CONTENTS 02The Spirit of GSK 08 27Business & Notice of Annual General Activity Details Meeting 03 05 GSK Quality Living Our Statement Values 04GSK EHSS 43 06 Corporate General Information Governance 87 Proxy Form 59Financials 09Business Review 27 Profile of the Company 28 Product Index 32 Product Information 34 Business Activity Details 38 Corporate Social Responsibility 86Contact Details 40 Responsible Business and Sustainability Development 41 Report on Human Resources 42 Going Green Business & Activity Business Details 09 Statement of Chairman 11 Report of Directors to the Shareholders 43 Corporate Governance Framework 18 Certificate on Compliance of Corporate Governance 44 Report of Corporate Governance 19 Report of Corporate Governance Compliance 48 Statement on Internal Control 22 Key Operating and Financial Records 51 Board of Directors 23 Shareholding Information 53 Company Executive Committee 24 Analysis of Sales Revenue 55 Consumer Healthcare Leadership Team 25 Key Performance Indicators 26 Value Added Statement 57 Audit Committee Report Review Business Corporate Governance Corporate 59 Statement of Directors’ Responsibility 60 Auditors’ Report to the Shareholders 61 Statement of Financial Position NOTE 62 Income Statement and Statement of Comprehensive Income Brand names appearing throughout this report are trademarks either owned by 63 Statement of Changes in Equity and/or licensed to GlaxoSmithKline Bangladesh Limited or GlaxoSmithKline 64 Statement of Cash Flows Group of Companies 65 Notes to the Financial Statements Financials ANNUAL REPORT 2014 THE SPIRIT MISSION Improve the quality of human life The Board of Directors of GlaxoSmithKline Bangladesh 2. Business Performance by enabling people to do more, Limited has the pleasure in submitting the annual report feel better and live longer together with the Company’s audited financial statements Pharmaceuticals for the year ended 31 December 2014. The local pharmaceuticals part of the business grew by 12% which is higher than the 11% market growth reported by IMS. In the year 2014, the Company started to recover from prior This was on the back of a very successful 2013. year’s external environment challenges. The Company Pharmaceuticals business exceeded its annual value and continued to focus on its key strategies in both the volume budgets enabling access of close to 30 million packs VALUES consumer healthcare and the pharmaceutical business of our products to patients across the nation. Growth was Respect for people segments to ensure consistency in the growth of its driven almost equally by all zones indicating robustness of Patient/Consumer focus shareholder value. This report highlights the key business processes and good field engagement. Vaccines part of the Transparency activities that drove the performance of the Company and business faced unprecedented challenges on the supply Integrity presents the necessary disclosure in relation to good front impacting overall business growth. Portfolio sales of corporate governance. global assets in the area of Oncology crossed a milestone of TK 50 mn helping improve the quality of life of more cancer 1. Industry Outlook and Possible Future Developments patients. Overall consistency in performance over last 24 months period reflects team’s abilities around robust STRATEGIES Pharmaceuticals planning and execution of strategies and a winning attitude. Grow a diversified global company According to the “Bangladesh Pharmaceutical Index” There has been a continued effort in building the capabilities Deliver more products of value published by the IMS Ag, Switzerland, which audits and of our sales and marketing teams Simplify the operating model reports sales in the retail channel, the Bangladesh Individual empowerment Pharmaceutical Market has crossed TK. 113,000mn with an Dermatology business has been your Company’s strength Build trust average growth rate of 11%. This represents an increase over and contributes 26% to the total business. 2014 saw the previous year (8%), which was marked with political continued strengthening of our position for major brands activities leading to disruption in business operations. with portfolio growing at 14%. Flagship brands BetnovateTM and DermovateTM grew over 12%, and BactrobanTM showed BEHAVIOURS Gastro-Intestinal and Metabolism remains the key biggest greater acceptance posting a 20% growth. Flexible thinking therapy areas in the country, followed by Anti-Infectives and Continuous improvement Analgesics. Meanwhile Cardiovascular and Hormones are With the recent introduction of Specialty Dermatology Customer driven emerging as the largest growth markets. However, the therapy portfolio from Stiefel we now offer a comprehensive range Developing people classes where GSK Bangladesh