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WELLOME PAKISTAN LIMITED
Annual Report year ended 1995
CONTENTS
Notice of Meeting			2
Company Information			4
Directors' Report			7
Chairman's Review			9
Auditors' Report to the Members			13
Balance Sheet			14
Profit and Loss Account			16
Cash Flow Statement			17
Notes to the Accounts			18
Statistical Summary			36
Pattern of Holdings of the Shares
held by Shareholders			37
Distribution/Sales Offices			38
Notice of Meeting
Notice is hereby given that the FORTY-FIRST Annual General Meeting of Wellcome Pakistan Limited
will be held on Wednesday, May 8, 1996 at Hotel Avari Towers, Karachi at 10.00 A.M. to transact the
following business:
1	To receive and adopt the Audited Balance Sheet and Accounts for the year ended December
	31, 1995, together with the Directors' and Auditors' Reports thereon.
2	To declare Final Dividend of 25% to Shareholders for the year ended December 31, 1995, as
	recommended by the Board of Directors.
3	To approve working Directors' remuneration.
4	To appoint Auditors for the year ending December 31, 1996 and to fix their remuneration.
Special Business
5	To consider and if thought fit to pass the following resolution as a Special Resolution namely:
Resolved that subject to the approval of the Corporate Law Authority the Company's memorandum
of association be and is hereby amended:
(a) by adding immediately after sub-clause (29) in clause 3, the following new-sub-clause
as sub-clause (30) namely:
"To amalgamate, enter into partnership or into any arrangement for sharing profits or
into any union of interests, joint venture, reciprocal concession or co-operation with any
person or persons or company or companies carrying on, or engaged in, or about to
carry on or engage in or in any business, or transaction capable of being conducted so
as directly or indirectly to benefit this Company", and
(b) by renumbering the remaining sub-clauses of clause 3 accordingly.
6	To transact any other business with the permission of the Chairman.
Notes:
1	The Share Transfer Books of the Company will remain closed from Wednesday May 1, 1996 to
	Wednesday, May 8, 1996 (both days inclusive). The Company remains closed for business/
	public dealings on Fridays and Saturdays throughout the year.
2	A Member entitled to attend and vote at the Annual General Meeting may appoint a proxy to
	attend and vote for him/her. Such proxy need not be a Member of the Company. Proxies must
	be deposited at the Company's Registered Office located at Salim Habib House, F/268, S.I.T.E.,
	KARACHI, not less than 48 hours before the time for holding the Meeting.
3	A corporation which is a Member of the Company may by a Resolution of its Board of
	Directors or Governing Body authorise a person to act as its representative at the Meeting.
4	Shareholders are requested to notify the Company's Shares Department immediately if there is
	any change in their registered addresses.
Statement under Section 160
of the Companies Ordinance, 1984
The Boards of Directors of Wellcome Pakistan Limited and Glaxo Laboratories (Pakistan) Limited have
approved a Scheme of Arrangement for the amalgamation of the two companies in accordance with
the provisions of Sections 284 to 288 of the Companies Ordinance, 1984. The Scheme will take effect
after the sanction and necessary orders of the High Court of Sindh, following formal approval by the
shareholders of each company at meetings to be convened for the purpose under the orders of the
Court.
Under the Scheme of Arrangements the entire business of Wellcome Pakistan Limited and all its assets,
rights, obligations and liabilities will vest in Glaxo Laboratories (Pakistan) Limited against the issue of
shares by Glaxo Laboratories (Pakistan) Limited to the shareholders of Wellcome Pakistan Limited.
After the amalgamation the business of both companies will be carried on by Glaxo Laboratories
(Pakistan) Limited. Consequently Wellcome Pakistan Limited will be dissolved.
The directors of Wellcome Pakistan Limited and Glaxo Laboratories (Pakistan) Limited as holder of
shares in those companies are interested in the Scheme of Arrangement as members of those companies
and the effect of the Scheme on the interests of these directors does not differ from its effect on the
like interests of other members.
