A Report

on
“Analysis of Financial Statement - A Study on Renata Limited”

Course Title: Financial Accounting and Reporting

Course code: F-504

Submitted To:
Mohammad Salauddin Chawdhury
Associate Professor
Department of Finance, EMBA Program
Faculty of Business Studies
University of Dhaka

Submitted By:
SL. Name Student ID
1. Nawal Mahbub 20233050
2. Syed Alimul Islam 20244040
3. Nahid Hasan 20244042

Date of Submission: 18th May, 2024

 Table of Content

Chapter Name of Content Page No.

Executive Summery I
Chapter 1 Overview of Renata Limited 1-4
1. Company Overview 1
1.1 Field of Businesses 1
1.1.1 Human Pharmaceuticals 1
1.1.2 Animal Health Medicines 2
1.2 Core Activities 2
1.2.1 Research and Development 2
1.2.2 Drug Manufacturing 2
1.3 Subsidiary Companies 3
1.3.1 Renata (UK) Limited 3
1.3.2 Renata Pharmaceuticals (Ireland) Limited 3
1.4 Export Growth and Global Accreditations 3
1.5 Operational Efficiency and Sustainability 4
Chapter 2 Financial Statements and Accounting Principles 4-19
2. Consolidated Financial Statements 4
2.1 Property Plant & Equipment 6
2.1.1 Implications of PPE in Renata 6
2.2 Depreciation 7
2.2.1 Implications of Depreciation in Renata 8
2.3 Intangible Asset 9
2.3.1 Implications of Intangible Assets in Renata 9
2.4 Financial Instruments 12
2.4.1 Implications of Financial Instruments in Renata 12
2.4.2 Impairment of Financial Assets 13
2.5 Inventories 15
2.5.1 Implications of Inventories in Renata 15
2.6 Trade and Other Receivables 16
2.7 Revenue Recognition Policy 18
2.7.1 Implications of Revenue Recognition Policy in Renata 18
2.8 Cost of Goods Sold 18
2.9 Other Comprehensive Income 19
2.9.1 Implications of OCI in Renata 19
Chapter 3 Conclusion 20
3 Conclusion 20
REFERENCES & BOOKS 21
 Executive Summery

Accounting information systems play a crucial role in ensuring the precision of a company's
financial transactions and records. This report aims to delve into the core accounting principles
and standards relevant to manufacturing companies, as taught in financial accounting and reporting
courses. By scrutinizing the annual report of Renata Limited, the pertinent information was
extracted and analyzed. This study provided insights into the practical application and adherence
to accounting systems, enhancing the understanding of their operational implementation in a real-
world context.
 CHAPTER – 1
Overview of Renata Limited

1. Company Overview
Renata Limited is a leading pharmaceutical and consumer healthcare company based in Dhaka,
Bangladesh. Originally established in 1972 as Pfizer Laboratories (Bangladesh) Limited, a
subsidiary of Pfizer Corporation, USA, the company was renamed Renata Limited in 1993
following the divestment of Pfizer's shareholdings. Renata has since grown to become one of the
largest and most reputable names in the Bangladeshi pharmaceutical industry. The company is
committed to improving healthcare by providing high-quality, affordable medicines and healthcare
products.
Key Financial Highlights:
• Revenue (FY 2022-23): Tk3,297 crore, marking a 6.12% year-on-year increase from
Tk3,107 crore.
• Profit After Tax: Tk232 crore, a 54.6% decline year-on-year.
• Market Share: 7% in the Bangladeshi pharmaceutical market.
• Top 20 Products: Represent 72% of pharma sales in Bangladesh.
• Distribution: Exports to over 42 countries, with major destinations including Denmark,
Myanmar, Pakistan, Sri Lanka, Ireland, and the United Kingdom, constituting 50% of its
exports. An additional 11.7% of shipments are directed to various African countries.

1.1 Field of Businesses

1.1.1 Human Pharmaceuticals:
Renata Limited manufactures a diverse array of pharmaceutical products, addressing a wide range
of therapeutic areas. The company is also renowned for its comprehensive range of human
pharmaceuticals, which encompass antibiotics, anti-inflammatories, analgesics, vitamins,
neurological products, anti-diabetics, and anti-cancer products, among others.
• Therapeutic Areas: Gastrointestinal, Anti-Infectives, CNS, Non-Narcotic Analgesics,
Cardiovascular, Antihistamines, Systemic Vitamin B1 & Combination, Endocrinology,
Women's Health
• Key products: Maxpro, Algin, Orcef, Furoclav, Gaba-P, Rolac, Fenadin, Thyrox, and
Normens.

