ANALYSIS OF

PHARMACEUTICAL INDUSTRY
Ferozsons Laboratories Limited

Submitted by: Aali Muazzam (2008-3-39-8410)

Dated: January 1, 2010
Analysis of Pharmaceutical Industry

TABLE OF CONTENTS

PHARMACEUTICAL SECTOR IN PAKISTAN

Main Market Segment -------------------------------------------------------------------------------05

Basic Manufacture------------------------------------------------------------------------------------06
Multi National Manufacturers-----------------------------------------------------------------------06
Local Manufacturers----------------------------------------------------------------------------------06
Drug Act -------------------------------------------------------------------------------------------------06
Drug Registration Status Report-------------------------------------------------------------------06
Pharma Industry-----------------------------------------------------------------------------------
----07
Pharmaceutical Sector Investment Policy ------------------------------------------------------08
Future Outlook-----------------------------------------------------------------------------------------10
Industry Summary ------------------------------------------------------------------------------------11
Outlook Measures ------------------------------------------------------------------------------------11
Industry at a Glance ---------------------------------------------------------------------------------12
Swot Analysis -----------------------------------------------------------------------------------------12

FEROZSONS LABORATORIES LIMITED

Company History -------------------------------------------------------------------------------------13

Company Introduction -------------------------------------------------------------------------------14
Business Highlights ----------------------------------------------------------------------------------14
Balance Sheet -----------------------------------------------------------------------------------------16
Profit and Loss Account -----------------------------------------------------------------------------17
Cash Flow Statement --------------------------------------------------------------------------------18
Ratio Analysis------------------------------------------------------------------------------------------19
Future Industry Scenario----------------------------------------------------------------------------27

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Analysis of Pharmaceutical Industry

January 1, 2010

Reader
College of Business Management
Karachi

Subject: Letter of Authorization

Dear Reader,

As a student of MBA (EX), College of Business Management for Analysis of

Financial Statements course, I have been authorized to present a report on
Analysis of Pharmaceutical Industry “Ferozsons Laboratories Limited”

The report covers the Analysis of Pharmaceutical Industry in Pakistan and ratio
analysis of last 10 years of Ferozsons Laboratories financial statements.

The report is due on the January 2nd 2010. If there be any query regarding the report
please feel free to contact.

Sincerely

Aali Muazzam
Student of MBA – Executive
College of Business Management

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Analysis of Pharmaceutical Industry

January 1’ 2010

Mr Maqbool ur Rehman
College of Business Management

Subject: Letter of Transmittal

Dear Mr Maqbool ur Rehman,

I am presenting the report on Analysis of Pharmaceutical Industry “Ferozsons

Laboratories Limited” assigned to me at the end of the term for Analysis of
Financial Statements.

The report discusses Analysis of Pharmaceutical Industry in Pakistan and ratio

analysis of last 10 years of Ferozsons Laboratories financial statements.

Hopefully if you demand clarification, feel free to contact me.

Sincerely

Aali Muazzam
Student of MBA – Executive
College of Business Management

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Analysis of Pharmaceutical Industry

PHARMACEUTICAL SECTOR IN PAKISTAN

Pakistan meets 80% of its domestic demand of medicines from local production and
20% through imports. The pharmaceuticals market size is Rs. 127 Billion (US $ 2
Billion), approximately. The market for pharmaceuticals in Pakistan has been
expanding at a rate of around 10 to15% since last few years.

Pakistan is also exporting its surplus drugs to a large number of countries particularly
to the Asian and African regions with an expanding trade in the newly emerged
Central Asian States. About a hundred million strong populations of the Central
Asian States, with almost no local manufacture of medicines, offers an attractive
market for industries located in Pakistan.

Pakistan's large population of more than 140 million people, expanding economy
including health services, individual rise in purchasing power, general awareness
regarding use of new molecules of drugs, etc. provides an ideal environment for
investment in this field.

Presently the pharmaceutical industry in Pakistan is producing all the major

pharmaceutical dosage forms. Similarly, there are some special products e.g.
immunological, anti-cancer drugs, certain anti-diabetics, antidotes and products
manufactured from biotechnology, which are still being imported, in the finished form.
These specific areas provide excellent opportunities for investment. Only few bulk
pharmaceutical raw materials are being manufactured locally and most of the
pharmaceutical raw materials are being imported in large quantities from different
countries of the world. This sector also gives challenge to explore and avail the
opportunities.

Main Market Segments

The prominent segments of the Pharma Sector & their respective shares
(Percentage);

Segment 2001 2002 2003 2004 2005 2006 2007 2008

Antibiotics 25 22 20 20 19 18 18 15

GIT 20 15 15 14 11 10 8 8

CNS 5 8 10 13 14 15 18 19

Respiratory 5 3 4 3 3 5 5 5

Vaccines 2 5 7 9 9 10 12 12

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Vitamins 8 10 10 8 8 10 10 10

Narcoleptic 3 5 4 3 2 2 2 2

Nutritional 5 7 8 5 3 3 3 3

Anti
5 8 10 10 12 12 15 15
metabolics

Anticancer 2 2 3 5 5 5 7 10

Basic Manufacture
There are five units operating in Pakistan for the Semi Basic Manufacturing of
pharmaceutical raw material and still Pakistan has the capacity to absorb the
significant investment in this field.

Multi National Manufacturers

At present 30 multinational pharmaceutical organizations are producing their
products in Pakistan.

Local Manufacturers
411 units are involved in local pharmaceutical manufacturing.

Drug Act
The Pharmaceutical manufacture and trade in Pakistan is regulated through the
Drug Act 1976, and the rules framed there under. This is a fairly comprehensive law.
Pakistan was the first amongst the developing countries in the world to have
introduced Good Manufacturing Practices as a mandatory requirement. Registrations
are granted by the Central Licensing and Registration Boards. The Quality Control
system at the federal and provincial levels is supported by the professionally
competent drug inspectorates and laboratory services.

Drug Registration Status Report

As on June 30, 2008
Sr. No Type of Drugs Total

1. Locally manufactured drugs of human use 27,055

2. Imported drugs for human use 5,388

3. Locally manufactured drugs for veterinary 2,742

use
4. Imported drugs for veterinary use 1,188

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Total Registered Drugs 36,373

Source: Ministry of Health, Pakistan

Pharma Industry
The 600 firms (over 400 domestic manufacturers and approximately 200 major
importers) together produce 40,000-odd formulations in the country. Despite high
competition and price wars, drug prices are controlled by a strict regulatory policy.

