DIFFERENT ASPECTS TO IMPROVE OVERALL FINANCIAL STRENTGH OF A PHARMACEUTICALS COMPANY

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                               Mr. Aminul Islam Khan

Finance & Operation Director                          Mr. Zahirul Islam Khan

Marketing Director                                                       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                        Mr. Md. Kabir Reza, FCMA

Company Secretary                             Mr. Khandaker Habibuzzaman, MBA, ACS

Head of Internal Audit             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
  • Terminally sterilized
B. Solid dosage forms (Dry powder fill)
Dedicated facility
Non-sterile products
  1. Liquid dosage forms (Syrup and Suspension)
  2. Semi solid dosage forms (Sterile and Non sterile)
  3. Solid dosage forms
  4. Single dose form (Tablets, Capsules, Sachet)
  5. 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 unit Capacity
( per day)
Capacity
(per 26 days)
Capacity
(per 30 days)
Oral solid
1. Tablet Granulation 4 30000 Box 750000 Box 225000000 Boxes
Compression 5
Coating 2
Blister pack 5
2. Capsule Encapsulation 4 10,000 Box 260,000 Box 75,000,000 Boxes
Blister pack 3
3. ORS Blending 1 10,000 Box 250000 Box 75000000 Boxes
Filling & Sachetting 1
4. Dry Powder fill Blending 1 20000 Bottles 500000 Bottles 150000000 Bottles
Filling & Sealing 1
5. Liquid Line 2 100000 Bottles 26000 Bottles 300000 Bottles
B. Semisolid Compounding 1 20000 Boxes 500000 Boxes 150000000 Box
Filling & sealing 1
C. Sterile Preparation
•  SVP Filling & Sealing 2 10000 Boxes of 10 each 250000 Boxes 75000000 Boxes
Packing 2
•  Sterile powder filling Filling & Sealing 1 20000 Boxes of one each 500000 Boxes of one each 150000000 Boxes of one each
Blister pack 1
3.5       Factory Premises:
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 40500 sft
10. ETP 1000 stf
Grand Total: 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 un-interruptedly.
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 F-SVP-01 F-SVP-012 F-SVP-13 F-SVP-23
Room Name Amp.
Wash
Amp.
Filling/
Sealing
Soln.
Prep.
Room
Cont.
Prep.
Room
Air Lock Air Lock Sterile
Cor.
Class 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
(without F.C.)
2.74
(without F.C.)
2.74
(without F.C.)
2.74
(without F.C.)
2.74
(without F.C.)
2.74
(without F.C.)
2.74
(without F.C.)
Overpressure In mm WG 25 Pa 45 Pa 35 Pa 25 Pa 25 Pa 45 Pa 25 Pa
Temp
(+/- 2 o C)
22 o C 22 o C 22 o C 22 o C 22 o C 22 o C 22 o C
Humidity
(RH %)(+/- 2%)
50 50 50 50 50 50 50
Air Changes
(+/- 20%)
20 120 60 20 10 20 10

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 In- process 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 Details
ASNIL Syrup Salbutamol BP 100 ml
ATEVAL Tablet Fluphenazine +Nortriptyline 10×10’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 Details
DOMIDON Suspension Domperidone 60 ml
DOMIDON Tablet Domperidone 10X10’s
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 10×100’s
MELXIT Tablet Flupentixol BP & Melitracen INN 5×10’s
METRO 400 Tablet Metronidazole 10X10’s
METRO Suspension Metronidazole 60 ml
MONOSPRIN Tablet Aspirin BP 10X10’s
Brand Name Generic Name Pack Size Details
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
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 Details
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 3×10’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.
