 4,316,755,028.00

Inventory (Current Period) 1,075,310,581.00 1,303,637,035.00 1,585,100,179.00 1,986,744,883.00 2,657,779,255.00
Inventory (Previous Period) 959,414,590.00 1,075,310,581.00 1,303,637,035.00 1,585,100,179.00 1,986,744,883.00
Average Inventory 1,017,362,585.50 1,189,473,808.00 1,444,368,607.00 1,785,922,531.00 2,322,262,069.00

Inventory Turnover 1.79 2.02 2.15 2.03 1.86

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 Profit Margin of Renata Limited
Items 2009 2010 2011 2012 2013
Net Income 603,524,452.00 851,428,532.00 1,087,719,131.00 1,237,926,366.00 1,390,164,527.00
Net Sales 3,900,732,314.00 5,090,318,113.00 6,519,639,234.00 7,671,572,303.00 8,757,405,748.00

Profit Margin 15% 17% 17% 16% 16%

Asset Turnover of Renata Limited

Items 2009 2010 2011 2012 2013

Net Sales 3,900,732,314.00 5,090,318,113.00 6,519,639,234.00 7,671,572,303.00 8,757,405,748.00

Total Assets (Current Period) 3,851,369,286.00 5,132,284,238.00 7,691,601,900.00 9,753,077,971.00 12,782,413,204.00
Total Assets (Previous Period) 3,162,232,934.00 3,851,369,286.00 5,132,284,238.00 7,691,601,900.00 9,753,077,971.00
Average Assets 3,506,801,110.00 4,491,826,762.00 6,411,943,069.00 8,722,339,935.50 11,267,745,587.50

Asset Turnover 1.11 1.13 1.02 0.88 0.78

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 Return on Assets of Renata Limited
Items 2009 2010 2011 2012 2013

Net Income 603,524,452.00 851,428,532.00 1,087,719,131.00 1,237,926,366.00 1,390,164,527.00

Total Assets (Current Period) 3,851,369,286.00 5,132,284,238.00 7,691,601,900.00 9,753,077,971.00 12,782,413,204.00
Total Assets (Previous Period) 3,162,232,934.00 3,851,369,286.00 5,132,284,238.00 7,691,601,900.00 9,753,077,971.00
Average Assets 3,506,801,110.00 4,491,826,762.00 6,411,943,069.00 8,722,339,935.50 11,267,745,587.50

Return on Assets 17% 19% 17% 14% 12%

Earnings Per Share (EPS) of Renata Limited

Item 2009 2010 2011 2012 2013

Earnings Per Share (EPS) 333.90 37.74 38.51 35.34 39.38

Return on Common Stockholder's Equity of Renata Limited

Items 2009 2010 2011 2012 2013
Net Income 603,524,452.00 851,428,532.00 1,087,719,131.00 1,237,926,366.00 1,390,164,527.00
(-) Preferred Dividends - - - - -
Common Stockholder's Equity (Current Year) 2,207,279,956.00 2,971,470,944.00 3,958,608,036.00 5,070,479,748.00 6,295,114,611.00
Common Stockholder's Equity (Previous Year) 1,662,073,357.00 2,207,279,956.00 2,971,470,944.00 3,958,608,036.00 5,070,479,748.00
Average Common Stockholder's Equity 1,934,676,656.50 2,589,375,450.00 3,465,039,490.00 4,514,543,892.00 5,682,797,179.50

Return on Common Stockholder's Equity 31% 33% 31% 27% 24%

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 Price-Earnings (P-E) Ratio of Renata Limited
Item 2009 2010 2011 2012 2013

Market Price Per Share of Stock 1205.15 1294.27 1205.00 739.50 722.00

Earnings Per Share (EPS) 333.90 37.74 38.51 35.34 39.38

Price-Earnings (P-E) Ratio 3.61 34.29 31.29 20.93 18.33

Debt to Equity Ratio of Renata Limited

Items 2009 2010 2011 2012 2013
Debts:
Short Term Bank Loan 794,424,620.00 1,129,414,884.00 2,402,992,758.00 1,812,605,178.00 3,041,324,251.00
Long Term Loan - - - 225,000,000.00 477,306,667.00
Total Debt 794,424,620.00 1,129,414,884.00 2,402,992,758.00 2,037,605,178.00 3,518,630,918.00

