| Glaxo Wellcome Pakistan Limited |
|
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|
|
|
|
|
|
| Annual
Report 2000 |
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| Key Data |
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|
2000 |
1999 |
|
|
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|
Rs. in
Million |
|
|
|
| Net Sales |
|
3,265.5 |
3,123.5 |
|
|
|
|
|
|
|
|
| Operating
Profit |
720.1 |
534.7 |
|
|
|
|
|
|
|
|
| Profit
before Taxation |
746.9 |
543.3 |
|
|
|
|
|
|
|
|
| Taxation |
|
245.0 |
178.5 |
|
|
|
|
|
|
|
|
| Profit
after Taxation |
501.9 |
364.8 |
|
|
|
|
|
|
|
|
| Dividend
- Cash |
201.3 |
184.5 |
|
|
|
|
|
|
|
|
| Paid-up
Capital |
335.5 |
335.5 |
|
|
|
|
|
|
|
|
| Shareholders'
Equity |
2,233.6 |
1,933.1 |
|
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|
|
| Contents |
|
|
| Notice
of Meeting |
|
| Corporate
Information |
|
| Directors'
Report |
|
| Review
by the Chief Executive/Managing Director |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Ten
Years at a Glance |
|
| Pattern
of Shareholdings |
|
| Factories
and Distribution/Sales Offices |
|
|
|
| Notice
of Meeting |
|
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| Notice
is hereby given that the FIFTY-FOURTH Annual General Meeting of the
Shareholders of the Company will |
|
| be
held at Beach Luxury Hotel, Karachi at 10:30 a.m. on Wednesday, May 9, 2001
to transact the following |
|
| business: |
|
|
| 1.
(a) To receive and adopt the Report of the Directors and the Accounts for the
year ended December 31, |
|
| 2000
and the Auditors' Report thereon; |
|
|
| (b)
To approve the payment of salaries and allowances to the Chief Executive and
the Directors as |
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| Executives
of the Company during the year ended December 31, 2000; |
|
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| (c)
To approve the payment of a dividend. |
|
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| 2.
To appoint Auditors and fix their remuneration. |
|
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|
By Order of the Board |
|
|
|
|
| Karachi |
|
Shahid Mustafa Qureshi |
|
| March
30, 2001 |
|
Director/Secretary |
|
|
| NOTES: |
|
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| 1.
The Share Transfer Books of the Company will be closed for the purpose of
determining the entitlement |
|
| for
the payment of Final Dividend from May 2, 2001 to May 9, 2001 (both days
inclusive). |
|
|
| 2.
A member is 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
must be deposited at |
|
| the
Registered Office of the Company not less than 48 hours before the time of
the Meeting. |
|
|
| 3.
The Shareholders are requested to notify the Company if there is any change
in their address. |
|
|
| 4.
CDC Account Holders will further have to follow the undermentioned guidelines
as laid down in Circular |
|
| No.
1 of 2000 dated January 26, 2000 issued by the Securities and Exchange
Commission of Pakistan. |
|
|
| A.
For Attending the Meeting: |
|
| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities are |
|
| in
group account and their registration details are uploaded as per the
Regulations, shall authenticate |
|
| his/her
identity by showing his/her original National Identity Card (NIC) or original
passport at the time |
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| of
attending the meeting. |
|
|
| ii)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
|
| signature
of the nominee shall be produced (unless it has been provided earlier) at the
time of the |
|
| meeting. |
|
|
| B.
For Appointing Proxies: |
|
|
| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities are |
|
| in
group account and their registration details are uploaded as per the
Regulations, shall submit the |
|
| proxy
form as per the above requirement. |
|
|
| ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC numbers shall be |
|
| mentioned
on the form. |
|
|
| iii)
Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be furnished with |
|
| the
proxy form. |
|
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| iv)
The proxy shall produce his/her original NIC or original passport at the time
of the meeting. |
|
|
| v)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
|
| signature
shall be submitted (unless it has been provided earlier) alongwith proxy form
to the |
|
| Company. |
|
|
|
| Corporate
Information |
|
|
| Board
of Directors |
|
| Mr.
