FINANCIAL STATEMENT ANALYSIS OF BEXIMCO PHARMACEUTICALS LTD

Md. Mahfujul Amin ID: 10364075

Financial Accounting and Analysis ACT 501 Spring2011

BRAC UNIVERSITY

About Beximco Pharmaceuticals Ltd

Beximco Pharmaceuticals Limited (BPL) is a part of Beximco Group, the largest private sector industrial conglomerate in Bangladesh. BPL develops, manufactures and markets both finished dosage form branded generic pharmaceutical products and active pharmaceutical ingredients (APIs), with products including solid dose forms, Metered Dose Inhalers, Nasal Sprays, Large Volume Intravenous Fluids, Suppositories, and Creams/Ointments. BPL produces and markets 'branded generics' for most diseases ranging from AIDS to cancer, from infection to asthma, from hypertension to diabetes, for both national and international markets. The company also manufactures active pharmaceutical ingredients and intravenous fluids and contract manufacture for major international brands of leading multinational companies. BPL utilizes state of the art manufacturing facilities. BPL also has outstanding reverse engineering capabilities. Incorporated in 1976, BPL started off as a distributor of pharmaceutical products. It imported products from global MNCs such as Bayer AG of Germany and Upjohn Inc. of USA and sold them in the local market. It eventually graduated to a manufacturer and distributor of these products in local market under licensing agreements. During the early 80s, BPL launched its own products in the local market. Beximco started its exports operation in the early 90s with APIs. Today BPL is one of the largest exporter of medicines from Bangladesh. BPL employs more than 2,400 staff, including over 300 qualified professionals such as pharmacists, chemists, microbiologists, engineers, doctors etc. BPL is the third largest pharmaceutical manufacturing company in Bangladesh with net sales of BDT 4.87 million, according to the 2009 annual report.

IN 2009
Achieved sales turnover of more than BDT 4.86 billion with more than 21% growth, outperforming the industry growth of 17%. The company saw introduction of 26 new products in total of 34 presentations. ION unit was launched for producing injectables, ophthalmics and nebulizer solutions and a total of 16 products were launched in the year. Commissioning of the remaining 3 lines of USEDA standard OSD facility started having an installed capacity to produce 4 billion tablets annually. Received regulatory approval from ANVISA (Brazil); as the first Bangladeshi company. Construction of new MDI facility completed in 2009; facility will be ready Q3 of 2010. Product registration in Australia. Signed long-term supply agreement with ADF, France for asthma inhalers. Export turnover grew 59%. 51 products registered in 12 countries. Oseflu, Beximcos brand of Oseltamivir, was supplied to central and Latin America in the wake of pandemic H1N! flu. This drug also supplied to government agencies and international organizations in Bangladesh during this national emergency.

Opportunities in International Markets

Beximco Pharma was one of the pioneers in exporting pharmaceuticals from Bangladesh. Today, it is among the largest exporters of pharmaceutical products from Bangladesh. The export market remains a huge opportunity for BPL as it has only scratched the surface thus far owing to capacity constraints resulting in its inability to meet export orders. The management wants to become a world-class manufacturer of pharmaceutical products operating in domestic and international markets, including Least Developed Countries (LDCs, owing to TRIPS Agreement), developing and developed countries. Currently, product registration in several countries is in the pipeline. In line with the goal to enter high margin markets and developed markets, few regulatory audits have already been taken place. Very recently, the Company has received GMP Clearance from Therapeutic Goods Administration (TGA), Australia, GCC and ANVISA, Brazil and expects to commence product exports to these countries from 2010. Regulatory audits by UKMHRA, EMEA and USFDA are also expected to take place during 2010 and 2011. The company expects that higher margin will be achieved in all these international markets. Along with developed markets, additional 25 countries are also targeted (distributor agreement signed and product registration under process) to enter by 2010. These markets/continents include Latin and Central America, South Africa, Africa, Caribbean Island, Pacific Island countries, South Asia and South East Asian countries. Along with own brand marketing, contract manufacturing opportunities are also expected from the developed countries. For example, after receiving TGAs GMP Clearance, the company has already started receiving strong queries for contract manufacturing from Australia and other developed European markets (including Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, UK etc.) where TGAs GMP certification is accepted as a quality standard (under Mutual Recognition Arrangement). Also as mentioned earlier regarding opportunities for inhalers, since only a few companies in the world are operating with their CFC free MDI formulations; there will be huge opportunities for contract manufacturing for reputed MNCs in the coming years. Moreover, opportunities for operating in developed markets with proprietary formulations are also opening up.

