Abbott Pakistan Annual Report 2010

Theme
2010 has been a year of celebration for Abbott Pakistan as we achieved our vision of Rs 10 billion sales, meeting our mantra of 10 by 10 and our flagship brand Brufen achieved the Rs 1 billion mark. In 2010, we delivered another year of industry leading performance finishing the year with strong sales growth across many of our businesses. We managed through several significant challenges, and exceeded our strategic and financial goals. Our Annual Report 2010's concept focuses on Celebration of our achievements in 2010. Achieving is one of our core values means Customer- focused outcomes and world-class execution. We drive for meaningful results -demanding of ourselves and each other because our work impacts people's lives.

We are ambitious, ready and determined to continue capturing the vast array of opportunities before us.

Our first Rs 1 Billion Product
Abbott Pakistan’s flagship brand Brufen added another feather in its cap recently. Its annual sales crossed the Billion Rupee mark. In doing so, it became Abbott Pakistan's first ever brand to have crossed the Billion Rupee barrier. Also, it became only the 6th brand in Pakistan's Pharmaceutical industry to have achieved the feat. This achievement is not only a depiction of the high volume of prescriptions and sales, but also a symbol of trust in the brand by the medical fraternity as well as by patients. Abbott Pakistan is proud to have Brufen in its ranks, which has provided quality solution to people suffering from Pain and Fever for over 40 years. Brufen is the original and trusted Ibuprofen that provides rapid and effective relief in pain, fever and inflammation with excellent tolerability, through a wide variety of formulations for better compliance.

Abbott Pakistan Annual Report 2010

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We achieved our vision of

Rs 10 Billion Sales by 2010

Billion
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About Us We are a global broad-based healthcare company devoted to discovering new medicines, new technologies and new ways to manage health. Our products span the continuum of care, from nutritional products and laboratory diagnostics through medical devices and pharmaceutical therapies. Our comprehensive line of products addresses all important health needs from infancy through the golden years.

Our work across broad lines of business gives us a wealth of knowledge, understanding and capabilities in a number of health areas, including:

Pharmaceuticals Nutritional Diagnostics Diabetes Care
Our capabilities allow us to focus on some of the most serious threats to a long and healthy life. From cancer and diabetes to a range of other conditions, our scientists are working hard every day to discover and develop new technologies and treatments for people in Pakistan and around the world.

Abbott Pakistan Annual Report 2010

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It’s part of our heritage and continues to define our work today. At Abbott. addressing not only treatment.to advance medical science to help people live healthier lives. 05 . Our products extend across many areas of health. but also prevention and diagnosis. Abbott Pakistan has been driven by a constant goal . we build upon our scientific expertise to bring new products to market.For more than 60 years.

A Promise for Life .

fairness and integrity. • We focus on exceptional performance – a hallmark of Abbott People worldwide – demanding of ourselves and each other because our work impacts people’s lives. This has been the way of Abbott for more than a century – passionately and thoughtfully translating science into lasting contributions to health. technologies. Our products encircle life.Turning Science into Caring We are here for the people we serve in their pursuit of healthy lives. • We value our diversity – that of our products. from nutrition and diagnostics to medical care and pharmaceutical therapy. Caring is central to the work we do and defines our responsibility to those we serve: • We help advance leading-edge science and technologies that hold the potential for significant improvements to health and to the practice of healthcare. excellence in personal relationships. The promise of our company is in the promise that our work holds for health and life. from newborns to aging adults. • We strive to earn the trust of those we serve by committing to the highest standards of quality. and behaviour characterized by honesty. • We sustain success – for our business and the people we serve by staying true to key tenets upon which our company was founded over a century ago: innovative care and a desire to make a meaningful difference in all that we do. 07 . markets and people – and believe that diverse perspectives combined with shared goals inspire new ideas and better ways of addressing changing health needs.

Contents 09 11 12 14 17 18 23 24 27 29 31 32 36 37 38 40 42 43 44 45 46 48 Corporate Information Corporate Structure of Abbott Pakistan Vision & Mision History of Abbott at a glance Our Core Values Our Strategic Priorities Ethics and Compliance Corporate Social Responsibility at Abbott Pakistan Human Resource Development Environment. Health & Safety Simplification Initiatives at Abbott Pakistan Pharmaceutical Products General Health Care Products Diagnostic Products Nutritional Products Diabetes Care Products Board of Directors Brief Terms of Reference of Board Committees Board Committees Attendance Corporate Governance Directors’ Profile Directors’ Report 54 58 59 61 62 64 65 66 68 69 70 71 72 107 108 110 112 113 Key Operating and Financial Data Vertical Analysis Horizontal Analysis Statement of Value Addition and its Distribution Statement of Compliance with the Code of Corporate Governance Review Report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance Auditors’ Report to the Members Balance Sheet Profit and Loss Account Statement of Comprehensive Income Cash Flow Statement Statement of Changes In Equity Notes to the Financial Statements Pattern of Shareholding Categories of Shareholders Notice of Annual General Meeting Calendar of Financial Events Contact Details Proxy Form Abbott Pakistan Annual Report 2010 08 .

abbott. Chundrigar Road. Shaikh Kamran Y. Freyman) Registered Office Opp. Farrukh Hafeez (Quality Assurance Director) Ayub A. Deutsche Bank AG MCB Bank Limited National Bank of Pakistan Standard Chartered Bank (Pakistan) Limited HSBC Bank Middle East Limited The Bank of Tokyo-Mitsubishi UFJ Limited Human Resource Committee Munir A. Landhi. Arshad Ahmed (Medical Director) Seema Khan (Regulatory Director) Athar Noman Khan (Materials Management Director) Hassham M. Mirza Thomas C.O.com.A. Karachi Share Transfer Committee Asif Jooma (Chairman) Syed Anis Ahmed Sadi Syed (Alternate Director to Thomas C. Siddiqui (Head of Nutrition Division) Habib Ahmed (Head of Diagnostic Division) Syed Imtiazuddin (Head of Diabetes Care Division) Dr. State Life Building 1-A. Shaikh (Chairman) Asif Jooma Sadi Syed (Alternate Director to Thomas C.pk Chief Financial Officer Syed Anis Ahmed Senior Management Team Asif Jooma (Chief Executive Officer) Syed Anis Ahmed (Chief Financial Officer) Sadi Syed (Operations Director) Dr. Malik (Human Resource Director) Company Secretary Malik Saadatullah Auditors M. I. 09 . ST-02.1st Floor. Shaikh (Chairman) Asif Jooma (Chief Executive Officer) Kamran Y. Radio Pakistan Transmission Centre. Surridge & Beecheno Share Registrar FAMCO Associates (Pvt) Ltd. Karachi. Sarmad Maqbool (Marketing & Strategy Director) Dr. Freyman (Alternate Director Sadi Syed) Syed Anis Ahmed Angelo Kondes Shamim Ahmad Khan Legal Advisors Orr. P. Shaikh (Chairman) Asif Jooma Shamim Ahmad Khan City Office 8th Floor. Hyderabad Road.Corporate Information Board of Directors Munir A. 74000 Audit Committee Shamim Ahmad Khan (Chairman) Munir A. Box 7229. Yousuf Adil Saleem & Co. Freyman) Syed Anis Ahmed Website www.Dignam & Co. Faysal House.I. Mirza Siraj Lawai (Chief Internal Auditor by invitation) Syed Anis Ahmed (CFO by invitation) Bankers The Royal Bank of Scotland Limited Citibank N. Shahrah-e-Faisal. Karachi Banking Committee Munir A.

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Corporate Structure of Abbott Pakistan Shareholders Audit Committee Board of Directors Human Resource Committee Share Transfer Committee CEO Banking Committee Internal Audit Management Pharmaceuticals Nutritional Others Established Pharma Operations General Health Care Diagnostics Diabetes Care 11 .

Abbott Pakistan Annual Report 2010 12 .Vision To be a premier healthcare company in Pakistan Mission To deliver consistently superior products and services which contribute significantly to improve the quality of life of the consumers.

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In 1888. Abbott's pharmacy. called “dosimetric granules.. Abbott Pakistan Annual Report 2010 14 . M. began making a new form of medicine.part of a medicinal plant. he formed tiny pills. The demand for these accurate granules soon far exceeded the needs of his own practice.History of Abbott at a glance A tradition of innovation. 30-year-old Wallace C. From a small operation based above Dr.” which provided a measured amount of the drug. For more than 120 years. Abbott has been a pioneer in developing innovative solutions that improve health and the practice of healthcare.or alkaloid . Abbott.D. Abbott has evolved into one of the world's leading healthcare companies. Using the active .

In addition. The company also introduces Ensure. Abbott acquires Vysis. Abbott breaks ground for a new manufacturing facility in North Chicago. 2001 Abbott completes the acquisition of the pharmaceutical business of BASF. Inc. Ohio.1888 Dr. Abbott also receives approval for XIENCE V in Japan. a leading genomic disease management company. which eventually becomes Abbott Nutritron. 1929 Abbott stock is listed on the Chicago Stock Exchange. including the global operations of Knoll Pharmaceuticals... Abbott begins producing dosimetric granules in his apartment on Chicago's North Side. including an improved version of Similac infant formula in the United States. and also launches several new products. 1997 Abbott acquires the parenteral products business of Sanofi Pharmaceuticals. Inc. 1973 Abbott forms its diagnostics division to bring together all diagnostic products and services. 1920 Dr. 2010 Abbott acquires Solvay Pharmaceuticals and STARLIMS. its first adult medical nutritional. 1900 The business is officially incorporated in Illinois as the Abbott Alkaloidal Company 1915 The company changes its name to Abbott Laboratories. 15 . 1964 The company acquires M&R Dietetic Laboratories of Columbus.

Our Promise conveys who we are and what we stand for to our stakeholders. our Promise and Values are a filter for all our decision-making. . As a pledge for how we will serve our constituents. communications and interactions with stakeholders.

We keep our promises. We lead with solutions that address human needs by pioneering innovative treatments and products. 17 . It is through our Promise and Values that these experiences are shaped. Our focus on execution and collaboration ensures that we keep our promises to each other and to those we serve. s We’re committed to working together to deliver solutions that are effective and profitable. At Abbott. We grow through our intellectual curiosity and a desire to continuously learn and improve. acting in accordance with all of our values. and new approaches to managing health. Caring Making a difference in people’ lives. All perceptions of Abbott are derived from the culmination of experiences any one person has with our company. lifesaving medical devices. Enduring Commitment and purpose. We will always be here to help keep people healthy. s Caring is central to the work that we do to help people live healthier lives.Our Core Values Pioneering Leading-edge science and commercialization. Every employee strives to deliver on all the values in their day-to-day work. Achieving Customer-focused outcomes and world-class execution. Our respect for people is demonstrated in what we do and how we act. We drive for meaningful results –demanding of ourselves and each other because our work impacts people’ lives. Enduring means both honoring our history and maintaining our commitment to the future. pioneering means leading-edge science and innovative execution. We have tremendous respect for the lives of everyone touched by our company.

Abbott Pakistan Annual Report 2010 18 .and the core of our commitment to advancing health and well-being. carry them through the critical stages of development and then deliver them to patients and health care providers around the world. Our broad scientific expertise enables us to create new health care products. development and engineering. nutritionals and medical and diagnostic devices share a common framework of excellence in science. research. Our diverse portfolio of pharmaceuticals. Our ongoing investment in R & D enables us to address the ever-changing global disease burden and to foster new.Our Strategic Priorities Innovating for the Future Scientific discovery and innovation are the hallmarks of Abbott's business . improved solutions for emerging health care challenges.

Enhancing Access Our expertise and resources help to bridge gaps in healthcare access. which is an HEOR (Health Economic Outcome Research) on Klaricid in a condition called Acute Exacerbation of Chronic Bronchitis. We work to address these and other obstacles as part of our core business strategy and as part of our commitment to enhancing global health and well-being. We tailor our approach to specific patient needs in specific regions of the world. governments. patients and others are demanding that healthcare companies demonstrate clinical comparative effectiveness. we initiated clinical trials of evaluating efficacy of Ganaton in treatment of Irritable Bowel Syndrome which is a functional bowel disorder characterized by chronic abdominal pain. discomfort. 19 . Lack of awareness about health care issues and treatments. bloating. and alteration of bowel habits in the absence of any detectable organic cause. healthcare payers. As healthcare systems become increasingly integrated. We understand these expectations and works to meet the changing needs of our customers and stakeholders. Expanding access to care requires addressing a complex array of challenges. inadequate healthcare infrastructure and social stigmas also can make it difficult for patients to get the medicines they need. Another clinical study was initiated in 2010.During this year.

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we work hard to ensure safety and consumer protection throughout the manufacturing and distribution process. All medicines. Along with educating patients and health care professionals about the safe use of our products.which must be balanced against the often greater risks associated with the illnesses or injuries these interventions are designed to treat.we work to educate patients and health care professionals about potential risks and side effects. procedures and products carry some degree of risk . All our processes are regularly monitored. Effectively identifying and targeting the most appropriate patient profiles for each Abbott product and ensuring that health care professionals are fully informed of the benefits and risks of our products. To deliver safe and effective products . Safeguarding the Environment Abbott Pakistan has long been committed to minimizing our global environmental impacts . Our obligation to protect patients and consumers goes beyond simply complying with regulatory requirements. development and manufacturing of our products and packaging. safety and authenticity of each product that bears the Abbott name through our distribution channels. Our commitment to patient and consumer protection is shared by all Abbott Pakistan employees and by the even greater numbers of people working on behalf of our partners and suppliers. Directly and indirectly educating patients about proper storage. procedures and resources that ensure our products are designed and manufactured to be safe and effective. the broad geographic dispersion of our supply chain requires increased oversight and auditing. and the use and disposal of our products by consumers and healthcare practitioners. safety and product integrity across the full spectrum of research. The safety of many product ingredients is generating significant debate throughout the health care industry. use and disposal of their medicines and health care products under appropriate medical supervision. and our products are assessed against approved specifications before distribution. health care interventions. We hold all of them to high ethical and performance standards and maintain effective management systems to review and audit them. It means earning and keeping the trust of all those who depend on our products by: • • • • Ensuring quality.from the sourcing of raw materials. At the same time. but delivering on our commitment to patients and consumers goes well beyond the laboratory. processes. Fully educating and informing our stakeholders about these risks and benefits is paramount.Protecting Patients & Consumers Our ability to create life-enhancing and life-preserving products is constantly bolstered by scientific advances. 21 . Ensuring the quality.at the right time and in the right dosage or formulation . the manufacture and distribution of our products. Our quality management system is supported by policies.

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a sense of ethics and respect for the law.large and small . In addition. To support Abbott commitment to ethical conduct and compliance with the law. laws relating to government healthcare programs and antitrust laws. A key to Abbott's ethics and compliance program is the policies and procedures that the Abbott's Office of Ethics & Compliance (OEC) has created to guide employees as they conduct their day-to-day activities within the global healthcare community. fairness and integrity represent the necessary conditions of an ethical workplace and are non-negotiable.Ethics and Compliance Abbott integrity is based on decisions . including food and drug laws. appropriate treatment of confidential information. All employees are required to read. Abbott has a long-standing ethics and compliance program. Our Code makes it clear that we do not tolerate illegal or unethical behaviour in any of Abbott business dealings. It stresses the importance of ethical and honest conduct. The Abbott Code of Conduct sets forth the principles and behaviours to which all Abbott employees must commit. 23 . Ethical conduct and compliance with the law are central to fulfilling Abbott responsibility to Abbott stakeholders. understand and certify their adherence to this Code annually. Abbott decisions are guided by Abbott values.that Abbott employees make each day at every level of the company. and the accuracy and integrity of Abbott's books and records. it requires timely and accurate public disclosures and compliance with relevant laws. Honesty. avoiding conflicts of interest. The policies and procedures supporting the principles outlined in the Code are updated to reflect changes in Abbott industry's codes.

encourage and partner with a wide array of credible and effective community-based organizations. hospitals. As part of social responsibility agenda of Abbott Pakistan. nutritionals. We effectively promote health care access by assisting governments. universities. We support. AJK and NWFP in health and education sectors. We work to facilitate access to health care by expanding our core businesses in pharmaceuticals. Abbott Pakistan has also supported Punjab Rural Support Programme which is working since 1997 and currently operating in 28 districts of Punjab with a mission to alleviate poverty and enhance household income. health care companies. We ask all our employees and affiliates to join in the effort. the company established a school "ROSHAN MUST AQBIL" for Internally Displaced Persons (IDPs) in one of the flood affectees camps where more then 1600 people from Abbott Pakistan Annual Report 2010 24 .Corporate Social Responsibility at Abbott Pakistan Abbott Pakistan seeks to make a significant and long-lasting difference in the quality of people's lives. research centers. medical devices and diagnostics by developing new products and services to address unmet health care needs. clinics and related institutions such as Concern for Children T rust which is working since1997 for the promotion of health and welfare of children in Pakistan and HOPE (Health Oriented Preventive Education) which is working for the benefit of the poor and needy in the urban slum areas of Karachi and rural Sindh.

Abbott Pakistan is always at front when it comes to community work and services and helped on a very large scale for (IDPs) with millions of rupees and in form of various goods and medicines. we apply our science. various affected parts of Sindh province were residing. by facilitating patient assistance and by supporting a wide array of civil society organizations engaged in the direct delivery of health care services. 25 . Karachi” which resulted in treatment of approximately 2 millions patients this year. We facilitate access through our corporate social responsibility initiatives by donating health care products and services. while reducing our impact on the environment by creating lasting solutions for both current and future stakeholders. Abbott Pakistan has supported through generous donations to “Poor Patient Aid Society Civil Hospital . We have partnered with the Kidney Centre for the treatment of the poor and needy patients suffering from kidney related diseases. expertise and technology to address critical health care needs through innovative collaborations and partnerships. Free books and school bags were also distributed by Abbott. Beyond philanthropy. We are working to build sustainable solutions to the society's most pressing healthcare challenges.We are redefining the concept of responsibility.

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internal Total number of courses conducted . Aligning the growth of our workforce with our global strategies.external Total training days . 27 . Retaining our people with rewards and opportunities for personal growth. focusing on four key objectives: • • • • Finding a diverse mix of talent for the right roles across global cultures and areas of expertise.internal Total training days . functions. technologies and customers.house and external trainings and workshops. which cross cultures.Human Resource Development Abbott Pakistan is committed to help its employees fulfill their potential and build rewarding careers. countries. an inclusive culture and ongoing career development opportunities.external 1. We choose our people carefully and guide them toward meaningful career paths. Abbott Pakistan exposes its people to a wide array of exciting challenges and experiences. affording them remarkable opportunities to solve problems and address emerging healthcare needs. Supporting our people with strong organizational values.528 103 47 41 99 Our human resources strategy reflects the dynamic opportunities inherent in the breadth and diversity of our different lines of businesses. Key learning statistics 2010 Total participants for both internal and external courses Total number of courses conducted . Trainings were mainly aimed at imparting knowledge to employees to work on multi-dimensional areas which were identified during employee growth plans. Emphasis on learning and development continued in 2010 with a large number of in.

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With ever increasing emphasis on environment and workers health & safety and also in achieving our goal of moving towards “Zero EHS&E Impacts”.Climate change is a serious global issue and Abbott Pakistan has been continuously working to reduce greenhouse gas emissions. reducing greenhouse gas emissions. maintaining legal compliance. Abbott Pakistan has been working well within its limits of C02 emissions and hence. water use and waste. • Integrate sound EHS practices consistent with our management system into all aspects of the business. reducing costs and preserving our ability to do business in the future. Environment. Health and Safety (EHS) standards. Abbott Pakistan has reached a milestone of 13 Million hours without any loss time accident. maintaining its position as a “Green plant”. Our environmental policy achieves these objectives: • Improve the efficiency and sustainability of our business activities and products. Health and Safety Our environmental stewardship initiatives help protect the planet while improving efficiency. water usage and product stewardship. The plant is also fully compliant with the defined parameters of National Environmental Quality Standards. • Establish goals and strategies for the enterprise and report publicly on our progress. • Require contractors working on behalf of Abbott to conform to regulatory requirements and meet applicable internal Environment. 29 . Our three environmental priorities are climate change.

