Performance Analysis of Central

Pharmaceuticals Ltd.
Group List

Name ID No
Tamanna Tasnim 21-009
Nabila Ahmad 21-013
Antor Shaha 21-055
Fahimur Rahman 21-093
Md.Najmul Hasan 21-097
Habiba Ferduse 21-119
Habiba Ferduse
ID: 21-119
Corporate Overview
Incorporation • 13 November, 1980

Commencement of • 01 December, 1980

Production

IPO • 2013

Authorized Capital • Taka 3000 Million

Paid-up Capital • Taka 103.62 Million

Number of Employees • 296

(30 June , 2017)

Number of Shareholders • 11,409

Corporate Overview

Vision

• Contribution in national economy

• Summit of manufacturing pharmaceuticals finished drugs.

Mission

• Realize dreams to create new dreams

• Better medicine better health.

Target

• Customer trust and satisfaction

Md.Najmul Hasan
ID: 21-097
 Profitability Analysis

RNOA
18.0%
16.2% 16.6%
16.0% 14.1%
14.0%
12.0%
10.0% 8.0% 8.8%
8.0%
6.0%
4.0%
2.0%
0.0%
2012-13 2013-14 2014-15 2015-16 2016-17

RNOA
Profitability Analysis
NOPAT AND NE T OPERATING ASSE TS
2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

-
2012-13 2013-14 2014-15 2015-16 2016-17
Profitability Analysis
Gross Profit Margin Operating Profit Margin Net Profit Margin

23.94%
2016-17 36.70%
48.45%

23.47%
2015-16 34.44%
49.24%

21.70%
2014-15 36.36%
49.07%

23.27%
2013-14 39.99%
49.76%

18.37%
2012-13 36.39%
48.72%
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
Tamanna Tasnim
ID: 21-009
 Profitability Analysis

SALES CONDITION
700,000,000 80.00%

600,000,000 60.00%

500,000,000 40.00%

400,000,000 20.00%

300,000,000 0.00%

200,000,000 -20.00%

100,000,000 -40.00%

- -60.00%
2012-13 2013-14 2014-15 2015-16 2016-17

Sales growth
Profitability Analysis
Total assets, current laibilities & net operating assets
8,000,000,000

7,000,000,000

6,000,000,000

5,000,000,000

4,000,000,000

3,000,000,000

2,000,000,000

1,000,000,000

-
2012-13 2013-14 2014-15 2015-16 2016-17

Total asset Current liability Net operating Asset

Profitability Analysis [ROCE]

Net i ncome, common shareholders equity & ROCE

2,000,000,000 12.0%

10.0%
1,600,000,000

8.0%
1,200,000,000
6.0%
800,000,000
4.0%

400,000,000
2.0%

- 0.0%
2012-13 2013-14 2014-15 2015-16 2016-17

Net income Common Equity ROCE

Fahimur Rahman
ID: 21-093
 Prospective Analysis
Pro forma Income Statements
Central Pharmaceuticals
BASE FORECAST
PARTICULARS
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Sales turnover 455,678,564 541,589,366 643,697,255 765,055,931 909,294,817 1,080,727,605 1,296,873,126
Cost of goods Sold 234,900,250 279,189,318 331,825,935 394,386,333 468,741,478 557,115,080 668,538,097
Gross profit 220,778,314 262,400,048 311,871,320 370,669,599 440,553,339 523,612,525 628,335,030
Operating expenses 53,537,769 63,631,447 75,628,124 89,886,580 106,833,237 126,974,910 152,369,893
Administrative expenses 14,132,099 16,796,477.03 19,963,180.31 23,726,914.14 28,200,238.92 33,516,936.53 40,220,323.84
Selling & distribution expenses 39,405,670 46,834,969.87 55,664,943.73 66,159,665.92 78,632,997.75 93,457,973.96 112,149,568.75
Operating income 167,240,545 198,768,601 236,243,196 280,783,019 333,720,102 396,637,614 475,965,137
Other income 7,375 7,375 7,375 7,375 7,375 7,375 7,375
Financial expenses 13,845,891 13,845,891 13,845,891 13,845,891 13,845,891 13,845,891 13,845,891
Net profit before WPPF 153,402,029 184,930,085 222,404,680 266,944,503 319,881,586 382,799,098 462,126,621
Contribution to WPPF 7,304,859 8,806,195 10,590,700 12,711,644 15,232,457 18,228,530 22,006,031
Net profit before tax 146,097,170 176,123,890 211,813,980 254,232,859 304,649,129 364,570,569 440,120,590
Income tax expenses 37,010,930 44,617,626 53,659,030 64,405,043 77,177,043 92,356,996 111,496,153
Current tax 36,524,293 44,030,973 52,953,496 63,558,216 76,162,283 91,142,643 110,030,149
Deferred tax 486,637 586,653 705,534 846,828 1,014,760 1,214,353 1,466,004
Net profit/loss 109,086,240 131,506,263 158,154,951 189,827,816 227,472,086 272,213,572 328,624,438
EPS 1.05 1.15 1.26 1.37 1.50 1.63 1.79
Number of shares 103,891,657 114,280,823 125,708,905 138,279,796 152,107,775 167,318,553 184,050,408
Prospective Analysis (assumption)
Sales Growth Operating Performance
2012-13 66.43%
2013-14 54.43% Gross Profit Margin 48.45%
2014-15 0.99%
Operating Profit Margin 36.70%
2015-16 -36.93%
2016-17 9.35% Net Profit Margin 23.94%
2017-18 18.85%

Others
Administrative expenses to sales 3.10%
Selling expenses to sales 8.65%
Contribution to WPPF 4.76%
Tax rate 25%
Deferred tax 1.33%
Depreciation 3.35%
 Prospective Analysis
Pro Forma Balance sheet (asset portion)
Central Pharmaceuticals
BASE FORECAST
PARTICULARS
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Non-current assets 1,056,805,602 1,021,408,628 987,197,469 954,132,398 922,175,022 891,288,232 861,436,163
PPE 1,056,612,218 1,021,215,244 987,004,085 953,939,014 921,981,638 891,094,848 861,242,779
Intangible assets 193,384 193,384 193,384 193,384 193,384 193,384 193,384
Current assets 1,233,641,391 1,442,066,514 1,684,368,586 1,967,197,848 2,298,449,516 2,687,498,795 3,149,735,426
Inventories 434,212,783 489,332,191 581,587,838 691,236,791 821,558,276 976,449,762 1,171,739,714
Spare parts & supplies 41,211,177 41,211,177 41,211,177 41,211,177 41,211,177 41,211,177 41,211,177
Advance, deposits,
254,953,295 254,953,295 254,953,295 254,953,295 254,953,295 254,953,295 254,953,295
prepayment
Accounts receivables 494,605,483 524,139,168 622,957,106 740,405,563 879,997,022 1,045,906,185 1,255,087,422
Cash &equivalent 8,658,653 132,430,683 183,659,170 239,391,022 300,729,747 368,978,376 426,743,818
Total Assets 2,290,446,993 2,463,475,142 2,671,566,055 2,921,330,246 3,220,624,538 3,578,787,027 4,011,171,589
Prospective Analysis (assumption)

Constant Others
Accounts Receivable
Intangible assets Turnover 1.03
Inventory Turnover
Spare parts and supplies 0.57

