Different Aspects to Improve Overall Financial Strength of Ziska Pharmaceuticals Ltd
1.0 Introduction Ziska Pharmaceuticals Ltd. is one of the fastest growing Pharmaceutical Company, committed to produce medicine strictly under cGMP compliance and extend its services to all our valued Customers through a healthy network all over Bangladesh. The company complies cGMP at its plant, where validation and documentation ensure the positions at international standard. Background of Square Pharmaceuticals Ltd. 2.1 Objectives Their objectives are to conduct transparent business operation based on market mechanism within the legal & social frame work with aims to attain the mission reflected by our vision. 2.2 Mission Their mission is to produce and provide quality & innovative healthcare relief for people, maintain stringently ethical standard in business operation also ensuring benefit to the shareholders and the society at large. 2.3 Vision They view business as a means to the material and social wellbeing of the investors, employees and the society at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human civilization. 2.4 Corporate focus Their vision, their mission and their objectives are to emphasis on the quality of product, process and services leading to growth of the company imbibed with good governance practices. 2.5 Corporate Information The Ziska Pharmaceuticals Limited is managed by a group of dynamic Board of Directors drawn from different disciplines. They hold very respectable positions in the society and are from highly successful group of Businesses and Industries in Bangladesh. The firm has a very competent Management Team who has long experience in domestic and international Pharmaceuticals Industries. The firm upholds and strictly abides by good corporate governance practices and is subject to the regulatory supervision. Chairman &
Managing Director
Finance & Operation Director Marketing Director
Mr. Aminul Islam Khan Mr. Zahirul Islam Khan Dr. Monirul Islam Khan
AUDIT COMMITTEE Chairman
Mr. Bahauddin Ahmed
Member
Mr. A. F. M. Jahangir Mr. Shahab Uddin Ahamed
MANAGEMENT COMMITTEE Chairman
Mr. Masudur Rahman
Member
Mr. K.M Saiful Islam Mr. Parvez Hashim Mr. M.Ashiqul Hoque Chowdhury Mr. Md. Kabir Reza, FCMA
COMPANY SECRETARY Mr. Khandaker Habibuzzaman, MBA, ACS SENIOR CORPORATE OFFICIALS Chief Financial Officer Company Secretary Head of Internal Audit
Mr. Md. Kabir Reza, FCMA Mr. Khandaker Habibuzzaman, MBA, ACS Mr. Md. Majibur Rahman Bhuiyan, M.Com
3.1 Company Profile Ziska Pharmaceuticals Ltd started its journey way back in 1989. Today after one glorious decade of constant up gradation, innovation, customization, research and development, it has become a force to reckon as one of the leading finished drug manufacturer at home and abroad. Experienced technical strength and innovation is the solid foundation on which ZISKA Pharmaceuticals Ltd. has built its success. A close knit of modern management, comprises of the Chairman and Managing Director having 20 years experience in this field. Director Marketing and Sales who is a Doctor (MBBS, FCPS), having thorough knowledge in Medical science. Director Finance, Master in Accounting & Marketing having 15 years of experience in operations of pharmaceutical activities. Ziska has a good marketing strength includes one experienced Marketing Manager, 2 experienced Sales Manager, two Assistant Manager (Sales), thirteen Regional Sales Managers, 64 area sales manager, and around 450skilled medical promotion Officer. Besides this, a team of 07 experienced pharmacists, 10 Expert Chemists and 220 skilled workers are working in the factory round the clock and also ensuring Production of medicine strictly as per c.GMP. So the Management Team acts as a constant source of inspiration for a cohesive family of professional and technical staff in dedicating themselves fully to achieve the highest level of quality. Our PMD (Product Management Department) is constantly pursuing to introduce new innovative medicine headed by a Doctor and a group of Pharmacists.
At Ziska Pharmaceuticals Ltd. product development is a continuous process. Every manufacturing unit has its dedicated Product Development Department with the total development tools and systems. Turnover The turnover of Ziska Pharmaceuticals Ltd. is US $08 Million/annum. The projection of turnover of next 3 years is US $10 Million/ annum and for next 5 years it is US $15 Million. Project Value US $15 Million 3.2 Manufacturing Facilities The site is situated at about 50 kilometer off from Dhaka city towards Answer Academy at Karol Surichalla under Shafipur Gazipur. The land is 3.50 acres, where seven separate buildings all of which are in double height building at 18 ft. out of which two building is multi-storied cover about 2.50 acres. While all the buildings are in eight storied foundations for future expansion. The facility has been designed followed by the latest recommendations of cGMP of WHO, FDA, TGA and MCA, Among the building facilities the production flow has been separated from molecule to molecule like penicillin cephalosporin and general formulations for oral, solid, liquid and injectable. The total manufacturing facilities are about 66000 sft, which has been divided into seven separate buildings. 3.3 Type of Actual Products Manufactured
Type of products manufactured on the site Sterile products A. Liquid dosage forms (small volume parenteral) Aseptically prepared o Terminally sterilized B. Solid dosage forms (Dry powder fill) o
Dedicated facility
Non-sterile products 1. 2. 3. 4. 5.
Liquid dosage forms (Syrup and Suspension) Semi solid dosage forms (Sterile and Non sterile) Solid dosage forms Single dose form (Tablets, Capsules, Sachet) Multi dose form (Powders)
Dedicated facility
Toxic or hazardous substances
Facilities
Penicillin (Entral and Parenteral)
Dedicated
Cephalosporin (Entral and Parenteral)
Dedicated
3.4
Production Capacity: Figure in boxes of finished product form
Dosage form
Stage
No. of Capacity unit ( per day)
Capacity (per 26 days)
Capacity (per 30 days)
Granulation
4
30000 Box
750000 Box
225000000 Boxes
10,000 Box
260,000 Box
75,000,000 Boxes
10,000 Box
250000 Box
75000000 Boxes
Oral solid
1. Tablet Compression
5
Coating
2
Blister pack
5
2. Capsule
4 Encapsulation 3
Blister pack
3. ORS
1 Blending
Filling & Sachetting
1
4. Dry Powder fill Blending
1
Filling & Sealing
1
5. Liquid
Line 2
B. Semisolid
Compounding
1
20000 Bottles
500000 Bottles
150000000 Bottles
100000 Bottles
26000 Bottles
300000 Bottles
20000 Boxes
500000 Boxes
150000000 Box
1
Filling & sealing
C. Sterile Preparation
• SVP
Filling & Sealing
10000 Boxes of 10 250000 Boxes each
75000000 Boxes
20000 Boxes of one each
150000000 Boxes of one each
2
Packing • Sterile powder filling
Filling & Sealing
Blister pack
3.5
2
Factory Premises:
1 1
500000 Boxes of one each
In building facilities, sandwich panels have been used in the ceiling as well as in some of the walls while joint less PVC has been used on the floor for prevention of moisture and bacterial growth. The ceiling, walls and all the contact parts are smooth and washable. In all respect of the facilities we have been maintaining unidirectional flow for man and materials. 1. Admin Block
4000 sft.
