ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Higher Dividend on Expanded Base

Higher Dividend on Expanded Base Hansavivek GLAXO LABORATORIES (India) has fared so well that the directors have stepped up equity distribution by two points to 18 per cent on the capital as expanded by issue of bonus shares on a one-for-two basis. While sales improved by 13 per cent, gross profit advanced by 43.3 per cent, reflecting widened margins. Net profit at Rs 3.08 crores was nearly 50 per cent higher than the previous year's and the enhanced dividend was covered 1.4 times against 1.6 times. The directors attribute the substantial improvement in results to the benefits of modernisation carried out a few years ago and of continuing research and development activity. The programme of modernisation and reorganisation of manufacturing facilities is still continuing. The company increased its exports, from Rs 168 lakhs to Rs 176 lakhs, which however stood far below its total ex penditure of foreign exchange. It exported several new pharmaceutical formulations for the first time and also developed a new high potency calcium sennosides for export. The first consignments of the latter have been well received in Germany and Japan. A contract has been entered into for exports worth over Rs 6 crores to the USSR over a four-year period. The company has finalised a detailed proposal for a major expansion of manufacture of bulk drugs, and is seeking necessary industrial licences. Meanwhile, It has started development of manufacturing processes. The laboratory chemicals activity is growing steadily. The company received government approval for manufacture of 24 new laboratory chemicals within the existing licensed capacity. It introduced six new products to meet the requirements of the industry research labo ratories, and defence establishments, The Company has received an industrial licence for manufacture of 400 kg of meclozine hydrochloride and expects to commence Its production this year. The management is also carrying on negotiations on the company's application for manufacture of salbutamol base and its formulations. The company's applications for the enhancement of licensed capacities for basic drugs, on account of replacement and modernisation of equipment and the export potential of certain basic drugs manufactured by it, are also pending with government. The company is also seeking licence to carry on business of the products falling in the category of 'other processed foods', as exemptions from industrial licensing for undertaking pertaining to these have been recently withdrawn, RICHARDSON HINDUSTAN has shown good results, with gross profit up from Rs 1.46 crores to Rs 2.06 crores following a comparatively modest increase in sales from Rs 9.95 crores November 19. 1977 to Rs 10.84 crores. Profit margins have widened appreciably. Despite increased tax liability, net profit is Rs 53 lakhs against Rs 10 lakhs previously, and the unchanged dividend is covered nearly two times, against 1.4 times previously. Encouraged by these results, the directors have revised their earlier proposal to capitalise Rs 25 lakhs out of the reserves for issue of bonus shares. They have now decided to utilise Rs 40 lakhs for making a larger bonus issue on a four-for-eleven basis. They have also recorded their intention to distribute the same quantum of dividend as for 1976-77 on the expanded capital alter the bonus issue. These results have been achieved in spite of the cumulative adverse effect of tight money conditions in the market, enhanced excise duties on drugs for a full year, and lower consumer purchasing power on account of high inflation. The company continues to make a substantial investment in building an extensive distribution network to promote and distribute its medicines to the remotest areas of the country. This is being done with the aid of mobih van units accompanied by rural health service programmes. The company was able to achieve marked increase in sales of menthol and peppermint oil. The management takes pride that its pioneering effort in research and development of mentha crop in UP has now brought more than 10,000 acres of land under this crop, making mentha a commercial crop in which nearly 25,000 small farmers and farm labourers get seasonal employment.

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