Advance deposit and Addition to PPE

0
prepayment

Cash = Total assets – all current assets – non current assets

 Prospective Analysis
Pro Forma Balance sheet (liability and equity portion)
Central Pharmaceuticals
BASE FORECAST
PARTICULARS
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Share equity 1,740,804,182 1,872,310,445 2,030,465,396 2,220,293,212 2,447,765,297 2,719,978,869 3,048,603,307
Share capital 1,037,236,750 1,140,960,425 1,255,056,468 1,380,562,114 1,518,618,326 1,670,480,158 1,837,528,174
Revaluation reserve 514,848,089 514,848,089 514,848,089 514,848,089 514,848,089 514,848,089 514,848,089
Retained earnings 188,719,343 216,501,931 260,560,839 324,883,008 414,298,883 534,650,622 696,227,044
Noncurrent liabilities 169,482,920 170,069,573 170,775,107 171,621,935 172,636,695 173,851,048 175,317,051
Long term loan 106,232,789 106,232,789 106,232,789 106,232,789 106,232,789 106,232,789 106,232,789
Deferred tax liabilities 63,250,131 63,836,784 64,542,318 65,389,146 66,403,906 67,618,259 69,084,262
Current liabilities 380,159,890 421,095,123 470,325,551 529,415,100 600,222,546 684,957,109 787,251,231
Short term loan 104,152,185 99,022,984 92,535,498 84,781,226 75,521,336 64,471,969 50,884,125
Sundry creditors 4,665,427 5,197,552 6,177,466 7,342,127 8,726,366 10,371,580 12,445,896
Liabilities for expenses 14,416,735 14,416,735 14,416,735 14,416,735 14,416,735 14,416,735 14,416,735
Others payable 6,582,325 6,582,325 6,582,325 6,582,325 6,582,325 6,582,325 6,582,325
Provision for Tax
243,038,359 287,069,332 340,022,828 403,581,043 479,743,327 570,885,970 680,916,119
liabilities
WPPF 7,304,859 8,806,195 10,590,700 12,711,644 15,232,457 18,228,530 22,006,031
Total Liability and
2,290,446,992 2,463,475,142 2,671,566,055 2,921,330,246 3,220,624,538 3,578,787,027 4,011,171,589
Equity
Prospective Analysis (assumption)
Others
Constant Accounts payable
53.71554414
turnover
Revaluation reserve Financial Leverage 1.315740745
Stock dividend 10%
Long term loan Same as currents years
WPPF
contribution
Short term portion of
project loan Provision for Tax Current years taxes are
liabilities added [no taxes are paid]
Liabilities for expenses
Beginning balance +
Deferred tax
Others payable current years balance
Antor Shaha
ID: 21-055
 Prospective Analysis
Residual Income Computation
Particulars 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Net profit/loss 109,086,240 131,506,263 158,154,951 189,827,816 227,472,086 272,213,572
Shareholders' Beginning Equity 1,740,804,182 1,872,310,445 2,030,465,396 2,220,293,212 2,447,765,297 328,624,438
Cost of Equity 0.11 0.11 0.11 0.11 0.11 0.11
Expected Earnings 191,488,460 205,954,149 223,351,194 244,232,253 269,254,183 2,719,978,869
Residual Income -59,982,197 -47,799,198 -33,523,378 -16,760,168 2,959,390 299,197,676
PV factor 0.90 0.81 0.73 0.66 0.59 29,426,762
PV of Residual Income (54,038,015) (38,794,902) (24,512,005) (11,040,442) 1,756,254
Total Residual Income (126,629,110)
Terminal Value of RI 1,458,406,032
Beginning Book Value 1,740,804,182
Value of Equity 3,072,581,104
Number of Shares Outstanding 103,891,657
Per Share Value (Forecasted) 29.57485893
Per Share Value (Actual at 30
30.3
June 2017)
Prospective Analysis (assumption)

Cost of Equity (2015-16)

Dividend Growth Rate 7.6%
Dividend Next Year (2016-17) 94,294,250
Current Stock Price (30 June 2016) 17.1
Retained Earnings (2015-16) 173,927,353
Retained Earnings (2016-17) 188,719,343
Net Income (2016-17) 109,086,240
Total shareholders' Equity (2015-2016) 1,631,717,942
Face Value of Shares 10
Number of Shares Outstanding (30 June
163,171,794
2016)
Dividend per Share (2016-17) 0.57788327
Cost of Equity 11%
ROE (2015_2016) 8%
Dividend Payout Ratio 0.1
Prospective Analysis

30 29.57

25

20
Price

15 Forecasted
Linear (Forecasted)
12 Market
10

0
Nabila Ahmad
ID: 21-013
Findings

1.RNOA had fallen down & income was low in year 2014-2015 due to volatility of sales

2.NOA increased in 2013-2014 due to utilization of maximum expansion capacity, low

overhead cost & high profit margin

3.Some minor fluctuations in net profit margin

4.Operating profit had been increasing since 2015 & had never been fallen down 20% since
2013

5.Negative sales growth in 2015 due to the shortage of working capital.

Findings

6.Operating profit margin, gross profit margin & net profit margin does not show the true condition

7.Operation of the firm is very effective.

8.The company was reformed in 2013 by selling off a large portion of their assets to pay
current liabilities

9.Operating assets increased after reformation operating profit didn’t increase

10.Company increased it’s net turnover in 2016-2017 due to rearrangement in marketing policy