2. Ware House including quarantine and Dispensing
10,500 sft
3. General production building comprising Tablet, Capsule, Liquid, Ointment
20500 sft
4. General production building comprising SVP QC Water treatment plant
12000 sft
5. Cephalosporin production building comprising OSD and injectable
4000 sft
6. Penicillin production building comprising OSD and injectable
4000 sft
7. Utility ground floor comprising
4000 sft
8. Utility 1st floor comprising
4000 sft
9. Laundry
2000 sft
Total service floor of above 7 floors of sandwich panel 10 ETP . Grand Total:
40500 sft 1000 stf 106500 stf
The total facilities have been hooked up with purified and WFI generation and distribution system through close circuit loops. Ziska has introduced the latest double stage RO technology with ultra filtration system to generate the highest pharma grade water. While dedicated HVAC system designed for proper humidity, temperature and pressure cascade. H14 HEPA filters have been used for class "B" area and U9 filters have been used for non-sterile area to prevent the cross contamination. HVAC system has got the facility to arrest the dust particles through the back filter, then pre-filter and finally in the fine filter. On the other hand pure steam and plant steam together with oil free and moisture free compressed air make the project energy saving and effective in respect of production and human resource together. The electric system has been designed in such a way to supply the electricity uninterruptedly. We have introduced full sorts of ETP for waste water disposal and its management. In the warehouse we are maintaining the segregation of chemicals and packing materials through industrial racking system with pallets for easy identification of materials and better management of the storing. A group of qualified Consultants were appointed for design and development of the project. The consultants were in the following aspects.
Name of the consultant
Specification of the Job
Address
Environ Structure Bangladesh
Civil construction
25,Elephant road dhaka, Bangladesh
Joyneil Technologies Pvt. Ltd. India
GMP guidelines implementation
39,Goria, Kolkata , India
Ethopia , Singapore
HVAC System and Clean Room Technology
Orchard road, Singapore
Blue star, India
HVAC System
7 Hair State, Kolkata , India
Powerman Bangladesh Ltd.
For Electrical Design
51, Dilkusha, Dhaka
Reytan, Belgium
For Paneling and Clean Room
ISOCAB Reytan , Belgium
Alpha lebel
Water System
India
Ducting
Omni International, Bonani
Banani , Bangladesh
Piping
Orbit International
38, Dilkusha, Dhaka , Bangladesh
3.6
Nature of construction and finishes
All R.C.C. construction, flameproof lighting fixtures and all other Constructions have been designed as per GMP guidelines to make the manufacturing areas easily cleanable. Dedicated Production buildings have been designed for general products, Beta-lactum Penicillin and Beta-lactum Cephalospirin in line with the latest International Standards. In general block separate modules have been provided for different types of manufacturing activities including sterile production area. The warehouse is a double height building with a heavy-duty floor for material handling. The floor has been covered with anti static joint less P.V.C. A latest materials storage facility has been introduced where high height storage racks , GMP compatible plastic pallets and fork lift trucks to facilitate proper material handling. The Sampling/Dispensing areas have been provided with class 100 booths fitted with HEPA filters. This area has the facilities for central excipient milling/drying and storage for heat sensitive materials. Utility Block is a two storied building which has been accommodated all central utilities like Gas fired Boilers, Central Chillers, Clean Air System, Electrical Distribution (HT Gears, Transformers, Distribution panels etc.) It has also the central fire fighting (Water storage and distribution system) arrangement.
The Central Chillers are PLC control while the clean air system has in built refrigeration system and 0.1 Micron filters to have clean process air of GMP standard. The plant has a central utility network consisting of the following. 1. Plant steam and condensate 2. Purified Water 3. Water for Injection 4. Raw Water 5. Soft Water/DM Water 6. Cooling Water (Supply and Return) 7. Clean Air 8. Vacuum The effluents generated in the plant are treated as per international standard through a modern effluent treatment plant having a central biological treatment facility 3.7
Ventilation Systems
The HVAC system for the manufacturing area has been designed as per international GMP standard to avoid cross contamination. The general production areas are protected with adequate terminal filters. Dust control arrangement in dust producing area have been done with adequate Bag filters. Proper pressure Cascade has been provided and the HVAC provides suitable temperature and humidity control. Sterile Area Class A/B clean rooms have been provided with adequate temperature and humidity control.
3.8
Parenteral Manufacturing Area
The areas have been designed with sandwich panels, interlocked doors (Changes), Air shower and pass boxes to achieve class 100 Aseptic filling conditions. These areas have 45 Pascal pressure to meet the latest GMP stipulations. The Injectable production area has been provided with latest GMP model Dry Heat Sterilizers, Autoclaves and provision of Filling/Sealing under Laminar Air Flow. The HVAC system has been developed with adequate controlled temperature/pressure and differential pressure under critical conditions like sudden depressurization through door opening. The Beta-lactum areas are designed for negative pressure in respect to Corridor/ air lock for contamination control. The HVAC System has been designed with four number of Package unit of R22 and a number of clean room material took place in the design of low side to meet room specifications. 3.9
The general specification of the Clean Room is as follows: Room No.
F-SVP-09
F-SVP-10
F-SVP-02
Amp.
Soln.
F-SVP-01 F-SVP-012 F-SVP-13 Cont.
Amp. Room Name
F-SVP-23
Sterile Filling/
Prep.
Prep.