The pharmaceutical market comprises of large Multinational Companies which are

producing and marketing research based products and also other big and small
National companies which pre-dominantly produce and market generic products.

Out of total market of US$ 2 billion, 53.3% is captured by Multinationals and 46.7% is
taken up by National companies. The top 50 companies enjoy more than 80%
market share. There are 20 multinationals in the top 50 companies, while the top 100
companies have 94.0% market share.

Having no recourse to a single price increase since December 2001, the

pharmaceutical sector will be under pressure to maintain its profitability in the face of
inflationary pressures and currency devaluation the total outlay on the health sector
is budgeted at Rs.38.0 billion, which has increased by 15.8 percent over last year.

The existing network of medical services consists of 12,260 hospitals, 113,000

doctors practicing, 4582 dispensaries, 5301 Basic Health Units (BHU), 552 Rural

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Health Centers (RHC), 906 Maternity and Child Health Centers (MCH) and 289
Tuberculosis Centers (TBC). total expenditure on health has increased from PKR
4.37 billion to PKR 6.04 billion, which is 31.86% higher than the last year.( as of
2007)

PHARMACEUTICALS EXPORT/IMPORT STATISTICS

Year 2005 2006 2007 2008

Export US$(Millions) 82.9 101.6 110.5 116.3

Import US$(Millions) 335.6 429.3 539.3

Source: www.epb.gov.pk (As of 31-12-2009)

Pharmaceutical Sector Investment Policy,

Tax and Other Incentive

POLICY PARAMETERS CONDITIONS

Not Required except specific licenses from
Govt. Permission
Ministry of Health
Remittance of capital, profits,
Allowed
dividends, etc.
Upper Limit of foreign equity
100%
allowed
Minimum Investment Amount No Restriction
Customs duty on import of PME** 5% *
Customs duty on import of Raw
5%
Materials & Chemicals
Sales Tax on import of PME 0%
Withholding Tax on import of
0%
PME***
Rate of Tax on Payment on 15% of the gross amount.
Royalty & Technical Fee (In case of non-residents is such as

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Analysis of Pharmaceutical Industry

contained in the overriding provision of

bilateral agreements on avoidance of
double taxation.)
Corporate Tax Rate:
Public companies 35%
Private companies 35%

Withholding Tax on Dividends:

5% (if received by Public & Insurances
Public & Insurances Cos.
Cos.)
Other Companies
10% (if received by other companies)
Withholding Tax on Capital
1%****
Goods****
 For Formulation of dosage forms the pharmaceutical raw materials, both the
active and the inactive, are exempted from custom duty in excess of 10% ad
valorem and sales tax. ***
 Withholding tax under section 148 on Capital Goods is charged at reduced
rate of 1% under clause (13G) of Part-II of Second Schedule to the Income
Ordinance, 2001.****
 The packing materials also enjoy the benefit of exemption from custom duty
in excess of 10% ad valorem. However, sales tax is levy-able ton the
packing material.
 For bulk manufacturing of pharmaceutical raw materials, the chemical raw
materials are exempted from custom duty in excess of 5% ad valorem and
sales tax. ***
 Once a local manufacturer of bulk pharmaceutical raw material is capable of
meeting the required standards of quality and the domestic requirements,
he may be granted a tariff protection on the recommendations of the
National Tarrif Commission.
 In order to promote pharmaceutical exports, 50% subsidy restored to
facilitate pharmaceutical companies for registration of their products in
foreign countries.
Source: Income Tax Ordinance 2001, CBR, and Investment Guide of Pakistan,
BOI, Ministry of Health, Drugs Control Organization.

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Future Outlook
BMI forecasts that the market should grow at a nominal CAGR of 12.7% in local
currency to reach PKR230bn (US$3bn) in 2013, with population growth being a
major driver. However, with inflation expected to average 9.9% over the forecast
period, drug market growth is likely to be negative in real terms. We expect both
prescription and OTC markets to be hit in Pakistan, since the majority of health
expenditure continues to be financed out of pocket, leaving market growth vulnerable
to deteriorating economic conditions.

BMI’s updated Business Environment Ratings for Q309 highlights the challenges
faced by pharmaceutical companies operating in Pakistan. The country is ranked
14th out of 15 markets assessed in the Asia Pacific region, with only Vietnam
considered less attractive. The country’s unstable political and economic situation
pose significant risks to the operating environment, while the pharmaceutical
regulatory situation, most notably patents, remain substandard.

Despite the challenges, Pakistan has a substantial pharmaceutical manufacturing

industry, which is largely geared towards supplying the domestic market. According
to the Pakistan Pharmaceutical Manufacturers Association (PPMA), domestic
manufacturing supplies 70% of the country’s demand for finished products, a figure
that is supported by trade data from the UN Commodity Trade Statistics Database
(Comtrade), which showed that imports only accounted for 20% of Pakistan’s
pharmaceutical consumption by value in 2007.

The PPMA claimed that the local pharmaceutical industry spent PKR107bn
(US$1.3bn) on manufacturing facilities, which he equated to a saving of about
US$3bn in foreign exchange on the import of medicines. The government is largely
supportive of pharmaceutical manufacturing; however, it has recently reduced
protectionist import tariffs in a number of therapeutic areas – recognition that
domestic manufacturing is restricted to low-tech, high-volume production.

Pakistan’s health indicators are generally poor, particularly in rural areas, indicating
that one of the major challenges for the government is to improve access to
healthcare. Pharmaceutical expenditure remains largely funded out of pocket,
meaning generics are popular and expensive treatments are unaffordable for many
on low incomes. Infectious disease remains a problem, as does malnutrition.
However, non-communicable chronic diseases such as diabetes and cancer are on
the rise, especially in cities.

The pharmaceutical sector has been permitted spur on import of raw materials and
active ingredients on compromising rates of duty in the budget to strike the export
potential existing in the world markets. The pharmaceutical industry has strongly
represented it in the pre-budget consultation process and has gained much-needed
incentives for developing exports from the country. Moreover, that high cost of doing
business including costly land, utilities and high interest rates were seriously
hampering the growth of pharma-industry. Some key incentives are also expected in
the forthcoming Trade Policy 2009 that will be announced in the 3rd week of July. In
the budget customs duties have been trimmed down from 25% and 10% to just 5%

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on import of 19 types of raw materials and active ingredients as well as chemicals.

