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1 dpavlin 1.1 <html>
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6     <meta name="GENERATOR" content="Microsoft FrontPage 4.0">
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8     <title>For immediate release</title>
9     </head>
10    
11     <body>
12    
13     <table border="0" width="100%" cellspacing="0" cellpadding="0">
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21     <td width="50%"></td>
22     <td width="50%"><img src="../images/icon_clip.gif" alt="Pliva Clippings" WIDTH="100" HEIGHT="97"></td>
23     </tr>
24     </table>
25     </td>
26     </tr>
27     <tr>
28     <td width="100%"></td>
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66     </table>
67     <p><br>
68     </td>
69     <td width="60%" valign="top">
70     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><b>For
71     immediate release<o:p>
72     </o:p>
73     <br>
74     16 September, 1999</b><br>
75     <br>
76     <b>PLIVA Group Results for H1 1999<o:p>
77     </o:p>
78     <br>
79     PLIVA’s Vision:</b><o:p>
80     </o:p>
81     </font></span></p>
82     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">To
83     be a pharmaceutical company creating superior and innovative solutions to
84     customer needs, by competing in the global market.<o:p>
85     </o:p>
86     </font></span></p>
87     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">HIGHLIGHTS:<o:p>
88     </o:p>
89     </font></span></p>
90     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">•
91     Overall revenue growth of 8% to HRK 1,983m<br>
92     • International revenue growth of 13% to HRK 1,194m<br>
93     • Strong increase in royalty revenue of 74%<br>
94     • Operating profit rose by 6% to HRK 652m<br>
95     • R&amp;D expenditure increased by 43% (7.4% of Healthcare sales)<br>
96     • Net income decreased by 7% to HRK 377m<br>
97     • Strong financial position<br>
98     • Focus on Pharmaceuticals<br>
99     • Divestment of Foodstuffs and Cosmetics businesses in progress<br>
100     • Two acquisitions in Pharmaceuticals area - Farmacom and Mixis<br>
101     • Two research agreements signed - with Glaxo Wellcome and Althexis<br>
102     • Strong investment activities continue<o:p>
103     </o:p>
104     </font></span></p>
105     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Despite
106     challenges in the operating environment (Kosovo crisis, the introduction
107     of<span style="mso-spacerun: yes">&nbsp; </span>a reference price system
108     and illiquidity in the Croatian health-care sector, introduction of a new
109     health-care system in Poland and the continuation of the Russian crisis),
110     PLIVA achieved good results in the first six months. Turnover rose to HRK
111     1,983 m., 8% higher than last year, with 60 % of this amount coming from
112     international markets. Gross profit increased by 10 % to HRK 1,324 m. in
113     the first half of the year, while operating profit went up by 6 % to HRK
114     652 m. However, net profit fell by 7% to HRK 377 m. due to financing costs
115     and negative exchange rate differentials which were significantly higher
116     than last year, and also significant costs related to restructuring
117     processes.<o:p>
118     </o:p>
119     </font></span></p>
120     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">PLIVA’s
121     restructuring activities continued during the first half of 1999. Going
122     forward, PLIVA will be focused on pharmaceutical business. The PLIVA XXI
123     project has resulted in the development of a new organisational structure,
124     systems and processes that will support PLIVA’s strategy to achieve
125     competitive advantages in the global pharmaceutical market. As part of the
126     restructuring processes, some services were separated into a company
127     called Adria servis d.o.o. This company, with 172 employees transferred
128     from the parent company, will offer its services to PLIVA, but also to
129     other companies. During the first half of the year Foodstuffs has been
130     reorganised towards becoming an independent company.<o:p>
131     </o:p>
132     </font></span></p>
133     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">PLIVA
134     is continuously confirming its focus on research and development, and has
135     accordingly increased its expenditures in this area by 43% in comparison
136     to the same period last year.<o:p>
137     </o:p>
138     </font></span></p>
139     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">The
140     main research events during the first half of 1999 were the signing of
141     collaboration agreements in the research and development of new broad
142     spectrum antibiotics with Glaxo Wellcome and Althexis, as well as the
143     acquisition of the biotech company MIXIS Genetics which has cutting-edge
144     proprietary technology in biodiversity.<o:p>
145     </o:p>
146     </font></span></p>
147     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Commenting
148     on the business results, Mr. &AElig;eljko »ovi&Ecirc;, President of the
149     Management Board said:<o:p>
150     </o:p>
151     </font></span></p>
152     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">“We
153     expect continual consolidation in our key markets and believe this will
154     contribute to the continuous growth of PLIVA in the future. In addition,
155     the PLIVA XXI project has defined the strategic guidelines of the
156     company’s future expansion and development. PLIVA is focused on
157     pharmaceuticals and on continuing to offer superior and innovative
158     solutions to its customers in the global marketplace to ensure long-term
159     value creation for shareholders.”<o:p>
160     </o:p>
161     </font></span></p>
162     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.
163     REVENUE<o:p>
164     </o:p>
165     </font></span></p>
166     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">In
167     the first half of 1999, PLIVA’s revenue increased by 7.9% over the same
168     period last year to HRK 1,983 m. <o:p>
169     </o:p>
170     </font></span></p>
171     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Royalty
172     revenue increased by 73.7 % and ammounted to HRK 398 m., or 20.0% of total
173     PLIVAGroup revenue.<o:p>
174     </o:p>
175     </font></span></p>
176     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.1.
177     Revenue by Region<br>
178     Domestic Sales<o:p>
179     </o:p>
180     </font></span></p>
181     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Despite
182     the introduction of a reference price system in the Croatian market at the
183     beginning of the year, which on average reduced the price of PLIVA’s
184     drugs by 5%, and liquidity problems in the Croatian health-care sector,
185     PLIVA has maintained its leading position in Croatia. Sales in Croatia
186     increased by 1.2%, totalling HRK 789 m. This was achieved by the
187     successful introduction of new products and from increased sales volume.
188     Revenues from Croatia accounted for 40% of PLIVA Group’s revenue; 22% of
189     PLIVA Group revenue was financed by the Croatian Health-care Fund.<o:p>
190     </o:p>
191     </font></span></p>
192     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">International
193     Revenue<o:p>
194     </o:p>
195     </font></span></p>
196     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Revenues
197     from international markets increased by 12.8% to HRK 1,194 m.<o:p>
198     </o:p>
199     </font></span></p>
200     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Revenues
201     in the Americas and Western Europe totalled HRK 668 m. and contributed 56%
202     to international revenue. The higher revenues from North and South America
203     were the result of royalty increases and increase an in Azithromycin
204     export sales to the USA. <o:p>
205     </o:p>
206     </font></span></p>
207     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Sales
208     in Poland, our single largest international market, amounted to HRK 252
209     m., contributing 21.1% to international revenue and 12.7% of total
210     revenue. PLIVA sales in Poland went up by 5.4% compared to the first six
211     months of 1998. Reform of the health-care system at the beginning of the
212     year caused a decline in the Polish drug market in the first quarter of
213     1999 compared to the last quarter of 1998. We believe this to be a
214     short-term effect and the Polish market is still the most attractive
215     market in the region. <o:p>
216     </o:p>
217     </font></span></p>
218     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Sales
219     in Russia were HRK 28.5 m., which represented 1.4% of PLIVA Group’s
220     revenue. The Russian crisis in August 1998 that resulted in a collapse of
221     the drug market has continued, which explains the drop in sales in
222     comparison to the same period last year. <o:p>
223     </o:p>
224     </font></span></p>
225     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Particularly
226     positive sales results were achieved in Bosnia and Herzegovina, Macedonia
227     and in Hungary.<o:p>
228     </o:p>
229     </font></span></p>
230     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.2.
