MIRA INFORM REPORT

 

 

Report Date :

24.09.2007

 

IDENTIFICATION DETAILS

 

Name :

FEROZSONS LABORATORIES LIMITED

 

 

Registered Office :

197-A, The Mall, Rawalpindi

 

 

Country :

Pakistan

 

 

Financials (as on) :

30.06.2007

 

 

Date of Incorporation :

1954

 

 

Com. Reg. No.:

0000645

 

 

Legal Form :

Public Limited Company

 

 

Line of Business :

Manufacture & Marketing of Pharmaceutical Products.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Business Name

 

FEROZSONS LABORATORIES LIMITED

 

 

Full Address       

 

Registered Address

197-A, The Mall, Rawalpindi, Pakistan

                       

Tel

92 (51) 5562155 - 57 (3 Lines)

Fax

92 (51) 5584195, 5566881

 

 

Short Description Of Business

 

Nature of Business        

Manufacture & Marketing of Pharmaceutical Products

Year Established

1954

Registration #

0000645

 

 

Factory Location

 

P.O. Ferozsons, Nowshera,

(N.W.F.P.), Pakistan

 

 

Auditors

 

Messrs KPMG Taseer Hadi & Co.

(Chartered Accountants)

 

 

Legal Status

 

Subject Company was incorporated as a Private Limited Company in 1954 and was converted into a Public Limited Company on September 8, 1960. The Company is listed on the Karachi, Lahore and Islamabad Stock Exchanges.

 

 

Details of Directors

 

Names

Designation

Mrs. Akhter Khalid Waheed

 

Mr. Osman Khalid Waheed

 

Mrs. Munize Azhar Peracha

 

Mr. Nihal A. Cassim

 

Mr. M. M. Ispahani

 

Mr. Taj Muhammad Khanzada

 

Mr. Farooq Mazhar

 

Mr. Dost Muhammad Khan Sherpao

 

Mr. Muhammad Nawaz Tishna

Chief Executive

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

 

Categories of Shareholders                

 

Names

Shareholding (%)

Individuals

 

Joint Stock Companies

 

Investment Companies

 

Financial Institutions

 

Insurance Companies

 

Others

50.84

 

27.50

 

0.02

 

11.56

 

9.72

 

0.36

 

 

Associates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

 

A.         Subsidiary

 

Farmacia, Pakistan. (98% owned subsidiary)

BF Biosciences Limited. (80% owned subsidiary)                                             

           

B.         Associated Companies

 

KFW Factors (Private) Limited, Pakistan.

 

 

Products

 

Manufacture & marketing of different pharmaceutical class like Anti Biotic, Anti Malarials, Anti-Rheumatic, Antihistamine, Narcotic Analgesic, Non Steroidal Respiratory Anti Inflamatory, Quinolones, Vitamins, Phenothiazine, Hypolipidaemics, Muscle Relaxant, Amoebicide with their brand names of ACYLEX, AMEZOLE, ASPIRIN, ATENORM, BECODON-L, BENZYL BENZOATE, BISACODYL, BRONOCHOL, CALIPTROL, CARMINATIVE MIXTURE, CARVEDA, CEFAPRO, CEFLIN, CELESTA, CHLOROFEN, CIMET, CLARION, DIABETRON, DONATAXEL, ERITHRIN, FEROCOL-D, FLIGEN, FURADIN, GENESIS, GYRASID, HELICURE, HYDROSONE, ISOBID, LEVO, LORAMAX, MEPON, MOTILEX, NEO CORT, NEOPAM, NOVAPRESSIN, OCTIL-S, OMEGA, OXALITIE, PANATAXEL PARACETAMOL, PEDIFEN, PHENOBARBITONE, PIPENZOLATE, PLATEX, PROFEN, PROFLOX, QUENCH, RANIDIN, SALAZODINE, STABIL, TR.BENZOIN CO, ULTRAHEAT RUB, XOLOX

           

 

Number of Employees

 

Between 400 & 500

 

 

Annual Production Volume

 

Capacity of the Pharmaceutical unit cannot be determined as the unit is used for manufacturing different products in varying quantities and packing

 

 

Annual Sales Volume

 

Years

In Pak Rupees

2006

2007

752,221,631/-

922,368,542/-

 

 

Trade Suppliers (Foreign)

 

Various international belongs to India, China, Singapore & Germany

 

 

Distributors

 

Mainly in all important cities of Pakistan

 

 

Exporting Countries

 

Mainly to Sri Lanka, Sudan, Ethiopia, Kenya, Uganda, Yemen, Bangladesh, Myanmar, Tanzania, Uzbekistan, Kazakhstan, Afghanistan, and Turkmenistan.

 

 

Bankers

 

Bank Alfalah Limited, Pakistan.

Habib Bank Limited, Pakistan.

Standard Chartered Bank Limited, Pakistan.

Allied Bank Limited, Pakistan.

 

 

Financial overview

 

Company achieved Net Sales of Rs. 922.369 million, against the figure of Rs. 752.222 million achieved last year. The Company’s net sales grew by 23%, or almost double the industry’s average growth of 12.5% as recordered by IMS Statistics for the period ending June 30, 2007. Gross Profit ratios were eroded slightly owing to depreciation in currency and corresponding increase in cost of materials and also because of a greater growth in the Company’s imported products, which have a lower GP margin compared to locally manufactured range. In absolute terms, Gross Profit of the Company grew by 18%. While the net profit increase by 14% to close at Rs. 200.254 million for the year (2006: Rs. 175.859 million). According to IMS statistics, Company’s overall sales ranking in the Pharma sector improved to 26 amongst over 600 national and multi-national companies operating in Pakistan. Subject ranked 3rd among all companies in the field of Oncology and Transplantation and 2nd in the pure oncology segment.

 

 

Future Outlook

 

Having no resource to a single price increase since 2001, the pharmaceutical sector will be under pressure to maintain its profitability in the face of inflationary pressures and currency devaluation. Although it registered a fairly healthy growth of 12.5% during 2006-07, as mentioned earlier, the total market in Pakistan, which currently stands at US $ 1.4 billion, remains small in relation to its population size. Next door, India’s domestic market is expected to grow to US $ 14 billion by 2011, despite the common but faulty perception that drugs are much cheaper in India (in reality, an almost equal number of drugs are cheaper in either country). The pharmaceutical industry has long argued that the best way to ensure competitive pricing is through deregulation. This principle has been clearly demonstrated in the case of the Telecom sector, where deregulation and a judicious regulatory authority have brought costs down dramatically. Time and again, it has been proven that prices are best controlled when market forces are allowed to come into play. Until the Government continues to subject the industry to an artificial control that is at a disconnect with economic reality, the future of the industry and the prospects for achieving global scale will remain uncertain.

 

 

Memberships

 

Pakistan Pharmaceutical Manufacturers Association. (PPMA)

Rawalpindi Chamber of Commerce & Industry. (RCCI)

 

 

Foreign Exchange Rates

 

Currency

 

Unit

Pakistani Rupee

US Dollar

1

            Rs. 60.65

UK Pound

1

            Rs.122.15

Euro

1

            Rs. 85.20

 

 

Comments

 

Subject Company was established in 1954 and is engaged in manufacture & marketing of Pharmaceutical Products. Market reputation is good. Trade relations are reported as fair. The Company can be considered for normal business dealings at usual trade terms and conditions.

 

 

 

 

 

 

 

 

 

FEROZSONS LABORATORIES LIMITED

 

 

PROFIT AND LOSS ACCOUNT

 

 

 

FOR THE YEAR ENDED JUNE 30, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2007

 

2006

 

 

 

Rupees

 

 

 

 

 

 

Net sales

 

 

     922,368,542

 

       752,221,631

Cost of sales

 

    (415,507,467)

 

     (322,838,328)

Gross profit

 

     506,861,075

 

       429,383,303

 

 

 

 

 

 

Other income

 

       28,149,442

 

         15,350,477

Administrative expenses

      (51,568,412)

 

       (50,131,489)

Selling and distribution cost

    (214,439,862)

 

     (161,570,092)

Finance cost

 

        (4,148,403)

 

         (2,268,560)

Other expenses

 

      (17,629,100)

 

       (19,806,627)

Share in profit of Farmacia

 

 

 

98% owned partnership firm

       11,288,372

 

           7,180,383

Profit before taxation

 

     258,513,112

 

       218,137,395

 

 

 

 

 

 

Provision for taxation

 

      (58,258,952)

 

       (42,268,679)

Profit after taxation

 

     200,254,160

 

       175,868,716

 

 

 

 

 

 

Earnings per share - basic and diluted

16.61

 

14.59

 

FEROZSONS LABORATORIES LIMITED

 

 

 

 

 

 

 

 

 

BALANCE SHEET AS AT JUNE 30, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2007

 

2006

 

 

 

2007

 

2006

 

 

 

 

(Rupees)

 

 

 

(Rupees)

SHARE CAPITAL AND RESERVES

 

 

 

 

 

FIXED ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

     120,560,640

 

   100,467,200

 

Property, plant and equipment

    539,455,959

 

   486,662,333

Reserves

 

 

 

 

 

 

 

 

 

 

 

 

Capital Reserve

 

 

            321,843

 

          321,843

 

LONG TERM INVESTMENTS

    149,606,959

 

   138,318,587

Revenue reserve - unappropriated

profit

     561,722,124

 

   416,294,570

 

 

 

 

 

 

 

 

 

 

     682,604,607

 

   517,083,613

 

LONG TERM LOAN

      75,187,500

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

SURPLUS ON REVALUATION

OF FIXED

 

 

 

 

LONG TERM DEPOSITS

           600,447

 

          436,447

ASSETS - net of tax

 

 

     256,984,285

 

   262,437,999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON CURRENT LIABILITIES

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long term financing - secured

 

       75,187,500

 

 -

 

Stores, spares and loose tools

        4,280,632

 

       3,719,036

Liabilities against assets

subject to finance lease

         1,024,253

 

       5,321,499

 

Stock in trade

    133,816,190

 

   145,341,209

Deferred liability for taxation

 

       48,302,487

 

     46,910,274

 

Trade debts - considered goods

      31,937,773

 

     12,611,931

 

 

 

 

     124,514,240

 

     52,231,773

 

Current portion of long term loan

      17,312,500

 

 -

 

 

 

 

 

 

 

 

Loans and advances - considered goods

      14,546,615

 

     46,907,762

 

 

 

 

 

 

 

 

Deposits and prepayments

        3,015,174

 

       2,563,919

CURRENT LIABILITIES

 

 

 

 

 

 

Interest accrued

        2,485,196

 

 -

 

 

 

 

 

 

 

 

Other receivables

      14,103,388

 

       6,954,243

Trade and other payables

 

     131,024,480

 

     86,859,522

 

Advance income tax - net

        3,362,895

 

 -

Accrued markup on long term financing

         1,610,432

 

 -

 

Short term investments

    186,969,198

 

     86,648,750

Current portion of long term financing

 

       17,312,500

 

 -

 

Cash and bank balances

      41,680,940

 

     12,301,864

Current portion of liabilities

 against assets

 

 

 

 

 

 

    453,510,501

 

   317,048,714

subject to finance lease

 

 

         4,310,822

 

     10,835,452

 

 

 

 

 

 

Provision for taxation - net

 

 -

 

     13,017,721

 

 

 

 

 

 

 

 

 

 

     154,258,234

 

   110,712,695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1,218,361,366

 

   942,466,080

 

 

 

 1,218,361,366

 

   942,466,080

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions