2015 A n n u a l R e p o r t

Abbott Pakistan

2015 ANNUAL REPORT

Abbott is a globally diversified healthcare company whose central purpose is to help people, at all the stages
of life, live their best possible lives through better health. We offer a broad portfolio of market-leading
products that align with favorable long-term healthcare trends in both developed and developing markets.
Building on a strong foundation of more than 125 years of success, our company is poised to deliver durable
growth, expanding margins, strong cash flow and increasing returns to shareholders.

Table of Contents
1

Our Vision

56 Our Global Citizenship Priorities

Our Mission

60 Awards and Recognition

Message From CEO

62 Corporate Information

4 Our Values

63 Corporate Structure

6 Life. To The Fullest

64 Directors Profile

8 Winning Together

66 Corporate Governance

10 Balanced

68 Brief Terms of Reference of Board Committees

12 Aligned

69 Board Committees Attendance

14 Leading

70 Directors Report

16 Established Pharmaceuticals

78 Key Operating and Financial Data

20 Nutrition

94 Statement of Compliance with the Code of Corporate

Governance

24 Diagnostics
28 Diabetes Care
32 Highlights Of The Year
34 Geographical Presence
36 Product Launches 2015
38 Our Portfolio Solutions
42 Ethics and Compliance
44 Human Resource Development
48 Environment, Health & Safety
52 Corporate Social Responsibility at Abbott Pakistan
54 Supporting Our Communities

96 Review Report to the Members on Statement of

Compliance with Best Practices of Code of Corporate
Governance
97 Auditors Report to the Members
98 Financial Statements
143 Pattern of Shareholding
147 Notice of Annual General Meeting
151 Calendar of Financial Events
152 Glossary

Proxy Form

Theme
Winning Together
At Abbott, we are all about teamwork, with a method to it. From getting started with the aim of adding
value, to collaboration which is at the heart of it all. We measure risk-taking, to re-adjust and keep on track.
Finally taking ownership where we not only analyze the outcome, but also set new goals. Thus we start the
process all over again, keeping a check on our key behaviors. But in the end we all know that we can only
win being together.

Abbott Pakistan

2015 ANNUAL REPORT

Vision
To be the most admired
healthcare company in Pakistan.

Mission
To deliver consistently superior
products and services which contribute
significantly to improve the quality of life
of consumers.

A Tradition of Innovation
More than 125 years ago, 30-year-old Dr. Wallace C. Abbott, a practicing physician and pharmacy
proprietor, founded the company that bears his name. Using the active part of a medicinal plant,
known as the alkaloid, he formed tiny pills, called dosimetric granules, which provided
more accurate and effective dosing for his patients than other treatments available at the time.
The demand for these accurate granules soon far exceeded the needs of his own practice and,
from these modest origins, was born Abbott, one of the worlds most broad-based health care
companies and a global leader in the discovery, development and manufacture of products that
span the continuum of care.

Abbott Pakistan

2015 ANNUAL REPORT

MESSAGE FROM SYED ANIS AHMED,

OUR NEW MANAGING DIRECTOR AND
CHIEF EXECUTIVE*

products portfolio mix with leading brands in almost

all therapeutical areas with presence in businesses:
Established Pharmaceuticals, Nutrition, Diagnostics
and Diabetes care.
This offers us the widest range of opportunities to
address the most relevant needs and capture and build
on emerging trends technological or demographic,
social or economic. We continually shape our business
to ensure that it remains ready and able to provide
what our customers needs are.

I am extremely humbled and grateful to Almighty

for the opportunity bestowed upon me to lead this
great company. I am thankful to Board members, our
regional & local management and most importantly all
the employees for their trust, support and confidence
they have shown and given me in all these years and I
look forward to work with all of you as a Team to make
this company a great place to work while achieving new
levels of success.

We are not without challenges but with products

innovation, operational excellence, commercial
execution and winning behaviors, we will touch new
horizons in terms of quality products, future growth
and profitability of the business. So, this translates into
higher value to shareholders, better serving to patients
and positive contribution in health care sector of the
Country.
Syed Anis Ahmed, MD & CEO Abbott Pakistan

We launched a new brand last year that captures

Abbotts mission, its philosophy, its spirit and the way
it does business Life. To the Fullest. This expresses
our companys deep respect for people and our world,
and our commitment to help them both thrive through
better health.
Abbott Pakistans existence in Pakistan is almost as old
as Pakistan. It started its operations in 1948 and today
we are the 2nd leading pharmaceutical company of the
Country, operating two state-of-art manufacturing
facilities in Karachi. We have the most diverse
*

Mr Arshad Saeed Husain, ex-Chief Executive Officer of the company resigned and ceased to hold the position effective January 1, 2016. Subsequently, the Board of
Directors appointed Syed Anis Ahmed as Interim Chief Executive. Thereafter in the month of March 2016, the Board of Directors has finalized the appointment of
Syed Anis Ahmed as Managing Director & Chief Executive Officer of Abbott Laboratories (Pakistan) Limited.

Abbott Pakistan

2015 ANNUAL REPORT

THIS IS A BBOTT

Our solutionsacross the spectrum of care

and for all stages of lifehelp people live
their best lives through better health.

Abbott Pakistan

2015 ANNUAL REPORT

our values
Values are the foundation for building a meaningful
corporate identity. Abbott is a company rooted in
values and our core values of honesty, integrity and
fairness describe a standard of behavior expected of
every Abbott employee.
Abbott has four differentiating values built on these
core values that speak to the unique strengths that
have made our company what it is today, and describe
the strengths we continue to build on to deliver our
business goals.
The values are a blueprint for employee behavior. They
are the underpinnings of our Brand Promise, defining
how we serve our constituents. These values are

woven into all business processes company-wide over

time, informing how we plan and run our businesses,
how we serve our customers, how we measure and
motivate performance, and how we communicate
internally and externally. Aligning our organization
around this cohesive set of values has been critical to
the achievement of Abbotts brand and business goals.
Pioneering
Leading-edge science and innovative commercialization
We lead with solutions that address human needs
by pioneering innovative treatments and solutions,
lifesaving medical devices, and new approaches to
managing health.

Abbott Pakistan

Achieving
Customer-focused outcomes and world-class execution
We drive for meaningful results demanding of
ourselves and each other because our work impacts
peoples lives. Were committed to working together to
deliver solutions that are effective and profitable. Our
focus on execution and collaboration ensures that we
keep our promises to each other and to those we serve.
Caring

2015 ANNUAL REPORT

respect for people is demonstrated in what we do and

how we act.
Enduring
Commitment and purpose
Enduring means both honoring our history and
maintaining our commitment to the future. We will
always be here to help keep people healthy. We keep
our promises, acting in accordance with all of our
values.

Making a difference in peoples lives

Caring is central to the work that we do to help people
live healthier lives. We have tremendous respect for
the lives of everyone touched by our company. Our

Values are the foundation for building a

meaningful corporate identity. Abbott is
a company rooted in values and our core
values of honesty, integrity and fairness
describe a standard of behavior expected
of every Abbott employee.

Abbott Pakistan

2015 ANNUAL REPORT

LIFE.

Abbott Pakistan

2015 ANNUAL REPORT

to the fullest.
People across the world share a simple goal.
They want to live their fullest lives, achieve their
highest potential and become their best possible
selves. At Abbott, we help them do that, with
innovative, high-quality products and services that
help people live not just longer, but better.

Abbott Pakistan

2015 ANNUAL REPORT

winning

together

Abbott Pakistan

Transforming
now to fuel our
future

2015 ANNUAL REPORT

OUR KEY BEHAVIORS

Adding Value
Collaboration
Measured Risk-Taking
Ownership

STRATEGIC
OBJECTIVES
Leadership in branded generic pharmaceutical
market
Sustain and grow developed markets
Strong therapeutic franchises
Quality products delivered through reliable
supply chain

STRATEGIC ENABLERS
HIGH PERFORMANCE ORGANIZATION
Winning
Portfolios
Commercial
Execution

Brand
Equity
Cost
Leadership

Winning Together
Behaviors & Culture

Abbott Pakistan

2015 ANNUAL REPORT

BALANCED

and broad-based
portfolio

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Abbott Pakistan

180+
products

Our broad portfolio lets

Abbott better address
the needs of every
segment we serve

2015 ANNUAL REPORT

The breadth and balance of

our product portfolio lets
Abbott help more people,
in more places, and gives
us increased stability in an
ever-changing scenario.
DIVERSE PORTFOLIO MIX
2%

17%
5%

Established
Pharmaceuticals*
Diagnostics

76%

Nutrition
Diabetescare

* includes General Health Care

PRESENCE IN ALL THERAPEUTIC AREAS

Gastroenterology
Pediatrics
Womens & Mens Health
Cardio Vascular and
Metabolic

Pain
Central Nervous System
Respiratory
Hospital Care

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Abbott Pakistan

2015 ANNUAL REPORT

ALIGNED

with a changing
environment

At every stage of life

Our products are there
to help from infancy
through adulthood

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Infants

Children

Adults

Infants Formula
Diagnostics
Pharmaceuticals

Pediatric Nutrition
Diagnostics
Diabetes Care
Pharmaceuticals

Adult Nutrition
Diagnostics
Diabetes Care
Pharmaceuticals

Abbott Pakistan

2015 ANNUAL REPORT

As our economy
expands, Abbott
is well positioned
to grow with the
countrys demand
for healthcare.
INCREASED INVESTMENT IN HEALTHCARE

Abbott invested more

than Rs 1 billion in
2015 for enhancement
of productivity and
efficiency of plant
operations to meet
future healthcare
needs of the country at
international standards.

DIVERSIFIED SEGMENT OF POPULATION

From new born to

aging adults, Abbott
encircles life and is
committed to nurturing
its customers through
a comprehensive line of
products that cater to
the diverse healthcare
needs of every segment
of people in Pakistan.
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Abbott Pakistan

2015 ANNUAL REPORT

LEADING

across
our businesses

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Abbott Pakistan

2015 ANNUAL REPORT

Leaders set the agenda. With

leading positions in our
businesses, Abbott is well
positioned to drive change
and improve healthcare.

LEADING
commercial presence

#2 pharmaceutical
company in Pakistan.
More than 180
branded products.
Two state-of-art
manufacturing
facilities in Karachi.

No.1

Pharma brands in many

therapeutic areas
Nutrition company in Pakistan
Immunoassay diagnostics
and blood screening

LEADING
innovation

Abbott research has

resulted in nextgeneration products
that have redefined
the standard of care in
several treatment areas.
LEADING
brands

With a global profile

that is more visible than
ever, Abbott is building
on a foundation of trust
that weve built over our
more than 125 years in
business.

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Abbott Pakistan

2015 ANNUAL REPORT

ESTABLISHED
PHARMACEUTICALS

EXPANDING OUR
IMPACT IN FASTGROWING MARKET

With the help of Abbotts Anti-epileptic

drug (AED), Hania is able to have an
epilepsy free normal life. She is progressing
at school and enjoying her playtime
without fear of another episode.

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Abbott Pakistan

Hania Hoor, 7 years old is a student of

Kindergarten. At the age of 3, she had 3
episodes of generalized body stiffness
and head deviation followed by brief
loss of consciousness and was taken to
a neurologist.
The EEG revealed an abnormality
suggesting generalized and multifocal
epilepsy.

2015 ANNUAL REPORT

she is physically and mentally very

active. She has a good memory and is
completely free from seizures.
Hania is now attending Kindergarten
and she has received A grade showing
excellent progress in her school.
Abbott helps patients live their best
possible lives.

Hania has since then been put on

Abbotts Anti-epileptic drug (AED)
by her neurologist and has been using
it since the last 4 years. Since then

Teachers comments: She is a wellmannered child. She pays good

attention and has clear concepts.
She works well in group activities.

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Abbott Pakistan

2015 ANNUAL REPORT

ESTABLISHED
PHARMACEUTICALS

RESHAPED
FOR
ACCELERATED
GROWTH

Were helping more people

in Pakistan by bringing them
high quality, branded generic
pharmaceuticals that have been
successfully treating patients for
years.
Were tailoring our product offerings
to the specific needs of the country,
offering new formulations, delivery
methods and packaging. Abbott
has leadership positions in many
therapeutic areas and is well aligned
with the fundamentals driving longterm growth for healthcare.

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TRUSTED BRANDS
People around the world rely on the quality of
medications with Abbotts name on the label
2015 BUSINESS HIGHLIGHTS
8 new product launches
Successful launch of portfolio selling
strategy
Introduction of Tablet devices for better
interactive communication with health
care professionals
Formulation of the trade team to better
cater the needs of pharmacies and
consumer products

Abbott Pakistan

2015 ANNUAL REPORT

> 150

PRODUCTS IN OUR PORTFOLIO

LARGE PORTFOLIO
Abbotts extensive portfolio of products lets us
more easily tailor our product offering to the
needs of specific therapeutic areas

NEW PRODUCT LAUNCHES IN 2015

ARINAC ACHIEVED
RS.

BILLION

SALES IN 2015

GLOBAL STRENGTH
Abbott has a pharmaceutical commercial
presence in approximately 90 countries
LEADING BRANDS
KLARICID
Pakistans #1 macrolide antibiotic
BRUFEN
Pakistans #1 ibuprofen brand in volume
SURBEX Z
Pakistans #1 multivitamin+mineral tablet
ARINAC
Pakistans #1 cough and cold preparation
DUPHASTON
Pakistans #1 brand for progesterone deficiency
SERC
Pakistans #1 branded treatment for vertigo
DUPHALAC
Pakistans #1 branded treatment for constipation
EPIVAL
Pakistans #1 branded treatment for epilepsy
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Abbott Pakistan

2015 ANNUAL REPORT

NUTRITION

A SOLID FOUNDATION
FOR A FULL LIFE

Recovery from a traumatic condition

of spinal cord was made easy, thanks to
Ensure. Now Dr. Raees Ahmed Siddiqui
can go about his daily life, feeling
energetic and fresh.

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Abbott Pakistan

Dr. Raees Ahmed Siddiqui in 2012

suffered from a traumatic condition in
spinal cord. He was advised complete
bed rest and was recommended to
take a nutritionally rich diet, however
considering limited physical activity
his meal intake was limited and
insufficient.
In order to cater for this, he started
Ensure daily during his recovery
period. Dr. Raees is now 60 years old

2015 ANNUAL REPORT

and has found excellent results from

Ensure in his overall recovery and feels
healthy and energetic.
He is currently working as a family
physician, operating his own private
practice.
Raees feels that Ensure is his partner
for life!

ENSURE

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Abbott Pakistan

2015 ANNUAL REPORT

NUTRITION

UNIQUELY
BALANCED
FOR
GROWTH

At Abbott, we develop science-based

nutrition products to help make
every stage of life a healthy one.
We offer trusted brands like Similac
infant formula and the complete
nutrition of PediaSure, for children,
and Ensure, for adults. We support
the unique nutrition needs of
people with chronic conditions with
products like Glucerna, for people
with diabetes.

TARGETED STRATEGIES
Focus on retail sales that will be key to our
continued success
2015 BUSINESS HIGHLIGHTS
Gross Profit increased by 27% from last year
Sales grew by 20% over last year
Continued to build our Infant Nutrition
business with the launch of Similac Neosure
and Similac Total Comfort 3
Increased our market share from 29.4% to
31.1% (IMS-Q4 2015)

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Abbott Pakistan

#1

HEALTHY LIVING
Adult Nutrition products, Ensure and Glucerna
help in delivering healthy living for people

NEW PRODUCT LAUNCHES IN 2015

2015 ANNUAL REPORT

NUTRITION COMPANY
IN PAKISTAN

RESPONSIVE TO CONSUMER PREFERENCE

In 2015, Abbott launched Similac Neosure
and Similac Total Comfort 3 to meet diversified
nutritional needs of consumers
PEDIASURE ACHIEVED
RS.

BILLION

SALES IN 2015

> 90%

Abbott represents more than ninety percent of

all sales in the Adult Nutrition segment and is
focused on expanding the overall market

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Abbott Pakistan

2015 ANNUAL REPORT

DIAGNOSTICS

TIMELY INFORMATION
TO IMPROVE THE
QUALITY OF CARE

Dr. Imran N. Ahmed, Chief of Pathology

& Director Laboratories, Shifa
International Hospital, Islamabad finds
Abbott instrumentation more robust and
reliable.

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Abbott Pakistan

Shifa International Hospital is a

private hospital based in Islamabad.
The laboratory of the hospital offers a
wide variety of tests and caters for all
in-patients and out-patients.
I have been working as the Chief of
Pathology & Director Laboratories
of Shifa International Hospitals
Limited since 2014. I find the Abbott
instrumentation more robust & reliable
and the entire Abbott diagnostics team
very helpful and supportive.

2015 ANNUAL REPORT

Abbott has been a key partner of Shifa

International and its laboratory for
over last 15 years. In 2010, Abbott
ARCHITECT ci8200 (seamless
integrated system) was installed along
with a mirror image back up unit.
This helped us in addressing growing
volume needs improving quality and
turnaround time at Shifa International
Hospital laboratory, benefiting patients
ultimately.

ARCHITECT

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Abbott Pakistan

2015 ANNUAL REPORT

DIAGNOSTICS

IMPROVING
OUTCOMES
WORLDWIDE

Abbott is a leader in core laboratory

in vitro diagnostics, offering a broad
portfolio spanning immunoassay,
clinical chemistry, hematology,
blood screening, molecular and
informatics. Our diagnostics
solutions are designed to improve
decision-making and patient care
across the entire healthcare system.
Abbott develops and commercializes
in vitro diagnostics instruments,
tests and related automation and
informatics solutions for use in
hospitals, reference labs, physician
offices, emergency departments and
clinics.
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CORE LABORATORY
Abbotts focus on combining speed, accuracy
and efficiency helps maintain our position as the
leader in immunoassay and blood screening
2015 BUSINESS HIGHLIGHTS
Sales growth by 14% over last year.
Launch of state-of-art Cardiac Marker, the
ARCHITECT High Sensitive Troponin I
Global acquisition of Omnilab, expanding
our lab informatics capabilities in global as
well as local market.

Abbott Pakistan

INTEGRATED SOLUTION
Our broad range of innovative instruments
and tests meets the needs of blood banks and
laboratories of all specialties and sizes

next
generation
systems
These new Abbott Systems
will improve care while creating
greater efficiencies in the
healthcare system

2015 ANNUAL REPORT

MOLECULAR
Abbotts m2000 RealTime System provides
automation, a broad assay menu, and other
solutions to make laboratories more efficient
LEADING BRANDS ACROSS OUR
DIAGNOSTICS BUSINESS
ARCHITECT
Immunoassay and clinical chemistry systems and tests
ACCELERATOR A3600
Advanced lab-automation system
CELL-DYN
Hematology analyzers and reagents
M2000
Molecular system and tests for infectious diseases
I-STAT
Point-of-Care testing system and tests

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Abbott Pakistan

2015 ANNUAL REPORT

DIABETES CARE

INNOVATION
IN ACTION

Realizing that diabetes is not a disease but

just a condition was helpful for M. Khurram
Idrees. With the help of FreeStyle Optium
blood glucose monitoring system, his life is
back to normal with peace of mind.

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Abbott Pakistan

M. Khurram Idrees, a young banker

who is a fond reader, likes to spend
time in reading new and interesting
articles.

2015 ANNUAL REPORT

On the basis of tests conducted, he

was diagnosed with Type 2 Diabetes
Mellitus in December 2012.

Along with the medications, he has

Through his reading and research,
been managing his diabetes well with
he noticed that excessive thirst is one
balanced diet, regular exercise and
of the many symptoms of Diabetes.
more importantly through continuous
This made him conscious as he was
blood glucose testing with FreeStyle
experiencing the symptom on a regular Optium blood glucose monitoring
basis. Having realized this matter he
system.
decided to go for a medical checkup.

FREESTYLE
OPTIUM

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Abbott Pakistan

2015 ANNUAL REPORT

DIABETES CARE

LEADING-EDGE
TECHNOLOGIES
THAT IMPROVE
LIVES

Good health management is one of

the most important goals for people
living with diabetes. So, in addition
to product development, Abbott
seeks to help patients and their
caregivers understand how they can
make the most beneficial choices in
consultation with their healthcare
team.
Abbotts focus on diabetes is part of
the global healthcare companys aim
to improve life through products and
technologies that span the breadth
of healthcare.

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BUILDING TRUST
People across the world count on the FreeStyle
glucose monitoring system to help them
manage their diabetes

AN ESTIMATED

7 MILLION

PEOPLE IN PAKISTAN
HAVE DIABETES.
AN ADDITIONAL

7 MILLION

ARE ON THE VERGE OF

DEVELOPING
DIABETES.

Abbott Pakistan

2015 ANNUAL REPORT

STATE-OF-ART SOFTWARE

CONSISTENT AND ACCURATE

Healthcare professionals depend on Abbott to

provide them with state-of-art tools to help them
care for their patients with diabetes

Consistent and accurate glucose monitoring is the

foundation of any diabetes management plan so
were committed to continuous improvement in the
way patients and professionals measure, track and
analyze glucose levels

OUR SOLUTION
The FreeStyle Optium system
offers intuitive setup and
simple icon-driven menus that
help simplify blood glucose
monitoring. The system tests
blood glucose using the FreeStyle
Optium blood glucose test strips.

EASY, EVERYDAY TESTING

Simple 2-Step Testing
Insert strip, add adequate blood sample,
and test begins
Smart Icon-Driven Menu
Intuitive setup and easy navigation
Easy-to-Use Buttons
Easy to review resultswith ability to
scroll back and forth
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Abbott Pakistan

2015 ANNUAL REPORT

Highlights of
the year

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Abbott Pakistan

2015 ANNUAL REPORT

During this year we

produced:

2,081 million Tablets

119.13 million bottles

of Liquid Products

10.54 million Tubes

7.69 million fills of

Injectables

5.38 million bottles

of General Health Care

Product

229.74 million units

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Abbott Pakistan

2015 ANNUAL REPORT

GEOGRAPHICAL
PRESENCE

Asia Pacific
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
New Zealand
Pakistan
Philippine
Singapore
South Korea
Taiwan
Thailand
Turkey
Vietnam

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Europe
Albania
Austria
Azerbaijan
Belarus
Belgium
Bosnia-Herzegovina
Bulgaria
Croatia
Czech Republic
Denmark
Egypt
Finland
France
Georgia
Germany
Greece
Hungary
Ireland
Italy
Kazakhstan
Latvia
Lithuania
Netherlands
Norway
Poland
Portugal
Republic of Serbia
Romania
Russian Fed.
Slovakia
Slovenia
Spain
Sweden
Switzerland
Ukraine
UK

Latin America and Canada

Argentina
Brazil
Canada
Chile
Colombia
Costa Rica
Dominican Republic
Ecuador
El Salvador
Guatemala
Mexico
Peru
Puerto Rico
Uruguay
Venezuela

Middle East and Africa

Algeria
Israel
Kuwait
Lebanon
Saudi Arabia
South Africa
Tunisia
Turkey
United Arab Emirates

Abbott Pakistan

2015 ANNUAL REPORT

United States
Illonis - Abbott Park - Head Office

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Abbott Pakistan

2015 ANNUAL REPORT

Product
Launches 2015

25mcg
50mcg
75mcg
100mcg
125mcg

360g

January

March

June

1/5mg
1/10mg

Orange Fragrance
Lavender Fragrance

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200ml

July

Abbott Pakistan

2015 ANNUAL REPORT

80mg+480mg
15mg/90mg-60ml
15mg/90mg-30ml

1mg
2mg
3mg
4mg

370g

AUGUST

September

October

December

0.5ml

5mg
10mg
20mg

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Abbott Pakistan

2015 ANNUAL REPORT

OUR
PORTFOLIO
SOLUTIONS
Gastroenterology

Pain

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Abbott Pakistan

2015 ANNUAL REPORT

Womens & Mens Health

Pediatrics

Cardio Vascular and Metabolic

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Abbott Pakistan

2015 ANNUAL REPORT

OUR
PORTFOLIO
SOLUTIONS
Respiratory

Central Nervous System

40

Hospital Care

Abbott Pakistan

2015 ANNUAL REPORT

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Abbott Pakistan

2015 ANNUAL REPORT

Ethics and
compliance
Abbotts integrity is based on decisions large and
small that our employees make each day at every
level of the company. Our decisions are guided by
our values, a sense of ethics and respect for the law.
To support our commitment to ethical conduct and
compliance with the law, Abbott has a longstanding
ethics and compliance program. The ethics and
compliance program applies to all officers, employees,
contract workers and agents of Abbott Laboratories,
its divisions, and affiliates, whether operating inside
or outside of the United States. The Abbott Code of
Business Conduct (Code) sets forth the principles
and behaviors to which all Abbott employees
must commit. All employees are required to read,

42

understand and certify their adherence to this Code

annually.
Our Code makes it clear that we do not tolerate illegal
or unethical behavior in any of Abbotts business
dealings. It stresses the importance of ethical and
honest conduct, appropriate treatment of confidential
information, avoiding conflicts of interest, and
the accuracy and integrity of Abbotts books and
records. In addition, it requires timely and accurate
public disclosures and compliance with relevant
laws, including food and drug laws, laws relating to
government healthcare programs and antitrust laws.