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finance and all other support functions to focus on evaluation of current business processes and commitment to eliminate redundant activities. marketing. At Abbott Pakistan. Simplification Initiatives at Abbott Pakistan “Simplification” is at the core of our business and operational excellence. A cross functional Simplification Committee reporting to top management has been set up to integrate simplification and business process improvement into all aspects of how we conduct business from ethics and compliance and social investing to product quality and safety and relationships with stakeholders.We recognize that achieving business and operational excellence is an ongoing process.e sales. we are committed to do pioneering work with simplicity. A number of simplification and continuous improvement projects with the aim to optimize efficiency and bring out further improvement in our processes were implemented in 2010. HR. Achieving being one of our core values is all about success with simplicity which involves integration of efforts from all areas of business i. claims and stock shipment system 31 . Some of these include: • • • • • Implementation of automated expense management solution Implementation of automated vendor approval and payment processing system Streamlined imprest fund management system at distribution offices Implementation of automated Business Travel Request system Streamlined distributors orders.

Pharmaceutical Products Abbott Pakistan Annual Report 2010 32 .

We also continue to pursue new therapeutic indications for existing medications that offer patients and physicians important treatment options.Abbott medicines are used to treat some of the world’s most serious and prevalent diseases. 33 .

Pharmaceutical Products Abbott Pakistan Annual Report 2010 34 .

Abbott Pakistan manufactures over 150 different pharmaceutical and general health care products for the local and export markets. 35 .

General Health Care Products Abbott Pakistan Annual Report 2010 36 .

We also have presence in Hematology & Clinical Chemistry. cancer. including infectious disease.Diagnostic Products Abbott Pakistan drives innovation in the fast-paced medical technology market. 37 . Our broad line of diagnostic instruments and tests are used worldwide in hospitals. we continue to transform the practice of medical diagnostics through innovative products and automated laboratory systems that lower costs and improve patient care. management and treatment monitoring. our division has been posting double digit growth for the last several years and is looking forward to even higher achievements in years ahead. diabetes and cardiac issues. We are the market leader in Immunoassays and is an established reference supplier of Infectious Disease screening markers. and with the Scientific Leadership we have in our products and solutions. small labs and clinics to diagnose a range of serious health concerns. large reference labs. Our products are addressing disease diagnosis. Being a leader in the In-Vitro Diagnostic Market.

Nutritional Products Abbott Pakistan Annual Report 2010 38 .

children. with our wide range of products for infants. mothers and adults. We are delivering the promise for life by providing nutritional support. We are committed to be the trusted leader in providing innovative and superior nutrition that advances the quality of life for people of all ages. 39 .Abbott Pakistan has pioneered the nutritional care with its pediatric and medical nutrition ranges.

Diabetes Care Products Abbott Pakistan Annual Report 2010 40 .

We design. require less blood and provide faster results. introducing systems that are easier to use. • 450 Test Results Recall with Date and Time • 7-Day. develop and manufacture several leading-edge glucose monitoring systems and test strips for use in both home and hospital settings. Optium Xceed Monitoring System & Strips. Abbott Diabetes Care is committed to develop products to reduce the discomfort and inconvenience of blood glucose monitoring.Committed to improve the lives of people with diabetes through our research and innovation. 14-Day & 30-Day Average Reading for Easy Data Management • Compact and Light Weight • Measures both Blood Glucose & Blood Ketone • 0.6 µ'b5L sample size • Smallest sample size on the market • Test results in 5 seconds • Optium™'99 Test strips are supplied individually packed • Each test strip is protected from damage or exposure to moisture • Each test strip can be used until the last day of expiry 41 .

Shaikh Mr. Shamim Ahmad Khan Mr. Angelo Kondes Mr. Mirza Mr.Board of Directors Sitting from left to right: Syed Anis Ahmed Mr. Asif Jooma Standing from left to right: Mr. Munir A. Sadi Syed (Alternate Director to Thomas C. Freyman) Abbott Pakistan Annual Report 2010 42 . Kamran Y.

transfer and transmission of shares. two Executive Directors (one of the Executive Directors is an alternate Director) and Chief Executive Officer. all of whom are Non-Executive Directors. Committee approves registration. • • • 43 . Company Secretary and Chief Internal Auditor. and provision by external auditors of any service in addition to audit of financial statements. HR Director acts as Secretary to the Committee. Consideration of any other issue or matter as may be assigned to the Committee by the Board of Directors. Determination of appropriate measures to safeguard the Company’s assets. At least once a year. audit fees. the Audit Committee shall meet external auditors without Chief Financial Officer and Chief Internal Auditor. Executive Directors. The meeting of the committee is held at least once in a year. closing and day to day operations of bank accounts. Recommendation about the appointment of external auditors to the board of directors and consider any questions of resignation or removal of external auditors. Review management letter issued by the external auditors and management response thereto.Brief Terms of Reference of Board Committees Audit Committee The Committee comprises of three members. This Sub-Committee of the Board is responsible for reviewing the remuneration and benefits of the Chief Executive Officer. the Audit Committee shall meet Chief Internal Auditor without Chief Financial Officer and External auditors. Moreover. Company Secretary acts as secretary to the Audit Committee. At least once a year. The Audit Committee meets at least four times a year. issuing such instructions to the company’s bankers with regards to the company’s banking transaction and business as it may consider appropriate. if any. it also issues and cancels share certificates including duplicate share certificates. Review of preliminary announcements of results prior to publication. Company Secretary acts as secretary to the Committee. Company Secretary acts as secretary to the Committee. • • Share Transfer Committee The Committee comprises of Chief Executive Officer and two Executive Directors (one of the executive directors is an alternate director). half yearly and annual financial statements of the company prior to their approval by the Board of Directors. Banking Committee The Committee comprises of a Non-Executive Director. • • Human Resource Committee The Committee consists of Chief Executive Officer and two Non– Executive Directors. Banking Committee approves matters relating to opening. The brief terms of reference of audit committee are as follows: • Review quarterly.

Chief Financial Officer By invitation . Freyman Member . Malik Category Chairman .Non Executive director Secretary Meetings Held Attended 1 1 1 1 1 1 1 1 SHARE TRANSFER COMMITTEE Name Asif Jooma Sadi Syed Syed Anis Ahmed Malik Saadatullah Category Chairman .Chief Executive Officer Member .Board Committees Attendance AUDIT COMMITTEE Name Shamim Ahmad Khan Munir A. Freyman Member .Alternate Director to Thomas C. Mirza Syed Anis Ahmed Siraj Lawai Malik Saadatullah Category Chairman .Chief Executive Officer Member .Non Executive director Member.Chief Financial Officer Secretary Meetings Held Attended 11 11 11 11 11 11 11 11 BANKING COMMITTEE Name Munir A. Shaikh Asif Jooma Shamim Ahmad Khan Hassham M. Shaikh Kamran Y.Non Executive director Member .Chief Internal Auditor Secretary Meetings Held Attended 4 4 4 4 4 4 4 4 3 4 4 4 HUMAN RESOURCE COMMITTEE Name Munir A.Chief Executive Officer Member .Non Executive director Member .Non Executive director Member .Non Executive director By invitation . Shaikh Asif Jooma Sadi Syed Syed Anis Ahmed Malik Saadatullah Category Chairman .Chief Financial Officer Secretary Meetings Held Attended 1 1 1 1 1 0 1 0 1 1 Abbott Pakistan Annual Report 2010 44 .Alternate Director to Thomas C.

e. and the Memorandum and Articles of Association of the Company. is present in every meeting of the Board. b.Corporate Governance Performance Evaluation of the Board The Board of Directors act as governing trustees of the Company on behalf of the shareholders while carrying out the Company's mission and goals. 1984. Ensuring required quorum of Board meeting is available. being part of the Board. particularly Companies Ordinance. c. Compliance with the legislative system in which Abbott Pakistan operates. The Board of Directors set following evaluation criteria to judge its performance. The CEO provides overview of the performance of Company to the Board and addresses any specific questions by the Board members. business excellence and people management. Ensuring training of Board of Directors including new appointments such that each member is fully aware of his roles and responsibilities. business process. Review of the strategic plans. Performance evaluation of the Chief Executive The Chief Executive Officer. 45 . listing regulation of Stock Exchanges. in order to have detailed deliberation and quality decision on matters of significance. business risks and monitoring Company's performance against the planned objectives and advice the management on strategic initiatives. a. The principle factors of evaluation includes financial performance. Establishing adequate internal control system in the Company and its regular assessment through self assessment mechanism and internal audit activities. d. The performance of CEO is assessed through the evaluation system set by the Abbott Pakistan. compliance.

(BOI) Government of Pakistan • Executive Committee (BOI) Government of Pakistan • OICCI Managing Committee • Board of Trustees of Abbott Laboratories Pakistan Limited Staff Provident Fund • Board of Trustees of Abbott Laboratories Pakistan Limited Staff Pension Fund Syed Anis Ahmed Chief Financial Officer Joined Board: 01 March 2009 Other Engagements: Member • Board of Trustees of Abbott Laboratories Pakistan Limited Staff Provident Fund • Board of Trustees of Abbott Laboratories Pakistan Limited Staff Pension Fund • Board of Trustees of Abbott Laboratories Pakistan Limited Workers Profit Participation Fund . Asif Jooma Chief Executive Officer Joined Board: 01 June 2007 Other Engagements: Director • NIB Bank • Engro Fertiliser Limited Member • Board of Investment. Director • Sunshine Holdings Srilanka Mr. Munir A.Directors’ Profile Mr. Shaikh Chairman (Non Executive) Joined Board: 20 August 2004 Other Engagements: Chairman / Director • Abbott India.

Freyman) Joined Board: 18 December 2007 Other Engagements: Member • Board of Trustees of Abbott Laboratories Pakistan Limited Staff Provident Fund. • Quality Control Board – ICAP Mr. • Board of Trustees of Abbott Laboratories Pakistan Limited Staff Pension Fund. • Board of Trustees of Abbott Laboratories Pakistan Limited Workers Profit Participation Fund. Mr. Mirza Director (Non Executive) Joined Board: 15 January 1978 Other Engagements: Director/ Chief Executive Officer • Pakistan Business Council. Special Advisor • Pakistan Micro Finance Network Member • Advisory Committee of Centre for International Private Enterprises. Member • Task Force Private Sector Development – Planning Commission Government of Pakistan. • Task Force Pharmaceutical Sector – Planning Commission Government of Pakistan. . Shamim Ahmad Khan Director (Non Executive) Joined Board: 01 August 2002 Other Engagements: Director • Packages Limited. Director • State Bank of Pakistan. Sadi Syed (Alternate Director to Thomas C. • Certification Panel of Pakistan Centre for Philanthropy. Angelo Kondes Director (Non Executive) Joined Board: 18 July 2008 Other Engagements: Director • Abbott Tanzania. Chairman • National Commodity Exchange Limited.Mr. • Board of Investments. • International Steel Limited • Competitiveness Support Fund. Mr. • IGI Insurance Limited. Kamran Y.

000) 1. Earnings per share for the thirteen months period were Rs 12.Directors’ Report Net sales for the thirteen months period registered an increase of 30% over last financial year (20% increase on 12 months comparable basis). which is in addition to an interim cash dividend of Rs 2. Your Directors are pleased to announce a final cash dividend of Rs 3.22 per share). Vitamins. Operating results Profit for the period before taxation Taxation Profit after taxation Other comprehensive income net of tax Un-appropriated profit brought forward Transfer from Un-appropriated profit Profit available for appropriation Appropriations: -Final dividend 2009 Rs 3 per share -Interim dividend 2010 Rs 2 per share Un-appropriated profit carried forward Rs in 000 1. favorable product-mix and limited price adjustments. cough and cold.449 (293. the ultimate holding company. antiinfectives.313) 1.944 (36.677) 547. Abbott Pakistan Annual Report 2010 48 .P ratio at 34% also showed an increase as compared to last financial year when it was 27% primarily due to better product-mix. During the period ended December 31.177 million (Financial Year 2009: Rs 609 million).257 (564.00 per share (2009 : Rs 3. Segment-wise Sales and Marketing Performance Pharmaceutical sales for the thirteen months period increased by 28% over last financial year (18% increase on 12 months comparable basis) mainly attributable to volume.02 (Financial Year 2009: Rs 6.801) 947. strong performance of consumer health care.176.182 (250.00 per share (2009: Rs 9. USA. The Directors take pleasure in presenting their Report together with the audited financial statements of the Company for the thirteen months ended December 31. the Company changed its financial year end from November 30 to December 31 to bring it in line with the financial year followed by Abbott International LLC.00 per share) paid to the shareholders during 2010. a limited hardship price adjustment on vitamins and relatively stable exchange rate vis a vis the US Dollar. gastro preparations.00 per share).741. hematanics and consumer products recorded strong double digit growth. Current period G. Profit after tax for the thirteen months period was Rs 1.701) (195.437.947 Financial Performance Net sales for the thirteen months period registered an increase of 30% over last financial year (20% increase on 12 months comparable basis). 2010. 2010.

Nutritional sales for the thirteen months period posted 39% growth over last financial year (28% increase on 12 months comparable basis) which is mainly volume driven coupled with price increase on certain products. General Health Care (GHC), Diagnostic and Diabetes Care sales for the thirteen months grew by 34% over last financial year (25% increase on 12 months comparable basis) owing primarily to focused marketing on consumer products and increased sales of Mospel.

Profit after tax for the thirteen months period was

Rs 1,177 million (Financial
Year 2009: Rs 609 million). Earnings per share for the thirteen months period were

Market Share
Abbott Pakistan achieved a market share of 6.1% as per IMS (Dec 2010, 12 Months) in the pharmaceutical and nutrition market (2009 market share: 5.8%).

Manufacturing
Abbott Pakistan manufactures over 150 different pharmaceutical and general health care products for the local and export markets.

Rs 12.02 (Financial Year 2009: Rs 6.22 per share).

Capital Expenditure
Your Company is continuously striving to improve the productivity and efficiency of plant operations. During the period, a total of Rs 493 million was spent on various capital projects such as GMP upgrade and procurement of manufacturing equipments for improving productivity.

PBT Rs. in million 26% 24%

PAT Rs. in million

PBT as % of sales

1,517

1,555

24%

1,265

1,238

1,058

Rs. in million

886

1,043

609

17%

864

876

1,177
16% 10%

2005

2006

2007

2008

2009

49

1,741

2010

Liquidity Management and Cash Flow Strategy
During the period an amount of Rs. 918 million was generated from operating activities of the Company which was spent mainly on capital projects and payment of dividends to shareholders. At the end of the period, the Company had a liquid fund position comprising of cash/bank balances and short term investments amounting to Rs. 819 million. To ensure sufficient availability of funds at all times while generating optimum returns through placement of surplus liquidity in various available investment avenues, the Company has developed and implemented a formal cash flow monitoring mechanism whereby cash inflows and outflows are projected and monitored on regular basis.

emissions. Abbott Laboratories Pakistan has been working well within its limits of C02 emissions and hence, maintaining its position as a “Green plant”. The plant is also fully compliant with the defined parameters of National Environmental Quality Standards. With ever increasing emphasis on environment and workers health & safety and also in achieving our goal of moving towards “Zero EHS&E Impacts”, Abbott Pakistan has reached a milestone of 13 Million hours without any loss time accident.

Business Process Improvement
l

The Company follows a conservative investment strategy for placement of its surplus funds and ensures that the investment portfolio of the Company is secured. Surplus funds are generally placed in short-term Bank deposits.
A monitoring system is in place whereby the Company's existing investment portfolio and new proposals for funds placement are reviewed by the Investment Committee comprising of senior management staff and professional consultants.

Abbott Pakistan has launched the RSO (Rationalization, Standardization, Optimization) program through which packaging of various products is standardized to achieve operational efficiencies such as cost improvement, cycle time reduction, and better inventory management. The TPM (Total Productive Maintenance) program was launched to minimize breakdowns and reduce machine change over time to increase the productivity.

l

Contribution to National Exchequer
Your Company has contributed Rs 1,507 million (2009: Rs 1,062 million) to the government and its agencies on account of various government levies including income tax, custom duties and sales tax etc.

l

Environment, Health and Safety
Climate change is a serious global issue and your Company has been continuously working to reduce greenhouse gas

As a part of Quality Management System improvement, initiatives were taken to further improve technical document handling, document traceability and complaint handling through automated processes.

The collective contribution of the various Business Process Improvement initiatives has greatly contributed in improving your Company's financial performance.

Human Resources
The focus of Human Resources has been to develop a best in class organization, providing individual employees an enabling environment in which they can fully leverage their capabilities and potential. The company conducted an in-depth culture survey targeting all employees of Abbott Pakistan. A participation rate of 98% was achieved demonstrating a strong sense of commitment by the employees. The Cultural Health Metric

Abbott Pakistan Annual Report 2010

50

We view our commitment to global citizenship not only as a business responsibility, but also as an opportunity to improve lives around the world. Caring being one of our Core Values, is all about making a difference in people's lives. Your Company has contributed in improving lives for more than half a century, while strengthening the Company and its communities for future generations.

for Abbott Pakistan stood at 85%, showing an improvement of 4% from 2008. The company has drawn up plans to address the identified gaps to further improve corporate culture and effectiveness. Emphasis on learning and development continued in 2010 with a large number of in-house and external training sessions and workshops. Training programs were mainly aimed at imparting knowledge to embellish technical and soft skills as identified in employee growth plans. The unwavering commitment to Training and Development has been a cornerstone of your Company's success. We are pleased to report that as a result of effective HR policies and a conducive and open environment, your Company's employee turnover rate is well below the industry average. We continue to focus on attracting, developing and retaining top tier talent for Abbott Pakistan.

As a part of the corporate social responsibility agenda of Abbott Pakistan, Abbott Pakistan initiated a school called "Roshan Mustaqbil / Bright Future" for Internally Displaced Persons (IDPs) in one of the camps 5 Km from Abbott site. More than 1600 people from various affected parts of Sindh province benefited from this endeavor. Abbott Pakistan is always at front when it comes to community work.
Caring being a core value of our Company, it is part of the corporate DNA. The Company and its employees stepped up in providing assistance in the form of various daily use items and medicines to help the IDPs. In addition to the above, Abbott Fund USA donated Rs. 30 million in cash and product towards the flood relief effort. Moreover, Abbott Pakistan also dispatched daily use items for the flood victims with employees contributing 1-5 days salary for the relief effort.

Corporate Social Responsibility
Corporate Social Responsibility (CSR) has been part of Abbott's strategic planning and objectives. In essence, CSR is the deliberate inclusion of public interest into corporate decision-making and the honoring of the triple bottom line considerations, i.e. people, planet and profit.

Subsequent Events
No material changes or commitments affecting the financial position of the Company have taken place between the end of the period and the date of this report.