Air Lock
Air Lock
Sealing
Room
Room
D
B
C
D
D
B
D
Area(approx) sq. m
41.95
41.62
28.94
8.91
4.64
2.32
9.754
Height, m
2.74
2.74
2.74
2.74
2.74
2.74
2.74
(without
(without
(without
(without
(without
(without
(without
Wash
Class
Cor.
Overpressure In mm WG
F.C.)
F.C.)
F.C.)
F.C.)
F.C.)
F.C.)
F.C.)
25 Pa
45 Pa
35 Pa
25 Pa
25 Pa
45 Pa
25 Pa
22 o C
22 o C
22 o C
22 o C
22 o C
22 o C
22 o C
50
50
50
50
50
50
50
20
120
60
20
10
20
10
Temp (+/- 2 o C) Humidity (RH %)(+/- 2%) Air Changes (+/- 20%)
The HVAC System consist of a centrifugal fan of capacity 6500m3 per hour with a fan motor of 5 HP. The pre-filter box at fan supply path consists of pre-filters (90% down to 10 microns) and fine filters (95% down to 5 microns). There are 8 numbers supply air terminals with HEPA filters (99.97% down to 0.3 microns) and volume control dampers. Return air grills are fitted with volume control dampers. There are two numbers fire damper (fusible type at supply and return path). There is manometer across the pre-filter box. There are also manometers to measure the pressure differentials between each class of rooms. Thermal insulation provided (25 mm thick thermocol slab on supply and return duct). The HVAC System in Tablet Granulation area consists of adequate Dust collection arrangement along with Split A/C s to maintain comfort level and humidity. Special areas for the handling of highly toxic, hazardous and sensitizing materials Special Storage facility has been made for Heat Sensitive and moisture raw Materials inside the store.
3.10
Water Systems (schematic drawings of the systems are desirable) including sanitation.
The water system of the plant consists of a purified water generation system. The latest Reverse Osmosis system with multi column Distillation plant has been installed. The users point are covered with SS 316L distribution loop with proper sanitation facilities. The entire water system has been designed and installed by M/S Alfa Label complying USP 26. The Multicolumn Distillation plant consists of 3 No. SS316 columns, insulated with glass wool and SS304 cladded with 1 Number condenser which is also made out of SS316L. The distillation columns operates at different pressure and temperature making it possible to transfer the energy in process forward column to column. The feed water system consists of a multistage feed water pump and a search tank with low-high level controller. Two flow meters are provided in feed water and cooling water lines. The centrifugal pump is used for circulating the cooling water. The steam inlet system consists of the steam inlet valve and a safety valve. The unit is designed to produce minimum 150 L of WFI per hour, as per USP26. The Unit has a DM Plant of 1000L per hour capacity. 3.11
Quality Control
The system of Quality Assurance in Ziska Pharmaceuticals Ltd. ensures that:
1.
The Pharmaceutical Products are designed and developed in a way that takes into account the requirements of Good Manufacturing Practices as described in Schedule of Drugs and Cosmetics Rules. 2. Adequate arrangements are made for manufacture, supply and use of correct starting and packaging materials 3. Adequate controls on starting materials, intermediate products and bulk products and other Inprocess controls, calibrations and validations are carried out. 4. The finished products are correctly processed and checked in accordance with established procedures 5. The Products are not released for sale or supplied before authorised persons have certified that each production batch has been produced and controlled in accordance with the requirements of the label claim and any other provisions relevant to production, control and release of finished products. 3.12 Technologies
• • • • • • • • • • • •
One of the finest infrastructure and facilities in Asia designed by a group of foreign consulting firms. Centrally monitored fully automated system. Cutting edge state of the art technology for production. More than 66,000 sft covered area for production. Complies with International GMP Standards (USFDA, UKMCA, TGA & WHO GMP). Dedicated Production building for Penicillin, Cephalosporin & General products. Dedicated HVAC System. Centralized PW & WFI generation & distribution system. Joint less PVC flooring. Walk on false ceiling by sandwich panel. Centralized Utility. Effluent Treatment Plant.
3.13
Product Catalog
Brand Name
Generic Name
Pack Size
ASNIL Syrup
Salbutamol BP
100 ml
ATEVAL Tablet
Fluphenazine +Nortriptyline
10x10's
AZITHROMAX 500 Tablet
Azithromycin USP
1X5's
BUTACIN Tablet
Hyoscine Butyl Bromide
10X10's
CALDICAL 500 Tablet
Calcium Carbonate
10X5's
CEFADIN PFS
Cephradine
100 ml
CEFADIN 500 Capsule
Cephradine
4X7's
CIPROZ 750 Tablet
Ciprofloxacin Hydrochloride
2X10's
CIPROZ 500 Tablet
Ciprofloxacin Hydrochloride
10X3's
CIPROZ PFS
Ciprofloxacin Hydrochloride
60 ml
CLOXI -Z 500 Capsule
Cloxacillin Sodium
25X4's
DELTAPRED Tablet
Prednisolone
50X10's
DEXTASON Tablets
Dexamethason Na phosphate BP
10X10's
DICLONAC 50 Tablet
Diclofenac Sodium
20X10\'s
Brand Name
Generic Name
Pack Size
DOMIDON Suspension
Domperidone
60 ml
DOMIDON Tablet
Domperidone
10X10's
Details
Details
FLUCOSTAN 50 Capsule
Fluconazole INN
5X4's
FLUXICAP 250 Capsule
Flucloxacillin Sodium BP
4X10's
FLUXICAP 500 Capsule
Flucloxacillin Sodium BP
4X10's
FLUXI SYRUP
Flucloxacillin Sodium BP
100ml
FOZI TR Capsule
Fe Sulp+Folic acid+Zn sulp
10X50's
GRISO 500 Tablet
Grisofulvin
10X100's
IRUFEN 400 Tablet
Ibuprofen
10X10's
LEMOVIT-C Tablet
Ascorbic Acid
10X20's
LORACIL Tablet
Loratadine INN
10x100's
MELXIT Tablet
Flupentixol BP & Melitracen INN
5x10's
METRO 400 Tablet
Metronidazole
10X10's
METRO Suspension
Metronidazole
60 ml
MONOSPRIN Tablet
Aspirin BP
10X10's
Brand Name
Generic Name
Pack Size
NEUBIN Tablet
Vitamin-B Complex
3X10's
NEUBIN Inj
Vitamin-B Complex
2X5's
NOMOTIL Capsule
Loperamide Hydrochloride USP
10X20's
OMEPROL 20 Capsule
Omeprazole BP
4X5X20's
ZIMOXYL 250 Capsule
Amoxicllin Trihydrate BP
10X10's
Details
ZIMOXYL 500 Tablet
Amoxicllin Trihydrate BP
5X10's
ZIMOXYL PFS
Amoxicllin Trihydrate BP
100 ml
EFEPIME Inj
Cefepime
TRIPHIN Inj
Ceftriaxone
ZISKAVIT Inj
Vitamin-B Complex
2 x 5 ampoules
CELOXIB
Celecoxib INN
10*30
HONYTUS
Glycerol & Liquid Sugar
100
NAPRONIX 250 mg
Naproxen USP
5 X 10's
NAPRONIX 500 mg
Naproxen USP
3 X 10's
TEXILIX
Antitussive Syrup
1*100
Brand Name
Generic Name
Pack Size
TONIC-Z
Iron, Vitamin-B Complex & Zinc Syrup
1*100
TRUGAIN
Minoxidil USP
VITATON-ZI
Iron, Vitamin-B Complex & Zinc Syrup
ZINCORAL Tablet
Zinc Sulfate USP
Details
3x10's
3.14 Marketing Our Activity: •
Local Marketing • Export • Contract Manufacturing We have countrywide marketing networks operated from 9 (nine) regional offices located in Dhaka, Chittagong, Comilla, Bogra, Faridpur, Maymensingh, Sylhet and Barisal Annual Turnover : 80 Crore BDT.