Abbott Pakistan

One of the key features of our Code is its Speak Up

program where by employees are encouraged through
several communication channels to report promptly
any violations or potential violations of the Code or
complaints or concerns with respect to their work
or seek guidance or advice in understanding the
applicability of the Code.
A key to our ethics and compliance program is the
policies and procedures that the Abbott Office of
Ethics & Compliance (OEC) has created to guide
employees as they conduct their day-to-day activities
within the global healthcare community.

2015 ANNUAL REPORT

Honesty, fairness and integrity represent the necessary

conditions of an ethical workplace and are nonnegotiable.
Whether writing an email, managing external
relationships, working through ethical decisions or
interpreting a regulation, Abbott employees play a
critical role in maintaining Abbotts reputation. To
ensure they have the most up-to-date knowledge about
how to comply with laws and regulations, the Office of
Ethics and Compliance (OEC) offers a comprehensive
list of courses and resources that provide guidance and
training on ethics and compliance topics most relevant
to our business.
During 2015 as part of OEC initiatives, a new online
training system LERN (Legal & Ethics Resource
Network) has been launched in Abbott Pakistan.
The LERN Training Program is an online program
designed to educate Abbott employees on a broad
range of ethics and compliance topics. LERN courses
are designed to provide employees with the practical
knowledge needed to recognize legal and ethical issues
that may be encountered on the job, to make sound
decisions, and to know when to seek assistance from
the OEC and other resources.
LERN courses are assigned to employees using LERN
system annually which include courses on Code of
Business Conduct, Code re-certification, Overview
of Abbotts Ethics and Compliance Program, AntiCorruption, Ethical Awareness and Decision Making
and Ethically Speaking. Its assignment, notification
and progress are managed and tracked at employee
level through system reports which is part of top
leadership review on periodic basis.

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Abbott Pakistan

2015 ANNUAL REPORT

human resource
development
At Abbott, we believe that when we are healthiest,
we have the potential to live not just longer, but
better. We believe that humans are capable of doing
amazing things, and that healthy people create more
productive communities that can overcome many
kinds of barriers. This belief that health is the key
to unlocking our potential drives our work every
day. As we expanded to meet changing health needs
through new offerings, we also expanded and invested
to meet these needs where they are in Pakistan and
around the world.
To do that well requires people on the ground to
understand the culture, and bring together the right
partners and expertise to develop the most relevant

44

solutions. Doing this well also requires that our human

resources share the same vision and are committed
to deliver results that not only adds value to our
shareholders, but to themselves as well and to the
society and communities that we serve. We take pride
in our rich heritage and highly committed human
resources who strive their best to achieve results with
highest degrees of commitment.

Creating Impacts
Our employees understand the impact their work and
our products can have on people. As a result, we strive
every day to do the right thing, in the right way.

Abbott Pakistan

Our leadership makes sure employees as stewards

of our company understand and, have access to the
policies, training, resources and people they need to be
able to conduct themselves with the highest standards
and expectations for integrity and ethics.
When we say that we are making an impact, our claim
is also backed by our global citizenship initiatives
where we are making measurable, positive impacts on
improving health for everyone, everywhere.

Unique Employment Value

Propositions
At Abbott, employees have the opportunity to work
in successful diverse business environment where

2015 ANNUAL REPORT

employees can make a positive impact on the health of

the communities we serve while pursuing their own
professional growth.
At Abbott, employees have the opportunity to realize
their own full potential while helping others achieve
theirs. Its an employment value proposition that
few companies can claim. Being a stable, growing,
relevant company, we provide our employees with
excellent development opportunities. With our global
presence and work in diverse areas of healthcare,
Abbott employees have the chance to pursue a variety
of career experiences in an environment rich in
opportunities for career growth and advancement. Our
Human Resource strategies follow a comprehensive
approach towards attracting, retaining, developing and
growing employees to enable them to achieve their
career ambitions while making a positive impact on the
society and contributing towards achieving business
objectives.

Talent Attraction
Our innovative and varied workplace programs have
earned us recognition as a leading employer globally as
well as in Pakistan. By providing equal opportunities
across several professions within the business
supplemented by excellent opportunities to grow
within the company both internally as well as in the
global organization, we are able to attract some of the
best talents across disciplines and career levels.
Our employee development programs are aligned with
our global strategies and talent needs. We provide
industry competitive compensation and benefits
packages. As an equal opportunity employer, your
company maintains a strong focus on diversity and
inclusion and being a socially responsible corporate
citizen. Together, these make Abbott a company
where employees enjoy a healthy yet competitive
environment where their skills and competencies are
adequately challenged which keeps employee excited,
engaged and committed to your company.

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Abbott Pakistan

2015 ANNUAL REPORT

Talent Retention
Our thriving culture fosters a stimulating, challenging
and fulfilling work environment. Each employee has
an opportunity to work to his/her optimum level.
Their contributions are well recognized through
several reward and recognition programs that add
to their motivation and commitment. Employees
are provided with opportunities to work in crossfunctional and cross-divisional teams which enhances
their knowledge base and equip them with better and
broader vision of businesses. Our talent management
and retention processes help identify people with
specific talents and supports employees in their
growth goals.

Employee Growth and

Succession Plans
We value innovation, diversity, collaboration, personal
development and growth opportunities. At Abbott, we
are always looking forward, never content to dwell
on our past successes. Employees find themselves
continually challenged and engaged, and pushed
not only to meet, but also to exceed their personal
development goals. We focus on strong teamwork and
relationships, and we believe that diverse teams drive
innovation and encourage personal growth.

46

Employees also get ample opportunities to work

in global teams on various local rollout as well as
international initiatives. This is an exposure only
a few multinational companies can offer. With our
functions being strategically aligned with business
needs, and high degree of focused and aligned learning
and exposure, our employees are able to explore
internal growth opportunities locally as well as for
international roles based on their own readiness and
interest and companys needs. Our well-structured
individual Talent Management and Succession Plans
provide for excellent learning and organic growth to
employees within Abbott Pakistan. The international
openings additionally provide employees with
opportunities to achieve or exceed their aspirations
of working in international markets. This way, your
company not only caters to employees own growth
and development needs, but also benefits in the
process by having a robust talent pipeline in place for
future opportunities.

A GREAT PLACE TO WORK

We have been widely regarded as an employer of
choice, with numerous local and global awards
recognizing our commitment to fostering an
extraordinary workplace. With our ongoing employee
events that focus on both engagement and employees

Abbott Pakistan

well-being; your HR team took and drove several

initiatives that contributed to employee motivation and
retention.
Senior Management Interactions
To provide higher degree of accessibility to employees,
HR Director and CEO conducted face to face sessions
with the entire sales and distribution teams across
Pakistan. This followed similar sessions in cycle
meetings of the salesforce where other senior members
of the management team interacted with employees
across Pakistan and responded directly to their queries
and concerns. This direct exposure has considerably
boosted the morale of the teams.
Several employee events were also organized across
Pakistan to provide our cross-country teams to further
interact with their senior management in an informal
set-up and enjoy some relaxed, quality time outside
of workplace setting. Several other similar initiatives
are in pipeline that are expected to further strengthen
the bond between employees and the company while
ensuring that each member of Abbott family remains
fully committed and highly motivated.
Workday
Workday, an online HR Management System rolled
out globally earlier this year was successfully rolledout this year in Pakistan as well. The system enables
employees to have ready access to their personnel
data as well as data of the organization reporting into
them as managers. This has brought about significant
operational efficiencies enabling managers to give
more time to their core functional responsibilities.
Learning and Development Initiatives
This year, your company has given a stronger than
ever focus towards employees development. Through
structured in-house programs and relevant programs
being offered by external vendors, several employees
were provided with opportunities to further enhance
their skills to deliver even better in their current role,
as well as prepare themselves to positions of higher
responsibilities.

2015 ANNUAL REPORT

Winning Together Behavior and Culture

WTBC is another one of Abbotts global initiative
which was also rolled-out in Abbott Pakistan. Through
this rollout, employees were exposed to the winning
behaviors that contribute directly to their own
performance and well-being; while also contributing
directly to business. All divisions of Abbott Pakistan
are participating in this learning and transformation
journey.

Employment of special persons

As a socially responsible corporate entity, Abbott
provides employment opportunity to special persons
and dependents of deceased or incapacitated
employees subject to availability of position and
suitability of the candidates in accordance with the
companys recruitment policy/standard in a supportive
environment for mutual growth.

Management Traineeships and

Internship Programs
As a responsible corporate citizen, your company
continued to provide management traineeships and
internship experiences to students from various
academic institutions. While management trainees
provide your company with succession pipeline,
interns continue to serve as our ambassadors at these
institutions. You will be happy to note that this year,
one intern has been selected for Abbott EMEA regions
formal Campus Ambassador Program as well.

Through providing stronger support to the businesses,

your HR Team is poised to continue making your
company A Great Place to Work.

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Abbott Pakistan

2015 ANNUAL REPORT

Environment
Health & safety
Abbott has clear, consistent policies and standards
requiring that we operate in a manner that promotes
employee health, safety and productivity while also
protecting the environment which has been the key for
continual improvement in the Environment, Health
& Safety culture of the organization and the EHS
Department itself. This year was no different.
Both manufacturing plants and commercial operations
sites adhere to technical requirements, including
metrics, auditing and reporting, which serve as a
baseline for health and safety performance.

48

As usual the Company was able to achieve all of its

EHS goals well within target dates, even the ones as
challenging, yet enthralling, as achieving Zero Waste to
Landfill i.e. preventing any waste from being discarded
to landfill (leading best practice of the industry), and
not just stopping there but also discovery green best
environmentally feasible solutions for the wastes to be
either re-used or recycled as a beneficial product.
One of such innovative solutions was the installation
of Compost Machine, which contributed significantly
towards the reduction of waste by 30%! Another key
milestone was the development of in-house state of the

Abbott Pakistan

art Medical Surveillance Room. Other achievements

during the year were engaging almost all of the plant
employees in carrying out Fire Prevention training
sessions, water conservation by 3%, 2% CO2 footprint
reduction, rise in reporting and rectification of near
misses & potential incidents and achieving almost
200,000 lost time accident free work hours at project
sites. All in all it was a good year where Abbott
Pakistan was able to improve its health and safety
standards and initiate some ground breaking ideas for
environmental conversation.

2015 ANNUAL REPORT

THE WASTE BURDEN & ABBOTTS ZERO

WASTE TO LANDFILL INITIATIVE (ZWL)
Zero waste to landfill is defined as the process
whereby a site finds ethical, economical, efficient
means to manage processes to avoid and eliminate
the volume and toxicity of waste and materials, and
to conserve and recover all resources. Implementing
ZWL eliminates all waste sent to a landfill and diverts
it to become a resource for other beneficial use.
Our environmental programs aim to improve the
efficiency and sustainability of our business activities
and products, reduce greenhouse gas emissions, water
use and waste. We integrate sound EHS practices
consistent with our management system into all
aspects of the business.
Zero Waste is a philosophy that encourages the
redesign of resource life cycles so that all products
are reused. Abbott Pakistan achieved a 20% reduction
in waste generation in 2015 with zero waste going to
landfill. This was a total reduction of 100 tons of waste
produced at site. This was accomplished through;
Segregation at source
Identification of As-Is reusable opportunities
Composting
Employee education was also an important component
of the program which included display of Awareness
Posters & Food Waste Statistics. Training sessions
on Waste Management were also held for key team
members at the plants.

49

Abbott Pakistan

2015 ANNUAL REPORT

COMPOSTING
As concern about landfill space increases, worldwide
interest in recycling by means of composting is
growing. Composting is a process for converting
decomposable organic materials into useful stable
products. This is also one of the only ways to revitalize
soil vitality due to phosphorus depletion in soil.
In this regard, Abbott Pakistan acquired the
composting machine, leading by example in industry.
The machine at site is a fully automated in-vessel
composting system that converts organic waste to
compost in just 24 hours. It has a capacity to produce
400 kg material as compost per day utilizing garden
waste and food scrapes from site canteen. This project
supports Abbotts zero waste to landfill initiative.

Energy Conservation
Increasing concerns about reducing carbon emissions
and growing global support for actions on energy
and environmental issues has shaped in a corporate
environmental commitment. Energy conservation has
emerged as a key component of these commitments.
Taking energy conservation initiatives gives
control over costs and a competitive edge as well as
instrumental towards meeting environmental goals.
Heating, ventilation and air-conditioning (HVAC) is
one of the major sources of consumption of energy at
our facility and offered opportunity to improve energy
efficiency. To seize this opportunity, a project is at the
verge of completion making our HVAC equipment
and process energy efficient through a Direct Digital
Control system by installing chilled water control
valves, temperature/RH sensors and VFDs.

Water Conservation
Abbott Pakistan gives special attention to water
conservation. This encompasses the activities made
to manage fresh water as a sustainable resource, to
protect the water environment, and to meet current
and future human demand.
The company achieved a 2.2% reduction in water
consumption in 2015. This was a total conservation
of 2 million US gallons of water used. This was
accomplished through:
- Re-use of RO Reject Water for flushing in toilets

50

-
-

Installation of automatic water faucets

Installation of flow meters for better monitoring

Quality Assurance
SolTRAQs: As a part of Quality Management System
improvement, SolTRAQs (Solution Tracking of
Regulatory and Quality Systems) has been deployed
to handle Validation Change Requests,Exceptions
and Laboratory Investigations. This will bring further
compliance improvement to regulations and policies,
and increased access to relevant data by various
functions, along with velocity improvement in quality
related processes.
SolTRAQs is used to manage multiple quality system
business processes at Abbott. This system gives
users the ability to manage their tasks in a more time
efficient and organized manner.
Quality month: The company celebrated Quality
& Regulatory month during November 2015. This
was celebrated at both plants with several activities
aimed at re-emphasizing that everyones action
contributes towards promoting culture of high quality
at production sites.
A variety of different activities which included
poster displays at both sites, distribution of flyers,
displaying screen savers with quality messages on
personal computers and presentation on quality were
carried out to promote a culture of high quality in the
Company.

Abbott Pakistan

2015 ANNUAL REPORT

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Abbott Pakistan

2015 ANNUAL REPORT

Corporate Social
Responsibility
at Abbott Pakistan
TREE PLANTATION DRIVE TREES
PLANTED IN COORDINATION WITH
SINDH FORESTRY DEPARTMENT

the student there a greener and cleaner environment

together with sense of responsibility for preserving the
nature.

To promote a culture of plantations, Abbott Pakistan

helped plant a total of 400 plants in the community by
collaborating with Sindh Forestry department.

BLOOD CENTER PROGRAM - BLOOD

DONATION IN COLLABORATION WITH
INDUS HOSPITAL

For this purpose Pir Bakhsh Village close to Korangi

plant was the location chosen. A team visited the
residential area and handed over the plants to the local
residents. Similarly Swedish College near Landhi
plant was chosen for Neem plantations, bringing to

Carrying forward the tradition of CSR activities, this

year in January 2015, Abbott Pakistan once again
collaborated with Indus Hospital to participate in their
Blood Donation Program.

52

Abbott Pakistan

Blood donation centers were arranged at both Landhi

and Korangi plants where number of employees
volunteered and made this drive successful.
This contribution of Abbott was highly appreciated by
the management of Indus Hospital.

EMPLOYEE HEALTH CAMP

As an initiative to help promote employee health
and well-being, Abbott Pakistan organized a health
camp where free of cost flu vaccination was offered to
Abbott employees at site. A total of 1,294 employees
benefited from this free of cost health offering. All

2015 ANNUAL REPORT

employees participated in the activity with great

enthusiasm.

TCFs Exposure Trip at Abbott

Landhi and Korangi Plant
During November 2015 a group of 115 TCF (Mentees
& Mentors) visited both Abbott Plants (Landhi /
Korangi). It was a great learning experience for
the students, they were motivated and keen on
continuing their education so they can become part of
organizations like Abbott Laboratories in future.

As of 2015, TCF has established 1,060

purpose-built school units nationwide with
an enrolment of 165,000 students.

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Abbott Pakistan

2015 ANNUAL REPORT

supporting our
communities
FIT AFTER FIFTY CAMPAIGN TO HELP
PATIENTS CREATE AWARENESS OF A
GOOD DIET IN THEIR SENIOR YEARS
To connect with our audiences in a meaningful way,
we developed the Ensure Health Drive, which was
an experiential campaign on wheels that went to
public areas across 4 metropolitan cities of Pakistan to
educate people about the prospect of staying Fit After
Fifty. Our vans traveled to location after location,
where they intercepted and invited people to come
in for an interactive session on health in senior years,
assisted by tools such as the Handgrip meter and
a professional assessment conducted by doctors &
dieticians.

54

Over 9,800 people experienced this context specific

campaign and were educated about the issue and
people were guided on ideal supplements available to
stay healthy in senior years.

ABBOTT Organized PATIENT

SUPPORT PROGRAM TO HELP
PATIENTS IN DIAGNOSIS OF THYROID
DISORDERS
Abbott Pakistan not only endeavors to provide quality
medicines that are efficacious but also supports the
community in diagnosis of patients health conditions.

Abbott Pakistan

The Companys medical department collaborated with

Abbott diagnostic division and a reputable clinical
laboratory to initiate a Patient Support Program. This
program was aimed to support health care professionals
and patients to test for thyroid disorders. On multiple
occasions thyroid disorders go undiagnosed due to
prohibitive cost of tests.
Abbott Pakistan through this support program is
providing free testing to approximately 5,000 patients
across the country. This service will not only support
doctors in diagnosis but will also help patients in timely
treatment.

2015 ANNUAL REPORT

ABBOTT Organized WELLNESS

CAMPAIGN FOR PATIENTS TO HELP
CREATE AWARENESS ABOUT LEVEL
OF ZINC IN THEIR BODY AND ITS
IMPORTANCE
Abbott Pakistan takes pride in giving back to the
community. Therefore, helping people live life
healthier is not just a vision but a part of our practical
reality. It is for this purpose that Abbotts women
and men health portfolio leads pan-Pakistan patient
support programs, providing free of cost zinc taste
tests, bone mineral densitometry and hemoglobin
testing to the common public.
These are done under the banner of Abbott Wellness
Camps without advocating the name of any particular
brand. Through these camps, patients can get an
indication of the level of zinc in their body. They can
also get an indication of their bone health or the level
of hemoglobin in their body. They are then encouraged
to consult their doctor or certified pharmacist for
further medical recommendation.

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Abbott Pakistan

2015 ANNUAL REPORT

our global
citizenship
priorities
At Abbott, we constantly work to integrate our
citizenship strategy with our core business strategy.
Abbott has four strategic priorities that, we believe,
best align our citizenship activities and resources with
our business operations. These are the material areas
where our core business can have the most significant
impact on society and the environment. We continue
to work diligently in pursuit of these priorities:

Innovating For The Future

Using our core strength as an innovator to make a

difference to the health and well-being of people
everywhere.

56

Enhancing Access

Breaking down the barriers that prevent many people

worldwide from accessing the medicine and health
care they need.

Supporting Patients and Consumers

Working to improve quality of life for our patients

and consumers, while helping to educate health care
professionals about the latest tools and treatments.

Safeguarding the Environment

Playing our part in addressing the global challenges of

climate change and water scarcity while minimizing
the environmental impacts of our products.

Abbott Pakistan

2015 ANNUAL REPORT

These four priorities provide a clear road map for

pursuing our responsibilities as a socially responsible
citizen, yet are flexible enough to enable creativity and
innovation across our diverse mix of businesses.

portfolio of pharmaceuticals, nutrition, medical and

diagnostic devices share a common framework of
excellence in science, research, development and
engineering.

Innovating for the Future

With increasing awareness and demands, we will

continue to run ICH-GCP (International Conference
on Harmonization Good Clinical Practices) complaint
clinical trials with the highest ethical standards to
demonstrate clinical effectiveness and with robust
Pharmacovigilance system to establish the safety of
Abbott products with our consumers. This in turn will
ensure availability of health care solutions for doctors
and highest quality products for patients.

Scientific discovery and innovation are the hallmarks

of Abbotts business and the core of our commitment
to advancing health and well being. Our broad
scientific expertise enables us to create new health
care products, carry them through the critical stages
of development and then deliver them to patients and
health care providers around the world. Our diverse

Our ongoing investment in R & D enables us to address

the ever changing global disease burden and to foster
new, improved solutions for emerging health care
challenges.

Enhancing Access
Our expertise and resources help to bridge gaps in
healthcare access. We tailor our approach to specific
patient needs in specific regions of the world.
Expanding access to care requires addressing a
complex array of challenges. Lack of awareness
about health care issues and treatments, inadequate
healthcare infrastructure and social stigmas also can
make it difficult for patients to get the medicines they
need. 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 wellbeing.
Expanding access to health care for patients around
the world is a key component of Abbotts commitment
to citizenship and is integral to our core business
strategy. One of the most critical challenges facing our
society is a broad lack of awareness about health care
issues and treatments.

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Abbott Pakistan

2015 ANNUAL REPORT

Abbott continues to be committed towards improving

the quality of life of the people it serves.
Educating Healthcare Professionals - We continue
to invest in continuing medical education of our
healthcare professionals while striking a balance
between continuing education and ethics compliance.
Reaching out to Under-served Communities - Abbott is
also aware of its surroundings and is committed
to giving back to the community where it operates.

SUPPORTING Patients & Consumers

Our ability to create life-enhancing and life-preserving
products is constantly bolstered by scientific advances,
but delivering on our commitment to patients and
consumers goes well beyond the laboratory. To
deliver safe and effective products - at the right time
and in the right dosage or formulation - we work to
educate patients and health care professionals about
potential risks and side effects. All medicines, health
care interventions, procedures and products carry
some degree of risk - which must be balanced against

58

the often greater risks associated with the illnesses or

injuries these interventions are designed to treat. Fully
educating and informing our stakeholders about these
risks and benefits is paramount. Along with educating
patients and health care professionals about the safe
use of our products, we work hard to ensure safety and
consumer protection throughout the manufacturing
and distribution process. The safety of many product
ingredients is generating significant debate throughout
the health care industry. At the same time, the broad
geographic dispersion of our supply chain requires
increased oversight and auditing.
Our obligation to protect patients and consumers
goes beyond simply complying with regulatory
requirements. It means earning and keeping the trust
of all those who depend on our products by:
Ensuring quality, safety and product integrity
across the full spectrum of research, development
and manufacturing of our products and packaging.
Ensuring the quality, safety and authenticity of
each product that bears the Abbott name through
our distribution channels.

Abbott Pakistan

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.
Directly and indirectly educating patients
about proper storage, use and disposal of their
medicines and health care products under
appropriate medical supervision.
As a leader in global health care, Abbotts goal is
to create and develop products that preserve and
enhance the lives of patients and consumers.

Safeguarding the Environment

We work diligently to reduce our global
environmental impacts - from the sourcing of raw
materials, to the manufacture and distribution of
our products, to the use and disposal of our products
by consumers and health care providers. Our
environmental stewardship initiatives help protect
the planet while improving efficiency, reducing
costs and preserving our ability to do business in the
future. We have three environmental priorities:

2015 ANNUAL REPORT

to conform to regulatory requirements and meet

applicable internal Environment, Health and
Safety (EHS) standards.
Establish goals and strategies for the enterprise
and report publicly on our progress.
Integrate sound EHS practices consistent with
our management system into all aspects of the
business, maintaining legal compliance.
Our global standards include technical program
requirements, metrics and audit and reporting
mechanisms that serve as a baseline expectation for
health and safety performance worldwide. Every
Abbott manufacturing plant implements a plan based
on these standards and is evaluated regularly.
Clear policies, standards and management system
ensure we operate in a manner that protects
both human health and the environment. Our
environmental management metrics, auditing and
reporting mechanisms are evaluated regularly, and
we hold our employees responsible for improving
their performance against these targets as part of our
annual performance appraisal process.