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1.1.2 Animal Health Medicines:
As the undisputed market leader in Bangladesh for over 30 years, Renata's animal health division
provides a wide array of veterinary products. These include antibiotics, antiparasitic, vaccines, and
nutritional supplements for livestock, poultry, and companion animals. The company's veterinary
products are developed to meet the specific needs of the local market while maintaining global
quality standards. Renata continues to be the market leader in animal health in Bangladesh. This
remarkable growth is supplemented by the development of new products tailored to meet the
evolving needs of the veterinary sector.
• Key Areas: Veterinary pharmaceuticals, vaccines, nutritional supplements
• Market Growth: Market leader with a growth rate of 11.4% vs. 9.09% market growth
• New Products: Approved by USFDA and WHO PQ

1.2 Core Activities:

1.2.1 Research and Development:
Renata invests heavily in cutting-edge technology to advance its research and development
endeavors. The company employs 160 scientists across 7 state-of-the-art R&D labs, dedicated to
solving complex medical challenges.
R&D Focus:
• Differentiation through investment
• Bioequivalent Products: Increased from 50 to 63
Key R&D Products:
• Boviren
• Ferro Plus
• Rena Zinc
• Dexaren
• Masti Ren

1.2.2 Drug Manufacturing:

Renata maintains world-class manufacturing facilities that adhere to the highest quality and safety
standards. The company has 14 manufacturing facilities spread over three manufacturing sites,
operating in various modalities including:
• Oral solid dosage forms (tablets, capsules, OROS, oral dispersible tablets, soft gels)
• Injectables (hormone injectables, general injectables, and oncology injectables)

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 • Inhalers (DPI, MDI)
• Nutraceutical products
Several of these sites have achieved international accreditations such as USFDA, UK MHRA,
TGA, ANVISA, and WHO (Geneva).

1.3 Subsidiary Companies

Subsidiaries are entities controlled by Renata Limited. An investor controls an investee when it is
exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. The followings are the subsidiaries of
Renata Limited:
1.3.1 Renata (UK) Limited: Renata (UK) Limited was incorporated on 26 September 2013 as a
private limited company under the UK Companies Act 2006. Renata Limited holds 100% of equity
interest in Renata (UK) Limited acquired as on 9 April 2018.

1.3.2 Renata Pharmaceuticals (Ireland) Limited: Renata Pharmaceuticals (Ireland) Limited was
incorporated on 24 April 2019 as a private limited company under the Irish Companies Act 2014.
Renata Limited holds 100% of equity interest in Renata Pharmaceuticals (Ireland) Limited

1.4 Export Growth and Global Accreditations

Renata has significantly expanded its global footprint, now exporting to 42 countries, up from 25
countries in the previous year. Major export destinations include Denmark, Myanmar, Pakistan,
Sri Lanka, Ireland, and the United Kingdom, which collectively represent 50% of our exports.
Additionally, 11.7% of our exports are directed to various African countries. This growth reflects
our commitment to providing high-quality pharmaceutical products to an increasingly diverse
international market.
Renata holds several global certifications and accreditations, such as the MHRA certificate from
the UK, USFDA approval, WHO PQ certificate from Geneva, and ANVISA certificate from Brazil.
These certifications underscore Renata's commitment to maintaining high standards in its
operations and products.
Certifications:
• MHRA Certificate (UK)
• USFDA Approval (USA)
• WHO PQ Certificate (Geneva)
• ANVISA Certificate (Brazil)

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1.5 Operational Efficiency and Sustainability
Renata Limited has made significant strides in operational efficiency and innovation. The company
has invested in new facilities focusing on economic, environmental and social sustainability.
Moreover, Social responsibility is a cornerstone of Renata Limited’s operations, with its parent
organization, Sajida Foundation, focusing on poverty alleviation, community healthcare, and
climate change. The company allocates 51% of its profit distributions to community empowerment
initiatives, highlighting its commitment to social causes.

• New Facilities: Respiratory care, Hormone sterile, Oncology sterile plants

• Capital Investments: Bhaluka Power Plant, Kashor data center, Rajendrapur R&D
laboratory
• Energy Projects: 3.96 MW solar power project to enhance sustainability and reduce
carbon footprint.
• Community Empowerment: Allocates 51% of its profit distributions to community
empowerment initiatives. Such as, Poverty alleviation, Community healthcare, Climate
change initiatives.