Total Shareholder's Equity 1,969,336,362.00 2,693,186,179.00 3,668,730,036.00 4,705,914,472.00 5,888,140,573.00

Debt to Equity Ratio 0.40 0.42 0.65 0.43 0.60

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 Debt to Total Assets Ratio of Renata Limited
Items 2009 2010 2011 2012 2013
Debts:
Short Term Bank Loan 794,424,620.00 1,129,414,884.00 2,402,992,758.00 1,812,605,178.00 3,041,324,251.00
Long Term Loan - - - 225,000,000.00 477,306,667.00
Total Debt 794,424,620.00 1,129,414,884.00 2,402,992,758.00 2,037,605,178.00 3,518,630,918.00
Assets:
Non-Current Assets 2,208,262,855.00 3,050,606,199.00 5,227,476,247.00 6,442,857,255.00 8,573,700,405.00
Current Assets 1,643,106,431.00 2,063,325,826.00 2,464,125,653.00 3,310,220,716.00 4,208,712,799.00
Total Assets 3,851,369,286.00 5,113,932,025.00 7,691,601,900.00 9,753,077,971.00 12,782,413,204.00

Debt to Total Assets Ratio 0.21 0.22 0.31 0.21 0.28

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 Beximco Pharmaceuticals Limited
Statement of Comprehensive Income
For the Years 2009-2013
Years
2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
Net Sales Revenue 12,734,505,434 15,458,228,971 18,764,516,938 22,777,971,303 27,649,844,567
(-) Cost of Goods Sold 5,506,730,545 6,684,539,268 8,114,263,966 9,849,785,762 11,956,510,162
Gross Profit 7,227,774,890 8,773,689,703 10,650,252,971 12,928,185,541 15,693,334,405

(-) Operating Expenses 2,531,354,448 3,072,773,958 3,729,995,143 4,527,786,280 5,496,213,214

Administrative Expenses

Selling, Marketing and Distribution Expenses

Profit from Operations 4,696,420,441 5,700,915,744 6,920,257,828 8,400,399,261 10,197,121,191

(+) Other Income 525,960,430 638,455,636 775,011,912 940,775,569 1,141,993,635

(-) Finance Cost 762,828,444 925,986,236 1,124,041,081 1,364,456,947 1,656,294,232
Profit Before Contribution to WPPF &
4,459,552,428 5,413,385,144 6,571,228,659 7,976,717,883 9,682,820,594
Welfare Funds

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(-) Contribution to WPPF & Welfare Funds 105,511,718 128,079,124 155,473,366 188,726,834 229,092,730

Profit Before Tax 4,354,040,710 5,285,306,020 6,415,755,293 7,787,991,049 9,453,727,864

(-) Income Tax Expenses 603,369,274 732,421,093 889,075,200 1,079,235,317 1,310,067,889

Current Tax 243,725,636 295,854,967 359,133,996 435,947,479 529,190,238
Deferred Tax 359,643,638 436,566,126 529,941,204 643,287,838 780,877,651
Profit After Tax for the Year 3,750,671,435 4,552,884,927 5,526,680,093 6,708,755,732 8,143,659,975

(+) Other Comprehensive Income - Fair Value

268,324 325,714 395,380 479,946 582,599
Gain on Investment in Listed Shares

Total Comprehensive Income for the Year 3,750,939,759 4,553,210,641 5,527,075,473 6,709,235,677 8,144,242,574

Earnings Per Share (EPS) / Adjusted EPS

(2012)
Number of Shares Used to Compute EPS
Depreciation 462,400,324 501,343,027 543,565,430 589,343,745 638,977,445

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 Workings
Sales Growth 0.33 0.22 0.18 0.13
Average Sales Growth 0.21
% of COGS 0.53 0.51 0.52 0.53 0.54
AVG % of COGS 0.52
% of Operating Expenses 0.27 0.24 0.23 0.23 0.24
AVG % of Operating Expenses 0.24
% of Other Income 0.04 0.07 0.04 0.05 0.05
AVG % of Other Income 0.05
% of Financial Cost 0.06 0.10 0.07 0.07 0.06
AVG % of Financial Cost 0.07
% of Contribution to WPPF & Welfare Funds 0.01 0.01 0.01 0.01 0.01