Climate change
Water usage
Product stewardship
We recognize the interrelated nature of these three
priorities. Our work in one area inevitably affects
the others. We have developed comprehensive
management and governance systems to ensure that
environmental considerations are fully integrated
into our day-to-day planning and business processes.
Our environmental stewardship initiatives help
protects the planet while improving efficiency,
reducing costs and preserving our ability to do
business in the future.
Our environmental policy achieves these objectives:
Improve the efficiency and sustainability of
our business activities and products, reducing
greenhouse gas emissions, water use and waste.
Require contractors working on behalf of Abbott

59

Abbott Pakistan

2015 ANNUAL REPORT

AWARDS AND
RECOGNITION

ABBOTT WINS BEST CORPORATE REPORT AWARD

2014
Abbott Pakistan was awarded 2nd position in the Others
category (which includes pharmaceutical companies) of
the 2014 Best Corporate Report Awards organized by the
Institute of Chartered Accountants of Pakistan (ICAP) and
Institute of Cost and Management Accountants of Pakistan
(ICMAP).
The objective of the award is to encourage and give
recognition to companies showing excellence in annual
corporate reporting that promotes corporate accountability
and transparency through the publication of timely,

60

qualitative and reader-friendly annual reports. Hence, this

achievement of the company is a manifestation of Abbotts
unrelenting drive towards excellence in all domains.

ABBOTT WINS BEST CORPORATE SOCIAL

RESPONSIBILITY (CSR) CONTRIBUTORS AWARD
Abbott Pakistan during 2015 was awarded the Best CSR
Contributor in the category of Green Environmental
Stewardship, at the event of 5th Corporate Social
Responsibility Awards 2016 organized by The Professional
Network. This award is an acknowledgment of Abbotts
contribution towards promotion of CSR values part of its
culture.

Abbott Pakistan

Some major CSR activities included procurement and

operation of Compost Machine that converts food and
garden waste into useful fertilizer, celebrating World
Environment Day with school children, educating them
on the topic of environmental conversation and providing
them with plantation opportunity, blood donation camps
organized at Landhi and Korangi plants and plantation drive
conducted in coordination with a college.

ABBOTT WINS MAP CORPORATE EXCELLENCE

AWARD
Abbott Pakistan won the 31st Corporate Excellence
Award and was awarded first rank by the Management

2015 ANNUAL REPORT

Association of Pakistan (MAP) in Pharmaceutical and Bio

Tech sector for the third consecutive year.
MAP annually organizes
Corporate Excellence
Awards to recognize and
honor the best managed
companies in Pakistan
that follow guidelines
and principles of latest
management techniques
by awarding them
Corporate Excellence
Award through an
extensive, transparent
process. The evaluation
process and criteria
entails Management
Practices Appraisal based
on questionnaire and
Top Management meetings and detailed financial evaluation
based on Annual Report.
Abbott Pakistan, through its consistent Abbott values, best
leadership practices and winning behavior culture has
once again won this distinguished corporate award. Such
recognition is clearly a source of continued enhanced image
of Abbott Pakistan in the corporate world.

ABBOTT WINS COMMERCIAL EHS PROGRAM OF

THE YEAR
Abbott Pakistan has been selected WINNER of 2014
Commercial EHS Program of the Year Large Affiliate
Category, organized by Global EHS of Abbott Group in
which the company competed against various international
affiliates.
The objective of the award is to recognize and honor the
Environmental, Health & Safety (EHS) programs that have
consistently demonstrated best-practice performance. This
award shows Abbott Pakistans commitment to excellence
and acknowledges the Companys commitment to caring for
its employees, customers and society.
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2015 ANNUAL REPORT

corporate information
BOARD OF DIRECTORS
Munir A. Shaikh (Chairman)
Arshad Saeed Husain (Chief Executive Officer)*
Kamran Y. Mirza
Ehsan Ali Malik
Syed Anis Ahmed (Chief Financial Officer)*
Shamim Ahmad Khan
Zehra Naqvi
AUDIT COMMITTEE
Ehsan Ali Malik (Chairman)
Shamim Ahmad Khan
Kamran Y. Mirza
Shahzeb Khan (Chief Internal Auditor - by invitation)
Syed Anis Ahmed (CFO by invitation)*
Malik Saadatullah (Secretary)
HUMAN RESOURSE AND
REMUNERATION COMMITTEE
Munir A. Shaikh (Chairman)
Arshad Saeed Husain*
Shamim Ahmad Khan
Zehra Naqvi
Asghar Huda
SHARE TRANSFER COMMITTEE
Arshad Saeed Husain (Chairman)*
Syed Anis Ahmed*
Kamran Y. Mirza
Malik Saadatullah (Secretary)
BANKING COMMITTEE
Zehra Naqvi (Chairman)
Arshad Saeed Husain*
Syed Anis Ahmed*
CHIEF FINANCIAL OFFICER
Syed Anis Ahmed*
COMPANY SECRETARY
Malik Saadatullah
AUDITORS
Ernst & Young Ford Rhodes
Sidat Hyder & Company
(a member firm of Ernst & Young)
Chartered Accountants
LEGAL ADVISORS
Orr, Dignam & Co.
Surridge & Beecheno
SHARE REGISTRAR
FAMCO Associates (Pvt) Limited
8-F, Next to Hotel Faran, Nursery Block 6
P.E.C.H.S, Shahrah-e-Faisal
Karachi

BANKERS
Faysal Bank Limited
Citibank N.A.
Deutsche Bank AG
MCB Bank Limited
National Bank of Pakistan
Standard Chartered Bank (Pakistan) Limited
The Bank of Tokyo-Mitsubishi UFJ Limited
Habib Bank Limited
REGISTERED OFFICE
Opposite Radio Pakistan
Transmission Centre,
Hyderabad Road, Landhi,
P.O. Box 7229, Karachi Pakistan.
CITY OFFICE
8th Floor, Faysal House,
St-02, Shahrah-e-Faisal, Karachi Pakistan.
WEBSITE
www.abbott.com.pk
SENIOR MANAGEMENT TEAM
Arshad Saeed Husain*
(Chief Executive Officer)
Syed Anis Ahmed*
(Chief Financial Officer)
Anis A. Shah
(Director Plant Operations)
Asim Shafiq
(General Manager, Abbott Nutrition International Pakistan)
Habib Ahmed
(Country Manager, Abbott Diagnostics
Division Pakistan)
Dr. Sheikh Adnan Lateef
(Head of Abbott Diabetes Care Pakistan)
Dr. Farrukh Hafeez
(Director Quality Assurance)
Dr. Sarmad Maqbool
(Director Marketing & Strategy)
Asghar Huda
(Director Human Resource)
Seema Khan
(Director Regulatory Affairs)
Dr. Raeef Ahmed
(Director Medical Affairs)
Dr. Suleman Alvi
(Director Business Development)
Rana A. Latif
(Director Manufacturing)
Zahid Hussain
(Director Materials Management)

* Mr Arshad Saeed Husain, ex-Chief Executive Officer of the company resigned and ceased to hold the position effective January 1, 2016.
Subsequently, the Board of Directors appointed Syed Anis Ahmed as Interim Chief Executive. Thereafter in the month of March 2016,
the Board of Directors has finalized the appointment of Syed Anis Ahmed as Managing Director & Chief Executive Officer of Abbott
Laboratories (Pakistan) Limited.

62

Abbott Pakistan

2015 ANNUAL REPORT

corporate structure

SHAREHOLDERS

AUDIT COMMITTEE

BOARD OF DIRECTORS

CEO

HUMAN RESOURCE
COMMITTEE

SHARE TRANSFER
COMMITTEE

BANKING
COMMITTEE

INTERNAL AUDIT

MANAGEMENT

ESTABLISHED
PHARMACEUTICALS

NUTRITION

OTHERS

GENERAL HEALTH
CARE

DIAGNOSTICS

DIABETES CARE

63

Abbott Pakistan

2015 ANNUAL REPORT

Directors Profile

Munir Shaikh is currently Chairman of the Board of Directors of Abbott Laboratories

(Pakistan) Limited and also Chairman of the Board of Directors of Abbott India
Ltd. and Sunshine Holdings Ltd. Sri Lanka. All of these companies are publically
listed with their shares quoted on Pakistan, Mumbai and Colombo Stock Exchanges
respectively. Mr. Shaikh has held several management positions with Abbott
in Asia, Middle East and the United States. He was Managing Director of Abbott
Pakistan, Regional Manager, Caribbean based in Puerto Rico, Director of Business
Development based in Chicago, Vice President, Middle East and Africa based in
Dubai and Vice President Pacific, Asia Africa based in Singapore. Mr. Shaikh is a
fellow of the Institute of Chartered Accountants in England and Wales.

Munir A. Shaikh
Chairman

Arshad Saeed Husain served as the Chief Executive Officer of Abbott Laboratories (Pakistan)
Limited during 2015. Subsequently he tendered his resignation and ceased to hold the position
effective 1st January 2016. Arshad was also a member of the Board of Trustees of the Abbott Staff
Provident Fund and Abbott Staff Pension Fund. Earlier he was Managing Director for Syngenta
Pakistan Limited and President Director, PT Syngenta Indonesia. He has a Bachelors Degree
(Honors) with specialization in International Trade & Development from the London School of
Economics & Political Science, University of London.

Arshad Saeed Husain

Chief Executive Officer

Ehsan Ali Malik is part of the Board of Directors of Abbott Laboratories (Pakistan) Limited.
Recently he has retired as a Chief Executive Officer/Director of Unilever Pakistan Limited. He was
also a Director of Unilever Pakistan Foods Limited. He is currently serving as Director on Board
of IGI Life Insurance Limited and as a Chief Executive, Pakistan Business Council. Further, he
also served as a Chief Executive/ Director of Lever Chemical (Private) Limited, Lever Associated
Pakistan Trust (Private) Limited, Unilever Birds Eye Foods Pakistan (Private) Limited and Sadiq
(Private) Limited. His earlier international appointments covered Unilevers regional business in
Srilanka, Egypt, Lebanon, Jordan, Syria and Sudan as well as Unilevers Head Office in UK. Ehsan
is a Fellow of the Institute of Chartered Accountants in England and Wales and alumni of the
Wharton and Harvard Business Schools.

64

EHSAN ALI MALIK

Director

Abbott Pakistan

2015 ANNUAL REPORT

Syed Anis Ahmed is part of the Board of Directors of Abbott Laboratories (Pakistan) Ltd.
During 2015 he served as the Chief Financial Officer of Abbott Pakistan. Later, he was
appointed as Interim Chief Executive by the Board of Directors after resignation of Mr.
Arshad Saeed Husain. Thereafter in the month of March 2016, the Board of Directors has
finalized his appointment as Managing Director & Chief Executive Officer of Abbott
Laboratories (Pakistan) Limited. Anis is a member of Board of Trustees of the Abbott Staff
Provident Fund, Abbott Staff Pension Fund and Abbott Workers Profit Participation Fund.
He has more than 20 years of experience in Finance, Taxation, IT, Corporate Governance
and Compliance. Prior to Abbott, he was associated with A.F. Ferguson & Co. and Philips
Pakistan. Anis is a fellow member of the Institute of Chartered Accountants of Pakistan.

Syed Anis Ahmed

Director

Kamran Y. Mirza
Director

Kamran Mirza is part of the Board of Directors Abbott Laboratories (Pakistan) Limited.
Previously, he has also served as the Chief Executive Officer of Abbott Pakistan for 29
years. He currently serves as Director on the Boards of Safari & Outdoor Club of Pakistan,
International Steel Ltd., Karwan-e-Hayat and Bank Al-Falah. He is also Chairman &
Director of Education Fund for Sindh (EFS), Unilever Pakistan Foods Limited and Philip
Morris (Pakistan) Limited. In the past, he has also served as Chief Executive, Pakistan
Business Council, Chairman, Karachi Stock Exchange (KSE), President, Overseas
Chamber of Commerce & Industry (OICCI), President American Business Council (ABC)
and Chairman Pharma Bureau. He is a qualified Chartered Accountant from the United
Kingdom.

Shamim Ahmad Khan is part of the Board of Directors of Abbott Laboratories (Pakistan)
Limited. He also serves on the Boards of Packages Limited, IGI Insurance Limited,
Attock Refinery Ltd, IGI Life Insurance Ltd. and Karandaaz (Pvt) Limited (a non-profit
company sponsored by DFID). He is also a Member of the Board of Governors Sustainable
Development Policy Institute (SDP) and Advisory Committee of Centre for International
Private Enterprises (CIPE). After joining the Civil Service of Pakistan in 1962, Mr. Shamim
Ahmad Khan served in various senior positions in Government of Pakistan retried as
Secretary, Ministry of Commerce. For ten years he worked as Member and later as
Chairman of the Corporate Law Authority, the regulatory body for the corporate sector in
Pakistan. He was the founder Chairman of the Securities and Exchange Commission of
Pakistan.

Zehra NAQVI
Director

Shamim Ahmad
Khan
Director

Zehra Naqvi is the Chief Executive Officer of ACE Insurance Ltd. a wholly owned
subsidiary of ACE-INA International Holdings Limited, Delaware, USA (an ACE Group
Company). She has 35 years of experience in the Insurance sector. Prior to joining ACE,
she worked with Guardian Royal Exchange and Adamjee Insurance Company in Pakistan.
Ms. Naqvi is a member of the Punjab Board of Investment & Trade. She is on the Managing
Committee of the Overseas Investors Chamber of Commerce & Industry and the Insurance
Association of Pakistan. She has also served on the Executive Committee of the American
Business Council. She is a Chartered Insurer from the Chartered Insurance Institute, UK.
She has a B.Sc. Degree from Karachi University and an MBA Degree from the Institute of
Business Administration, Karachi.

65

Abbott Pakistan

2015 ANNUAL REPORT

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 Companys mission and goals. The Board of
Directors sets the following evaluation criteria to judge its
performance.
a. Compliance with the legislative system in which Abbott
Pakistan operates, particularly Companies Ordinance,
1984, listing regulations of Pakistan Stock Exchange,
and the Memorandum and Articles of Association of the
Company.
b. Review of the strategic plans and business risks, monitor
Companys performance against the planned objectives
and advise the management on strategic initiatives.
c. Establishing adequate internal control system in the
Company and its regular assessment through self
assessment mechanism and internal audit activities.
d. Ensuring required quorum of Board meeting is available,
in order to have detailed deliberation and quality
decision on matters of significance.
e. Ensuring training of Board of Directors including new
appointments such that each member is fully aware of
his roles and responsibilities.

PERFORMANCE EVALUATION OF THE

CHIEF EXECUTIVE
The Chief Executive Officer, being part of the Board, is
present in every meeting of the Board. The CEO provides
an overview of the Companys performance to the Board
and addresses any specific questions by the Board members.
The performance of the CEO is assessed through the
evaluation system set by Abbott Pakistan. The principle
factors of evaluation include financial performance, business
processes, compliance, business excellence and people
management.

Role of Chairman
The Chairman of the Board has a responsibility to lead the
Board and ensure its effective functioning and continuous
development.
Role of Chairman of the Board is to:

66

ensure that the Board is properly working and all

matters relevant to the effective functioning of the
Company are placed on the agenda of Board meetings;

conduct the Board meetings including fixing the agenda;

and

ensure that all the directors are enabled and encouraged

to fully participate in the deliberations and decisions of
the Board.

Role of Chief Executive

Chief Executive is responsible for the management of
the Company and its procedures in financial and other
matters, subject to the oversight and directions of the
Board, in accordance with the Companies Ordinance, 1984.
His responsibilities include implementation of strategies
and policies approved by the Board, making appropriate
arrangements to ensure that all the resources are properly
safeguarded and are used economically, efficiently and
effectively and in accordance with all statutory obligations.

Internal Control Framework

and Role of Internal Auditor
The Company maintains an established internal control
framework comprising clear structures, authority limits, and
accountabilities, well understood policies and procedures
and budgeting for review processes under oversight of
Board of Directors. All policies and control procedures are
documented in manuals.
As a part of internal control framework, the Board of
Directors acts in accordance with the recommendations
of the Audit Committee as documented in its terms of
reference.
In line with the requirements of Code of Corporate
Governance, the Company has established an independent
Internal Audit function who reports to the Audit Committee.
During the year, the Internal Audit function carried out its
activities in accordance with its approved Audit Program
and made its recommendations for value addition and
improvement in existing internal controls / operations.
Internal Audit function has played a vital role in improving
the overall control environment within the organization.

Abbott Pakistan

It is also acting as an advisor to other functions for

streamlining systems in addition to ensuring effective
implementation of Companys policies and suggesting
procedures for revenue maximization and cost savings.

Conflict of Interest among

BOARD members
Any conflict of interest relating to members of Board of
directors is managed as per provisions of the Companies
Ordinance, 1984 and rules and regulations of SECP and
Pakistan Stock Exchange.

Stakeholders engagement
At Abbott, a robust engagement takes place to understand
and respond to our legitimate stakeholder concerns. Our
key stakeholders are:

2015 ANNUAL REPORT

Safeguarding of Records
Abbott effectively ensures the safety of records. All records
are retained as long as they are required to meet legal,
administrative, operational and other requirements of the
Company.

IT Governance at Abbott
Abbott Pakistan has put into place governance
arrangements through an IT steering committee to align
IT related decisions and actions with the organizations
strategic and operational priorities. With senior executive
representation from each division and chaired by the
Managing Director, the committee meets on a quarterly
basis and provides oversight of IT Governance and input
on strategic alignment, value delivery and resource
management.

Shareholders
Customers
Suppliers
Banks
Employees
Government and regulatory authorities
The frequency of engagements is based on business needs
and corporate requirements as specified by the Code of
Corporate Governance, or as contracted, under defined
procedures.

67

Abbott Pakistan

2015 ANNUAL REPORT

brief terms of reference

of board committees
AUDIT COMMITTEE
The Committee comprises of three members, all of whom are Non-Executive Directors. The Audit Committee meets at least
four times a year. The Company Secretary acts as secretary to the Audit Committee. The brief terms of reference of the audit
committee are as follows:

Review quarterly, half yearly and annual financial statements of the company prior to their approval by the Board of
Directors.

Review preliminary announcements of results prior to publication.

At least once a year, the Audit Committee shall meet external auditors without Chief Financial Officer and Chief Internal
Auditor.

At least once a year, the Audit Committee shall meet Chief Internal Auditor without Chief Financial Officer and external
auditors.

Recommend the appointment of external auditors to the Board of Directors and consider any questions of resignation or
removal of external auditors, if any, audit fees, and provision by external auditors of any service in addition to audit of
financial statements.

Review management letter issued by the external auditors and management response thereto.

Determination of appropriate measures to safeguard the Companys assets.

Consideration of any other issue or matter as may be assigned to the Committee by the Board of Directors.

BANKING COMMITTEE
The Committee comprises of a Non-Executive Director, one Executive Director and Chief Executive Officer. The Banking
Committee approves matters relating to opening, closing and day-to-day operations of bank accounts, issuing such
instructions to the Companys bankers with regards to the Companys banking transaction and business, as it may consider
appropriate.

HUMAN RESOURCE and REMUNERATION COMMITTEE

The Committee consists of Chief Executive Officer and three Non-Executive Directors. The HR Director acts as Secretary
to the Committee. This Sub-Committee of the Board is responsible for reviewing the remuneration and benefits of the Chief
Executive Officer, Executive Directors, Company Secretary and Chief Internal Auditor. The meeting of the committee is held
at least once in a year.

SHARE TRANSFER COMMITTEE

The Committee comprises of Chief Executive Officer, one Executive Director and one Non-Executive Director. The Company
Secretary acts as secretary to the Committee. The Committee approves registration, transfer and transmission of shares.
Moreover, it also issues and cancels share certificates including duplicate share certificates.

68

Abbott Pakistan

2015 ANNUAL REPORT

board committees attendance

AUDIT COMMITTEE
Name

Category

Meetings
Held

Attended

Ehsan Ali Malik

Chairman - Non Executive Director

Shamim Ahmad Khan

Member - Non Executive Director

Kamran Y. Mirza

Member - Non Executive Director

Syed Anis Ahmed

By invitation - Chief Financial Officer

Abdul Wahab Godil

By invitation - Acting Chief Internal Auditor

Shahzeb Khan

By invitation - Chief Internal Auditor

Malik Saadatullah

Secretary

HUMAN RESOURCE AND REMUNERATION COMMITTEE

Name

Category

Meetings
Held

Attended

Munir A. Shaikh

Chairman - Non Executive Director

Arshad Saeed Husain

Member - Chief Executive Officer

Shamim Ahmad Khan

Member - Non Executive Director

Atif Aslam Bajwa*

Member - Non Executive Director

Zehra Naqvi**

Member - Non Executive Director

Nausheen Amin/Munika Kaneria

By invitation - Acting Secretary

Asghar Huda

Secretary

SHARE TRANSFER COMMITTEE

Name

Category

Meetings
Held

Attended

Arshad Saeed Husain

Chairman - Chief Executive Officer

12

12

Syed Anis Ahmed

Member - Executive Director

12

12

Kamran Y. Mirza

Member - Non Executive Director

12

12

Malik Saadatullah

Secretary

12

12

BANKING COMMITTEE
Name

Category

Meetings
Held

Attended

Atif Aslam Bajwa*

Chairman - Non Executive Director

Zehra Naqvi**

Chairman - Non Executive Director

Arshad Saeed Husain

Member - Chief Executive Officer

Syed Anis Ahmed

Member-Executive Director

* Removed from the Committee effective May 26, 2015

** Appointed as Member of Committee w.e.f August 21, 2015

69

Abbott Pakistan

2015 ANNUAL REPORT

DIRECTORS
REPORT
The Directors take pleasure in presenting this Report
together with the audited financial statements of the
Company for the year ended December 31, 2015.
OPERATING RESULTS
Profit for the period before taxation
Taxation
Profit after taxation
Other comprehensive income net of tax
Un-appropriated profit brought forward
Profit available for appropriation

Rs in 000
5,006,477
(1,419,741)
3,586,736
(102,629)
4,214,694
7,698,801

APPROPRIATIONS:
Final dividend 2014 Rs 4.8 per share
Interim dividend 2015 Rs 10 per share
Un-appropriated profit carried forward

70

(469,921)
(979,003)
6,249,877

FINANCIAL PERFORMANCE
Net sales for the year increased 8% over previous year. Gross
Profit ratio at 39% improved marginally. Further, decrease
in Taxation charge is due to reduced tax rate in the current
year. Additionally, deferred tax income in the current year as
against deferred tax charge in the prior year also contributed
to the decrease. Profit after tax for the year increased 27%
over prior year. Earnings Per Share was Rs 36.64 (2014: Rs
28.77).
The Directors are pleased to announce a final cash dividend
of Rs 20.00 per share (2014: Rs 4.80 per share), which is in
addition to an interim cash dividend of Rs 10.00 per share
(2014: Rs 3.00 per share) paid to the shareholders during
2015.

Abbott Pakistan

SEGMENT-WISE SALES AND MARKET PERFORMANCE

Pharmaceutical sales increased 5%. Nutritional sales
increased 20% over prior year mainly due to volume and
selective price increases of certain products. Pediasure,
Ensure and Glucerna posted strong double digit growth.
General Health Care (GHC), Diagnostic and Diabetes Care
sales for the year grew 12%. This is mainly driven by new
product launches.
INDUSTRY OVERVIEW
Pharmaceutical industry in Pakistan is currently estimated
at US $ 2.6 billion as per IMS December 2015. The market
share of MNCs is currently at 37% which has declined

2015 ANNUAL REPORT

significantly over the years. Some MNCs have been forced

to scale back their operations due to continued financial
viability of their products. This highlights need for more
pragmatic pricing policy by the Government. Abbott
Pakistan achieved share of 6.4% (as per IMS Dec. 2015,
MAT) in the pharmaceutical and nutrition market.
CAPITAL EXPENDITURE
The Company during the year made capital investment of
Rs. 1,174 million for enhancement of productivity, efficiency
of plant operations and future growth. Major capital
expenditure was for expanding manufacturing capacity of
Lyophilized products, Tablet manufacturing, and Liquid
manufacturing at Korangi.