Total Manpower in Marketing and Sales: 500. 4.1 Balance Sheet (Unaudited):
Ziska Pharmaceuticals Ltd. Balance Sheet (Unaudited) As at Dec-31, 2010
As at Dec’31 2010
As at Dec’31 2009
ASSETS Non-Current Assets Property, Plant and Equipment- Carrying Value Intangible Assets
313,605,325 228,985,636 84,619,689
272,836,633 199,217,503 73,619,129
Current Assets Inventories Spares & Supplies Accounts Receivable Loans, Advances and Deposits Short Term Investment Cash and Cash Equivalents TOTAL ASSETS
475,868,982 52,987,654 29,654,320 189,828,765 158,789,544 37,854,923 6,753,776 789,474,307
414,006,014 46,099,259 25,799,258 165,151,026 138,146,903 32,933,783 5,875,785 686,842,647
SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' Equity Issued Share Capital
120,000,000 120,000,000
104,400,000 104,400,000
Non-Current Liabilities Long Term Borrowing-Net of Current Maturity (Secured) Deferred Tax Liability 441,888 352,416
510,505,865
444,140,103
508,017,190 2,488,675
441,974,955 2,165,147
Current Liabilities and Provisions Short Term Borrowing Long Term Borrowing-Current Maturity Creditors and other Payables Accrued Expenses Income Tax Payable TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
158,968,442 136,962,883 1,165,416 7,789,500 575,000 12,475,643
138,302,545 119,157,708 1,013,912 6,776,865 500,250 10,853,809
789,474,307
686,842,647
4.2
Profit Analysis: Loss Profit Analysis
As at Dec’31 2010 Net Sales Revenue
902,180,897
784,897,380
Cost of Goods Sold Gross Profit
559,040,923 343,139,974
519,908,058 264,989,322
Operating Expenses : Administrative Expenses Selling and Distribution Expenses
(242,030,461) (61,513,805)
(225,088,329) (57,207,839)
(180,516,656)
(167,880,490)
Profit from Operations
585,170,435
490,077,651
Other Income Finance Cost Profit before Contribution to WPPF
25,890,300 (21,567,850)
24,492,224 (20,403,186)
589,492,885
494,166,689
Contribution to Workers' Profit Participation/ Welfare Funds
(235,765,800)
(223,034,447)
353,727,085 (586,385) 353,140,700
271,132,242 (554,720) 270,577,522
Profit before Tax Income Tax Profit after Tax 4.3
As at Dec’31 2009
Cash Flow Statement (Unaudited):
Ziska Pharmaceuticals Ltd. Cash Flow Statement (Unaudited) As at Dec-31, 2010 As at Dec’31 2010
As at Dec’31 2009
902,180,897 (418,673,273) 483,507,624
784,897,380 (364,245,748) 420,651,633
(217,282) (586,385) 484,311,291
(189,035) (510,155) 421,350,823
Cash Flows from Operating Activities : Cash Receipts from Customers and Others Cash Paid to Suppliers and Employees Cash Generated from Operations Interest Paid Income Tax Paid Net cash Generated from Operating Activities Cash Flows from Investing Activities :
Acquisition of Property, Plant and Equipment (net of IDCP) Intangible Assets Short Term Investment Disposal of Property, Plant and Equipment Net Cash used in Investing Activities
(29,768,133) (11,000,560) 4,921,140 1,550,000 (34,297,553)
(25,898,276) (9,570,487) 4,281,392 1,348,500 (29,838,871)
Cash Flows from Financing Activities : Net (Decrease)/Increase in Long Term Borrowings Net (Decrease) /Increase in Short Term Borrowings Net Cash Generated from Financing Activities Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period
66,042,235
57,456,744
17,805,175 83,847,410 117,283,517 178,456,784
15,490,502 72,947,247 102,036,660 155,257,402
Cash and Cash Equivalents at End of Period
295,740,301
257,294,062
4.4
Inventories, Loans, Advances and Deposits, Cash and Cash Equivalents Analysis
As at Dec’31 2010 Inventories Finished Goods Materials (Including Work in Process and Transit) Sample & Others Loans, Advances and Deposits Motor Cycle Loan Sequrity and Other Deposit Advance for Expense Salary Advance Sundry Party Others Cash and Cash Equivalents Cash in Hand , Transit & Bank
As at Dec’31 2009
21,005,270
18,274,585
120,567,650 459,680 142,032,600
104,893,856 399,922 123,568,362
18,880,744 138,450 1297107 5,635,972 787,542
17,370,284 127,374 1,193,338 5,185,094 724,539
26,739,815
24,600,630
7,360,817 7,360,817
6,992,776 6,992,776
98,519,307 20,726,265 119,245,572
93,593,342 19,689,952 113,283,293
Long Term Borrowing A Non Current Maturity Project Loan Obligation under Finance Lease
4.5
Cost of Goods Sold, Administrative Expenses, Selling and Distribution Expenses Analysis As at Dec’31 2010
Cost of Goods Sold Materials Factory Overhead Depreciation
Administrative Expenses Salary & Allowances Fuel, Repairs & Office Maintenance Travelling & Conveyance AGM and Company Secretarial Expenses Other Expenses Depreciation
Selling and Distribution Expenses Salary & Allowances Travelling & Conveyance Market Research & New Products Sample, Literature & Promotional Expenses Delivery Commission Depreciation Other Expenses
4.6
As at Dec’31 2009
120,567,650 418,673,273 19,800,000 559,040,923
112,127,915 389,366,144 18,414,000 519,908,058
14,985,221 2,613,774 3,549,758 37,827,816 1,247,824 61,513,805
13,936,256 2,430,810 0 3,301,275 35,179,869 1,160,476 57,207,839
10,821,756 1,289,412 456,000
10,064,233 1,199,153 424,080
1,234,530 13,339,679 505,200 152,870,079 180,516,656
1,148,113 12,405,901 469,836 142,169,173 167,880,490
Ratio Analysis
Financial strength ratios go by many names (liquidity, solvency, financial leverage), but they all point to the same thing. A balance sheet–oriented value investor looks closely to make sure that the company will be around tomorrow. Value investors first look at financial strength ratios for obvious danger. Current and "quick" ratios These commonly used liquidity ratios help evaluate a company's ability to pay its short-term obligations: Current ratio