  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 313,605,325 272,836,633
Property, Plant and  Equipment- Carrying Value 228,985,636 199,217,503
Intangible Assets 84,619,689 73,619,129
Current Assets 475,868,982 414,006,014
Inventories 52,987,654 46,099,259
Spares & Supplies 29,654,320 25,799,258
Accounts Receivable 189,828,765 165,151,026
Loans, Advances and Deposits 158,789,544 138,146,903
Short Term Investment 37,854,923 32,933,783
Cash and Cash Equivalents 6,753,776 5,875,785
TOTAL ASSETS 789,474,307 686,842,647
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ Equity 120,000,000 104,400,000
Issued Share Capital 120,000,000 104,400,000
Non-Current Liabilities 510,505,865 444,140,103
Long Term Borrowing-Net of Current Maturity (Secured) 508,017,190 441,974,955
Deferred Tax Liability 441,888 352,416 2,488,675 2,165,147
Current Liabilities and Provisions 158,968,442 138,302,545
Short Term Borrowing 136,962,883 119,157,708
Long Term Borrowing-Current Maturity 1,165,416 1,013,912
Creditors and other Payables 7,789,500 6,776,865
Accrued Expenses 575,000 500,250
Income Tax Payable 12,475,643 10,853,809
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 789,474,307 686,842,647
4.2       Profit Analysis:
Loss Profit Analysis
As at Dec’31 2010 As at Dec’31 2009
Net Sales Revenue 902,180,897 784,897,380
Cost of Goods Sold 559,040,923 519,908,058
Gross Profit 343,139,974 264,989,322
Operating Expenses : (242,030,461) (225,088,329)
Administrative  Expenses (61,513,805) (57,207,839)
Selling and Distribution Expenses (180,516,656) (167,880,490)
Profit from Operations 585,170,435 490,077,651
Other Income 25,890,300 24,492,224
Finance Cost (21,567,850) (20,403,186)
Profit before Contribution to WPPF 589,492,885 494,166,689
Contribution to Workers’
Profit Participation/ Welfare Funds (235,765,800) (223,034,447)
Profit before Tax 353,727,085 271,132,242
Income Tax (586,385) (554,720)
Profit after Tax 353,140,700 270,577,522
4.3       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
Cash Flows from Operating Activities :                    
Cash Receipts from Customers and Others 902,180,897 784,897,380
Cash Paid to Suppliers and Employees (418,673,273) (364,245,748)
Cash Generated from Operations 483,507,624 420,651,633
Interest Paid (217,282) (189,035)
Income Tax Paid (586,385) (510,155)
Net cash Generated from Operating Activities 484,311,291 421,350,823
Cash Flows from Investing Activities :
Acquisition of Property, Plant and Equipment (net of IDCP) (29,768,133) (25,898,276)
Intangible Assets (11,000,560) (9,570,487)
Short Term Investment 4,921,140 4,281,392
Disposal of Property, Plant and Equipment 1,550,000 1,348,500
Net Cash used in Investing Activities (34,297,553) (29,838,871)
Cash Flows from Financing Activities :
Net (Decrease)/Increase in Long Term Borrowings 66,042,235 57,456,744
Net (Decrease) /Increase in Short Term Borrowings 17,805,175 15,490,502
Net Cash Generated from Financing Activities 83,847,410 72,947,247
Increase/(Decrease) in Cash and Cash Equivalents 117,283,517 102,036,660
Cash and Cash Equivalents at Beginning of Period 178,456,784 155,257,402
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 As at Dec’31 2009
Inventories
Finished Goods 21,005,270 18,274,585
Materials
(Including Work in Process and Transit) 120,567,650 104,893,856
Sample & Others 459,680 399,922
142,032,600 123,568,362
Loans, Advances and Deposits
Motor Cycle Loan 18,880,744 17,370,284
Sequrity and Other Deposit 138,450 127,374
Advance for Expense 1297107 1,193,338
Salary Advance 5,635,972 5,185,094
Sundry Party 787,542 724,539
Others
26,739,815 24,600,630
Cash and Cash Equivalents
Cash in Hand , Transit & Bank 7,360,817 6,992,776
7,360,817 6,992,776
Long Term Borrowing
A Non Current Maturity
Project Loan 98,519,307 93,593,342
Obligation under Finance Lease 20,726,265 19,689,952
119,245,572 113,283,293
4.5       Cost of Goods Sold, Administrative Expenses, Selling and Distribution Expenses Analysis
As at Dec’31 2010 As at Dec’31 2009
Cost of Goods Sold
Materials 120,567,650 112,127,915
Factory Overhead 418,673,273 389,366,144
Depreciation 19,800,000 18,414,000
559,040,923 519,908,058
Administrative  Expenses
Salary & Allowances 14,985,221 13,936,256
Fuel, Repairs & Office Maintenance 2,613,774 2,430,810
Travelling & Conveyance 0
AGM and Company Secretarial Expenses 3,549,758 3,301,275
Other Expenses 37,827,816 35,179,869
Depreciation 1,247,824 1,160,476
61,513,805 57,207,839
Selling and Distribution Expenses
Salary & Allowances 10,821,756 10,064,233
Travelling & Conveyance 1,289,412 1,199,153
Market Research & New Products 456,000 424,080
Sample, Literature & Promotional Expenses 1,234,530 1,148,113
Delivery Commission 13,339,679 12,405,901
Depreciation 505,200 469,836
Other Expenses 152,870,079 142,169,173
180,516,656 167,880,490

4.6       Ratio AnalysisFinancial strength ratios go by many names (liquidity, solvency, financial leverage), but they all point to the same thing.

