ASSIGNMENT- 1

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. Toput 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 NameAlpha Pharma Ltd.

Corporate HeadquartersUday Tower

Gulshan Avenue

Gulshan-1 Dhaka - 1212

Bangladesh

Phone: + 880 28831382

Mobile: + 880 01676256775

Fax: + 880 29343459

Factory PremisesPlot# 42, Block # B, Tejgaon,Dhaka

Phone: +880 2 85646754

Fax No: +880 2 97543459

FoundedJanuary 1, 2013

Scope of the BusinessManufacturing and marketing of human drugs.

Board of DirectorsSagor Sarkar CEO

Shakkhor Haque CFO

Raihan Chowdhury Raju ED

Zobaeir Bin Lutfor GM

Number of Employees23

Associated BankASIAN Bank Ltd

Bashundhara R/A Branch,

Dhaka-1229

Associated AuditorSakib Chartered Accountants Bangladesh.95, Mohakhali C/A,

Dhaka-1229

Authorized Capital40,000,000 TK

Issued and Outstanding Shares40,000,000 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 NameTrade NameUses

ParacetamolAce

Relief ofheadaches and other minor aches and pains, mild fever as well as colds and flus

OmeprazoleGastrazoleRelief of peptic ulcer, for preventing gastric acidic formation

5. Company Background:Number of employees: 23Number of departments: 4There 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

CEO30000

HR (20000 + 18000 + 8000*2)54000

Finance (20000*2 + 18000 + 8000)66000

Marketing (20000 + 18000 + 8000*2)54000

Production (20000 + 10000*2)40000

Tk244,000

6. Financial Policy

The financial policy of Alpha Pharma is given below:Production Costs

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 QUOTE = TK. 6,285, 706.83Loan18,000,000

Payment6,285,706.832.864

YearBeginning BalancePaymentInterestPayment of PrincipalRemaining Balance

118,000,0006285706.8339600002325706.82815674293.17

215674293.176285706.833448344.52837362.33112836930.84

312836930.846285706.832824124.783461582.0439375348.797

49375348.7976285706.832062576.744223130.0935152218.704

55152218.7046285706.831133488.115152218.714-0.009310412

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 AssetExpected Lifetime (Years)Depreciation Rate (%)Salvage Value

Machinery2030

Vehicle1050

Furniture1050

Building5020

1. Transactions for the First Quarter of 2013Jan 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. 1,000,000February 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

DateDr.Cr.

Jan. 1Cash40,000,000

Capital40,000,000

Jan. 1Cash1,800,000

Bank loan1,800,000

Jan. 1Prepaid Insurance100,000

Cash 1,00,000

Jan.3Land30,000,000

Cash24,000,000

Accounts Payable6,000,000

Jan.3Building15,000,000

Cash 9,000,000

Accounts Payable 6,000,000

Jan.4Machinery20,000,000

Cash20,000,000

Jan.4Vehicle2,000,000

Cash2,000,000

Jan.4Furniture1,500,000

Cash1,500,000

Jan.10Office Supplies50,000

Cash50,000

Jan.31Telephone bills3,500

Cash 3,500

Jan.31Salaries Expense244,000

Cash244,000

Jan.31Interest expense330,000

Interest expense payable330,000

Jan.31Depreciation expense- Building500

Accumulated depreciation -Building500

Jan.31Depreciation expense- Machinery

2500

Accumulated depreciation - machinery2500

Jan.31Depreciation expense- Furniture

625

Accumulated depreciation - Furniture625

Jan.31Depreciation expense- vehicle

833

Accumulated depreciation - vehicle833

Jan.31Insurance expense8334

Prepaid insurance 8,334

Jan.31Gas and Electricity Expense9,000

Cash9,000

Feb.11Telephone Bills3,500

Cash3,500

Feb.12Freight out expenses40,000

Cash40,000

Feb.22Office supplies expense15000

Office supplies15000

Feb.23Miscellaneous Expense

2000

Cash2000

Feb.24Advertising expense1,000,000

Cash1,000,000

Feb.25Gas and Electricity Expense9,000

Cash9,000

Feb.28Salaries Expense244,000

Cash244,000

Feb.28Interest expense330,000

Interest expense payable330,000

Feb.28Depreciation expense- Building500

Accumulated depreciation -Building500

Feb.28Depreciation expense- Machinery

2500

Accumulated depreciation - machinery2500

Feb.28Depreciation expense- Furniture

625

Accumulated depreciation - Furniture625

Feb.28Depreciation expense- vehicle

833

Accumulated depreciation - vehicle833

Feb.28Insurance expense8333

Prepaid insurance 8,333

March 22Telephone bills3,500

Cash 3,500

Mar.24Miscellaneous Expense

2000

Cash2000

Mar.31Gas and Electricity Expense7,000

Cash7,000

Mar.31Salaries Expense244,000

Cash244,000

Mar.31Interest expense330,000

Interest expense payable330,000

Mar.31Depreciation expense- Building500

Accumulated depreciation -Building500

Mar.31Depreciation expense- Machinery2500

Accumulated depreciation - machinery2500

Mar.31Depreciation expense- Furniture625

Accumulated depreciation - Furniture625

Mar.31Depreciation expense- vehicle834

Accumulated depreciation - vehicle834

Mar.31Insurance expense8333

Prepaid insurance8,333

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