= current assets / current liabilities = 475,868,982 / 158,968,442 = 2.99
The current ratio includes all current assets, but since inventory is often difficult to turn into cash, many analysts remove it from the equation to arrive at a quick ratio. The quick ratio emphasizes coverage assets quickly convertible into cash: Quick ratio
= (current assets – inventory) / current liabilities
= (475,868,982 – 52,987,654) / 158,968,442 = 2.66 The traditional thinking is that the higher the ratio, the better off the company. Greater than 2:1 for the current ratio or 1:1 for the quick ratio is good and safe; less than 2:1 or 1:1 is a sign of impending problems meeting obligations. Debt to equity and debt to assets Sometimes also called solvency, or leverage, ratios, this set measures what portion of a firm's assets are provided by the owners versus provided by others. Too much long-term debt costs money, increases risk, and can place restrictions on management in the form of restrictive lender covenants governing what a company can and can't do. The two most common ratios used to assess solvency and leverage are debt to equity and debt to total assets:
Debt to equity = total debt / owner's equity = 189,828,765 / 120,000,000 = 1.58
(Note that current liabilities, such as accounts payable, typically are not included.)
Debt to total assets
= total debt / total assets = 189,828,765 / 789,474,307 = 0.24
When a company has more debt than equity, yellow flags fly, but industry comparisons are important. Economic value achieved should exceed the cost and risk incurred with the debt. Solvency measures probably deliver a stronger signal for what not to buy than what to buy. Cash flow ratios Because cash is really the lifeblood of a business, financial strength assessments typically look at cash and cash flow ratios. But there's a hidden agenda behind these ratios: to assess earnings quality. The overall cash flow ratio tells whether a business is generating enough cash from its business to sustain itself, grow, and return capital to its owners:
Overall cash flow ratio = cash inflow from operations / (Investing cash outflows + financing cash outflows) = 484,311,291 / 34,297,553 + 83,847,410 = 4.99
If the overall cash flow ratio is greater than 1, the company is generating enough cash internally to cover business needs. If it's less than 1, the company is going to capital markets or is selling assets to keep afloat. It's best when cash flows march in step with or exceed earnings. If earnings increase without a corresponding increase in cash flow, earnings quality comes into question. Use the cash flow to earnings ratio as a base measure: Cash flow to earnings
= cash flow from operations / net earnings = 484,311,291 / 353,140,700 = 1.37
Because depreciation and other noncash amortizations vary by industry, it's hard to hang a specific goal on this measure. Consistency over time is good, as are favorable industry comparisons. Further, it's good when period-to-period earnings increases are accompanied by corresponding cash flow increases. 5.1
Date taken from Depot Survey: Bogra depot
C/C Code
Name of the Expenditure
4040121
Salary
4040102
Ta/ Da Allowance
4040103
Brand Loyality
4040104
Rent/Bill
4040105
Delivery Cost
4040106
Booking Cost/Postage Charge
4040107
DD Cost/ Bank Charge
4040108
Donation/Gift
4040109
Conveyance
4040110
Computer Paper/Ribon
4040111
Fuel & Tool
4040112
Stationary & Photocopy
4040113
Entertainment & Confer.
Exp as on 31 Jan2011 81 3,326 40 4,590 19 4,500 3 1,120 3 2,938 2 3,661
Exp as on 28 Feb 2011
3,105
5,191
4,899 5 7,400 1 0,390
660
990
742
1,774
330.00 1 ,032.00
6,833 2
7,803 2
970.00 3
9,600
1624056 844077 39 4,500 6 1,545 8 8,607 4 1,252
Net Exp For the month of Feb 2011 810 ,730.00 439 ,487.00 200 ,000.00 30 ,425.00 55 ,669.00 17 ,591.00 1 ,794.00 47 ,800.00 5 ,199.00
Cost 4040114
Miscelance
4040115
Cash Incentive
4040117
Sales Commission
4040118
Product Bonus
4040119
Postage Charge
4040120
Photocopy
4040121
Car Maintinance
4040122
Hardship Allowance
4040124
Carring Outward
4040125
Gold Leaf & Jute
4040127
Carring Inward
4040123
Loss & Damage Total
1,955
5,195
,240.00
803 6,500 17 7,074 4 7,330
1,403 10 2,000 59 7,941 9 9,490
1,205
2,400
600.00 95 ,500.00 420 ,867.00 52 ,160.00 1 ,195.00
565
937
3,730 6,510 1 0,274
6,870 1 1,350 2 9,881
4,829 1 1,932
9,328 2 9,779
1,81 8,973
4053867
372.00 3 ,140.00 4 ,840.00 19 ,607.00 4 ,499.00 17 ,847.00 2,234 ,894.00
Chittagong depot
C/C Code
Name of the Expenditure
4040203
Brand Loyality
4040201
Salary
4040202
Ta/ Da Allowance
4040204
Rent/Bill
4040205
Delivery Cost
Exp as on 31 Jan2011 23 4,000 74 2,890 35 7,199 2 8,700 9 1,130
Exp as on 28 Feb 2011 47 3,000 1,51 7,898 74 2,054 5 8,246 13 7,946
Net Exp For the month of Feb 2011 239 ,000.00 775 ,008.00 384 ,855.00 29 ,546.00 46 ,816.00
4040206
Booking Cost/Postage Charge
4040207
DD Cost/ Bank Charge
4040208
Donation/Gift
4040209
Conveyance
4040210
Computer Paper/Ribon
4040211
Fuel & Lubricants
4040212
Stationary & Photocopy
4040213
Entertainment & Confer. Cost
4040214
Miscelance
4040215
Cash Incentive
4040217
Sales Commission
4040218
Product Bonus
4040219
Postage Chargre
4040220
Photocopy
4040221
Car Maintinance
4040222
Hardship Allowance
4040224
Carring Outward
4040225
Gold Leaf & Jute
4040226
Office Maint.