71

Abbott Pakistan

2015 ANNUAL REPORT

LIQUIDITY MANAGEMENT AND CASH FLOW STRATEGY

During the period, Rs. 4,062 million was generated from
operations. At year end, the Company had liquid funds
comprising cash/bank balances and short term investments
amounting to Rs. 8,321 million net of investments on capital
projects and dividend payments.
A formal cash flow monitoring mechanism has been
developed whereby cash inflows and outflows are projected
and monitored on a regular basis. This ensures sufficient
availability of funds at all times while generating optimum
returns through placement of surplus liquidity in various
suitable investment opportunities.
The Company follows a prudent investment strategy for
placement of surplus funds. These funds are generally placed
in short-term bank deposits.
The Companys existing investment portfolio and new
proposals for funds placement are reviewed by the
investment committee comprising members of senior
management.
EVALUATION OF COMPANYS PERFORMANCE
For the purpose of evaluating the performance of the
Company, the management uses various indicators that
include industry growth, position of peer companies in
relevant therapeutic areas, prior years performance, macroeconomic indicators and business environment impacting
the Company.
Budgets are formulated and actual performance measured
against the budget at regular intervals during the year so
that remedial action could be taken on a timely basis. This
exercise is carried out for all the business segments of the
Company. The management believes that these indicators
will continue to be relevant in the future.
RISK MANAGEMENT
The Companys overall risk management program focuses
on minimizing potential adverse effects on the Companys
performance. The overall risk management of the Company
is carried out by the Companys senior management team
and the results are shared with the Board of Directors. This
entails identifying, evaluating and addressing strategic,
72

financial, commercial and operational risks faced by the

Company.
A senior management team also carries out a SWOT analysis
of the Company and its products. On the basis of the SWOT
analysis, key challenges are addressed and opportunities
identified, action plans developed and executed to achieve
the long term strategic objectives of the Company.
CONTRIBUTION TO NATIONAL EXCHEQUER
Your Company has contributed Rs 3,043 million (2014:
Rs 2,765 million) to the government on account of various
government levies including income tax, customs duties and
sales tax.
ENVIRONMENT, HEALTH AND SAFETY
Your Company has achieved the targets set for concept of
Zero Waste to Landfill through various waste reduction
initiatives including installation of composting machine.
Your company has pioneered to convert canteen and garden
waste into compost that can be utilized as fertilizer. To
conserve water, automatic water faucets and flow meters
have been installed.
Overall it proved to be a highly successful year in which
all the Environment, Health and Safety (EHS) goals were
achieved and a truly EHS enriched culture was promoted
throughout the organization.
BUSINESS PROCESS IMPROVEMENT
Abbott Pakistan has been continuously making investment
in production facilities for process improvement, energy
conservation, and improvement in quality and ensuring
regulatory, safety and environmental compliance.
Manufacturing capacity of liquid area has been expanded
and approved by regulatory authority. This should improve
productivity and customer service.
Sterile Manufacturing facility has been expanded to increase
manufacturing capacity of Lyophilized products by installing
a new state-of-the-art Lyophilizer (Freeze Dryer) of four
times higher capacity along with Vial Filling and Sealing
Machines to meet increasing customer demand.

Abbott Pakistan

New software Solution for Tracking Regulatory and Quality

Systems (SolTRAQs) has been deployed for Validation
Change Requests, Exceptions and Laboratory Investigations
to enhance process efficiency and compliance as part of
improvement in Quality Management System.
Overall, various Business Process Improvement initiatives
greatly contributed towards improving your Companys
financial performance.
HUMAN RESOURCES
Abbott Pakistan HR continued to take and drive several
initiatives that contributed to employee motivation and
retention.
Workday an online HR Management System which was
globally rolled-out earlier this year was also successfully
rolled-out in Pakistan. The system enables employees to
have ready access to their personnel data as well as data
of the organization reporting into them as managers. This
system is bringing about significant operational efficiencies
enabling managers to give more time to their core functional
responsibilities.
Winning Together Behavior and Culture; another one of
Abbotts global initiatives was rolled-out in Abbott Pakistan.
Through this rollout, employees were educated on behaviors
that positively contribute to their own performance and
well-being; while also contributing directly to business;
and it is expected to bring about a major positive change in
how employees pursue their targets. All divisions of Abbott
Pakistan are participating in this initiative.
As a responsible corporate citizen, your company continued
to provide management traineeships and internship
experiences to students from various academic institutions.
While management trainees provide your company with
succession pipeline, interns continue to serve as our
ambassadors at these institutions.
Your company has been placing a stronger than ever focus
on employees development, through structured in-house
programs and structured in-house and external programs to
enhance their skills.

2015 ANNUAL REPORT

By implementing all these initiatives, your company is

endeavoring to make itself A Great Place to Work.
GLOBAL CITIZENSHIP
At Abbott, we believe that responsible, sustainable businesses
have an important role to play in building a healthy, thriving
society. This commitment to global citizenship shapes
the way we operate, the people we hire, the activities we
support, and the relationships we form. To transform our
global citizenship ambitions into sustainable ideas, Abbott
focuses on four key priorities: Innovating for the Future,
Enhancing Access, Protecting Patients and Consumers and
Safeguarding the Environment.
Working in partnership with others, Abbott leverages its
core business expertise and resources to create sustainable
solutions in countries around the world.
SUBSEQUENT EVENTS
The Chief Executive Officer of the company has resigned
and ceased to hold the position effective January 1, 2016.
Subsequently, the Board of Directors has appointed Syed
Anis Ahmed, Director Finance as Interim Chief Executive
for the period of three months with effect from January 13,
2016.
No material changes or commitments affecting the financial
position of the Company have taken place between the end of
the year and the date of this report.
BUSINESS CHALLENGES AND FUTURE OUTLOOK
Lack of pricing mechanism is adversely impacting growth
of Pharmaceutical industry. This also hampers introduction
of new drugs in the country. Despite the enactment of
new Drug Pricing Policy (the Policy) by the Government
in 2015 with prescribed timeframe, The Drug Regulatory
Authority (the authority) has been unable to provide any
price adjustment for pending hardship applications for many
years. The Policy also mandated a rollback in drug prices
to October 2013 levels. In this respect, the Industry has
obtained a Stay Order from the Sindh High Court. Further,
there are concerns as to other provisions of the Policy where
the perspective of all the stakeholders has not been taken
into account.
73

Abbott Pakistan

2015 ANNUAL REPORT

The Company continues to face the ever present challenges

of rapid escalation in costs owing to inflation and devaluation
of Pak Rupee. In the absence of corresponding price
adjustments, efforts are being made to offset increase in
manufacturing and operating cost through productivity
improvements, cost containment and process simplification.
The Company despite all these challenges has remained
focused on continued sustainability of its operations by
providing quality products to the consumers.
Considering the steady escalation in input costs, we
request the Government of Pakistan to implement a
rational and transparent pricing mechanism acceptable
to all the stakeholders to ensure continued availability of
quality pharmaceutical products in the market. Abbott
Pakistan along with other members of the pharmaceutical
industry continues to work with the Government for the
implementation of a rational acceptable pricing policy for
pharmaceutical products. Rationalization of taxes, especially
through zero rating the pharmaceutical industry for sales tax
purposes is an urgent need to ensure availability of quality
pharmaceuticals to the patients.
The Drug Regulatory Authority has significant importance
for the overall development of pharmaceutical industry. We
hope that the Authority will remain affirmative in helping
the industry to grow and addressing various long outstanding
issues.
Ineffective legal protection of Intellectual Property Rights
remains a matter of concern for the industry. Concrete
steps need to be taken to address the growing menace of
both piracy and counterfeiting. Active implementation and
monitoring would help the industry and the consumers.
AUDITORS
The present Auditors M/s Ernst & Young Ford Rhodes Sidat
Hyder, Chartered Accountants, retire and being eligible,
offer themselves for re-appointment. The Board of Directors
endorses the recommendation of the Audit Committee for
their re-appointment as auditors of the Company for the
financial year ending December 31, 2016.

74

PATTERN OF SHAREHOLDING
A statement showing the pattern of shareholding in the
Company and additional information as at December 31, 2015
is given on page 143.
Mr. Ehsan Ali Malik, Director has acquired 3,400 shares at
the rate of Rs 681.8 per share in December 2015.
Other directors, CEO, CFO, Company Secretary and their
spouses and minor children did not carry out any transaction
in the shares of the Company during the year.
HOLDING COMPANY
As at December 31, 2015 Abbott Asia Investments Limited,
UK held 76,259,454 shares. The ultimate holding Company
is Abbott Laboratories, USA.
COMPLIANCE WITH THE CODE OF CORPORATE
GOVERNANCE
As required by the Code of Corporate Governance 2012, the
Directors are pleased to state as follows:
The financial statements, prepared by the management of
the Company, present fairly its state of affairs, the results
of its operations, cash flows and changes in equity.
Proper books of account of the Company have been
maintained.
Appropriate Accounting policies have been consistently
applied in preparation of financial statements. Accounting
estimates are based on reasonable and prudent judgment.
International Financial Reporting Standards, as applicable
in Pakistan, have been followed in preparation of financial
statements and any departure therefrom has been
adequately disclosed and explained.
The Company maintains a sound internal control system
which gives reasonable assurance against material
misstatement or loss. The internal control system is
regularly reviewed.
There are no doubts upon the Companys ability to
continue as a going concern.
Key operating and financial data for the last six years is
summarized on page 78.

Abbott Pakistan

2015 ANNUAL REPORT

Outstanding taxes, statutory charges and duties, if any,

have been duly disclosed in the Financial Statements.

Number of Board Committees meetings and attendance

therein is included on page 69.

Significant deviations, from last year in the operating

results of the Company have been highlighted and
explained.

ACKNOWLEDGEMENTS

In accordance with the criteria specified in clause (xi)

of the Code, two directors have a certification under
Directors Training Program, three directors of the
Company are exempt from the requirement of Directors
training program and the remaining Directors will receive
training within the prescribed time period up to June 30,
2016. All the directors on the Board are fully conversant
with their duties and responsibilities as directors of
corporate bodies. The Board had arranged an orientation
course of the Code of Corporate Governance for its
directors in the previous years to apprise them of their
role and responsibilities.

The Board of Directors would like to take this opportunity to

express its deep appreciation of the commitment, loyalty and
dedication of employees. We would also like to acknowledge
the support and cooperation received from our esteemed
customers, suppliers, bankers and stakeholders.

Munir A. Shaikh
Chairman
February 19th, 2016

There are no outstanding loans, TFCs, sukuks or any other

debt instruments.
The value of investments made by the staff retirements
funds as per their financial statements are as follows:Value (Rs in millions)
ALPL Pension Fund (Based on year ended
December 31, 2014) audited
ALPL Provident Fund (Based on year ended
December31, 2014) audited

3,065

1,052

During the period, four meetings of the Board of Directors

were held. Attendance by each Director/CFO/Company
Secretary was as follows:
Number
of Board
Name of Directors/CFO/Co. Secretary
Meetings
Attended

1 Mr. Munir A. Shaikh

3
2 Mr. Arshad Saeed Husain
4
3 Syed Anis Ahmed Director & CFO
4
4 Mr. Kamran Y. Mirza
4
5 Mr. Shamim Ahmad Khan
4
6 Mr. Ehsan Ali Malik
4
7 Mr. Atif Aslam Bajwa*
1
8 Ms. Zehra Naqvi**
1
11 Mr. Malik Saadatullah (Company Secretary)
4

* Retired from the Board w.e.f. May 26, 2015
** Appointed to the Board w.e.f. August 21, 2015
75

Abbott Pakistan

2015 ANNUAL REPORT

BOARD OF DIRECTORS

Munir A. Shaikh
Chairman

Syed Anis Ahmed*

Managing Director &
Chief Executive Officer

* Mr Arshad Saeed Husain, ex-Chief Executive Officer of the company resigned and ceased to hold the position effective January 1, 2016.
Subsequently, the Board of Directors appointed Syed Anis Ahmed as Interim Chief Executive. Thereafter in the month of March 2016,
the Board of Directors has finalized the appointment of Syed Anis Ahmed as Managing Director & Chief Executive Officer of Abbott
Laboratories (Pakistan) Limited.

76

Abbott Pakistan

EHSAN ALI MALIK

Director

ZEHRA NAQVI
Director

Kamran Y. Mirza
Director

2015 ANNUAL REPORT

Shamim Ahmad Khan

Director

77

2015 ANNUAL REPORT

Abbott Pakistan

Key Performance Indicators

2015
Sales Revenue
Return on Equity
Earnings per share
Shareholders' Equity
Total Assets Turnover Ratio
Current Ratio
Market Capitalization

Rs in million
%
Rs.
Rs in million
Times
Times
Rs in million

2014

21,170
27.7%
36.64
12,949
1.40
3.73
62,167

19,692
25.9%
28.77
10,872
1.58
3.86
69,576

Key Operating and Financial Data

2015

2014

December 31,
2013
2012

Financial Position

2011

2010

(Rupees in '000)

Balance Sheet
Fixed Assets
- property, plant and equipment
- intangible assets
Other Non-Current Assets
Current Assets
Total Assets
Issued, subscribed and paid-up
capital
Capital Reserves
Revenue Reserves
Total Equity

4,017,403
21,983
68,797
12,380,092
16,488,275

3,359,092
24,395
62,980
10,319,128
13,765,595

3,183,735
41,615
44,064
7,898,590
11,168,004

2,629,154
58,835
54,509
6,587,364
9,329,862

2,298,062
76,055
55,449
4,975,763
7,405,329

1,877,596
56,152
3,856,673
5,790,421

979,003

979,003

979,003

979,003

979,003

979,003

381,945
11,588,299
12,949,247

339,481
9,553,116
10,871,600

300,030
7,468,232
8,747,265

262,308
5,466,083
6,707,394

223,247
3,983,933
5,186,183

197,167
2,736,369
3,912,539

219,144
3,319,884
3,539,028

223,953
2,670,042
2,893,995

203,562
2,217,177
2,420,739

189,557
2,432,911
2,622,468

165,219
2,053,927
2,219,146

115,182
1,762,700
1,877,882

16,488,275

13,765,595

11,168,004

9,329,862

7,405,329

5,790,421

Non-Current Liabilities
Current Liabilities
Total Liabilities
Total Equity and Liabilities

Balance Sheet Analysis - Assets

Balance Sheet Analysis - Equity and Liabilities

12,949

2015

219

10,872

2014

224

8,747

2013

204

6,707

2012

190

5,186

2011

3,913

2010
0

165
115

3,320

2,433

18000

Rs. in Million

Total Equity

78

Non-Current Liablities

4,976

2,430
1,934

2010
13500

6,587

2,742

2012
2011

9000

7,899

3,269

2013

2,053

12,380
10,319

3,446

2014

2,217

1,763

4500

4,108

2015

2,670

3,857

4500

9000

13500

Rs. in Million

Current Liablities

Non-Current Assets

Current Assets

18000

2015 ANNUAL REPORT

Abbott Pakistan

Operating and Financial Trends

Twelve
months ended
December 31,
2015

Twelve
months ended
December 31,
2014

Twelve
months ended
December 31,
2013

Twelve
months ended
December 31,
2012

Twelve
months ended
December 31,
2011

Thirteen
months ended
December 31,
2010

12,946,968
4,666,478
2,378,042
2,374,826
730,240
1,644,586
587,402
2,657,942

10,995,701
3,687,038
1,744,787
1,741,257
564,313
1,176,944
489,502
2,000,889

(Rupees in 000)

Profit and Loss

Net sales including toll manufacturing service fee
Gross profit
Operating profit
Profit before taxation
Taxation
Profit after taxation
Ordinary cash dividends *
EBITDA **

21,170,446
8,227,233
5,012,361
5,006,477
1,419,741
3,586,736
2,937,009
5,496,717

19,692,354
7,550,142
4,323,341
4,318,567
1,502,255
2,816,312
763,622
4,758,663

17,217,258
6,621,646
3,689,179
3,686,223
1,157,374
2,528,849
685,302
4,087,276

15,216,253
5,702,828
3,016,363
3,014,137
924,042
2,090,095
685,302
3,353,127

2,483,858
(690,491)
(686,528)
3,897,051

2,509,703
(485,630)
(687,188)
2,790,212

Cash Flows
Operating activities
Investing activities
Financing activities
Cash and cash equivalents at the end of the year

4,062,034
(672,470)
(1,450,032)
8,320,913

3,331,081
(159,370)
(687,381)
6,381,381

1,772,876
(643,800)
(494,836)
1,453,327

917,503
(374,785)
(494,415)
819,087

* Includes final dividend amounting to Rs. 1,958.006 million proposed by the Board of Directors subsequent to the year end.
**EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation)

Profit and Loss Analysis - Expenses

Profit and Loss Analysis - Sales and Other Income

21,170

12.9

477

2015

2015
19,692

2014

17,217

476

2014

273

15,216

2012

183

12,947

2011

10,996

6250

12500

18750

25000

0.3 0.3

0.4 0.4

0.4 0.4

0.4 0.4
1.2

1.0

1.0

10

12

14

16

Rs. in Billion

Other income

Cost of goods sold and services

Other charges

Selling and distribution expenses

Taxation - net

Administrative expenses

Cash Flow Analysis

5,000
4,000

4,062
3,331

3,000

2,484

2,510
1,773

2,000

918

1,000
0
-1,000
-2,000

(159)
(687)

(672)

(690) (687)

(486)(687)

(495)
(644)

(375) (494)

2011

2010

(1,450)

2015

2014
Operating activities

2013
Investing activities

2012

1.4
1.5

1.6 0.3 0.2 1.0

Rs. in Million

Net sales including toll

manufacturing service fee

2.2
1.9 0.3 0.2

7.3

2010

109

Rs. in Million

8.3

2011

2010

2.5

9.5

2012

142

3.0

10.6

2013

2013

2.9

12.1

Financing activities

79

18

Abbott Pakistan

2015 ANNUAL REPORT

Twelve
months ended
December 31,
2015

Ratios

Twelve
months ended
December 31,
2014

Twelve
months ended
December 31,
2013

Twelve
months ended
December 31,
2012

Twelve
months ended
December 31,
2011

Thirteen
months ended
December 31,
2010

Unit

Profitability Ratios
Gross profit ratio

38.9%

38.3%

38.5%

37.5%

36.0%

33.5%

Net profit to sales

16.9%

14.3%

14.7%

13.7%

12.7%

10.7%

EBITDA** margin to sales

26.0%

24.2%

23.7%

22.0%

20.5%

18.2%

0.24

0.22

0.21

0.20

0.18

0.16

Operating leverage ratio

Return on equity / Return on capital employed
Return on assets

Times
%

27.7%

25.9%

28.9%

31.2%

31.7%

30.1%

21.8%

20.5%

22.6%

22.4%

22.2%

20.3%

Liquidity Ratios
Current ratio

Times

3.73

3.86

3.56

2.71

2.42

2.19

Quick / Acid test ratio

Times

2.81

2.76

2.27

1.66

1.26

0.97

Cash to Current Liabilities

Times

2.51

2.39

1.76

1.15

0.71

0.46

Cash flow from operations to Sales

Times

0.19

0.17

0.14

0.16

0.14

0.08

No. of days in inventory

Days

80.82

83.95

89.38

90.99

96.67

101.19

No. of days in receivables

Days

8.27

9.54

11.80

11.74

9.52

8.94

No. of days in payables

Days

58.13

49.32

48.78

47.33

45.76

51.00

Activity / Turnover Ratios

Inventory Turnover

Times

4.52

4.35

4.08

4.01

3.78

3.61

Debtors Turnover

Times

44.14

38.28

30.94

31.10

38.36

41.64

Creditors Turnover

Times

6.28

7.40

7.48

7.71

7.98

15.00

Operating Cycle

Days

30.96

44.17

52.40

55.40

60.43

59.13

Total assets turnover ratio

Times

1.40

1.58

1.68

1.82

1.96

2.04

Fixed assets turnover ratio

Times

5.70

5.96

5.82

6.01

6.09

6.21

12.02

Investment / Market Ratios

Rs.

36.64

28.77

25.83

21.35

16.80

Price earning ratio

Basic / Diluted Earnings per share

Times

17.33

24.70

15.23

10.75

5.94

9.13

Dividend yield ratio

4.7%

1.1%

1.8%

3.1%

6.0%

4.6%

Dividend pay out ratio

Times

0.82

0.27

0.27

0.33

0.36

0.42

Dividend cover ratio

Times

1.22

3.69

3.69

3.05

2.80

2.40

Rs.

30.00

7.80

7.00

7.00

6.00

5.00

Rs.

39.96

Cash dividend per share

Break-up value per share with / without
surplus on revaluation of fixed assets

132.27

111.05

89.35

68.51

52.97

Bonus shares issued

Number

No. of shares at end of year

Number

97,900,300

97,900,300

97,900,300

97,900,300

97,900,300

97,900,300

Rs in million

62,167

69,576

38,524

22,468

9,769

10,744

Market value per share at the end of the year

Market Capitalization

Rs.

635.00

710.68

393.50

229.50

99.79

109.74

Market value per share (High)

Rs.

744.42

913.50

456.00

234.00

103.00

126.50

Market value per share (Low)

Rs.

473.19

355.00

197.25

90.00

79.25

77.00

Rs in million

3,043

2,765

2,479

1,988

1,798

1,507

Times

851.86

905.60

1,248.03

1,355.06

739.44

494.27

Contribution to National Exchequer

Capital Structure Ratios

Interest cover ratio

Note : Sales include toll manufacturing service fee

**EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation)

80

Abbott Pakistan

2015 ANNUAL REPORT

Comments on Financial Ratios

PROFITABILITY RATIOS
The increase in profit after tax by 27% compared to prior
year is mainly attributable to volume growth, new product
launches, effective cost controls and reduced taxation
charge in current year.
Gross Profit ratio improved to 39% from 38% last year
despite inflationary pressures owing to improved product
mix. Net Profit to sales ratio improved to 17% from 14%
last year mainly on account of improved gross margins,
effective cost controls and reduced prior year taxation
charge in current year.

LIQUIDITY RATIOS
The increase in cashflows from operating activities is
mainly derived from improved profitability and better
working capital management which accordingly resulted
in increase in cash and cash equivalents by Rs 1,939 million
as compared to last year.
Increase in cash & cash equivalents has resulted in
increase in liquidity ratios such as quick / acid test ratio
(2015: 2.81, 2014: 2.76) and cash to current liabilities (2015:
2.51, 2014: 2.39).

P/E ratio declined from 24.70 in 2014 to 17.33 in 2015,

mainly due to decline in market price per share from
Rs 710.68 in 2014 to Rs 635.00 in 2015.
Dividend yield ratio increased from 1.1% in 2014 to 4.7%
in 2015 and Dividend pay-out ratio increased from 0.27
(times) in 2014 to 0.82 (times) in 2015, on account of
increased dividend payout in the current year from Rs 7.8
to Rs 30.00 per share.
Break-up value per share has increased from Rs 111.05 in
2014 to Rs 132.27 in 2015 due to increase in total equity this
year by Rs 2,078 million as compared to prior year.
Market capitalization has declined from Rs 69,576 million
in 2014 to Rs 62,167 million in 2015 due to decline in
market price per share from Rs 710.68 in 2014 to Rs 635.00
in 2015

CAPITAL STRUCTURE RATIOS

There is no short-term or long-term debt as at balance
sheet date, therefore capital structure ratios like financial
leverage ratio, weighted average cost of debt and debt to
equity ratio are not relevant.

ACTIVITY / TURNOVER RATIOS

Operating cycle has declined overall from 44.17 days
in 2014 to 30.96 days in 2015 due to better inventory
management which has resulted in reduced number of
days in inventory.
Total assets turnover ratio declined from 1.58 in 2014 to
1.40 in 2015 due to increase in cash & cash equivalents as
explained above.
Fixed assets turnover ratio declined from 5.96 in 2014 to
5.70 in 2015 due to increase in capital expenditure from Rs.
661 million in 2014 to Rs. 1,174 million in 2015.

