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Contents
Executive Summary.....................................................................................................................3
Overview of GSK........................................................................................................................4
GSKs Mission.............................................................................................................................4
GSKs Values...............................................................................................................................4
The Brand Speaks for Itself.........................................................................................................5
Forecasted Sales For 2014...........................................................................................................6
Assumptions................................................................................................................................8
References....................................................................................................................................9

Executive Summary
The sole purpose of making this term project is to forecast the
Income Statement and Balance Sheet of Pakistans biggest
pharmaceutical company named Glaxo-Smith Kline. Research was
done from various resources including the employees of GSK to
know if any drastic changes in sales or cost would be incurred,
and a number of assumptions were then made after which
forecasted financial statements were made.

Overview of GSK
GlaxoSmithKline Pakistan Limited was created January 1st, 2001
through the merger of SmithKline and French of Pakistan Limited,
Beecham Pakistan (Private) Limited and GlaxoWellcome (Pakistan)
Limited- standing today as the largest pharmaceutical company in
Pakistan. As an industry leader we are committed to our mission
of providing patients quality products to help improve their lives.
GSKs Mission

GlaxoSmithKline one of the world's leading research-based

pharmaceutical and healthcare companies is committed to
improving the quality of human life by enabling people to do
more, feel better and live longer.
GSKs Values

GSK values are deeply embedded in every function, across the

globe. Strategic development, operations, and customer
engagement are based on their values.
As a leading international pharmaceutical company GSK makes a
real difference to global healthcare and specifically to the
developing world. We believe this is both an ethical imperative
and key to business success. Companies that respond sensitively
and with commitment by changing their business practices to
address such challenges will be the leaders of the future. GSK
Pakistan
operates
mainly
in
two
industry
segments:
Pharmaceuticals (prescription drugs and vaccines) and consumer
healthcare (over-the-counter- medicines, oral care and nutritional
care).

GSK Pakistan leads the industry in value, volume and prescription

market shares, and we are committed to our mission of providing
patients quality products to help improve the quality of their lives.
Some of our leading pharmaceutical brands include Augmentin,
Seretide, Amoxil, Velosef, Zantac and Calpol and renowned
consumer healthcare brands, which include Panadol, Horlicks,
Aquafresh, Macleans and ENO.

THE BRAND SPEAKS FOR ITSELF

The Experts In Responsible Investment Solutions (EIRIS) report

awarded GSK the top 'A' rating, thus placing it on fourth rank in
recognition for the healthcare product and services the company
offers.
Notably, GSK Pakistan became the only company in the
pharmaceutical industry to have 6 new launches in the industry
and top 20 out of the 439 new products launched in 2012. The
products to which this milestone is attributed include Synflorix,
Fixval, Theragran Ultra, Duodart, Priorix Tetra and Avamys. Other
breakthrough products in the portfolio include Calpol and Velosef.

Forecasted Sales For 2014

Year
Sales

2011

217501
47
Increas
ed:

2012

2013

23149964

25,230,878

2014(Foreca
sted)
28,132,429

1399817

2,080,914

2,901,551

Sales
30000000
25000000
20000000
15000000
10000000
5000000
0

Sales

The sales graph and table shows an increase of 11.5% in the sales
of Glaxo Smith Kline in 2014. This increase has been seen mainly
due to the increase in export sales of GSK. The local sales have

seen a minimal increase, but an increase of 15% is seen in

exports with the exports increased in Central Asia including India,
Srilanka, Middle East and mainly Nigeria. The research
productivity of GSK has increased all over the World, and
according to a research, there will be an increase 2% in sales due
to that because they are coming up with the new products in the
markets other than the competitors products to cater more
market share. All of these factors would lead to a net increase of
11.5% in the sales of GSK. The products that contributed to this
increase are mainly Sensodyne, Horlicks, Panadol and the
antibiotic products of GSK.
While the Cost of Goods Sold section has to have a direct effect
with the increase in Sales, but in this case, the scenario has
turned out to be different. Cost of Sales has seen a bigger
increase the Sales itself; this is due to the purchase of a
packaging machine that was worth 3BN. Not only this, due to
currency devaluation in the past, and the increasing cost of
freight, energy and fuel have contributed to it. The sales, due to
price policies of Government, have not increased with the same
rate as Cost. The increasing wages have also added to the
already growing Cost of Sales of GSK.
However, there is one factor of fuel that would give relief to GSK
in 2014. The currency of Pakistan has just started to appreciate,
and due to this we will see a slight decrease in the fuel prices.
Going more in depth, we see a heavy increase in Marketing and
Selling expenses of GSK, which again has not contributed heavily
to the Sales of the company. A sum of 4BN will be paid in rural
areas to raise awareness about the diseases. As we talked to the
representative of GSK, this amount will augment in 2014, as the
company is focusing more and more on CSR activities, which may
not benefit them in the short-run, but surely benefit them in the
long-run.

