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SQUARE today symbolizes a name – a state of mind.

But its journey to the growth and prosperity has


been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line
conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong
leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to
becoming a high performance global player. SQUARE Pharmaceuticals Limited is the largest
pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all
national and multinational companies since 1985. It was established in 1958, converted into a public
limited company in 1991 and listed with stock exchanges in 1995. The turnover of Square Pharma was
BDT 50.87 Billion (US$ 609.18 million) with about 16.95% market share having a growth rate of about
10.85% (July 2018– June 2019).

SQUARE Pharmaceuticals Limited has extended its range of services towards the highway of global
market. It pioneered exports of medicines from Bangladesh in 1987 and has been exporting antibiotics
and other pharmaceutical products. Present export market covers 42 countries. This extension in
business and services has manifested the credibility of Square Pharmaceuticals Limited.

The breakdown of stockholders of Square Pharma:


Sponsors:

 PHARMA FEST 2020, University of Asia Pacific: SQUARE Pharma as Platinum Sponsor
 Free Diabetes Screening Program 2019 on World Diabetes Day by Square
Pharmaceuticals Ltd.
 SQUARE Pharmaceuticals Ltd. organized Samson H Chowdhury Memorial Conference
2019 on Bangladesh Pharmaceuticals Industry & Current Issues
 Press Conference on 4th Samson H Chowdhury Memorial Conference at SQUARE
Hospital
 Unveiling ceremony of Vitaminion Comic by SQUARE
 Square Pharma. organized symposium on Autism
 SQUARE Pharmaceuticals Ltd. sponsored the SQUARE-NDDC 26TH National Debate
Competition 2014
 SQUARE Pharmaceuticals Ltd. sponsored the "SQUARE-Notre Dame Annual Science
Festival 2014 & 24th GKC"
 Dhaka University and Square Group will jointly initiate “CGS-Square Fellowship 2015-
2017”
 CME titled as ‘Practical Aspects of Contact Lens’ was sponsored by SQUARE Herbal &
Nutraceuticals Ltd. on December 23, 2013
 CME titled as ‘Herbal Medicine- Science Behind It’ was organized by SQUARE Herbal &
Nutraceuticals Ltd. on September 05, 2013
 CME titled as 'Herbal Medicine- Science Behind It’ was organized by SQUARE Herbal &
Nutraceuticals Ltd. on August 23, 2013
 CME titled as ‘Immunity in childhood: The role of probiotics’ was organized by SQUARE
Herbal & Nutraceuticals Ltd. on July 04, 2013
 Role of Probiotics in Boosting Childhood Immunity’ was sponsored by SQUARE Herbal &
Nutraceuticals Ltd. on June 16, 2013
 Debate Competition Sponsored by Square

Is this a company where there is a separation between management and ownership?

Their vision, their mission and their objectives are to emphasize on the quality of product,
process and services leading to growth of the company imbibed with good governance. As per
provisions of the Article of Association, Board of Directors holds periodic meetings to resolve
issue of policies and strategies, recording minutes/decisions for implementation by the
Executive Management.

The Executive Management is headed by the Managing Director, the Chief Executive Officer
(CEO) who has been delegated necessary and adequate authority by the Board of Directors. The
Executive Management operates through further delegations of authority at every echelon of
the line management. The Executive Management is responsible for preparation of segment
plans/sub-segment plans for every profit centers with budgetary targets for every item of goods
& services and is held accountable for deficiencies with appreciation for exceptional
performance. These operations are carried out by the Executive Management through series of
committees, sub-committees, ad-hock committees, standing committees assisting the line
management.

Social obligation or CSR activities

Corporate Social Responsibility (CSR) is the continuing commitment by business to behave


ethically and contribute to economic development while improving the quality of life of the
workforce and their families as well as of the local community and society at large.