CHAPTER – 2
Financial Statements and Accounting Principles
2. Consolidated Financial Statements
Consolidated financial statements are financial statements that present the assets, liabilities, equity,
income, expenses and cash flows of a parent and its subsidiaries as those of a single economic
entity.
IFRS 10 establishes principles for presenting and preparing consolidated financial statements
when an entity controls one or more other entities.

Implications in Renata
• The Group's financial statements consolidate the financial data of Renata Limited and its
subsidiaries, following uniform accounting policies and a consistent fiscal year-end.
• Consolidation starts from the date Renata Limited obtains control over a subsidiary and
ends when control is lost.
• All intra-group balances, transactions, income, expenses, and cash flows are fully
eliminated. Profits or losses arising from intra-group transactions that are reflected in the
assets are also fully eliminated.
• The consolidated financial statements also present non-controlling interests, if any, within
the equity section of the balance sheet, separate from the equity held by the owners of
Renata Limited.

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This statement provides a snapshot of Renata Limited's financial position as of June 30, 2023,
showing what the company owns and owes, its sources of capital, and its net worth per share. The
detailed notes referenced in the statement would provide further insight into specific accounting
policies and details on asset valuations, depreciation methods, and reserves.
Let's break down the Statement of Financial Position for Renata Limited as of June 30, 2023, by
examining each category and entry, explaining how values are calculated, including how
depreciation is accounted for, and referencing the relevant International Accounting Standards
(IAS) or International Financial Reporting Standards (IFRS):

2.1 Property Plant & Equipment

According to IAS 16, Property, Plant and Equipment outlines the accounting treatment for most
types of property, plant and equipment. Property, plant and equipment is initially measured at
its cost, subsequently measured either using a cost or revaluation model, and depreciated so that
its depreciable amount is allocated on a systematic basis over its useful life.
Highlights of IAS 16:
✓ Items of property, plant, and equipment should be recognised as assets when it is probable
that the future economic benefits associated with the asset will flow to the entity.

✓ Items of property, plant, and equipment should be recognised as assets when the cost of the
asset can be measured reliably

✓ An item of property, plant and equipment should initially be recorded at cost. [IAS 16.15]
Cost includes all costs necessary to bring the asset to working condition for its intended
use. This would include not only its original purchase price but also costs of site
preparation, delivery and handling, installation, related professional fees for architects
and engineers, and the estimated cost of dismantling and removing the asset and restoring
the site.

✓ After recognition, PPE is measured at cost less accumulated depreciation and any
accumulated impairment losses.

2.1.1 Implications of PPE in Renata

Items of property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses, if any.
The cost of an item of property, plant and equipment comprises its purchase price, import duties,
non-refundable taxes, capitalisable borrowing costs and any costs directly attributable to bringing

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the asset to the location and condition necessary for it to be capable of operating in the intended
manner after deducting trade discount and rebates, if any.
Cost also includes initial estimate of the costs of dismantling and removing the item and restoring
the site on which it is located (generally called 'asset retirement obligation'). Purchased software
that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When major parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment. The
Company follows revaluation model for land and buildings in accordance of IAS 16 Property, plant
and equipment.
Subsequent costs
The cost of replacing or up gradation of an item of property, plant and equipment is recognized in
the carrying amount of the item if it is probable that the future economic benefits embodied within
the item will flow to the Company and its cost can be measured reliably. The carrying amount of
the replaced component is derecognized.

2.2 Depreciation
According to IAS 16, The depreciation method used should reflect the pattern in which the
asset's economic benefits are consumed by the entity, a depreciation method that is based on
revenue that is generated by an activity that includes the use of an asset is not appropriate.
Companies are allowed to use different type of depreciation method based on their business pattern
like-
• Straight Line Method
• Unit S of Activity Method
• Declining Balance Method

Highlights of Depreciation as Per IAS 16:

✓ Depreciation should be charged to profit or loss, unless it is included in the carrying amount
of another asset.
✓ The depreciation method should be reviewed at least annually and, if the pattern of
consumption of benefits has changed, the depreciation method should be changed.
✓ Depreciation begins when the asset is available for use and continues until the asset is
derecognised, even if it is idle.
✓ The residual value and the useful life of an asset should be reviewed at least at each
financial year-end and, if expectations differ from previous estimates, any change is
accounted for prospectively as a change in estimate.