is present viz. Antibiotics, which not only treat skin conditions but also protect & Enable and drive change Building relationships Dermatological & Respiratory are experiencing stable growth. maintain good skin health of the aspiring patient class. DUAC, which offers a unique combination to manage ACNE, Consumer Healthcare and PHYSIOGEL, a moisturizer with lipids which resemble Coming out of a severe political strife in 2013, 2014 continued DERMA MEMBRANE STRUCTURE technology, are best in class to see sluggish consumer sentiment. The Fast Moving products and hold great promise for the future. Deliver excellence by being the best you can be Consumer Goods (FMCG) market, estimated by the research agency, Nielson to be valued at TK. 315,200mn, grew by 10%. Respiratory business which happens to be our second strong This was driven by price led growth in the Non-food pillar continued to perform well clocking a 15% growth. It is Categories (12.9%), while Foods category grew by only 4.8%. seen across the globe that Asthma patients tend to lead a The Health Food Drinks (HFD) segment which showed a compromised life with sub-optimal control of their disease remarkable growth of 18.3% in 2013 closed the year at a condition. GSK strives to promote guidelines set by global decline of -7.6%. experts that aim to improve patient adherence to treatment 2 and providing total control. Flagship brands the initiative of providing access to good nutrition to the people of the country. On this journey, HR is carrying out strategic business partnering in Healthcare Professionals, a directive from GSK SERETIDETM and VENTOLINTM continued to placing the right people on board, developing capability of workforce worldwide. This helped to improve profit after tax mentioned in the notes to the Financial framework under the Statement of Internal Control. under the provision of Article 89 also retire and being eligible, offer details of the Audit Committee’s responsibilities are Free Primary school at Mirpur, Dhaka. Asia Pacific Promotion and Marketing Code which has 18. Acknowledgement help improve the life of asthma patients. 3. Manufacturing and creating an environment where your people can perform to the best by 51% which stood at Tk 826mn. As a result EPS Statements; themselves for re-election. included in the Audit Committee Report. GSK’s continuous support of this primary school for slum children in L3 Audit is a review process of compliance become firmly established as the cornerstone of Roopnagar, Mirpur, Dhaka, has enabled it to provide more than 500 students AVAMYSTM yet another global asset and a of their capabilities and accelerating company wheels running in the (Earnings per Share) has increased to Tk 68.63 i) There is no extra-ordinary gain or loss during 10. Going Concern status for the sites through GSK Audit & Performance with Integrity value. GSK demands that The Board of Directors would like to express their deepest Remuneration to Directors: free education from pre-school to Class 5. Till date two batches have best in class treatment for Allergic Rhinitis In 2014, Global Manufacturing & Supply (GMS) Chittagong site added one right direction. from Tk 45.35 in 2013. the year; Assurance (A&A) Group. Chittagong Site its sales and marketing employees not only follow the appreciation to all employees, of the Company who exemplified the continued to see greater acceptance and more year of success to the legacy of more than four decades of glorious The Directors are of the opinion that the Company is a going concern The remuneration, performance and related bonus of graduated the Primary School Certificate exams with 100% pass rate from scored ‘3 STAR’ audit rating in the integrated letter of the Code, but enthusiastically embrace its GSK spirit of putting the patient and consumer first. All of them j) Utilization of proceeds from public issues is not this school. achieved impressive sales numbers. achievement. The end-to-end supply chain program, which began in early With this in view, HR in your organization has rolled out a new and there are no significant doubts upon the Company’s ability to Executive Directors are reviewed and approved by the L3 audit of EHSS & PQ, held in March 2014. spirit with a firm policy of zero tolerance to worked tirelessly within the constraints to provide appropriate 6. Dividend applicable; 2014 continue to reform and simplify GMS Chittagong’s supply chain to performance system to sharpen employee focus on enterprise thinking, continue as a going concern. Accordingly, Financial Statements are above country management. Occupational Hygiene diagnostic study has deviations. information and ensure product availability for patients, consumers The Duke of Edinburgh’s Awards (DEA) Brands belonging to the Classic