The advertising expenses have also seen a great rise of 16%,

while wages of employees have increased by 21.5%. Inflation rate
has played a great part in all the increase. Inflation rate has
increased to 9.8% currently and according analysis posted by
Jeffery Franks of IMF, inflation rate will increase more during the
year.
The dividend of the company in 2013 was around Rs 3.5 declined
from Rs 4 in 2012 and it is forecasted the dividend will decline
further more to around 3.25 because the companys management
is looking to invest further more on the CSR activities such as
they are looking to help the underprivileged students for the
education purpose as well as they helped the flood that took
place in Baluchistan recently regarding water issue.
We did short term borrowing through notes payable as a
historically and paid KIBOR+1.5%, which resulted in 12%, and
long-term borrowing through banks and financial institutions and
paid Kibor+1.75% interest on it. The current kibor rate is around
10.5 %.

Net sales
Cost of sales
Gross profit
Selling, marketing and
distribution expenses
Administrative expenses
Operating Profit
Other operating expenses
Other income
EBIT
Financial charges
Profit before taxation
Taxation

2013

20141ST PASS

2014-2nd
Pass

25,230,878

28,132,42
9

28,132,429

(22,048,31
1)

(22,048,311)

6,084,11
8

6,084,118

(3,635,914.0
0)

(4,144,942
)

(4,144,942)

(920,396.00)

(1,026,242
)

(1,026,242)

912,934

912,934

(174,682)

(174,682)

527,703

527,703

1,265,95
4.43

1,265,954

(88,616.81 (77,667.
)
23)

(166,284.04)

1,177,33
7.62

1,099,670.3

(482,708.4

(450,864.86)

(19,007,165.
00)
6,223,713

1,667,403
(153,230.00)
454,916
1,969,089
(159,217.00)
1,809,872
(747,609.00)

2)
Profit after taxation
P.S Dividend

1,062,263
0

694,629.
20
0

EACS

1,062,263

694,629.
20

648,805.53

1,013,304

(607,982.4
0)

(607,982.40)

86,646.8
0

40,823.13

CS DIVIDEND
ADD: TO RETAINED
EARNING

NON-CURRENT ASSETS
Fixed assets
Intangible goodwill
Long-term loans to
employees
Long-term deposits

48,959

648,805.53

5,973,404
955,742

6,272,074
955,742

6,272
955

70,079
16,865
7,016,090

70,079
16,865
7,314,760

70
16
7,314

CURRENT ASSETS
Stores and spares
Stock-in-trade
Trade debts
Loans and advances
Trade deposits and
prepayments
Interest accrued
Refunds due from
government
Other receivables
Taxation - payments less
provision
Investments
Cash and bank balances

156,548
6,271,405

177,681.98
7,118,044.6
8

177

7,118

349,950
248,463

397,193.25
248,463

397
248

118,592
9,753

118,592
9,753

118
9

46,951
392,202

46,951
392,202

46
392

1,231,588
224,269

1,231,588
224,269
2088393.88
5

1,231
224

12,053,132

12,053

1,872,999
10,922,72
0

2,088

17,938,81
0

19,367,892

19,367

SHARE CAPITAL AND

RESERVES
Share capital

2,895,156

2,895,156

2,895

Reserves

8,454,157

8,540,803.8
0

11,349,31
3

11,435,959
.80

TOTAL ASSETS

NON-CURRENT
LIABILITIES
long term borrowing
Staff retirement benefits
Deferred taxation
CURRENT LIABILITIES
Short term Borrowing
Trade and other payables
Provisions

TOTAL CLAIMS

8,581,626.93

11,476

0
250,977
612,012
862,989

0
250,977
612,012
862,989

0
5,561,429
165,079
5,726,508

0
6200993.33
5
165079
6,366,072

6200993
16
6576933

17,938,81
0

18,665,021

19,408

AFN

702,871 AFN

492009.
250
612
1354998

210861.

-40

BORROWING Table:
70% long term

492009.60
1

60271.17618

30% Short term

210861.25
8

24249.04464

702870.85
9

84520.22083

References
http://www.brecorder.com/company-news/235/1183297/
http://www.gsk.com.pk/home.aspx
http://us.gsk.com/html/integrity/integrity-manufacturing.html
http://www.thenews.com.pk/article-147300-IMF-says-Pakistan-economy-on-track-but-inflationlooms

http://www.tradingeconomics.com/pakistan/inflation-cpi
http://www.forecasts.org/oil.htm
http://pakbiz.com/finance/petroleumprices.html?page=3
http://www.outlookpakistan.com/2014/03/17/petrol-price-will-reduce-from-1st-april-ishaq-dar/