4040227
Carring Inward
4040223
Loss & Damage
4,795
1 4,315
1,847 4 6,150
3,058 6 4,650
1,089
4,079
9 ,520.00 1 ,211.00 18 ,500.00 2 ,990.00
850
1,800
950.00
1,800
1,800
7,271 2 1,210 2 0,075 1 3,000 7 9,417 2 0,326
7,950 2 5,720 2 7,940 1 9,500 21 8,965 4 4,647
679.00 4 ,510.00 7 ,865.00 6 ,500.00 139 ,548.00 24 ,321.00
1,090
1,880
790.00
301 1 0,300
426 1 0,300
125.00
642 2 0,724
1,212 2 2,147
4,213
8,917 2 1,227
570.00 1 ,423.00 4 ,704.00 2 ,720.00 14 ,540.00
3,43 2,397
1,716 ,691.00
Exp as on 28 Feb 2011 49 1,500
Net Exp For the month of Feb 2011 268 ,000.00
2720 6,687
Total
1,71 5,706
-
-
Faridpur depot C/C Code 4040303
Name of the Expenditure Brand Loyality
Exp as on 31 Jan2011 22 3,500
4040301
Salary
4040302
Ta/ Da Allowance
4040304
Rent/Bill
4040305
Delivery Cost
4040306
Booking Cost/Postage Charge
4040307
DD Cost/ Bank Charge
4040308
Donation/Gift
4040309
Conveyance
4040310
Computer Paper/Ribon
4040311
Fuel & Lubricants
4040312
Stationary & Photocopy
4040313
Entertainment & Confer. Cost
4040314
Miscelance
4040315
Cash Incentive
4040317
Sales Commission
4040318
Product Bonus
4040319
Postage Charge
4040321
Car Maint.
4040322
Hardship Allowance
4040324
Carring Outward
4040325
Gold Leaf & Jute
4040326
Office Maint.
4040327
Carring Inward
4040320
Photocopy
4040323
Loss & Damage
94 2,426 48 0,987 2 5,214 6 1,240
1,93 1,682 93 3,104 5 0,340 13 0,132
4,925
8,940
1,599 8 1,460 3,271
3,633 8 1,460 1 0,159
1,060
2,297
400 9,589 2 7,380
1,250 1 0,430 12 5,282
4,595 1 9,000 16 0,650 3 2,172
8,601 10 2,000 28 9,787 5 2,093 285
6 ,888.00 1 ,237.00 850.00 841.00 97 ,902.00 4 ,006.00 83 ,000.00 129 ,137.00 19 ,921.00
290
2,770
450 4 7,422
1,750 8 4,461
4,681
9,554
285.00 2 ,480.00 1 ,300.00 37 ,039.00 4 ,873.00
1 7,245
500 3 1,332
500.00 14 ,087.00
41
Total
989 ,256.00 452 ,117.00 25 ,126.00 68 ,892.00 4 ,015.00 2 ,034.00
2,14 9,597
(41.00) 188 4,36 3,530
188.00 2,213 ,933.00
Sylhet Depot C/C Code
Name of the Expenditure
4040403
Brand Loyality
4040401
Salary
4040402
Ta/ Da Allowance
4040404
Rent/Bill
4040405
Delivery Cost
4040406
Booking Cost/Postage Charge
4040407
DD Cost/ Bank Charge
4040408
Donation/Gift
4040409
Conveyance
4040410
Computer Paper/Ribon
4040411
Fuel & Lubricants
4040412
Stationary & Photocopy
4040413
Entertainment & Confer. Cost
4040414
Miscelance
4040417
Sales Commission
4040418
Product Bonus
4040415
Cash Incentive
4040419
Postage Charge
4040420
Photocopy
4040421
Car Maintinance
4040424
Carring Outward
4040425
Gold Leaf & Jute
4040427
Carring Inward
4040423
Loss & Damage
Exp as on 31 Jan2011 20 6,000 47 0,683 20 5,458 3 0,470 2 8,078 2 2,974
Exp as on 28 Feb 2011 41 7,000 98 6,227 39 0,904 6 0,320 6 2,496 5 0,184
259 8,495
1,261 7 7,442
3,038
4,694
Net Exp For the month of Feb 2011 211 ,000.00 515 ,544.00 185 ,446.00 29 ,850.00 34 ,418.00 27 ,210.00 1 ,002.00 68 ,947.00 1 ,656.00
980
1,800
820.00
45
45
576 2 3,672
811 2 6,512
235.00 2 ,840.00
1,000 2 9,342
1,500 6 8,400 2 6,767
500.00 39 ,058.00 17 ,818.00 2 ,000.00
8,949
2,000 244
568
110
290
5,000
6,900
3,724
9,097
2,996
2,996
9,698
-
324.00 180.00 1 ,900.00 5 ,373.00 (9, 698.00) -
4040426
Office Maint.