AVG % of Contribution to WPPF & Welfare Funds 0.01

% of Current Tax 0.00 0.01 0.03 0.05 0.03

AVG % of Current Tax 0.02
% of Deferred Tax 0.05 0.04 0.03 0.02 0.03
AVG % of Deferred Tax 0.03

% of Other Comprehensive Income - Fair Value Gain on Investment in Listed

0.00 0.00 0.00 0.00 0.00013
Shares

106
AVG % of Other Comprehensive Income - Fair Value Gain on Investment in
0.00003
Listed Shares

% of Depreciation 0.00088 0.02588 0.02774 0.03177 0.02806

AVG % of Depreciation 0.02

107
 Beximco Pharmaceuticals Limited
Statement of Financial Position
For the Years 2009-2013
Years
Assets: 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
Non-Current Assets: 20,222,082,429.84 21,925,157,712.66 23,771,663,595.61 25,773,679,601.70 27,944,302,574.35
Property, Plant and Equipment- Carrying Value
Intangible Assets
Investment in Shares

Current Assets: 9,562,217,373.79 10,367,533,844.77 11,240,672,933.98 12,187,346,566.76 13,213,747,718.71

Inventories
Spares & Supplies
Accounts Receivable
Loans, Advances and Deposits
Short Term Investment
Cash and Cash Equivalents

Total Assets 29,784,299,803.63 32,292,691,557.42 35,012,336,529.59 37,961,026,168.46 41,158,050,293.06

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 Equity & Liabilities:
Shareholder's Equity: 20,889,326,657.48 22,648,596,308.78 24,556,029,170.74 26,624,103,340.15 28,866,347,801.53
Issued Share Capital
Share Premium

Excess of Issue Price over Face Value of GDRs

Capital Reserve on Merger

Revaluation Surplus
Fair Value Gain on Investment
Retained Earnings

Non-Current Liabilities: 5,121,647,580.82 5,552,985,522.03 6,020,650,136.75 6,527,700,806.23 7,077,454,568.50

Long Term Borrowings-Net off Current Maturity
(Secured)
Liability for Gratuity and WPPF & Welfare
Funds
Deferred Tax Liability
Fully Convertible, 5% Dividend, Preference
Share

Current Liabilities & Provisions: 3,773,325,565.34 4,091,109,726.62 4,435,657,222.10 4,809,222,022.08 5,214,247,923.04

Short Term Borrowings (Secured)
Long Term Borrowings-Current Maturity
(Secured)

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Creditors and Other Payables
Accrued Expenses
Dividend Payable
Income Tax Payable

Total Equity & Liabilities 29,784,299,803.63 32,292,691,557.42 35,012,336,529.59 37,961,026,168.46 41,158,050,293.06

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 Workings
Growth in Total Assets 0.07 0.08 0.07 0.12
AVG Growth in Total Assets 0.08
% of Non-Current Assets 0.65 0.71 0.69 0.67 0.68
AVG % of Non-Current Assets 0.68
% of Current Assets 0.35 0.29 0.31 0.33 0.32
AVG % of Current Assets 0.32
% of Shareholder's Equity 0.55 0.75 0.74 0.75 0.72
AVG % of Shareholder's Equity 0.70
% of Non-Current Liabilities 0.34 0.13 0.14 0.13 0.12
AVG % of Non-Current Liabilities 0.17
% of Current Liabilities & Provisions 0.12 0.12 0.11 0.12 0.16
AVG % of Current Liabilities & Provisions 0.13
Growth in Total Equity & Liabilities 0.07 0.08 0.07 0.12
AVG Growth in Total Equity & Liabilities 0.08

Net Working Capital 5,788,891,808 6,276,424,118 6,805,015,712 7,378,124,545 7,999,499,796

Change in Net Working Capital 1,268,050,758 487,532,310 528,591,594 573,108,833 621,375,251

Capital Spending 1,654,752,956 1,703,075,283 1,846,505,883 2,002,016,006 2,170,622,973

111