Of

Submitted To:
Mr. Hashmat Nawaz
Submitted By:
By:
Muhammad Waseem
Roll # 10555
MBA 2nd Morning
 I must offer my thanks to Allah the Almighty
by whose blessing I have been able to complete my
report on GSK Pharmaceuticals.

I also offer my thanks to my favorite teacher

Mr. Hashmat Nawaz for his valuable guidance
and contribution in making my report meaningful
and useful.
(Thank you Teacher)

Muhammad Waseem
Roll # 10555
M.B.A 2nd Morning
Our quest is to improve the quality of
Human life by enabling people to

do more
feel better

live
longer
 vision is exciting:
the opportunity to make a difference
to the lives of billions of people.”

“All of us have a responsibility

to engage in this quest and to
successfully deliver on our promise.”
Board of Directors
Mr. M. Salman Burney
Mr. M Tariq Iqbal Khan
Mr. Rafique Dawood
Mr. Shahid Mushtaq Qureshi
Mr. Ghulam Mustafa Aziz
Dr. Muzaffar Iqbal
Ms. Talat A. Naseer
Audit Committee
Mr. Rafique Dawood
Mr. Tariq Iqbal Khan
Mr. M. Salman Burney
Management Committee
Mr. M Salman Burney
Dr. Mazaffar Iqbal
Mr. Ghulam Mustafa Aziz
Mr. Shahid Mustafa Qureshi
Dr. Iffat Yazdani
Dr. Z. U. Khan
Hajji Muhammad Hanif
Ms. Erum S. Rahim
Development
Mr. Pervaiz Iqbal Awan
Mr. Maqbool ur Rehman
Mr. Sohail Matin
Company Secretary
Mr. Shahid Mustafa Qureshi
Chief Financial Officer
Mr. Ghulam Mustafa Aziz
Registered Office
35-Dockyar Road, West Wharf, Karachi-74000.

2315478-82, 2316071-73 & 2315101-08
 www.gsk.com.pk
Chairman / Chief Executive
Non-Executive Director
Non-Executive Director
Legal and Corporate Affairs Director
Finance and I.T. Director
Technical Director
Director Human Resources & O.D.
Chairman
Member
Member
Chairman / Chief Executive
Technical Director
Finance and I.T. Director
Legal and Corporate Affairs Director
Director Medical Services
Head of Quality
Head of Procurement
Director Marketing and Business
Sales Director
Sales Director
Country Manager – Consumer Healthcare
Auditors
A. F. Ferguson & Co.
Chartered Accountants
Legal Advisors
Rizvi, Isa, Afridi & Angell
Mandviwalla & Zafar
Surridge & Beecheno
Vellani & Vellani Orr, Dignom & Co.
GlaxoSmithKline (GSK) is a pharmaceutical company. GlaxoSmithKline Pakistan
Limited was created on January 1st 2002 through the merger of SmithKline and
French of Pakistan Limited, Beecham Pakistan (Private) Limited and Glaxo
Wellcome (Pakistan) Limited- standing today as the largest pharmaceutical company
in Pakistan.

Burroughs Wellcome & Company was founded in 1880 in London and Glaxo was
founded in Bunnythrope, New Zealand, originally a baby food manufacturer
processing local milk into and early baby food. Glaxo becomes Glaxo Laboratories,
and opened new units in London in 1935. To be a stronger force in the medicine
market, Burroughs Wellcome and Glaxo merged in 1995 and the new name of the
company was GlaxoWellcome.

There are four main companies in the history of GDK: Burroughs Wellcome &
Company, Glaxo Laboratories, Beecham and SmithKline and French. In 1830, John
K. Smith opened its first pharmacy in Philadelphia. The company also wanted to
spread all over the world to capture shares in various medicine markets, and to
accomplish this they bought 7 more laboratories in Canada and US and changed its
name to SmithKline Bachman.