4040427
Carring Inward Total
1,06 1,791
353 3 0,862 2,22 9,429
353.00 30 ,862.00 1,167 ,638.00
Exp as on 28 Feb 2011 63 2,500 2,74 3,272 1,34 4,638 16 6,683 22 6,552
Net Exp For the month of Feb 2011 324 ,200.00 1,382 ,954.00 678 ,715.00 100 ,613.00 113 ,462.00
370
370.00
1,113 36 2,842 2 4,330 1 1,395
695.00 115 ,790.00 10 ,045.00 3 ,400.00
Dhaka Depot C/C Code
Name of the Expenditure
4040503
Brand Loyality
4040501
Salary
4040502
Ta/ Da Allowance
4040504
Rent/Bill
4040505
Delivery Cost
4040506
Booking Cost
4040507
Bank/DD Charge
4040508
Donation/Gift
4040509
Conveyance
4040510
Computer Paper/Ribon
4040511
Fuel & Lubricants
4040512
Photocopy
4040513
Postage Charge
4040514
Stationary
4040415
Conference Entertainment
4040517
Cash Incentive
4040518
Sales Commission
4040519
Product Bonus
4040521
Car Maintinance
4040522
Hardship Allowance
Exp as on 31 Jan2011 30 8,300 1,36 0,318 66 5,923 6 6,070 11 3,090
418 24 7,052 1 4,285 7,995
148
163
15.00 -
2,125 6 2,212 1 7,500 13 8,595 4 8,373
2,275 6 7,402 2 3,974 68 8,023 8 0,063
2,318
4,118 1
150.00 5 ,190.00 6 ,474.00 549 ,428.00 31 ,690.00 1 ,800.00 7
4040523
Loss & Damage
4040524
Carring Outward
4040525
Gold Leaf & Jute
4040527
Repair & Maint.
4040529
Miscelance Total
5,124 4 1,594 4 0,024 2 2,135
2,794 4 1,594 6 7,043 2 3,335
,670.00
7,048
7,549
501.00
2,200 3,17 2,847
2,200 6,53 4,228
3,361 ,381.00
Exp as on 28 Feb 2011 33 2,760 68 7,075 40 7,507 3 0,240 6 0,259 5 4,519
27 ,019.00 1 ,200.00
Barisal Depot C/C Code
Name of the Expenditure
4040603
Brand Loyality
4040601
Salary
4040602
Ta/ Da Allowance
4040604
Rent/Bill
4040605
Delivery Cost
4040606
Booking Cost
4040607
Bank Charge/DD Cost
4040608
Donation/Gift
4040609
Conveyance
4040610
Computer Paper/Ribon
4040612
Stationary
4040613
Entertainment & Conference Cost
4040614
Misc Exps
4040615
Cash Incentive
4040617
Sales Commission
4040618
Product Bonus
4040619
Postage Charge
Exp as on 31 Jan2011 15 9,160 44 0,241 19 4,481 2 0,136
7,900
1,902 1 8,105
1,295
3,805
Net Exp For the month of Feb 2011 173 ,600.00 246 ,834.00 213 ,026.00 10 ,104.00 58 ,484.00 26 ,073.00 1 ,377.00 10 ,205.00 2 ,510.00
1,082
1,920
838.00
4,520 1 0,746
4,520 1 4,087
3 ,341.00
9,063 1 3,000 2 8,769
9,648 2 7,500 7 9,647 2 0,592
585.00 14 ,500.00 50 ,878.00 20 ,592.00
1,775 2 8,446 525
-
4040620
Photocopy
4040622
Hardship Allowance
4040624
Carring Outward
4040625
Gold Leaf & Jute
4040623
720
1,120
400.00
190
340
2,508
6,478
4,239
8,045
150.00 2 ,340.00 3 ,970.00 3 ,806.00
1,77 2,409
843 ,613.00
86 7,139 41 2,220 26 1,300 2 2,134 10 9,272 7 4,804
Exp as on 28 Feb 2011 1,10 2,169 78 6,217 51 5,100 4 2,964 19 5,538 14 6,053
Net Exp For the month of Feb 2011 235 ,030.00 373 ,997.00 253 ,800.00 20 ,830.00 86 ,266.00 71 ,249.00
908 2 8,675
1,450 5 8,060
4,884 5,740
7,527 1 5,970
542.00 29 ,385.00 2 ,643.00 10 ,230.00
820
1,632
812.00
901 4 2,115
1,241 4 7,592
355
1,690
340.00 5 ,477.00 1 ,335.00
2,340
Loss & Damage Total
92 8,796
Comilla Depot A/C Code
Name of the Expenditure
4040701
Salary
4040702
Ta/ Da Allowance
4040703
Brand Loyality
4040704
Rent/Bill
4040705
Delivery Cost
4040706
Booking Cost
4040707
DD Cost/ Bank Charge
4040708
Donation/Gift
4040709
Conveyance
4040710
Computer Paper/Ribon
4040711
Fuel/Tools
4040712
Office Stationary
4040713
Entertainment
4040714
Miscelance
Exp as on 31 Jan2011
4040715
Cash Incentive
4040717
Sales Commission
4040718
Product Bonus
4040719
Postage Charge
4040720
Photocopy
4040721
Car Maintinance
4040722
Hardship Allowance
4040724
Carring Outward
4040725
Gold Leaf & Jute
4040326
Office Maint.