INVESTMENT / MARKET RATIOS

Earnings per share increased from Rs 28.77 in 2014 to Rs
36.64 in 2015 as a result of the increase in profit after tax
by 27% compared to prior year as mentioned above.

81

Abbott Pakistan

2015 ANNUAL REPORT

COMMENTS ON PROFIT
AND LOSS ACCOUNT

CURRENT ASSETS
The increase in current assets mainly owes to higher cash
and bank balances generated from operations during the
year.

SALES

CURRENT LIABILITIES

Net sales for the year increased 8% over previous year.

Pharmaceutical sales for the year increased by 5% over prior
year mainly due to unit growth. Nutritional sales for the year
posted 20% growth over prior year mainly due to volume
and selective price increases of certain products. Pediasure,
Ensure and Glucerna posted strong double digit growth.
Sales for others that include General Health Care (GHC),
Diagnostic and Diabetes Care, grew by 12% over last year.
This is mainly driven by new product launches during the
year.

Trade and other payables have increased over prior year

mainly because of increased bills payable liability at year end
due to timing difference.

SELLING AND DISTRIBUTION EXPENSES

Decrease in selling and distribution expenses is attributable
to company initiatives taken last year resulting in savings
in current year mainly from realignment of our field
force, induction of trade team and one off expenditures
in connection with successful launch of portfolio selling
strategy.

TAXATION
Decrease in overall taxation charge in current year versus
last year is attributable to reduced prior year charge in
current year, reduction in 1% corporate tax rate, and
occurrence of deferred tax income in current year versus
deferred tax charge in last year.

COMMENTS ON BALANCE
SHEET
NON-CURRENT ASSETS
Property, plant and equipment have witnessed significant
increase during the current year due to strategic investments
in production facilities and infrastructure to support
growing scale of business at international quality standards.
Major capital expenditure incurred during the year was for
expanding manufacturing capacity of lyophilized products,
tablet manufacturing, liquid manufacturing upgrade at
Korangi facility and demonstration equipments.

82

EQUITY
Equity grew from prior year primarily due to profit for the
year, partially offset by final and interim dividends during
the year.

COMMENTS ON CASH
FLOWS
CASHFLOWS FROM OPERATING
ACTIVITIES
There is an increase in cashflows from operating activities
mainly due to higher profitability and favorable working
capital changes, partially offset by income taxes paid during
the year.

CASHFLOWS FROM INVESTING

ACTIVITIES
Net cash outflows from investing activities have increased
from prior year primarily due to increase in capital
expenditure during the year.

CASHFLOWS FROM FINANCING

ACTIVITIES
Cash outflow from financing activities increased during the
current year primarily on account of increased dividend
payout during the year.

Abbott Pakistan

2015 ANNUAL REPORT

CASH FLOW STATEMENT - DIRECT METHOD

For The Year Ended December 31, 2015

2015

2014

(Rupees in 000)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers
Cash paid to suppliers / service providers
Cash paid to employees

21,183,885

19,731,593

(12,593,143)

(12,091,832)

(2,283,587)

(2,269,422)

Payment of royalty and technical service fee

(168,209)

(157,575)

Payment to retirement funds

(236,917)

(218,416)

(1,520,063)

(1,409,639)

(319,623)

(249,020)

Income taxes paid

Payment of other statutory charges
Long-term deposits - net
Long-term prepayments - net
Net cash inflow from operating activities

130

(3,502)

(439)

(1,106)

4,062,034

3,331,081

(1,174,097)

(661,443)

CASH FLOWS FROM INVESTING ACTIVITIES

Fixed capital expenditure
Acquisition of intangible asset
Sale proceeds from disposal of property, plant and equipment
Interest income

(18,500)
63,199

75,531

456,928

426,542

(672,470)

(159,370)

(5,884)

(4,774)

Dividends paid

(1,444,148)

(682,607)

Net cash outflow from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Finance cost paid
Net cash outflow from financing activities

(1,450,032)

Net increase in cash and cash equivalents

1,939,532

2,484,330

(687,381)

Cash and cash equivalents at the beginning of the year

6,381,381

3,897,051

Cash and cash equivalents at the end of the year

8,320,913

6,381,381

83

2015 ANNUAL REPORT

Abbott Pakistan

graphical presentation

24%

6000
5000

18%

3,587

3000

2,375
1,741

15

2,816

2,529

10

2,090

1,645

1,177

1000
0

2010

2011

2012

PBT

PAT

2013

2014

PBT as % of sales

120

3500
101.19

96.67

89.38

83.95

Days

58.13
51.00

47.33

45.76

48.78

49.32

2000

8.94

2010

11.74

9.52

2011

No. of Days in inventory

2012

11.80

2013

No. of Days in payables

9.54

2014

2015

490

685

587

685

27%

3.56

2010

2011

2012

2013

2014

2.42

2.0

36.64

28.77

10

0.5

5
2011

2012

2013

Current Ratio

2014

2015

24.70

21.35

20

1.0

2010

25.83

25

15

1.5

2015

Dividend Payout %

30

2.19

20

35

3.73

2.71

30

764

10

Dividend

Rupees

Times

40

33%

40

3.0

84

36%

No. of Days in Receivables

3.86

3.5

0.0

50

42%

1500

500

8.27

4.5
4.0

2.5

60

1000

20
0

70

27%

40

90
80

2500

80.82

80
60

82%
2,937

3000

90.99

Rs. in Million

100

2015

17.33

16.80

15.23

12.02

10.75

9.13
5.94

2010

2011

2012

Earning Per Share (Rupees)

2013

2014

2015

Price Earnings Ratio (Times)

Percentage

Rs. in Million

3,686
3,014

2000

20

4,319

16%

4000

25

5,006

Percentage

20%

22%

21%

Abbott Pakistan

35

25000
21,170

20000
15,216

15000

31.7%

31.2%
28.9%

27.7%
25.9%

17,217

Percentage

Rs. in Million

30

19,692

30.1%

2015 ANNUAL REPORT

12,947
10,996

10000

25
20
15
10

5000
0

5
2010

2011

2012

2013

2014

2015

Net Sales (including Toll Manufacturing Service Fees)

Book Value Per Share

1120
Rs. in Million

2013

2014

132.27

111.05

2012

2013

2014

2015

1,174

635.00
393.5

2011

68.51

2010

89.35

52.97

100

109.74

200

99.79

229.5

300

39.96

Rupees

600

400

2012

1,400

700

500

2011

Return on equity / Return on capital employed

710.68

800

2010

2015

Market Price Per Share

973

840
560

715

671

661

493

280
0

2010

2011

2012

2013

2014

2015

Capital Expenditure

85

Abbott Pakistan

2015 ANNUAL REPORT

vertical analysis
December 31,
2015

Rupees in 000

December 31,
2014

Rupees in 000

Balance Sheet
Total Equity
Non-Current Liabilities
Current Liabilities
Total Equity and Liabilities
Non-Current Assets

12,949,247

78.5

10,871,600

79.0

219,144

1.3

223,953

1.6

3,319,884

20.1

2,670,042

19.4

16,488,275

100.0

13,765,595

100.0

4,108,183

24.9

3,446,467

25.0

Current Assets

12,380,092

75.1

10,319,128

75.0

Total Assets

16,488,275

100.0

13,765,595

100.0

Twelve months
ended December
31, 2015
Rupees in 000

Twelve months
ended December
31, 2014

Rupees in 000

Profit and Loss Account

Net sales

21,170,446

100.0

19,692,354

100.0

Cost of goods sold

12,943,213

61.1

12,142,212

61.7

Gross Profit

8,227,233

38.9

7,550,142

38.3

Selling and distribution expenses

2,876,407

13.6

2,965,120

15.1

383,612

1.8

367,379

1.9

4,967,214

23.5

4,217,643

21.4

476,868

2.3

475,693

2.4

Administrative expenses
Other income
Other charges
Finance costs
Profit before taxation

431,721

2.0

369,995

1.9

5,012,361

23.7

4,323,341

22.0

5,884

0.0

4,774

0.0

5,006,477

23.6

4,318,567

21.9

Taxation - net

1,419,741

6.7

1,502,255

7.6

Profit for the year

3,586,736

16.9

2,816,312

14.3

86

Abbott Pakistan

December 31,
2013

Rupees in 000

December 31,
2012

8,747,265

Rupees in 000

78.3

December 31,
2011

6,707,394

Rupees in 000

71.9

2015 ANNUAL REPORT

December 31,
2010

5,186,183

Rupees in 000

70.0

3,912,539

67.6

203,562

1.8

189,557

2.0

165,219

2.2

115,182

2.0

2,217,177

19.9

2,432,911

26.1

2,053,927

27.8

1,762,700

30.4

11,168,004

100.0

9,329,862

100.0

7,405,329

100.0

5,790,421

100.0

3,269,414

29.3

2,742,498

29.4

2,429,566

32.8

1,933,748

33.4

7,898,590

70.7

6,587,364

70.6

4,975,763

67.2

3,856,673

66.6

11,168,004

100.0

9,329,862

100.0

7,405,329

100.0

5,790,421

100.0

Twelve months
ended December
31, 2013
Rupees in 000

Twelve months
ended December
31, 2012

Rupees in 000

Twelve months
ended December
31, 2011

Rupees in 000

Thirteen months
ended December
31, 2010

Rupees in 000

17,217,258

100.0

15,216,253

100.0

12,946,968

100.0

10,995,701

100.0

10,595,612

61.5

9,513,425

62.5

8,280,490

64.0

7,308,663

66.5

6,621,646

38.5

5,702,828

37.5

4,666,478

36.0

3,687,038

33.5

2,471,404

14.4

2,212,421

14.5

1,894,390

14.6

1,601,101

14.6

366,938

2.1

344,494

2.3

295,823

2.3

267,915

2.4

3,783,304

22.0

3,145,913

20.7

2,476,265

19.1

1,818,022

16.5

273,059

1.6

183,430

1.2

142,466

1.1

109,079

1.0

367,184

2.1

312,980

2.1

240,689

1.9

182,314

1.7

3,689,179

21.4

3,016,363

19.8

2,378,042

18.4

1,744,787

15.8

2,956

0.0

2,226

0.0

3,216

0.0

3,530

0.0

3,686,223

21.4

3,014,137

19.8

2,374,826

18.3

1,741,257

15.8

1,157,374

6.7

924,042

6.1

730,240

5.6

564,313

5.1

2,528,849

14.7

2,090,095

13.7

1,644,586

12.7

1,176,944

10.7

87

Abbott Pakistan

2015 ANNUAL REPORT

horizontal analysis
December 31,
2015

2014

2013

2012

2011

2010

(Rupees in 000)

Balance Sheet
Total Equity
Non-Current Liablitites
Current Liabilities
Total Equity and Liabilities
Non-Current Assets

12,949,247

10,871,600

8,747,265

6,707,394

5,186,183

3,912,539

219,144

223,953

203,562

189,557

165,219

115,182

3,319,884

2,670,042

2,217,177

2,432,911

2,053,927

1,762,700

16,488,275

13,765,595

11,168,004

9,329,862

7,405,329

5,790,421

4,108,183

3,446,467

3,269,414

2,742,498

2,429,566

1,933,748

Current Assets

12,380,092

10,319,128

7,898,590

6,587,364

4,975,763

3,856,673

Total Assets

16,488,275

13,765,595

11,168,004

9,329,862

7,405,329

5,790,421

Twelve months
ended
December 31,
2015

Twelve
months ended
December 31,
2014

Twelve
months ended
December 31,
2013

Twelve months
ended
December 31,
2012

Twelve
months ended
December 31,
2011

Thirteen
months ended
December 31,
2010

(Rupees in 000)

Profit and Loss Account

Net sales

21,170,446

19,692,354

17,217,258

15,216,253

12,946,968

10,995,701

Cost of goods sold

12,943,213

12,142,212

10,595,612

9,513,425

8,280,490

7,308,663

Gross Profit

8,227,233

7,550,142

6,621,646

5,702,828

4,666,478

3,687,038

Selling and distribution expenses

2,876,407

2,965,120

2,471,404

2,212,421

1,894,390

1,601,101

383,612

367,379

366,938

344,494

295,823

267,915

Administrative expenses

4,967,214

4,217,643

3,783,304

3,145,913

2,476,265

1,818,022

Other income

476,868

475,693

273,059

183,430

142,466

109,079

Other charges

431,721

369,995

367,184

312,980

240,689

182,314

5,012,361

4,323,341

3,689,179

3,016,363

2,378,042

1,744,787

5,884

4,774

2,956

2,226

3,216

3,530

Finance costs

5,006,477

4,318,567

3,686,223

3,014,137

2,374,826

1,741,257

Taxation - net

Profit before taxation

1,419,741

1,502,255

1,157,374

924,042

730,240

564,313

Profit for the year

3,586,736

2,816,312

2,528,849

2,090,095

1,644,586

1,176,944

88

Abbott Pakistan

2015 ANNUAL REPORT

December 31,
2015

2014

2013

2012

2011

2010

% increase / (decrease) over preceding year

19.1

24.3

30.4

29.3

32.6

20.8

(2.1)

10.0

7.4

14.7

43.4

(3.7)

24.3

20.4

(8.9)

18.5

16.5

9.7

19.8

23.3

19.7

26.0

27.9

16.7

19.2

5.4

19.2

12.9

25.6

13.4

20.0

30.6

19.9

32.4

29.0

18.3

19.8

23.3

19.7

26.0

27.9

16.7

Twelve
months ended
December 31,
2015

Twelve
months ended
December 31,
2014

Twelve
months ended
December 31,
2013

Twelve
months ended
December 31,
2012

Twelve
months ended
December 31,
2011

Thirteen
months ended
December 31,
2010

% increase / (decrease) over preceding year

7.5

14.4

13.2

17.5

17.7

30.1

6.6

14.6

11.4

14.9

13.3

19.2

9.0

14.0

16.1

22.2

26.6

58.8

(3.0)

20.0

11.7

16.8

18.3

27.8

4.4

0.1

6.5

16.5

10.4

32.7

17.8

11.5

20.3

27.0

36.2

109.8

0.2

74.2

48.9

28.8

30.6

(23.1)

16.7

0.8

17.3

30.0

32.0

40.5

15.9

17.2

22.3

26.8

36.3

98.6

23.3

61.5

32.8

(30.8)

(8.9)

39.8

15.9

17.2

22.3

26.9

36.4

98.8

(5.5)

29.8

25.3

26.5

29.4

111.4

27.4

11.4

21.0

27.1

39.7

93.2

89

Abbott Pakistan

90

2015 ANNUAL REPORT

Abbott Pakistan

2015 ANNUAL REPORT

statement of value addition and

its distribution
For The Year Ended December 31, 2015
2015
Rupees 000

Wealth Generated

Total revenue inclusive of sales tax and other income

Bought-in-materials and services

22,109,521
13,112,172
8,997,349

2014
Rupees 000

100%

20,592,891
12,534,223
8,058,668

100%

2,717,916

30.24%

2,573,121

31.93%

1,451,282
382,092
462,207
2,295,581

18.01%
4.74%
5.74%
28.49%

1,485,930
363,688
424,844
2,274,462

21.56%
5.28%
6.16%
33.00%

868

0.01%

803

0.01%

2,937,009

36.45%

763,623

11.08%

5,884

0.07%

4,774

0.06%

484,356
547,098
1,031,454

5.39%
6.09%
11.47%

435,322
2,006,563
2,441,885

5.40%
24.90%
30.30%

8,988,712

100.00%

8,058,668

100.00%

Wealth Distribution

To Employees
Salaries, wages, 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
Retained in the Business
Depreciation and amortisation
Added to Unappropriated profit

* Dividends include final dividend amounting to Rs. 1,958.006 million proposed by the Board of Directors subsequent to the year end.
2015

2014

11.47%
0.07%

30.24%

To Employees

31.93%

30.30%

To Government
To Society
To Providers of Capital

36.45%

To Providers of Finance
Retained in the Business
0.01%

28.49%

0.06%
11.08%
0.01%
33.00%

91

Abbott Pakistan

2015 ANNUAL REPORT

DuPont Analysis

2015

EBIT Margin
(23.7%)

Interest Burden /
Efficiency
(99.9%)

Tax Burden /
Efficiency
(71.6%)

Assets Turnover
(1.40)

Net Profit Margin

(16.9%)

Leverage
(1.17)

Return oN Equity
(27.7%)

2014

EBIT Margin
(22.0%)

Interest Burden /
Efficiency
(99.9%)

Tax Burden /
Efficiency
(65.2%)

Assets Turnover
(1.58)

Net Profit Margin

(14.3%)

Leverage
(1.15)

Return oN Equity
(25.9%)

92

2015 ANNUAL REPORT

Abbott Pakistan

quarterly analysis
Jan - Mar
2015
Rs 000
%

Apr - Jun
2015
Rs 000
%

Jul - Sep
2015
Rs 000
%

Net Sales

4,266,725

20%

5,534,709

26%

5,471,404

26%

5,897,608

28%

21,170,446 100%

Gross Profit

1,515,560

18%

2,209,086

27%

2,162,008

26%

2,340,579

29%

8,227,233 100%

562,511

16%

909,489

25%

939,688

26%

1,175,048

33%

3,586,736 100%

Profit after tax

Oct - Dec
2015
Rs 000
%

Jan - Dec
2015
Rs 000
%

Quarterly Analysis
Jan-Mar

Apr-Jun

Jul-Sep

Oct-Dec
33%

26% 26%

28%

27%

20%

26%

29%
25%

18%

Sales - net

26%

16%

Gross profit

Profit after tex

Share Price Sensitivity Analysis

Share price in the stock market moves due to various factors such as company performance, general market sentiment, economic
events and interest rates, etc. Being a responsible and law-compliant Company, Abbott circulates price sensitive information to
the stock exchange in accordance with the requirements of listing regulations on a timely manner. During the year 2015, Abbott
share price has touched the peak of Rs 744.4 while the lowest recorded price was Rs 473.2 with a closing price of Rs. 635 at the
end of the year.
Share Price Sensitivity

1,000.00
913.50

900.00

Market value per share

(Rupees)

800.00
700.00
600.00
500.00

744.42

Share price - High

Share price - Closing
Share price - Low

710.68

635.00
456.00

473.19

400.00

355.00

300.00
200.00

393.50

197.25

100.00

234.00
229.50
90.00

2015

2014

2013

2012

103.00
99.79
79.25

126.50
109.74
77.00

2011

2010

93

Abbott Pakistan

2015 ANNUAL REPORT

STATEMENT OF COMPLIANCE WITH THE

CODE OF CORPORATE GOVERNANCE
This statement is being presented to comply with the Code of Corporate Governance (the Code) contained in the listing
regulations of Pakistan Stock Exchange for the purpose of establishing a framework of good governance, whereby a listed
company is managed in compliance with the best practices of corporate governance.
The Company has applied the principles contained in the Code in the following manner:
1. The Company encourages representation of independent non-executive directors and directors representing minority
interests on its Board of Directors (the Board). At present the Board constitutes of:
Category
Independent Director
Executive Director
Non-Executive Director

Names
Mr. Ehsan Ali Malik
Ms. Zehra Naqvi
Mr. Arshad Saeed Husain
Syed Anis Ahmed
Mr. Munir A. Shaikh
Mr. Kamran Y. Mirza
Mr. Shamim Ahmad Khan

The independent directors meet the criteria of independence under clause i (b) of the Code.
2. The directors have confirmed that none of them is serving as a director on more than seven listed companies, including this
Company.
3. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any
loans to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by
that stock exchange.
4. One casual vacancy occurred in the Board during the year and was filled within 90 days of its occurrence.
5. The Company has prepared a Code of Business Conduct and has ensured that appropriate steps have been taken to
disseminate it throughout the Company. In addition, 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.
6. The Company has developed a vision / mission statement, overall corporate strategy and significant policies of the
Company. A complete record of particulars of significant policies along with the dates on which they were approved or
amended has been maintained.
7. All the powers of the Board have been duly exercised and decisions on material transactions, including appointment and
determination of remuneration and terms and conditions of appointment of the Chief Executive Officer (CEO), other
executive and non-executive directors, have been taken by the Board.
8. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for
this purpose. The Board met at least once in every quarter. Written notices of the Board meetings, along with agenda and
working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately
recorded and circulated in time.
9. In accordance with the criteria specified in clause (xi) of the Code, two directors have a certification under Directors
Training Program, three directors of the Company are exempt from the requirement of Directors Training Program and
the rest of the Directors will be trained within the prescribed time period during June 30, 2012 to June 30, 2016. All the
directors on the Board are fully conversant with their duties and responsibilities as directors of corporate bodies. The
Board had arranged an orientation course of the Code of Corporate Governance for its directors in the previous years to
apprise them of their role and responsibilities.
10. The Board approves the appointment, remuneration and terms and conditions of Chief Financial Officer (CFO), Company
Secretary and Head of Internal Audit, as recommended by HR and Remuneration Committee.
94

Abbott Pakistan

2015 ANNUAL REPORT

11. The Company maintains an updated list of related parties and all transactions with related parties are placed before
the Audit Committee on a quarterly basis. 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.
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.
13. The financial statements of the Company were duly endorsed by the CEO and CFO before approval of the Board.
14. The Directors, CEO and executives do not hold any interest in the shares of the Company other than that disclosed
in the pattern of shareholding.
15. The Company has complied with all the corporate and financial reporting requirements of the Code.
16. The Board has formed an Audit Committee. It comprises three members, of whom all are non-executive directors
including the chairman of the audit committee and the chairman of the Committee is an independent director.
17. The meetings of the Audit Committee were held at least once every quarter prior to approval of the quarterly, half
yearly and final results of the Company and as required by the Code. The terms of reference of the Committee have
been formed and advised to the committee for compliance.
18. The Board has formed an HR and Remuneration Committee. It comprises four members, of whom three are nonexecutive directors and an executive director. The Chairman of the Committee is a non-executive director.
19. The Board has set-up an effective in-house Internal Audit function. In addition, the Board has made arrangements
for periodic internal audits by an independent firm of Chartered Accountants. Both the firm and the in-house
internal audit staff are conversant with the policies and procedures of the Company.
20. 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 (ICAP), that they or any of
the partners of the firm, 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 the code of
ethics as adopted by the ICAP.
21. 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 auditors have confirmed that they have observed IFAC
guidelines in this regard.
22. The closed period, prior to the announcement of interim and final results, and business decisions, which may
materially affect the market price of the Companys securities was determined and intimated to directors, employees
and Stock Exchanges.
23. Material / price sensitive information has been disseminated among all market participants at once through Stock
Exchanges.
24. We confirm that all other material principles enshrined in the Code have been complied with.

By order of the Board

Munir A. Shaikh
Chairman
Karachi
February 19, 2016

95

Abbott Pakistan

2015 ANNUAL REPORT

REVIEW REPORT TO THE MEMBERS ON STATEMENT

OF COMPLIANCE WITH THE CODE OF CORPORATE
GOVERNANCE
We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of Corporate Governance
(the Code) prepared by the Board of Directors of Abbott Laboratories (Pakistan) Limited (the Company) for the year ended
31 December 2015 to comply with the requirements of Listing Regulations of Pakistan Stock Exchange Limited, where the
Company is listed.
The responsibility for compliance with the Code is that of the Board of Directors of the Company. Our responsibility is to review,
to the extent where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of
the Companys compliance with the provisions of the Code and report if it does not and to highlight any non-compliance with
the requirements of the Code. A review is limited primarily to inquiries of the Companys personnel and review of various
documents prepared by the Company to comply with the Code.
As a 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 are not required to consider whether
the Board of Directors statement on internal controls covers all risks and controls, or to form an opinion on the effectiveness
of such internal controls, the Companys corporate governance procedures and risks.
The Code requires the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place
before the Board of Directors for their review and approval its related party transactions distinguishing between transactions
carried out on terms equivalent to those that prevail in arms length transactions and transactions which are not executed at
arms length price and recording proper justification for using such alternate pricing mechanism. We are only required and
have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of
Directors upon recommendation of the Audit Committee. We have not carried out any procedures to determine whether the
related party transactions were undertaken at arms length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does
not appropriately reflect the Companys compliance, in all material respects, with the best practices contained in the Code, as
applicable to the Company for the year ended 31 December 2015.