In 1988, SmithKline Beckman bought its biggest competitor, International Clinical

Laboratories and enlarged by 50%. The next year, Beecham and SmithKline Beckman
becomes one and changed the name of the company to SmithKline Beecham plc. The
latest merger occurred in 2000 with Glaxo Wellcome. Since 2001 the name of the
company has been GlaxoSmithKline.
 VERTICAL ANALYSIS
BALANCE SHEET
As At December 31,2007

2007 2006 2007 2006

SHARE CAPITAL AND RESERVES

Authorised Capital
ordinary share of Rs. 10 each 2500000 1,500,000 24.60% 15.88%

Issued, subscribed and paid-up capital 1706719 1,365,375 16.79% 14.46%

Rerserves 6410922 6171543 63.07% 65.35%

8117641
7,536,918 79.86% 79.81%
NON-CURRENT LIABILITIES
Staff retirement benefits-staff gratuity 23192 66057 0.23% 0.70%
Deferred taxation 262458 137041 2.58% 1.45%
285650 203098 2.81% 2.15%
CURRENT LIABILITIES
Trade and other payables 1698374 1598432 16.71% 16.93%
Taxation 62844 105374 0.62% 1.12%
1761218 1703806 17.33% 18.04%

CONTINGENCIES AND COMMITMENTS

10164509 9443822 100% 100%

NON-CURRENT ASSETS
Fixed assets-property, plant and equipment 2236720 1774449 22.01% 18.79%
Long-term loans to employees 53755 35786 0.53% 0.38%
Long-term deposits 6808 6808 0.07% 0.07%
Investments 346824 96425 3.41% 1.02%

CURRENT ASSETS
Stores and spares 107199 64996 1.05% 0.69%
Stock-in-trade 2277175 2195407 22.40% 23.25%
Trade debts 116847 84697 1.15% 0.90%
Loans and advances 81039 64589 0.80% 0.68%
Trade deposits and prepayments 84348 76420 0.83% 0.81%
Accrud return on investment
and bank deposits 109851 189829 1.08% 2.01%
Refunds due from the government 14898 39430 0.15% 0.42%
Other receivables 378071 49416 3.72% 0.52%
Investments 98229 99100 0.97% 1.05%
Cash and bank balances 4252745 4666470 41.84% 49.41%
7520402 7530354 73.99% 79.74%

10164509 9443822 100% 100%

 HORIZONTAL ANALYSIS
BALANCE SHEET
As At December 31,2007

2007 2006 2007 2006

SHARE CAPITAL AND RESERVES

Authorised Capital
ordinary share of Rs. 10 each 2500000 1,500,000 166.67% 100%

Issued, subscribed and paid-up capital 1706719 1,365,375 125.00% 100%

Rerserves 6410922 6171543 103.88% 100%

8117641 7,536,918 107.71% 100%

NON-CURRENT LIABILITIES
Staff retirement benefits-staff gratuity 23192 66057 35.11% 100%
Deferred taxation 262458 137041 191.52% 100%
285650 203098 140.65% 100%
CURRENT LIABILITIES
Trade and other payables 1698374 1598432 106.25% 100%
Taxation 62844 105374 59.64% 100%
1761218 1703806 103.37% 100%

CONTINGENCIES AND
COMMITMENTS
10164509 9443822 107.63% 100%
100%
NON-CURRENT ASSETS 100%
Fixed assets-property, plant and
equipment 2236720 1774449 126.05% 100%
Long-term loans to employees 53755 35786 150.21% 100%
Long-term deposits 6808 6808 100.00% 100%
Investments 346824 96425 359.68% 100%

CURRENT ASSETS
Stores and spares 107199 64996 164.93% 100%
Stock-in-trade 2277175 2195407 103.72% 100%
Trade debts 116847 84697 137.96% 100%
Loans and advances 81039 64589 125.47% 100%
Trade deposits and
prepayments 84348 76420 110.37% 100%
Accrud return on investment
and bank deposits 109851 189829 57.87% 100%
Refunds due from the government 14898 39430 37.78% 100%
Other receivables 378071 49416 765.08% 100%
Investments 98229 99100 99.12% 100%
Cash and bank balances 4252745 4666470 91.13% 100%
7520402 7530354 99.87% 100%

10164509 9443822 107.63% 100%

Balance Sheet Analysis

Interpretation
Vertical Analysis

Years 2006
 Authorized Capital is 15.88% of total assets.
 Non-current liabilities are 2.15% of total assets.
 Current liabilities are 18.04 times of total assets of the company.
 Fixed assets are 18.79 times of the total assets of the company.
 Stock in trade is 23.25% of total assets.
 Other receivables are 0.52% of total assets.
 Cash and Bank balances are 49.41 times of total assets.

