| GlaxoWellcome |
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| Annual
Report 1997 |
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| CONTENTS |
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| Notice
of Meeting |
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| Company
Information |
|
| Directors'
Report |
|
| Review
by the Deputy Chairman & Managing Director |
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| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Account |
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| Statistical
Summary |
|
| Pattern
of Holding of the Shares held by Shareholders |
|
| Factories
and Distribution / Sales Offices |
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|
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the FIFTIETH Annual General Meeting of the shareholders
of the Company |
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| will
be held at Hotel Avari Towers, Karachi at 10:30 a.m. on Monday, October 27,
1997 to transact the |
|
| following
business:- |
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| 1. (a) To receive the Report of the Directors
and the Accounts for the year ended June 30, |
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| 1997
and the Auditors' Report thereon; |
|
|
| (b)
To approve the payment of salaries and allowances to the Chief Executive and
the |
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| Directors
as Executives of the Company during the year ended June 30, 1997; |
|
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| (c)
To approve the payment of a dividend. |
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| 2.
To consider the appointment of Messrs. Coopers & Lybrand, as auditors of
the Company for |
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| the
year ending June 30, 1998 (and to fix their remuneration) in pursuance of a
Notice dated |
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| September
4, 1997 sent under Section 253 (1) of the Companies Ordinance, 1984 by Glaxo |
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| Group
Limited (member of the Company), and received by the Company on September 5, |
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| 1997,
by which the said member has notified its intention to appoint at the Annual
General |
|
| Meeting
of the Company (for which Notice is being hereby given) the said Messrs.
Coopers & |
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| Lybrand,
Chartered Accountants, in place of the retiring auditors Messrs. A. F.
Ferguson & Co., |
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| for
the reason that the said Coopers & Lybrand carry out the audit of the
Group companies of |
|
| the
Glaxo Wellcome plc. worldwide. |
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|
By order of the Board |
|
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| Karachi |
|
|
Aleem A. Dani |
|
| September
28, 1997 |
|
Director |
|
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| NOTES: |
|
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| 1.
The Share Transfer Books of the Company will be closed for the purpose of
determining the |
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| entitlement
for the payment of Final Dividend from October 21, 1997 to October 27, 1997 |
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| (both
days inclusive). |
|
|
| 2.
A Member entitled to attend and vote at the Meeting may appoint another
member as his/her |
|
| Proxy
to attend, speak and vote at the Meeting on his/her behalf. Instrument
appointing Proxy |
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| must
be deposited at the Registered office of the Company not less than 48 hours
before the |
|
| time
of the Meeting. |
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|
|
| COMPANY
INFORMATION |
|
|
| Mr
H Ken Windle |
(Chairman) |
|
| Mr
A U Khawaja |
(Non-Executive Director) |
|
|
|
|
|
| Executive
Committee |
|
|
|
| Mr
Alan R Eldridge |
(Deputy Chairman &
Managing Director) |
|
| Mr