M. Salman Burney |
|
Chief Executive/Managing
Director |
|
| Mr.
A. U. Khawaja |
|
Non-Executive Director |
|
| Mr.
Rafique Dawood |
|
Non-Executive Director |
|
| Mr.
Shahid Mustafa Qureshi |
|
| Mr.
Ghulam Mustafa Aziz |
|
| Dr.
Muzaffar Iqbal |
|
| Mr.
S. Masood Abbas Jaffery |
|
|
| Company
Secretary |
|
| Mr.
Shahid Mustafa Qureshi |
|
|
| Bankers |
|
| Standard
Chartered Grindlays Bank |
|
| ABN
Amro Bank NV |
|
| Union
Bank Limited (formerly Bank of America) |
|
| Credit
Agricole Indosuez |
|
| Emirates
Bank International PJSC |
|
| Habib
Bank Limited |
|
| Standard
Chartered Bank |
|
| The
Hongkong and Shanghai Banking Corporation |
|
| United
Bank Limited |
|
|
| Auditors |
|
| A.
F. Ferguson & Co. |
|
|
| Legal
Advisors |
|
| Surridge
& Beecheno |
|
| Vellani
& Vellani |
|
| Orr
Dignam & Co. |
|
| Rizvi,
Isa & Company |
|
|
| Registered
Office |
|
| 35
- Dockyard Road, West Wharf, |
|
| Karachi
- 74000. |
|
| Telephones:
2315478-82, 2316071-73 & 2315101-08 |
|
| Fax:
2314898 & 2311105 |
|
|
|
| Directors'
Report |
|
|
| 1.
To be submitted to the members of Glaxo Wellcome Pakistan Limited at
FIFTY-FOURTH |
|
| Annual
General Meeting of the Company to be held on May 9, 2001. |
|
|
| The
Directors submit their Report and Audited Accounts of the Company for the
year ended |
|
| December
31, 2000. |
|
|
|
Rs.000 |
|
| The
Net Profit for the year before providing for |
|
| Taxation,
WPPF and WWF |
|
799,475 |
|
|
| Workers'
Profit Participation Fund |
|
40,128 |
|
| Workers'
Welfare Fund |
|
12,495 |
|
|
------------ |
|
|
52,623 |
|
|
------------ |
|
| Profit
before Taxation |
|
746,852 |
|
| Taxation |
|
245,000 |
|
|
------------ |
|
| Profit
after Taxation |
|
501,852 |
|
| Unappropriated
Profit brought forward |
|
167 |
|
|
------------ |
|
| Available
for Appropriation |
|
502,019 |
|
| Appropriations: |
|
| Interim
Dividend |
@ 25% |
|
83,877 |
|
| Proposed
Final Dividend @ 35% |
|
117,427 |
|
| Transfer
to Revenue Reserves |
|
150,000 |
|
|
------------ |
|
|
351,304 |
|
|
------------ |
|
| Unappropriated
Profit carried forward |
|
150,715 |
|
|
========== |
|
|
|
|
| 2.
Chief Executive/Managing Director's Review: The Chief Executive/Managing
Director's |
|
| Review
on Pages 5 to 7 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 holding of the Shares is shown on
Pages 40 and 41. |
|
|
| 4.
Earnings per Share: The after tax earnings per ordinary share of Rs. 10 is
Rs. 14.96 |
|
| (1999:
Rs. 10.87). |
|
|
| 5.
Holding Company: The Company is a subsidiary of Glaxo Wellcome Investments
B.V. |
|
| Netherland
which is incorporated in the Netherlands. |
|
|
| 6.