Year 2007
 Authorized Capital is 24.60% of total assets.
 Non-current liabilities are 2.81% of total assets.
 Current liabilities are 17.33 times of the total assets of the company.
 Fixed assets are 22.01 times of total assets of the company.
 Stock in trade is 22.40% of the total assets.
 Other receivables are 3.72% of total assets.
 Cash and Bank balances are 41.84% of the total assets.

Horizontal Analysis
Year 2007
 Non-current liabilities are 140.65% in 2007, increased by 40.65%.
 Current liabilities are 103.37% in 2007, increased by 3.37%.
 Total liabilities are 107.63% in 2007, increased by 7.63%.
 Fixed assets are 359.68% in 2007, increased by 259.68%.
 Stock in trade is 103.72% in 2007, increased by 3.72%.
 Accrued interest on investment and bank deposits are 57.87% in 2007,
decreased by 42.13%
 Receivables are 765.08% in 2007, increased by 665.08%.
 Cash and bank balances are 99.87% in 2007, reduced by 0.13%.
 VERTICAL ANALYSIS

Profit and Loss Account

for the year ended December 31,2007

2007 2006 2007 2006

Net Sales 10610882 10088247 100% 100%

Cost of goods sold (6,658,753) (6,221,581) -62.75% -61.67%

Gross profit 3952129 3866666 37.25% 38.33%

Selling, Marketing
and
Distribution expenses (1,210,818) (1,053,388) -11.41% -10.44%
Administrative expenses (486,721) (436,821) -4.59% -4.33%
Other operating expenses (223,912) (221,662) -2.11% -2.20%
Other operating income 639415 496390 6.03% 4.92%

Operating profit 2670093 2651185 25.16% 26.28%

Financial charges (11,550) (19,316) -0.11% -0.19%
Profit before
taxation 2658543 2631869 25.05% 26.09%
Taxation (988,018) (966,906) -9.31% -9.58%

Profit after taxation 1670525 1664963 15.74% 16.50%

Earnings per share 9.79 9.76 0.00% 0.00%

 HORIZONTAL ANALYSIS
Profit and Loss Account
for the year ended December 31,2007

2007 2006 2007 2006

Net Sales 10610882 10088247 105.18% 100%

Cost of goods sold (6,658,753) (6,221,581) 107.03% 100%

Gross profit 3952129 3866666 102.21% 100%

Selling, Marketing
and
Distribution expenses (1,210,818) (1,053,388) 114.95% 100%
Administrative expenses (486,721) (436,821) 111.42% 100%
Other operating
expenses (223,912) (221,662) 101.02% 100%
Other operating income 639415 496390 128.81% 100%

Operating profit 2670093 2651185 100.71% 100%

Financial charges (11,550) (19,316) 59.79% 100%
Profit before
taxation 2658543 2631869 101.01% 100%

Taxation (988,018) (966,906) 102.18% 100%

Profit after taxation 1670525 1664963 100.33% 100%

Earnings per share 9.79 9.76 100.31% 100%

 Profit/Loss Statement Account

Interpretation
Vertical Analysis
Year 2006
 Cost of goods sold is 62.75% of total sales.
 Gross profit is 38.33% of total sales.
 Operating profit is 26.28% of total sales.
 Net profit is 16.50% of total sales.

Year 2007
 Cost of goods sold is 61.67% of total sales.
 Gross profit is 37.25% of total sales.
 Operating profit is 25.16% of total sales.
 Net profit is 15.74% of total sales.

Horizontal Analysis

Year 2007
 Sales increased by 105.18% as compared to 100% of previous year.
 Cost of goods sold increased by 102.21% as compare to 100% of previous
year.
 Distribution expenses increased by 114.95% as compare to 100% of pervious
year.
 Other operating income increased by 128.81% as compared to 100% of
previous year.
 Profit before tax increased by 101.01% as compared to 100% of previous year.
 Taxes increased by 102.18% as compared to 100% of previous year.
 Profit after taxes increased by 100.33% as compare to 100% of previous year.
 CURRENT RATIO
Current Ratio

4.45
4.4
4.35
Values

4.3 Ratio
4.25
4.2
4.15
2006 2007
Years

Analysis

In 2007Company has 4.27 rupees to pay each liability. In 2006 it had 4.41 rupees for
each liability. Company’s current position is good.

QUICK RATIO
Quick Ratio

3.15
3.1
Values

3.05
Ratio
3
2.95
2.9
2006 2007
Years

Analysis
Company is in better position its most liquidate assets are 2.977 times of its current
liabilities in 2007.And they were 3.131 times of current liabilities in 2006.
 CASH RATIO

Cash Ratio

2.8
2.7
2.6
Values

2.5 Ratio
2.4
2.3
2.2
2006 2007
Years

Analysis

In year 2007Company has 2.414 cash in hand to pay its current liabilities and in 2006
company’s cash was 2.738 times of its current liabilities.

NVENTORY TURNOVER

Inventory Turnover Ratio

2.94
2.92
2.9
2.88
Values

2.86 Ratio
2.84
2.82
2.8
2.78
2006 2007
Years

Analysis
Company’s inventory is 2.92 days of its C.G.S in 2007 and it was 2.83 days in 2006.
 RECIEVABLE TURNOVER

A/R Turnover Ratio

140
120
100
Values

80
Ratio
60
40
20
0
2006 2007
Years

Analysis
In 2006 account receivable were 119.10 and in 2007 it are 90.81. It means receivable
turnover decreases in 2007.

FIXED ASSETS TURNOVER

Fixed Assets Turnover

5.8
5.6
5.4
5.2
Values

5 Ratio

4.8
4.6
4.4
4.2
2006 2007
Years

Analysis
Sales are 4.74 times of fixed assets in 2007 and 5.68 times in 2006. It means fixed
assets are increased as compare of sales of 2007.
 TOTAL ASSETS TURNOVER
Total Assets Turnover

1.07
1.065
1.06
1.055
Values

1.05 Ratio

1.045
1.04
1.035
1.03
2006 2007
Years

Analysis
Sales are 1.043 times of total assets in 2007 and they were 1.068 times in 2006. It
means company’s total assets are as compare of sales of 2007.

DEBT RATIO

Debt Ratio

0.202
0.2019
0.2018
0.2017
0.2016
Values

0.2015 Ratio
0.2014
0.2013
0.2012
0.2011
0.201
2006 2007
Years
Analysis
Company’s total liabilities are 0.2013 times of total assets in 2007 and they were
0.2019 times of total assets in 2006.
 GROSS PROFIT MARGIN

Gross Profit Margin

37.24% 38.32%

2006
2007

Analysis
Net profit is 37.24% of sales in 2007 which was 38.32% of sales in 2006. It shows
that the company is able to meet its expenses.

OPERATIN PROFIT MARGIN

Operating Profit Margin

25.16% 26.27%

2006
2007

Analysis
In 2007 Operating profit is 25.16% of sales and it was 26.27% of sales in 2006.
 NET PROFIT MARGIN

Net Profit Margin

2006
2007

Analysis

In year 2007 net profit is 15.74% of sales and in 2006 it was 16.50% of the sales.

RETURN ON ASSETS

Return on Assets

0.178
0.176
0.174
0.172
0.17
Values

0.168 Ratio
0.166
0.164
0.162
0.16
0.158
2006 2007
Years

Analysis
In the year 2007 company’s assets are 0.164 but in 2006 return on assets were 0.176.
 EARNING PER SHARE

Earning Per Share

9.79
9.785
9.78
9.775
9.77
9.765
Values
9.76 Ratio
9.755
9.75
9.745
9.74
9.735
2006 2007
Years

Analysis

In year 2007 company’s earning per share is 9.786 (9.79) but in 2006 earning per
share was 9.755 (9.76). That’s means there is a little increase in company’s earning
per share.

THANKS
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