Aleem A Dani |
(Finance Director) |
|
| Dr
Muzaffar Iqbal |
(Human Resources & |
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|
Administration Director) |
|
| Mr
D C Joby |
(Technical Director) |
|
| Mr
S Riaz Ahmad |
(Acting Director,
Marketing, |
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|
Sales & Distribution) |
|
| Mr
Hidayat A Khan |
(Director, Business |
|
|
|
Development ) |
|
| Mr
M H Mansuri |
(Director, Material |
|
|
Management ) |
|
| Dr
Raza Zaidi |
(Director, Medical & |
|
|
|
Scientific Information) |
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|
|
|
|
|
|
| Board
of Directors |
|
| Mr
H Ken Windle |
|
(Chairman) |
|
| Mr
Alan R Eldridge |
|
(Deputy Chairman O
Managing Director) |
|
| Mr
Aleem A Dani |
|
|
|
| Dr
Muzaffar Iqbal |
|
| Mr
D C Joby |
|
| Mr
A U Khawaja |
|
| Mr
Stephen Looi |
|
|
| Executive
Committee |
|
| Mr
Alan R Eldridge |
|
(Deputy Chairman &
Managing Director) |
|
| Mr
Aleem A Dani |
|
(Finance Director) |
|
| Dr
Muzaffar Iqbal |
|
(Human Resources &
Administration Director) |
|
| Mr
D C Joby |
|
(Technical Director) |
|
| Mr
S Riaz Ahmad |
|
(Acting Director,
Marketing, Sales & Distribution) |
|
| Mr
Hidayat A Khan |
|
(Director, Business
Development) |
|
| Mr
M H Mansuri |
|
(Director, Material
Management) |
|
| Dr
Raza Zaidi |
|
(Director, Medical &
Scientific Information) |
|
|
| Bankers |
|
| ANZ
Grindlays Bank plc |
|
| Standard
Chartered Bank |
|
| Bank
of America NT & SA |
|
| ABN
Amro Bank |
|
| American
Express Bank Limited |
|
| Citibank,
N.A. |
|
| The
Hong Kong and Shanghai Banking Corporation |
|
| Credit
Agricole Indosuez |
|
| The
Bank of Tokyo-Mitsubishi Limited |
|
| Habib
Bank Limited |
|
| United
Bank Limited |
|
|
| Auditors |
|
|
|
| A
F Ferguson & Co. |
|
|
| Legal
Advisors |
|
| Surridge
& BeechenD |
|
| Fatehali
W Vellani & Go. |
|
| Orr,
Dignam & Go. |
|
|
| Registered
Office |
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| F/268,
S.I.T.E., |
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| Karachi-75700 |
|
| Telephone
Nos.: 2570665-69 & 2564355-65 |
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| Fax:
2564749 & 2564729 |
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| Telex:
21920 TAB PK |
|
|
|
| DIRECTORS'
REPORT |
|
|
| 1.
To be submitted to the Members of Glaxo Wellcome Pakistan Limited [formerly
Glaxo Laboratories |
|
| (Pakistan)
Limited] at the FIFTIETH Annual General Meeting of the Company to be held on
October 27, 1997. |
|
|
| The
Directors submit their Report and Audited Accounts of the Company for the
year ended June 30, |
|
| 1997. |
|
|
Rs. 000 |
|
| The
Net Profit for the year before providing |
|
| for Taxation, WPPF and WWF |
|
384,113 |
|
|
| Workers'
Profit Participation Fund |
|
19,251 |
|
| Workers'
Welfare Fund |
|
8,246 |
|
|
-------- |
|
|
27,497 |
|
|
-------- |
|
| Profit
Before Taxation |
|
356,616 |
|
| Taxation |
|
113,876 |
|
|
-------- |
|
| Profit
After Taxation |
|
242,740 |
|
| Unappropriated
Profit Brought Forward |
|
106 |
|
|
-------- |
|
| Profit
Available for Appropriation |
|
242,846 |
|
| Appropriations: |
|
| Interim
Dividend @ 15% |
|
50,326 |
|
| Proposed
Final Dividend @ 20% |
|
67,101 |
|
|
-------- |
|
| Total
Dividend |
|
117,427 |
|
| Transfer
to Revenue Reserve |
|
125,000 |
|
|
-------- |
|
|
|
|
242,427 |
|
|
|
|
-------- |
|
| Unappropriated
Profit Carried Forward |
|
419 |
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|
======== |
|
|
| 2. Review by
the Deputy Chairman & Managing Director: The
Deputy Chairman & Managing Director's |
|
| Review
on Pages 5 & 6 deals with the activities during the year. The Directors
of the Company endorse |
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| the
contents of the same. |
|
| 3.
Pattern of Shareholdings: The Pattern of holding of the Shares is shown on
pages 36 & 37. |
|
| 4.
Earnings per Share: The after-tax earnings per ordinary share of Rs. 10 is
Rs. 7.23. (1996: Rs. 4.67). |
|
| 5.
Holding Company: The Company is a subsidiary of Glaxo Group Limited which is
incorporated in the |
|
| United
Kingdom. |
|
| 6.