Auditors: The Present Auditors, Messrs. A. F. Ferguson & Co. will retire
and being eligible, |
|
| offer
themselves for re-appointment. |
|
|
|
By Order of the Board |
|
|
| Karachi |
|
M. Salman Burney |
|
A.U. Khawaja |
|
| February
22, 2001 |
|
Chief Executive/Managing Director |
|
Director |
|
|
|
| Review
by the Chief Executive/Managing Director |
|
|
| It
gives me great pleasure to welcome you to the 54th Annual General Meeting of |
|
| the
Company. |
|
|
| BUSINESS
REVIEW |
|
| I
am pleased to say that inspite of the negative impact of Rupee devaluation |
|
| and
an increase in the cost of production, the Company has given an improved |
|
| performance
in 2000 by maintaining growth and increasing profitability. The |
|
| management
of your Company made every effort in challenging circumstances |
|
| to
improve productivity and the expense-revenue relationship. The growth in |
|
| profits
reflects management's performance and commitment to the shareholders for |
|
| cost
efficiency and a justified return on investment. |
|
|
| Ethical |
|
| Net
local sales of pharmaceutical at Rs.
3,104.9 m showed 4.7% growth over |
|
| last
year. Products like Zantac, Zeffix and Dermatologicals have shown a good |
|
| performance.
The Government has allowed up to 10% price increase on |
|
| decontrolled
and 8% on controlled drugs with effect from 20th June 2000. No price |
policies |
|
| increase
was however, given on the products which were subjected to a |
|
| downward
revision in price of 10% last year, which continues to affect the |
|
| Company
adversely. |
|
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| It
is now hoped that the Government would maintain consistent and |
|
| transparent
policies regarding price adjustments and new product |
|
| registrations,
so that the people of Pakistan and the Company can benefit |
|
| from
the latest research discoveries of the Company |
|
|
| Animal
Health Products |
|
| Sales
at Rs. 116.8 million were 9.2% up over the corresponding period last year. |
|
| This
is due to higher sales of Tribrissen Injection at the trade level during the |
|
| period |
|
|
| Exports |
|
| Export
sales at Rs. 43.7 million were 11.8% down over the corresponding period last |
|
| year.
The exports, comprising mainly of Lotrix Cream, Betnovates, Actifed Syrups |
|
| &
Tablets and Septran were made to Afghanistan and other sister companies in |
|
| Switzerland,
Bangladesh and Sri Lanka. |
|
|
|
|
| New
products |
|
| The
Company continued efforts to enhance its presence in the local market |
|
| by
introducing three new products namely Dicofen Injection 3 ml, Oxafax |
|
| 1000
ml and Silvate Cream, during the year under review. |
|
|
| On
the instructions of Ministry of Health, pack size of Tribrissen Injection was |
|
| changed
from 10 ml to 50 mi. |
|
|
| FINANCIAL
HIGHLIGHTS |
|
| Capital
Expenditure |
|
| The
capital expenditure for the year under review was Rs. 206.9 million. Of |
|
| this
Rs. 183.3 million was on secondary manufacturing and Rs. 23.6 million on |
|
| other
areas. In secondary manufacturing Rs. 141.3 million was spent on |
|
| manufacturing
rationalization project (Tablet and QA Manufacturing Block at |
|
| F/268,
and refurbishment of the Production Block at the West Wharf |
|
| factory).