 In 2009, 51 products registered in 12 countries Export turnover grew 59% over 2008.

Product Registration Worldwide

Australia 1 Asia 322 Africa 75 Middle East 22 Central & Latin America 11
Taka in Thousand

Key Operating and Financial Data

Particulars Authorized Capital Paid up Capital Total Sales Export Sales Gross Margin Profit Before Tax Net Profit Fix Assets (Gross) Shareholders Equity 2009 9100000 1511493 4868255 272126 2302048 867467 624740 15621366 10885707 2008 2000000 1259577 4010167 170604 2007296 714121 545341 14291850 10450202 2007 2000000 1145070 3597025 122752 1629515 399678 353068 10516030 8250940 2006 2000000 1040973 3702317 115099 1731086 523243 470659 9885840 7949920

Dividend Earnings per Share (EPS) Marketing Price Per Share (at end of the year) Price Earnings Ratio (Time) Number of shareholders Foreign Investors ICS including ICB

15% 4.13 155.8 37.72 80189 54 890

30% 3.61 167.7 46.45 65556 54 885

15% 2.80 58.9 21.04 53892 60 879

15% 4.11 53.7 13.06 48932 58 986

Investors Account Sponsors, General Public & Other Institutions Number of Employees 79245 2511 64617 2310 52953 2384 47888 2403

BEXIMCO PHARMACEUTICALS LIMITED Balance Sheet As At 31st December 2009

2009 Tk. ASSETS Non - Current Assets Property, Plant And Equipments - Carrying Value Intangible Assets Investment In Share Current Assets Inventories Spares & Supplies Accounts Receivable Loans, Advance & Deposits Short Term Investment Cash & Cash Equivalent TOTAL ASSETS SHAREHOLDERS' EQUITY & LIABILITIES Shareholders' Equity Issued Share Capital Share Premium Excess Of Issue Price over Face Value Of GDRs Capital Reserve On Merger Revaluation Surplus Retained Earnings Non - Current Liabilities Long Term Borrowings- Net Off Current Maturity (Secured) Fully Convertible, 5% Dividend, Preference Share Liability Of Gratuity & WPPF 12975195529 12966587178 5726525 2881826 6916737893 1722953284 242034855 694111730 699204450 2500000000 1058433574 19891933422 65.2 65.2 0.03 0.01 34.8 8.7 1.2 3.5 3.5 12.6 5.3 100.0 11957773787 11921072697 0 36071090 2861891654 1505288093 234530326 503916401 544509106 0 73647728 14819665441 80.69 80.44 0.24 19.31 10.16 1.58 3.40 3.67 0 0.50 100 Change % 2008 Tk. Change %

10885706614 1511492960 1489750000 1689636958 294950950 1617361714 4282514032 6684775166 1924933065 4100000000 307425614

54.7 7.6 7.5 8.5 1.5 8.1 21.5 33.6 9.7 20.6 1.5

10450202145 1259577470 1489750000 1689636958 294950950 1711174747 4005112020 1767431029 1446600500 0 274419253

70.52 8.50 10.05 11.40 1.99 11.55 27.03 11.93 9.76 0 1.85

Deferred Tax Liability Current Liabilities & Provisions Short Term Borrowings Long Term Borrowings- Current Maturity Creditors & Other Payables Accrued Expenses Dividend Payable Income Tax Payable TOTAL LIABILITIES & SHAREHOLDERS EQUITY

352416487 2321451642 1451326354 308820056 409898122 79094905 1727724 70584481 19891933422

1.8 11.7 7.3 1.5 2.1 0.4 0.0 0.3 100.0

46411276 2602032267 1461666227 648165841 263176822 81776450 3169568 144077359 14819665441