Auditors: The present Auditors, Messrs. A F Ferguson & Co., will retire
and Messrs. Coopers & Lybrand |
|
| have
offered themselves for appointment. |
|
|
|
BY ORDER OF THE BOARD |
|
| Alan
R. Eldridge |
|
Aleem A. Dani |
|
| Deputy
Chairman & Managing Director |
|
Director |
|
| (Chief
Executive) |
|
|
| Karachi |
|
| September
28, 1997 |
|
|
|
| REVIEW
BY THE DEPUTY CHAIRMAN & MANAGING DIRECTOR |
|
| It
gives me great pleasure to welc6me you |
|
| to
the 50th Annual General Meeting of the |
|
| Company. |
|
|
| Board
of Directors |
|
| On
July 01, 1997, Dr Nighat Parveen and |
|
| Dr
M S Habib left the Board and Dr Muzaffar |
|
| Iqbal
and myself have joined the Board. |
|
|
|
| I
was appointed as the Managing Director of |
|
| the
Company with effect from September |
|
| 01,
1997 and subsequently appointed as |
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| Deputy
Chairman by the Board. I have been |
|
| associated
with the Group for the last 18 years. |
|
|
| Dr
Muzaffar Iqbal has Executive responsibilities |
|
| for
Human Resources and Administration. |
|
|
| On
September 22, 1997, Mr M H Mansuri |
|
| resigned
from the Board due to personal |
|
| reasons.
He has been replaced by Mr Stephen |
|
| Looi
who joined as Non-Executive Director. |
|
|
| Business
Review |
|
| The
1996 comparative figures discussed here |
|
| include
figures of the former Wellcome |
|
| Pakistan
Limited for six months ended June 30, |
|
| 1996.
Due to this reason, results of 1996-97 |
|
| show
an overstated comparison with the |
|
| corresponding
last year. |
|
|
| Sales |
|
| Pharmaceuticals |
|
| Net
sales of pharmaceuticals at Rs. 2,550m |
|
| show
a growth of 55.4% over last year. The |
|
| major
products which did well were Forram, |
|
| Zinacef,
Zinnat, Betnovate and Ventolin. |
|
|
| Food |
|
| The
sales of food business at Rs. 207.3 m |
|
| had
a mere 1.1% growth over last year. |
|
| Glaxose-D,
the only major food product, |
|
| continues
to make a valuable contribution |
|
| to
our revenue. |
|
|
| Exports |
|
| Exports
at Rs. 81.2 m recorded a significant |
|
| growth
of 38.4% over the previous year. |
|
| The
main contribution comes from |
|
| Betnovates,
Ranitidine, the active ingredient |
|
| of
our anti-ulcerant drug-Zantac, and |
|
| Griseofulvin,
an anti-fungal drug. |
|
|
| Accounts |
|
| Sales
during the year under, review shows a |
|
| growth
of 49% over last year while operating |
|
| profit
at Rs. 371 m shows a growth of 79.3% |
|
| over
last year. For fiscal/year 1996-97, cost |
|
| of
production was impacted by currency |
|
| devaluation,
local inflation and levy of |
|
| regulatory
duty and sales tax on pharmaceutical |
|
| raw
and packing materials which had to be |
|
| absorbed
by the Company. |
|
|
| Profit
before tax at Rs. 356.6 m shows a growth |
|
| of
73.5% which is 6% lower than the growth |
|
| of
79.3% in operating profit. This was due to |
|
| higher
financial charges and lower investment |
|
| income
due to high stock levels. Steps have |
|
| been
initiated to reduce the stock levels. |
|
|
| An
interim dividend of 15% was paid in |
|
| April
1997 and the Directors propose a final |
|
| dividend
of 20% making a total dividend |
|
| payment
of 35% (Rs. 3.50 per share). |
|
|
| Of
the profits remaining after appropriation |
|
| of
dividends, Rs. 125 m is being transferred |
|
| to
revenue reserve. |
|
|
| Development |
|
| Capital
expenditure during the year amounted |
|
| to
Rs. 62.7 m. Of this, Rs. 6.8 m has been |
|
| spent
on our basic manufacturing activities |
|
| and
Rs. 14.2 m on our secondary (i.e. |
|
| formulation)
activities. Of the remaining |
|
| Rs.