Expenditures in the other categories reflect outlays for Motor |
|
| Vehicles
& IT equipment and other miscellaneous items. |
|
|
| MANUFACTURING
OPERATIONS |
|
| Manufacturing
continued to operate to a high standard of quality and |
|
| safety. |
|
|
| The
Lahore factory received the Chairman's Certificate for Health, |
|
| Safety
& Environment for working more than 2 million hours without |
|
| any
Lost Time Accident. |
|
|
| The
West Wharf factory received Chairman's Certificate for Health, |
|
| Safety
& Environment for working more than 1 million hours without |
|
| any
Lost Time Accident. |
|
|
| F/268
and D/43 received Chairman's Certificate of Commendation on |
|
| Machine
Guarding. |
|
|
| GW
Pakistan was among the top ten Companies to receive Employers' |
|
| Federation
Golden Jubilee Award for: |
|
| a)
Best Practices in Occupational Health, Safety and Environment. |
|
| b)
Excellence in Productivity. |
|
| c)
HR and IR Practices. |
|
|
| The
new Tablet Block at F/268 was inaugurated by Mr. Timothy C. Tyson, |
|
| Senior
Vice President and Director World Wide Manufacturing and |
|
| Supply
on October 13, 2000. All operations were transferred from |
|
| D/43
to the new Block without any disruption in supplies to the market. |
|
|
| INDUSTRIAL
RELATIONS |
|
| The
Company continued its efforts for the development of human resources and |
|
| organized
a number of training programmes during the year. The |
|
| industrial
relations climate remained very cordial and employees performed with |
|
| commitment
for the achievement of Company objectives. |
|
|
| During
the year a reduction in permanent staff of 65 was achieved mainly due to |
|
| internal
reorganization. Head count at the end of the year was 1972, which |
|
| includes
1909 permanent and 63 temporary staff. |
|
|
| I
would like to thank all the employees for giving their best to the Company,
in |
|
| challenging
circumstances, without which these excellent results would have not |
|
| been
possible. I look forward to their continued support and wish them and |
|
| their
families best of luck for the year 2001. |
|
|
| FUTURE
OUTLOOK |
|
| The
Company will continue its drive for efficiency improvements, aimed at |
|
| improving
the long term prospects for its business. |
|
|
| Efforts
will be made to further improve margins by focusing on core brands and |
|
| bringing
to Pakistan, latest research products at affordable prices, ensuring |
|
| continuous
long term growth for the Company and returns to shareholders. |
|
|
| The
international merger of Glaxo Wellcome plc and SmithKline Beecham |
|
| plc
to create GlaxoSmithKline plc became effective on December 27, 2000, and |
|
| dealing
in GlaxoSmithKline shares commenced on the same day on the |
|
| London
and New York Stock Exchanges. The Company has initiated efforts at |
|
| achieving
maximum saving, synergies and benefits and set up at arms length cost |
|
| sharing
arrangements with its associated companies, in Pakistan. A decision will be |
|
| taken
in due course on the structuring of GlaxoSmithKline's subsidiaries in
Pakistan. |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Glaxo Wellcome Pakistan Limited as
at December |
|
| 31,
2000 and the related profit and loss account, cash flow statement and
statement of changes |
|
| in
equity 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. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of |
|
| internal
control, and prepare and present the above said statements in conformity with
the |
|
| approved
accounting standards and the requirements of the Companies Ordinance, 1984.
Our |
|
| responsibility
is to express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. |
|
| These
standards require that we plan and perform the audit to obtain reasonable
assurance |
|
| about
whether the above said statements are free of any material misstatement. An
audit |
|
| includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the |
|
| above
said statements. An audit also includes assessing the accounting policies and
significant |
|
| estimates
made by management, as well as, evaluating the overall presentation of the
above |
|
| said
statements. We believe that our audit provides a reasonable basis for our
opinion and, after |
|
| due
verification, we report that: |
|
|
| a)
in our opinion, proper books of accounts 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 change as explained in note 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, cash flow statement and
statement of |
|
| changes
in equity together with the notes forming part thereof conform with approved |
|
| accounting
standards as applicable in Pakistan, and, 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, 2000 and of the
profit, its cash |
|
| flows
and changes in equity for the year then ended; and |
|
|
| d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII |
|
| of
1980), was deducted by the company and deposited in the Central Zakat Fund
established |
|
| under
Section 7 of that Ordinance. |
|
|
| A.