231     Revenue by Businesses Segment<o:p>
232     </o:p>
233     </font></span></p>
234     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Revenue
235     from “core business” (Pharmaceuticals, Bulk Pharmaceuticals and
236     royalties) increased 8.8% to HRK 1,615 m. or 81.5% of total revenue.
237     Animal Health and Agrochemicals accounted for 6.2% of total revenue, and
238     Foodstuffs and Cosmetics and Hygiene Products accounted for 11.2%<br>
239     Pharmaceuticals<o:p>
240     </o:p>
241     </font></span></p>
242     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Pharmaceuticals
243     sales were HRK 947 m. or 2.9% lower than during the first half of last
244     year. <o:p>
245     </o:p>
246     </font></span></p>
247     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Domestic
248     sales were HRK 522 m., an increase of 2.9% over the previous year. The
249     strong domestic performance was attributed to increased marketing
250     activities, the introduction of new products and increased sales volume.<o:p>
251     </o:p>
252     </font></span></p>
253     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">International
254     sales amounted to HRK 425 m., a 9.2% decrease on the previous year. This
255     drop was primarily caused by the Russian crises and sales of Sumamed
256     imitations on the unregulated Russian and Chinese markets. Due to its
257     decreased international sales, Sumamed recorded HRK 116 m. of sales, a
258     17.4% drop in total sales compared to the previous year.<o:p>
259     </o:p>
260     </font></span></p>
261     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Bulk
262     Pharmaceuticals<o:p>
263     </o:p>
264     </font></span></p>
265     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">The
266     total sales of Bulk Pharmaceuticals accounted for 13.6% of total revenue
267     and amounted to HRK 270 m. or 3.6% less than the previous year.
268     Azithromycin revenue, which accounts for 77% of total sales of this
269     business segment, reached a total of HRK 207 m. or a drop of 8.7%.<o:p>
270     </o:p>
271     </font></span></p>
272     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Animal
273     Health and Agrochemicals<o:p>
274     </o:p>
275     </font></span></p>
276     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Animal
277     Health and Agrochemicals accounted for 6.2% of PLIVA’s total revenue, or
278     HRK 123 m. A sales increase was recorded both in domestic (5.7%) and
279     international (8.8%) markets. 35% of total sales are generated on
280     international markets.<br>
281     Foodstuffs and Cosmetics and Hygiene Products<o:p>
282     </o:p>
283     </font></span></p>
284     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">The
285     sales of Foodstuffs and Cosmetics and Hygiene Products amounted to HRK 223
286     m. or 11.2% of PLIVA’s total revenue. PLIVA, as defined by the PLIVA XXI
287     project, will be focussed on pharmaceuticals going forward. Consequently,
288     the decision to divest the Foodstuffs and Cosmetics and Hygiene Products
289     businesses was made earlier this year. The selection of relevant partners
290     is underway. <o:p>
291     </o:p>
292     </font></span></p>
293     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2.
294     PROFITABILITY<o:p>
295     </o:p>
296     </font></span></p>
297     <p class="MsoNormal" align="center"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Key
298     Financial Indicators</font></span></p>
299     <p class="MsoNormal" align="right"><span style="font-family:
300     TIMES"><font face="Arial" size="2" color="#000080">HRK m<o:p>
301     </o:p>
302     </font></span></p>
303     <table border="0" width="100%" cellpadding="0" cellspacing="0">
304     <tr>
305     <td width="176"></td>
306     <td width="67" align="center">
307     <p align="left"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">I-VI
308     ‘98<span style="mso-tab-count:1">&nbsp; </span></font></span></td>
309     <td width="65" align="center">
310     <p align="left"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>I-VI
311     ‘99</font><span style="mso-tab-count:1"></span></span></td>
312     <td width="82" align="center">
313     <p align="left"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Change<span style="font-family: TIMES">
314     %</span></font></span></td>
315     <td width="214" colspan="3">
316     <p align="center"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Rate</font></span></td>
317     </tr>
318     <tr>
319     <td width="176"></td>
320     <td width="67"></td>
321     <td width="65"></td>
322     <td width="82"></td>
323     <td align="center" width="65">
324     <p align="left"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>I-VI
325     ‘98</font></span></td>
326     <td align="center" width="68">
327     <p align="left"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">I-XII
328     ‘98</font><span style="mso-tab-count:1"></span></span></td>
329     <td align="center" width="77">
330     <p align="left"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">I-VI
331     ‘99</font></span></td>
332     </tr>
333     <tr>
334     <td width="176"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">GROSS
335     PROFIT</font></span></td>
336     <td width="67"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.199<span style="mso-tab-count:1">&nbsp;
337     </span></font></span></td>
338     <td width="65"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.324</font><span style="mso-tab-count:
339     1"></span></span></td>
340     <td width="82"><span style="font-family:TIMES"><span style="mso-tab-count:
341     1"></span><font face="Arial" size="2" color="#000080">+10.4</font><span style="mso-tab-count:1"></span></span></td>
342     <td width="65"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">65.3</font></span></td>
343     <td width="68"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">65.3<span style="mso-tab-count:
344     1"> </span></font></span></td>
345     <td width="77"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">66.8</font></span></td>
346     </tr>
347     <tr>
348     <td width="176"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">EBIT</font><span style="mso-tab-count:1"></span></span></td>
349     <td width="67"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">615<span style="mso-tab-count:1">
350     </span></font></span></td>
351     <td width="65"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">652<span style="mso-tab-count:
352     1"> </span></font></span></td>
353     <td width="82"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">+6.0<span style="mso-tab-count:1">
354     </span></font></span></td>
355     <td width="65"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">33.5<span style="mso-tab-count:1">
356     </span></font></span></td>
357     <td width="68"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">30.2</font></span></td>
358     <td width="77"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">32.9</font></span></td>
359     </tr>
360     <tr>
361     <td width="176"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">FIN.