In view of the proposed amalgamation of Wellcome Pakistan Limited with Glaxo Laboratories (Pakistan)
Limited, the memorandum of association of the Company needs to be amended. The Board of
Directors of the Company accordingly propose that the resolution set forth in item 5 of the notice be
passed by the shareholders of the Company as a special resolution.
COMPANY INFORMATION
Board of Directors
Mr. C. N. Howarth			(Chairman)
Dr. M. S. Habib			(Deputy Chairman)
Dr. Nighat Parveen			(Managing Director)
Mr. M. H. Mansuri
Mr. M. Asadullah Shaikh*
Mr. A. H. Rathore**
Mr. Aleem A. Danit***
*	Appointed in place of Mr. G. D. Memon who resigned on November 30, 1995
**	Appointed in place of Mr. Saeed Mirza who was appointed in place of Mr. K. M. Smith on
	August 22, 1995 and subsequently resigned on December 1, 1995.
***	Appointed in place of Mr. A. J. Anjum who was appointed in place of Mr. A. A. Minai on
	December 1, 1995 and subsequently resigned on March 5, 1996.
Executive Committee
Dr. Nighat Parveen			(Managing Director)
Mr. M. H. Mansuri			(Material Management & Distribution Director)
Mr. A. H. Rathore			(Human Resource & Administration Director)
Mr. Aleem A. Dani			(Finance Director)
Mr. D. C. Joby			(Technical Director)
Mr. Hidayat A. Khan			(Marketing & Sales Director)
Dr. Raza Zaidi			(Medical Director)
Mr. A. Mujtaba Khalid			(Internal Auditor & Systems Controller/Company Secretary)
Bankers
Standard Chartered Bank
ANZ Grindlays Bank plc
Bank of America NT & SA
American Express Bank Limited
Citibank N A
Habib Bank Limited
Banque Indosuez
United Bank Limited
The Bank of Tokyo Limited
The Hong Kong and Shanghai Banking Corporation
Auditors
Coopers & Lybrand
Legal Advisors
Orr, Dignam & Co.
Registered Office
Salim Habib House
F/268, S.I.T.E., P.O. Box - 3686, Karachi-75700
Telephone Nos.: 2564355-65, 2574120-23, 2570665-69
Fax: 2564749, 2564729
Telex: 21920 TAB PK
Cable · TABLOID
DIRECTORS' REPORT
1	To be submitted to the Members of Wellcome Pakistan Limited at the FORTY-FIRST
	Annual General Meeting of the Company to be held on May 8, 1996.
	The Directors submit their Report and Audited Accounts of the Company for the year ended
	December 31, 1995.
							Rs. 000
	The Net Profit for the year before providing
	for Taxation, WPPF and WWF						215,555
	Workers' Profits Participation Fund						10,779
	Workers' Welfare Fund						4,053
							14,832
							-------
	Profit Before Taxation						200,723
	Taxation						67,610
							-------
	Profit After Taxation						133,113
	Unappropriated Profit Brought Forward						730
							-------
	Profit Available for Appropriation						133,843
	Appropriations:
	Interim Dividend @ 10%						9,832
	Proposed Final Dividend @25%						24,576
							-------
	Total Dividend @ 35%						34,411
	Transfer to General Reserve						99,000
							133,411
							-------
	Unappropriated Profit Carried Forward						432
							=======
2	Chairman's Review: The Chairman's Review on Pages 9 & 10 deals with the activities during the year.
	The Directors of the Company endorse the contents of the same.
3	Pattern of Shareholdings: The Pattern of Shareholdings is provided on page 37.
4	Earning per Share: The earning per share is Rs. 13.54.
5	Holding Company: The Company is a subsidiary of Burroughs Wellcome International Limited which is
	incorporated in the United Kingdom.
6	Auditors: The present Auditors, Messrs Coopers & Lybrand, retire and being eligible,
	offer themselves for reappointment.
Chairman's Review
It gives me great pleasure once again to present
to you the performance of your company and
to apprise you of its future projections.