51

l l l l Auditors The present Auditors M/s M. except for changes as mentioned in note 2. 2002 the Directors are pleased to state as follows: l The financial statements. The industry associations i. prepared by the management of the Company. The ultimate holding Company is Abbott International LLC. Holding Company As at December 31. have been followed in preparation of financial statements and any departure there from has been adequately disclosed. Compliance with the Code of Corporate Governance As required by the Code of Corporate Governance dated March 28th. the impending devolution of health to the provinces following the passage of the 18th Amendment has serious implications for the industry. Yousuf Adil Saleem & Co. Your Company along with other members of the pharmaceutical industry continues to pursue the Government for a mutually acceptable pricing mechanism for pharmaceutical products. Key operating and financial data for the last six years is summarized on page 54 . Simultaneously. present fairly its state of affairs.e. In addition. Intellectual Property Rights continues to be a concern for the industry.57. there is an urgent need for an across the board price increase. Business challenges and future outlook Rupee devaluation and inflation are major challenges for your company's profitability. 2010 is given on page 107. 2011. CFO. the results of its operations. The Company maintains a sound internal control system which gives reasonable assurance against material misstatement or loss. l l l Abbott Pakistan Annual Report 2010 52 . Chartered Accountants. The Directors. offers themselves for re-appointment. Proper books of account of the Company have been maintained.Board Changes No Board change occurred during the period. The Board of Directors endorses recommendation of the Audit Committee for their re-appointment as auditors of the Company for the financial year ending December 31. USA. retires and being eligible.259. This is no different to existing structures globally where Drug registration and Pricing are coordinated by one body at a Federal level. Appropriate Accounting policies have been consistently applied in preparation of financial statements. UK held 76.454 shares..3 to the financial statements related to segment reporting and recognition of actuarial gains and losses on defined benefit plan in other comprehensive income.1. as applicable in Pakistan. as well as the industry. as detailed in the Listing Regulations. cash flows and changes in equity. Accounting estimates are based on reasonable and prudent judgement. Effective implementation will protect consumers. International Accounting Standards. There are no doubts upon the Company's ability to continue as a going concern. CEO. PPMA and Pharma Bureau are aligned on the need for the formation of a Drug Regulatory Authority at the Federal level to manage Pharmaceutical Registration and Pricing. 2010 Abbott Asia Investments Limited. Pattern of Shareholding A statement showing the pattern of shareholding in the Company and additional information as at December 31. The internal control system is regularly reviewed. From Business sustainability point of view. Company Secretary and their spouses and minor children did not carry out any transaction in the shares of the Company during the period. There has been no material departure from the best practices of corporate governance. Concrete efforts need to be undertaken to discourage both piracy and counterfeiting. the Company is also investing in cost improvement initiatives and product portfolio optimization to partially offset the impact of inflation / devaluation.

loyalty and dedication of the employees.audited l l l 1. The value of investments made by the staff retirements funds as per their financial statements are as follows:Value (Rs millions) ALPL Pension Fund (Based on year ended November 30. Munir A. bankers and stakeholders. Kamran Y. 2011 53 .audit in progress ALPL Provident Fund (Based on year ended November 30. Malik Saadatullah (Company Secretary) Acknowledgements The Board of Directors would like to take this opportunity to express their deep appreciation of the commitment. Secretary 1 2 3 4 5 6 7 8 9 Mr. Shaikh Mr. We would also like to acknowledge the support and cooperation received from our esteemed customers. Shamim Ahmad Khan Syed Anis Ahmed (CFO) Mr.l Outstanding taxes. suppliers. Sadi Syed . Shaikh Chairman February 22nd. Mirza Mr. Munir A.326 l 441 l During the period. have been duly disclosed in the Financial Statements. statutory charges and duties if any. 2009) .Alternate Director to Thomas C Freyman Mr. Asif Jooma Mr. Attendance by each Director/CFO/Company Secretary was as follows: Number of Board Meetings Attended 4 4 2 4 3 4 4 4 4 Name of Directors/CFO/Co. four meetings of the Board of Directors were held. 2009) . from last year in the operating results of the Company have been highlighted and explained. Angelo Kondes Syed Anis Ahmed Mr. Significant deviations.

174.606.746 3. 2010 Twelve months ended November 30.762.008.107) 1.321.368 1.576 979.198 5.835 33. 2006 November 30.978 266.964.666 885. 2008 November 30.130 717.418 3.785) (494.176. 293.790.784 607.055 679.580.129.761.964. 2006 Twelve months ended November 30.879 373.564.084 2.129 5.003 197.560.841 745.369 3.787 1.421 1.515 (494.481.877.085.681 992.884 339.055 Total Assets Issued.216.425 979.539 115.097 3.732 3.023 4.555.592 1.016 2.558.775 * Includes final dividend amounting to Rs.604 3.576 1.003 173.038 1.129 4.662.673 5. 2008 Profit and Loss Net sales including toll manufacturing service fee Gross profit Operating profit Profit before taxation Taxation Profit after taxation Ordinary cash dividends * 10.131 878.003 154.100 749.426) 1.273 110.283 2.844 21.710 1.853 2.414 881.757 (181.502 6.167 2.259.001 293.786 4.489 1.Key Operating and Financial Data Financial Position December 31.512 100.227.687.267.606 1.240.908.property.118 934.072 1.701 5.460 119. 2005 Balance Sheet Fixed Assets .736.415) 819.701 million proposed by the Board of Directors subsequent to the period / year end.681.058.591.321 1.890 1.689.539 5.004 2.199 512.652 864.596 56.380.169 5. 2009 Twelve months ended November 30.856.095 4.264.368 979. plant and equipment Other Non-Current Assets Current Assets Rupees in '000 1.995.081 696.035.517.200) (1.777 2.790.116 4.206 5.182 1. Abbott Pakistan Annual Report 2010 54 .246.051.127) 1.187.450.237.437.977 3.785 42.710 979.762.042.503 875.804 Twelve months ended November 30.484 1.469.203 (325.049.744.309 1.257 564.005 1.821 35.129. 2010 November 30.005) 496.741.238.583 1.489 1.931 Cash Flows Operating activities Investing activities Financing activities Cash and cash equivalents at the end of the period / year 917.584.912.118 2. 2005 7.152 3.087 1.550 378.836) (1.181 2.701 3.211 4.502 8.516.401 1.944 489.882 5.914.568. subscribed and paid-up capital Capital Reserves Revenue Reserves Total Equity Non-Current Liabilities Current Liabilities Total Liabilities Total Equity and Liabilities Operating and Financial Trends Thirteen months ended December 31.877.109 1.174. 2007 Restated November 30.606 3.123.226 1.700 1. 2007 Restated Rupees in '000 Twelve months ended November 30.003 46.160.282 442.726.452 1.411.233 3.129.185 4.412 2.074.118 (93.254 3.434.342.717 (913.035.887 1.503 (374.227 489.863 140.262) 770.421 979.503) (342.635.049.227 459.524) (173.003 130.425 1.516.313 1.454 2. 2009 November 30.681.906 609.439 793.627 1.023 34.520.886 44.455.749 33.241.

889 33.90 120.900.93 0.41 1.49 126.900. of days in inventory No.00 59.00 1.5% 28.83 5.000.02 0.3% 22.300 Times 0. 2008 Twelve months ended November 30.69 5.79 46.300 0.2% 18. Rs.00 1.8% 28.45 110.08 96. Rs.19 8.22 12.52 347.5% 12.900.4% 17.5% 18.00 9.56 85.900.94 6.9% 21.14 90.00 1.40 Times 494.9% 26.3% 100.914.74 126.12 2.02 5.36 53.803 36.100 67. 2005 Ratios Gross profit ratio EBITDA* margin to sales Net profit to sales Return on equity / Return on capital employed Return on assets No.80 219. of days in payables Operating cycle Total assets turnover ratio Fixed assets turnover ratio Current ratio Quick / Acid test ratio Earnings per share .57 1.00 77.77 458.38 2.5% 15.7% 20.42 Times 2.36 1.7% 30.1% 24.24 8.05 0.75 8.32 29.40 1.0% 132.33 144.1% 20. Times Number 33.36 9. Taxation.12 1.49 76. '000 39.331.24 2.50 77.744.05 5.9% 24.0% 21.63 2.50 1.00 233.70 42.986.8% 12.Thirteen months ended December 31.00 2.00 12. of shares at end of period / year Dividend yield ratio Dividend pay out ratio Dividend cover ratio Interest cover ratio Break-up value per share with / without surplus on revaluation of fixed assets Market value per share at the end of the period / year Market value per share (High) Market value per share (Low) EBTIDA* Unit % % % % % Days Days Days Days Times Times Times Times Rs.300 0.03 0.239 Note : Sales include toll manufacturing service fee *EBITDA (Earnings Before Interest. Depreciation and Amortisation) ** Basic / Diluted 55 .3% 121. Rs.03 0.1% 119.38 97.5% 130.54 43.42 65.09 1.59 486.61 436.00 13.97 7.300 0. 2007 Restated Twelve months ended November 30.65 18.680.80 40.76 3.Restated** Cash dividend per share Price earning ratio Bonus shares issued No.000 97.38 8.300 0.81 3.09 11.96 109.46 97.13 27. 2006 Twelve months ended November 30.84 4.05 9.04 6.75 Number 97.0% 27. 2009 Twelve months ended November 30.21 2.00 19.01 10.18 181.22 53.73 1.50 210.97 12.2% 17.443.21 1.605 50.51 4.8% 7.084.92 34.300 0.28 3. Rs.46 4.27 Rs.416.76 62.585 37.51 97.0% 26. 2010 Twelve months ended November 30.15 109.2% 10.00 20.55 1.94 51.00 141.00 1.3% 101.3% 12.00 15.60 415.29 4.231 43.69 0.39 4.89 10.1% 16.73 51.95 10.19 0.68 206.36 4. of days in receivables No. Rs.18 2.41 1.00 136.99 53.46 3.00 244.05 Times 0.900.

058 5.65 12.38 144.83 2008 2009 2010 Note: 2010 graphs are based on financial period ended December 31.96 2010 2005 2006 2007 8.00 109.02 6.265 Rs.08 2009 39.22 50.Restated (Rupees) Price earning ratio (Times) 206.584 Rs.555 24% 8.46 15.18 43.49 9.74 Rupees 96.05 10.09 181.80 19.914 6.238 7.50 20.450 1. 2010 Abbott Pakistan Annual Report 2010 9.68 36.Key Operating and Financial Data Net sales (Including Toll Manufacturing Service Fees) PBT 26% 24% PAT PBT as % of sales 10.45 2005 2006 2007 2008 33.227 886 1.123 1.32 12.13 1.51 110.00 10.81 13. in million 1.Graphical Presentation .741 56 .996 1. in million 5.517 1.177 1.043 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 609 17% 864 876 16% 10% 2010 Book value per share Market value per share Earnings per share .33 37.

of days in inventory No.9 24.0 Vertical Analysis Current Ratio Capital Expenditure 4.38 9. in million 2.36 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 7.73 2009 8.Return on equity / Return on capital employed No.89 121.03 2010 2.76 3.19 26.97 24.79 2010 8.18 4.3 30.22 10.50 274 Times 2005 2006 2007 2008 2009 2.05 28.99 100.8 8.19 2005 2006 2007 2008 255 2009 318 2010 57 493 . of days in receivables 130.55 365 417 Rs.75 132.94 101.1 119.2 % Days 18.

4 0.0 Rupees ' 000 3.199 512.517.681.810 201. 2009 34.980.9 5.0 40.965 161.0 26.763 2.4 16.238.687.049.5 33.181 3.8 100.084 2.421 Thirteen months ended December 31.460 119.0 Rupees ' 000 3.627 1.484 853.559 1.130 4.9 17.673 5.790.9 0.368 % 78.1 23.368 Twelve months ended November 30.635.995.7 1.035.256 3.129 5.net Profit for the period / year 3.914.489 4.748 3. 2005 Balance Sheet Total Equity Non-Current Liablitites Current Liabilities Total Equity and Liabilities Rupees ' 000 3.058.8 2.185 4.700 5.1 10.0 1.545 65.185 108.1 1.568.267.7 8.844 21.8 15.309 1.8 17.564.4 23.741.129 4.0 14.0 25.100 749.884 100.072 100.4 18.5 14.558.975 49.221.241.129.4 100.038 1.964.8 100.257 564.227 100.Vertical Analysis December 31.169 5.0 Profit and Loss Account Net sales including toll manufacturing service fee Cost of goods sold and services Gross Profit Selling and distribution expenses Administrative expenses Rupees ' 000 % Rupees ' 000 % Rupees ' 000 % Rupees ' 000 % Rupees ' 000 % Rupees ' 000 % 10.525 875.912.425 % 84.240.6 2.6 70.2 70.131 1.689.552.407 2.020 1.7 23.0 17.278 1.5 27.594.469.681.0 57.079 182.129.7 7.601.6 100.049.978 266.859 1.313 1.5 42.454 3.542.654.401 3.0 27.6 24.8 2.5 10.512 100.949.0 24.187 121.397.8 1.9 100.051 1.606.550 378.239 3.0 65.4 2.321 777.4 65.450.584.391 3.273 110.606 1.5 1.8 2.035.787 Finance cost Profit before taxation Taxation .081 696.0 1.6 2.705.4 66.890 129.314 1.887 3.866 173.765 878. 2008 November 30.9 2.701 7.2 7.987 2.503 2.3 1.005 1.762.0 Rupees ' 000 4.8 2.394 179.7 2.0 43.933.227.252.109 908.4 100.7 0.380.581 3.943 866.1 6.890 100.6 68.564.818.246.0 66. 2006 29.001 100.583 2.2 12.710 % 70.200.094.9 100.2 0.118 6.055 % 82.264.592 5. 2008 31.4 100.908.722 130.915 1.0 1.5 16.412 4.259.906 609. 2010 November 30.0 30.9 14.455. 2007 Restated 33.8 0.353.421 % 67.2 25.411.4 2.4 100.2 0.697 2.2 2.2 66.516.6 100. 2010 33.055 Twelve months ended November 30.0 15.660 1.128.227 459.8 5.2 16.2 7.023 4.2 7.0 1.9 2.308.202 1.123.576 Twelve months ended November 30.4 16.471.6 2.4 0.112 1.8 5.0 60.182 1.0 Rupees ' 000 3.129.022 100.101 267.555.042.032 2.0 Rupees ' 000 3.787 114.0 Non-Current Assets Current Assets Total Assets 1.4 10. 2007 Restated November 30.064 135.964. 2006 November 30.5 0.8 2.7 0.0 10.452 2.710 Twelve months ended November 30.345 2.8 100.6 0.3 34.0 72.0 1.0 1.666 885.4 5.321.902 1.520.539 115.176.7 15.681 4.0 13.587 1.7 15.9 Other operating income Other operating charges 109.790.744.226 1.530 1.405 174.378 141.4 3.4 32.652 864.576 % 65. 2005 29.886 44.879 373.6 7.663 3.425 Twelve months ended November 30.089 105.5 14.414 881.944 Abbott Pakistan Annual Report 2010 58 .2 25.237.511 1.5 14. 2009 November 30.439 5.0 57.3 100.704 1.856.

705.710 Twelve months ended November 30.3 16.200.606 1.906 609.321.257 564.4) (27.227 6.450.8 111.199 512.226 1.2) (6.555.666 885. 2007 Restated 4.744.129.169 5.7 109.539 115.787 114.129 4.460 119.391 3.4 7.559 1.3 109.627 1.8) (20.944 Abbott Pakistan Annual Report 2010 .810 201.681.049.949.1) (63.049.353.6 (7.035.2 58.0 20. 2007 Restated Rupees in ' 000 2006 2005 December 31.221.2) (7.987 2.094.660 1.3 19.129 5.005 1.886 44.5 (12.2 12.064 135.421 1. 2010 2009 2008 November 30.4 93.421 Thirteen months ended December 31.587 1.246.2 % increase / (decrease) over preceeding year* 18.5 15.176.606. 2006 3.5 98.123.5 59.7) 25.856.1 14.890 129.0) 150.058.3) (8.995. 2009 (3.7 (27.100 749.1) 20.592 5.9 2.6) (20.8 (3.081 696.530 1.2 1.5 22.9 (5.380.701 7.741.0) 5.401 3.6 (1.238.129.2) (28.4 11.4) 2.181 3.9 Twelve months ended November 30.964.6 39.5 33.5 (12.023 4.763 2.239 3.241.576 Twelve months ended November 30.525 875.256 3.394 179.455.6 23.558.4 11.185 108.368 1.581 3.700 5.859 1. 2010 2009 2008 November 30.7) 6.748 3.051 1.9 121.378 141.550 378.035.965 161.568. 2007 2006 2005 % increase / (decrease) over preceeding year* Balance Sheet Total Equity Non-Current Liability Current Liabilities Total Equity and Liabilities Non-Current Assets Current Assets Total Assets 3.980.129.237.564.425 Twelve months ended November 30.552.511 1.309 1.321 777.0 12.884 30.452 2.1) (17.564.1) 2.7 5.4) (15.520.313 1.6 Thirteen months ended December 31. 2006 22.933.4 14.469.4 (1.7) (1. 2008 (13.252.264.542.4 (7.9 16.663 3.583 2.1 15.818.762.4 17.866 173.6 31.038 1.0 12. 2007 24.5 38.020 1.308.5 22.6) (29.652 864.5 (29.3) 20.915 1.978 266.407 2.8) 34.397.2 (23.022 Other operating income Other operating charges 109.4 18.0 9.704 1.227.890 5.6) 12.512 100.7 6.887 3.1 14.411.079 182.844 21.314 1.902 1.5 11.687.267.912.368 Twelve months ended November 30.7 13.681.9) 56.7 16.7) 9.975 49.722 130.3 (4.6 47.3 (12.414 881.0 26.914.345 2.503 2.8 (23.654.273 110.0 Twelve months ended November 30.3 16.055 1.072 7.259.240. 2008 3.673 5.601.227 459.3) (39.790.2 7.8 32.7 15.9 (6. 2005 Profit and Loss Account Net sales including toll manufacturing service fee Cost of goods sold and services Gross Profit Selling and distribution expenses Administrative expenses 10.6) (29.0) 14.185 4.545 65.0 21.7 13.681 4.517.1 19.454 3.112 1.4 99.7 13.187 121.Horizontal Analysis December 31.1 17.576 1.4 8.405 174.0 22.584.484 853.1) 40. 2010 (9.790.943 866.8 98.8 3.7 22.109 908.101 267.5) 20.964. 2009 3.594.471.635.439 5.7 10.055 Twelve months ended November 30.4 85.697 2.2 4.516.131 1.6 21.710 1.130 4.202 1.689.787 Finance cost Profit before taxation Taxation .042.908.879 373.425 1.6 7.412 4.7) Twelve months ended November 30.118 6.089 105.489 4.182 1. 2010 3.2) 18.2 17.001 5.4 7.6 22.6 Twelve months ended November 30.278 1.128.5) 8. 2005 20.765 878.7 (6.8 27.0) Twelve months ended November 30.net Profit for the period / year * Compared with restated figures 59 Rupees '000 8.084 2.032 2.

Horizontal Analysis Abbott Pakistan Annual Report 2010 60 .

2010 (Rupees ‘000) Wealth Generated Total Revenue inclusive of sales tax and other operating income Bought-in-materials and services 11.747.41 22.525 206.673 8.00 1.98 100.945.076 930.752 38.183 3.648.980 155.337.03 44.50 12.765 906.10 To To To To Providers To Providers To Employee Government Society of capital of finance Company 0.49 22.86 22.39) 100.03 0.09 6.862 233.41 0. 44.09 To To To To Providers Employee Government Society of capital To Providers To of finance Company 61 -5.49 16.84 13.10 12.41 0.174.752 489.58 % 12.417 2.95 3.019.752 % Twelve months ended November 30.102 650.18) (5. 2009 (Restated) (Rupees ‘000) % 100 100 Wealth Distribution To Employees Salaries.611.804 2.50 2010 2009 23.41 0.564 146.673 40.10 7.91 23.39 .169 6.392.85 3.945. 293.00 * Dividends Include final dividend amounting to Rs.300 (349.520 550.828) 2.10 0.701 million proposed by the Board of Directors subsequent to the period / year end.834 340.648.161 593.98 % 22.530 256.58 0.867 3.70 5.35 40.84 38.502 3.562 855 1.856 7.72 5.421 97.Statement of Value Addition and its Distribution Thirteen months ended December 31.098. allowances and staff welfare To Government Income Tax Workers' Funds and Central Research Fund Sales tax and excise duty To Society Donations To Providers of Capital Dividends* To Providers of Finance Finance cost To Company Depreciation Added to / (Utilised from) Unappropriated profit 1.502 3.79 (13.35 0. wages.128) (142.

the Board includes four non-executive Directors including one independent Director representing minority shareholders. Company Secretary and Chief Internal Auditor. All the directors on the Board are fully conversant with their duties and responsibilities as directors of corporate bodies. 13. The Directors. The Directors have confirmed that none of them is serving as a director in more than ten listed companies. The minutes of the meetings were appropriately recorded and circulated in time. The Company has developed a vision / mission statement. 15. which has been circulated and signed by all the Directors and employees of the Company. whereby a listed company is managed in compliance with the best practices of corporate governance. The meetings of the Board were presided over by the Chairman and. 8. The Board approves the appointment. The Company encourages representation of independent non-executive Directors and Directors representing minority interests on its Board of Directors. All the resident Directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company. 6. 5. 11. 3. including this Company. Written notices of the Board meetings. The Company has adopted a Code of Business Conduct. None of the resident Directors are a member of the stock exchanges on which the Company's shares are listed. 14. The Board has formed an Audit Committee. were circulated at least seven days before the meetings. The Board met at least once in every quarter. The financial statements of the Company were duly endorsed by the Chief Executive and Chief Financial Officer. remuneration and terms and conditions of Chief Financial Officer. comprising two non-executive Directors Abbott Pakistan Annual Report 2010 62 . 2010. The Company has complied with all the corporate and financial reporting requirements of the Code. 12. The Directors' report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. by a director elected by the Board for this purpose. It comprises three members all of whom are non-executive Directors. The Company has applied the principles contained in the Code in the following manner: 1. The Board had arranged an orientation course of the Code of Corporate Governance for its directors in the previous year to apprise them of their role and responsibilities. including appointment and determination of remuneration and terms and conditions of appointment of the Chief Executive have been taken by the Board.Statement of Compliance With the Code of Corporate Governance This statement is being presented to comply with the requirements of the Code of Corporate Governance (the Code) contained in the listing regulations of Karachi. a Development Financial Institution or a Non-banking Financial Institution. In addition. 4. All related party transactions have been reviewed and approved by the Board and are carried out on normal / agreed terms and conditions in accordance with the agreements. the Company has prepared and fully implemented an Ethics Compliance Program under which a number of core policies have been prepared to cover various facets of business practices. in his absence. The Board has also formed a Human Resource Committee. 10. 7. overall corporate strategy and significant policies of the Company. All the powers of the Board have been duly exercised and decisions on material transactions. 16. before approval by the Board. Chief Executive and Executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. Lahore and Islamabad Stock Exchanges for the purpose of establishing a framework of good governance. 2. 9. No casual vacancy occurred in the Board during the financial period ended December 31. as determined by the Chief Executive. along with agenda and working papers. At present.