362     EXP. &amp; FOR.GAINS/LOSSES</font><span style="mso-tab-count:1"></span></span></td>
363     <td width="67" valign="bottom"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">29</font></span></td>
364     <td width="65" valign="bottom"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-81</font></span></td>
365     <td width="82" valign="bottom"><font face="Arial" size="2" color="#000080">-</font></td>
366     <td width="65" valign="bottom"><font face="Arial" size="2" color="#000080">-</font></td>
367     <td width="68" valign="bottom"><font face="Arial" size="2" color="#000080">-</font></td>
368     <td width="77" valign="bottom"><font face="Arial" size="2" color="#000080">-</font></td>
369     </tr>
370     <tr>
371     <td width="176"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">NET
372     PROFIT<span style="mso-tab-count:1"> </span></font></span></td>
373     <td width="67"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">408</font><span style="mso-tab-count:1"></span></span></td>
374     <td width="65"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">37</font></span></td>
375     <td width="82"><span style="font-family:TIMES"><span style="mso-tab-count:
376     1"></span><font face="Arial" size="2" color="#000080">-7.4</font></span></td>
377     <td width="65"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">22.2</font><span style="mso-tab-count:1"></span></span></td>
378     <td width="68"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">19.3</font><span style="mso-tab-count:
379     1"></span></span></td>
380     <td width="77"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">19.0</font></span></td>
381     </tr>
382     </table>
383     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Gross
384     profit<o:p>
385     </o:p>
386     </font></span></p>
387     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">HRK
388     1,324.3 m. of gross profit was recorded in the first half of 1999, with a
389     higher profit margin of 66.8%, primarily attributed to the faster growth
390     of royalties. Costs of goods sold grew by 3.1%, primarily as a result of
391     higher expenses for depreciation and salaries.<o:p>
392     </o:p>
393     </font></span></p>
394     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Earnings
395     before interest and taxes (EBIT)<o:p>
396     </o:p>
397     </font></span></p>
398     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Earnings
399     before interest and taxes (EBIT) amounted to HRK 652.4 m., which is 6%
400     higher than last year. PLIVA’s EBIT margin of 32.9% represented a
401     decrease compared to the same period last year (33.5%), but was higher
402     than that recorded for the whole year in 1998 (30.2%). The EBIT margin has
403     fallen due to the faster growth in selling, general and administrative
404     expenses (11.5%), and in research and development expenses (43%, or 7.4%
405     of total health-care sales) in comparison to growth in revenue. Selling,
406     general and administrative costs increased mainly because of depreciation,
407     salaries, as well as larger investments in marketing activities in Poland.<o:p>
408     </o:p>
409     </font></span></p>
410     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Earnings
411     before taxes (EBT)<o:p>
412     </o:p>
413     </font></span></p>
414     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Earnings
415     before taxes (EBT) amounted to HRK 571.4 m., an 11.4% decrease compared to
416     the first six months last year, largely as a result of foreign exchange
417     losses and interest expenses, amounting to a total of HRK 81 m, while in
418     the same period last year HRK 29 m. gains were recorded.<o:p>
419     </o:p>
420     </font></span></p>
421     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Apart
422     from depreciation costs, the strong investment cycle generated interest
423     expenses against loans used for financing investments. Also, PLIVA
424     Group’s foreign currency exchange loss of HRK 62.1 m. was due mainly to
425     PLIVA’s long-term loans which have currency clause or are received in
426     foreign currencies.<o:p>
427     </o:p>
428     </font></span></p>
429     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Net
430     profit<o:p>
431     </o:p>
432     </font></span></p>
433     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Net
434     profit of PLIVA Group in the first half of 1999 amounted to HRK 377.3 m.,
435     7.4% lower than the same period in 1998. Net profit margin went down from
436     22.2% in the first six months of 1998 and 19.3% for the whole year to
437     19.0% for the first half of 1999.<o:p>
438     </o:p>
439     </font></span></p>
440     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3.
441     FINANCIAL POSITION<o:p>
442     </o:p>
443     </font></span></p>
444     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">PLIVA
445     maintained a very strong financial position, despite numerous difficulties
446     in our operating environment. Continued deferred payments in Croatia
447     decreased PLIVA’s cash in-flow and increased our need for external
448     financing. PLIVA satisfied this through short-term sources such as
449     commercial paper programmes, both on the European and Croatian market.<o:p>
450     </o:p>
451     </font></span></p>
452     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">The
453     29.3% growth in short-term receivables caused a growth in short-term debts
454     by 37.8%.<o:p>
455     </o:p>
456     </font></span></p>
457     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Net
458     working capital increased by 16.4% and amounted to HRK 1.61 billion.
459     Current liquidity ratio went down from 2.74 to 2.47.<o:p>
460     </o:p>
461     </font></span></p>
462     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">PLIVA
463     Group assets were HRK 6.14 billion, representing a 14.8% increase in
464     comparison to the beginning of the year.<o:p>
465     </o:p>
466     </font></span></p>
467     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">The
468     66.5% contribution of the Group’s own funds continue to account for a
469     high percentage of total resources.<o:p>
470     </o:p>
471     </font></span></p>
472     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">4.
473     INVESTMENTS<o:p>
474     </o:p>
475     </font></span></p>
476     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
477     investments of PLIVA Group amounted to HRK 367.8 m., of which tangible
478     assets accounted for HRK 307.8 m. or 84%.<br>
479     The largest individual investment was the investment in the construction
480     of a plant for solid oral dosage forms in Zagreb which totalled HRK 90.5
481     m. The completion of the plant is anticipated for next year. This
482     state-of-the-art plant will enable PLIVA to launch its products in even
483     the most demanding markets. Total investments in tangible assets of PLIVA
484     Krakow amounted to HRK 25 m. The introduction of SAP R/3 in the first half
485     of 1999 required an investment of HRK 22.9 m.<o:p>
486     </o:p>
487     </font></span></p>
488     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">HRK
489     7.3 m. was invested in the construction of a modern Research Institute
490     which is a large strategic investment for PLIVA.<o:p>
491     </o:p>
492     </font></span></p>
493     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">This
494     year, PLIVA has also made two capital investments to further develop the
495     pharmaceuticals business: Farmacom in Krakow (amounted to HRK 35.8m) in
496     order to strengthen PLIVA’s production of syrups, and Mixis Genetics
497     (amounted to HRK 24.2 m), which made PLIVA the owner of several patents in
498     the field of biodiversity.<o:p>
499     </o:p>
500     </font></span></p>
501     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">5.
502     IT TECHNOLOGY<o:p>
503     </o:p>
504     </font></span></p>
505     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">New
506     IT system (SAP R/3)<o:p>
507     </o:p>
508     </font></span></p>
509     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Since
510     July 1999, PLIVA d.d. has implemented 8 functional modules of the SAP R/3
511     system. With the implementation of SAP R/3 the company has advanced its
512     efforts in response to the Y2K issue, and will ensure an overall stability
513     of its operations during transition to the year 2000.<o:p>
514     </o:p>
515     </font></span></p>
516     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Y2K
517     Project<o:p>
518     </o:p>
519     </font></span></p>
520     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Upgrading
521     incompatible systems is underway and systems that have been upgraded and
522     adjusted are being tested. 95% system compatibility is expected by the end
523     of September, and the rest will be adjusted in time as well.<o:p>
524     </o:p>
525     </font></span></p>
526     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">To
527     avoid the negative impact of external factors (compatibility of PLIVA’s
528     business partners) a back-up plan has commenced for solving the Y2K
529     problem which will ensure the uninterrupted flow of PLIVA’s business
530     operations in the year 2000.<o:p>
531     </o:p>
532     </font></span></p>
533     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">6.