F. Ferguson & Co. |
|
| Chartered
Accountants |
|
|
| Karachi |
|
| February
23, 2001 |
|
|
|
| Balance
Sheet |
|
| As
at December 31,2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rs. 000 |
Rs. 000 |
|
|
|
Restated |
|
| Tangible
Fixed Assets |
|
3 |
923,587 |
820,905 |
|
| Long-term
Loans and Advances |
|
4 |
31,184 |
21,779 |
|
| Long-term
Deposits |
|
|
6,480 |
3,332 |
|
| Deferred
Taxation |
|
5 |
-- |
6,967 |
|
|
|
|
|
| Current
Assets |
|
|
|
|
| Stores
and Spares |
|
6 |
45,148 |
46,221 |
|
| Stock-in-trade |
|
7 |
893,483 |
1,564,338 |
|
| Trade Debts |
|
8 |
101,866 |
91,429 |
|
| Loans
and Advances |
|
9 |
28,370 |
21,557 |
|
| Trade
Deposits and Prepayments |
|
10 |
80,265 |
15,150 |
|
| Short-term
Investments |
|
|
815,000 |
-- |
|
| Taxation
Recoverable |
|
|
-- |
51,340 |
|
| Other
Receivables |
|
11 |
71,440 |
53,535 |
|
| Bank
and Cash Balances |
|
12 |
89,482 |
38,149 |
|
|
|
2,12S,054 |
1,881,719 |
|
| Less:
Current Liabilities |
|
|
|
|
| Short-term
Finances |
|
13 |
-- |
41,941 |
|
| Creditors,
Accrued and Other Liabilities |
|
14 |
504,897 |
550,804 |
|
| Taxation
Payable |
|
|
96,784 |
-- |
|
| Proposed
Dividend |
|
|
117,427 |
117,427 |
|
|
|
----------- |
----------- |
|
|
|
719,108 |
710,172 |
|
|
|
----------- |
----------- |
|
| Net
Current Assets |
|
|
1,405,946 |
1,171,547 |
|
|
|
----------- |
----------- |
|
|
|
2,367,197 |
2,024,530 |
|
|
|
========== |
========== |
|
|
| Financed by: |
|
|
|
|
| Share
Capital |
|
15 |
335,507 |
335,507 |
|
| Capital
Reserve - Share Premium |
|
|
1,409 |
1,409 |
|
| Revenue
Reserves |
|
16 |
1,745,970 |
1,595,970 |
|
| Unappropriated
Profit |
|
|
150,715 |
167 |
|
|
|
|
----------- |
----------- |
|
| Shareholders'
Equity |
|
|
2,233,601 |
1,933,053 |
|
|
|
|
|
|
| Surplus
on Revaluation of Fixed Assets |
|
17 |
21,270 |
21,270 |
|
| Long-term
Loans and Deferred Liabilities |
|
18 |
89,065 |
70,207 |
|
| Deferred
Taxation |
|
5 |
23,261 |
-- |
|
| Contingencies
and Commitments |
|
19 |
|
|
|
----------- |
----------- |
|
|
2,367,197 |
2,024,530 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
M. Salman Burney |
|
A.U. Khawaja |
|
|
Chief Executive/Managing Director |
|
Director |
|
|
|
| Profit
and Loss Account |
|
| For
the year ended December 31, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rs. 000 |
Rs. 000 |
|
|
|
Restated |
|
| Net Sales |
|
| Local |
|
3,221,771 |
3,073,860 |
|
| Export |
|
43,742 |
49,599 |
|
|
----------- |
----------- |
|
|
20 |
3,265,513 |
3,123,459 |
|
|
| Cost
of Sales |
|
| Local |
|
2,517,019 |
2,556,009 |
|
| Export |
|
28,377 |
32,718 |
|
|
20 |
2,545,396 |
2,588,727 |
|
|
| Operating
Profit |
|
| Local |
|
704,752 |
517,851 |
|
| Export |
|
15,365 |
16,881 |
|
|
----------- |
----------- |
|
|
20 |
720,117 |
534,732 |
|
|
|
|
|
|
21 |
94,544 |
63,273 |
|
|
|
----------- |
----------- |
|
|
|
814,661 |
598,005 |
|
|
|
|
|
| Financial
Charges |
|
22 |
5,566 |
6,476 |
|
| Other
Charges |
|
23 |
62,243 |
48,271 |
|
|
|
|
----------- |
----------- |
|
|
67,809 |
54,747 |
|
|
----------- |
----------- |
|
| Profit
before Taxation |
|
746,852 |
543,258 |
|
| Taxation |
|
24 |
245,000 |
178,469 |
|
|
|
----------- |
----------- |
|
| Profit
after Taxation |