20. 18. The Board has set-up an effective in-house Internal Audit function. We confirm that all other material principles contained in the Code have been complied with. The meetings of the Audit Committee were held at least once every quarter prior to approval of the quarterly. The terms of reference of the Committee have been formed and advised to the Committee for compliance. Shaikh Chairman February 22. the Board has formed a Shares Transfer Committee and a Banking Committee. half yearly and final results of the Company and as required by the Code. 19. that they or any of the partners of the firm. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Listing Regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. the Board has made arrangements for periodic internal audits by an independent firm of Chartered Accountants. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review program of the Institute of Chartered Accountants of Pakistan. By Order of the Board Munir A. 21. 17. In addition.and one executive Director. their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan. In addition. 2011 63 . Both the firm and the in-house internal audit staff are conversant with the policies and procedures of the Company.

Karachi-75350. for the period ended December 31.M. We are only required and have ensured compliance of requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the audit committee. A-35. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Board's statement on internal control covers all controls and the effectiveness of such internal controls. Our responsibility is to review. to the extent where such compliance can be objectively verified. The Listing Regulations of the Karachi.deloitte. Chartered Accountants Engagement Partner: Nadeem Yousuf Adil Karachi Date: 22 February 2011 Abbott Pakistan Annual Report 2010 64 . Further. all such transactions are also required to be separately placed before the audit committee. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code. Further.com Review Report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of Abbott Laboratories (Pakistan) Limited (the Company) to comply with the Listing Regulations of Karachi. whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Code of Corporate Governance and report if it does not. UAN: +92 (0) 21 111-55-2626 Fax: +92 (0) 21 3454 1314 Web: www. 2010. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance. with the best practices contained in the Code of Corporate Governance as applicable to the Company. Yousuf Adil Saleem & Co Chartered Accountants Cavish Court. Sharea Faisal. As part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any procedures to determine whether the related party transactions were under taken at arm's length price or not. Pakistan. in all material respects. Lahore and Islamabad Stock Exchanges where the Company is listed. Lahore and Islamabad Stock Exchanges require the Company to place before the Board of Directors for their consideration and approval related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length price recording proper justification for using such alternate pricing mechanism. Based on our review. Block 7 & 8 KCHSU.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. statement of comprehensive income. Zakat deductible at source under Zakat and Ushr Ordinance. statement of comprehensive income. give the information required by the Companies Ordinance. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. (b) in our opinion: (i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance. 2010 and of the profit.com Auditors’ Report to the Members We have audited the annexed balance sheet of Abbott Laboratories (Pakistan) Limited (the Company) as at December 31. It is the responsibility of the Company's management to establish and maintain a system of internal control. as well as. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. and (ii) (iii) the business conducted. An audit also includes assessing the accounting policies and significant estimates made by management. Pakistan. cash flow statement and statement of changes in equity together with the notes forming part thereof. with which we concur. Block 7 & 8 KCHSU.deloitte. 1984. 1984. (c) in our opinion and to the best of our information and according to the explanations given to us. Chartered Accountants Engagement Partner: Nadeem Yousuf Adil Karachi Date: 22 February 2011 65 . Sharea Faisal. in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at December 31. we report that: (a) in our opinion. was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance. evaluating the overall presentation of the above said statements. 1984. Our responsibility is to express an opinion on these statements based on our audit. were necessary for the purposes of our audit. cash flows and changes in equity for the period then ended. 2010 (hereinafter referred to as 'period') and we state that we have obtained all the information and explanations which. UAN: +92 (0) 21 111-55-2626 Fax: +92 (0) 21 3454 1314 Web: www. proper books of account have been kept by the Company as required by the Companies Ordinance. Karachi-75350.1. and are in agreement with the books of account and are further in accordance with accounting policies consistently applied except for the changes as stated in note 2. 2010 and the related profit and loss account. the balance sheet. An audit includes examining. profit and loss account. 2009 to December 31. A-35. We believe that our audit provides a reasonable basis for our opinion and. and (d) in our opinion. on a test basis. investments made and the expenditure incurred during the period were in accordance with the objects of the Company.M. the expenditure incurred during the period was for the purpose of Company's business. to the best of our knowledge and belief. total comprehensive income.3. 1980 (XVIII of 1980). after due verification. 1984. evidence supporting the amounts and disclosures in the above said statements. and. cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan. Yousuf Adil Saleem & Co Chartered Accountants Cavish Court. for the thirteen month period from December 1.

2010 Note December 31.049.877.912.512 5 115.762.604 3. 2010 2009 (Restated) (Rupees ‘000) SHARE CAPITAL AND RESERVES Authorised capital 3 2.380.777 2.003 197.000 Issued. November 30.539 979.000.085.003 154.732 3.000.000 November 30.700 1.capital Reserves .489 1.460 979.Balance Sheet As at December 31.606 6 1.revenue Total Equity NON-CURRENT LIABILITY Deferred taxation CURRENT LIABILITIES Trade and other payables Total Liabilities CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES 4 979.853 2.198 7 5.434.568.736.369 3.726.790.003 173.000.238.000 2.606.592 1.167 2. subscribed and paid-up capital Reserves .116 1.576 5.882 1. 2008 (Restated) 2.421 4.182 119.627 100.964.710 Abbott Pakistan Annual Report 2010 66 .481.

705.Note December 31.673 5.129 5.000 234.560.877.considered good Trade deposits and short-term prepayments Accrued profit Other receivables Taxation recoverable Cash and bank balances Total Current Assets TOTAL ASSETS 11 12 13 14 15 16 17 72.421 69.489 3.property.748 1.200 172.425 81.747 1.933. Chief Executive Director 67 .053 295.594 35.825 21.203 2.097 1.580 4.730 770. 2008 (Restated) 1.069.634 1.430 2.581 47.773 1.596 39. November 30.576 8 9 10 1.391 November 30.434 1.801 14.708 1. plant and equipment Long-term loans and advances Long-term deposits Long-term prepayments Total Non-current Assets CURRENT ASSETS Stores and spares Stock-in-trade Trade debts Loans and advances .715 286.785 6.633 263.393 6.455.868 134.675.277 90.316 164.087 3.662.710 The annexed notes 1 to 38 form an integral part of these financial statements.594.790.267 130.170 705 79.049.393 5.465 258.148 1.798 819.784 3.779 4.185 41.696.051.856.185 4. 2010 2009 (Restated) (Rupees ‘000) NON-CURRENT ASSETS Fixed assets .259.964.785 31.835 23.

321.252.701 10.118 6.944 (Rupees) Earnings per share .906 609.257 564.995.038 8.741.313 1.022 109.744.978 266. 2009 (Restated) (Rupees ‘000) 8.890 129. 2010 Note Thirteen months ended December 31.101 267.687.080 19.072 Sales .915 1.818.Profit and Loss Account For the thirteen months ended December 31.079 182. Chief Executive Director Abbott Pakistan Annual Report 2010 68 . 2010 Twelve months ended November 30.503 2.943 866.995.530 1.810 201.765 878.314 1.525 875.308.378 141.987 2.450.701 19 21 22 23 24 25 26 7.038 1.128.02 6.663 3.131 1.176.787 3.22 The annexed notes 1 to 38 form an integral part of these financial statements.431.basic / diluted 27 12.net Service fee for toll manufacturing Cost of goods sold and services Gross profit Selling and distribution expenses Administrative expenses Other operating income Other operating charges Finance cost Profit before taxation Taxation .net Profit for the period / year 18 10.601.

net of tax Total comprehensive income for the period / year 20.676 The annexed notes 1 to 38 form an integral part of these financial statements.1. Chief Executive Director 69 .176.677) 1. 2010 Note Thirteen months ended December 31.604 825.7 1.749 (36.Statement of Comprehensive Income For the thirteen months ended December 31.515) 216. 2010 Twelve months ended November 30.944 (50.072 Profit for the period / year Other comprehensive income for the period / year .267 290.Tax on actuarial losses / (gains) Other comprehensive income .426) 13.140.Actuarial (losses) / gains on defined benefit pension plan .119 (73. 2009 (Restated) (Rupees ‘000) 609.

475 116.757 The annexed notes 1 to 38 form an integral part of these financial statements.839) 38. 2009 (Restated) (Rupees ‘000) CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Income taxes paid Long-term loans and advances .442.714) 917.503 1.415) 48.784 819.171.051.303 770.074. 2010 Twelve months ended November 30.785) (318.231 (374.530) (490.512.422) (8.705) 1.974) (7.424) 1.net Net cash inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure Sale proceeds of fixed assets Interest income Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Finance cost paid Dividends paid Net cash outflow from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period / year Cash and cash equivalents at the end of the period / year (3. Chief Executive Director Abbott Pakistan Annual Report 2010 70 .885) (494.592 (7.087 (2.489 770.525) (1.017) 20.023 (580.784 (492.342 (181.262) (280.200) 28 1.823 79.net Long-term deposits .Cash Flow Statement For the thirteen months ended December 31.net Long-term prepayments .737) (1.174.199) (661) 1. 2010 Note Thirteen months ended December 31.039 (358.

Statement of Changes in Equity For the thirteen months ended December 31.182 (250.933.259.368.604 825.140.097 46.3 (b)) Other comprehensive income for the year.restated Transactions with owners.097 - Reserves Revenue Reserves General UnReserve appropriated Profit (Rupees ‘000) 2.140.422 (293. 2010 Profit for the thirteen months ended December 31. net of tax Total comprehensive income for the thirteen months ended December 31.000) (600.1.070 1.947 (293.944 (36.003 - 108.422 (230. recorded directly in equity Final dividend for the year ended November 30. 2009 Capital contribution from Abbott International LLC. Chief Executive Director 71 .310 230.701) (195.103) 19.589.944 (36.097 23.677) 1.701) (881.176.604 825.536 (293. 2010 Capital contribution from Abbott International LLC.076 127.944 (36.000 Total Total Equity Balance as at November 30.756 - 1. 2010 Share Capital Capital Reserves OtherReserve arising on (Note merger 2.701) (881.072 216.912. 2010. 2008 Transfer from general reserve to unappropriated profit subsequent to the year ended November 30.103) 547.000 600.267 1.801) 947.238. 2009 Transfer from unappropriated profit to general reserve made subsequent to the year ended November 30. USA Balance as at November 30.176.676 979. 2010 Transactions with owners.422 1.267 1.003 46.072 216.701) (195.097 - 19.140. USA Balance as at December 31.000) 66.460 3.267 979.003 979.314 2.509 - 3.801) 23.000) (293.512 - - - - - 609.259.788.1.072 216.314 151. 2008 declared subsequent to the year end Interim dividend for the year ended November 30. 2009 declared subsequent to the year end Interim dividend for the thirteen months ended December 31.restated (note 2.003 - 46.176.756 127. 2008 Transfer from general reserve to unappropriated profit Total comprehensive income for the year ended November 30.604 825.314 3. 2009 Balance as at November 30.457 - (293. 2009 Total comprehensive income for the thirteen months ended December 31.457 2. net of tax .701) (881.701) (195.677) 1.676 609.422 250.076 3.182 547. 2010 Other comprehensive income for the thirteen months ended December 31.680 - 2.460 - - - - - 1.677) 1.538.103) 19. recorded directly in equity Final dividend for the year ended November 30.801) 23.000 (293.539 The annexed notes 1 to 38 form an integral part of these financial statements.3 (b)) Total comprehensive income for the year .568. 2009 . 2010 979.676 609.238.538.restated Profit for the year .076 2.22) 46.restated (note 2.

1984. diabetic care.1. 2010 1. 1984. It is a disclosure based standard that has resulted in no change in previously identified reportable segments (refer note 2. 2. molecular devices. THE COMPANY AND ITS OPERATIONS Abbott Laboratories (Pakistan) Limited (The Company) is a public limited company incorporated in Pakistan on July 02. 1984. 2. and its shares are quoted on Karachi. provisions of and directives issued under the Companies Ordinance. The current year figures pertain to thirteen months ended December 31. 2010. 2010 (period) and the corresponding figures pertain to twelve months (year) ended November 30. Landhi. the accounting policy for recognition of actuarial gains / losses has been changed in accordance with option allowed by IAS 19 ‘Employee Benefits’ to appropriately reflect the operating results of the Company. hospital and consumer products and in providing toll manufacturing services. the provisions. The Company is principally engaged in the manufacture. The address of its registered office is opposite Radio Pakistan Transmission Centre. import and marketing of research based pharmaceutical. the ultimate holding company.21 and 33). 2009. and therefore are not comparable. under which segment information is presented on the same basis as that used for internal reporting purposes. In case requirements differ. During the period ended December 31. diagnostic.1 Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan.3 Changes in accounting policies and disclosure a) Adoption of new standard effective in the current year and adopted by the Company IFRS 8 ‘Operating Segments’ – The standard requires a ‘management approach’. Hyderabad Road. shall prevail. 2.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation 2. 2. Lahore and Islamabad stock exchanges. of or directives issued under Companies Ordinance. b) Recognition of actuarial gains and losses on pension scheme directly in equity During the period. The change in accounting policy has the following impact on these financial statements: Abbott Pakistan Annual Report 2010 72 . Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance. Changes in Accounting Estimates and Errors". The change in accounting policy has been recognized retrospectively and comparative information has been restated in accordance with the requirements of IAS 8 "Accounting Policies. Previously actuarial gains / losses were recognized in profit and loss account. the Company changed its financial year end from November 30 to December 31 to bring it in line with the financial year followed by Abbott International LLC. 1948. Karachi.1. nutritional.2 Accounting convention These financial statements have been prepared under the historical cost convention except certain financial instruments which are measured at fair value.1.Notes to the Financial Statements For the thirteen months ended December 31. The actuarial gains and losses are now recognised in the period in which they occur in other comprehensive income and presented in the statement of comprehensive income. USA.

21) The change in accounting policy has no impact on the balance sheet for the current and previous periods.1. net of tax Increase / (decrease) in earnings per share Statement of comprehensive income: Increase / (decrease) in profit for the period / year. but are either not relevant or do not have any material effect on the financial statements of the Company: IFRS 3 (Revised) ‘Business Combinations’ IFRS 4 ‘Insurance Contracts’ IFRS 5 (Amendments) ‘Non-current Assets Held for Sale and Discontinued Operations’ IAS 1 (Amendment) ‘Presentation of financial statements’ IAS 23 (Revised) ‘Borrowing Costs’ IAS 27 (Amended) ‘Consolidated and Separate Financial Statements’ IFRIC 9 (Amendment) ‘Reassessment of embedded derivatives and IAS 39.677 (36. net of tax (Decrease) / increase in other comprehensive income for the period / year.37 (216.677) (216.604 Rupees 36.4 New / revised standards and interpretations to existing standards effective from current period or early adopted but not relevant to the Company The following standards (revised or amended) and interpretations became effective for the current financial period or early adopted. Financial instruments: Recognition and measurement’ IFRIC 15 ‘Agreement for Construction of Real Estate’ IFRIC 16 ‘Hedges of a net investment in a foreign operation’ IFRIC 17 ‘Distributions of Non-cash Assets to Owners’ IFRIC 18 ‘Transfers of Assets from Customers’ IAS 38 (Amendment) ‘Intangible assets’ IAS 36 (Amendment) ‘Impairment of assets’ IFRS 2 (Amendments) 'Share-based Payments' .Thirteen months ended December 31.604) (2.‘Group cash-settled share-based payment transactions’ 73 . net of tax 36.604) 216.677 0. 2. 2009 (Rupees ‘000) Profit and loss account: Increase / (decrease) in profit for the period / year. 2010 Twelve months ended November 30.

amendments and interpretations to existing standards have been published and are mandatory for accounting periods beginning on or after January 1. 2013). 2011) . Minimum Funding Requirements and Their Interaction’ (effective for annual period s beginning on or after Januar y 1. 2011) ‘Prepayments of a minimum funding requirement’. IFRIC 19 ‘Extinguishing Financial Liabilities with Equity Instruments’ (effective for annual periods beginning on or after July 1. IAS 24 (Revised). 2010) – ‘Classification of rights issues’ . Provided certain conditions are met. IFRS 9 introduces new requirements for classifying and measuring financial assets. 2011). these issues had to be accounted for as derivative liabilities. The amendments correct an unintended consequence of IFRIC 14. Abbott Pakistan Annual Report 2010 74 . The amendment is intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset. and the amendments correct this. entities are not permitted to recognise as an asset some voluntar y prepayments for minimum funding contributions. ‘Financial instruments: recognition and measurement’. 2011) – ‘T ransfers of financial assets’ – This amendment increases the disclosure requirements for transactions involving transfer of financial assets.1. IFRIC 13 (Amendment) 'Customer Loyalty Programmes' (effective from annual periods on or after Januar y 1. Without the amendments. ‘Related party disclosures’ (effective for ann ual periods beginning on or after Januar y 1. the equity instruments should be measured to reflect the fair value of the financial liability extinguished.The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other governmentrelated entities. This was not intended when IFRIC 14 was issued. Previously.Notes to the Financial Statements For the thirteen months ended December 31. IFRS 9 ‘Financial instruments’ (effective for annual periods beginning on or after January 1. 2010) – This Interpretation addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability. It requires a gain or loss to be recognised in profit or loss. This standard is the first step in the process to replace IAS 39. IFRIC Interpretation 14 – IAS 19 (Amendment) ‘The Limit on a Defined Benefit Asset. IAS 32 (Amendment) ‘Financial Instruments: Presentation’ (effective for annual periods beginning on or after February 1. 2010 2. 2011 or later periods: IFRS 7 (Amendment) ‘Financial Instruments: Disclosures’ (effective for annual periods beginning on or after July 1.The amendment addresses the accounting for rights issues that are denominated in a currency other than the functio nal currency of the issuer. If the fair value of the equity instruments issued cannot be reliably measured. 2011). which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.5 New / revised standards and interpretations to published accounting standards that are issued but not yet effective The following standards. IAS 34 (Amendment) 'Interim Financial Reporting' (effective from annual periods on or after January 1. The amendment clarifies that the fair value of award credits take into account the amount of discounts or incentives that otherwise would be offered to customers that have not earned the award credits. such rights issues are now classified as equity regardless of the currency in which the exercise price is denominated. It adds further examples to the list of events or transactions that require disclosure under IAS 34 and remove references to materiality that describe other minimum disclosures.