Customs duty on import of packing materials has been reduced from 25% or 20% to
just 5% on import. Pharmaceutical products exports have been increasing from the
last four years and it is expected that the industry would gear up its efforts for
tapping export potential in regional as well as exports markets in African countries.
Pharmaceutical industry has not been allowed increase in the price of medicines
since 2001 when the government had permitted 3 percent increase in controlled
medicines and 4 percent increase in de-controlled medicines.

Industry Summary
The Pakistani pharmaceutical industry has an estimated worth of $1.9 billion and
existing exports have reached $125 million. The industry has set an export target of
$1 billion to be achieved by 2010. Pakistan to enlarge production base and saving at
least $ 3 billion worth of foreign exchange which would have otherwise spent on the
import of medicines. This seems like a highly challenging task since recently the
manufacturers have been facing problems from all directions. Rising cost of energy,
raw materials and a weak rupee have all contributed to high production costs and
squeezed the industries profit margins further. Pakistan was among those 35
countries which are self sufficient in medicines production. The pharma-industry
indirectly employs about 1 billion people while its direct employees have touched
162,000 persons. The recent electricity crises has also harmfully affected the
production of life saving medicine. However, the pharmaceutical manufacturers can
take solace in the fact that patents worth billions of dollars are nearing expiration and
will fuel growth in global generic market. The fast-deteriorating business environment
especially for the pharmaceutical companies in the wake of high cost of production
has been burdening the local pharma sector.

Outlook Measures
The government can play its role by ensuring uninterrupted electricity to the
manufacturers, and taking steps to prevent such shortages in the future. Also, carve
in duty is beneficial for industry growth which might sufficient effect on exports
growth. Being one of the major indicators of economy, pharma industry has
contributed positively so far and has somehow managed to increase production by a
meager 1%. Additionally, in order to improve the growth rate of pharmaceutical
exports government authorities should provide financial incentives and support
schemes. These could range from local subsidies to cost sharing of foreign
registrations. Authorities can also enter into MOUs with other countries in order to
provide bilateral support to boost Pakistani exports. The health ministry can also play
a vital role by helping emerging exporters to achieve world class Good
Manufacturing Practices (GMP) standards and earn certifications by foreign
regulatory agencies. With a low cost-base, world class manufacturing facilities and a
duly placed intellectual property legislature the local manufacturers have all the right
ingredients to become regional export leaders. The cut of import duty may reveal
further recovery in industry and would help to increase rising opportunities for
investment.

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Industry at a Glance
Share in GDP: 0.8%
Imports: US $ 388.6 Mn
Exports: US$ 125.4 Mn
Total No of Units 431
Multinational companies: 30
Local companies: 411
Total investment: US$ 1.9 Billion
Share of MNC`s 48%
Share of local Co.s 52%

SWOT ANALYSIS
STRENGTHS
 Established pharmaceutical industry.
 Exposure to export of medicines in central Asia, South Asia & Africa.
 Availability of Skilled Manpower
 Low Labor cost.
 Increase local demand due to population growth & poor health conditions in
Pakistan.

WEAKNESSES
 Research & Development facilities.
 No infrastructure to produce medicines from Biotechnology.
 Manufacturing of Basic raw material.
 Old manufacturing facilities with in-efficient process.
 No World Class manufacturing practices & certification by reputable foreign
regulatory agencies.
 Poor Policy framework.

OPPORTUNITIES
 Good export market.
 Increase domestic demand.
 Availability of infrastructure
 New medicines from biotechnology.
 Develop world class manufacturing facilities to boom exports.
 Improve & upgrade manufacturing processes.

THREATS
 Regulated Price mechanism for local sale.
 Dumping of low cost medicines from china & India.
 High manufacturing cost mainly due to electricity tariffs.
 Un-availability of power due to frequent power outages & load shedding.
 High import duty on raw materials.
 High interest rates

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FEROZSONS LABORATORIES LIMITED

Company History
In 1894, Maulvi Ferozuddin Khan established the business House of Ferozsons
through the creation of a publishing House - Ferozsons Limited. From the beginning,
Ferozuddin Khan's vision of business extended beyond wealth creation, and firmly
incorporated the enrichment of human life in the under-developed South Asian
region.

Thus the publishing house was created not only as a means of creating wealth, but
as one of spreading literacy and education among the masses of the sub-continent.
In the same spirit, Ferozsons Laboratories Limited was created in 1956 as one of
the first pharmaceutical manufacturing facilities in the fledgling state of Pakistan, to
ensure a constant and reliable source of quality medicines for the people of the
nation as experienced its birth pangs.

Incorporated as a Private Limited Company in 1954, Ferozsons Laboratories Limited

became Pakistan's first local pharmaceutical company to be listed on the country's
stock exchanges (1960).

Commencing production in 1956, we made our beginnings primarily as

manufacturers of fine chemicals and galenicals, and as toll-manufacturers for
multinational pharmaceutical corporations like Boots (now a part of Knoll), Lakeside
Laboratories Inc. of the USA (now a division of HMR/Aventis), Chemie Grunenthal of
Germany, and more recently, Procter & Gamble of the United States, Curatis
Pharma GmbH, Germany, and the Bago Group, the largest pharmaceutical group in
Latin America with sales of over US $ 500 million.

Though now an independent entity and a public limited company listed on the
country's three stock exchanges, the founder's spirit still courses through the
company's veins. In our quest for maximizing returns to our shareholders and
increasing market share, we have not lost sight of the fact that we exist first and
foremost to improve the quality of life in the markets we serve. While maintaining the
highest standards of Quality and ensuring adequate financial returns to our
investors, we seek also to ensure that our products are made available at prices that
are relevant to the local population in our chosen markets. Today, our core strength
lies in our own range of branded generics, which cover products in the following
segments:

Anti-infectives
Gastrointestinal
Cardiovascular
Dermatology

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Company Introduction
Plant has recently undergone a major renovation to keep our production processes
and facilities in line with the latest GMP requirements. Ferozsons production
capabilities include the manufacture of tablets, capsules, syrups, suspensions,
creams and ointment.

The company is also in the process of setting up independent units for the
manufacture of Sterile liquids and solid products., including a separate dedicated
facility for the production of injactable cephalosporins

Existing Manufacturing Facility: Nowshera, NWFP.

New Facility: Raiwind Road Lahore (Under Construction)
Company Head Office: Mall Road Rawalpindi
Total No of Employees: 450

Business Highlights
The company has achieved sales growth of over 16%, with Net Sales of Rs. 1.085
Billion in year ended June’2009. The Company achieved a Net Sales figure of Rs.
1.189 Billion against the figure of Rs 1.029 Billion achieved last year.
In contrast, depreciation in the Rupee and a rise in the cost of inputs significantly
eroded the Gross Profit of the company, which grew by 8%, for the Year. Operating
and Net Margins were further reduced due to increased marketing spend. This
spend was necessitated by the launch of four new products:
• Aurora (Rosuvastatin), in cardiology, for elevated cholesterol.
• Orion (Olmesartan), also in cardiology for primary hypertension.
• Centaurus (Entecavir) for Hepatitis B, in the company’s Biotech division.
• Dynetic (Itopride) in gastroenterology, for the treatment of Functional
Dyspepsia.

While the marketing activities associated with these launches significantly increased
the selling expense during the fiscal year, the benefit they are expected to add to the
top line and profitability will begin to accrue in Fiscal year 2009-10.
Net Profit decreased by 16% to close at Rs. 182.757 Million for the Year (2008: Rs.
217.024 Million). This decrease was mainly influenced by some aggressive
marketing activities.

In an industry that has been stifled under the weight of a price freeze for nearly a
decade, new launches are the life-blood for any company. Correspondingly, as
mentioned above, company undertook 4 major product launches in the second half
of the year. These launches will add much-needed depth to Ferozsons Cardiology,
Gastroenterology and Hepatology portfolios. It was expected that these products to
contribute handsomely to the company’s sales growth and profitability in the quarters
and years to come.
In preparation for the launch of Ferozsons’s subsidiary, BF Biosciences Limited, the
company also increased their participation in international conferences including the
American Society of Clinical Oncology (ASCO) meeting held in the United States,
and the Digestive Diseases Week, also held in the United States. The management
is confident that they have provided a solid footing for the Company’s biotech
portfolio, which will expand further under the BF Biosciences umbrella starting July,

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2009, and will increase profitability as its major brands shift to local manufacturing.
The Company’s entry into medical devices through its partnership with the Boston
Scientific Corporation has also made an encouraging start during the fiscal year,
and with the start-up phase now nearing completion. In coming year, this business
will grow to its potential and add significantly to the company’s depth particularly in
the Cardiology, Gastroenterology and Oncology segments of the market.

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BALANCE SHEET
AS AT 30TH JUNE 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
(RUPEES) (RUPEES) (RUPEES) (RUPEES) (RUPEES) (RUPEES) (RUPEES) (RUPEES) (RUPEES) (RUPEES)
SHARE CAPITAL AND RESERVES
Issue , subscribed & paid up capital 173,607,322 144,672,768 120,560,640 100,467,200 77,282,460 55,201,760 44,161,410 35,329,130 35,329,130 35,329,130
Capital reserve 321,843 321,843 321,843 321,843 321,843 321,843 321,843 321,843 321,843 321,843
Reserve for issue of Bonus shares 6 22,080,706 11,040,356 8,832,283
Unappropriated profit 795,036,930 681,242,280 561,722,124 416,294,570 305,866,486 164,874,732 124,381,575 90,261,594 69,864,368 54,548,073
MINORITY INTEREST 38,990,296
Total SHE 1,007,956,391 826,236,891 682,604,607 517,083,613 383,470,795 242,479,041 179,905,184 134,744,850 105,515,341 90,199,046

SURPLUS ON REVALUATION OF FIXED ASSETS 247,474,526 252,011,413 256,984,285 262,437,999 54,537,651 61,284,221 61,543,907 76,157,950 45,725,290 45,725,290
Non-Current Liabilities
Long Term Financing Secured 174,062,500 156,062,500 75,187,500
DEFERRED LIABILITY FOR TAXATION 53,960,116 49,691,426 48,302,487 46,910,274 16,512,079 17,214,210 11,769,751 5,546,478 5,046,478 4,887,985
OBLIGATIONS UNDER FINANCE LEASES 475,003 1,456,643 1,024,253 5,321,499 11,873,821 2,341,580 6,733,166 5,879,561 -- 723,500

CURRENT LIABILITIES
Bank borrowings/Short term borrowings secured 548,554 -- 12,782,463
Current maturity of long term liabilities 94,125,000 56,750,000 17,312,500 723,500 1,487,400
Current portion of obligations under finance leases 983,653 2,399,815 4,310,822 10,835,452 11,456,235 5,141,337 6,407,314 3,816,660
Creditors, accrued and other liabilities 166,505,160 116,423,214 131,024,480 86,794,523 66,697,360 46,288,138 47,640,404 32,585,986 26,058,715 33,967,533
Revolving advances 65,000 122,456 122,456 122,456 122,456 67,456 429,456
Accrued markup on long term financing 6,983,134 5,588,157 1,610,432
Provision for taxation 0 15,008,477 13,017,721 23,927,980 12,832,490 32,000,000 27,875,835 22,728,243 10,570,686
Unclaimed dividend 4,043,765 16,207,221 1,840,365 1,651,186
Proposed dividend 22,080,704 19,872,635 8,832,283 24,730,391 8,832,283
Total Current Liabilities 269,145,501 196,169,663 154,258,234 110,712,696 102,204,031 86,465,125 110,086,574 89,440,441 76,148,670 69,721,007
Total Liabilities & SHE 1,753,074,037 1,481,628,536 1,218,361,366 942,466,081 568,598,377 409,784,177 370,038,582 311,769,280 232,435,779 211,256,828

FIXED ASSETS 1,273,098,467 610,987,413 539,455,959 486,662,333 265,711,067 226,954,299 178,468,756 159,202,571 110,244,807 103,135,645
CAPITAL WORK IN PROGRESS 16,523 3,458 5,388
LONG TERM INVESTMENTS 33,085 203,425,956 149,606,959 138,318,587 19,138,244 14,304,739 6,029,485 6,031,885 33,085 33,085
Long Term Loan 156,062,500 75,187,500
Derivative Asset-interest rate swap 31,143 822,691
LONG TERM Deposits 5,061,570 790,870 600,447 436,447 526,947 481,047
Total Fixed Assets 1,278,224,265 972,089,430 764,850,865 625,417,367 285,376,258 241,740,085 184,514,764 165,234,456 110,281,350 103,174,118

CURRENT ASSETS
Stores, spares and loose tools 3,628,845 4,091,300 4,280,632 3,719,036 3,802,163 3,408,688 3,537,866 2,402,757 2,218,485 1,933,404
Stock in trade 280,924,884 180,787,784 133,816,190 145,341,209 97,077,143 84,605,100 101,722,444 77,057,413 87,150,800 79,057,782
Trade debts-unsecured (considered good) 57,955,059 24,454,201 31,937,773 12,611,931 5,763,040 6,370,838 7,390,611 6,182,384 6,419,389 8,001,468
Advances, deposits, prepayments and other receivables 7,964,738 4,560,060 3,015,174 2,563,919 33,991,241 23,412,411
Loans & Advances 14,546,615 46,907,762 44,357,908 4,197,556
Current Portion of Long term Loan 56,750,000 17,312,500
Trade deposits & short term prepayments 7,293,812 5,809,956 6,192,514 3,387,606
other receivables 1,768,991 1,530,284 14,103,388 6,954,243 2,500,000 338,195 12,031,726 16,238,543
Interest accrued 996,428 1,273,496 2,485,196
Advance income tax-net 4,598,809 3,362,895
Short Term Investments 63,974,446 194,474,564 186,969,198 86,648,750 57,071,000 24,763,787 1,843,000 4,897,550
Cash and bank balances 45,743,760 35,807,461 41,680,940 12,301,864 66,458,351 40,972,322 37,038,656 32,582,309 14,334,029 2,851,513
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total Current Assets 474,849,772 509,539,106 453,510,501 317,048,714 283,222,119 168,044,092 185,523,818 146,534,824 122,154,429 108,082,710
Total Assets 1,753,074,037 1,481,628,536 1,218,361,366 942,466,081 568,598,377 409,784,177 370,038,582 311,769,280 232,435,779 211,256,828

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PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 30TH JUNE 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
(RUPEES) (RUPEES)
NET SALES 1,189,256,968 932,297,994 922,368,542 752,221,631 655,761,685 500,930,930 492,846,868 404,635,697 351,148,935 297,618,660
LESS: COST OF SALES (584,146,610) (391,559,432) (415,507,467) (322,838,328) (279,508,957) (195,893,031) (250,188,539) (218,952,624) (199,969,968) (191,065,649)
GROSS PROFIT 605,110,358 540,738,562 506,861,075 429,383,303 376,252,728 305,037,899 242,658,329 185,683,073 151,178,967 106,553,011

LESS: OPERATING EXPENSES

Administrative expenses 82,717,534 60,719,276 51,568,412 51,000,143 33,753,707 27,040,360 30,132,959 22,296,722 17,708,748 16,739,459
Selling expenses 271,025,184 199,424,660 214,439,862 163,052,856 137,686,959 122,146,359 110,618,385 81,518,389 65,714,540 54,970,318
Other charges 27,964,315 21,073,792 17,629,100
Financial expenses 3,778,988 1,487,228 4,148,403 2,268,560 1,797,616 1,363,047 1,044,415 1,553,835 2,366,541 4,379,781
Total Operating Expenses 385,486,021 282,704,956 287,785,777 216,321,559 173,238,282 150,549,766 141,795,759 105,368,946 85,789,829 76,089,558
OPERATING PROFIT 219,624,337 258,033,606 219,075,298 213,061,744 203,014,446 154,488,133 100,862,570 80,314,127 65,389,138 30,463,453

OTHER INCOME 29,516,774 20,809,630 28,149,442 15,350,477 25,800,546 6,923,722 3,995,490 3,020,074 700,545 508,515
Loss/Gain on remeasurement of investments held for trading (4,798,077) (6,086,758) (435,778) 145,236 630,379
Share in profit/loss of Farmacia-98% owned partnership 13,818,997 11,288,372 7,180,383 4,833,505 (3,129,441)
PROFIT FOR THE YEAR 249,141,111 292,662,233 258,513,112 230,794,527 227,561,739 157,846,636 105,003,296 83,964,580 66,089,683 30,971,968
LESS: WORKERS' (PROFIT) PARTICIPATION FUND 10,653,087 10,150,722 7,724,407 5,043,129 4,015,706 3,269,457 1,523,173
CENTRAL RESEARCH FUND 2,004,046 1,957,558 1,453,106 948,707 755,430 615,047 286,538
0 0 0 12,657,133 12,108,280 9,177,513 5,991,836 4,771,136 3,884,504 1,809,711
PROFIT BEFORE TAXATION 249,141,111 292,662,233 258,513,112 218,137,394 215,453,459 148,669,123 99,011,460 79,193,444 62,205,179 29,162,257

PROVISION FOR TAXATION

Taxation 66,331,849 75,638,404 58,258,952 42,268,679 61,887,660 47,713,720 30,928,694 27,000,000 22,158,493 10,609,492
PROFIT AFTER TAXATION/Net Income 182,809,262 217,023,829 200,254,160 175,868,715 153,565,799 100,955,403 68,082,766 52,193,444 40,046,686 18,552,765

ACCUMULATED PROFIT BROUGHT FORWARD 90,261,594 69,864,368 54,548,073 44,827,591

Transfer of surplus on revaluation of fixed assets
Prior Years 9,934,644
Current Year-net of tax 263,982
0 0 0 0 0 0 100,460,220 69,864,368

PROFIT AVAILABLE FOR APPROPRIATION 182,809,262 217,023,829 200,254,160 175,868,715 153,565,799 100,955,403 168,542,986 122,057,812 94,594,759 63,380,356

APPROPRIATIONS:
Interm Dividend (13,248,423) (14,131,652)
Proposed Dividend @ 70% (2000: 25%) (19,872,635) (8,832,283) (24,730,391) (8,832,283)
Transfer to Reserve for issue of Bonus shares (11,040,353) (8,832,283)
0 0 0 0 0 0 (44,161,411) (31,796,218) (24,730,391) (8,832,283)
UNAPPROPRIATED PROFIT CARROED FORWARD 182,809,262 217,023,829 200,254,160 175,868,715 153,565,799 100,955,403 124,381,575 90,261,594 69,864,368 54,548,073
No of shares 17,360,733 14,467,277 12,056,064 10,046,720 7,728,246 5,520,176 4,416,141 4,416,141 3,532,913 3,532,913

EARNINGS PER SHARE-BASIC 10.53 15.00 16.61 17.51 19.87 18.29 15.42 11.82 11.34 5.25

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Analysis of Pharmaceutical Industry

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30TH JUNE
2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
(RUPEES) (RUPEES)
Profit before taxation 249,141,111 292,662,232 258,513,112 218,137,394 215,453,459 148,669,123 99,011,460 79,193,444 62,205,179 29,162,257
Cash flow from operating activities
Adjustment for:
Depreciation 45,402,712 33,244,566 42,105,532 45,170,037 23,829,142 16,570,745 14,854,314 11,824,345 9,422,727 8,300,141
Profit on sale of fixed assets (3,014,100) (687,675) (1,592,218) (5,025,921) (14,986,494) (378,803) (377,584) (482,230) (576,897) (346,822)
Financial Charges 2,591,349 1,487,228 4,148,403 2,268,560 1,797,616 1,363,047 1,044,415 1,553,835
Profit/interest from investments/deposits/capital gains/dividend income (26,441,366) (15,229,954) (26,557,224) (10,324,556) (10,814,052) (6,544,919) (3,593,966) (2,470,611)
Loss/Gain on remeasurement of investments held for trading 5,251,345 -3,704,361 4,798,077 6,086,758 435,778 -145,236 -630,379
Share in Profit/loss of Farmacia-98% owned partnership (13,818,997) (11,288,372) (7,180,383) (4,833,505) 3,129,441
Loss/Gain on fair value adjustment of interest rate swap 1,187,639 (1,187,639)
24,977,579 103,168 6,816,121 29,705,814 1,079,465 14,575,289 11,781,943 9,794,960 8,845,830 7,953,319
Operating profit before working capital changes 274,118,690 292,765,400 265,329,233 247,843,208 216,532,924 163,244,412 110,793,403 88,988,404 71,051,009 37,115,576
(Increase)/decrease in:
Stocks and stores (88,765,980) (46,782,262) 10,963,423 (48,180,939) (12,865,518) 2,131,237 (25,800,140) 9,909,115 (8,378,099) (9,566,289)
Trade debtors (21,199,391) 7,483,572 (19,325,842) (6,848,891) 607,798 (1,816,383) (1,208,227) 237,005 1,582,079 (1,797,813)
Advances, deposits, prepayments and other receivables (9,407,536) 6,833,437 (11,753,493) (3,285,002) (45,172,965) 3,832,930 (8,613,507) (11,116,938) 4,206,817 (1,825,922)
(119,372,907) (32,465,253) (20,115,912) (58,314,832) (57,430,685) 4,147,784 (35,621,874) (970,818) (2,589,203) (13,190,024)

(Decrease)/increase in other payables/current liabilities 35,727,920 (17,426,686) 42,856,164 18,305,902 19,417,548 3,171,992 14,518,796 6,582,271 (21,053,281) 2,396,735
190,473,703 242,873,461 288,069,485 207,834,278 178,519,787 170,564,188 89,690,325 94,599,857 47,408,525 26,322,287

Financial charges paid (2,146,965) (3,097,660) (2,537,971) (2,268,560) (1,797,616) (1,363,047) (1,044,414) (1,553,835) (2,366,541) (4,379,781)
Payment of tax (81,231,407) (55,878,093) (73,247,355) (55,223,829) (51,494,301) (45,898,276) (27,027,763) (21,352,408) (9,842,443) (5,907,352)
Payment of dividend (34,244,162) (24,495,187) (8,643,104) (6,008,818)
Net cash from operating activities 107,095,331 183,897,708 212,284,159 150,341,889 125,227,870 123,302,865 27,373,986 47,198,427 28,922,978 14,406,117

Cash flow from investing activities

Long term investments (40,000,000) (111,999,960) 4,995,996 1,000,404 2,400 (5,998,800)
Capital expenditure (275,959,826) (86,770,250) (58,087,290) (30,665,371) (43,312,167) (66,973,876) (25,127,490) (19,707,551) (16,968,759) (13,712,506)
Short term investments (96,412,228) (240,974,845) (100,320,448) (34,375,827) (42,954,189) (18,360,569) 2,569,407 (4,267,171)
Sale proceeds from short term investment 248,371,272 237,173,839
Long term loan disbursed (134,500,000) (92,500,000)
Long term loan recovered 14,187,500
Compensation receivable from Government written off -- 738,076
Profit/interest from investments/deposits/capital gains/dividend income 25,694,600 18,414,107 22,922,268 10,324,556 10,378,274 6,460,299 3,659,733 2,206,864
Cash transferred to Farmacia (455,390)
Sale proceeds of fixed assets 7,314,722 2,369,375 2,280,350 10,163,018 26,490,250 770,251 1,702,052 1,293,790 1,015,697 1,212,842
Net cash used in investing activities (90,991,460) (230,100,274) (225,705,120) (156,553,584) (44,401,836) (77,558,881) (17,193,898) (26,472,868) (15,953,062) (11,761,588)

Cash flow from financing activities

Payments-finance lease (2,397,802) (4,444,417) (10,821,877) (7,173,105) (14,930,361) (6,703,563) (5,723,741) (2,477,279) (1,487,400) (1,640,032)
Proceeds from short term financing (867,745) 92,500,000
Proceeds from long term financing 87,926,150 134,500,000
Repayment of long term financing (94,125,000) (14,187,500)
Proceeds from minority share capital contribution 10,000,000
Payment of dividend (41,938,309) (75,538,996) (38,878,086) (40,771,687) (40,409,644) (35,106,755)
Net cash from/(used in) financing activities (41,402,706) 40,329,087 42,800,037 (47,944,792) (55,340,005) (41,810,318) (5,723,741) (2,477,279) (1,487,400) (1,640,032)
Net increase/(decrease) in cash and cash equivalents (25,298,835) (5,873,479) 29,379,076 (54,156,487) 25,486,029 3,933,666 4,456,347 18,248,280 11,482,516 1,004,497
Cash and cash equivalents at the beginning of the year 71,042,595 41,680,940 12,301,864 66,458,351 40,972,322 37,038,656 32,582,309 14,334,029 2,851,513 1,847,016
Cash and cash equivalents at the end of the year 45,743,760 35,807,461 41,680,940 12,301,864 66,458,351 40,972,322 37,038,656 32,582,309 14,334,029 2,851,513

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Analysis of Pharmaceutical Industry

Ratio Analysis
Company's profitability has been an improvement on a year-on-year basis, as the
company is able to minimize its cost structure and hence, post a profitable return.
The gross profit margin for FY08 was 30%. Approximately 10% increase compared
to the previous year FY07 (41.20%). Several factors contributed to this decline, as
there was rupee devaluation, increase in international prices and inflationary
pressures. Furthermore, the concern then lies with net profit margin, which has
declined to 16.1% in FY08 as compare to FY07. The basic reason for decline is an
increase in cost of goods sold mainly sales promotion for the new launches during
the period of FY08.

Liqudity Ratios
2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
Current ratio 1.76 2.60 2.94 2.86 2.77 1.94 1.69 1.64 1.60 1.55
Quick ratio 0.69 1.65 2.07 1.55 1.76 0.93 0.76 0.78 0.46 0.42
Cash flow liquidity 0.81 2.11 2.86 2.25 2.43 2.19 0.60 0.95 0.57 0.25
Inv days 175.53 168.52 117.55 164.32 126.77 157.64 148.40 128.46 159.07 151.03
Receivable days 17.79 9.57 12.64 6.12 3.21 4.64 5.47 5.58 6.67 9.81
Payable days 104.04 108.53 115.10 98.13 87.10 86.25 69.50 54.32 47.56 64.89
Leverage Ratios
Debt ratio 0.43 0.44 0.44 0.45 0.33 0.41 0.51 0.57 0.55 0.57
Long term debt to total captalization 0.32 0.36 0.36 0.38 0.18 0.25 0.31 0.39 0.32 0.36
Debt to equity 0.74 0.79 0.78 0.82 0.48 0.69 1.06 1.31 1.20 1.34
Solvency Ratio
Time interest earned 59.12 174.50 53.81 94.92 113.94 114.34 97.57 52.69 28.63 7.96
Cash coverage ratio 88.72 78.41 113.50 91.62 99.31 125.13 53.09 45.12 17.38 5.64
Fixed charged coverage ratio 59.12 174.50 53.81 94.92 113.94 114.34 97.57 52.69 28.63 7.96
Cash Flow Adequacy ratio 0.33 1.11 2.13 2.04 1.46 1.19 1.05 2.22 1.50 0.80
Profitability ratio
Cash flow margin 0.09 0.20 0.23 0.20 0.19 0.25 0.06 0.12 0.08 0.05
Net profit margin 0.15 0.23 0.22 0.23 0.23 0.20 0.14 0.13 0.11 0.06
Optn profit margin 0.19 0.28 0.24 0.29 0.31 0.31 0.21 0.20 0.19 0.12
Gross profit margin 0.51 0.58 0.55 0.57 0.57 0.61 0.49 0.46 0.43 0.36
ROI /ROA 0.10 0.15 0.16 0.19 0.27 0.25 0.18 0.17 0.17 0.09
ROE 0.18 0.26 0.29 0.34 0.40 0.42 0.38 0.39 0.38 0.21
Cash return on assets 0.06 0.12 0.17 0.16 0.22 0.30 0.07 0.15 0.12 0.07
Market Ratio
EPS 10.53 15.00 16.61 17.51 19.87 18.29 15.42 11.82 11.34 5.25
DPS 2.42 5.22 3.22 4.06 5.23 6.36 7.75 5.55 2.45 1.70
Dividend Pay out ratio 0.23 0.35 0.19 0.23 0.26 0.35 0.50 0.47 0.22 0.32
P.E Ratio 14.72 20.60 14.93 11.71 9.81 8.20 6.10 4.48 2.43 2.86
Dividend Yield 1.56 1.69 1.30 1.98 2.68 4.24 8.25 10.47 8.90 11.34
Degree of fin leverage 1.22 1.20 1.11 1.22 1.33 1.54 1.50 1.57 1.69 1.88
DuPont Analysis
Profitability 0.15 0.23 0.22 0.23 0.23 0.20 0.14 0.13 0.11 0.06
Activity 0.68 0.63 0.76 0.80 1.15 1.22 1.33 1.30 1.51 1.41
Solvency 1.74 1.79 1.78 1.82 1.48 1.69 2.06 2.31 2.20 2.34
Efficiency Ratios
Receivable TO 20.52 38.12 28.88 59.64 113.79 78.63 66.69 65.45 54.70 37.20
Inv. TO 2.08 2.17 3.11 2.22 2.88 2.32 2.46 2.84 2.29 2.42
Payable TO 3.51 3.36 3.17 3.72 4.19 4.23 5.25 6.72 7.67 5.62
Fixed Assets TO 0.93 0.96 1.21 1.20 2.30 2.07 2.67 2.45 3.18 2.88
Total Asst TO 0.68 0.63 0.76 0.80 1.15 1.22 1.33 1.30 1.51 1.41

Return on Assets (ROA) has shown a marginal decrease in FY08. It has reduced
from 15% in FY07 to 10% in FY08. This decline has mainly resulted in an increase in

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Analysis of Pharmaceutical Industry

the cost of goods sold mentioned above. It has resulted in a low net income, which in
turn, led to low ROA. Ferozsons had been performing well from the past few years
with an increment of the ROA on year-on-year basis, however FY08 decline has
dented the growth of the profits of Ferozsons. The net income of FY08 was 16.1%
less compared to the net income in FY07. This shows the main reason of low ROA

Compared to other companies, Ferozsons has not performed well in terms of

profitability, as it was in previous years. ROE (Return on Equity) has followed a
similar trend as ROA has. This is because again the lower net income earned in the
period, along with a very high investment in Bio sciences business.

Similar is the case with ROE, there has been an increase in the net equity, however,
not a proportionate increase in the net income observed. In fact, in FY08, there has
been a fall in net income. ROE has been on an increasing trend for the past half
decade, with earnings on the rise plus stable increase in the equity. However, FY08
has made ratios growth under stress, because of rupee devaluation, inflationary
pressures, which have affected the cost structures of the company, especially the
cost of goods sold & entering in biosciences business. Augmenting to this, are high
selling and distributive expenses, which has resulted in further decline of net income.

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Analysis of Pharmaceutical Industry

Compared to the previous years, the current ratio has further deteriorated. In FY06,
it was 2.94x, then declined to 2.60x in FY07 and further to 1.76 in FY08. The
company has not been able to increase its current assets in line with the current
liabilities. However, it remained in a strong competitive position in the market.
Current Liabilities have again shown increasing trend. FY08 showed a substantial
increase of 37.2%. This was mainly due to an increase in trade payables that was
experienced by the company and current maturity of long term liabilities. Ferozsons
has not been able to actively manage its current ratio structure, hence faced a
declining trend for the two consecutive years - FY07 and FY08.

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Analysis of Pharmaceutical Industry

Quick ratio has also shown a declining movement because an increase in stock-in-
trade figures. The quick ratio declined to 0.69x in FY08 from 1.65x in FY07. This
year, the reduction is basically attributed to an increase in the stock-in-trade values,
which has increased by 55.4% in FY08. Hence, the liquidity condition for the
company has been under stress as there has been decline of both current and quick
ratios emanating because of increase in current liabilities and disproportionate
increase in current assets. Keeping its previous years performance, the company
has been a good performer in terms of fulfillment of debt obligations and still stands
to be considering the current economy and market condition for the local firms to
operate.

Receivable days show how quickly the company is able to collect the dues from its
debtors. It should be high enough for the company to avoid risks of bad debts.
Ferozsons has increased its receivable days from 9.57days in FY07 compared to
17.79 days in FY08. This shows that the company has not able to collect their debts
from the customers and made sure that their customers do not take long enough to
repay the debts of the company. This is mainly due to increase in inventory &
marketing strategy to boost sale on credit to minimize inventory levels.

Inventory Turnover (ITO) ratio depicts how quickly the company is able to sell-off
its inventory. Ferozsons has been able to perform better in this area. ITO has slightly
deteriorated in FY08 from 168 days in FY07 to 175 days in FY08. This shows that
the company has taken 7 days extra to sell-off its inventory, as a result reduced in
their efficiency process. This could have been because there is an increase in sales,
however the average inventory has been more than the last year's figures. This has
resulted in the decline in the ITO. It is not been a significant increase however,
compared to the industry, it has slightly deteriorated.

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Analysis of Pharmaceutical Industry

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Analysis of Pharmaceutical Industry

Considering the debt management ratio, the company has not performed well in
this area. The ratios were slightly detoriated from previous years. The first would be
Debt to Asset ratio. There has been a slight deterioration in this ratio as it has
declined from 0.44x in FY07 to 0.43x in FY08. The ratio basically tells us that the
company has been able to finance their assets through their debt (long-term plus
short-term). A slight reduction could be because of the accrued liabilities that have
increased in FY08.

The second ratio is Debt to Equity. This shows us that the financing of its assets are
done through either certain percentage of debt and equity. There has been a decline
in the ratio, 0.74x in FY08 from 0.79x in FY07. This tells us that the company has
been relying more on debt to finance its assets than equity. The main reason of
increase in this ratio from FY06 was due to company investments in new
manufacturing facility & Farmacia business.

Long-term Debt to Equity has been on a declining trend over the past 4 years.
However, the ratio has been a significant concern for the company. This is because
of a increase in the Long term financing in the past two years. The company had
been performing well in FY04 and FY05.

Though it shows that the company has generated enough income to fulfill their
financial cost obligations. However there was a decline because of a low EBIT
compared to previous years. There has been a significant decline in EBIT in FY08
compared to FY07. The sharp increase in selling expense is the main reason for the
decline. This is mainly due to launching of new medicines in local market. The (P/E)
ratio shows how much investors are willing to pay per rupee of the reported profits,
depends on the company's price per share and its the earnings per share (EPS).

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Analysis of Pharmaceutical Industry

There is a decline in the EPS observed in FY08. It has fallen from 15 in FY07 to
10.53 in FY08. This main reason for this decline is credited to decrease in the net
income & increase in the outstanding shares.

However, P/E has shown an increase in the value because the investors are still
ready to pay a higher price for the shares of the company. This shows that the
reliability of the company's performance with respect to local investors. Market price
at the year-end showed a decline from Rs 309 in FY07 to Rs 155 in FY08. This could
be because of the current stock market condition & volatility of the company's
financial performance, which led to a lower demand for the market investment.

The dividend per share showed a sharp decrease in FY08, because of the decrease
in the dividend paid out for the year. This could be because the company was re-
investing its profits for the expansionary purpose for the past 2-3 years.

However it has paid out dividends to their shareholders in order to promote as a

profit sharing company and attracted other investors to keep investing in the
company. One reason for doing this is that the company faced a competitive
financial year hence to keep trustworthy position of the company; this move can be
beneficial to keep their healthy investors in tact rather than losing out on
investments. Secondly, the company can argue that the investments made in
previous year have paid off and that has resulted in dividend payout for the
shareholders.

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Analysis of Pharmaceutical Industry

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Analysis of Pharmaceutical Industry

Future Industry Scenario

The pharmaceutical industry is subject to structural weaknesses brought about by a
challenging and in many cases irrational regulatory environment. The Government’s
drug pricing policy refuses to address the legitimate and substantial increase in
manufacturing costs.
Pharmaceutical manufacturers in Pakistan today suffer on many fronts. First, the
industry is constrained by a pricing freeze from adjusting its prices in response to
cost increases. Second, it also suffers, like other manufacturing sector, from
shortages in the supply of utilities, particularly electricity and gas, but is again unable
to pass on the cost of its utilities when it is forced by the outages to rely on
expensive alternate sources of power. Finally, whereas in other countries,
investment in the manufacturing sector is encouraged through tax holidays and duty
waivers on import of plant, equipment and raw material, in Pakistan, particularly in
the Pharma Sector, it is the commercial importers who derive the benefits of duty
free imports and a low withholding tax regime as final liability at the import stage. By
constrast, the manufacturing sector, which generates much-needed investment and
employment, by comparison, faces a tax burden greater in several orders of
magnitude compared to the importer. This kind of ‘reverse-subsidy’ in taxation
against local manufacturing is counter-productive and a strong disincentive against
investment in the sector. Until this disconnect in tax policy is rectified, the
manufacturing sector will continue to struggle in Pakistan.

Ferozsons Laboratories have invested in Hepatitis and Cancer medicine. There is a

strong local market of above mentioned medicines. This will increase future sales
and profit of the company.

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