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  Exp Exp  Net Exp
 as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
4040121 Salary                    813,326 1624056                                810,730.00
4040102 Ta/ Da Allowance                    404,590 844077                                439,487.00
4040103 Brand Loyality                    194,500                    394,500                                200,000.00
4040104 Rent/Bill                      31,120                      61,545                                  30,425.00
4040105 Delivery Cost                      32,938                      88,607                                  55,669.00
4040106 Booking Cost/Postage Charge                      23,661                      41,252                                  17,591.00
4040107 DD Cost/ Bank Charge                        3,105                        4,899                                    1,794.00
4040108 Donation/Gift                        9,600                      57,400                                  47,800.00
4040109 Conveyance                        5,191                      10,390                                    5,199.00
4040110 Computer Paper/Ribon                           660                           990                                       330.00
4040111 Fuel & Tool                           742                        1,774                                    1,032.00
4040112 Stationary & Photocopy                        6,833                        7,803                                       970.00
4040113 Entertainment & Confer. Cost                      21,955                      25,195                                    3,240.00
4040114 Miscelance                           803                        1,403                                       600.00
4040115 Cash Incentive                        6,500                    102,000                                  95,500.00
4040117 Sales Commission                    177,074                    597,941                                420,867.00
4040118 Product Bonus                      47,330                      99,490                                  52,160.00
4040119 Postage Charge                        1,205                        2,400                                    1,195.00
4040120 Photocopy                           565                           937                                       372.00
4040121 Car Maintinance                        3,730                        6,870                                    3,140.00
4040122 Hardship Allowance                        6,510                      11,350                                    4,840.00
4040124 Carring Outward                      10,274                      29,881                                  19,607.00
4040125 Gold Leaf & Jute                        4,829                        9,328                                    4,499.00
4040127 Carring Inward                      11,932                      29,779                                  17,847.00
4040123 Loss & Damage                                               –  
Total                 1,818,973 4053867                             2,234,894.00
Chittagong depot
 C/C Code Name of the Expenditure  Exp Exp  Net Exp
 as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
4040203 Brand Loyality                    234,000                    473,000                                239,000.00
4040201 Salary                    742,890                 1,517,898                                775,008.00
4040202 Ta/ Da Allowance                    357,199                    742,054                                384,855.00
4040204 Rent/Bill                      28,700                      58,246                                  29,546.00
4040205 Delivery Cost                      91,130                    137,946                                  46,816.00
4040206 Booking Cost/Postage Charge                        4,795                      14,315                                    9,520.00
4040207 DD Cost/ Bank Charge                        1,847                        3,058                                    1,211.00
4040208 Donation/Gift                      46,150                      64,650                                  18,500.00
4040209 Conveyance                        1,089                        4,079                                    2,990.00
4040210 Computer Paper/Ribon                           850                        1,800                                       950.00
4040211 Fuel & Lubricants                        1,800                        1,800                                               –  
4040212 Stationary & Photocopy                        7,271                        7,950                                       679.00
4040213 Entertainment & Confer. Cost                      21,210                      25,720                                    4,510.00
4040214 Miscelance                      20,075                      27,940                                    7,865.00
4040215 Cash Incentive                      13,000                      19,500                                    6,500.00
4040217 Sales Commission                      79,417                    218,965                                139,548.00
4040218 Product Bonus                      20,326                      44,647                                  24,321.00
4040219 Postage Chargre                        1,090                        1,880                                       790.00
4040220 Photocopy                           301                           426                                       125.00
4040221 Car Maintinance                      10,300                      10,300                                               –  
4040222 Hardship Allowance                           642                        1,212                                       570.00
4040224 Carring Outward                      20,724                      22,147                                    1,423.00
4040225 Gold Leaf & Jute                        4,213                        8,917                                    4,704.00
4040226 Office Maint. 2720                                    2,720.00
4040227 Carring Inward                        6,687                      21,227                                  14,540.00
4040223 Loss & Damage                                               –  
Total                 1,715,706                 3,432,397                             1,716,691.00
Faridpur depot
 C/C Code Name of the Expenditure  Exp Exp  Net Exp
 as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
4040303 Brand Loyality                    223,500                    491,500                                268,000.00
4040301 Salary                    942,426                 1,931,682                                989,256.00
4040302 Ta/ Da Allowance                    480,987                    933,104                                452,117.00
4040304 Rent/Bill                      25,214                      50,340                                  25,126.00
4040305 Delivery Cost                      61,240                    130,132                                  68,892.00
