The company has also issued a notice, dated May 24, 1999, announcing the closure of the company's Ankleshwar plant with effect from July 31, 1999. As part of the manufacturing restructuring initiative, depreciation included an additional charge of Rs 64 lakhs based on re-evaluation of the useful life of the Ankleshwar plant assets.

Other income for the quarter, stood at Rs 13.43 crores and includes service income of Rs 11.77 crores. Total expenditure for the period was Rs 70.65 crores and includes compensation under the voluntary retirement scheme which is being amortised over a period of three years. The expenditure for the current quarter, amounting to Rs 1.14 crores isthe amortisation of the prior years deferred revenue expenditure.

Interest and depreciation were Rs 20 lakhs and Rs 1.84 crores respectively. Provision for taxation was Rs 3.17 crores.

Meanwhile the company said that it had set up a special Y2K project team to address Y2K issues. "Most of the hardware and software have been tested for Y2K compliance. It is expected to complete and implement Y2K preparedness for all internal systems before September 30, 1999".

Expenditure incurred on Y2K compliance is about Rs 22 lakhs and the balance expenditure estimated to be incured is Rs 33 lakhs.

Meanwhile, Pfizer also said that the financial results for the next two quarters could be negatively impacted due to adverse price fixation orders. The National Pharmaceutical Pricing Authority (NPPA) had slapped a ceiling price on Pfizer's Becosules (the top-selling formulation in India as per ORG data), a move that is expected to adversely affect the company's bottomline, given that the multivitamin accounts for salesof around Rs 80 crores. However, Omni-Protech Drugs, the assignee of the Becosules brand, has sought a review of the NPPA's April 15 decision which cut the prices of the multivitamin formulation by 31.48 per cent.

Insight

Duchem's good performance props up bottomline
Though Pfizer's quarterly results are not comparable it is apparent that the company has performed well because of contribution from its subsidiary, Duchem. However, an important feature of Pfizer's quarterly results is that the management has issued a profit warning that the next two quarters will be negatively impacted due to adverse price fixation. This is mainly because of the 30 per cent reduction in the price of Becosules. This news however, has already been discounted in the market.

However, the scrip has reacted positively to the results mainly because markets were expecting a provision for the additional excise amounting to Rs 7.1 crore. The company has not done so and has instead gone for an appeal.

ShishirAsthana