41.8 m, a major portion was spent on |
|
| civil
& other works and information technology. |
|
|
| Staff |
|
| It
gives me much pleasure to record the |
|
| Directors'
appreciation of the fine work put |
|
| in
during the year by the Company's Staff |
|
| at
all levels. |
|
|
| Future Outlook |
|
| The ethical business should
continue to |
|
| progress well. The Company
has plans to |
|
| launch
new products in the coming year |
|
| which
would not only help to augment the |
|
| sales
but would also broaden the range of |
|
| products.
The withdrawal of sales tax on |
|
| raw
and packing material should have a |
|
| positive
effect on the profitability of the |
|
| Company. |
|
|
| With
the emphasis of the present Government |
|
| to
encourage industrial growth, the Company |
|
| remains
optimistic on the industrial |
|
| development
prospects of Pakistan. However, |
|
| we
hope that the Ministry of Health would |
|
| respond
positively to the demand of pharma |
|
| industry
by reviewing the prices of drugs in |
|
| the
light of substantial increases in the cost |
|
| of
production on account of devaluation of |
|
| Pak
rupee against the major foreign currencies |
|
| and
high local inflation. |
|
|
| The
Company intends to continue its |
|
| contribution
to the national economy as the |
|
| leading
pharmaceutical company. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed Balance Sheet of Glaxo Wellcome Pakistan Limited
[formerly Glaxo |
|
| Laboratories
(Pakistan) Limited] as at June 30, 1997 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: |
|
|
| 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; |
|
|
| (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 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 June 30, 1997 and of the profit and cash flows for the year then ended;
and |
|
|
| (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. |
|
|
| Karachi |
|
A.F. Ferguson & Co. |
|
| September
19, 1997 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1997 |
|
|
|
1997 |
1996 |
|
|
Note |
Rs. 000 |
Rs. 000 |
|
|
| Tangible
Fixed Assets |
|
3 |
695,191 |
713,018 |
|
| Long-term
Loans and Advances to Employees |
|
4 |
19,478 |
12,760 |
|
| Long-term
Deposits and Prepayments |
|
5 |
1,889 |
1,762 |
|
|
| Current
Assets |
|
| Stores
and spares |
|
6 |
56,756 |
54,506 |
|
| Stock-in-trade |
|
7 |
1,272,450 |
841,655 |
|
| Trade
debtors |
|
8 |
159,998 |
111,735 |
|
| Loans,
advances and other receivables |
|
9 |
162,757 |
179,494 |
|
| Taxation
recoverable |
|
|
8,599 |
-- |
|
| Bank
and cash balances |
|
10 |
78,612 |
267,144 |
|
|
---------- |
---------- |
|
|
1,739,172 |
1,454,534 |
|
|
| Less:
Current Liabilities |
|
| Short-term
finances |
|
11 |
230,690 |
43,837 |
|
| Creditors,
accrued and other liabilities |
|
12 |
456,586 |
428,608 |
|
| Taxation |
|
-- |
42,522 |
|
| Proposed
dividend |
|
67,101 |
83,877 |
|
|
---------- |
---------- |
|
|
754,377 |
598,844 |
|
|
---------- |
---------- |
|
| Net
Current Assets |
|
984,795 |
855,690 |
|
|
---------- |
---------- |
|
|
1,701,353 |
1,583,230 |
|
| Financed
by: |
|
========== |
========== |
|
|
|
|
|
| Share
Capital |
|
13 |
335,507 |