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2.2.1 Implications of Depreciation in Renata
Depreciation on other items of property, plant and equipment is recognised on a straight-line basis
over the estimated useful life of each item of property, plant and equipment. The range of estimated
useful lives shown below depends on sub-category of the assets under the broad category.
Depreciation method, useful lives and residual values are reviewed at each year-end and adjusted
if appropriate.
No depreciation is charged on land and capital work in progress as the land has unlimited useful
life and capital work in progress has not yet been placed in service.
The estimated useful lives of the items of property, plant and equipment for the current and
comparative periods are as follows:

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2.3 Intangible Asset
According to IAS 38, intangible asset is an identifiable non-monetary asset without physical
substance. An asset is a resource that is controlled by the entity as a result of past events (for
example, purchase or self-creation) and from which future economic benefits (inflows of cash or
other assets) are expected.
Three critical attributes of an intangible asset are:
✓ Identifiability
✓ Control (power to obtain benefits from the asset)
✓ Future economic benefits (such as revenues or reduced future costs)
An intangible asset will be recognized if—
✓ It is probable that the future economic benefits that are attributable to the asset will flow
to the entity
✓ The cost of the asset can be measured reliably
If an intangible item does not meet both the definition of and the criteria for recognition as an
intangible asset, IAS 38 requires the expenditure on this item to be recognised as an expense
when it is incurred.
Recognition:
Charge all research cost to expense. If an entity cannot distinguish the research phase of an internal
project to create an intangible asset from the development phase, the entity treats the expenditure
for that project as if it were incurred in the research phase only
Development costs are capitalised only after technical and commercial feasibility of the asset for
sale or use have been established. This means that the entity must intend and be able to complete
the intangible asset and either use it or sell it and be able to demonstrate how the asset will generate
future economic benefits.

2.3.1 Implications of Intangible Assets in Renata

Intangible assets that are acquired by the Company and have finite useful lives are measured at
cost less accumulated amortisation and accumulated impairment loss, if any. Intangible assets are
recognised when all the conditions for recognition as per IAS 38 Intangible Assets are met.
The cost of an intangible asset comprises its purchase price, import duties and non-refundable
taxes and any directly attributable cost of preparing the asset for its intended use.
Expenditure on research activities, undertaken with the prospect of gaining new scientific or
technical knowledge and understanding, is recognised in the profit or loss as incurred.

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Development activities involve a plan or design for the production of new and substantially
improved products and processes. Development expenditures, on an individual project, are
recognised as an intangible asset when the Company can demonstrate all of the following:

✓ the technical feasibility of completing the intangible asset so that it will be available for
use or sale;

✓ its intention to complete the intangible asset and use or sell it;

✓ its ability to use or sell the intangible asset;

✓ how the intangible asset will generate probable future economic benefits. Among other
things, the entity can demonstrate the existence of a market for the output of the intangible
asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset;

✓ the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset; and

✓ its ability to measure reliably the expenditure attributable to the intangible asset during its
development.

Other development expenditures are recognised in profit or loss as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period.
Following initial recognition of the development expenditure as an asset, the cost model is applied
requiring the asset to be carried at cost less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins when development is complete and the asset
is placed in service. It is amortised over the period of expected future economic benefits. During
the period of development, the asset is tested for impairment annually.

Internally generated intangible assets, excluding capitalised development costs, are not capitalised
and expenditure is reflected in profit or loss in the year in which the expenditure is incurred.

Amortisation is recognised in profit or loss on a straight line basis over the estimated useful lives
of intangible assets. The estimated useful lives are as follows:

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2.4 Financial Instruments

IFRS 9 specifies how an entity should classify and measure financial assets, financial liabilities,
and some contracts to buy or sell non-financial items. This principal requires an entity to
recognise a financial asset or a financial liability in its statement of financial position when it
becomes party to the contractual provisions of the instrument. At initial recognition, an entity
measures a financial asset or a financial liability at its fair value plus or minus, in the case of a
financial asset or a financial liability not at fair value through profit or loss, transaction costs
that are directly attributable to the acquisition or issue of the financial asset or the financial
liability.

When an entity first recognises a financial asset, it classifies it based on the entity’s business model
for managing the asset and the asset’s contractual cash flow characteristics, as follows:

Amortised cost—a financial asset is measured at amortised cost if both of the following
conditions are met:

✓ the asset is held within a business model whose objective is to hold assets in order to collect
contractual cash flows; and
✓ the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

Fair value through other comprehensive income: Financial assets are classified and measured at
fair value through other comprehensive income if they are held in a business model whose objective
is achieved by both collecting contractual cash flows and selling financial assets.

Fair value through profit or loss: Any financial assets that are not held in one of the two business
models mentioned are measured at fair value through profit or loss.

2.4.1 Implications of Financial Instruments in Renata

A financial asset is measured at amortised cost if it meets both of the following conditions and is
not designated as at FVTPL:
✓ it is held within a business model whose objective is to hold assets to collect contractual
cash flows; and
✓ its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not
designated as at FVTPL:
✓ it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
✓ its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

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On initial recognition of an equity investment that is not held for trading, the Company may
irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election
is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are
measured at FVTPL.
A financial asset (unless it is a trade receivable without a significant financing component that is
initially measured at the transaction price) is initially measured at fair value plus, for an item not
at FVTPL, transaction costs that are directly attributable to its acquisition.
The following accounting policies apply to the subsequent measurement of financial assets:
Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and
losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost: These assets are subsequently measured at amortised cost
using the effective interest method. The amortised cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any
gain or loss on derecognition is recognised in profit or loss. Trade receivables are classified
asfFinancial assets measured at amortised cost.
Debt investments at FVOCI: These assets are subsequently measured at fair value. Interest
income calculated using the effective interest method, foreign exchange gains and losses and
impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On
derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI: These assets are subsequently measured at fair value. Dividends
are recognised as income in profit or loss unless the dividend clearly represents a recovery of part
of the cost of the investment. Other net gains and losses are recognised in OCI and are never
reclassified to profit or loss.

2.4.2 Impairment of Financial Assets

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ (ECL) model.
The new impairment model applies to financial assets measured at amortised cost, contract assets
and debt investments at FVOCI, but not to investments in equity instruments. The financial assets
at amortised cost consist of trade receivables, cash and cash equivalents, and corporate debt
securities.
Renata Limited measures loss allowances at an amount equal to ECL from trade receivables. When
determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, Renata Limited considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on Renata Limited’s historical
experience and informed credit assessment and including forward-looking information.

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Renata Limited considers a financial asset to be in default when the debtor is unlikely to pay its
credit obligations to the Company in full, without recourse by Renata Limited to actions such as
realising security.

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2.5 Inventories
IAS 2 provides guidance for determining the cost of inventories and for subsequently
recognising an expense, including any write-down to net realisable value. It also provides
guidance on the cost formulas that are used to assign costs to inventories.
Highlights of IAS 2
✓ The cost of inventories includes all costs of purchase, costs of conversion (direct labour
and production overhead) and other costs incurred in bringing the inventories to their
present location and condition.
✓ Specific identification of cost for items of inventory that are not ordinarily interchangeable
✓ The first-in, first-out or weighted average cost formula for items that are ordinarily
interchangeable
✓ When inventories are sold, the carrying amount of those inventories is recognised as an
expense in the period in which the related revenue is recognised. The amount of any write-
down of inventories to net realisable value and all losses of inventories are recognised as
an expense in the period the write-down or loss occurs.

2.5.1 Implications of Inventories in Renata

Renata follows the principle of measuring inventories at the lower of cost and net realizable value,
except for Goods-in-Transit, which is measured at cost. Net realizable value is determined by
deducting any expenses incurred to make the sale from the estimated selling price in the ordinary
course of business. Obsolete stock or abnormal losses are recognized as expenses in the respective
period.

The costs of inventories include purchase costs, conversion costs, and other costs incurred in
bringing the inventories to their present location and condition. The first-in, first-out (FIFO) cost
formula is used for assigning costs to active materials, raw materials, and packing materials. The
cost of work-in-progress and finished stocks is determined using the FIFO cost formula, including
the allocation of manufacturing overheads.
For finished goods, Renata employs the standard cost method for measurement. When inventories
are sold, their carrying amount is recognized as an expense in the period when the related revenue
is recognized. Write-downs of inventories to net realizable value and losses are recognized as
expenses in the period of occurrence. Reversals of write-downs, arising from an increase in net
realizable value, are recognized as a reduction in the expense in the period of the reversal.
Goods-in-Transit represents costs incurred until the reporting date for inventories yet to be
received. Spare goods, comprising spare and replacement parts, are used to facilitate the
production of finished goods and are accounted for in the ordinary course of business. Renata's
inventory accounting principles adhere to the lower of cost and net realizable value principle, with
specific methodologies such as FIFO and standard cost methods employed for different inventory
components.