Our Business Motivation is Being Good by Doing Well and to conduct transparent business
operations based on market mechanism within the legal, ethical & social framework with aims
to attain the mission reflected by our vision. We scale-up CSR activities to consider the interests
of our external & internal stakeholders like customers, employees, vendors, shareholders,
society, government etc. and ecological & ethical considerations in all aspects of operations.
SQUARE is one of the pioneer signatories of United Nations Global Compact (UNGC) in
Bangladesh. UNGC principles are aligned with company's culture from the very outset.

SQUARE recognizes that progressive labour policies are good business practices, especially for a
company like us that has global ambition. We follow laws and encourage work environment
that welcomes diversity and also follow non-discrimination & fair treatment policy both in the
recruitment & selection process and performance management system. We have Trade Union
& our HR policies have been continuously up-to-dated as per existing labour law of the country.
We do not allow any female employees during night shift operations & we strictly prohibit any
form of forced labour. We actively pursue the policy of No child labour in SQUARE.

Transparency & business ethics is the core value of SQUARE and it is strictly followed at every
step of the business processes. Every business in SQUARE is modeled in a way that enables the
management to ensure highest degree of both financial and behavioral accountability. SQUARE
pursues Zero Tolerance policy against all kinds of corruption.

SQUARE's activity goes well beyond the sphere of business. As socially conscious and
responsible corporate body SQUARE is committed to the improvement of the society as a
whole. Meril-Prothom Alo festival sponsored by SQUARE, has become a national calendar
event. SQUARE helps many NGO's in their effort to make available healthcare to the
disadvantage population of the country. It sponsors programs to build awareness on the
healthcare need. SQUARE is also a major sponsor of sporting events in the country.

SQUARE is proud to be a Bangladeshi Company actively involved in various field of Corporate


Social Responsibility.

Risk Management:

A Risk Management Program starts with identifying the possible risks associated with a product
or with the process used to develop, manufacture, and distribute the product. An effective
quality risk management ensures the high quality of drug product to the patient. No
undertaking is free from risks and concerns that might arise both from internal as well as
external fronts. While operating in a dynamic industry and highly competitive market. Risk
Management at Square Pharma is concerned with earning competitive returns from the
Company’s various business activities at an acceptable risk level. It supports the Company’s
competitiveness by developing a culture, practice and structure that systematically recognize
and address future opportunities whilst managing adverse effects (threats) through recognizing
risk and acting appropriately upon it. The Company has well defined risk management policy,
procedures and processes to mitigate strategic and enterprise level risks.
Four primary principles of QRM are:

 The assessment of the risk to quality should be based on scientific knowledge and
ultimately link to the protection of the patient.

 QRM should be dynamic, iterative and responsive to change.

 The level of effort, formality and documentation of the QRM process should be
commensurate with the level of risk

 The capability for continual development and enhancement should be embedded in the
QRM process.

Risk Control

Absence of long-range planning, inadequate strategize investment policies, product pricing


policies, international trade barriers, Socio-economic in cohesive situation impose regressive
impact on the growth of R&D in the sector. Square Pharma always careful to identify the key
business risk and ensures the migration plans are in place. Cernuous reviewing and adopting of
the best practices enable Square Pharma to achieve its objective efficiently and effectively.

Risk control includes decision making to reduce and/or accept risks. The intention of risk control
is to reduce the risk to an acceptable level. The amount of effort used for risk control should be
proportional to the significance of the risk.

Risk control might focus on the following questions:

 Is the risk above an acceptable level?

 What actions might take to reduce or eliminate risks?

 What is the appropriate balance among benefits, risks and resources?