335,507 |
|
| Capital
Reserve - share premium |
|
1,409 |
1,409 |
|
| Revenue
Reserve |
|
14 |
1,239,793 |
1,114,793 |
|
| Unappropriated
Profit |
|
|
419 |
106 |
|
|
|
|
---------- |
---------- |
|
| Shareholders
Equity |
|
|
1,577,128 |
1,451,815 |
|
|
|
|
|
|
| Surplus
on Revaluation of Fixed Assets |
|
15 |
21,270 |
21,270 |
|
| Long-term
Loans and Deferred Liabilities |
|
16 |
102,955 |
110,145 |
|
| Contingent
Liabilities and Commitments |
|
17 |
-- |
-- |
|
|
---------- |
---------- |
|
|
1,701,353 |
1,583,230 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1997 |
|
|
|
1997 |
1996 |
|
|
Note |
Rs. 000 |
Rs. 000 |
|
| Net sales |
|
| Local |
|
2,757,527 |
1,845,947 |
|
| Export |
|
81,220 |
58,680 |
|
|
---------- |
---------- |
|
|
18 |
2,838,747 |
1,904,627 |
|
| Cost
of sales |
|
18 |
2,467,737 |
1,697,685 |
|
|
---------- |
---------- |
|
| Operating
profit |
|
| Local |
|
347,820 |
192,750 |
|
| Export |
|
23,190 |
14,192 |
|
|
---------- |
---------- |
|
|
18 |
371,010 |
206,942 |
|
| Other
income |
|
22 |
37,139 |
29,116 |
|
|
---------- |
---------- |
|
|
408,149 |
236,058 |
|
| Financial
charges |
|
23 |
13,846 |
3,908 |
|
| Other
charges |
|
24 |
37,687 |
26,589 |
|
|
---------- |
---------- |
|
|
51,533 |
30,497 |
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
356,616 |
205,561 |
|
| Taxation |
|
25 |
113,876 |
48,953 |
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
242,740 |
156,608 |
|
| Unappropriated
profit brought forward |
|
106 |
1,024 |
|
|
---------- |
---------- |
|
| Available
for appropriation |
|
242,846 |
157,632 |
|
|
| Appropriations: |
|
| Transfer
to Revenue Reserve |
|
125,000 |
44,000 |
|
| Interim
Dividend @ 15% (1996: 12.5%) |
|
50,326 |
29,649 |
|
| Proposed
Final Dividend @ 20% (1996: 25%) |
|
67,101 |
83,877 |
|
|
---------- |
---------- |
|
|
242,427 |
157,526 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
419 |
106 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1997 |
|
|
|
1997 |
1996 |
|
|
Note |
Rs. 000 |
Rs. 000 |
|
|
| Cash
Flow from Operating Activities |
|
|
| Cash generated from operations |
29 |
|
14,530 |
185,825 |
|
| Staff
gratuity paid |
|
(25,722) |
(13,496) |
|
| Mark-up
/ interest paid |
|
(6,222) |
(12,190) |
|
| Taxes paid |
|
(162,377) |
(82,735) |
|
| Long-term
loans and advances |
|
(6,718) |
2,031 |
|
| Long-term
deposits and prepayments |
|
(127) |
(122) |
|
|
---------- |
---------- |
|
| Net
cash (outflow) / inflow from operating activities |
|
(186,636) |
79,313 |
|
|
---------- |
---------- |
|
| Cash
Flow from Investing Activities |
|
|
| Fixed
capital expenditure |
|
(62,737) |
(69,987) |
|
| Sale
proceeds of fixed assets |
|
6,656 |
7,815 |
|
|
---------- |
---------- |
|
| Net
cash outflow from investing activities |
|
(56,081) |
(62,172) |
|
|
---------- |
---------- |
|
| Cash
Flow from Financing Activities |
|
|
| Long-term
loans paid |
|
-- |
(1,660) |
|
| Dividend
paid |
|
(132,668) |
(94,845) |
|
|
---------- |
---------- |
|
| Net
cash outflow from financing activities |
|
(132,668) |
(96,505) |
|
|
---------- |
---------- |
|
| Net
decrease in cash and cash equivalents |
|
(375,385) |
(79,364) |
|