The period under review has been very tough
for the company, due to various factors, viz
the political situation in the country, the
deteriorating law and order situation in Karachi
and price controls by the Government. The
Wellcome & Glaxo integration issues were
among other matters the company has had to
deal with.
Profit before tax is higher by 47% on an
annualised basis as compared to last year. You
would be aware that the last year closing was
for 16 months. We still managed to maintain
excellent results despite the constant currency
depreciation and cost pressures including the
high rate of inflation throughout the year. This
we achieved through extensive cost control
measures and the cooperation of the employees.
There has been no price increase on controlled
drugs during the entire year while some increases
were made on decontrolled drugs in mid 1995.
However, effective January 1, 1996, the
Government has allowed the price increase of
only 6.5% on products under the controlled
category. This increase is even lesser than the
devaluation in value of the Pak rupee made
by the Government during the latter part of
1995. Besides, the above, there has been an
increase in the cost of petroleum and other
items.
As mentioned earlier, I will repeat that there
are several unscrupulous manufacturers supplying
adulterated drugs and marketing copy products.
Adulterated medicines, you will appreciate are
extremely dangerous and can cause irreparable
damage to patients, therefore, manufacturers
copying our trade marks, brand names and
pack designs can cause damage to our reputation
and brand image. We have been and continue
to take stern measures, legal as well as
administrative, to curb this menace.
I am pleased to inform you that construction
work at Peshawar and Multan warehouses is
almost completed and the warehouses will be
in operation in 1996.
It should be noted that both Wellcome Pakistan
Limited and Glaxo Laboratories (Pakistan) Limited
have started the process of integration and a
management structure is being evolved to
ultimately manage the affairs of the merged
entity. Other planned integration and rationalized
measures are expected to take place during 1996.
A further development, due to the merger,
has been the discontinuance of sales of Astra
and Fujisawa products on January 19, 1996.
This accounted for approximately 19% of the
sales during 1995. Following the termination
of the licensing Agreements with Astra Export
& Trading AB and the Fujisawa Pharmaceutical
Co. Ltd., their products will now be contract
manufactured on behalf of the new distributors
by Wellcome Pakistan Ltd.
During the period under review the following
new products were launched by the company:
Lamictal 25mg, 50mg and 100mg Tablets, Nemazole 500 Tablets, Exosurf.
There is also a wide range of products in the
pipeline in different therapeutic areas, which
will be launched in the coming years.
The company's staff strength as on December
31, 1995 was 1,732. The two year agreement
between the CBA and the Management expired
in December 1994. Negotiations with the CBA
were held in accordance with the statutory
requirement, and I am pleased to report that
we have amicably concluded a two year
agreement, valid till December 31, 1996.
Finally, I wish to place on record my personal
and your company's appreciation to Mr A Minai
and Prof M Matin Khan who retired from the
company's services during the months of
November and December 1995 respectively.
Mr Minai has also retired from the Board of
Directors on December 1, 1995. I would also
like to welcome Mr A H Rathore and Mr A J
Anjum who have been appointed on the Board
of Directors of the company.
Auditors' Report to the Members
We have audited the annexed balance sheet of Wellcome Pakistan Limited as at December 31, 1995
and the related profit and loss account and cash flow statement, together with the notes forming part
thereof, for the year then ended and we state that we have obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purposes of our
audit and, after due verification thereof, we report that:
(a, in our opinion, proper books of account have been kept by the company as required by the
Companies Ordinance, 1984:
(b) in our opinion:
(i)	the balance sheet and profit and loss account together with the notes thereon have been
	drawn up in conformity with the Companies Ordinance, 1984 and are in agreement with
	the books of account and are further in accordance with accounting policies consistently
	applied, except for the changes as stated in notes 2.2 and 2.4 with which we concur;
(ii)	the expenditure incurred during the year was for the purpose of the company's business; and
(iii)	the business conducted, investments made and the expenditure incurred during the year
	were in accordance with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given to us,
the balance sheet, profit and loss account and the cash flow statement, together with the notes
forming part thereof, give the information required by the Companies Ordinance, 1984 in the
manner so required and respectively give a true and fair view of the state of the company's
affairs as at December 31, 1995 and of the profit and the cash flows for the year then ended;
(d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 was
deducted by the company and deposited in the Central Zakat Fund established under section 7
of that Ordinance; and
(e) without qualifying our opinion we draw your attention to note 34 regarding change in Company's
ultimate holding company.