4040306 Booking Cost/Postage Charge                        4,925                        8,940                                    4,015.00
4040307 DD Cost/ Bank Charge                        1,599                        3,633                                    2,034.00
4040308 Donation/Gift                      81,460                      81,460                                               –  
4040309 Conveyance                        3,271                      10,159                                    6,888.00
4040310 Computer Paper/Ribon                        1,060                        2,297                                    1,237.00
4040311 Fuel & Lubricants                           400                        1,250                                       850.00
4040312 Stationary & Photocopy                        9,589                      10,430                                       841.00
4040313 Entertainment & Confer. Cost                      27,380                    125,282                                  97,902.00
4040314 Miscelance                        4,595                        8,601                                    4,006.00
4040315 Cash Incentive                      19,000                    102,000                                  83,000.00
4040317 Sales Commission                    160,650                    289,787                                129,137.00
4040318 Product Bonus                      32,172                      52,093                                  19,921.00
4040319 Postage Charge                           285                                       285.00
4040321 Car Maint.                           290                        2,770                                    2,480.00
4040322 Hardship Allowance                           450                        1,750                                    1,300.00
4040324 Carring Outward                      47,422                      84,461                                  37,039.00
4040325 Gold Leaf & Jute                        4,681                        9,554                                    4,873.00
4040326 Office Maint.                           500                                       500.00
4040327 Carring Inward                      17,245                      31,332                                  14,087.00
4040320 Photocopy                             41                                       (41.00)
4040323 Loss & Damage                           188                                       188.00
Total                 2,149,597                 4,363,530                             2,213,933.00
Sylhet Depot
 C/C Code Name of the Expenditure  Exp Exp  Net Exp
 as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
4040403 Brand Loyality                    206,000                    417,000                                211,000.00
4040401 Salary                    470,683                    986,227                                515,544.00
4040402 Ta/ Da Allowance                    205,458                    390,904                                185,446.00
4040404 Rent/Bill                      30,470                      60,320                                  29,850.00
4040405 Delivery Cost                      28,078                      62,496                                  34,418.00
4040406 Booking Cost/Postage Charge                      22,974                      50,184                                  27,210.00
4040407 DD Cost/ Bank Charge                           259                        1,261                                    1,002.00
4040408 Donation/Gift                        8,495                      77,442                                  68,947.00
4040409 Conveyance                        3,038                        4,694                                    1,656.00
4040410 Computer Paper/Ribon                           980                        1,800                                       820.00
4040411 Fuel & Lubricants                             45                             45                                               –  
4040412 Stationary & Photocopy                           576                           811                                       235.00
4040413 Entertainment & Confer. Cost                      23,672                      26,512                                    2,840.00
4040414 Miscelance                        1,000                        1,500                                       500.00
4040417 Sales Commission                      29,342                      68,400                                  39,058.00
4040418 Product Bonus                        8,949                      26,767                                  17,818.00
4040415 Cash Incentive                        2,000                                    2,000.00
4040419 Postage Charge                           244 568                                       324.00
4040420 Photocopy                           110                           290                                       180.00
4040421 Car Maintinance                        5,000                        6,900                                    1,900.00
4040424 Carring Outward                        3,724                        9,097                                    5,373.00
4040425 Gold Leaf & Jute                        2,996                        2,996                                               –  
4040427 Carring Inward                        9,698                                  (9,698.00)
4040423 Loss & Damage                                               –  
4040426 Office Maint.                           353                                       353.00
4040427 Carring Inward                      30,862                                  30,862.00
Total                 1,061,791                 2,229,429                             1,167,638.00
Dhaka Depot
 C/C Code Name of the Expenditure  Exp Exp  Net Exp
 as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
4040503 Brand Loyality                    308,300                    632,500                                324,200.00
4040501 Salary                 1,360,318                 2,743,272                             1,382,954.00
4040502 Ta/ Da Allowance                    665,923                 1,344,638                                678,715.00
4040504 Rent/Bill                      66,070                    166,683                                100,613.00
4040505 Delivery Cost                    113,090                    226,552                                113,462.00
4040506 Booking Cost                           370                                       370.00
4040507 Bank/DD Charge                           418                        1,113                                       695.00
4040508 Donation/Gift                    247,052                    362,842                                115,790.00
4040509 Conveyance                      14,285                      24,330                                  10,045.00
4040510 Computer Paper/Ribon                        7,995                      11,395                                    3,400.00