4040727
Carring Inward Total
6,765
2,520 1 9,454
7 ,500.00 182 ,170.00 15 ,875.00 (18, 485.00) ( 376.00) 13 ,128.00 ( 280.00) 17 ,654.00
3,100
7,550
785.00
9,236 2,08 7,033
325 1 7,546 3,42 3,245
325.00 8 ,310.00 1,336 ,212.00
49 9,038 22 5,545 16 3,000 2 0,242 3 0,797 3 7,080
Exp as on 28 Feb 2011 1,03 5,264 44 7,323 31 7,000 4 1,914 5 7,002 8 1,800
338 1 3,985
1,699 4 5,185
1,843
2,858
Net Exp For the month of Feb 2011 536 ,226.00 221 ,778.00 154 ,000.00 21 ,672.00 26 ,205.00 44 ,720.00 1 ,361.00 31 ,200.00 1 ,015.00
820
820.00
20 9,978 2 0,770
7,500 39 2,148 3 6,645
995
2,285
322
619 1 3,450
2,800 1,800
Mymensingh Depot A/C Code
Name of the Expenditure
4040801
Salary
4040802
Ta/ Da Allowance
4040803
Brand Loyality
4040804
Rent/Bill
4040805
Delivery Cost
4040806
Booking Cost
4040807
DD Cost/ Bank Charge
4040808
Donation/Gift
4040809
Conveyance
4040810
Computer Paper
4040811
Fuel
Exp as on 31 Jan2011
4040812
Office Stationary
4040813
Entertainment
4040814
Miscelance
4040815
Cash Incentive
4040817
Sales Commission
4040818
Product Bonus
4040819
Postage Charge
4040820
Photocopy
4040821
Car Maintinance
4040822
Hardship Allowance
4040824
Carring Outward
4040825
Gold Leaf & Jute
4040827
Carring Inward Total
309
309.00
6,135 1 5,043
7,061 1 7,193
926.00 2 ,150.00
2,314
3,128
814.00
2,000 3 6,064 9,435
2,000 19 1,957 1 7,207
155 ,893.00 7 ,772.00
555
965
410.00
160
254
4,645
8,725
94.00 4 ,080.00
50
50
350
8,822
850
850 1 4,608 2,30 3,994
6 ,256.00 1,226 ,173.00
Exp as on 28 Feb 2011 1,52 5,364 80 1,752 56 6,000 3 3,409 9 7,093 7 9,225
Net Exp For the month of Feb 2011 779 ,743.00 406 ,365.00 293 ,500.00 9 ,392.00 60 ,358.00 46 ,172.00
8,352 1,07 7,821
8 ,472.00 -
Rangpur Depot
C/C Code
Name of the Expenditure
4040901
Salary
4040902
Ta/ Da Allowance
4040903
Brand Loyality
4040904
Rent/Bill
4040905
Delivery Cost
4040906
Booking Cost
Exp as on 31 Jan2011 74 5,621 39 5,387 27 2,500 2 4,017 3 6,735 3 3,053
4040907
DD Cost/ Bank Charge
4040908
Donation/Gift
4040909
Conveyance
4040910
Computer Paper/Ribon
4040911
Fuel/Tools
4040912
Office Stationary
4040913
Entertainment
4040914
Miscelance
4040915
Cash Incentive
4040917
Sales Commission
4040918
Product Bonus
4040919
Postage Charge
4040920
Photocopy
4040921
Car Maintinance
4040922
Hardship Allowance
4040924
Carring Outward
4040925
Gold Leaf & Jute
4040926
Office Maint.
4040927
Carring Inward Total
Total expenditure = 5.1
6,628 4 4,510 1 3,353
1 3,322 5 7,410 2 4,038
1,620
3,225
398
398
4,182 2 2,805
7,430 2 7,385
508 8 6,694 1 4,860
1,429 12 9,000 23 2,646 3 0,245
1,054
2,080
1,665
3,456
1,091
3,349
570 8,529
2,370 1 9,556
4,550
9,575
1,020 1 6,230 1,73 7,580
3 2,952 3,70 2,709
6 ,694.00 12 ,900.00 10 ,685.00 1 ,605.00 3 ,248.00 4 ,580.00 921.00 129 ,000.00 145 ,952.00 15 ,385.00 1 ,026.00 1 ,791.00 2 ,258.00 1 ,800.00 11 ,027.00 5 ,025.00 (1, 020.00) 16 ,722.00 1,965 ,129.00 16,065 ,664.00
Suggestions and Recommendations
The current ratio includes all current assets, but since inventory is often difficult to turn into cash, many analysts remove it from the equation to arrive at a quick ratio. The traditional thinking is that the higher the ratio, the better off the company. Greater than 2:1 for the current ratio or 1:1 for the quick ratio is good and safe; less than 2:1 or 1:1 is a sign of impending problems meeting obligations.
Too much long-term debt costs money, increases risk, and can place restrictions on management in the form of restrictive lender covenants governing what a company can and can't do. The two most common ratios used to assess solvency and leverage are debt to equity and debt to total assets: When a company has more debt than equity, yellow flags fly, but industry comparisons are important. Economic value achieved should exceed the cost and risk incurred with the debt. Solvency measures probably deliver a stronger signal for what not to buy than what to buy. The overall cash flow ratio tells whether a business is generating enough cash from its business to sustain itself, grow, and return capital to its owners: If the overall cash flow ratio is greater than 1, the company is generating enough cash internally to cover business needs. If it's less than 1, the company is going to capital markets or is selling assets to keep afloat. It's best when cash flows march in step with or exceed earnings. If earnings increase without a corresponding increase in cash flow, earnings quality comes into question. Use the cash flow to earnings ratio as a base measure: Because depreciation and other noncash amortizations vary by industry, it's hard to hang a specific goal on this measure. Consistency over time is good, as are favorable industry comparisons. Further, it's good when period-to-period earnings increases are accompanied by corresponding cash flow increases. 5.2 CONCLUSION Since the introduction of the Ratio Analysis in Ziska Pharmaceuticals Limited in 2011, it has been used effectively and efficiently in the evaluation of financial strength. We conducted a study through personal collect data, survey and we tried for a through understanding of the process with its benefits as well as shortcomings. It has been found that there are some positive and negative sides of this financial strength. Positive is that its well financial security. On the other hand, the negative sides are: sometimes the frequency of evaluation is not quarterly as it was mentioned in the ratio analysis; still there is a chance of subjectivity, which the expenditure will to be reduced. But overall, the financial strength is satisfied, although not highly satisfied with the existing financial strength.
APPENDIX B: Bibliography Textbooks
•
Corporate Financial Analysis: By Francis J. Clauss - McGraw-Hill (2009)
•
Financial Analysis Tools and Techniques: By Erich A. Helfert - McGraw-Hill (2001)
•
Financial Statement Analysis: By Clyde P. Stickney, Paul Brown, James M. Wahlen, Stephen P. Baginski, Mark Bradshaw - Cengage Learning (2010)
•
Financial Statement Analysis: By Steven M. Bragg - Wiley (2006)
Other Publications Ziska Pharmaceuticals Ltd. Annual report of the year 2009-10 Internship/Thesis Reports of Southeast University Various journals and magazines Websites Some websites are visited for collecting some secondary data, which are: http:// www.ziskapharma.com http:// www.dummies.com http:// www.ambest.com http:// www.financialstrength.com