Financial Analysis

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1.0 Introduction

The project topic 'An Analysis of the Financial Performance of Renata Limited' is a significant one as it facilitates the understanding of the financial performance parameters of a company, on the context of a growing pharmaceuticals industry base in Bangladesh.

1.1 Origin

This report has been authorized to the students as an integral component of the Financial Management (F- 501) course requirement. The Course Instructor Mr. Imran Rahman has authorized this report on the June 7, 2003 with the date of submission being July 1, 2003.

1.2 Objectives

The objectives of the report is,

To discuss the Pharmaceutical Sector's prospect over the next one year.

To do a full analysis of the company's financial performances in the past three years.

To prepare the forecasted income statement for the next year and

To estimate the external fund requirement for the next year.

1.3 Methodology

Only secondary sources of data, which comprised the annual reports of the company of the year 2002 and 2001 has been used to do the project. The prospect for the sector has been written based on the news and information available from websites.

1.4 Scope

The scope of the report is limited to the information gathered from the Annual Reports of the Company. The performance analysis does not include any discussion with the management or the visit of the factory.

1.5 Limitation

The major limitation of the report was the lack of adequate information as the management was reluctant in divulging any information other than what is published on the annual reports.

2.0 Overview of Renata Limited

History Founded in 1972 as a subsidiary of Pfizer Inc. Ownership transferred from Pfizer Inc. to local institutions and the general public in 1993. Company name subsequently changed from Pfizer Laboratories (Bangladesh) Limited to Renata Limited.

Type of Company Listed Public Limited (Dhaka Stock Exchange).

Authorized Capital US $2.0 Million

Paid-Up Capital US $1.0 Million

Net Asset Value US $7.20 Million

Quality Recognition ISO9001 (DNV)

Turnover 911,593,846 taka in 2002

No. of Employees 905 in 2002

Trade Mark Acquisition Trademarks for three Hoechst Marion Roussel (HMR) products perpetually assigned to Renata. These products are

Bactamox (Amoxicillin Tablet and Dry Syrup)

Alsporin (Cephalexin Tablet and Dry Syrup)

Pyralgin (Paracetamol Tablet and Suspension)

This acquisition was made following a three-year relationship with HMR. From 1997-2000, Renata manufactured 19 Penicillin and Cephalosporin formulations on behalf of HMR.

Export Human Pharmaceuticals to Myanmar, Nepal and SriLanka.

Affiliations Providing technical assistance to Deurali Janata Pharmaceuticals Private Limited (Nepal)

Agreement with Social Marketing Company (SMC) for supplying oral re-hydration salts.

Agreement with BRAC for supplying oral re-hydration salts.

49% Shareholding in BRAC-Renata Agro Industries Limited (One of largest poultry breeding and hatching operation in Bangladesh).

Receiving Technical Assistance from BASF (Germany) regarding the manufacture of Animal Nutrition products. Also distributing a selection of BASF feed additives for Animals.

Distributor for Pfizer, India (Animal Health)

Distributor for Zinpro, USA (Metal Amino Acid Complexes)

Distributor for Biomin Laboratories, Singapore (Mycotoxin Binders and Nutraceuticals).

Distributor for British Oxygen Company (Bangladesh) (Medical Devices.

Bankers Standard Chartered Grindlays Bank.

American Express Bank

Agrani Bank

3.0 Prospect of the Pharmaceutical Industry of Bangladesh

Bangladesh produces just 6-8 bulk drugs that include paracetamol, diclofenac, ampicillin and amoxycillin among others. However, the country produces almost the entire requirements of finished pharmaceutical products for domestic consumption to the extent of 95 per cent. Finished formulation imports, mostly constituting...
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