4040511 Fuel & Lubricants                                               –  
4040512 Photocopy                           148                           163                                         15.00
4040513 Postage Charge                                               –  
4040514 Stationary                        2,125                        2,275                                       150.00
4040415 Conference Entertainment                      62,212                      67,402                                    5,190.00
4040517 Cash Incentive                      17,500                      23,974                                    6,474.00
4040518 Sales Commission                    138,595                    688,023                                549,428.00
4040519 Product Bonus                      48,373                      80,063                                  31,690.00
4040521 Car Maintinance                        2,318                        4,118                                    1,800.00
4040522 Hardship Allowance                        5,124                      12,794                                    7,670.00
4040523 Loss & Damage                      41,594                      41,594                                               –  
4040524 Carring Outward                      40,024                      67,043                                  27,019.00
4040525 Gold Leaf & Jute                      22,135                      23,335                                    1,200.00
4040527 Repair & Maint.                        7,048                        7,549                                       501.00
4040529 Miscelance                        2,200                        2,200                                               –  
Total                 3,172,847                 6,534,228                             3,361,381.00
Barisal Depot
 C/C Code Name of the Expenditure  Exp Exp  Net Exp
 as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
4040603 Brand Loyality                    159,160                    332,760                                173,600.00
4040601 Salary                    440,241                    687,075                                246,834.00
4040602 Ta/ Da Allowance                    194,481                    407,507                                213,026.00
4040604 Rent/Bill                      20,136                      30,240                                  10,104.00
4040605 Delivery Cost                        1,775                      60,259                                  58,484.00
4040606 Booking Cost                      28,446                      54,519                                  26,073.00
4040607 Bank Charge/DD Cost                           525                        1,902                                    1,377.00
4040608 Donation/Gift                        7,900                      18,105                                  10,205.00
4040609 Conveyance                        1,295                        3,805                                    2,510.00
4040610 Computer Paper/Ribon                        1,082                        1,920                                       838.00
4040612 Stationary                        4,520                        4,520                                               –  
4040613 Entertainment & Conference Cost                      10,746                      14,087                                    3,341.00
4040614 Misc Exps                        9,063                        9,648                                       585.00
4040615 Cash Incentive                      13,000                      27,500                                  14,500.00
4040617 Sales Commission                      28,769                      79,647                                  50,878.00
4040618 Product Bonus                      20,592                                  20,592.00
4040619 Postage Charge                           720                        1,120                                       400.00
4040620 Photocopy                           190                           340                                       150.00
4040622 Hardship Allowance                        2,340                                    2,340.00
4040624 Carring Outward                        2,508                        6,478                                    3,970.00
4040625 Gold Leaf & Jute                        4,239                        8,045                                    3,806.00
4040623 Loss & Damage                                               –  
Total                    928,796                 1,772,409                                843,613.00
Comilla Depot
A/C Code Name of the Expenditure Exp Exp Net Exp
as on 31 Jan2011 as on 28 Feb 2011 For the month of Feb 2011
4040701 Salary                    867,139                 1,102,169                                235,030.00
4040702 Ta/ Da Allowance                    412,220                    786,217                                373,997.00
4040703 Brand Loyality                    261,300                    515,100                                253,800.00
4040704 Rent/Bill                      22,134                      42,964                                  20,830.00
4040705 Delivery Cost                    109,272                    195,538                                  86,266.00
4040706 Booking Cost                      74,804                    146,053                                  71,249.00
4040707 DD Cost/ Bank Charge                           908                        1,450                                       542.00
4040708 Donation/Gift                      28,675                      58,060                                  29,385.00
4040709 Conveyance                        4,884                        7,527                                    2,643.00
4040710 Computer Paper/Ribon                        5,740                      15,970                                  10,230.00
4040711 Fuel/Tools                           820                        1,632                                       812.00
4040712 Office Stationary                           901                        1,241                                       340.00
4040713 Entertainment                      42,115                      47,592                                    5,477.00
4040714 Miscelance                           355                        1,690                                    1,335.00
4040715 Cash Incentive                        7,500                                    7,500.00
4040717 Sales Commission                    209,978                    392,148                                182,170.00
4040718 Product Bonus                      20,770                      36,645                                  15,875.00
4040719 Postage Charge                           995                        2,285                                (18,485.00)
4040720 Photocopy                           322                           619                                     (376.00)
4040721 Car Maintinance                        2,800                      13,450                                  13,128.00