534     OWNERSHIP STRUCTURE AND SHARE PRICE MOVEMENT<o:p>
535     </o:p>
536     </font></span></p>
537     <p class="MsoNormal"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">At
538     the beginning of 1999 the PLIVA d.d. share price on the Zagreb Stock
539     Exchange was HRK 522 while on the London Stock Exchange it amounted to USD
540     16.12 per GDR. At the end of January, the price in Zagreb was HRK 603 per
541     share, while in London it was USD 18.78 per GDR (+16.5% over the beginning
542     of the month). This was followed by a price correction at the end of
543     February to HRK 565 (USD 16.85 per GDR), and in mid March the share price
544     recovered to HRK 630 (USD 18.75 per GDR). The end of June saw a share
545     price of HRK 550 in Zagreb and USD 15.15 per GDR in London. <o:p>
546     </o:p>
547     </font></span></p>
548     <table border="0" cellpadding="0" cellspacing="0" width="100%">
549     <tr>
550     <td width="50%"><span style="font-family:
551     TIMES"><font face="Arial" size="2" color="#000080">PLIVA Group</font><span style="mso-tab-count:1"></span></span></td>
552     <td width="50%">
553     <p align="right"><span style="font-family:
554     TIMES"><font face="Arial" size="2" color="#000080">(Unaudited)</font></span></td>
555     </tr>
556     </table>
557     <p class="MsoNormal" align="center" style="text-align:center;tab-stops:right 283.5pt 326.05pt 389.85pt 425.25pt"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">BALANCE
558     SHEET (IAS)<o:p>
559     </o:p>
560     </font></span></p>
561     <table border="0" cellpadding="0" cellspacing="0" width="100%">
562     <tr>
563     <td width="49%"></td>
564     <td width="29%" colspan="2">
565     <p align="center"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">31
566     December 1998</font><span style="mso-tab-count:1"></span></span></td>
567     <td width="40%" colspan="2">
568     <p align="center"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">30
569     June 1999</font></span></td>
570     </tr>
571     <tr>
572     <td width="49%"></td>
573     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">000
574     HRK</font></span></td>
575     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">%</font></span></td>
576     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">000
577     HRK</font></span></td>
578     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">%</font></span></td>
579     </tr>
580     <tr>
581     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">ASSETS</font></span></td>
582     <td width="14%"></td>
583     <td width="15%"></td>
584     <td width="14%"></td>
585     <td width="26%"></td>
586     </tr>
587     <tr>
588     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Non-Current
589     Assets</font></span></td>
590     <td width="14%"></td>
591     <td width="15%"></td>
592     <td width="14%"></td>
593     <td width="26%"></td>
594     </tr>
595     <tr>
596     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Goodwill<span style="mso-tab-count:1">
597     </span></font></span></td>
598     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">430,277</font><span style="mso-tab-count:1"></span></span></td>
599     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">8.0</font><span style="mso-tab-count:
600     1"></span></span></td>
601     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">426,048</font></span></td>
602     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>6.9</font></span></td>
603     </tr>
604     <tr>
605     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Investments</font></span></td>
606     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">245,299</font></span></td>
607     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">4.6</font></span></td>
608     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">256,874</font><span style="mso-tab-count:1"></span></span></td>
609     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">4.2</font></span></td>
610     </tr>
611     <tr>
612     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Long-term
613     receivables</font><span style="mso-tab-count:1"></span></span></td>
614     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">236,615</font><span style="mso-tab-count:1"></span></span></td>
615     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">4.4</font><span style="mso-tab-count:
616     1"></span></span></td>
617     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">243,189</font></span></td>
618     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">4.0</font></span></td>
619     </tr>
620     <tr>
621     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Tangible
622     fixed assets</font><span style="mso-tab-count:1"></span></span></td>
623     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2,252,226</font></span></td>
624     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">42.1</font></span></td>
625     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2,500,954</font></span></td>
626     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">40.8</font></span></td>
627     </tr>
628     <tr>
629     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
630     non-current assets</font><span style="mso-tab-count:
631     1"></span></span></td>
632     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3,164,417<span style="mso-tab-count:1">
633     </span></font></span></td>
634     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">59.2</font><span style="mso-tab-count:1"></span></span></td>
635     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3,427,065</font><span style="mso-tab-count:
636     1"></span></span></td>
637     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">55.8</font></span></td>
638     </tr>
639     <tr>
640     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Current
641     assets</font></span></td>
642     <td width="14%"></td>
643     <td width="15%"></td>
644     <td width="14%"></td>
645     <td width="26%"></td>
646     </tr>
647     <tr>
648     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Inventories</font><span style="mso-tab-count:1"></span></span></td>
649     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">592,045</font></span></td>
650     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">11.1<span style="mso-tab-count:
651     1"> </span></font></span></td>
652     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">650,019</font></span></td>
653     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">10.6</font></span></td>
654     </tr>
655     <tr>
656     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Marketable
657     securities</font></span></td>
658     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">195,974</font><span style="mso-tab-count:1"></span></span></td>
659     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3.7</font></span></td>
660     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:
661     1"></span><font face="Arial" size="2" color="#000080">158,931</font></span></td>
662     <td width="26%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">2.6</font></span></td>
663     </tr>
664     <tr>
665     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Acccounts
666     receivable</font><span style="mso-tab-count:1"></span></span></td>
667     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,146,328</font><span style="mso-tab-count:1"></span></span></td>
668     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">21.4</font></span></td>
669     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,481,979</font><span style="mso-tab-count:1"></span></span></td>
670     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">24.1</font></span></td>
671     </tr>
672     <tr>
673     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Short-term
674     loans</font><span style="mso-tab-count:1"></span></span></td>
675     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">83,456</font></span></td>
676     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">1.6</font><span style="mso-tab-count:
677     1"></span></span></td>
678     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">146,784<span style="mso-tab-count:1">
679     </span></font></span></td>
680     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2.4</font></span></td>
681     </tr>
682     <tr>
683     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Cash
684     and cash equivalents</font></span></td>
685     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">164,054<span style="mso-tab-count:1">
686     </span></font></span></td>
687     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3.1<span style="mso-tab-count:1">
688     </span></font></span></td>
689     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">272,397</font></span></td>
690     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">4.4</font></span></td>
691     </tr>
692     <tr>
693     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
694     current assets</font><span style="mso-tab-count:1"></span></span></td>
695     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2,181,857<span style="mso-tab-count:1">
696     </span></font></span></td>
697     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">40.8<span style="mso-tab-count:
698     1"> </span></font></span></td>
699     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2,710,110<span style="mso-tab-count:1">
700     </span></font></span></td>
701     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">44.2</font></span></td>
702     </tr>
703     <tr>
704     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
705     assets<span style="mso-tab-count:1"> </span></font></span></td>
706     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">5,346,274<span style="mso-tab-count:1">&nbsp;
707     </span></font></span></td>
708     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">100.0</font><span style="mso-tab-count:
709     1"></span></span></td>
710     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">6,137,175<span style="mso-tab-count:1">
711     </span></font></span></td>
712     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">100.0</font></span></td>
713     </tr>
714     <tr>
715     <td width="100%" colspan="5"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">LIABILITIES
716     AND SHAREHOLDERS’ EQUITY</font></span></td>
717     </tr>
718     <tr>
719     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Long-term
720     liabilities</font></span></td>
721     <td width="14%"></td>
722     <td width="15%"></td>
723     <td width="14%"></td>
724     <td width="26%"></td>
725     </tr>
726     <tr>
727     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Long-term
728     debt<span style="mso-tab-count:1"> </span></font></span></td>
729     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">760,800<span style="mso-tab-count:1">
730     </span></font></span></td>
731     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">14.2<span style="mso-tab-count:
732     1"> </span></font></span></td>
733     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">813,989</font></span></td>
734     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">13.3</font></span></td>
735     </tr>
736     <tr>
737     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Long-term
738     provisions</font><span style="mso-tab-count:1"></span></span></td>
739     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">22,253<span style="mso-tab-count:1">
740     </span></font></span></td>
741     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.4<span style="mso-tab-count:
742     1"> </span></font></span></td>
743     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">22,506</font><span style="mso-tab-count:1"></span></span></td>
744     <td width="26%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">0.4</font></span></td>
745     </tr>
746     <tr>
747     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
748     long-term liabilities<span style="mso-tab-count:
749     1"> </span></font></span></td>
750     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">783,053</font></span></td>
751     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">14.6</font></span></td>
752     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">836,495<span style="mso-tab-count:
753     1"> </span></font></span></td>
754     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">13.6</font></span></td>
755     </tr>
756     <tr>
757     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Current
758     liabilities</font></span></td>
759     <td width="14%"></td>
760     <td width="15%"></td>
761     <td width="14%"></td>
762     <td width="26%"></td>
763     </tr>
764     <tr>
765     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Accounts
766     payable</font></span></td>
767     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">455,771</font><span style="mso-tab-count:1"></span></span></td>
768     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>8.5<span style="mso-tab-count:
769     1"> </span></font></span></td>
770     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">477,373</font><span style="mso-tab-count:1"></span></span></td>
771     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">7.8</font></span></td>
772     </tr>
773     <tr>
774     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Bank
775     loans</font><span style="mso-tab-count:1"></span></span></td>
776     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">200,335<span style="mso-tab-count:1">
777     </span></font></span></td>
778     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3.7<span style="mso-tab-count:
779     1"> </span></font></span></td>
780     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">268,985</font></span></td>
781     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">4.4</font></span></td>
782     </tr>
783     <tr>
784     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Commercial
785     papers</font><span style="mso-tab-count:1"></span></span></td>
786     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">81,988</font></span></td>
787     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.5<span style="mso-tab-count:
788     1"> </span></font></span></td>
789     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:
790     1"></span><font face="Arial" size="2" color="#000080">135,064<span style="mso-tab-count:1">
791     </span></font></span></td>
792     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2.2</font></span></td>
793     </tr>
794     <tr>
795     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Taxes
796     and contributions</font></span></td>
797     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">6,448</font><span style="mso-tab-count:1"></span></span></td>
798     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>0.1</font></span></td>
799     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">11,801</font></span></td>
800     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.2</font></span></td>
801     </tr>
802     <tr>
803     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Dividends
804     payable</font><span style="mso-tab-count:1"></span></span></td>
805     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">16</font></span></td>
806     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.0<span style="mso-tab-count:
807     1"> </span></font></span></td>
808     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">144,451</font></span></td>
809     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2.4</font></span></td>
810     </tr>
811     <tr>
812     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Current
813     portion of long-term debt</font></span></td>
814     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">51,612</font></span></td>
815     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.0<span style="mso-tab-count:1">
816     </span></font></span></td>
817     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">59,255</font></span></td>
818     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.0</font></span></td>
819     </tr>
820     <tr>
821     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
822     current liabilities<span style="mso-tab-count:
823     1"> </span></font></span></td>
824     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:
825     1"></span><font face="Arial" size="2" color="#000080">796,170</font><span style="mso-tab-count:1"></span></span></td>
826     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">14.9</font><span style="mso-tab-count:1"></span></span></td>
827     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,096,929<span style="mso-tab-count:
828     1"> </span></font></span></td>
829     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">17.9</font></span></td>
830     </tr>
831     <tr>
832     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
833     liabilities</font><span style="mso-tab-count:1"></span></span></td>
834     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,579,223</font></span></td>
835     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">29.5<span style="mso-tab-count:
836     1"> </span></font></span></td>
837     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,933,424</font><span style="mso-tab-count:1"></span></span></td>
838     <td width="26%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">31.5</font></span></td>
839     </tr>
840     <tr>
841     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Shareholders’
842     e<o:p>
843     quity</font></span></td>
844     <td width="14%"></td>
845     <td width="15%"></td>
846     <td width="14%"></td>
847     <td width="26%"></td>
848     </tr>
849     <tr>
850     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Share
851     capital</font><span style="mso-tab-count:1"></span></span></td>
852     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2,020,940<span style="mso-tab-count:1">
853     </span></font></span></td>
854     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">37.8</font></span></td>
855     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2,020,940</font><span style="mso-tab-count:1"></span></span></td>
856     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">32.9</font></span></td>
857     </tr>
858     <tr>
859     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Capital
860     gain<span style="mso-tab-count:1"> </span></font></span></td>
861     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">23,516</font></span></td>
862     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.4</font></span></td>
863     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">163,525</font><span style="mso-tab-count:1"></span></span></td>
864     <td width="26%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">2.7</font></span></td>
865     </tr>
866     <tr>
867     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Treasury
868     shares</font></span></td>
869     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">-55,839</font></span></td>
870     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">1.0<span style="mso-tab-count:
871     1"> </span></font></span></td>
872     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-29,641</font></span></td>
873     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.5</font></span></td>
874     </tr>
875     <tr>
876     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Capital
877     reserves<span style="mso-tab-count:1"> </span>60,762</font><span style="mso-tab-count:1"></span></span></td>
878     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">60,762<span style="mso-tab-count:1">
879     </span></font></span></td>
880     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">1.1</font><span style="mso-tab-count:
881     1"></span></span></td>
882     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:
883     1"></span><font face="Arial" size="2" color="#000080">60,762</font></span></td>
884     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.0</font></span></td>
885     </tr>
886     <tr>
887     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Statutory
888     reserves<span style="mso-tab-count:1"> </span></font></span></td>
889     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">98,722</font><span style="mso-tab-count:1"></span></span></td>
890     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.8</font><span style="mso-tab-count:
891     1"></span></span></td>
892     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">98,722<span style="mso-tab-count:1">
893     </span></font></span></td>
894     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.6</font></span></td>
895     </tr>
896     <tr>
897     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Retained
898     profit</font><span style="mso-tab-count:1"></span></span></td>
899     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">1,514,638</font><span style="mso-tab-count:1"></span></span></td>
900     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">28.3</font><span style="mso-tab-count:
901     1"></span></span></td>
902     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,370,187<span style="mso-tab-count:1">
903     </span></font></span></td>
904     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">22.3</font></span></td>
905     </tr>
906     <tr>
907     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Profit
908     of the current year</font></span></td>
909     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:
910     1"></span><font face="Arial" size="2" color="#000080">0</font><span style="mso-tab-count:1"></span></span></td>
911     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">0.0</font><span style="mso-tab-count:1"></span></span></td>
912     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">377,330</font><span style="mso-tab-count:
913     1"></span></span></td>
914     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">6.1</font></span></td>
915     </tr>
916     <tr>
917     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Foreign
918     currency translation differences</font></span></td>
919     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-8,128<span style="mso-tab-count:1">
920     </span></font></span></td>
921     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.2</font></span></td>
922     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">17,832</font><span style="mso-tab-count:
923     1"></span></span></td>
924     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-0.3</font></span></td>
925     </tr>
926     <tr>
927     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
928     shareholders’ equity</font></span></td>
929     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3,654,611</font></span></td>
930     <td width="15%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">68.4</font></span></td>
931     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">4,079,657<span style="mso-tab-count:
932     1"> </span></font></span></td>
933     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">66.5</font></span></td>
934     </tr>
935     <tr>
936     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Minority
937     interests</font></span></td>
938     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">112,440</font></span></td>
939     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">2.1</font><span style="mso-tab-count:
940     1"></span></span></td>
941     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">124,094<span style="mso-tab-count:1">
942     </span></font></span></td>
943     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>2.0</font></span></td>
944     </tr>
945     <tr>
946     <td width="49%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Total
947     liabilities and shareholder’s equity</font><span style="mso-tab-count:1"></span></span></td>
948     <td width="14%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">5,346,274</font></span></td>
949     <td width="15%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">100.0</font><span style="mso-tab-count:1"></span></span></td>
950     <td width="14%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">6,137,175</font><span style="mso-tab-count:1"></span></span></td>
951     <td width="26%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">100.0</font></span></td>
952     </tr>
953     </table>
954     <p class="MsoNormal" style="tab-stops:right 425.25pt">&nbsp;</p>
955     <table border="0" cellpadding="0" cellspacing="0" width="100%">
956     <tr>
957     <td width="50%"><span style="font-family:
958     TIMES"><font face="Arial" size="2" color="#000080">PLIVA Group</font><span style="mso-tab-count:1"></span></span></td>
959     <td width="50%">
960     <p align="right"><span style="font-family:
961     TIMES"><font face="Arial" size="2" color="#000080">(Unaudited)</font></span></td>
962     </tr>
963     </table>
964     <p class="MsoNormal" align="center" style="text-align:center;tab-stops:right 283.5pt 326.05pt 389.85pt 425.25pt"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">PROFIT
965     AND LOSS ACCOUNT<o:p>
966     </o:p>
967     </font></span></p>
968     <table border="0" cellpadding="0" cellspacing="0" width="100%">
969     <tr>
970     <td width="45%"></td>
971     <td colspan="2" width="11%" valign="top">
972     <p align="left"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Jan.-June
973     1998</font></span></td>
974     <td colspan="2" width="11%" valign="top">
975     <p align="left"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Jan.-June
976     1999.</font></span></td>
977     <td width="11%" valign="top">
978     <p align="left"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">%
979     change</font></span></td>
980     </tr>
981     <tr>
982     <td width="45%"></td>
983     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">000
984     HRK</font></span></td>
985     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">%</font></span></td>
986     <td width="12%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">000
987     HRK</font></span></td>
988     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">%</font></span></td>
989     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">99/98</font></span></td>
990     </tr>
991     <tr>
992     <td width="45%"><br>
993     </td>
994     <td width="12%"></td>
995     <td width="10%"></td>
996     <td width="12%"></td>
997     <td width="10%"></td>
998     <td width="11%"></td>
999     </tr>
1000     <tr>
1001     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Turnover</font><span style="mso-tab-count:1"></span></span></td>
1002     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,838,052<span style="mso-tab-count:1">
1003     </span></font></span></td>
1004     <td width="10%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">100.0<span style="mso-tab-count:
1005     1"> </span></font></span></td>
1006     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,982,762</font></span></td>
1007     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">100.0</font><span style="mso-tab-count:1"></span></span></td>
1008     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">7.9</font></span></td>
1009     </tr>
1010     <tr>
1011     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Costs
1012     of goods sold<span style="mso-tab-count:1"> </span></font></span></td>
1013     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">638,677</font></span></td>
1014     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">34.7<span style="mso-tab-count:
1015     1"> </span></font></span></td>
1016     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">658,477</font><span style="mso-tab-count:1"></span></span></td>
1017     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">33.2</font><span style="mso-tab-count:1"></span></span></td>
1018     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3<o:p>
1019     .1</font></span></td>
1020     </tr>
1021     <tr>
1022     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Gross
1023     profit</font><span style="mso-tab-count:1"></span></span></td>
1024     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,199,375</font><span style="mso-tab-count:1"></span></span></td>
1025     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">65.3</font><span style="mso-tab-count:
1026     1"></span></span></td>
1027     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,324,285</font></span></td>
1028     <td width="10%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">66.8</font></span></td>
1029     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">10.4</font></span></td>
1030     </tr>
1031     <tr>
1032     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Selling,
1033     general and administrative expenses</font></span></td>
1034     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">499,841</font></span></td>
1035     <td width="10%"><span style="font-family:TIMES"><span style="mso-tab-count:
1036     1"></span><font face="Arial" size="2" color="#000080">27.2</font><span style="mso-tab-count:1"></span></span></td>
1037     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">557,258</font><span style="mso-tab-count:1"></span></span></td>
1038     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">28.1</font></span></td>
1039     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">11.5</font></span></td>
1040     </tr>
1041     <tr>
1042     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Research
1043     and development expenses</font><span style="mso-tab-count:1"></span></span></td>
1044     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">69,062</font></span></td>
1045     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3.8</font><span style="mso-tab-count:1"></span></span></td>
1046     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">99,043<span style="mso-tab-count:1">
1047     </span></font></span></td>
1048     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">5.0</font><span style="mso-tab-count:
1049     1"></span></span></td>
1050     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">43.4</font></span></td>
1051     </tr>
1052     <tr>
1053     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Exceptional
1054     provisions</font><span style="mso-tab-count:
1055     1"></span></span></td>
1056     <td width="12%"><span style="font-family:TIMES"><span style="mso-tab-count:
1057     1"></span><font face="Arial" size="2" color="#000080">0<span style="mso-tab-count:1">
1058     </span></font></span></td>
1059     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.0</font></span></td>
1060     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>0</font><span style="mso-tab-count:
1061     1"></span></span></td>
1062     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.0</font></span></td>
1063     <td width="11%"><span style="font-family: TIMES"><font face="Arial" size="2" color="#000080">-</font></span></td>
1064     </tr>
1065     <tr>
1066     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Goodwill
1067     amortisation</font><span style="mso-tab-count:1"></span></span></td>
1068     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">15,086</font></span></td>
1069     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.8</font></span></td>
1070     <td width="12%"><span style="font-family:TIMES"><span style="mso-tab-count:
1071     1"></span><font face="Arial" size="2" color="#000080">15,546</font></span></td>
1072     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.8</font></span></td>
1073     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3.0</font></span></td>
1074     </tr>
1075     <tr>
1076     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Earnings
1077     before interest and taxes</font></span></td>
1078     <td width="12%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">615,386</font></span></td>
1079     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">33.5</font></span></td>
1080     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">652,438</font></span></td>
1081     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">32.9</font><span style="mso-tab-count:1"></span></span></td>
1082     <td width="11%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">6.0</font></span></td>
1083     </tr>
1084     <tr>
1085     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Financial
1086     income/expenses<span style="mso-tab-count:
1087     1"> </span></font></span></td>
1088     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-1,681</font></span></td>
1089     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-0.1</font></span></td>
1090     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-18,965</font></span></td>
1091     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.0</font></span></td>
1092     <td width="11%"><span style="font-family: TIMES"><font face="Arial" size="2" color="#000080">-</font></span></td>
1093     </tr>
1094     <tr>
1095     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Foreign
1096     currency exchange gains/losses</font></span></td>
1097     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">30,964</font></span></td>
1098     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1.7</font></span></td>
1099     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-62,123</font></span></td>
1100     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-3.1</font><span style="mso-tab-count:
1101     1"></span></span></td>
1102     <td width="11%"><span style="font-family: TIMES"><font face="Arial" size="2" color="#000080">-</font></span></td>
1103     </tr>
1104     <tr>
1105     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Profit
1106     before taxes and contributions</font><span style="mso-tab-count:1"></span></span></td>
1107     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">644,669</font></span></td>
1108     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">35.1</font><span style="mso-tab-count:1"></span></span></td>
1109     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">571,350</font><span style="mso-tab-count:1"></span></span></td>
1110     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">28.8</font><span style="mso-tab-count:
1111     1"></span></span></td>
1112     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-11.4</font></span></td>
1113     </tr>
1114     <tr>
1115     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Taxes
1116     and contributions</font></span></td>
1117     <td width="12%"><span style="font-family:TIMES"><span style="mso-tab-count:
1118     1"></span><font face="Arial" size="2" color="#000080">228,505</font><span style="mso-tab-count:1"></span></span></td>
1119     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">12.4</font></span></td>
1120     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">187,770</font><span style="mso-tab-count:
1121     1"></span></span></td>
1122     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">9.5</font></span></td>
1123     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-17</o:p>
1124     .<o:p>
1125     8</font></span></td>
1126     </tr>
1127     <tr>
1128     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Profit
1129     after tax</font><span style="mso-tab-count:1"></span></span></td>
1130     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">416,164</font></span></td>
1131     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">22.6</font></span></td>
1132     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">383,580</font></span></td>
1133     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">19.3</font><span style="mso-tab-count:1"></span></span></td>
1134     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-7.8</font></span></td>
1135     </tr>
1136     <tr>
1137     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Minority
1138     interests</font></span></td>
1139     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>8,486</font></span></td>
1140     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.5</font></span></td>
1141     <td width="12%"><span style="font-family:TIMES"><span style="mso-tab-count:
1142     1"></span><font face="Arial" size="2" color="#000080">6,251</font></span></td>
1143     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0.3</font><span style="mso-tab-count:1"></span></span></td>
1144     <td width="11%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-26.3</font></span></td>
1145     </tr>
1146     <tr>
1147     <td width="45%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Net
1148     profit<span style="mso-tab-count:1"> </span></font></span></td>
1149     <td width="12%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">407,678</font></span></td>
1150     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">22.2</font><span style="mso-tab-count:
1151     1"></span></span></td>
1152     <td width="12%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">377,329</font></span></td>
1153     <td width="10%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">19.0</font></span></td>
1154     <td width="11%"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">-7.4</font></span></td>
1155     </tr>
1156     </table>
1157     <p class="MsoNormal" style="tab-stops: right 425.25pt">&nbsp;</p>
1158     <table border="0" cellpadding="0" cellspacing="0" width="100%">
1159     <tr>
1160     <td width="50%"><span style="font-family:
1161     TIMES"><font face="Arial" size="2" color="#000080">PLIVA Group</font></span></td>
1162     <td width="50%">
1163     <p align="right"><span style="font-family:
1164     TIMES"><font face="Arial" size="2" color="#000080">(Unaudited)</font></span></td>
1165     </tr>
1166     </table>
1167     <p class="MsoNormal" align="center" style="text-align:center;tab-stops:right 283.5pt 326.05pt 389.85pt 425.25pt"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">CASH
1168     FLOW STATEMENT</font></span></p>
1169     <table border="0" cellpadding="0" cellspacing="0" width="100%">
1170     <tr>
1171     <td width="50%"></td>
1172     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Jan.-June
1173     1998</font></span></td>
1174     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Jan.-June
1175     1999</font></span></td>
1176     </tr>
1177     <tr>
1178     <td width="50%"></td>
1179     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">000
1180     HRK<span style="mso-tab-count:1"> </span></font></span></td>
1181     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">000
1182     HRK<span style="mso-tab-count:1"> </span></font></span></td>
1183     </tr>
1184     <tr>
1185     <td width="50%" colspan="3"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><br>
1186     CASH FLOW FROM OPERATING ACTIVITIES<br>
1187     </font></span></td>
1188     </tr>
1189     <tr>
1190     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Cash
1191     receipts from customers</font><span style="mso-tab-count:
1192     1"></span></span></td>
1193     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,573,011<span style="mso-tab-count:1">
1194     </span></font></span></td>
1195     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,704,136</font></span></td>
1196     </tr>
1197     <tr>
1198     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Cash
1199     paid to suppliers and employees</font></span></td>
1200     <td width="25%" align="right"><span style="font-family:TIMES"><span style="mso-tab-count:
1201     1"></span><font face="Arial" size="2" color="#000080">1,573,011</font><span style="mso-tab-count:1"></span></span></td>
1202     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,704,136</font></span></td>
1203     </tr>
1204     <tr>
1205     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Cash
1206     paid to suppliers and employees</font></span></td>
1207     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-1,183,050</font></span></td>
1208     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,279,385</font></span></td>
1209     </tr>
1210     <tr>
1211     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Cash
1212     generated from operations</font></span></td>
1213     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">389,961</font></span></td>
1214     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">424,751</font></span></td>
1215     </tr>
1216     <tr>
1217     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">nterest
1218     received</font></span></td>
1219     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">14,071</font><span style="mso-tab-count:1"></span></span></td>
1220     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">17,018
1221     </font></span></td>
1222     </tr>
1223     <tr>
1224     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Dividends
1225     received</font></span></td>
1226     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,289</font><span style="mso-tab-count:1"></span></span></td>
1227     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">3,452
1228     </font></span></td>
1229     </tr>
1230     <tr>
1231     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Interest
1232     paid</font><span style="mso-tab-count:1"></span></span></td>
1233     <td width="25%" align="right"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">-19,839</font></span></td>
1234     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-39,435</font></span></td>
1235     </tr>
1236     <tr>
1237     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Taxes
1238     and contributions</font></span></td>
1239     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-153,985</font></span></td>
1240     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-239,442
1241     </font></span></td>
1242     </tr>
1243     <tr>
1244     <td width="50%"></td>
1245     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">231,497</font></span></td>
1246     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><span style="mso-tab-count:1">&nbsp;</span>166,344</font></span></td>
1247     </tr>
1248     <tr>
1249     <td width="50%" colspan="3"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080"><br>
1250     CASH FLOW FROM INVESTING ACTIVITIES<br>
1251     </font></span></td>
1252     </tr>
1253     <tr>
1254     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Purchase
1255     of tangible assets</font></span></td>
1256     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-202,994</font></span></td>
1257     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-320,493</font></span></td>
1258     </tr>
1259     <tr>
1260     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Proceeds
1261     from sale of equipment<span style="mso-tab-count:1"> </span></font></span></td>
1262     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">5,030</font><span style="mso-tab-count:
1263     1"></span></span></td>
1264     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">232</font></span></td>
1265     </tr>
1266     <tr>
1267     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Investments
1268     in long-term receivables</font><span style="mso-tab-count:1"></span></span></td>
1269     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-12,394</font></span></td>
1270     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-6,574
1271     </font></span></td>
1272     </tr>
1273     <tr>
1274     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Investments
1275     in subsidiaries and other companies</font></span></td>
1276     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-48,933</font></span></td>
1277     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-11,575</font></span></td>
1278     </tr>
1279     <tr>
1280     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Acquisition/sales
1281     of marketable securities</font><span style="mso-tab-count:1"></span></span></td>
1282     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-140,847</font></span></td>
1283     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">37,043</font></span></td>
1284     </tr>
1285     <tr>
1286     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Short-term
1287     loans</font></span></td>
1288     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">1,382</font></span></td>
1289     <td width="25%" align="right"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">-63,328</font></span></td>
1290     </tr>
1291     <tr>
1292     <td width="50%"></td>
1293     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-398,756</font></span></td>
1294     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-364,695</font></span></td>
1295     </tr>
1296     <tr>
1297     <td width="50%" colspan="3"><font face="Arial" size="2" color="#000080"><br>
1298     <span style="font-family:TIMES">CASH FLOW FROM FINANCING ACTIVITIES<br>
1299     </span></font></td>
1300     </tr>
1301     <tr>
1302     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Long-term
1303     loans</font></span></td>
1304     <td width="25%" align="right"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">404,969<span style="mso-tab-count:1">
1305     </span></font></span></td>
1306     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">61,085
1307     </font></span></td>
1308     </tr>
1309     <tr>
1310     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Short-term
1311     loans / Commercial papers</font><span style="mso-tab-count:1"></span></span></td>
1312     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">30,000</font></span></td>
1313     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">121,726</font></span></td>
1314     </tr>
1315     <tr>
1316     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Treasury
1317     shares</font><span style="mso-tab-count:1"></span></span></td>
1318     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-71,954</font><span style="mso-tab-count:1"></span></span></td>
1319     <td width="25%" align="right"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">166,207</font></span></td>
1320     </tr>
1321     <tr>
1322     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Dividends
1323     paid</font></span></td>
1324     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-63,434</font><span style="mso-tab-count:1"></span></span></td>
1325     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">0</font></span></td>
1326     </tr>
1327     <tr>
1328     <td width="50%"></td>
1329     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">299,581</font></span></td>
1330     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">349,018</font></span></td>
1331     </tr>
1332     <tr>
1333     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">Effect
1334     of exchange rate fluctuations</font></span></td>
1335     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">35,646</font></span></td>
1336     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">-42,324
1337     </font></span></td>
1338     </tr>
1339     <tr>
1340     <td width="50%"></td>
1341     <td width="25%" align="right"></td>
1342     <td width="25%" align="right"></td>
1343     </tr>
1344     <tr>
1345     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">NET
1346     CASH FLOW</font><span style="mso-tab-count:1"></span></span></td>
1347     <td width="25%" align="right"><span style="font-family:TIMES"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">167,968</font></span></td>
1348     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">108,343</font></span></td>
1349     </tr>
1350     <tr>
1351     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">CASH
1352     AND CASH EQUIVALENTS</font></span></td>
1353     <td width="25%" align="right"></td>
1354     <td width="25%" align="right"></td>
1355     </tr>
1356     <tr>
1357     <td width="50%"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">AT
1358     THE BEGINNING OF THE PERIOD</font></span></td>
1359     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">145,534</font></span></td>
1360     <td width="25%" align="right"><span style="font-family:TIMES"><font face="Arial" size="2" color="#000080">164,054</font></span></td>
1361     </tr>
1362     <tr>
1363     <td width="50%"><span style="font-size:12.0pt;mso-bidi-font-size:10.0pt;font-family:TIMES;
1364     mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:&quot;Times New Roman&quot;;
1365     mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"><font face="Arial" size="2" color="#000080">AT
1366     THE END OF THE PERIOD</font><span style="mso-tab-count:1"></span></span></td>
1367     <td width="25%" align="right"><span style="font-size:12.0pt;mso-bidi-font-size:10.0pt;font-family:TIMES;
1368     mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:&quot;Times New Roman&quot;;
1369     mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">313,502</font></span></td>
1370     <td width="25%" align="right"><span style="font-size:12.0pt;mso-bidi-font-size:10.0pt;font-family:TIMES;
1371     mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:&quot;Times New Roman&quot;;
1372     mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"><span style="mso-tab-count:1"></span><font face="Arial" size="2" color="#000080">272,397</font></span></td>
1373     </tr>
1374     </table>
1375     <p ALIGN="JUSTIFY"><font FACE="Arial"><a href="news_clip.htm"><small>Back
1376     to the news page</small></a></font></p>
1377     <p ALIGN="JUSTIFY"><font face="Arial" size="2" color="#000080">&nbsp;</font></td>
1378     <td width="15%"></td>
1379     </tr>
1380     </table>
1381    
1382     </body>
1383    
1384     </html>

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