Balance Sheet as at December 31, 1995
						1995	1994
					Note	Rs. 000	Rs. 000
Share Capital and Reserves
Authorised share capital
20,000,000 ordinary shares of Rs 10 each						200,000	100,000
						=======	=======
Issued, subscribed and paid-up share capital					3	98,315	65,543
Reserves					4	447,909	381,681
Unappropriated profit						432	730
						---------------	---------------
						546,656	447,954
Surplus on Revaluation of Fixed Assets					5	21,270	21270
Long-term Loan and Debentures					6	_	1,660
Deferred Liabilities
Staff retirement gratuity						_	20,056
Deferred taxation						7,050	4,962
Deferred gain on sale and leaseback transaction					7	_	364
						---------------	---------------
						7,050	25,382
Current Liabilities and Provisions
Running finances under mark-up arrangements					8	25,844	187,173
Current maturity of long-term loan and debentures					6	1,660	4,820
Current maturity of liability against assets
subject to finance lease					7	_	3,754
Creditors, accrued expenses and other liabilities					9	273,895	266,562
Provision for taxation						35,757	35,744
Proposed dividend						24,579	13,108
						---------------	---------------
						361,735	511,161
Contingencies and Commitments					10
						936,711	1,007,427
						=========	=========
The annexed notes form an integral part of these accounts.
						1995	1994
					Note	Rs. 000	Rs. 000
Tangible Fixed Assets
Operating assets					11	247,663	274,469
Capital work-in-progress					12	60,571	35,146
						---------------	---------------
						308,234	309,615
Long-term Loans and Advances					13	9,372	9,880
Long-term Deposits and Prepayments					14	544	480
Current Assets
Spares					15	11,472	10,848
Stocks					16	355,919	449,779
Trade debts					17	25,098	145,378
Loans and advances					18	14,024	13,069
Trade deposits and prepayments						18,210	11,877
Other receivables					19	10,433	8,650
Cash and bank balances					20	183,405	47,851
						---------------	---------------
						618,561	687,452
						---------------	---------------
						936,711	1,007,427
						=======	=======
Profit and Loss Account for the year ended December 31, 1995
						12 Months	16 Months
						December, 95	December, 94
					Note	Rs. 000	Rs. 000
Net sales					21	1,432,819	1,764,250
Cost of sales					22	934,360	1,194,932
						-----------------------	-----------------
Gross profit						498,459	569,318
Selling, administration and general expenses					23	268,327	360,874
						-----------------------	-----------------
Operating profit						230,132	208,444
Other income					24	6,567	21,545
						-----------------------	-----------------
						236,699	229,989
Other charges					25	16,842	15,520
						-----------------------	-----------------
						219,857	214,469
Financial charges					26	19,134	32,166
						-----------------------	-----------------
Profit before taxation						200,723	182,303
Taxation					27	67,610	65,638
						-----------------------	-----------------
Profit after taxation						133,113	116,665
Unappropriated profit brought forward						730	54
						-----------------------	-----------------
Profit available for appropriation						133,843	116,719
Appropriations:
Interim dividend @ 10% (1994: 20%)						9,832	13,109
Proposed final dividend @ 25% (1994: 20%)						24,579	13,108
						-----------------------	-----------------
Total dividend @ 35% (1994: 40%)						34,411	26,217
Transfer to capital reserve for issue of bonus shares						_	32,772
Transfer to general reserve						99,000	57,000
						-----------------------	-----------------
						133,411	115,989
						-----------------------	-----------------
Unappropriated profit carried forward						432