Chartered Accountants
Date: 19 February 2016
Place: Karachi

96

Abbott Pakistan

2015 ANNUAL REPORT

AUDITORS REPORT TO THE MEMBERS

We have audited the annexed balance sheet of Abbott Laboratories (Pakistan) Limited as at 31 December 2015 and the related profit
and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the
notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which,
to the best of our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the Companys management to establish and maintain a system of internal control, and prepare and
present the above said statements in conformity with the approved accounting standards and the requirements of the Companies
Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. 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.
An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit
also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall
presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due
verification, we report that:
a) in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984;
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, 1984, and are in agreement with the books of account and are further in accordance
with accounting policies consistently applied except for changes as stated in note 2.1.3 to the accompanying financial
statements with which we concur;

ii)

the expenditure incurred during the year was for the purpose of the Companys business; and

iii) the business conducted, investments made and the expenditure incurred during the year were in accordance with the
objects of the Company;

c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit
and loss account, statement of comprehensive income, 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, and, gives the
information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair
view of the state of the Companys affairs as at 31 December 2015 and of the profit, the comprehensive income, its cash flows
and changes in equity for the year then ended; and
d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the
Company and deposited in the Central Zakat Fund established under Section 7 of that Ordinance.

Chartered Accountants
Audit Engagement Partner: Riaz A. Rehman Chamdia
Date: 19 February 2016
Place: Karachi
97

Abbott Pakistan

2015 ANNUAL REPORT

BALANCE SHEET

As At December 31, 2015

Note

2015
2014
(Rupees 000)

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Authorised capital

2,000,000

2,000,000

Issued, subscribed and paid-up capital

979,003

979,003

381,945

339,481

11,588,299

9,553,116

12,949,247

10,871,600

219,144

223,953

3,319,884

2,670,042

3,539,028

2,893,995

16,488,275

13,765,595

Reserves - capital
- revenue
Total Equity

NON-CURRENT LIABILITY
Deferred taxation

CURRENT LIABILITIES

Trade and other payables

Total Liabilities

CONTINGENCIES AND COMMITMENTS

TOTAL EQUITY AND LIABILITIES

98

Abbott Pakistan

Note

2015 ANNUAL REPORT

2015
2014
(Rupees 000)

ASSETS
NON-CURRENT ASSETS
Fixed assets
- Property, plant and equipment

4,017,403

3,359,092

- Intangible assets

21,983

24,395

Long-term loans and advances

10

51,712

46,204

Long-term deposits

11

7,475

7,605

9,610

9,171

4,108,183

3,446,467

Long-term prepayments
Total Non-current Assets
CURRENT ASSETS
Stores and spares

12

140,069

120,158

Stock-in-trade

13

2,908,690

2,823,007

Trade debts

14

476,403

482,771

Loans and advances

15

100,194

81,259

Trade deposits and short-term prepayments

16

231,897

177,948

8,573

17,351

97,495

192,610

95,858

42,643

8,320,913

6,381,381

Total Current Assets

12,380,092

10,319,128

TOTAL ASSETS

16,488,275

13,765,595

Interest accrued
Other receivables

17

Taxation recoverable
Cash and bank balances

18

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive
(Interim)

Director

99

Abbott Pakistan

2015 ANNUAL REPORT

PROFIT AND LOSS ACCOUNT

For The Year Ended December 31, 2015

Note

2015
2014
(Rupees 000)

Sales - net

19

21,170,446

19,692,354

Cost of goods sold

Gross profit

20

12,943,213
8,227,233

12,142,212
7,550,142

Selling and distribution expenses

Administrative expenses
Other charges
Other income

22
23
24
25

2,876,407
383,612
431,721
476,868

2,965,120
367,379
369,995
475,693

3,214,872
5,012,361

3,226,801
4,323,341

Finance costs
Profit before taxation

26

5,884
5,006,477

4,774
4,318,567

Taxation-net

27

1,419,741

1,502,255

3,586,736

2,816,312

Profit for the year

(Rupees)
Earnings per share - basic / diluted

28

36.64

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive
(Interim)
100

Director

28.77

Abbott Pakistan

S TAT E M E N T O F CO M P R E H E N S I V E I N CO M E

2015 ANNUAL REPORT

For The Year Ended December 31, 2015

Note
Profit for the year

2015
2014
(Rupees 000)
3,586,736

2,816,312

(134,170)

(62,451)

31,541

16,325

Other comprehensive income for the year

- Actuarial losses on defined benefit pension plan

21.1.2

- Tax on actuarial losses

Other comprehensive income - net of tax

(102,629)

(46,126)

Total comprehensive income for the year

3,484,107

2,770,186

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive
(Interim)

Director

101

Abbott Pakistan

2015 ANNUAL REPORT

CASH FLOW STATEMENT

For The Year Ended December 31, 2015

Note

2015
2014
(Rupees 000)

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations
Income taxes paid
Long-term loans and advances - net
Long-term deposits - net
Long-term prepayments - net

29

5,587,914
(1,520,063)
(5,508)
130
(439)

4,759,636
(1,409,639)
(14,308)
(3,502)
(1,106)

4,062,034

3,331,081

(1,174,097)
(18,500)
63,199
456,928

(661,443)
75,531
426,542

(672,470)

(159,370)

Finance cost paid

Dividends paid

(5,884)
(1,444,148)

(4,774)
(682,607)

Net cash outflow from financing activities

(1,450,032)

(687,381)

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

1,939,532
6,381,381

2,484,330
3,897,051

Cash and cash equivalents at the end of the year

8,320,913

6,381,381

Net cash inflow from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Fixed capital expenditure
Acquisition of intangible asset
Sale proceeds from disposal of property, plant and equipment
Interest income
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive
(Interim)
102

Director

2015 ANNUAL REPORT

Abbott Pakistan

S TAT E M E N T O F C H A N G E S I N E Q U I T Y

For The Year Ended December 31, 2015

Reserves
Revenue Reserves

Capital Reserves
Reserve
Arising on
Merger

Share
Capital

Balance as at January 1, 2014

Other(Note
2.22)

UnGeneral
appropriated
Reserves
Profit
(Rupees 000)

2,129,810

Total

Total
Equity

7,768,262

8,747,265

979,003

46,097

253,933

5,338,422

Final dividend for the year ended December 31,

2013 @ Rs. 4 per share

(391,601)

(391,601)

(391,601)

Interim dividend for the year ended December 31,

2014 @ Rs. 3 per share

(293,701)

(293,701)

(293,701)

Capital contribution from Abbott International LLC., USA

39,451

39,451

39,451

Profit for the year

2,816,312

2,816,312

2,816,312

Other comprehensive income for the year, net of tax

(46,126)

(46,126)

(46,126)

Total comprehensive income for the year

2,770,186

2,770,186

2,770,186

Balance as at December 31, 2014

979,003

46,097

293,384

5,338,422

4,214,694

9,892,597

10,871,600

Balance as at January 1, 2015

979,003

46,097

293,384

5,338,422

4,214,694

9,892,597

10,871,600

Final dividend for the year ended December 31,

2014 @ Rs. 4.8 per share

(469,921)

(469,921)

(469,921)

Interim dividend for the year ended December 31,

2015 @ Rs. 10 per share

(979,003)

(979,003)

(979,003)

Capital contribution from Abbott International LLC., USA

42,464

42,464

42,464

Profit for the year

3,586,736

3,586,736

3,586,736

Other comprehensive income for the year, net of tax

(102,629)

(102,629)

(102,629)

Total comprehensive income for the year

3,484,107

3,484,107

3,484,107

979,003

46,097

335,848

5,338,422

6,249,877

11,970,244

12,949,247

Transactions with owners, recorded directly in equity

Total comprehensive income for the year ended December 31, 2014

Transactions with owners, recorded directly in equity

Total comprehensive income for the year ended December 31, 2015

Balance as at December 31, 2015

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive
(Interim)

Director

103

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

1.

For The Year Ended December 31, 2015

THE COMPANY AND ITS OPERATIONS

Abbott Laboratories (Pakistan) Limited (the Company) is a public limited Company incorporated in Pakistan
on July 02, 1948, and its shares are quoted on Pakistan Stock Exchange. The address of its registered office
is opposite Radio Pakistan Transmission Centre, Hyderabad Road, Landhi, Karachi. The Company is
principally engaged in the manufacture, import and marketing of research based pharmaceutical, nutritional,
diagnostic, diabetic care, hospital and consumer products.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1

Basis of preparation

2.1.1

Statement of compliance
These financial statements have been prepared in accordance with approved accounting standards as
applicable in Pakistan. 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, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In
case requirements differ, the provisions or directives of the Companies Ordinance, 1984, shall prevail.

2.1.2 Accounting convention

These financial statements have been prepared under the historical cost convention except for defined
benefit pension plan which is carried at present value of defined benefit obligation net of fair value of plan
assets.
2.1.3 Adoption of amended standards
The accounting policies adopted in the preparation of these financial statements are consistent with those
of the previous financial year except as describe below:
New Standards, Interpretations and Amendments
The Company has adopted the following accounting standards and the amendments and interpretation of
IFRSs which became effective for the current year:
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IFRS 13 Fair Value Measurement
IAS 19 Employee Benefits (Amendment) - Defined Benefit Plans: Employee Contributions
Improvements to Accounting Standards Issued by the IASB in December 2013
IFRS 2 Share-based Payment Definitions of vesting conditions
IFRS 3 Business Combinations Accounting for contingent consideration in a business combination
IFRS 3 Business Combinations Scope exceptions for joint ventures
IFRS 8 Operating Segments Aggregation of operating segments
IFRS 8 Operating Segments Reconciliation of the total of the reportable segments assets to the entitys
assets
IFRS 13 Fair Value Measurement - Scope of paragraph 52 (portfolio exception)
IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets Revaluation method proportionate
restatement of accumulated depreciation / amortisation
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Abbott Pakistan

2015 ANNUAL REPORT

IAS 24 Related Party Disclosures - Key management personnel

IAS 40 Investment Property - Interrelationship between IFRS 3 and IAS 40 (ancillary services)
The adoption of the above amendments, improvements to accounting standards and interpretations did not
have any effect on the financial statements.
2.1.4 Standards, interpretations and amendments to approved accounting standards that are not yet effective
The following standards, amendments and interpretations with respect to the approved accounting standards
as applicable in Pakistan would be effective from the dates mentioned below against the respective standard
or interpretation:
Standard or Interpretation

Effective date (annual periods

beginning on or after)

IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests

in Other Entities and IAS 27 Separate Financial Statements Investment
Entities: Applying the Consolidation Exception (Amendment)

01 January 2016

IFRS 10 Consolidated Financial Statements and IAS 28 Investment in

Associates and Joint Ventures - Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture (Amendment)

Not yet finalized

IFRS 11 Joint Arrangements - Accounting for Acquisition of Interest in

Joint Operation (Amendment)
IFRS 1 Presentation of Financial Statements - Disclosure Initiative
(Amendment)
IAS 16 Property, Plant and Equipment and IAS 38 intangible assets Clarification of Acceptable Method of Depreciation and Amortization
(Amendment)

01 January 2016
01 January 2016

01 January 2016

IAS 16 Property, Plant and Equipment and IAS 41 Agriculture - Agriculture:

Bearer Plants (Amendment)

01 January 2016

IAS 27 Separate Financial Statements Equity Method in Separate

Financial Statements (Amendment)

01 January 2016

The above standards and amendments are not expected to have any material impact on the Companys
financial statements in the period of initial application.
In addition to the above standards and amendments, improvements to various accounting standards have
also been issued by the IASB in September 2014. Such improvements are generally effective for accounting
periods beginning on or after 01 January 2016. The Company expects that such improvements to the
standards will not have any material impact on the Companys financial statements in the period of initial
application
Further, following new standards have been issued by IASB which are yet to be notified by the SECP for the
purpose of applicability in Pakistan.
Standard
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 14 Regulatory Deferral Accounts
IFRS 15 Revenue from Contracts with Customers
IFRS 16 Leases

IASB Effective date

(annual periods
beginning on or after)
01 January 2018
01 January 2016
01 January 2018
01 January 2019

105

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

2.1.5 Critical accounting estimates and judgments

The preparation of financial statements in conformity with approved accounting standards, as applicable in
Pakistan, requires management to make judgments, estimates and assumptions that affects the application
of policies and the reported amount of assets, liabilities, 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, the results of which form the basis of making the judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates. The estimates underlying the assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision affects only
that period, or in the period of the revision and future periods if the revision affects both current and future
periods.
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)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
2.2

Useful lives of items of property, plant and equipment (note 2.3 and note 8.1);
Provision for slow moving and obsolete stock-in-trade (note 2.6 and note 13);
Provision for slow moving and obsolete stores and spares (note 2.5 and 12);
Provision for doubtful trade debts (note 2.7 and 14);
Provision for doubtful other receivables (note 2.7 and 17);
Provision for sample inventory (note 2.8);
Estimates of receivables and payables in respect of staff retirement benefit schemes (note 2.14 and note 21);
Provision for taxation (note 2.9, note 5 and note 27);
Share based compensation (note 2.22 and 30); and
Contingencies and commitments (note 7).

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). The financial statements are
presented in Pakistani Rupees, which is also the Companys functional currency.

2.3

Property, plant and equipment

a)

Owned
These are stated at cost less accumulated depreciation and impairment loss, if any, except freehold
land, which is stated at cost. Cost includes expenditure that is directly attributable to the acquisition of
the asset. When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.

b)

Leased
Leased asset comprises of leasehold land which is stated at cost less accumulated amortisation and
accumulated impairment, if any.

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 8.1. Depreciation
on assets is charged from the month of addition to the month of disposal. The assets residual values
and useful lives are reviewed, and adjusted if appropriate, at each financial year end. Amortisation on
leasehold land is charged to profit and loss account equally over the period of the lease.

106

Abbott Pakistan

d)

2015 ANNUAL REPORT

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.

e)

Subsequent costs
Maintenance and normal repairs are charged to profit and loss account as and when incurred.
Major renewals and improvements which increase the assets remaining useful economic life or the
performance beyond the current estimated levels are capitalized and the assets so replaced, if any, are
retired.

f)

Capital work-in-progress
This is stated at cost less impairment loss, if any, and consists of expenditure incurred and advances
made in the course of construction and installation. These are transferred to specific assets as and when
the assets are available for use.

2.4

Intangible assets
An intangible asset is recognised as an asset if it is probable that future economic benefits attributable to the
asset will flow to the entity and the cost of such asset can be measured reliably.
Intangible asset with finite life is measured initially at cost and subsequently stated at cost less accumulated
amortisation and impairment losses, if any. It is amortised on a straight line basis over its estimated useful
life.
The amortisation period for intangible assets with finite useful lives is reviewed at each year end and is
changed to reflect the useful life expected at respective year end.

2.5

Stores and spares

These are valued at cost determined on weighted average basis. Cost in relation to items in transit comprises
of invoice value and other charges incurred thereon up to the balance sheet date. Provision is made in the
financial statements for obsolete and slow moving items based on estimates regarding their usability.

2.6

Stock-in-trade
Stock of raw and packing materials, work-in-process and finished goods are valued at the lower of cost,
calculated on first-in-first-out basis, and net realisable value. Cost in relation to work-in-process and
finished goods represent direct cost of materials, direct wages and an appropriate portion of production
overheads. Cost in relation to items in transit represent invoice value and other charges incurred thereon
up to the balance sheet date.
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.

2.7

Trade debts and other receivables

Trade debts and other receivables are recognised initially at fair value and subsequently measured at
amortised cost less provision for impairment. A provision for impairment of trade debts is estimated when
there is objective evidence that the Company will not be able to collect all amounts due according to the
original terms of the receivables. The carrying amount of the asset is reduced through the use of an allowance

107

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

account, and the amount of the loss is recognized in the profit and loss account within other charges. When
a trade debt is uncollectible, it is written off against the allowance account for trade debts. Subsequent
recoveries of amounts previously written off are credited to other income in the profit and loss account.
2.8

Sample inventory
Sample inventory is classified as prepayment in the balance sheet and is carried at cost. The cost of sample
inventory is charged to profit and loss account on issuance of samples to medical practitioners. Provision
is made in the financial statements for obsolete and slow moving items based on estimates regarding their
usability.

2.9

Taxation
Current
The charge for current taxation is based on taxable income at the current rates of taxation in accordance
with Income Tax Ordinance, 2001.
Deferred
Deferred tax is provided in full using the balance sheet liability method on all temporary differences arising
at the balance sheet date, between the tax bases of the assets and the liabilities and their carrying amounts.
Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are
recognized for all deductible temporary differences, unused tax losses and unused tax credits to the extent
that it is probable that future taxable profits will be available against which these can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse,
based on tax rates that have been enacted or substantively enacted by the balance sheet date and recognised
after adjusting the impact of tax under FTR.

2.10

Cash and cash equivalents

Cash and cash equivalents comprise of cash in hand, cheques and drafts in hand and in transit and balances
with banks in savings, deposit, current accounts and short-term running finance, if any.

2.11

Trade and other payables

Short-term liabilities for trade and other amounts payable are recognised initially at fair value plus directly
attributable transaction cost, if any, and subsequently carried at amortised cost.

2.12

Dividend distribution
Dividend distribution to the Companys shareholders is recognised as a liability in the financial statements
in the period in which the dividends are approved by the shareholders.

2.13

Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of
past events; it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; and the amount can be reliably estimated. Provisions are reviewed at each balance
sheet date to reflect the current best estimate.

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Abbott Pakistan

2.14

2015 ANNUAL REPORT

Staff retirement benefits

Defined contribution plan
The Company operates a recognised provident fund (defined contribution plan) for all permanent employees
who have completed six months service. Equal monthly contributions are made by the Company and its
employees at the rate of 10% of basic salary. The contribution of the Company is charged to profit and loss
account as and when incurred.
Defined benefit plan
The Company operates an approved funded pension scheme (defined benefit plan) for all its permanent
employees who have completed one years service.
Contributions and annual provisions to cover the obligation under the funded pension scheme are made
based on annual actuarial valuation. 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.
Staff retirement benefits are payable to employees on completion of the prescribed qualifying period of
service under the scheme.

2.15

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. Provisions to cover the obligations are made using the current salary levels of employees.
No actuarial valuation of compensated absences is carried out as the management considers that the
financial impact is not material.

2.16

Foreign currency transactions

Transactions denominated in foreign currencies are recorded in Pakistani Rupees at the foreign currency
rates prevailing on the date of transaction. Monetary assets and liabilities in foreign currencies are translated
into Pakistani Rupees at the rates of exchange approximating those at the balance sheet date. Exchange
differences are taken to the profit and loss account.

2.17

Revenue recognition
-

Local sales are recognised as revenue upon transfer of significant risk and rewards of ownership, which
coincides with delivery of goods to customers.

Export sales are recognised as revenue upon transfer of significant risks and rewards of ownership,
which coincides with date of shipment.

Service income is recognised when the related services are rendered.

Income on investments / deposits is accrued on a time proportionate basis, taking into account the
effective interest rates.

109

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

2.18

For The Year Ended December 31, 2015

Impairment
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that
it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more
events have had a negative effect on the estimated future cash flows of that asset.
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. If any such indication exists then the assets
recoverable amount is estimated. An impairment loss is recognised, as an expense in the profit and loss
account, for the amount by which the assets carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an assets fair value less cost to sell and value in use. 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 purpose
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash generating units).
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment
had been recognised.

2.19

Financial instruments
All financial assets and financial liabilities are recognised at the time when the Company becomes a party
to the contractual provisions of the instrument. Financial assets are derecognised at the time when the
Company loses control of the contractual rights that comprise the financial assets. All financial liabilities are
derecognised at the time when they are extinguished that is, when the obligation specified in the contract
is discharged, cancelled or expires. Any gains or losses on derecognition of financial assets and financial
liabilities are taken to the profit and loss account currently.

2.20 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.
2.21

Segment reporting
Segment reporting is based on the operating (business) segments of the Company. An operating segment
is an identifiable component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of
the Companys other components and for which discrete financial information is available. An operating
segments 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.
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. Unallocated items comprise mainly corporate assets,
income tax assets, liabilities and related income and expenditure. Segment capital expenditure is the total
cost incurred during the period to acquire property, plant and equipment.

110

Abbott Pakistan

2015 ANNUAL REPORT

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. Segments reported are as follows:
Pharmaceutical
The Pharmaceutical segment is engaged in the manufacture, import and marketing of research based
pharmaceutical products registered with the Drug Regulatory Authority of Pakistan.
Nutritional
The Nutritional segment is engaged in the import and marketing of pediatric nutritional products and
medical nutritional products.
Others
The Others segment represents the manufacture, import and marketing of diagnostic equipment, diabetes
care, molecular devices, their testing kits, general healthcare products.
2.22

Share based compensation

The 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. Since awarded shares relate
to the ultimate holding company, a corresponding reserve is created to reflect the equity component.

3.

AUTHORISED CAPITAL
2015
2014
Number of shares
200,000,000

4.

200,000,000

2015
2014
(Rupees 000)
Ordinary shares of Rs. 10 each

2,000,000

2,000,000

ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

2015
2014
Number of shares
5,832,196

5,832,196

18,479,640

18,479,640

73,588,466

73,588,466

97,900,302

97,900,302

2015
2014
(Rupees 000)
Ordinary shares of Rs. 10 each
issued as fully paid for cash

58,322

58,322

Ordinary shares of Rs. 10 each,

determined pursuant to merger
of Abbott Laboratories (Pakistan)
Limited with Knoll Pharmaceutical
Limited in accordance with the
swap ratio stipulated therein

184,796

184,796

Ordinary shares of Rs. 10 each

issued as fully paid bonus shares

735,885

735,885

979,003

979,003

As at December 31, 2015, Abbott Asia Investments Limited, UK held 76,259,454 shares. The ultimate holding
company is Abbott International LLC., USA.
111

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

5.

6.

For The Year Ended December 31, 2015

DEFERRED TAXATION

258,048

257,547

Deferred tax asset arising in respect of provisions

(38,904)

(33,594)

219,144

223,953

TRADE AND OTHER PAYABLES

6.1

6.2
6.3

21.1.1

114,398
1,153,738 `
827,066
182,842
16,063
59,829
51,616
53,523
84,547
610,971
152,548
12,743
3,319,884

68,013
1,194,406
427,612
175,770
11,287
48,397
67,317
7,425
46,575
93,765
446,443
76,324
6,708
2,670,042

Bills payable include the following amounts payable to related parties:

Abbott Health Care Puerto Rico
Abbott Diagnostics GmbH
Abbott Logistics B.V.
Abbott Laboratories (Singapore) PTE Limited
Abbott Products Operation AG
Abbott International LLC., USA
Abbott GmbH & Co. KG.
Abbott Diabetes Care Inc.
Abbott Diabetes Care Limited, UK
Abbott DO Brazil Ltda
Abbott International LLC., USA

112

2015
2014
(Rupees 000)

Deferred tax liability arising due to accelerated tax

depreciation allowance

Creditors
Accrued liabilities
Bills payable
Advances from customers
Unclaimed dividends
Payable to related parties
Sales tax payable
Workers Profit Participation Fund
Central Research Fund
Workers Welfare Fund
Staff pension fund
Provision for Gas Infrastructure Development Cess
Others

6.1

Note

44,068
211,141
279,192
94,222
83,776
4,481
33,393
23,595
5,168
779,036

48,071
95,294
110,998
22,687
76,799
13,397
6,658
329
81
374,314

Abbott Pakistan

Note
6.2

2015
2014
(Rupees 000)

Payable to related parties represents the following amounts payable to:

Abbott International LLC., USA
Abbott Laboratories (Singapore) PTE Limited
AbbVie Logistics B.V.
Abbott Products Operation AG

6.3

2015 ANNUAL REPORT

40,450
19,379
59,829

42,316
3,629
2,452
48,397

7,425
266,900
274,325

(12,720)
231,932
219,212

276,000
(1,675)

211,787
7,425

Workers Profit Participation Fund

Balance at the beginning of the year
Allocation for the year
Less: Amount paid to the fund
Balance (receivable) from / payable to the Fund

24

7.

CONTINGENCIES AND COMMITMENTS

7.1

Contingencies

7.1.1

The Company has given bank guarantees of Rs. 141.626 million (2014: Rs. 135.054 million) to the Customs
Department, a utility company and other institutions against tenders.

7.1.2

The taxation officer has contended that the Company has not deducted tax under the law on certain
expenses. The order was passed and a demand of Rs. 20 million was raised against the Company, however
an appeal has been filed by the Company with the Appellate Tribunal Inland Revenue which is pending
for adjudication.
Based on the tax advisors opinion, management is of the view that the position of the Company is sound
and the eventual outcome is expected to be in the Companys favour.

7.1.3

The Commissioner Inland Revenue (CIR) has selected the case of the Company for audit of tax year 2012
(accounting year December 31, 2011) and has requested various information from the Company in this
regard. The Company believes that only the Federal Board of Revenue has the right to select the Company
for audit based on defined criteria or through random balloting and the CIR does not have the right to
select the Company for Audit. The Company has filed writ petition in the High court in this regard.

113

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

7.2

Commitments

7.2.1

Commitments for capital expenditure aggregated approximately Rs. 298.176 million (2014: Rs. 353.850
million).

7.2.2

The Company has obtained short-term financing facilities from various commercial banks amounting to
Rs. 1,120 million (2014: Rs. 1,020 million). These facilities can be utilised for letters of credit, guarantees
and running finance / short-term loans. However, the running finance / short-term loan utilisation cannot
exceed Rs. 250 million (2014: Rs. 250 million). The running finance / short-term loan carries markup at
rates ranging from KIBOR plus 1% to KIBOR plus 2% (2014: KIBOR plus 1% to KIBOR plus 2%) and are
secured against first joint pari passu hypothecation charge over stocks and book debts of the Company,
ranking hypothecation charge over stocks and book debts of the Company, promissory notes, and counter
guarantees. The Company has not borrowed any amount against running finance / short-term loan facilities
at the balance sheet date. Commitments in respect of letters of credit as at balance sheet date aggregated
to Rs. 384.742 million (2014: Rs. 447.727 million).

Note
8.

PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets
Capital work-in-progress

114

2015
2014
(Rupees 000)

8.1
8.5

3,299,161
718,242

2,939,248
419,844

4,017,403

3,359,092

Abbott Pakistan

8.1

2015 ANNUAL REPORT

Operating fixed assets

The following is a statement of operating fixed assets:
Freehold
land

Leasehold
land

Buildings
Buildings
Plant and
on freehold on leasehold
machinery
land
land

Vehicles

Office
equipment

Computers

Demonstration
equipmentnote 8.2

Total

(Rupees 000)
At December 31, 2013
Cost
Accumulated depreciation /
amortisation

20,679

2,718

368,170

66,683

3,176,505

351,921

102,090

230,088

1,097,875

5,416,729

834

195,930

64,758

1,450,417

114,030

75,607

146,909

536,824

2,585,309

Net book value

20,679

1,884

172,240

1,925

1,726,088

237,891

26,483

83,179

561,051

2,831,420

20,679

1,884

172,240

1,925

1,726,088

237,891

26,483

83,179

561,051

2,831,420

16,395

239,494

119,552

3,360

28,605

186,508

593,914

Year ended December 31, 2014

Opening net book value
Additions / transfers
Disposals / write offs
Cost

28,186

74,213

3,048

1,523

258,690

365,660

23,269

41,190

2,999

1,360

228,858

297,676

4,917

33,023

49

163

29,832

67,984

29

10,282

712

182,944

49,541

11,062

32,152

131,380

418,102

20,679

1,855

178,353

1,213

1,777,721

274,879

18,732

79,469

586,347

2,939,248

Cost
Accumulated depreciation /
amortisation

20,679

2,718

384,565

66,683

3,387,813

397,260

102,402

257,170

1,025,693

5,644,983

863

206,212

65,470

1,610,092

122,381

83,670

177,701

439,346

2,705,735

Net book value

20,679

1,855

178,353

1,213

1,777,721

274,879

18,732

79,469

586,347

2,939,248

Depreciation
Depreciation / amortisation
charge for the year
Closing net book value
At December 31, 2014

Year ended December 31, 2015

Opening net book value

20,679

1,855

178,353

1,213

1,777,721

274,879

18,732

79,469

586,347

2,939,248

Additions / transfers

45,367

438,112

146,095

6,271

28,624

211,230

875,699

Disposals / write offs

Cost

62

10,957

112,711

1,492

13,053

18,728

157,003

62

9,882

61,538

1,398

13,053

18,728

104,661

1,075

51,173

94

52,342

29

12,028

712

202,638

58,129

10,361

34,552

144,995

463,444

20,679

1,826

211,692

501

2,012,120

311,672

14,548

73,541

652,582

3,299,161

Cost
Accumulated depreciation /
amortisation

20,679

2,718

429,870

66,683

3,814,968

430,644

107,181

272,741

1,218,195

6,363,679

892

218,178

66,182

1,802,848

118,972

92,633

199,200

565,613

3,064,518

Net book value

20,679

1,826

211,692

501

2,012,120

311,672

14,548

73,541

652,582

3,299,161

1.06
1.06

2-10
2-10

5-10
5-10

5-20
5-20

20-25
20-25

10-33
10-33

20-33
20-33

11-33
11-33

Depreciation
Depreciation / amortisation
charge for the year
Closing net book value
At December 31, 2015

Annual rate of depreciation / amortisation %

2014
2015

8.2

Demonstration equipment of the Company is in the possession of various hospitals and clinics.
115

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

Note
8.3

The depreciation charge for the year has been allocated as follows:
Cost of goods sold
Selling and distribution expenses
Administrative expenses

8.4

2015
2014
(Rupees 000)

20
22
23

222,732
215,222
25,490
463,444

200,992
195,308
21,802
418,102

Details of disposals of operating fixed assets having book value exceeding Rs. 50,000:
Description

Cost

Accumulated
Book
depreciation
value
(Rupees 000)

Sale
proceeds

Mode of disposal

Particulars of purchaser

Vehicles
5,866
1,895
1,457
1,289
1,479
1,389
1,457
1,457
1,653
1,572
1,661
1,673
1,414
1,456
1,554
2,010
1,289
1,384
1,300
1,337
1,953
1,451
1,414
8,499
3,000
1,480
779
1,663
4,068
1,733
1,389
1,427
1,427
1,480
1,337
1,337
1,289
1,663
1,480
1,461
1,529
1,688
1,399
1,399
1,399
1,529
1,399
1,399
1,399
1,480
1,399
1,679

116

3,520
1,137
1,069
773
887
833
1,107
1,166
372
354
394
502
848
874
796
1,219
773
830
780
802
49
1,142
848
5,099
2,700
888
467
457
2,441
347
833
856
856
888
802
802
773
333
888
877
917
548
839
839
839
917
839
839
839
888
839
1,007

2,346
758
388
516
592
556
350
291
1,281
1,218
1,267
1,171
566
582
758
791
516
554
520
535
1,904
309
566
3,400
300
592
312
1,206
1,627
1,386
556
571
571
592
535
535
516
1,330
592
584
612
1,140
560
560
560
612
560
560
560
592
560
672

2,900
758
815
516
592
556
945
945
1,301
1,251
1,289
1,189
566
1,037
855
795
516
554
520
535
1,850
1,067
1,075
3,800
1,463
592
630
1,414
3,965
1,500
1,136
1,046
910
592
535
535
516
1,414
592
584
612
1,181
560
560
560
612
560
560
560
592
560
672

Open Market Auction

Negotiation
Open Market Auction
Negotiation
Negotiation
Negotiation
Open Market Auction
Open Market Auction
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Open Market Auction
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Insurance Claim
Open Market Auction
Negotiation
Open Market Auction
Open Market Auction
Negotiation
Negotiation
Negotiation
Open Market Auction
Insurance Claim
Open Market Auction
Open Market Auction
Open Market Auction
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation

Ilyas Ibrahim
Malik Sadatullah
Babar Ali
Pir M Shah
Amir M Beg
Jamal Nasir
Syed Muzammil Shah
Syed Muzammil Shah
Jurrat Hussain
Haider Salahuddin
Amir Khan
Muhammad Javed
Irfan Hafeez
Wasim Mirza
Tariq Mahmood Khaldi
Ms Seema Khan
Asif Ali
Amjad Jamal
Ms Rozina Kazmi
Athar Raza Kazmi
EFU
Gul Faraz Khan
Azam Khan Niazi
Muhammad Afzal
Syed Yousuf Shah
Amir Tufail
M.Majid
Shaikh Zaigham Masood
Danish Wali
EFU
Wasim Mirza
Muhammad Abid
Syed Amir Jamil
Shaikh Adnan Latif
Hazrat uddin
Ahmed Ashraf
Arifullah
Zafar Iqbal
Imran Atta
Muhammad Imran Khan
Ejaz Ahmed
Abdul Razzak
Abdul Rehman
Iftikhar Ali
M. Tariq Khan
Shah Saleem
Abdul Ahad
Muhammad Jahangir Jalil
Sirbiland Khan
Asmatullah Khan
Najeebuddin Siddiqui
Syed Javed Bukhari

69-A; Lalazar Street No. 4 New Queens Road

Employee
Traiday Wali, Daakana Khaas, Teshil Ferozwala, District Sheikhupura.

Employee
Employee
Employee
E/475, Shahjee Compound, Karachi
E/475, Shahjee Compound, Karachi
Ex - Employee
Ex - Employee
Ex - Employee
Ex - Employee
Ex - Employee
10/4,Block 10/A, Gulshan-e-Iqbal
Ex - Employee
Employee
Employee
Ex - Employee
Employee
Employee
EFU House, M.A. Jinnah Road
Khuldabad, Quaidabad, Landhi
Employee
Royal Group, One E-2, Meharsons Estate,Talpur Road
Allah Wali Market, Qazzafi Town
Ex - Employee
Employee
Ex - Employee
Flat No. B-10; Abbas Square, F.B.Area Block 7
EFU House, M.A. Jinnah Road
10/4,Block 10/A, Gulshan-e-Iqbal
House no. H-129, Area 5C; Landhi, Karachi
413, Anum Blessing, Block No 7/8
Employee
Employee
Employee
Employee
Ex - Employee
Employee
Employee
Employee
Ex - Employee
Employee
Employee
Employee
Employee
Employee
Employee
Employee
Employee
Employee
Employee

Abbott Pakistan

Description

Cost

Accumulated
depreciation

Book
value

Sale
proceeds

Mode of disposal

2015 ANNUAL REPORT

Particulars of purchaser

(Rupees 000)

Vehicles
1,529
1,394
1,673
1,869
2,020
1,399
1,688
1,399
1,628
944
1,504
1,554
1,490

917
836
648
607
1,212
839
570
839
244
566
902
932
894

612
558
1,025
1,262
808
560
1,118
560
1,384
378
602
622
596

1,150
558
1,171
1,400
808
560
1,181
560
1,400
653
1,300
622
596

Insurance Claim
Negotiation
Negotiation
Insurance Claim
Negotiation
Negotiation
Negotiation
Negotiation
Insurance Claim
Negotiation
Negotiation
Negotiation
Negotiation

8,235
2,346

7,412
2,112

823
234

- Write-off
- Write-off

1,492

1,398

94

- Write-off

32,219

32,201

18

- Write-off

EFU
Salman Ahmed
Maqsood Hussain
EFU
Dr. Raeef Ahmed
Muhammad Zafar ullah
Amjad Ali
Kifayat ullah
EFU
Sheikh Imran uddin
Dr. Sarmad Maqbool
Masood Akhter
Naeem uddin

EFU House, M.A. Jinnah Road

Employee
Ex - Employee
EFU House, M.A. Jinnah Road
Employee
Employee
Employee
Employee
EFU House, M.A. Jinnah Road
Employee
Employee
Employee
Employee

Plant and
machinery

Office
Equipment

Items having
book value less
than Rs.50,000
each

8.5

Capital work-in-progress
Plant and
machinery

Vehicles

Building, office
equipments
and computers

Total

(Rupees 000)
At December 31, 2013

307,184

8,901

36,230

352,315

226,055
(206,185)

119,613
(119,552)

129,267
(81,669)

474,935
(407,406)

At December 31, 2014

327,054

8,962

83,828

419,844

Additions
Transferred to operating fixed assets

738,768
(438,112)

173,802
(146,095)

50,297
(80,262)

962,867
(664,469)

627,710

36,669

53,863

718,242

Additions
Transferred to operating fixed assets

At December 31, 2015

117

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

9.

For The Year Ended December 31, 2015

INTANGIBLE ASSETS
Intangible assets include rights acquired from Highnoon Laboratories Limited against transfer of technical,
marketing and sales know-how and assignment of other necessary rights and requisites for marketing and
selling ex-Solvay products in Pakistan, following a global acquisition of Solvay Pharmaceuticals by Abbott
International, the ultimate holding company.
Note

2015
2014
(Rupees 000)

Cost
Opening balance

86,100

86,100

Additions

18,500

104,600

86,100

61,705

44,485

20,912

17,220

82,617

61,705

104,600

86,100

Accumulated amortisation

(82,617)

(61,705)

Balance as at December 31,

21,983

24,395

Balance as at December 31,

Accumulated amortisation
Opening balance
Amortisation charge

22

Balance as at December 31,

Net book value
Cost

Years
4-5

Useful life

10.

2015
2014
(Rupees 000)

LONG-TERM LOANS AND ADVANCES - considered good, secured

Long-term loans
Due from:
- Executives
- Employees
Less: recoverable within one year
- Executives
- Employees
Long-term advances
- Employees

118

10.1
10.2

15

36,736
43,468
80,204

33,767
36,951
70,718

15,847
15,165
31,012
49,192

13,354
14,097
27,451
43,267

2,520
51,712

2,937
46,204

Abbott Pakistan

2015 ANNUAL REPORT

2015
2014
(Rupees 000)
10.1

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

33,767
17,378
8,599
23,008
36,736

17,444
25,573
9,205
18,455
33,767

10.2

Loans given to executives and employees are in accordance with the Company policy. These loans are
interest free and are repayable in equal monthly installments within a maximum period of four years. These
loans are carried at cost due to practicality and materiality of the amounts involved. These loans are for
the purpose of purchase of refrigerators, scooters, vehicles and television sets. The loans for purchase of
vehicles are secured by way of registration of vehicles purchased in the name of the Company.

10.3

The maximum aggregate amount of loans due from executives at the end of any month during the year were
Rs. 40.469 million (2014: Rs. 33.814 million), respectively.

11.

LONG-TERM DEPOSITS
Represents deposits paid for utilities and gas cylinders.
Note

12.

STORES AND SPARES

Stores
Spares [including spares-in-transit Rs. 36.591 million
(2014: Rs. 13.416 million)]
Less: Provision for slow moving and obsolete items

12.1

71,395

70,575

106,434
177,829

85,749
156,324

37,760
140,069

36,166
120,158

36,166
1,594
37,760

35,160
1,006
36,166

1,624,428
224,347

1,873,239
197,872

20

1,180,172
3,028,947

842,296
2,913,407

13.2

120,257
2,908,690

90,400
2,823,007

12.1

Reconciliation of provision for slow moving and obsolete items

Opening provision
Charge for the year
Closing provision

13.

2015
2014
(Rupees 000)

STOCK-IN-TRADE
Raw and packing materials [including stock-in-transit of
Rs. 176.552 million (2014: Rs. 214.113 million)]
Work-in-process
Finished goods [including stock-in-transit of
Rs. 181.713 million (2014: Rs. 54.487 million)]

Less: Provision for slow moving and obsolete items

20

119

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

13.1

For The Year Ended December 31, 2015

Stock-in-trade includes items costing Rs. 107.930 million (2014: Rs. 68.886 million) valued at net realisable
value of Rs. 93.945 million (2014: Rs. 64.741 million) resulting in a write down of Rs. 13.985 million (2014:
4.145 million).
Note

13.2

14.

2015
2014
(Rupees 000)

Reconciliation of provision for slow moving and obsolete items

Opening provision
Charge for the year
Write offs during the year

90,400
113,718
(83,861)

148,152
74,429
(132,181)

Closing provision

120,257

90,400

109,389

137,516

33,849
333,165
367,014

6,921
338,334
345,255

476,403

482,771

10,639

11,480

487,042

494,251

10,639
476,403

11,480
482,771

11,480
(841)
-

32,283
1,723
(22,526)

10,639

11,480

TRADE DEBTS
Considered good:
Secured
Unsecured
- Due from a related party
- Others

14.1

Considered doubtful:
Unsecured

Less: Provision for doubtful debts

14.2

14.1

Represents receivable from Abbott Products Operations AG, a related party.

14.2

Reconciliation of provision for doubtful debts

Opening provision
(Reversal) / charge for the year
Write offs during the year
Closing provision

120

25

Abbott Pakistan

Note
15.

2015 ANNUAL REPORT

2015
2014
(Rupees 000)

LOANS AND ADVANCES

Current portion of long-term loans

10

31,012

27,451

7,435
4,978
56,769
69,182
100,194

5,791
2,803
45,214
53,808
81,259

794
100,988
794

81,259
-

100,194

81,259

Considered good
Advances to:
- Executives
- Employees
- Suppliers

Considered doubtful
Less: Provision for doubtful advances

15.1

The maximum aggregate amount of advances due from the chief executive, directors and executives at the
end of any month during the year were Rs. Nil, Rs. 3.99 million and Rs. 40.67 million (2014: Rs. Nil, Rs. 3.58
million and Rs. 24.29 million) respectively.
2015
2014
(Rupees 000)

16.

TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS

Considered good
Trade deposits
Prepayments [including sample inventory Rs. 43.207 million
(2014: Rs. 45.572 million)]

94,804

58,535

137,093

119,413

231,897

177,948

2,161

2,161

234,058

180,109

2,161
231,897

2,161
177,948

Considered doubtful
Trade deposits

Less: Provision for doubtful trade deposits

121

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

Note
17.

2015
2014
(Rupees 000)

OTHER RECEIVABLES
Considered good
Due from related parties
Material on loan
Insurance claim receivable
Service fee for toll manufacturing
Workers Profit Participation Fund
Others

17.1

6.3

Considered doubtful
Less: Provision for doubtful other receivables
17.1

17.2

3,239
100,734

3,135
195,745

3,239
97,495

3,135
192,610

80
1,049
13,535
604
787
144
4,306
21,269
41,774

842
4,907
42,181
8,037
380
21,467
507
29,109
22,891
130,321

3,135
104
3,239

2,678
457
3,135

Reconciliation of provision for doubtful other receivables

Opening provision
Charge for the year
Closing provision

122

130,321
41,438
13,534
163
7,154
192,610

Due from related parties

Abbott Laboratories (Singapore) PTE Limited
Abbott International LLC., USA
Abbott Laboratories Philippines
Abbott Mearo
Abbott Laboratories Malaysia
Abbott Laboratories South Africa
P.T. Abbott Indonesia
Zwolle Manufacturing
Abbott Laboratories Trading (Shanghai) Co. Ltd.
Abbott GmbH & Co. KG.
Abbott DO Brazil Ltda
AbbVie Logistics B.V.
AbbVie Biopharmaceuticals GmbH

17.2

41,774
42,905
4,389
1,675
6,752
97,495

24

Abbott Pakistan

Note
18.

2015 ANNUAL REPORT

2015
2014
(Rupees 000)

CASH AND BANK BALANCES

With banks
Savings accounts:
- Local currency
- Foreign currency

18.1

302,925
404,222
707,147

203,948
216,279
420,227

18.2

7,500,000

5,800,000

4,524

3,047

8,211,671

6,223,274

3,887
1,743

2,838
2,507

103,612
8,320,913

152,762
6,381,381

Deposit accounts:
- Local currency
Current accounts:
- Local currency
In hand
- Foreign currency
- Local currency
Cheques and drafts in hand and in transit
18.1

These savings accounts carry markup rate of 4.50% (2014: 6.50%).

18.2

These deposit accounts carry markup rate of 5.25% (2014: 8.75%).

19.

SALES NET

Note

Local
Export
- to related parties
- to others

32

2015
2014
(Rupees 000)
20,624,196

19,362,125

277,345
884,396
1,161,741
21,785,937

104,137
758,988
863,125
20,225,250

153,284
462,207
615,491
21,170,446

108,052
424,844
532,896
19,692,354

Less:
Sales returns and discounts
Sales tax and excise duty

123

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

Note
20.

2015
2014
(Rupees 000)

COST OF GOODS SOLD

Opening work-in-process
Raw and packing materials consumed

197,872
7,566,213
7,764,085

182,917
6,414,133
6,597,050

1,316,274
61,038
367,777
222,732
130,321
140,019
14,609
9,124
26,877
2,909
37,973
27,424
8,964
157,820
2,523,861
10,287,946

1,176,899
82,419
338,795
200,992
104,277
138,618
12,708
7,632
17,281
3,020
26,515
20,919
10,844
127,503
2,268,422
8,865,472

(224,347)
10,063,599

(197,872)
8,667,600

842,296
3,217,490
14,123,385

1,160,559
3,156,349
12,984,508

(1,180,172)
12,943,213

(842,296)
12,142,212

Manufacturing expenses:
Salaries, wages, 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, rates and taxes
Laboratory testing supplies
Computer expenses
Postage, telephone and telegram
Others

Closing work-in-process
Cost of goods manufactured

20.1

8.3
32

20.2

13

Finished goods
Opening stock
Purchases

Closing stock

20.1

124

13

Salaries, wages, allowances and staff welfare includes a net charge of Rs. 122.008 million - note 21.3 (2014:
net charge of Rs. 117.168 million) in respect of staff retirement benefits.

Abbott Pakistan

2015 ANNUAL REPORT

2015
2014
(Rupees 000)
20.2 Details of other expenses
Other fees and purchased services
Recruitment and training expenses
Membership and subscription
Conference expenses
Miscellaneous expenses
21.

STAFF RETIREMENT BENEFITS

21.1

Defined benefit scheme

73,726
1,661
691
821
80,921
157,820

60,906
1,561
669
896
63,471
127,503

As mentioned in note 2.14, the Company operates a funded pension scheme for all its permanent employees.
Contributions are made to the scheme based on actuarial recommendations. The actuarial valuation was
carried out as at December 31, 2015 using the Projected Unit Credit Method.
2015
2014
(Rupees 000)

Note
21.1.1 Amounts recognised in the balance sheet:
Present value of the defined benefit obligation
Less: Fair value of the plan assets
Deficit

21.1.2
21.1.3
6

3,696,667
3,085,696
610,971

Present value
of defined
benefit
obligation

Fair value of
plan assets

3,424,767
2,978,324
446,443

Total

(Rupees 000)
21.1.2 As at January 1, 2015
Current service cost
Interest cost / (income)
Company contributions
Benefits paid

3,424,767
144,264
370,285
(266,692)

(2,978,324)
(328,801)
(155,390)
266,692

446,443
144,264
41,484
(155,390)
-

Remeasurements recognised in other comprehensive income:

- Loss due to changes in experience adjustment
- Return on plan assets excluding amounts included in
interest income
As at December 31, 2015

24,043

24,043

110,127

110,127

24,043

110,127

134,170

3,696,667

(3,085,696)

610,971

125

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

Present value
of defined
benefit
obligation

Fair value of
plan assets

Total

(Rupees 000)
As at January 1, 2014
Current service cost
Interest cost / (income)
Company contributions
Benefits paid
Remeasurements recognised in other comprehensive income:
- Loss due to changes in experience adjustment
- Return on plan assets excluding amounts
included in interest income
As at December 31, 2014

2,923,069
139,267
376,415
(56,870)

42,886
42,886
3,424,767

Note

(2,570,830)
(339,712)
(144,217)
56,870

19,565
19,565
(2,978,324)

352,239
139,267
36,703
(144,217)
-

42,886
19,565
62,451
446,443

2015
2014
(Rupees 000)

21.1.3 Plan assets are comprised as follows:

Debt
Equity
Bank balances

21.1.7

1,666,008
1,383,176
36,512
3,085,696

1,544,210
1,384,177
49,937
2,978,324

144,264
41,484
185,748

139,267
36,703
175,970

218,674

320,147

21.1.4 Amount recognised in profit and loss:

Current service cost
Net interest
21.3
21.1.5 Actual return on plan assets

(Percent per annum)

21.1.6 Principal actuarial assumptions used were as follows:
Discount rate
Future salary increases
Future pension increases

21.1.8

9.75
7.75
1.50

11.25
9.25
3.00

21.1.7 Pension plan assets include the Companys ordinary shares with a fair value of Rs. 283.099 million (2014:
Rs. 309.451 million).