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2.6 Trade and Other Receivables
Renata follows aging of trade and other receivables rather than percentage of sales method to
maintain provision.

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2.7 Revenue Recognition Policy:
IFRS 15 states that a company should recognize revenue in a way that represents the transfer
of promised goods or services to customers at an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services.
2.7.1 Implications of Revenue Recognition Policy in Renata
The Group receives revenue for supply of goods to external customers against orders received.
The majority of contracts that the Group enters into relate to sales orders containing single
performance obligations for the delivery of pharmaceutical animal health, agro-based and
consumer healthcare products.
Product revenue is recognized when control of the goods is passed to the customer. The point
at which control passes is determined by each customer arrangement, but generally occurs
on delivery to the customer. Value added tax and other sales taxes are excluded from revenue.
Product revenue represents net invoice value including fixed and variable consideration. Variable
consideration arises on the sale of goods as a result of discounts and allowances given and accruals
for estimated future returns and rebates.
Revenue is not recognized in full until it is highly probable that a significant reversal in the amount
of cumulative revenue recognized will not occur.

2.8 Cost of Goods Sold

According to IFRS the cost of goods sold (COGS) refers to the direct costs attributable to the
production of the goods sold by a company. This includes the cost of materials used in creating
the good along with the direct labor costs used to produce the goods.

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2.9 Other Comprehensive Income
Under IFRS 9, assets are measured at fair value, gains and losses are either recognized entirely
in profit or loss (fair value through profit or loss), or recognized in other comprehensive income
(fair value through other comprehensive income).
For debt instruments the fair value through OCI classification is mandatory for certain assets
unless the fair value option is elected. Whilst for equity investments, the fair value through OCI
classification is an election. Furthermore, the requirements for reclassifying gains or losses
recognized in other comprehensive income are different for debt instruments and equity
investments.

A financial asset is measured at amortized cost if it meets both of the following conditions and is
not designated as at fair value through profit and loss:
a) it is held within a business model whose objective is to hold assets to collect contractual cash
flows; and
b) its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
A debt investment is measured at fair value through OCI if it meets both of the following
conditions:
a) it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and
b) its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

2.9.1 Implications of OCI in Renata

As Renata invested in equity share for liquidity purpose and so as per fair value adjustment
method company included 2,633,894 in other comprehensive income as loss.

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 CHAPTER – 3
Conclusion

3. Conclusion
The financial statements of Renata Limited showcase a robust and expanding enterprise excelling
in both the human pharmaceutical and animal health sectors. The company's dedication to quality,
innovation, and market diversification has driven its success, establishing a strong presence in
Bangladesh and internationally. Adherence to international accounting standards and employing a
reputable auditor like S. F. Ahmed & Co. underscores its commitment to transparency and financial
integrity. Consistent application of accounting policies ensures reliable financial reporting,
reinforcing its strategic focus on human pharmaceuticals and animal health products, aiding its
navigation of the pharmaceutical market complexities.
Renata Limited's expansion into 42 countries, including Denmark and Ireland, fortifies its market
position and bolsters export growth. With a dedicated workforce of over 8,000 and strategic
subsidiaries like Renata (UK) Limited and Renata Pharmaceuticals (Ireland) Limited, the company
is propelled in its pursuit of healthcare advancements, cementing its global footprint. Looking
ahead, Renata Limited is well-positioned for sustained success. Its unwavering commitment to
excellence, diversified market presence, and dedication to innovation poise it to significantly
impact the healthcare landscape in Bangladesh and globally.
In summary, Renata Limited's financial statements and strategic initiatives reveal a thriving
company with a clear vision for the future. Its dedication to quality, innovation, and responsible
financial practices positions it as a leader in the healthcare sector, contributing to the improvement
of lives and overall well-being.

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 REFERENCES

1. Renata Limited. (n.d.). Retrieved May 17, 2024, from https://renata-ltd.com

2. Renata Limited. (n.d.). Annual Report. Retrieved May 17, 2024, from
https://renata-ltd.com/annualreport

BOOKS

1. Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2016). Financial accounting:

IFRS (3rd ed.). Wiley.

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