Actual results may differ from these estimates.1). 2. requires management to make judgments. estimates and assumptions that affects the application of policies and the reported amount of assets. which is stated at cost. The financial statements are presented in Pakistani Rupees.8.1. iii) Estimates of receivables and payables in respect of staff retirement benefit schemes (note 2. or in the period of the revision and future periods if the revision affects both current and future periods.3 Fixed assets Property.2 Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (the "functional currency").13 and note 20). plant and equipment (note 2.The above mentioned new / revised standards. note 11 and note 12). The estimates underlying the assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period. which is also the Company’s functional currency. income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. ii) Provision for obsolete and slow moving stores and spares and stock-in-trade (note 2.3 and note 8. 75 . 2. 2. liabilities. Judgments and estimates made by the management that may have a significant risk of material adjustments to the financial statements in the subsequent years are as follows: i) Property. as applicable in Pakistan.6 Critical accounting estimates and judgments The preparation of financial statements in conformity with approved accounting standards.4. iv) Provision for taxation (note 2. plant and equipment (a) Owned These assets are stated at cost less accumulated depreciation and impairment loss (if any) except freehold land. the results of which form the basis of making the judgments about the carr ying values of assets and liabilities that are not readily apparent from other sources. note 2. and v) Share based compensation (note 2.22 and 29). note 5 and note 26). amendments and interpretations are either not relevant to the Company’s operations or are not expected to have significant impact on the Company’s financial statements other than increase in disclosures in certain cases.5.

Amortisation on leasehold land is charged to income equally over the period of the lease. if any and consists of expenditure incurred and advances made in the course of construction and installation. (e) Subsequent costs Subsequent costs are included in the assets' carr ying amount and recognised as a separate asset as appropriate. Provision is made in the financial statements for obsolete and slow moving items based on estimates regarding their usability. and net realisable value. only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The assets’ residual values and useful lives are reviewed. calculated on first-in-first-out basis. Net realisable value signifies the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. (f) Capital work-in-progress This is stated at cost less impairment loss. (d) Gains or losses on disposal of fixed assets Gains or losses on disposal of fixed assets are taken to the profit and loss account in the period in which they arise. Abbott Pakistan Annual Report 2010 76 . if any. and adjusted if appropriate. at each financial year end. Cost in relation to items in transit comprises of invoice value and other charges incurred thereon up to the balance sheet date.5 Stock-in-trade Stock of raw and packing materials. Cost in relation to items in transit represents invoice value and other charges incurred thereon up to the balance sheet date. direct wages and an appropriate portion of production overheads. work-in-process and finished goods are valued at the lower of cost.4 Stores and spares These are valued at cost determined on the weighted average basis. (c) Depreciation / amortisation Depreciation is charged to income applying the straight line method whereby the cost less residual value of an asset is allocated over its estimated useful life at the rates given in note 8.Notes to the Financial Statements For the thirteen months ended December 31. Depreciation on assets is charged from the month of addition to the month of disposal. These are transferred to specific assets as and when the assets are available for use. 2010 (b) Leased Leased asset comprises of leasehold land which is stated at cost less accumulated amortisation less accumulated impairment. 2. All other repairs and maintenance are charged to income as and when incurred. 2. Cost in relation to work-in-process and finished goods represents direct cost of materials.1.

Income tax paid at import stage under FTR is recognised as tax expense in the period in which related goods are sold as required by the Accounting Technical Release .6 Trade debts and other receivables Trade debts and other receivables are recognized initially at fair value and subsequently measured at amortised cost less provision for impairment. if any. 2. The cost of sample inventory is charged to income on issuance of samples to medical practitioners. cheques and drafts in hand and in transit and balances with banks in savings. Subsequent recoveries of amounts previously written off are credited to 'other operating income' in the profit and loss account. The carrying amount of deferred tax asset is reviewed at each balance sheet date and is recognised only to the extent that it is probable that future taxable profits will be available against which the asset may be utilised. Deferred Deferred tax is recognised using the balance sheet liability method. current accounts and short-term running finance. on all temporary differences between the carrying amount of assets and liabilities and their tax bases after adjusting for the impact of FTR. The charge for current tax also includes adjustments for prior years or otherwise considered necessary for such years.2.30 of the Institute of Chartered Accountants of Pakistan. When a trade debt is uncollectible. and taxes paid under the Final T ax Regime (FTR). A provision for impairment of trade debts is estimated when there is objective evidence that the Company will not be able to collect all amount due according to the original terms of the receivables. The carrying amount of the asset is reduced through the use of an allowance account. 77 . deposit. Provision is made in the financial statements for obsolete and slow moving items based on estimates regarding their usability. 2. Deferred tax assets are recognised for all deductible temporary differences and carry forward of unused tax credits and losses.7 Sample inventory Sample inventory is classified as prepayment in the balance sheet and is carried at cost.9 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand. it is written off against the allowance account for trade debts. if any .8 Taxation Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into account tax credits and rebates available. 2. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. and the amount of the loss is recognized in the profit and loss account within 'other operating charges'. to the extent that it is probable the taxable profit will be available against which the deductible temporary differences and / or carry-forward of unused tax credits and losses can be utilised.

13 Staff retirement benefits The Company operates: . and subsequently carried at amortised cost. Provisions to cover the obligations are made using the current salary levels of employees.3 (b)).14 Liability for employees' compensated absences The Company accounts for the liability in respect of employees' compensated absences in the year in which these are earned. 2010 2. The actuarial valuation is carried out using the Projected Unit Credit Method. The actuarial gains and losses arising at each valuation date are recognised in other comprehensive income and presented in the statement of comprehensive income. 2.11 Dividend distribution Dividend distribution to the Company's shareholders is recognised as a liability in the financial statements in the period in which the dividends are approved by the Shareholders. Abbott Pakistan Annual Report 2010 78 .12 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events. 2. Previously actuarial gains / losses were recognised in profit and loss account (refer note 2. Exchange differences are taken to the profit and loss account currently.Notes to the Financial Statements For the thirteen months ended December 31. 2. 2. Monetar y assets and liabilities in foreign currencies are translated into Pakistani Rupees at the rates of exchange approximating those at the balance sheet date.15 Foreign currency transactions Transactions denominated in foreign currencies are recorded in Pakistani Rupees at the foreign currency rates prevailing on the date of transaction. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. if any.10 Trade and other payables Short-term liabilities for trade and other amounts payable are recognised initially at fair value plus directly attributable cost. and . Contributions and annual provisions to cover the obligation under the funded pension scheme are made based on annual actuarial valuation.1. and the amount can be reliably estimated. 2. Provisions are reviewed at each balance sheet date to reflect the current best estimate.An approved funded pension scheme (defined benefit plan) for all its permanent employees who have completed one year's service.A recognised provident fund (defined contribution plan) for all permanent employees who have completed six months’ service.

The particular recognition method adopted are disclosed in the individual policy statements associated with each item. Value in use is ascertained through discounting of the estimated future cash flows using a discount rate that reflects the current market assessments of the time value of money and the risk specific to the assets. for the amount by which the asset's carr ying amount exceeds its recoverable amount.Sales are recorded on dispatch of goods to customers. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. as an expense in the profit and loss account. when the obligation specified in the contract is discharged. assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Financial instruments carried on the balance sheet include loans. accrued profit. deposits.Income on investments / deposits is accrued on a time proportionate basis. 2. if no impairment had been recognised. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined. taking into account the effective interest rates. trade debts. 2. The recoverable amount is the higher of an asset's fair value less cost to sell and value in use.Service income is recognised when the related services are rendered.17 Revenue recognition . An impairment loss is recognised. Changes in the fair value of derivative instruments are recognised immediately in the profit and loss account. 2. 79 . Any gains or losses on derecognition of financial assets and financial liabilities are taken to the profit and loss account currently. cancelled or expires. cash and bank balances and trade and other payables.18 Impairment Non-financial assets The carrying amount of non-financial assets other than inventories are assessed at each reporting date to ascertain whether there is any indication of impairment. other receivables. . All financial liabilities are derecognised at the time when they are extinguished that is. .19 Financial instruments All the financial assets and financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument. If any such indication exists then the asset's recoverable amount is estimated. net of depreciation or amortisation.16 Derivative financial instruments Derivative financial instruments held by the Company generally comprise of forward foreign exchange contracts. For the purpose of assessing impairment. Financial assets are derecognised at the time when the Company loses control of the contractual rights that comprise the financial assets.2. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

Unallocated items comprise mainly corporate assets. their testing kits and general healthcare products. 2. including revenues and expenses that relate to transactions with any of the Company’s other components. molecular devices.000. import and marketing of pediatric nutritional products and medical nutritional products. import and marketing of diagnostic equipment. AUTHORISED CAPITAL December 31. a corresponding reserve is created to reflect the equity component. An operating segment’s operating results are reviewed regularly by the Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance. 2.000. 2010 2009 (Rupees ‘000) 2. Others The Others segment represents the manufacture. diabetes care. November 30. 3.22 Share based compensation The economic cost of awarding shares to employees is reflected by recording a charge in the profit and loss account equivalent to the fair value of shares on the grant date over the vesting period.000 Abbott Pakistan Annual Report 2010 80 . 2010 2. Segments reported are as follows: Pharmaceutical The Pharmaceutical segment is engaged in the manufacture. Since awarded shares relate to Group Companies. and for which discrete financial information is available. 10 each December 31. Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.000 200. plant and equipment. An operating segment is an identifiable component of the Company that engages in business activities from which it may earn revenues and incur expenses.Notes to the Financial Statements For the thirteen months ended December 31. import and marketing of research based pharmaceutical products registered with the Ministry of Health and in providing toll manufacturing services.20 Offsetting Financial assets and liabilities are offset and the net amount is reported in the financial statements only when the Company has a legally enforceable right to offset the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. income tax assets.000.000.000 Ordinary shares of Rs. 2010 2009 Number of shares 200.21 Segment reporting Segment reporting is based on the operating (business) segments of the Company. Segment capital expenditure is the total cost incurred during the period to acquire property. The business segments are engaged in providing products or services which are subject to risks and rewards which differ from the risk and rewards of other segments.000 2. Nutritional The Nutritional segment is engaged in the manufacture. November 30. liabilities and related income and expenditure.

10 each issued as fully paid for consideration other than cash Ordinary shares of Rs.526 20. 10 each issued as fully paid bonus shares As at December 31. ISSUED.315 8.938 23.1 6. Abbott Labs PTE Ltd. 5.322 184.551 20.490 576.885 979. 2010.3 20.580 10.479.479.700 114.832.588. Inc. Puerto Rico Abbott GMBH Diagnostic Abbott Logistics B.474 111.588.725 81 . DEFERRED TAXATION Deferred tax liability arising due to accelerated tax depreciation allowance Deferred tax asset arising in respect of provisions 6. 2010 2009 Number of shares 5.466 432. The ultimate holding company is Abbott International LLC.640 73. 2010 2009 (Rupees ‘000) 58. Abbott Asia Investments Limited.1 Bills payable include the following amounts payable to related parties: Other related parties Abbott Pharmaceuticals.318 22.302 552.924 25.2 6. TRADE AND OTHER PAYABLES Creditors Accrued liabilities Advances from customers Unclaimed dividends Bills payable Payable to related parties Sales tax payable Workers’ Profit Participation Fund Central Research Fund Workers’ Welfare Fund Staff pension fund Others 6.832.494 34.302 5.672 48. Singapore Abbott International LLC.4.466 97.322 184. SUBSCRIBED AND PAID-UP CAPITAL December 31.992 236.496 (36.094 98.196 18.796 275 106 318.328 3.869) 119.615 20.900..913 10.295 (40.196 18.438 8.1.489 155.415 62.353 47. November 30.113) 115.V.516 120.182 156.640 250. UK held 76.466 97..602 25.235 152.885 979.458 36. 10 each issued as fully paid for cash Ordinary shares of Rs.259.900.640 73. USA.924 22.776 1.1 112.455 65.454 shares.253 38. USA Abbott International Malaysia Abbott International South Africa 52.606.003 Ordinary shares of Rs.796 735.368 1.302 Note December 31.003 58.023 340. November 30.627 6.762.747 26.796 735.452 425.

021 2.641 million) to the Customs Department. The running finance / short term loan carries markup at rates ranging from KIBOR plus 1% to KIBOR plus 2% (2009: KIBOR plus 1. ranking hypothecation charge over stocks and book debts of the Company promissory notes and counter guarantees.property. 2010 2009 (Rupees ‘000) 6. 2010 Note December 31. has not borrowed any amount against running finance / short term loan facilities at the balance sheet date. 401.1 Commitments for capital expenditure aggregated approximately Rs. 130.938 185 21.954 1.484.886 1. Note 8. Commitments in respect of letters of credit as at balance sheet date aggregated to Rs.2. 7.618 367 34.899 159.873 30. 2010 2009 (Rupees ‘000) 1.1 CONTINGENCIES AND COMMITMENTS Contingencies The Company has given bank guarantees of Rs..647 million (2009: Rs.615 91.785 Abbott Pakistan Annual Report 2010 82 .535 million (2009: Rs.833 29. 317.2 The Company has obtained short term financing facilities from various commercial banks amounting to Rs. 335 million (2009: Rs. plant and equipment Operating fixed assets Capital work-in-progress 8.218 62.526 29.1 8. FIXED ASSETS . 980 million (2009: Rs.615 3.2.615 7. USA Abbott Mearo Abbott Labs PTE Ltd.526 156. the running finance / short term loan utilisation cannot exceed Rs. 7.419 1.028 million (2009: Rs.642 392. 49.615 93.596 1.5 December 31.2 Commitments 7. a utility company and other institutions against tenders. guarantees and running finance / short term loans. These facilities can be utilised for letters of credit. 7. November 30.2 Payable to related parties represents the following amounts payable to: Other related parties Abbott Australasia Pty Limited Abbott Mexico Abbott International LLC.054 million).141 152. 335 million).75%) and are secured against first joint pari passu hypothecation charge over stocks and book debts of the Company.3 Workers’ Profit Participation Fund Balance at the beginning of the period / year Allocation for the period / year Less: Amount paid to the fund 24 62.502. 71.Notes to the Financial Statements For the thirteen months ended December 31. However. 67.762 25. Singapore Abbott China Abbott International Japan 661 1.218 62.877.. November 30.662.583 1.551 6. 980 million). The Company .517 million).

322 174.615 120.767 206.5-33 12.393 3.278 76.639 133 133 - - 43.484.495 1.128 161.643 182.358.793 175.174 2.386 936.679 20.330.031 314.264 1.913 21.721 4.908 39.445 2.718 716 2.570 75.252 1.087 41.659 30. 83 .679 2.542 1.718 747 1.5-33 8.029 24.985 1.707 6.966 145.283 9.679 2.790 224.300 1.278 3.835 256.373 1.971 151.711 6.662.002 9.679 1.718 687 2.174 37.228 22.074.698 8.060.502.734 968.393 1.071 672 57.502.984.323 66.323 7.571 455.320 1.617 172.281 105.102 Closing net book value At December 31.321 24.323 1.493 75.880 139.058 51.463 8.230 65.611 20.667 20.828 5.789 151.502.764 154.679 2.971 324.174 879.702 12.899 259.8.946 125.445 52.679 20.294 161.411 75.484.411 20.342 174.509 5.793 10.510 208.436 145.306 79.179 160.950 10.391 43.707 45.469.679 29 2.1 Operating fixed assets The following is a statement of operating fixed assets: Freehold land Leasehold land Buildings on Buildings on freehold leasehold land land Plant and machinery Vehicles Office equipment Computers Demonstration equipmentsnote 8.899 Disposals / write off Cost Depreciation - - - - 19.376 26.303 160.899 20.008 150.471 4.930 24.903 288.355 360.828 66.926 Depreciation / amortisation charge for the year - 31 9.908 68. 2010 Cost Accumulated depreciation / amortisation Net book value Annual rate of depreciation / amortisation 2009 2010 20. 2009 Cost Accumulated depreciation / amortisation Net book value Thirteen months ended December 31.636 496.411 181.353 1.813 105.728 1.512 161.679 20.950 385.229 40.839 98.769 145.06 2-10 2-10 5-10 5-10 5-20 5-20 20-25 20-25 10-33 10-33 20-33 20-33 12.495 39.507 24.294 1.239 12.355 20.636 208.411 10.734 39.322 249.115 161.06 1.793 14.585 9.785 1.683 57.330 391 110.679 2.683 59.865 7.743 19.445 85.120 4.320 9.643 185.120 936.289 192.617 163.998 879.184 1.058 84.002 161.833.642 20.228 66.853 8.563 7.771 20.571 6.011.614 2.985 865.493 46.002 324.585 66.347 263.908 221.827.679 2.2 Total (Rupees ‘000) At November 30.095 18.893 12.120 2.683 61.484 192.642 - 1. 2010 Opening net book value Additions / transfer 20.058 3.358.2 Demonstration equipments of the Company are in the possession of various hospitals and clinics.437 24.571 6. 2008 Cost Accumulated depreciation / amortisation Net book value Year ended November 30.711 164.180.031 160.295 192. 2009 Opening net book value Additions / transfer Disposals / write off Cost Depreciation Depreciation / amortisation charge for the year Closing net book value At November 30.091 865.764 8.683 38.625 936.980 22.020.

895 19. Islamabad. Street No. Employee Employee Employee House No. A-202. Karachi. Jinnah road. House No. 216-A. House No. Karachi. 78. 216-A. Block-4A. 50. Sector G-9/4. Block-13.011 1.282 1. 146-B.Ameer Ali Wali A Khan Ameer Ali Wali A Khan Wali A Khan Wali A Khan Jamal Nasir Muhammad Irfan Syed Riaz Ahmed Owais Ghaziani EFU Irfan Hafeez Malik Akbar Khan Habib Ahmed Sarmad Butt Uzma Qutub Syed Kashif Mazhar Abbas Zafar Iqbal Amjad Ali Fayyaz M Khan Asim Shafiq Aqeel Butt Ashfaq Pyar Ali Aurangzeb Khan Azam Mehmood Feroz Alam Shah Farrukh Amanat Syed Nasir Zahid Hussain Hassham Malik Zain Imtiaz Shaikh Arshad Ahmed Shah Thames Shah Shehla Naseem Amjad Jamal Asif Ali Azam Khan Niazi Asif Husain Usman Ali Syed Kashif Sher Afzal Syed Riaz Ahmed Abida Sultana Rana Anjum Lateef Yousuf Zaman Khan EFU Farrukh Hafeez S. Street No. Sahafi Colony. PECHS. Gulshan-e-Iqbal. 1184. Karachi.369 1. EFU house. 2010 8. Islamabad. Malir Karachi. Gulshan-e-Iqbal. Karachi. Street No. House No. House No. Federal B Area. Sector G-9/4. B-380. PECHS. Islamabad. Employee Employee Employee Employee Employee Employee Employee Employee House No. 2-A. Sector G-9/4.039 1. House No. House No.076 256. Federal B Area. Islamabad.010 977 1.672 Open Market Auction Open Market Auction Open Market Auction Open Market Auction Open Market Auction Open Market Auction Open Market Auction Open Market Auction Open Market Auction Open Market Auction Negotiation Open Market Auction Open Market Auction Open Market Auction Insurance Claim Negotiation Negotiation Negotiation Negotiation Negotiation Open Market Auction Negotiation Negotiation Negotiation Open Market Auction Negotiation Negotiation Negotiation Negotiation Open Market Auction Negotiation Negotiation Negotiation Negotiation Negotiation Open Market Auction Negotiation Negotiation Negotiation Negotiation Negotiation Negotiation Negotiation Negotiation Open Market Auction Negotiation Open Market Auction Negotiation Negotiation Negotiation Insurance Claim Negotiation Open Market Auction Open Market Auction Open Market Auction Negotiation Open Market Auction Written off Written off S. 1184.3 The depreciation charge for the period / year has been allocated as follows: Thirteen months ended December 31. Employee Flat No. Block-13.007 73. M. 60 B. House No.Muhammad Saeed S. Karachi. B-213. 1184. Sector G-9/4.580 Book value Sale proceeds Mode of disposal Particulars of purchaser (Rupees ‘000) Vehicles 630 610 1.329 969 969 969 879 1. C-87.010 977 557 1.Muhammad Saeed Wali A Khan Wali A Khan S. Karachi.293 967 932 1. Karachi. Block-3. Block-3. House No.048 982 1. Block-D-13. Karachi. Jinnah road.717 386 373 891 388 487 388 861 404 404 391 264 1. 3f-8/5 Nazimabad-3.126 15. House No. House No.063 586 586 608 598 646 640 593 401 619 606 633 606 607 876 878 873 592 658 583 583 646 589 589 785 583 619 633 633 619 84 814 556 319 727 319 19.743 126 114 205 209 197 212 114 205 205 191 350 298 246 174 1.034 17.010 4. Karachi Employee House No.058 570 1.070 23. 83.102 121.084 1. Employee Employee Employee Employee Employee Flat No.025 1.Notes to the Financial Statements For the thirteen months ended December 31.900 102. Street No.010 1. Karachi.228 871 1. Plot No.010 1. Block-13.A.329 969 1.066 391 404 391 399 548 988 540 374 416 366 366 404 368 368 849 366 986 404 404 391 501 511 472 429 957 427 6.300 Details of disposals of operating fixed assets having book value exceeding Rs.4 19 21 22 138. G-18/1 Cliton Quarters. Employee Employee Employee EFU house. Islamabad. 12 Commercial Street Phase II Extension DHA Karachi. 2009 Note (Rupees ‘000) Cost of goods sold and services Selling and distribution expenses Administrative expenses 8. 83. Karachi.262 388 404 1. Street No. 60 B. Karachi. PECHS. 83.025 1. Federal B Area.010 978 661 1.010 466 19.010 1. House No.A. Employee Sold to Fayyaz & Co Plant and machinery Demonstration equipment 23. 2010 Twelve months ended November 30.022 12. Street No. Block-4A. 83. Employee House No.000: Description Cost Accumulated depreciation 504 496 820 839 785 846 456 820 820 893 661 741 982 697 166 625 653 3. 83. M. B-380. 3f-8/5 Nazimabad-3. Jahangir Road. Block-6.271 206. Gulshan-e-Iqbal. 1184. 1184. Block-6. Islamabad. B-213. Gulshan-e-Iqbal. 83. Sector G-9/4.025 1.010 920 920 981 916 1.Ameer Ali Eslam Sarwar Fayyaz M Khan Faiaz Ahmed House No. 1184. Karachi. House No.279 694 466 1. Sector G-9/4.163 344 357 858 310 326 266 383 383 361 281 364 370 385 260 391 371 378 371 392 493 404 477 345 381 333 333 364 331 331 196 333 391 377 377 358 473 465 138 147 283 147 673 861 1.350 937 1.435 657 606 1. Karachi.334 Abbott Pakistan Annual Report 2010 84 .039 916 916 1.754 425 400 727 717 872 712 332 738 737 722 404 753 711 587 1. Sahafi Colony. Gulshan-e-Iqbal. House No.011 977 999 1. Karachi Employee Employee Employee Employee Employee House No. Millat Town. Block-6. Employee Employee Employee Employee House No. B-380. Karachi.