4040722 Hardship Allowance                        1,800                        2,520                                     (280.00)
4040724 Carring Outward                        6,765                      19,454                                  17,654.00
4040725 Gold Leaf & Jute                        3,100                        7,550                                       785.00
4040326 Office Maint.                           325                                       325.00
4040727 Carring Inward                        9,236                      17,546                                    8,310.00
Total                 2,087,033                 3,423,245                             1,336,212.00
Mymensingh Depot
A/C Code Name of the Expenditure Exp Exp Net Exp
as on 31 Jan2011 as on 28 Feb 2011 For the month of Feb 2011
4040801 Salary                    499,038                 1,035,264                                536,226.00
4040802 Ta/ Da Allowance                    225,545                    447,323                                221,778.00
4040803 Brand Loyality                    163,000                    317,000                                154,000.00
4040804 Rent/Bill                      20,242                      41,914                                  21,672.00
4040805 Delivery Cost                      30,797                      57,002                                  26,205.00
4040806 Booking Cost                      37,080                      81,800                                  44,720.00
4040807 DD Cost/ Bank Charge                           338                        1,699                                    1,361.00
4040808 Donation/Gift                      13,985                      45,185                                  31,200.00
4040809 Conveyance                        1,843                        2,858                                    1,015.00
4040810 Computer Paper                           820                                       820.00
4040811 Fuel                           309                                       309.00
4040812 Office Stationary                        6,135                        7,061                                       926.00
4040813 Entertainment                      15,043                      17,193                                    2,150.00
4040814 Miscelance                        2,314                        3,128                                       814.00
4040815 Cash Incentive                        2,000                        2,000                                               –  
4040817 Sales Commission                      36,064                    191,957                                155,893.00
4040818 Product Bonus                        9,435                      17,207                                    7,772.00
4040819 Postage Charge                           555                           965                                       410.00
4040820 Photocopy                           160                           254                                         94.00
4040821 Car Maintinance                        4,645                        8,725                                    4,080.00
4040822 Hardship Allowance                             50                             50                                               –  
4040824 Carring Outward                           350                        8,822                                    8,472.00
4040825 Gold Leaf & Jute                           850                           850                                               –  
4040827 Carring Inward                        8,352                      14,608                                    6,256.00
Total                 1,077,821                 2,303,994                              1,226,173.00
Rangpur Depot
 C/C Code Name of the Expenditure  Exp Exp  Net Exp
 as on 31 Jan2011 as on 28 Feb 2011  For the month of Feb 2011 
4040901 Salary                    745,621                 1,525,364                                779,743.00
4040902 Ta/ Da Allowance                    395,387                    801,752                                406,365.00
4040903 Brand Loyality                    272,500                    566,000                                293,500.00
4040904 Rent/Bill                      24,017                      33,409                                    9,392.00
4040905 Delivery Cost                      36,735                      97,093                                  60,358.00
4040906 Booking Cost                      33,053                      79,225                                  46,172.00
4040907 DD Cost/ Bank Charge                        6,628                      13,322                                    6,694.00
4040908 Donation/Gift                      44,510                      57,410                                  12,900.00
4040909 Conveyance                      13,353                      24,038                                  10,685.00
4040910 Computer Paper/Ribon                        1,620                        3,225                                    1,605.00
4040911 Fuel/Tools                           398                           398                                               –  
4040912 Office Stationary                        4,182                        7,430                                    3,248.00
4040913 Entertainment                      22,805                      27,385                                    4,580.00
4040914 Miscelance                           508                        1,429                                       921.00
4040915 Cash Incentive                    129,000                                129,000.00
4040917 Sales Commission                      86,694                    232,646                                145,952.00
4040918 Product Bonus                      14,860                      30,245                                  15,385.00
4040919 Postage Charge                        1,054                        2,080                                    1,026.00
4040920 Photocopy                        1,665                        3,456                                    1,791.00
4040921 Car Maintinance                        1,091                        3,349                                    2,258.00
4040922 Hardship Allowance                           570                        2,370                                    1,800.00
4040924 Carring Outward                        8,529                      19,556                                  11,027.00
4040925 Gold Leaf & Jute                        4,550                        9,575                                    5,025.00
4040926 Office Maint.                        1,020                                  (1,020.00)
4040927 Carring Inward                      16,230                      32,952                                  16,722.00
Total                 1,737,580                 3,702,709                             1,965,129.00
Total expenditure =                           16,065,664.00

5.1       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: