GSK_Annual_Report_2021

Statutory Reports GlaxoSmithKline Pharmaceuticals Limited 36 undertaken to evaluate various options arising from the global discontinuation of the Zinetac brand. These options included, among others, modification of the plant to a multi-product facility and in-sourcing of products currently being manufactured at internal or external manufacturing facilities. The evaluation concluded that none of these alternatives were economically viable. As a result, the immediate sale of the facility was proposed as the best option. In line with this decision, your Company, during the quarter ended March 2021, entered a binding agreement for the sale of Vemgal assets. The conclusion of this sale is subject to necessary statutory and regulatory approvals. Exceptional charges during the year, amounting to ` 173 crores largely comprise impairment charge to reflect the estimated realisable value of the assets, reversal of associated costs and of earlier provisions no longer required on account of the Zinetac recall. Profit Before Exceptional Items and Tax amounted to ` 722 crores, at 23% of sales for the year. Key Financial Ratios Year ended 31-Mar-21 31-Mar-20 Profitability Ratios Operating Profit Margin (%) Profit from Operations/ Sale of Products 19% 18% Net Profit Margin (%)* Profit after Tax/ Revenue from operations 11% 3% Return on Net Worth* Profit after Tax/ Shareholders equity 24% 6% EBITDA % EBITDA/Sales 22% 21% Efficiency Ratios Current Ratio Current assets/ current liabilities 1.5 1.8 Inventory turnover ratio Sale of products/ Average inventories 6.3 6.6 Debtors turnover ratio Sale of products/ Average trade receivables 20.0 28.9 FA Turnover Ratio Sale of Products/ Average Fixed Assets 6.5 6.2 *If the impact of exceptional items is excluded then the net profit margin (%) would be 17% (previous year 14%), Return on Net Worth would be 35% (previous year 25%). Interest coverage ratio and Debt Equity Ratio are not relevant for the company as it has negligible debt. Despite the difficult external environment, Cash Generation from Operations remained strong even in FY 2020-21 and was in line with the good underlying business performance. Your Company focused its efforts on achieving working capital efficiencies and faster cash conversion. A deposit of ` 180 crores was received towards the sale of Vemgal assets. Your Company continues to deploy accumulated cash balances in bank deposits. There are no loans or guarantees given, securities provided, and investments covered under Section 186 of the Companies Act, 2013. Your Company has not accepted any fixed deposits during the year. There was no outstanding amount towards unclaimed deposits payable to depositors, as on 31 March 2021. Further, there are no significant or material orders passed by regulators, courts or tribunals which impact the going concern status of your Company and its future operations. There are also no material changes and commitments affecting the financial position of your Company as on the date of this report. (b) Business performance and outlook Pharmaceuticals Even amid the lockdown, your Company’s field force remained active on the ground, using digital channels effectively to engage remotely with Health Care Professionals (HCPs). Your Company’s robust digital infrastructure proved to be a reliable means of communicating the science behind the medicines. Touch points were increased to 30 million through enhanced use of tele-calling, webinars and emailers, coupled with adoption of state-of-the-art technology platforms such as Veeva Engage. On resumption of interpersonal interactions, your Company focused on skill enhancement of its field force to upgrade their skills and efficiencies amid the new norms of functioning. As a result, Company’s representatives were among the first