868 31.856 134.944 56.490 2. These loans are interest free and are repayable in equal monthly installments within a maximum period of four years.769) 313. 2008 Additions Transferred to operating fixed assets At November 30.779 9.908 1.Employees Less: recoverable within one year . vehicles and television sets. November 30.100 million) respectively.122 48.122 854 1.592 840 21.Employees 9.444 814 18.1 Reconciliation of carrying amount of long-term loans to executives: Opening balance Disbursements Transfer of balances of employee cadre to executive cadre Less: Repayments Closing balance 1.724 (9. Nil) and Rs. scooters.129 1.8.203 1.122 9.Employees 14 Long-term advances .052 Note 10.025 (68.347) 159.480 241.495 (175.136 21.648 58.753 (284.5 Capital work-in-progress Buildings on freehold land Plant and machinery Vehicles (Rupees ‘000) At December 1.580 1. 2010 8.102 36. 2010 2009 (Rupees ‘000) 1. LONG-TERM LOANS AND ADVANCES .853) 182.959 (16.281) 134.646 83.221 (182.712 1.450 million (2009: Rs. 3.359 83.994 202.719 19.073 1.057 million (2009: Rs.Executives .427) 392.796 247.2 Loans given to executives and employees are in accordance with t he Company policy.765) 68. 0.considered good Long-term loans Due from: . The loans for purchase of vehicles are secured by way of registration of vehicles purchased in the name of the Company.764) 18.113 (20.262 22. 2009 Additions Transferred to operating fixed assets At December 31.1 December 31.533 29.954 Others Total 9.893) 10.449) 6.Executives . The maximum aggregate amount of loans due from the chief executive and executives at the end of any month during the thirteen months were Rs.944 507 108 1. These loans are for the purpose of purchase of refrigerators. 2. 9.744 1.444 78.713 39.911 1.322 49.357 (85.886 408.3 85 .849 (75.

Abbott Pakistan Annual Report 2010 86 .430 43.948 2. 27. 100. 14.118 1. 112.558 million) valued at net realisable value amounting to Rs. STOCK-IN-TRADE Raw and packing materials [including stock-in-transit Rs.118 - 11.266 69.393 10. 81.771. 74.266 12.633 877.664 million (2009: Rs. 2.675.886 million (2009: Rs.2 Stock-in-trade includes finished goods costing Rs.000 27.343 million (2009: Rs.576 24. November 30.266 2.016 million (2009: Rs.649 million).264 million (2009: Rs.784 million)] Work-in-process Finished goods [including stock-in-transit Rs.418 52.177. 2010 Note 10.581 107.591 192.864 95.917 million)] Less: Provision for slow moving and obsolete items 11.945 96.218.048 53.749 million)] Less: Provision for slow moving and obsolete items 12. 4.097 24 1.615 27. 19. STORES AND SPARES Stores Spares [including spares-in-transit Rs.651 2.913 701.Notes to the Financial Statements For the thirteen months ended December 31.801 4. LONG TERM DEPOSITS Deposits Less: Provision for doubtful deposits 10.1 Reconciliation of provision for slow moving and obsolete items Opening provision Charge for the period / year Closing provision 12.958 102. 12.310 29.393 4.3 1. 91.1 December 31.419 1. 2010 2009 (Rupees ‘000) 3.923 96.932 2. 82. 22.1 Reconciliation of provision Opening provision Charge for the period / year Closing provision 11.1 48.923 1.363 27.785 862.1 Write down of inventories recognised as an expense in the current period amounts to Rs.513 million (2009: Rs.118 2.576 72.069.919 1.864 million).006 29.

743 (22. TRADE DEBTS Considered good: Secured . 2010 2009 (Rupees ‘000) 12.702 (90.697 454 3.185 96.868 19.393 11.923 87 .923 101.654 21.615 108.3 Reconciliation of provision for slow moving and obsolete items Opening provision Charge for the period / year Write offs during the period / year Write backs during the period / year Closing provision 13.Others Unsecured Considered doubtful: Unsecured Less: Provision for doubtful debts 13.Due from other related parties .742 249.070 37.2 14.742 (1.042) (44.381 192.267 15.838 16.Employees .267 5.846 13.185 13.Suppliers 9 22.V.102 2.607 15.2 Reconciliation of provision for doubtful debts Opening provision (Reversal) / charge for the period / year Closing provision 14.746 30.considered good Current portion of long-term loans Advances to: .393 277.660 14.744 41.Executives .948 146.277 15.Note December 31.135 4.742 234.746 5.1 7.533 582 508 1.927 15.846 35.1 Due from other related parties Abbott Logistics B.804 234. LOANS AND ADVANCES . Abbott Laboratories Indonesia Abbott Laboratories Mexico 13.535 41.349) 14.151 105.677) 107.393 263.742 7.746 7.616) 96.090 20.816 225.044 684 118 5.451 263.766 130. November 30.

.687 12.795 2. 1. directors and executives at the end of any month during the thirteen months were Rs.550 259 4.Singapore Abbott International LLC.161 2.634 2.720 163 21.167 (1. 0. USA Abbott Laboratories Japan Abbott Laboratories Maero Abbott Laboratories Philippines Abbott Laboratories Mature product USA Abbott Laboratories Indonesia Abbott Laboratories Egypt Abbott ALSA Abbott Laboratories Saudi Arabia 30. TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS Considered good Trade deposits Prepayments [including sample inventory Rs.160 million and Rs. Rs.161 3. November 30. 2.876 79.053 23 2. 1.715 1. 4.272 266 99 57.170 40. 2010 14. Note December 31.327 1.687 29.402 3.715 57.211 95. 34.213 50.2 16.014 million)] Considered doubtful Trade deposits Less: Provision for doubtful trade deposits 15.769 1.544 81.959 134.161 136.161 15.451 4.053 1.283 million) respectively.1 The maximum aggregate amount of advances due from the chief executive.831 16. .1 41. 0.634 Abbott Pakistan Annual Report 2010 88 .421 90.716 82.309 245 21. 2010 2009 (Rupees ‘000) 15.170 2.697 million (2009: Rs.006) 2. 32.161 90.779 41.161 92.831 5.189 2.876 81.743 79.661 3.103 million.1 Due from related parties Abbott Labs PTE Ltd.1 38.972 million (2009: Rs.161 134.1 Reconciliation of provision for doubtful trade deposits Opening provision Reversal for the period / year Closing provision 16.686 1.331 2. OTHER RECEIVABLES Considered good Due from related parties Material on loan Insurance claim receivable Service fee for toll manufacturing Others Considered doubtful Less: Provision for doubtful other receivables 16.017 million.854 163 13.071 742 273 2. Rs.Notes to the Financial Statements For the thirteen months ended December 31.591 1.179 million and Rs.716 81.

318 137.080 89 .716 160 1.354.Local currency Cheques and drafts in hand and in transit 17. 2010 2009 (Rupees ‘000) 16.448 24 1.2 Reconciliation of provision for doubtful other receivables Opening provision Charge for the period / year Closing provision 17.695 10. CASH AND BANK BALANCES With banks Savings accounts: .876 1.55%).161 256.763 819.Local currency Current accounts: .10% to 11.Local currency In hand .890 75.Note December 31.728.2 600.671 101.130 571.2 These deposit accounts carry markup rates ranging from 10. SALES – NET Local Export .514 11.to related parties Export .643 17.619 233.482 184.681 770.494 8.076 358.087 892 1.000 550.384 625.45% to 11.415 13.701 8.431.430 155.177 52. 2009 1.646 70 1.407 2. 17.267.155 368.089 801.784 2.428 199.502 2. November 30.966 46.to others Less: Sales returns and discounts Sales tax and excise duty 31 (Rupees ‘000) 10.396 125. 2010 Twelve Months ended November 30.Local currency .1 These savings accounts carry markup rate at the rate of 5% (2009: 5%).1 Deposit accounts: .995.195 736.339 420. Note Thirteen Months ended December 31.Foreign currency 17.000 123.716 18.95% (2009: 11.882 54.687.591 8.Foreign currency .568 31.

901 10.558 90 (Rupees ‘000) .989 42.391 61.419 1.595 (862.950 1.237 6.393 89. 2009 26. allowances and staff welfare Stores and spares consumed Fuel and power Depreciation Repairs and maintenance Technical service fee Insurance Printing and stationery Travelling and entertainment Rent.259.264 17.2 19.663 19.note 20.913) 4.913 4.2 Details of other expenses Other fees and purchased services Recruitment and training expenses Membership and subscription Conference expenses Miscellaneous expenses Twelve Months ended November 30.1 Salaries.399 2.748. 2010 Note Thirteen Months ended December 31. 2010 Twelve Months ended November 30.900 66.830.269 3.739 68.632 5.344 6.950 Abbott Pakistan Annual Report 2010 19.558 1.327 2.Notes to the Financial Statements For the thirteen months ended December 31. telephone and telegram Others Closing work-in-process Cost of goods manufactured and services Finished goods Opening stock Purchases Closing stock 19. Thirteen Months ended December 31.453.719 782 405 186 31.419) 6.406 (701.466 59. COST OF GOODS SOLD AND SERVICES Opening work-in-process Raw and packing materials consumed Manufacturing expenses: Salaries.449 5.424 1.136.987 19.844.171.883 14.194.3 (2009: net charge of Rs.514.638 979. 127.508 1.138 1.572 24.3 31 192.057 million .308.590.721. wages. 2009 (Restated) (Rupees ‘000) 125.389 3.472 7. allowances and staff welfare include a net charge of Rs.007 47.329.707 410 51 50.153 682.128.623 701.051 million . wages.restated) in respect of staff retirement benefits.147 184.932) 7.553 8.644 85.551 (192.949 121.785) 5.272 124.922 59. rates and taxes Laboratory testing supplies Computer expenses Postage.669 5. 2010 33.776 818.260.834 11.863 4.1 8.368 85.634 3.272 138.408 (95.398 4. 101.133.519 3.

316. the Company operates a funded pension scheme for all its permanent employees.2 Movement in the present value of the defined benefit obligation: Obligation at beginning of the period / year Current service cost Interest cost Benefits paid Actuarial loss / (gain) Obligation at end of the period / year 20.950) 425.039 585. November 30.13.950 (59.315 162.127 425.3 2.4 Movement in liability: Staff Pension Fund at beginning of the period / year Charge for the period / year Actuarial loss / (gain) recognised in equity Company contributions Staff Pension Fund at end of the period / year 20. 2010 using the Projected Unit Credit method. Note December 31.959 232. 2010 2009 (Rupees ‘000) 20.580 573.2 20.637 (59.1.741.127 1.5 Plan assets are comprised as follows: Debt Equity Mixed funds Bank balances 492.724 (290.996 84.902 85.932 236.1.119) (84.1 Amounts recognised in the balance sheet: Present value of the defined benefit obligation Less: Fair value of the plan assets Deficit 20.812 192.536. Contributions are made to the scheme based on actuarial recommendations.509) 23. The actuarial valuations were carried out as at November 30.316.127 175. 2010 and December 31.149) 1.1.906 (65.442 20.745 50.536.1.315 1.316.20.088.127 425.970 1.897 1.088.715 (65.660 226.619 1.741.613 1.459 304. 20.591 241.741.505.1.442 101.442 1.039 931.316.619 1.386) (22.257 81.039 2.3 Movement in the fair value of plan assets: Fair value at beginning of the period / year Expected return on plan assets Company contributions Benefits paid Actuarial gain Fair value at end of the period / year 20.597 90.068 431.580 1.386) 267.252 1.039 552.1.083 236.1.1 STAFF RETIREMENT BENEFITS Defined benefit scheme As mentioned in note 2.509) 74.315 31 91 .906) 552.536.128 371.426 (85.

2010 Experience adjustments on plan liabilities .154.00 11.148.1. 2006 20. 48.597 573.745 (290.7 Amount recognised in other comprehensive income: Actuarial losses / (gains) 20.119) 358.9 Principal actuarial assumptions used were as follows: Discount rate Expected return on plan assets Future salary increases Future pension increases Thirteen Months Twelve Months ended ended December 31. 2008 (Rupees ‘000) 1.8 Actual return on plan assets 50.442 1.11 The expected return on plan assets was taken as 14%.300 million).316.14 Five year data on experience adjustments is as follows: December 31.996) 226. 2010 20.00 14.971 1.loss / (gain) Experience adjustments on plan assets . 2010 Thirteen Months ended December 31.127 425. Abbott Pakistan Annual Report 2010 92 . 20.505. 2011 is Rs.83 5.56 12.12 Expected contributions to the plan for the year ending December 31.088.315 November 30.285 (167.966 20.314) 1.Notes to the Financial Statements For the thirteen months ended December 31.741. 2009 (Restated) (Rupees ‘000) 81.50 10.515 Twelve Months ended November 30.10 Pension plan assets include the Company's ordinary shares with a fair value of Rs.1.1. November 30. 20.724 101.660 1.1. 2007 November 30.426 199.17 20.13 Five year data on the (surplus) / deficit of the plan is as follows: December 31. 2009 1.259.848) November 30.6 Amount recognised: Current service cost Interest cost Expected return on plan assets 20.580 November 30. 2008 Percentage 6 (65) November 30. which is representative of yields on long-term Government bonds and term deposits with banks.100 million (2009: Rs.536. 2009 (1) 20 November 30.257 931. 2007 (2) 12 November 30.715 (175.36 4.083 236. 2010 2009 Percent per annum 14.50 12.1. 42.637 (90.619 1.1.1.932 236. 2010 Present value of defined benefit obligation Fair value of plan assets Deficit / (surplus) 2.1. 89 million.902) 162.1.039 552.449 1.gain / (loss) 4 2 November 30. 20.427.297 (5. 2006 5 (2) The adjustments have been expressed as a percentage of the plan liabilities and plan assets at the balance sheet date.

654.1 21.724 (3.1 101.413 215.1 593.20.967 35.639 4. Note Thirteen Months Twelve Months ended ended December 31.B.057 105. wages.I.1 Salaries.404 11. professional and other services Postage.3 (2009: net charge of Rs.731 350.2 Defined contribution scheme An amount of Rs.131 9. 105.113 14.192 30. 93 .175 9.221 257.601.026) 34.250 7.065 209.360 10.087 127.083 13.930 102.611 70.461 13.655 73.252. samples and sales promotion Forwarding expenses Electricity Computer expenses Training and development expenses Packing and miscellaneous supplies Others Less: Reimbursement from related party 21.691 19.852 263.2 31 21.192 million . allowances and staff welfare include a net charge of Rs.022 18.101 503.852 million (2009: Rs.938 14. SELLING AND DISTRIBUTION EXPENSES Salaries.408 4. conveyance and entertainment Advertising. wages.3 Staff retirement benefit cost recognised in the profit and loss account Pension cost Less: Reimbursement from related party Provident fund contribution E. 2010 2009 (Restated) (Rupees ‘000) 20.287. 34.971 million .126 19.087 226. Allocated as: Cost of goods sold and services Selling and distribution expenses Administrative expenses 19. 82.622 4.286 152. November 30.restated) in respect of staff retirement benefits.1 22.330 12.note 20. 42.162 53.971 25.923 263.622 million) has been charged during the period in respect of the contributory provident fund maintained by the Company.051 82.852 4.O.745 (1.172 31 21.061 1.577 24.905 79.139 9.733 14. allowances and staff welfare Rent.157 1.972 100.335) 42.752 1.698 17.810 8. rates and taxes Repairs and maintenance Royalty Insurance Depreciation Legal.172 162.180 17.822 16.529 16.3 21.825 209.491 1. telephone and telegram Printing and stationery Travelling.353 143.

271 5.065 5.733 1. 30.204 94 .066 6.987 12. rates and taxes Repairs and maintenance Insurance Depreciation Legal.402 8.923 million .519 40.2 Details of other expenses Other fees and purchased services Security expenses Membership and subscription Air conditioning expenses Housekeeping expenses Water charges Miscellaneous expenses Abbott Pakistan Annual Report 2010 (Rupees ‘000) 18.674 4.204 209.288 40.756 70.746 5.725 29.2 31 22.974 1.note 20.753 1.199 674 1.596 1.698 12.896 276. 2009 (Rupees ‘000) 21.774 201. 2010 2009 22.752 9. 2009 (Restated) 123. wages.896 16.431 6.284 1. 2010 Note Thirteen Months ended December 31.628 6.578 4.1 Salaries.354 1.3 22. ADMINISTRATIVE EXPENSES Thirteen Months ended December 31.148 2.717 7.517 272 524 36. November 30.076 8.493 15.833 1.047 2.285 17.360 2.3 (2009: net charge of Rs.065 million .126 7.293 439 141 41.613 2.943 8.567 1.Notes to the Financial Statements For the thirteen months ended December 31.097 5.203 4. conveyance and entertainment Electricity Computer expenses Training and development expenses Miscellaneous office supplies Others Less: Reimbursement from related party 22.977 4. 2010 Twelve Months ended November 30.487 267. telephone and telegram Printing and stationery Travelling.048 190 6.915 Twelve Months ended November 30. Thirteen Months Twelve Months ended ended December 31.349 682 7. allowances and staff welfare Rent.064 2.restated) in respect of staff retirement benefits.696 4. 2010 Salaries. allowances and staff welfare include a net charge of Rs.258 6. professional and other services Postage.483 29.1 149.539 79.354 530 8.896 2.341 6. 25.2 Details of other expenses Other fees and purchased services Security expenses Membership and subscription Air conditioning expenses Housekeeping expenses Water charges Purchased gas Sales commission expenses Miscellaneous expenses 18. wages.702 232 3.958 2.030 12.491 22.

350 150 82 1.708 111.582 3.588 11.103 787 8.550 855 23.277 million) on account of interest income earned from Abbott Labs PTE Ltd.1 16.727 1.314 24.615 1.526 1. 23.3 The amount is net of reimbursement of Rs.1 93.550 24.2 15.589 160 1. 2010 Twelve Months ended November 30.6%) of half of the written down value of assets deployed by the Company on their behalf in the Company's diagnostic division in Pakistan.1 23. 2010 Twelve Months ended November 30.481 million from other related party against provision for doubtful debts.6% (2009: 15.1 Interest income include an amount of Rs.2 Recipients of donations do not include any donee in whom a director or his spouse had any interest (2009: None).457 129.2 16.006 14.777 70 2.118 28.3 10.126 25. 2009 (Restated) (Rupees ‘000) 62.350 150 50 1. 10. OTHER OPERATING INCOME Gain on disposal of fixed assets Interest income Scrap sales Provision for doubtful trade debts no longer required written back Provision for doubtful trade deposits no longer required written back Others 23.781 109.1 24.582 1. 10. Note Thirteen Months ended December 31.2 The amount is net of claim of Rs.713 141.562 million given to other related party against reversal of provision.765 24.-Singapore. 2009 (Rupees ‘000) 23.231 million (2009: Rs.2 24.840 182. OTHER OPERATING CHARGES Workers’ Profit Participation Fund Auditors’ remuneration Donations Workers’ Welfare Fund Central Research Fund Provision for doubtful other receivables Provision for doubtful trade debts less reimbursement from related party Provision for doubtful deposit Exchange loss Others 6. 95 . 2.079 10. a related party @ 15.Note Thirteen Months ended December 31.290 1.511 4.752 35.1 Auditors’ remuneration Statutory audit fee Special certifications Out of pocket expenses 1.3 24. 24.747 17. 0.890 23.173 4.897 78.

530 Thirteen Months ended December 31.978 35% 306.758 (4.Prior year Deferred 535.906 609.712 27.900.532 (100. FINANCE COST Bank charges 3.712 247.440 32.173 6.010) 5.733 266. 2010 Thirteen Months Twelve Months ended ended December 31.257 35% 609.02 .313 1. TAXATION .592 6. Abbott Pakistan Annual Report 2010 96 1.354) 7.22 12.121) (42. 2010 2009 (Rupees ‘000) 25. EARNINGS PER SHARE .072 97.525 Twelve Months ended November 30.906 26.1 There is no dilutive effect on the basic earnings per share of the Company.176.net Current tax charge .900.854 568.854 875.841 564.944 97.313 241. 2009 (Restated) (Rupees ‘000) 26.885 19.1 Relationship between tax expense and accounting profit Accounting profit before taxation Tax rate Tax on accounting profit Tax for prior years Tax effect of: Expenses that are not deductible in determining taxable profit Applying lower tax rates to certain income Others (including the impact arising as a consequence of reversal of deferred tax liability and change in allocation ratio of revenue chargeable under FTR and Non-FTR) 14.302 (Rupees) Earnings per share 27.445) 564.741.904 32.Current year .302 (10.021 266. November 30.BASIC / DILUTED Profit for the period / year Weighted average number of ordinary shares in issue during the period / year Number of shares (Restated) 6. 2010 2.Notes to the Financial Statements For the thirteen months ended December 31.

333) (394. eligible as per policy are awarded Restricted stock units of Abbott International LLC. CASH GENERATED FROM OPERATIONS Profit before taxation Adjustment for: Depreciation / amortisation Gain on disposal of property plant and equipment Interest income Expense recognised in profit or loss in respect of equity-settled share-based compensation Pension retirement benefit Finance cost Working capital changes 1. USA and is charged against income on a straight-line basis over the vesting period of the plan.200 (61.257 8.300 (10.226 (493.173) 19. 2010.360) (19.338 (558.1 Working capital changes (Increase) / decrease in current assets net of provision Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and short-term prepayments Other receivables Increase in current liabilities Trade and other payables .1 28.082) (89.net 29.267 .039 25 28.741.633) (29.442.837) 65.3 23 23 256.978 206.536) 1.591) (43.774 2.175 318.908) 371. Under the plan.267 1.525 318.708) (111.897) (78.102 (16.512.530 (493. The plan entitles eligible employees shares of the parent company which are vested equally over next three years. USA (the “Parent company”). 2009 (Restated) (Rupees ‘000) 28. services received from employees as consideration for stock options are recognized as an expense in the profit and loss account.151 (45.023 875.314 76. the Company’s equity settled share-based compensation plan includes restricted stock units plan. subject to certain vesting conditions.839 3.Note Thirteen Months ended December 31. The fair value of restricted stock units plan is measured at the date of grant using the Black-Scholes option pricing model with the following assumptions: 97 (3.611) (21. the Company employees. The expense corresponds to the fair value of the stock option plans of the shares of the Abbott International LLC.350) 21.611) 1. In accordance with IFRS 2 (Share-Based Payments).588) (52.076 141. SHARE BASED COMPENSATION Share-based compensation plans As at December 31. with the corresponding entry recorded as equity.511) 23. 2010 Twelve Months ended November 30.961) 74.

TRANSACTIONS WITH RELATED PARTIES The related parties of the Company comprises other related parties.943.669 2.546 68.717 98 .335 10.487 1.70% 2008 24.277 21 22 23.237 562 53.50% November 30.60% 3. employee retirement benefit plans.369 79. Transactions with related parties are as follows: Note Thirteen Months ended December 31.00% 2.50% 4.Notes to the Financial Statements For the thirteen months ended December 31.231 52.622 109.157 7. 2010 2009 Volatility Dividend yield Risk free interest rate A summary of options outstanding is given below: December 31. directors and key management personnel.00% 3.18 22.00% 2. 2009 Outstanding Weighted number of average options value per option 12. 31.507 89.933 12. 2009 (Restated) Other related parties Sale of goods Purchase of materials Technical service fee Reimbursements from a related party on account of: Other operating income Other operating charges Selling and distribution expenses Administrative expenses Pension Fund Interest income earned Contributions paid in respect of staff retirement benefit plans Pension Fund Provident Fund Key management personnel Short-term employee benefits Post-employment benefits Abbott Pakistan Annual Report 2010 (Rupees ‘000) 18 19 54.00% 2007 25.061 8.297.906 42. 2010 Twelve Months ended November 30.026 10.778 30.3 85.1 20.852 84. CAPACITY USD 48. 2010 Outstanding Weighted number of average options value per option 6. The Company's production was according to market demand.130 2.155 1.00% 2. Transactions with related parties essentially entail sale and purchase of goods and services and expenses charged between these companies.1.481 35.774 3.950 34.129 14.3 20.783 USD 23.52 The capacity and production of the Company's plants is indeterminable as these are multi-product plants involving varying processes of manufacture.

DIRECTORS AND EXECUTIVES The aggregate amounts charged in the financial statements in respect of remuneration.354 2.240 million (2009: Rs.477 19.831 473 171.694 339 165 27. directors and executives of the Company were as follows: Thirteen Months ended December 31. 1 23.358 719 18 20.616 36.3 Key management personnel are those persons having authority and responsibility for planning.679 1 16.2 Managerial remuneration includes Rs 50.527 716 260. to be key management personnel.780 Number of persons (At December 31 / November 30) *Includes 1 alternate Director 32.982 9.178 16. including all benefits to the chief executive.095 2.335 28. Outstanding balances of loans and advances to key management personnel are disclosed in note 9 and note 14.314 million (2009 Rs: 19. 0.062 3. reimbursements and staff retirement benefits are included in notes 6. 16 and 20.076 million) has been charged in the profit and loss account in respect of sharebased payments to chief executive.030 101 25. club membership and telephone facilities as per terms of employment.445 Retirement benefits 3.195 13.340 million). REMUNERATION OF CHIEF EXECUTIVE. 32.3 Directors and certain other executives are provided with free use of Company maintained cars.2 Outstanding balances in respect of related party sales and purchases.230 115 19.419 609 217 109 17.539 *2 Directors Executives Twelve Months ended November 30. 0. 32. 13. 2010 Chief Executive Short-term employee benefits Managerial remuneration Leave passage / encashment Medical expenses Rent / utility / maintenance / furnishing 24.359 4. 31.864 2.4 31.586 93 99 .614 297. 32.4 The aggregate amount charged in these financial statements for fees to non-executive directors is Rs.645 24.655 million) charged in the profit and loss account in respect of bonus to chief executive. plant and equipment to key management personnel are disclosed in note 8.941 196.22. directors and certain executives of the Company as mentioned in note 2.1 In addition.831 *2 156.188 million (2009 Rs: 35.1 Disposals of property.477 30. The Company considers all members of their executive management team. directing and controlling the activities of the entity directly or indirectly. Rs 23. directors and certain executives of the Company. 2009 Chief Executive Directors Executives (Rupees ‘000) 230.584 22.314 1.31. including the chief executive and directors. 32.

129 954.396 125.563 22.074.116 232.Notes to the Financial Statements For the thirteen months ended December 31.453 60.451 981.028 1.743 1.net Service fee for toll manufacturing 8.531 375.342.619 233.017 160.300.083.765.118 6.393 5.664.308.421 1.673 1.705 176.994 541.126 219.535 226.066 120.787 141.616 172.855 4.155 8.5 109.102 3.955 15.794 367.353.479 6.638 402.526 970.038 8.863.753 675.289 5.244 4.479 39.453 244.167 92.128.154 215.839 256.783.994 713.452.981.158 3.523 62.300 Abbott Pakistan Annual Report 2010 100 .514.807.225 115.763 803.079 182.663 3.054 3.808 10.289 8.872 11.882 492.817 23.143.378 Twelve Months ended November 30.758 618.528 487.263 6.080 19. 2009 (Restated) Nutritional Others Total Cost of goods sold and services .315 2.765.102 256.790.300 206.354.586 61.314 1.477 1.943 1.135 181.054 27.877.746.971 2.995.345 8.3 Gross profit Selling and distribution expenses .268 16.123.361 4.758 954.765 878.601.820 335.204 196.726. SEGMENT WISE OPERATING RESULTS Thirteen Months ended December 31.456 1.987 2.618 966.430 155.188 59.744.915 1.297 15.342 206.701 10.399 1.101 267.038 6.076 10.353.017 318.964.503 3.687.898 20.050.687.701 7.818.576 1.433 101.444 78.332 1.947 1.974 1.635 713.871 1.175.4 Administrative expenses .912 9.161 8.995 82.128.450.687.810 201.2010 Pharmaceuticals Nutritional Others Total Pharmaceuticals (Rupees ‘000) Sales Less: Sales returns and discounts Less: Sales tax and excise duty Sales .514 1.016 1.431.048 7.869.823.378 104.753 866.252.840 15.022 6.321.704 81.818.219 838.448.687.426 754.654 1.269 1.890 129. 2010 33.763 970.626 235.note 33.380 168.979 95.938 205.366) 796.051 318.031.454.671 101.890 242.501 (29.654 866.363 1.995.note 33.131 1.628 167.839 492.411.297 140.859 1.note 33.033 57.497 Segment result Unallocated corporate expenses / income Other operating income Other operating charges Profit before finance cost and taxation Other Information Segment assets employed Unallocated corporate assets Total assets Segment liabilities Unallocated corporate liabilities Total liabilities Capital expenditure during the period / year Unallocated corporate capital expenditure Total capital expenditure Depreciation / amortisation Unallocated depreciation / amortisation Total depreciation / amortisation 186.323 19.038 1.

818 4.883 14.553 485.624 186.103 3.994 (167.709 3.365 138.558 1.546 2.498 1.854) 866.246 1.414 1.174) 5.987 186.634 3.995.701 10.866 80.082 512.323 3.534 4.519 3. 33.967 340.844.123.644 4.007 47.147 40.508 1.270 142 60 93 49 316 385 211 1.368 7.150 5.315 19.679) 541.414 720.701 8.453.776 3.056 1.097 90.234 1.481 119.128.340 132.607 115.776 3.595 5.640 (95.497) 220.302 5.310 244.616 682.174 3.823.159 6.595 24.260.621 1. allowances and staff welfare Stores and spare parts consumed Fuel and power Depreciation / amortisation Repairs and maintenance Technical service fee Insurance Printing and stationery Travelling and entertainment Rent.658 760.398 4.079 3.130 3.632 1.949 121. Assets and liabilities which cannot be allocated to a particular segment on a reasonable basis are reported as unallocated corporate assets and liabilities. trade debts and stock-in-trade.112.046 3.541 4.737 23.153 Twelve Months ended November 30.133.175 87.065.877 6.261 3.033 9.641 3.272 118.153) 5.064.913) 4.187 434.995.561.361 3.168 63.356 3.038 8.257 17.634 183. 2010 Pharmaceuticals Nutritional Others Total Pharmaceuticals (Rupees ‘000) Opening work-in-process Raw and packing materials consumed Manufacturing expenses: Salaries.904) 5. 2010 2009 (Rupees ‘000) 10.171.106 658.323 2.843 (3.528 20.391 654.423 4.743 14.2 Segment assets consist primarily of property.956 4.641 131.849 37.679 448.237 66.280 56.422 4.445 (135) 59.785) (186.078 149 80 126 60 565 417 241 1.370.480 34.729 8.658) 803.792 139 59 92 48 310 378 207 3.308.158 1.174) 618.922 59.623 4.590.551 (192.825 (862.830.612 1.194.584 26.442.419 572.669 5.080 19.514.431.258 192.175 4.863 2.572 1. wages.931 5.1 Geographical information Sales to external customers Pakistan Afghanistan Sri lanka Holland Bangladesh Egypt Hong kong Nigeria Syria Singapore Service fee for toll manufacturing Pakistan Thirteen Months Twelve Months ended ended December 31.199 3.295 (116.136.969 785. 2009 (Restated) Nutritional Others Total 101 .932) (340.259.105) 52.137 2.619 27.772 129.468.994.389 5.737 24.450.223 89.820 818. Segment liabilities comprise of trade creditors and an apportionment of accrued expenses.700 2.449 2. plant and equipment.321.989 42.636 (4.327 2.472 7.739 68.531 275.723 58.663 4.286 (244.548 384.932.748.399 3.897 8.901 13.638 979.631 66.010.105 20.341 1.329.314 47.269 3.272 124.218 1.045 184.900 114.184 175.124 3.120 (92.745 59.3 Segment wise cost of goods sold and services Thirteen Months ended December 31.282 5.586 266.672 161 87 136 65 611 451 261 3.118.412 1.462 1.088 125.834 11.709 10.088 17.466 701.291 3.674 67 10.628 1.447 23. telephone and telegram Others Closing work-in-process Cost of goods manufactured and services Finished goods Opening stock Purchases Closing stock 778.585 223. rates and taxes Laboratory testing supplies Computer expenses Postage.913 118.510 54.141 1.393 45.187 145.219 (497.264 11.346 116.082) 7.406 (701.721.251.382 (197.634) 142.346 29.344 6.170 6.504 85.436 61.628 14.118 33.783. November 30.950 54.048.138.Note 33.424 1.275 (2.419) 6.408 4.

840 356 1.901 634 2.499 21 23 3.355 9.733 12.007 1.731 110.915 106.601.360 2.250 7.131 9.034 2.948 93.404 11. wages.011 1.514 176.101 779 197 44 1.681 1.533 24.938 14.830 55.694 28.154 1.076 8.473 143.072 635 578 3 4.524 24.354 1.402 8. allowances and staff welfare Rent.431 9.896 276.285 17.946 910 476 267 958 29 157 234 619 1.048 12.563 3.204 6.402 5.139 14.981 219.357 8.165 235.894 9.967 35.626 69.774 201.158 658 1.120 32.088 40.529 16.949 9.401 1. professional and other services Postage.582 14.449 325 3.243 10.101 966.066 6.286 152.487 267.810 Twelve Months ended November 30.271 5.641 8.064 2.626 1.204 209.514 28.655 73.563 219. conveyance and entertainment Electricity Computer expenses Training and development expenses Miscellaneous office supplies Others Less: Reimbursement from related party 130.158 1.885 5.651 645 1.487 9.431 6.376 4.5 Segment wise administrative expenses Thirteen Months ended December 31. allowances and staff welfare Rent.154 149.633 486 35.000 3.639 4.705 53. telephone and telegram Printing and stationery Travelling.360 68.261 73 861 2.774 10.352 10.847 262 1.022 18.113 10.079 5.413 6.089 187.174 17.973 53.822 8.297 42.146 20.148 2.186 160.808 503.821 11.618 183 407 77 483 713 22.075 119 3.978 1.985 2.162 966.493 15.965 35.333 2.987 12.061 1.660 17.514 10. 2009 (Restated) Nutritional Others Total 33.194 4.519 40.611 70. samples and sales promotion Forwarding expenses Electricity Computer expenses Training and development expenses Packing and miscellaneous supplies Others Less: Reimbursement from related party 464.901 1.018 17.660 1.157 104.902 13.180 7.521 561 1. conveyance and entertainment Advertising.810 79.705 61.870 258.126 7.230 503 58.204 15.098 2.930 3.006 1.182 13.670 107.175.506 12.834 18. 2010 Pharmaceuticals Nutritional Others Total Pharmaceuticals (Rupees ‘000) Salaries.518 633 20. 2010 Pharmaceuticals Nutritional Others Total Pharmaceuticals (Rupees ‘000) Salaries.694 69.297 181. 2009 (Restated) Nutritional Others Total Abbott Pakistan Annual Report 2010 102 .912 593.157 1.097 5.725 29.596 1.698 18.365 19.717 7. 2010 33.096 339 3.097 918 26.046 7.199 674 1.885 19.287.691 10.330 12.578 4.587 10 654 390 2.659 3.855 3.396 1.775 176.578 4.175 9.408 4.890 22.871 13.833 1.840 14.418 49 8 178 548 15.890 5.461 13.972 100.385 72.609 4.162 181.061 205.814 10.563 60.577 399.881 17.639 16.242 19.905 9.697 350.930 2.Notes to the Financial Statements For the thirteen months ended December 31.031 65 76 3.353 173.4 Segment wise selling and distribution expenses Thirteen Months ended December 31.030 12.999 7.752 66. professional and other services Postage.960 37.126 34.252 3.166 16.139 8.217 758 2.330 800 1.779 102.491 1. telephone and telegram Printing and stationery Travelling.674 4.698 12.871 235.568 1.225 123. rates and taxes Repairs and maintenance Insurance Depreciation Legal.408 4.236 130 2.406 14 41 420 107 15 3.943 Twelve Months ended November 30.654.335 663 637 966 299 252 278 167 2.352 215. wages.065 5.685 309 28.974 1.838 301 20. rates and taxes Repairs and maintenance Royalty Insurance Depreciation Legal.221 257.175.696 4.291 22 549 933 139.252.083 13.625 2.

political or other conditions. other receivables and balances with banks.170 1.402 44.532 7.789 18. The maximum exposure to credit risk for loans and receivables at the reporting date are: December 31. The carrying amount of financial assets represents the maximum credit exposure. 2010 2009 (Rupees ‘000) 10.313 815. Concentration of credit risk arises when a number of counter parties are engaged in similar business activities or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economical. The Company’s overall risk management programme focuses on minimizing potential adverse effects on the Company’ s financial performance.221 27. The credit risk on liquid funds such as balances with banks is limited because the counter parties are banks with reasonably high credit ratings.324 1. fair value interest rate risk and cash flow interest rate risk).1 Credit Risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss without taking into account the fair value of any collateral.34.425 75. Such policies entail identifying.6 respectively. Credit risk of the Company arises principally from the trade debts.619 18. the Company has developed a formal approval process. Financial Risk Management The Company’s activities expose it to a variety of financial risks: credit risk. December 31. The Company’s overall risk management procedures to minimize the potential adverse affects of financial market on the Company’s performance are as follows: 34. The overall risk management of the Company is carried out by the Company’s finance department under policies approved by the Board of Directors.251. 103 .188 28. 2010 2009 (Rupees ‘000) 64.012 263. November 30. November 30.923 52.456 41.576 29.606 234.267 705 67. whereby credit limits are applied to its customers. loans and advances. Concentrations of credit risk indicate the relative sensitivity of the Company's performance to developments affecting a particular industry.185 1.886 Ageing of trade debts past due but not impaired: 61-90 days 91-180 days 181-360 days Over 360 days The impaired trade debts and the basis of impairment are disclosed in notes 13 and 2. evaluating and addressing financial risks of the Company.334 The maximum exposure to credit risk at the reporting date is as follows: Loans Deposits Trade debts Accrued profit Other receivables Balances with banks The Company is not exposed to concentrations of credit risk in respect of trade debts because the Company’s sales are primarily against advance payment / collection on delivery (COD) terms. To reduce the exposure to credit risk on trade debts.392 768. The management continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful of recover y.176. trade deposits.892 7. liquidity risk and market risk (including currency risk.

A. The Company manages liquidity risk by maintaining sufficient cash / bank balance and the availability of funding through an adequate amount of committed credit facilities.Notes to the Financial Statements For the thirteen months ended December 31. 2009 Rupees US Dollars Date of Ratings Short -term Long-term Rating December 31. 2010. 931. that it will always have sufficient liquidity to meet its liabilities when due. supply and demand of securities and liquidity in the market. speculative activities.054 - PACRA Standard & Poor’s (S&P) PACRA PACRA Moody’s S&P S&P JCR-VIS JCR-VIS A1+ A-1 A1+ A1+ P-1 A-1 A-1 A-1+ A-1+ AA A+ AA+ AAA Aa3 A+ A+** AAA AA Jun 2010 Feb 2010 Jun 2010 Jun 2010 May 2010 Jun 2010 Aug 2010 Jun 2010 Jun 2010 Abbott Pakistan Annual Report 2010 104 .455) (34. 993.987 563 89 3. As at December 31.4 Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Liquidity risk arises because of the possibility that the Company could be required to pay its liabilities earlier than expected or encounters difficulty in raising funds to meet commitments associated with financial liabilities as they fall due.872 30 500. National Bank of Pakistan Faysal Bank Limited* * Placed on Rating Watch ** Rating Outlook Negative 34. interest rate risk and other price risk. as far as possible.786) November 30.433 (236. 2010 The credit quality of balances with banks can be assessed with reference to external credit ratings as follows: Rating Agency Name of Banks Royal Bank of Scotland Limited* Deutsche Bank AG MCB Bank Limited Standard Chartered Bank (Pakistan) Limited HSBC Bank Middle East Limited Bank of Tokyo-Mitsubishi UFJ Limited Citibank N.690) 47.2 Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.854 million (2009: Rs.225) 566 761 (3. The Company's exposure to foreign currency risk at the reporting date was as follows: December 31.030) 897 576 (2.374 63.832 33 283.756) (407) (1.938) (145. November 30.426 million) are all current and due in next financial year.749 47 85 44 2.551) (233.3 Market Risk Market risk is the risk that the value of financial instrument may fluctuate as a result of changes in market interest rates or the market price due to a change in credit rating of the issuer or the instrument.930 49. 34.808) (305) (2. Market risk comprises three types of risk: currency risk. The Company is not exposed to other price risk whereas the exposure to currency risk and interest rate risk is given below: 34. 2010 Rupees US Dollars (’000) Cash and cash equivalents Due from related parties Bills payable to related parties Payable to related parties 76.725) (25. the Company’s financial liabilities of Rs.677 (318.002 88 1. 2010 2009 (Rupees ‘000) 14. change in market sentiments. The Company's approach to managing liquidity is to ensure.110 465 730. It arises mainly where receivables and payables exist due to transactions entered into foreign currencies.

34. remain constant.2 81.8 83. 2010 November 30.0 per share). the Company may adjust the amount of dividends paid to shareholders or issue new shares. 105 .The following significant exchange rates were applied during the period / year: Balance sheet date rate December 31. 2011. The analysis is performed on the same basis for the previous year. The current capital structure of the company is equity based with no financing through borrowings. 3.7 85.5 Interest rate risk Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Majority of the interest rate exposure arises from savings and deposit accounts with banks. the Board of Directors of the Company have proposed a final cash dividend for the thirteen months ended December 31. 9.0 per share (2009: Rs. This is in addition to interim cash dividend of Rs. This analysis assumes that all other variables.3 A ten percent strengthening / weakening of the Pakistani Rupee against the US Dollar at the reporting date would increase / decrease post tax profit for the period / year by Rs.216 million). NON . Therefore. 16. 2. ended November 30. In order to maintain or adjust the capital structure. 36.0 per share). Fixed rate instruments December 31. 35.803 million (2009: Rs. a change in interest rate at the reporting date would not affect profit and loss account.0 per share (2009: cash dividend of Rs. 34.6 Fair value of financial assets and liabilities The carrying amounts of all financial assets and liabilities reflected in the financial statements approximate their fair values. 2010 of Rs.318 734. 2010 2009 (Rupees ‘000) 799. in particular interest rates.ADJUSTING EVENT AFTER THE BALANCE SHEET DATE In their meeting held on February 22. 9. 3. November 30.448 Financial assets The Company has not designated any financial assets or liabilities as "at fair value through profit or loss". CAPITAL RISK MANAGEMENT The Company's objective when managing capital is to safeguard the Company's ability to remain as a going concern and continue to provide returns for shareholders and benefits for other stakeholders. 2009 Average rate Thirteen Months Twelve Months ended December 31. 2010 2009 (Rupees) US Dollar 85.

2010 do not include the effect of the final cash dividend nor the effect of the proposed transfer between reserves which will be accounted for in the financial statements for the year ending December 31. 2010 2009 (Rupees ‘000) Cash dividend Cash dividend per share 489.000 million from Unappropriated Profit to General Reserve (2009: Rs.804 12. The financial statements for the thirteen months ended December 31.650. 2011 by the Board of Directors of the Company.Notes to the Financial Statements For the thirteen months ended December 31. 2011.000 million from Unappropriated Profit to General Reserve ). the Board has proposed a transfer of Rs. 250. for the purpose of comparison.174. November 30. Chief Executive Director Abbott Pakistan Annual Report 2010 106 .00 In addition.00 Rupees 1. 2010 The total dividend declared during the period / year and dividend per share has been summarised below: December 31. wherever necessary.481 DATE OF AUTHORISATION These financial statements were authorised for issue on February 22. Significant reclassifications made are as follows: From To Nature Amount re-classified Rupees '000 Administrative expense 38 Other operating charges Reimbursement of provision for doubtful debt from other related party 2.502 5. 37 CORRESPONDING FIGURES Corresponding figures have been rearranged and reclassified.

001 TOTAL 100 500 1.001 15.986 796.001 25.516 523.001 35.000 440.001 435.619 105.001 250.000 750.449 97.608 490.259.000 500.267.520 514.000 220.000 785.670.173 45.764 703.242.000 76.670.000 1.635 56.000 700.302 107 .000 20.001 780.001 490.000 495.Pattern of Shareholding As at December 31.387 1.520 197.270.001 1.000 1.001 60.001 135.000 835. 10 Shares 1 101 501 1.001 40.000 25.675.001 140.001 775.926 495.728 82.253 779.000 270.689 452.358.001 970.000 40.001 700.266 294.001 215.000 55.000 140.001 20.689 1.086 746.472 56.766 252.001 535.000 60.001 50.265.000 240.001 55.001 235.614 229.001 830.000 455.624 974.001 695.569 160.538 76.000 975.532 780.434 518.001 5.001 515.000 30.001 10.000 525.303 236.000 2.001 270.627 219.001 76.986 64.150 830.050 272.000 50.000 275.000 515.001 495.454 438.000 15.000 705.236 536.673 111.900.596 1.001 30.000 65.844 Total Shares 36.992 140.000 540.000 35.001 745.396.001 510.933 454.000 Number of Shareholders 836 796 372 632 110 37 9 9 2 3 3 2 1 2 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 2. 2010 Size of Holding Rs.001 735.275 96.000.000 45.001 520.000 740.240.462 2.300.001 450.874 738.000 5.000 255.328 1.245.001 1.001 2.000 520.000 780.001 45.000 10.000 145.

NO 1 2 3 FOLIO 4502 03277-2083 03277-7217 NAME M/S. TRUSTEE DEPARTMENT NATIONAL BANK OF PAKISTAN-TRUSTEE DEPARTMENT NI(U)T FUND TOTAL HOLDING 100 880 2.84 2.689 490.243 108 Abbott Pakistan Annual Report 2010 .NO 1 2 3 FOLIO 2405 4171 02154-27 NAME NATIONAL BANK OF PAKISTAN (TRUSTEE DEPARTMENT) N. MUNIR AHMED SHAIKH MR.900.089 168.285 11.757 2. B.215.064 List of NIT and ICP S.302 5. Undertakings and Related Parties NIT and ICP Directors.064 2. MIRZA SHAMIM AHMAD KHAN TOTAL HOLDING 1 1 1 1 1 36.140 37.04 100. THOMAS C.518 List of Directors S. Development Finance Institutions.518 37. of shareholders 3 3 7 1 No.844 5.259. P.624 % 78. Non-Banking Finance Institutions. of shares 77.788.NO 1 2 3 4 5 6 7 FOLIO 4113 4487 4579 4596 4607 03277-144 06122-5280 NAME MR.926 77.189.No 1 2 3 4 5 6 Shareholders category Associated Companies.85 7 8 24 49 2. CEO and Their Spouses Executives Public Sector Companies and Corporations Banks. ABBOTT ASIA INVESTMENTS LIMITED TRUSTEES OF ABBOTT LAB (PAK) LTD.00 List of Associated Companies and Undertakings S.189.73 0.STAFF PROVIDEND FUND TOTAL HOLDING 76.17 12.33 0.671.671. FREYMAN MR.243 830.479 97. 2010 S. Modaraba and Mutual Funds Others Individuals TOTAL No. ASIF JOOMA MR.04 0. Insurance Companies.Categories of Shareholders As at December 31.538 2.449 438. STAFF PENSION FUND TRUSTEES ABBOTT LAB (PAK) LTD. ANGELO KONDES SYED ANIS AHMED KAMRAN Y.098 1.670.

000 10.462 135.236 738. 2010 Public Sector Companies and Corporations S.R. ABBOTT ASIA INVESTMENTS LIMITED HOLDING 76.NO 1 FOLIO 4502 NAME M/S.624 830.000 523. Insurance Companies.TRUSTEE FIRST HABIB STOCK FUND MCBFSL-TRUSTEE URSF-EQUITY SUB FUND MCBFSL-TRUSTEE UIRSF-EQUITY SUB FUND TOTAL HOLDING 48 2 5.TREASURY CDC .089 Shareholders holding 10% or more voting interest S. THE BANK OF KHYBER NATIONAL BANK OF PAKISTAN NATIONAL BANK OF PAKISTAN MCB BANK LIMITED .600 6. OF PAKISTAN TOTAL HOLDING 830.986 236.000 252.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 FOLIO 3031 3137 00083-36 00307-40281 02295-39 02394-29 03277-3711 03277-7520 03277-10526 03277-10633 03277-57588 03277-69871 03798-52 03889-28 03889-44 04127-28 06411-21 07088-39 10728-27 11320-25 11353-22 12310-25 12526-29 12534-28 NAME M/S.516 42.NO 1 FOLIO 02683-23 NAME STATE LIFE INSURANCE CORP.117 53.259.766 1.050 31.242.244 518. LTD. Development Finance Institutions.431 1.500 64.STOCK FUND B.588 7.LIMITED FIRST CONSTELLATION MODARABA ATLAS INSURANCE LIMITED ASIA CARE HEALTH & LIFE INSURANCE CO. TREASURY DIVISION. Modaraba and Mutual Funds S. Non-Banking Finance Institutions.TRUSTEE HBL .215. GOLDEN ARROW SELECTED STOCK UNITED INSURANCE CO OF PAK LTD IDBP (ICP UNIT) INNOVATIVE INVESTMENT BANK LIMITED FAYSAL BANK LIMITED NIB BANK LIMITED ADAMJEE INSURANCE COMPANY LIMITED FIRST HABIB MODARABA HABIB INSURANCE CO.624 Banks.000 9.596 1.500 7. CDC .500 56. GUARDIAN MODARABA NATIONAL INVESTMENT TRUST LIMITED CDC .500 5.R.086 1.267.361 4.TRUSTEE AKD INDEX TRACKER FUND THE BANK OF PUNJAB.449 109 .Categories of Shareholders As at December 31.

2011 to Monday. Freyman Mr. The Beneficial owner of the shares of the Company in the Central Depository System of the CDC of his/her proxy entitled to attend and vote at this meeting. 3. 2011. 1-A. To approve a cash dividend.I. Karachi. Attested copies of CNIC or Passport of the Beneficial Owner of t he shares of the Company in the Central Depository System of the Central Depository Company (CDC) and the proxy. State Life Building No. and the same shall be produced in original at the time of the meeting to authenticate the identity. To elect seven directors as fixed by the Board in accordance with the Companies Ordinance 1984.30 p. in the Jasmine Hall of Beach Luxury Hotel. Thomas C. The names of the r etiring Directors are as follows: Mr. speak and vote instead of him/her. The Share Transfer books of the Company will r emain closed from Saturday. Kamran Y. Chundrigar Road. FAMCO Associates (Pvt) Limited (Formerly Ferguson Associates (Pvt) Limited). 5. A pr oxy need. to transact the following business: ORDINARY BUSINESS 1. 4. 2011 will be consider ed in time for entitlement of cash dividend. The proxy shall produce his/her original CNIC or Passport to prove his/her identity. March 19 th. March 28th. Munir Ahmad Shaikh Mr. consider and adopt the Audited Accounts together with the Directors and Auditors’ Reports thereon for the thirteen months ended December 31st. Shamim Ahmad Khan By Order of the Board Karachi : dated this 22nd day of February 2011 Malik Saadatullah Company Secretary Notes: 1. 2. Asif Jooma Mr. To appoint the Auditors of the Company up to the next Annual General Meeting and to authorise the Dir ectors to fix their remuneration. A member of the Company entitled to attend and vote at the meeting may appoint a proxy to attend. Moulvi T amizuddin Khan Road. the Board of Directors' resolution/power of attorney with specimen signature of the nominee shall be submitted with the proxy form to the Company. 29th March. 2011 (both days inclusive).m. 3.Notice of Annual General Meeting NOTICE is hereby given that the 62 nd Annual General Meeting of the Company will be convened on Tuesday. 4. not be a member of the Company . for a period of 3 years commencing 25 th March. Proxies must be deposited at the Company's registered office not less than 48 hours before the time of holding the meeting. Angelo Kondes Syed Anis Ahmed Mr. 1 st Floor. 2011 at 3. 2. To receive. In case of corporate entity. Abbott Pakistan Annual Report 2010 110 . March 18th. Karachi-74000 at the close of business on Friday . shall be furnished with the proxy form to the Company. 2010. Transfer received in order by our Shares Registrar. I. shall pr oduce his/her original CNIC or Passport to pr ove his/her identity. entitled to attend and vote at the meeting. Mirza Mr.

Lahore Stock Exchage and Islamabad Stock Exchange and has read the relevant provision contained therein. CDC Account Holders will further have to follow the under mentioned guidelines as laid down in Circular 1 dated January 26. a development financial institution or a non-banking financial institution. The proxy form shall be witnessed by two persons whose names. (ii) B. that his/ her name is bor ne on the register of National Tax Payers ( except where he/ she is a non-resident). For Attending the Meeting: (i) In case of individuals.6. 7. if any immediately. (C) a declaration in the terms of clauses (iii) and (iv) of the Code of Corporate Gover nance to the effect that he/ she is not serving as Dir ectos of ten other listed companies. the Board of Directors' resolution/ power of attorney with specimen signature of the nominee shall be pr oduced (unless it has been pr ovided earlier) at the time of the Meeting. the Board of Directors' resolution/power of attorney with specimen signature shall be submitted (unless it has been pr ovided earlier) along with pr oxy form to the Company . (v) In case of corporate entity. (ii) (iii) (iv) The Proxy shall pr oduce his/her original CNIC or original passport at the time of the Meeting. 1984 together with (A) consent in form 28. the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations. 1984. (B) a Declaration with consent to act as Dir ectors in the prescribed form under clause (ii) of the Code of Corporate Governance to the effect that he/ she is aware of the duties and powers of the Directors under the Companies Ordinance. 8. For Appointing Proxies: (i) In case of individuals. Attested copies of CNIC or the passport of the beneficial owners and of the Proxy shall be furnished with the proxy form. Any person who seeks to contest the election of directors shall file with the Company at its registered office not later than fourteen days before the day of the above said meeting his/ her intention to offer himself/ herself for the election of Directors in terms of Section178 (3) of the Companies Ordinance. 10. 9. the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations. addresses and CNIC numbers shall be mentioned on the form. that he/ she has not been convicted by a court of competent jurisdiction as defaulter in payment of any loan to a banking company. shall submit the proxy form as per the above requirement. In case of corporate entity. Form of proxy is attached in the Annual Report. Members who have not yet submitted photocopy of their computerized national identity cards to the Company are requested to send the same at the earliest. 111 . the Memorandum and Articles of the Comoany and the Listing Regulations of the Karachi Stock Exchange. A. 2000 issued by the Securities and Exchange Commission of Pakistan. shall authenticate his/her identity by showing his/her original National Identity Card (CNIC) or original passport at the time of attending the meeting. Shareholders are requested to notify the Company of any change in their addr esses.

2011 3rd week of April. 2010 September 16. 2011 Abbott Pakistan Annual Report 2010 112 . 2011 3rd week of February. 2010 March 15. 2010 July 22. 2010 3rd quarter ended August 31. 2011 3rd week of October. 2011 2nd week of August. 2010 Thirteen months ended December 31. 2010 2nd quarter ended May 31. 2011 2nd quarter ending June 30. 2012 Actual dates for announcement of financial results for the Financial Year 2009-10 : 1st quarter ended February 28. 2011 Year ending December 31. 2011 3rd quarter ending September 30. 2010 February 22.Calendar of Financial events Tentative dates for announcement of financial results for the Financial Year 2011: 1st quarter ending March 31.

53700. St-02.O.pk 113 . 061-4556145 Fax: 061-4551817 Lahore 16-Km Shah Pur Kanjran Multan Road Lahore. Karachi Distribution Offices Multan Hassan Abad Gate # 2 Near Pak Arab Fertilizers Khanewal Road Multan.Contact Details Karachi City Office 8Th Floor. 44800. Radio Pakistan Transmission Centre. Tel: 042-7512188.7512199 Fax: 042-7511171 Islamabad Plot # 136 Street # 9.com. Box 7229. P. Faysal House. Karachi Registered Office Opp. Tel: 051-4445020. 1-10/3 Industrial Area Islamabad . 051-4448278 Fax:051-4449868 Website www. Landhi. Hyderabad Road.abbott.60650. Shahrah-e-faisal. Tel: 061-4551818. 051-4447464.

4. not later than 48 hours before the time for holding the meeting and must be duly stamped.ABBOTT LABORATORIES (PAKISTAN) LIMITED P. signed and witnessed. Proxies in order to be effective. No. entitled to attend and vote at this meeting.m.O. 2011 at 3:30 p. and at any adjournment thereof. March 29th. Shall be furnished the proxy form to the Company. Signature of Member Shareholder’s Folio No. Witness: Signature: Name: CNIC No. Box 7229. 5/- 2. 2 3. Box 7229. Note: 1. Karachi-74400 Proxy Form I/We of in the district of being a member of ABBOTT LABORATORIES (PAKISTAN) LIMITED and holder of Ordinary Shares as per Share Register Folio No. Attested copies of CNIC or Passport of the Beneficial Owner of the shares of the Company in the Central Depository System of the Central Depository Company (CDC) and the proxy. Landhi. must be received by the Company Secretary.D. CDC A/c No. The Beneficial Owner of share of the Company in the Central Depository System of the Central Depository Company (CDC) of His/her proxy entitled to attend and vote at this meeting. Abbott Laboratories (Pakistan) Limited P. As witnessed given under my/our hand(s) day of 2011 1. appoint and Sub Account No. hereby appoint (Name) of or failing him (Name) of as my / our proxy to vote for me/us and on my/our behalf at the 62nd Annual General Meeting of the Company to be held on Tuesday. Address: Affix Revenue stamps of Rs. In case of corporate entity. . the Board of Directors’ resolution/power of attorney with specimen signature of the nominees shall be submitted with the proxy form to the Company and the same shall be produced in original at the time of the meeting to authenticate the identity. Address: Witness: Signature: Name: CNIC No.O. CNIC No. and/or CDC Participant I. shall produce his/her original NIC or passport to prove his/her identity.

O.AFFIX CORRECT POSTAGE ABBOTT LABORATORIES (PAKISTAN) LIMITED. . P. Landhi KARACHI-74400. Box 7229.

O.pk . Karachi-74400 Tel: (92-21) 111 Abbott (111-222-688) Fax: (92-21) 35001903 URL: www.abbott. Box 7229.ABBOTT LABORATORIES (PAKISTAN) LIMITED P.com.

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