ALPHA Pharmaceuticals LTD.

Mission
To become an innovative and leading pharmaceuticals company in Bangladesh

Vision
To provide service to Bangladeshi people and to fulfill the demand of countrys medicine and
export it also to overseas.

Objectives
Our objectives are to transform Pharmainto a profitable company through operation of business
by 2016, and make best use of resource with serving our society well.

Bangladeshs Pharmaceutical Industry Overview

The Bangladesh pharmaceutical market in 2004 stood at approximately US $ 560
million, which was very small when compared to the population base of the country, which
currently stood at about 140 million. To put this number on a proper perspective, the total global
pharmaceutical sale in 2004 was $430 billion. This is expected to grow at 8.1% to
about$530billion in 2005.

However today, the pharmaceutical companies in Bangladesh are one of the fastest growing
sectors in the nation. Prior to post-liberation, the Multinational companies used to dominate the
market but today this situation has been completely reversed. Now approximately 80% of the
domestic pharmaceutical need is met by the local companies. In 2010, the total size of the
pharmaceuticals market of Bangladesh was estimated to be USD 100 billion with an annual
growth rate of about 24.58%, which has the highest annual growth in the world. With high
growth rates and increasing demand for products both locally and overseas Bangladeshs
Pharmaceutical Industry is now heading towards self-sufficiency. Eventually pharmaceutical
industry got an occasion to post a growth above 20% in 2010.

ALPHA PHARMA: COMPANY PROFILE

Company Name

Alpha Pharma Ltd.

Corporate Headquarters

Uday Tower
Gulshan Avenue
Gulshan-1 Dhaka - 1212
Bangladesh
Phone: + 880 28831382
Mobile: + 880 01676256775
Fax: + 880 29343459

Factory Premises

Plot# 42, Block # B, Tejgaon,Dhaka

Phone: +880 2 85646754
Fax No: +880 2 97543459

Founded

January 1, 2013

Scope of the Business

Manufacturing and marketing of human drugs.

Board of Directors

Sagor Sarkar

CEO

Shakkhor Haque

CFO

Raihan Chowdhury Raju ED

Zobaeir Bin Lutfor GM

Number of Employees

23

Associated Bank

ASIAN Bank Ltd

Bashundhara R/A Branch,
Dhaka-1229

Associated Auditor

Sakib Chartered Accountants Bangladesh.

95, Mohakhali C/A,
Dhaka-1229

Authorized Capital

40,000,000 TK

Issued and Outstanding Shares

40,000,000 TK

4. Products

Initially Alpha Pharma will be focusing in producing a few basic pharmaceutical

products which are needed by most people in their everyday lives, including medicines to cure
common colds, headaches and Gastric. Hence our core products will include

Generic Name

Trade Name

Uses

Paracetamol

Ace

Relief of headaches and other

minor aches and pains, mild
fever as well as colds and flus

Omeprazole

Gastrazole

Relief of peptic ulcer, for

preventing gastric acidic
formation

5. Company Background:
Number of employees: 23
Number of departments: 4
There are 4 departments in the organization which consists of the Finance and Accounting
Department, Marketing Department, Production Department and the Human Resources
Department. Alpha Pharma was established on January 1, 2013 with the aim of producing
innovative medicines for the people of Bangladesh so as to improve the general healthcare
system in the country. As of January 2013 the Company hired a total of 23 employees for various
departments for production purposes.

Finance and Accounting:

Our Finance and Accounting Department provides cost effective and efficient
accounting and financial management services to the Board and other stakeholders. Timely,
accurate, clear and complete financial information is provided through budget and financial
reporting, management information systems, forecasting and procedure development.

Marketing:
The Companys marketing department serves as the face of the organization, coordinating
and producing all materials representing the company. It is the marketing department's job to
reach out to potential customers, investors and the community, and create an image that
represents the company in a positive light.

Production:
Production is the functional area responsible for turning inputs into finished outputs
through a series of production processes. The Production Manager is responsible for making sure
that raw materials are provided and made into finished goods effectively. He also makes sure that
work is carried out smoothly, and must supervise procedures for making work more efficient and
more enjoyable.

Human Resources Department:

The HR function consists of tracking existing employee data which traditionally
includes personal histories, skills, capabilities, accomplishments and salary.

Corporate Governance
To assure the spirit of the Corporate Governance with accountability for inspiring
confidence of investors, regulators, financer and other stakeholders, Alpha Pharma is committed
to comply with all the requirements of Corporate Governance as required by the Securities and
Exchange Commission (SEC).

Board of Directors

The Board of Directors lies between the shareholders and operational management
of the organization. Directors are elected or appointed by the shareholders. The Board of
Directors is responsible for operating the Company and for the best interest of its shareholders
and is directly accountable to the shareholders. The Board of Directors of Alpha Pharma
comprises of 21 members including the CEO, CFO, GM and Executive Financial Director.

Chairman of the Board and Chief Executive Officer

The Chairman of the Company is elected among the directors of the Company.
The Board of Directors also clearly defines the respective roles and responsibilities of the
Chairman and the CEO in addition to their roles and responsibilities as per Articles of
Association of the Company.

MANAGERIAL HIERARCHY

Salary Schedule of the employees

CEO
HR (20000 + 18000 + 8000*2)
Finance (20000*2 + 18000 + 8000)
Marketing (20000 + 18000 + 8000*2)
Production (20000 + 10000*2)

6. Financial Policy
The financial policy of Alpha Pharma is given below:

Production Costs

30000
54000
66000
54000
40000
Tk244,000

Costs are broken down into three specific categories, direct materials, direct labor
and manufacturing overheads. Cost of manufactured goods is estimated to be Tk. 5.

Revenue
Revenue is only recognized when a formal transaction is made with a retail store or a
hospital. Revenue is recognized from the moment inventory leaves the stock. The price of all the
tablets, and capsules on an average is Tk. 8.5.

Accounts Payable
Accounts payable of Alpha Pharma will be stated at its original invoiced amount after
deducting debit balances. Normally we will try to keep the average payment period at less than
40 days.

Accounts Receivable
Accounts receivable will be stated at its original invoiced amount after deducting
credit balances. There will be a 30 day payment policy for general customers on accounts
receivables, and a 40 day payment policy for prioritized customers.

Interest payment policy

Interest will be paid on the loan amount on a yearly basis.

Calculation of Payment
Present value = PMT (PVIFA 22%, 5)
18,000,000 = PMT (2.863639761)
PMT =18,000,000/2.864 = TK. 6,285, 706.83

Loan

18,000,000

Payment

6,285,706.83

2.864

Year

Beginning
Balance

Payment

Interest

Payment of
Principal

Remaining
Balance

18,000,000

6285706.83

3960000

2325706.828

15674293.17

15674293.17

6285706.83

3448344.5

2837362.331

12836930.84

12836930.84

6285706.83

2824124.78

3461582.043

9375348.797

9375348.797

6285706.83

2062576.74

4223130.093

5152218.704

5152218.704

6285706.83

1133488.11

5152218.714

-0.009310412

Fixed Assets
Machinery, Land, vehicles and furniture are stated in the Financial Statements at
cost less depreciation. When fixed assets are to be disposed the book values of the asset and their
accumulated depreciation are eliminated up to the date of disposal. Any gains or losses from
disposal are then recorded as income or loss.

Depreciation
Alpha Pharma depreciates its fixed assets under the the straight line depreciation method.

Fixed Asset

Expected Lifetime
(Years)

Depreciation Rate (%)

Salvage Value

Machinery

20

Vehicle

10

Furniture

10

Building

50

1. Transactions for the First Quarter of 2013

Jan 1:

Shareholders invested Tk. 40,000,000 in the company.

Received bank loan of Tk. 18,000,000 (22% Interest Rate).

Paid insurance premium of Tk. 100,000 for 1 year.

Jan 3:

Purchased land for Tk. 30,000,000 with 80% cash and rest 20% on credit.
Construction of building cost Tk. 15,000,000 with 60% on cash and 40% on credit.
Estimated life is expected to be 50 years.

Jan 4:

Bought machinery, including the installation costs for Tk. 20,000,000. The estimated life

the machinery is 20 years.

Bought vehicle for Tk. 20, 00,000. Estimated life is expected to be 10 years.
Purchased furniture for Tk. 1,500,000. Estimated life is 10 years.

January 10: Bought office Supplies for 1 year with Tk. 50,000.
January 31: Paid telephone bills of Tk.3500.
January 31: Paid Salary expenses of Tk. 244,000.
January 31: Gas and electricity expenses were Tk. 9,000.
February 11: Paid telephone bills of Tk.3500.
February 12: Freight out was Tk. 40,000.
February 22: Used office supplies of Tk. 15,000.

February 23: Miscellaneous expenses of Tk. 2000.

February 24: Advertising expense of TK. 1,000,000
February 25: Gas and electricity expenses were Tk. 9,000.
February 28: Paid Salary expenses of Tk. 244,000
.
March 22: Paid telephone bills of Tk.3500.
March 24: Miscellaneous expenses of Tk. 2000.
March 31: Gas and electricity expenses were Tk. 9,000.
March 31: Paid Salary expenses of Tk. 244,000.

Journal Entries for the First Quarter of 2013

Date
Jan. 1
Jan. 1
Jan. 1
Jan.3

Jan.3

Jan.4
Jan.4
Jan.4
Jan.10
Jan.31
Jan.31

Cash
Capital

Dr.
40,000,000

40,000,000

Cash
Bank loan

1,800,000

Prepaid Insurance
Cash

100,000

Land
Cash
Accounts Payable

30,000,000

Building
Cash
Accounts Payable

15,000,000

Machinery
Cash

20,000,000

Vehicle
Cash

2,000,000

Furniture
Cash

1,500,000

Office Supplies
Cash

50,000

Telephone bills
Cash

3,500

Salaries Expense

244,000

1,800,000
1,00,000
24,000,000
6,000,000
9,000,000
6,000,000
20,000,000
2,000,000
1,500,000
50,000
3,500

Cash
Jan.31
Jan.31

Jan.31

244,000

Interest expense
Interest expense payable

330,000

Depreciation expense- Building

Accumulated depreciation
-Building

500

Depreciation expense- Machinery

2500

330,000
500

Accumulated depreciation machinery

Jan.31

Depreciation expense- Furniture

Accumulated depreciation -

Cr.

2500

625
625

8. General process of listing with DSE through IPO

The unlisted companies are required to complete certain procedures to get listing at DSE
(Dhaka Stock Exchange). The present process/way of listing, in short, may describe as follows:
1. Every company intending to enlist its securities to DSE by issuing its securities through
IPO is required to appoint Issue Manager to proceed with the listing process of the
company in the Exchange;
2. The Issue Manager prepares the draft prospectus of the company as per Public Issue
Rules of SEC and submit the same to the SEC and the Exchange(s) for necessary
approval;
3. The Issuer is also required to make agreement with the Underwriter(s) and Bankers to the
Issue for IPO purpose;
4. After receiving the draft prospectus, the Exchange examine and evaluate overall
performance as well as financial features of the company which may have short term and
long term impact on the market;
5. The Exchange send its opinion to SEC within 15 days of receipt of draft prospectus for
SEC's consideration;
6. After proper scrutiny, SEC gives it consent for floating IPO as per Public Issue Rule;
7. Having consent from SEC, the Issuer is required to file application to the Exchange for
listing its securities within 5 days of issuance of its prospectus;
8. On successful subscription, the company is required to complete distribution of
allotment/refund warrants within 42 days of closing of subscription;
9. After 100% distribution of shares/refund warrants and compliance of other requirements,
the application for listing of the Issuer is placed to the Exchange's meeting for necessary
decision of the Board of DSE;

10. The Board of DSE takes the decision regarding listing/non-listing of the company which
must be completed within 75 days from the closure of the subscription.

THE END