0.31 17.56 9.86 4.37 1.78 0.55 0.02 0.97 100

BEXIMCO PHARMACEUTICALS LIMITED Profit and Loss Account For The December 31st 2009
Increase Or ( Decrease) During 2009 Amount Percent 858087840 563335445 294752411 292264848 61728264 230536544 2487563 198299869 39773694 21.4 28.1 14.7 29 40.2 27 0.25 28885.2 15.9

Net sales Revenue Cost Of Goods Sold Gross Profit Operating Expenses: Administrative Expenses Selling, Marketing And Distribution Expenses Profit From Operation Other Income Finance Cost Profit Before Contribution To WPPF Contribution To Workers Contribution / Welfare Fund Profit before Tax Income Tax Expense Current Tax Deferred Tax (Expense) / Income

2009 Tk. 4868254915 (2566206626) 2302048289 (1300765878) (215192547) (1085573331) 1001282411 198986379 (289427992) 910840798

2008 Tk. 4010167057 (2002871181) 2007295878 (1008501030) (153464283) (855036787) 998794848 686510 (249654298) 749827060

161013738

21.5

(43373371) 867467427 (242727120) 0 (242727120)

(35706050) 714121010 (168779737) (173720430) 4940693

7667321 153346417 73947365 (173720430) 237786427

21.5 21.5 21.5

4812.8

Profit After Tax Transferred To Statement Of Changes In Equity Earnings Per Share (Of Tk.10 Each) (Adjusted EPS Of 2008) Number Of Share Used To Complete EPS

624740307 4.13

545341273 3.61

79399034 0.52

14.6 14.4

151149296

151149296

Overview in graphs

BEXIMCO PHARMACEUTICALS LIMITED Ratio Analysis

2009 2008

Liquidity Ratio:
Current Ratio Acid test (Quick) Ratio Receivable Turnover Inventory Turnover 2.98:1 1.83:1 8.13 Times 1.59 Times 1.1:1 0.22:1 7.99 Times 1.35 Times

Profitability Ratio:
Profit Margin Asset Turnover Return On Assets Return On Common Stockholders Equity Earnings Per Share (EPS) Price-Earning( P-E) Ratio Payout Ratio 12.8% 0.28 Times 3.6% 5.9% Tk. 4.13 37.72 Times 20.39% 13.6% 0.30Times 4.1% 5.8% Tk. 3.61 46.45 Times 10.52%

Solvency Ratio:
Debt To Total Assets Ratio Time Interest Earned 45.28% 3.49Times 29.48% 3.34 Times

Appendix:
Key To Solve Financial ratio:
Liquidity Ratio:
1) Current Ratio = Current Assets / Current Liabilities 2) Acid test(Quick) Ratio = Cash + Short Term Investment + Receivable (net) / Currents

Liability
3) Receivable Turnover = Net Credit Sales / Average Net Receivable 4) Inventory Turnover = Cost Of Goods Sold / Average Inventory

Profitability Ratio:
5) Profit Margin = Profit After Tax Transferred To Statement Of Changes In Equity / Net

Sales
6) Asset Turnover = Net Sales / Average Assets 7) Return On Assets = Profit After Tax Transferred To Statement Of Changes In Equity /

Average Assets
8) Return On Common Stockholders Equity = Profit After Tax Transferred To Statement Of

Changes In Equity / Average Common Stockholders Equity

9) Earnings Per Share (EPS) = Profit After Tax Transferred To Statement Of Changes In

Equity / Weighted Average Common Shares Outstanding

10) 11)

Price-Earning( P-E) Ratio = Market Price Per Share Of Stock / Earning Per Share

Payout Ratio = Cash Dividend / Profit After Tax Transferred To Statement Of Changes In Equity

Solvency Ratio:
12) Debt To Total Assets Ratio = Total Debt / Total Assets 13) Time Interest Earned = Income Before Income Taxes And Interest Expenses / Interest Expenses

Additional Information:

Dividends Paid during 2009 was Tk. 127399591 & 2008 was Tk. 57369278. Interest Paid During 2009 was Tk. 248370850 & 2008 was Tk. 214066707 Total Assets During 2009 was Tk. 11953418940 Accounts Receivable on 2009 was Tk. 4996807992 Inventories on 2009 was Tk. 1470152242