 Are new risks introduced as a result of the identified risks being control

Recent investments:
Square Pharmaceuticals Ltd has decided to set up a subsidiary company by investing Tk350 core
to extend its foothold in the medicine market and to meet the growing demand for its
products. The company sales have been growing by double digits over the last few years.
Initially, Square Pharma had intended to invest Tk200 core to expand its existing factory, but
now it has decided to set up a new subsidiary company – Square Life sciences Ltd – which will
be completely run by Square Pharma. Square Pharma's Secretary Khandaker Habibuzzaman
confirmed to The Business Standard that the company has decided to expand medicine
production by forming a separate subsidiary company. He explained this by saying, "It is a
strategic policy of the board. However, Square Pharma will have absolute control over the new
company. "He added that the new company will produce only oral dosage products – tablets
and capsules. They expect to implement the project by the end of June 2023. Md Kabir Reza,
head of accounts and finance at Square Pharma, said the project is at an initial stage. The paid-
up capital of the new subsidiary will be Tk10 crore. The necessary investment for the company
will come from Square Pharma's own funds and from other entrepreneurs. 

Square's dominance in drug market

Late Samson H Chowdhury started his the drug business by setting up Square Pharmaceuticals
Ltd in 1958 when the country's medicine market was dominated by multinational companies.
Later, the drug business by local companies started to grow after Bangladesh secured patent
privilege in medicine as a least developed country. Now, Square Pharmaceuticals leads the
country's drug market. The demand for medicine in the country was Tk22, 352 core at the end
of 2019, and this demand has been growing by 15 percent every year. Square Pharma controls
17 percent of the total market. At present, the company produces 858 types of medicines, with
Seclo, a drug for gastric ailments, leading the sales. The company earned Tk4, 500 revenue in
the 2018-19 financial year. Its business has been growing by 15 percent every year.

Dividend earned to investing Square Prarma stock in last 3 years

The board recommends 42% cash, 7% stock dividend

The board of directors of Square Pharmaceuticals approved Tk200 crore for factory
modernization and expansion of operation amid increased profitability of the drug
maker.

The approval of BMRE (Balancing, Modernization, Rehabilitation and Expansion), along


with the dividend declaration came from the board meeting of the company on Tuesday.
The board recommended 42% cash and 7% stock dividend for the year ending on June
30, 2019, according to an announcement on Dhaka Stock Exchange (DSE) website.

The final approval of dividend will come during the annual general meeting (AGM)
scheduled to be held on December 12 at Dhaka Club in Dhaka. The record date for
entitlement of dividend is on November 19 this year, adds the announcement.

The company has also reported consolidated earnings per share (EPS) of Tk16.03,
consolidated net asset value (NAV) per share of Tk86.03 and consolidated net operating
cash flow per share (NOCFPS) of Tk15.71 for the year ending on June 30, 2019 as against
Tk14.69, Tk73.28 and Tk12.55 respectively for the same period of the previous year.

In 2018, the pharma company disbursed 36 per cent cash and 7.0 per cent stock
dividend. In 2017, 35% cash and 7.50% stock dividend disbursed. In 2016, the pharma
company’s disbursed 40% cash and 10% stock dividend.

The production plants of Square Pharma in Pabna and Kaliakoir continue to improve
their operational efficiency both qualitatively and quantitatively by upgrading
technological process, research and training. 

Square Pharmaceuticals, one of the leading pharmaceuticals companies, manufactures


and markets various generic pharmaceuticals products, basic chemicals, and animal
health products. The company holds 17.73% of pharmaceutical market share.  Square
Pharma has 4 subsidiary companies, according to the company’s profile.

The company was listed on the Dhaka Stock Exchange (DSE) in 1995. Square Pharma’s
paid-up capital is Tk 789 crore. Each share of the company closed at Tk 238.30 each on
Wednesday.

How has Square Pharma returned to its owners?

 Square Pharmaceuticals posted the highest net profit for the fiscal year (FY) 2018-19
due to its country-wide network and quality of products. The company posted its
turnover of above Tk 25.43 billion for the FY 2018-19 against Tk 21.33 billion reported
for the previous FY. The company's net profit stood at above Tk 1.44 billion for the FY
2018-19 against Tk 1.42 billion reported for the previous FY.

Different types of financing used to raise funds


Retained Earnings

Businesses aim to maximize profits by selling a product or rendering service for a price
higher than what it costs them to produce the goods. It is the most primitive source of
funding for any company.

After generating profits, a company decides what to do with the earned capital and how
to allocate it efficiently. The retained earnings can be distributed to shareholders
as dividends, or the company can reduce the number of shares outstanding by initiating
a stock repurchase campaign.

Alternatively, the company can invest the money into a new project, say, building a new
factory, or partnering with other companies to create a joint venture.

Debt Capital

Companies obtain debt financing privately through bank loans. They can also source new
funds by issuing debt to the public.

Equity Capital

Companies can raise funds from the public in exchange for a proportionate ownership
stake in the company in the form of shares issued to investors who become shareholders
after purchasing the shares.

Also

 Companies use retained earnings from business operations to expand or


distribute dividends to their shareholders.

 Businesses raise funds by borrowing debt privately from a bank or by going public
(issuing debt securities).

Profitability of square
Profitability means ability to make profit from all the business activities of an
organization, company, firm, or an enterprise. ... According to Harward & Upton,
“profitability is the 'the ability of a given investment to earn a return from its use.” There
are many measures of profitability, which relate the returns of the firm to its sales, assets, or
equity. Without profits, a firm could not attract outside capital. Profitability measure are: Gross
profit margin, Net profit margin, Return on total asset (ROA), Return on total equity (ROE).

Gross profit margin: The gross profit margin ratio analysis is an indicator of a company's
financial health. It tells investors how much gross profit every dollar of revenue a
company is earning. If we see the comparison between Squrpharma and Bxpharma,
squrpharma last three years gross profit margin is 0.432, 0.426, and 0.431. bxpharma is
0.463, 0.468 and 0.465. Squrpharma is lower gross profit than Bxpharma. They aren't
generating strong sales prices relative to your cost of goods sold, or COGS, which are
your costs to make or acquire products.

GROSS PROFIT MARGIN

0.47
0.46 0.47

0.43 0.43
0.43

squrpharma Bxpharma

2017 2018 2019


Net profit margin: Net Profit Margin Ratio indicates the proportion of sales revenue that
translates into net profit. If we see the comparison between Squrpharma and Bxpharma,
squrpharma last three years net profit margin is 23%, 22.9%, 23. And bxpharma is 14.4%,
14.3% and 13.3%. Squrpharma has high net profit margin than bxpharma. Net Profit
Margin ratio is a key performance indicator of the profitability of an enterprise. A high
net profit margin means that a Squrpharma is able to effectively control its costs and/or
provide goods or services at a price significantly higher than its costs.

NET PROFIT MARGIN


2017 2018 2019
22.9
23

23

14.4

14.3

13.3

Sq u r p h ar m a Bx p h ar m a

ROA : The ROA figure gives investors an idea of how effective the company is in
converting the money it invests into net income. The higher the ROA number, the better,
because the company is earning more money on less investment. If we see the
comparison between Squrpharma and Bxpharma, squrpharma last three years ROA is
0.185, 0.171, and 0.162. And bxpharma is 0.065, 0.058 and 0.062. Squrpharma has high
ROA than bxpharma. And squrpharma earning more money on less investment.
ROA
2017 2018 2019
0.19

0.17

0.16

0.07

0.06
0.06
Sq u r p h ar m a Bx P H ARMA

ROE

0.2
0.18
0.17

0.1
0.09 0.09

Squrpharma Bxpharma

2017 2018 2019

ROE: A rising ROE suggests that a company is increasing its profit generation without needing as much
capital. It also indicates how well a company's management deploys shareholder capital. Put another
way, a higher ROE is usually better while a falling ROE may indicate a less efficient usage of equity
capital. If we see the comparison between Squrpharma and Bxpharma, squrpharma last three years ROE
is 0.198, 0.181, and 0.173. And bxpharma is 0.089, 0.093 and 0.102. Squrpharma has high ROE than
bxpharma. A high ROE could indicate a good utilization of equity capital but it could also mean the
company has taken on a lot of debt.

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