126

Abbott Pakistan

2015 ANNUAL REPORT

21.1.8 The discount rate of 9.75% is representative of yields on long-term Government Bonds and term deposits
with banks.
21.1.9 Expected contributions to the plan for the year ending December 31, 2016 is Rs. 233.187 million.
21.1.10The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Impact on defined benefit obligation
Change in
assumption

Increase in
assumption

Decrease in
assumption

(Rupees in 000)
Discount rate
Salary growth rate
Pension growth rate

1%
1%
1%

(382,399)
263,807
219,053

458,689
(236,554)
(192,329)

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the
same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting period) has been applied as when calculating the pension liability
recognised within the statement of financial position.
21.2

Defined contribution scheme

An amount of Rs. 73.997 million (2014: Rs. 69.138 million) has been charged during the year in respect of the
contributory provident fund maintained by the Company.
Note

21.3

2015
2014
(Rupees 000)

Staff retirement benefit cost recognised in the profit and

loss account
Pension cost
Less: Reimbursement from related party
Provident fund contribution
E.O.B.I.

21.1.4
32
32

185,748
(2,620)
73,997
10,150
267,275

175,970
(3,460)
69,138
8,520
250,168

20.1
22.1
23.1

122,008
110,209
35,058
267,275

117,168
105,212
27,788
250,168

Allocated as:
Cost of goods sold
Selling and distribution expenses
Administrative expenses

127

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

21.4

For The Year Ended December 31, 2015

The Companys staff retirement benefits includes provident fund - a defined contribution plan. The
Company has established a separate provident fund. Following information of the provident fund has been
derived from the unaudited (2014: audited by another firm of chartered accountants) financial statements
of the provident fund:
2015
Number of members

2014

1,381

1,365

Size of provident fund (Rupees '000)

995,345

1,047,047

Cost of investments made (Rupees '000)

693,401

733,234

Percentage of investments made

69.66%

70.03%

Fair value of investment (Rupees '000)

992,117

1,051,733

456,799
45.89%

490,958
46.19%

385,259
38.71%

405,043
38.11%

208
0.02%

5,194
0.49%

149,850
15.06%

150,538
14.16%

Break-up of investments:
- Balance in Government securities
Amount of investment (Rupees '000)
Percentage of size of the fund
- Balance in equity shares in listed companies
Amount of investment (Rupees '000)
Percentage of size of the fund
- Balance in term finance certificates
Amount of investment (Rupees '000)
Percentage of size of the fund
- Balance at bank
Amount of investment (Rupees '000)
Percentage of size of the fund

21.4.1 As at December 31, 2015, investments out of provident fund have been made in accordance with the
provisions of section 227 of the Companies Ordinance, 1984 and the rules formulated for this purpose.
21.5

The average number of employees during the year and number of employees as at December 31, 2015 and
2014 respectively are as follows:
2015
2014
No. of employees
Average number of employees during the year
Number of employees as at year end

128

1,455
1,455

1,430
1,439

Abbott Pakistan

Note
22.

2015
2014
(Rupees 000)

SELLING AND DISTRIBUTION EXPENSES

Salaries, wages, allowances and staff welfare
Rent, rates and taxes
Repairs and maintenance
Royalty
Insurance
Depreciation
Amortisation of intangible assets
Legal, professional and other services
Postage, telephone and telegram
Printing and stationery
Travelling, conveyance and entertainment
Advertising, samples and sales promotion
Forwarding expenses
Electricity
Computer expenses
Training and development expenses
Packing and miscellaneous supplies
Distributors commission
Others
Less: Reimbursement from related party

22.1

2015 ANNUAL REPORT

22.1

8.3
9

22.2
32

1,011,888
43,307
21,970
27,498
16,191
215,222
20,912
31,403
39,176
8,219
301,280
679,280
318,865
21,509
42,346
22,111
26,251
27,486
85,088
2,960,002

1,080,689
40,433
22,665
23,438
10,075
195,308
17,220
32,854
33,555
16,743
290,646
651,506
300,752
17,771
18,197
35,028
81,300
107,869
64,409
3,040,458

83,595
2,876,407

75,338
2,965,120

Salaries, wages, allowances and staff welfare includes a net charge of Rs. 110.209 million - note 21.3 (2014:
net charge of Rs. 105.212 million) in respect of staff retirement benefits.
2015
2014
(Rupees 000)

22.2

Details of other expenses

Other fees and purchased services
Security expenses
Membership and subscription
Air conditioning expenses
Housekeeping expenses
Water charges
Purchased gas
Miscellaneous expenses

55,082
8,602
1,260
4,194
3,421
185
277
12,067
85,088

45,398
6,846
731
3,175
2,716
212
440
4,891
64,409

129

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

Note
23.

ADMINISTRATIVE EXPENSES
Salaries, wages, allowances and staff welfare
Rent, rates and taxes
Repairs and maintenance
Insurance
Depreciation
Legal, professional and other services
Postage, telephone and telegram
Printing and stationery
Travelling, conveyance and entertainment
Electricity
Computer expenses
Training and development expenses
Miscellaneous office supplies
Others

Less: Reimbursement from related party

23.1

23.1

8.3

23.2

32

8,235
383,612

12,151
367,379

2015
2014
(Rupees 000)

15,890
1,256
10,509
4,595
474
68
4,073
36,865

14,518
1,334
6,236
6,091
1,086
167
744
30,176

4,440
868
266,900
64,621
50,571
104
44,217
431,721

3,324
803
231,932
88,134
43,622
457
1,723
369,995

OTHER CHARGES
Auditors remuneration
Donations
Workers Profit Participation Fund
Workers Welfare Fund
Central Research Fund
Provision for doubtful other receivables
Provision for doubtful trade debts
Exchange loss

130

253,082
15,072
3,768
3,017
21,802
5,486
6,641
2,629
10,685
10,580
11,205
1,500
3,887
30,176
379,530

Details of other expenses

Other fees and purchased services
Security expenses
Membership and subscription
Air conditioning expenses
Housekeeping expenses
Water charges
Miscellaneous expenses

24.

255,584
16,564
5,477
4,458
25,490
8,139
7,942
3,963
7,685
5,720
11,036
679
2,245
36,865
391,847

Salaries, wages, allowances and staff welfare includes a net charge of Rs. 35.058 million - note 21.3 (2014: net
charge of Rs. 27.788 million) in respect of staff retirement benefits.
Note

23.2

2015
2014
(Rupees 000)

24.1
24.2
6.3
17.2
14.2

Abbott Pakistan

2015 ANNUAL REPORT

2015
2014
(Rupees 000)
24.1

Auditors remuneration
Statutory audit and half-yearly fees
Tax advisory services
Special certifications
Out of pocket expenses

1,760
2,180
400
100
4,440

1,600
1,309
355
60
3,324

24.2 Recipients of donations do not include any donee in which any director or his / her spouse had any interest.
Note
25.

OTHER INCOME
Gain on disposal of property, plant and equipment
Interest income
Scrap sales
Exchange gain
Reversal of provision for doubtful trade debts

25.1

2015
2014
(Rupees 000)

25.1

14.2

10,857
448,150
17,020
841
476,868

7,547
437,971
15,105
15,070
475,693

Interest income include an amount of Rs. 33.261 million (2014: Rs. 30.303 million) on account of interest
income earned from Abbott GmbH & Co. KG., a related party at the rate of 10% (2014: 10%) of half of the
written down value of assets deployed by the Company on their behalf in the Companys diagnostic division
in Pakistan.
2015
2014
(Rupees 000)

26.

FINANCE COSTS
Bank charges

27.

5,884

4,774

1,305,210
119,340
1,424,550

1,263,779
218,085
1,481,864

(4,809)
1,419,741

20,391
1,502,255

TAXATION - net
Current
- For the year
- Prior year

Deferred

131

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

2015
2014
(Rupees 000)

27.1

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
- BMR tax credit
- Tax rate adjustment
- 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)

28.

5,006,477

4,318,567

32%

33%

1,602,073
119,340

1,425,127
218,085

13,876
(255,243)
(43,811)
(39,541)

13,284
(113,830)
(23,949)
(11,987)

23,047
1,419,741

(4,475)
1,502,255

3,586,736

2,816,312

EARNINGS PER SHARE - BASIC / DILUTED

Profit for the year

Number of shares
Weighted average number of ordinary shares in issue during the year

97,900,302

97,900,302

(Rupees)
36.64

Earnings per share

28.1

There is no dilutive effect on the basic earnings per share of the Company.
Note

29.

2015
2014
(Rupees 000)

CASH GENERATED FROM OPERATIONS

Profit before taxation
Adjustment for:
Depreciation
8.3
Amortisation on intangible assets
9
Gain on disposal of property, plant and equipment
25
Interest income
25
Expense recognised in profit or loss in respect of equity-settled
share-based compensation
30
Pension retirement benefit
Finance costs
26
Working capital changes
29.1

132

28.77

5,006,477

4,318,567

463,444
20,912
(10,857)
(448,150)

418,102
17,220
(7,547)
(437,971)

42,464
30,358
5,884
477,382
5,587,914

39,451
31,753
4,774
375,287
4,759,636

Abbott Pakistan

2015 ANNUAL REPORT

2015
2014
(Rupees 000)
29.1

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 - net

30.

(19,911)
(85,683)
6,368
(18,935)
(53,949)
95,115
(76,995)

(12,920)
(60,317)
63,322
90,946
(23,335)
(113,341)
(55,645)

554,377
477,382

430,932
375,287

SHARE BASED COMPENSATION

Share-based compensation plans
As at December 31, 2015, the Companys equity settled share-based compensation plan includes restricted
stock units plan.
Under the plan, the Company employees,eligible as per policy are awarded restricted stock units of Abbott
International LLC., USA (the ultimate holding company). The plan entitles eligible employees shares of
the ultimate holding company which are vested equally over next three years, subject to certain vesting
conditions.
In accordance with IFRS 2 (Share-Based Payments), services received from employees as consideration
for stock units are recognised as an expense in the profit and loss account, with the corresponding entry
recorded as equity. The expense corresponds to the fair value of the stock unit of the Abbott International
LLC., USA and is charged against income on a straight-line basis over the vesting period of the plan.
An expense of Rs. 42.464 million (2014: Rs. 39.451 million) was recognized for this plan during the year.
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:

Volatility
Dividend yield
Risk free interest rate

2014

2013

2012

20.00%
2.20%
1.90%

20.00%
1.60%
1.10%

21.00%
3.60%
1.20%

133

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

A summary of units outstanding is given below:

2015
Average
exercise price
Stock units
per stock unit
(USD)

2014
Average
exercise price
Stock units
per stock unit
(USD)

At January 1,
Granted
Exercised / cancelled

37.55
46.99
40.42

10,481
10,739
10,999

39.34
38.82
40.43

11,223
11,130
11,872

At December 31,

44.38

10,221

37.55

10,481

Stock units outstanding at the end of the year have the following expiry date and exercise prices:
2015
Vesting date

Stock units

2015
2016
2017

31.

2014
Exercise
Price
(USD)

Stock units

Exercise
Price
(USD)

6,681
3,540

43.00
46.99

7,006
3,475
-

37.10
38.47
-

10,221

44.38

10,481

37.55

CAPACITY
The capacity and production of the Companys plants is indeterminable as these are multi-product plants
involving varying processes of manufacture. The Companys production was according to market demand.

32.

TRANSACTIONS WITH RELATED PARTIES

The related parties of the Company comprises parent, ultimate parent, other related parties, employee
retirement benefit plans, directors and key management personnel. Transactions with related parties
essentially entail sale and purchase of goods and services and expenses charged between these companies.
Transactions with related parties are as follows:

134

Abbott Pakistan

Note

2015 ANNUAL REPORT

2015
2014
(Rupees 000)

Related parties
Sale of goods
Purchase of materials
Technical service fee
Reimbursements from a related party on account of:
Selling and distribution expenses
Administrative expenses
Pension Fund
Interest income earned
Contributions paid in respect of staff retirement benefit plans
Pension Fund
Provident Fund

19
20

277,345
3,664,028
140,019

104,137
4,036,659
138,618

22
23
21.3
25.1

83,595
8,235
2,620
33,261

75,338
12,151
3,460
30,303

21.1.2
21.3

155,390
73,997

144,217
69,138

181,177
26,350

152,810
22,109

Key management personnel

Short-term employee benefits
Post-employment benefits
32.1

Disposals of property, plant and equipment to key management personnel are disclosed in note 8.4.

32.2

Outstanding balances in respect of related party sales and purchases, reimbursements and staff retirement
benefits are included in notes 6, 14, 17 and 21.

32.3

Key management personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the entity directly or indirectly. The Company considers all members of
their executive management team, including the chief executive and directors, to be key management
personnel. Outstanding balances of loans and advances to key management personnel are disclosed in
note 10 and note 15.

33.

REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in the financial statements in respect of remuneration, including all
benefits to the chief executive, directors and executives of the Company were as follows:
2015

2014

Chief
Executive

Chief
Executives
Executive
(Rupees 000)

Director

Managerial remuneration
Leave passage / encashment
Medical expenses
Rent / utility / maintenance / furnishing

29,232
1,942
107
-

20,362
707
83
-

1,054,945
64,086
53,454
1,620

Retirement benefits

31,281
4,488

21,152
3,246

35,769
1

Directors

Executives

26,936
196
135
-

39,085
2,575
223
111

915,949
57,496
59,680
2,511

1,174,105
158,297

27,267
3,983

41,994
6,032

1,035,636
138,475

24,398

1,332,402

31,250

48,026

1,174,111

587

*2

558

Short-term employee benefits

Number of persons
*Includes 1 alternate Director

135

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

33.1

In addition, Rs. 42.464 million (2014: Rs. 39.451 million) has been charged in the profit and loss account
in respect of share-based payments to chief executive, directors and certain executives of the Company as
mentioned in notes 2.22 and 30.

33.2

Managerial remuneration includes Rs. 195.528 million (2014: Rs. 175.639 million) charged in the profit and
loss account in respect of bonus to chief executive, directors and certain executives of the Company.

33.3

Directors and certain other executives are provided with free use of Company maintained cars, club
membership and telephone facilities as per terms of employment.

33.4

The aggregate amount charged in these financial statements for fees to non-executive directors is Rs. 1.320
million (2014: Rs. 0.780 million).

136

2015 ANNUAL REPORT

Abbott Pakistan

34. SEGMENT WISE OPERATING RESULTS

2015
Pharmaceutical

Nutritional

2014
Others

Pharmaceutical

Total

Nutritional

Others

Total

(Rupees 000)
Sales
Less: Sales returns and discounts
Less: Sales tax and excise duty
Sales - net

15,772,161

3,958,837

2,054,939

21,785,937

15,053,186

3,320,103

1,851,961

118,274

5,050

29,960

153,284

88,424

3,061

16,567

20,225,250
108,052

365,894

96,313

462,207

316,994

107,850

424,844

15,653,887

3,587,893

1,928,666

21,170,446

14,964,762

3,000,048

1,727,544

19,692,354

Cost of goods sold

9,759,428

2,137,810

1,045,975

12,943,213

9,084,346

1,860,328

1,197,538

12,142,212

Gross profit

5,894,459

1,450,083

882,691

8,227,233

5,880,416

1,139,720

530,006

7,550,142

Selling and distribution expenses

2,061,714

445,037

369,656

2,876,407

2,240,802

397,118

327,200

2,965,120

336,085

35,134

12,393

383,612

317,925

32,912

16,542

367,379

3,496,660

969,912

500,642

4,967,214

3,321,689

709,690

186,264

4,217,643

Administrative expenses
Segment result
Unallocated corporate expenses / income
Other income
Other charges
Profit before finance cost and taxation
Finance costs
Profit before taxation
Taxation

476,868
431,721

475,693
369,995

5,012,361
5,884

4,323,341
4,774

5,006,477
1,419,741

4,318,567
1,502,255

3,586,736

2,816,312

Other Information
Segment assets employed

5,967,338

333,624

1,225,157

Unallocated corporate assets

Total assets
Segment liabilities

1,922,325

318,196

413,541

Unallocated corporate liabilities

Total liabilities
Capital expenditure during the year

935,180

11,760

227,157

Unallocated corporate capital expenditure

Total capital expenditure
Depreciation / amortisation
Unallocated depreciation / amortisation
Total depreciation / amortisation

314,748

8,929

160,679

7,526,119

5,332,042

402,983

1,138,869

6,873,894

8,962,156

6,891,701

16,488,275

13,765,595

2,654,062

1,698,031

178,628

187,891

2,064,550

884,966

829,445

3,539,028

2,893,995

1,174,097

436,599

20,041

204,803

661,443

1,174,097

661,443

484,356
484,356

291,472

7,844

136,006

435,322
435,322

137

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended December 31, 2015

2015
2014
(Rupees 000)

34.1

Geographical information
Sales to external customers, net of returns, discounts, sales tax and excise duty
Pakistan
Afghanistan
Srilanka
Netherland
Bangladesh
Switzerland

20,008,705
816,613
58,622
18,447
9,161
258,898
21,170,446

18,829,229
703,560
49,409
11,426
6,019
92,711
19,692,354

34.2

Segment assets consist primarily of property, plant and equipment, trade debts and stock-in-trade. Segment
liabilities comprise of trade creditors and an apportionment of accrued expenses. Assets and liabilities which
cannot be allocated to a particular segment on a reasonable basis are reported as unallocated corporate
assets and liabilities.

35.

FINANCIAL RISK MANAGEMENT

The Companys activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk
(including currency risk, fair value interest rate risk and cash flow interest rate risk). The Companys
principal financial liabilities comprise trade and other payables. The Company has various financial assets
such as loans, deposits, trade and other receivables and cash and bank balances, which are directly related
to its operations. The Companys overall risk management programme focuses on minimizing potential
adverse effects on the Companys financial performance. The overall risk management of the Company is
carried out by the Companys senior management team under policies approved by the Board of Directors.
Such policies entail identifying, evaluating and addressing financial risks of the Company.
The Companys overall risk management procedures to minimize the potential adverse affects of financial
market on the Companys performance are as follows:

35.1

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. 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, political or other conditions. Concentrations of credit risk indicate the
relative sensitivity of the Companys performance to developments affecting a particular industry.
Credit risk of the Company arises principally from the trade debts, loans and advances, trade deposits, other
receivables and balances with banks. The carrying amount of financial assets represents the maximum
credit exposure. To reduce the exposure to credit risk on trade debts, the Company has developed a formal
approval process, whereby credit limits are applied to its customers. The management continuously
monitors the credit exposure towards the customers and makes provision against those balances considered
doubtful of recovery. The credit risk on liquid funds such as balances with banks is limited because the
counter parties are banks with reasonably high credit ratings.

138

Abbott Pakistan

The maximum exposure to credit risk at the reporting date is as follows:

Loans and advances

Deposits
Trade debts
Interest accrued
Other receivables
Balances with banks

2015 ANNUAL REPORT

2015
2014
(Rupees 000)
95,137
102,279
476,403
8,573
54,590
8,211,671
8,948,653

82,249
66,140
482,771
17,351
151,172
6,223,274
7,022,957

The Company is not significantly exposed to concentrations of credit risk in respect of trade debts because
the Companys sales are primarily against advance payment / collection on delivery (COD) terms.
As at December 31, 2015, trade debts of Rs. 75.160 million (2014: Rs. 107.135 million) were past due but not
impaired. These relate to a number of independent customers for whom there is no recent history of default.
The aging of trade debts past due but not impaired is as follows:
2015
2014
(Rupees 000)
61-90 days
91-180 days
181-360 days
Over 360 days

16,485
10,067
9,365
39,243
75,160

26,495
29,565
16,631
34,444
107,135

The impaired trade debts and the basis of impairment are disclosed in notes 14 and 2.7 respectively.
The credit quality of balances with banks can be assessed with reference to external credit ratings as follows:

Name of Bank

Ratings
Rating
Agency Short-term Long-term

Date of
Rating

2015
2014
(Rupees 000)

Deutsche Bank AG

S&P
Moodys
Fitch

A-2
P-2
F1

BBB+
A3
A

June 2015
June 2015
May 2015

1,507,209

1,812,253

MCB Bank Limited

PACRA

A1+

AAA

June 2015

179

170

Standard Chartered Bank

(Pakistan) Limited

PACRA

A1+

AAA

June 2015

3,698,568

1,395,174

The Bank of TokyoS&P

Mitsubishi UFJ Limited Moodys
Fitch

A-1
P-1
F1

A+
A1
A

February 2015
February 2015
February 2015

3,000,081

1,000,076

Citibank N.A.

Moodys

P-1

A2

March 2015

63

63

National Bank of Pakistan PACRA

A-1+

AAA

June 2015

4,381

1,986

Faysal Bank Limited

PACRA
JCR-VIS

A1+
A-1+

AA
AA

June 2015
June 2015

192

84

Habib Bank Limited

JCR-VIS

A-1+

AAA

June 2015

998

2,013,468

Financial assets other than trade debts and bank balances, are not exposed to any material credit risk.
139

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

35.2

For The Year Ended December 31, 2015

Liquidity risk
Liquidity risk reflects the Companys inability in raising fund to meet commitments. 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. The Companys approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due. The Company manages liquidity risk by
maintaining sufficient cash / bank balance and the availability of funding through an adequate amount of
committed credit facilities. As at December 31, 2015, the Companys financial liabilities of Rs. 2,336.385
million (2014: Rs. 1,832.650 million) are all current and due in next financial year.

35.3

Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises three types of risk: currency risk, interest
rate risk and other price risk. The Company is not exposed to other price risk whereas the exposure to
currency risk and interest rate risk is given below:

35.3.1

Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
due to changes in foreign exchange rates and arises where transactions are done in foreign currency. It
arises mainly where receivables and payables exist due to transactions entered into foreign currencies.
The Companys exposure to foreign currency risk at the reporting date was as follows:
2015
Rupees
Cash and cash equivalents
Due from related parties
Bills payable
Payable to related parties

408,109
75,623
(827,066)
(59,829)
(403,163)

2014

US Dollars
Rupees
(000)
3,891
721
(7,885)
(570)
(3,843)

219,117
137,242
(427,612)
(48,397)
(119,650)

US Dollars
2,174
1,361
(4,242)
(480)
(1,187)

The following significant exchange rates were applied during the year
Balance sheet date rate
2015
US Dollars

104.89

2014

Average rate

2015
(Rupees)

100.80

102.92

2014
101.36

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 year by Rs. 28.883 million (2014: Rs. 7.803 million).
This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis
is performed on the same basis for the previous year.

140

Abbott Pakistan

2015 ANNUAL REPORT

35.3.2 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.
2015
2014
(Rupees 000)
Fixed rate instruments
Financial assets

8,207,147

6,220,227

As of the balance sheet date, the Company is not significantly exposed to any interest rate risk.
35.4

Fair value of financial assets and liabilities

Fair value is the amount for which an asset could be exchanged, or a liability can be settled, between
knowledgeable willing parties in an arm's length transaction. As of the balance sheet date, the carrying
value of all financial assets and liabilities reflected in the financial statements approximate to their fair
values.

36.

CAPITAL RISK MANAGEMENT

The Companys objective when managing capital is to safeguard the Companys ability to remain as a going
concern and continue to provide returns for shareholders and benefits for other stakeholders.
The Company manages its capital structure and makes adjustment to it, in light of changes in economic
conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders, return capital to shareholders or issue new shares.
The current capital structure of the Company is equity based with no financing through borrowings.

37.

NON - ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

In their meeting held on February 19, 2016, the Board of Directors of the Company have proposed a final
cash dividend for the year ended December 31, 2015 of Rs. 20.0 per share (2014: cash dividend of Rs. 4.8 per
share). This is in addition to interim cash dividend of Rs. 10.0 per share (2014: Rs. 3.0 per share). The total
dividend declared during the year and dividend per share have been summarised below:
2015
2014
(Rupees 000)
Cash dividend

2,937,009

763,622

(Rupees)
Cash dividend per share

30.00

7.80

The financial statements for the year ended December 31, 2015 do not include the effect of the final cash
dividend which will be accounted for in the financial statements for the year ending December 31, 2016.

141

Abbott Pakistan

2015 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

38.

For The Year Ended December 31, 2015

DATE OF AUTHORISATION
These financial statements were authorised for issue on February 19, 2016 by the Board of Directors of the
Company.

Chief Executive
(Interim)

142

Director

Abbott Pakistan

P attern of S hareholding
Size of Holding
Rs. 10 Shares
1
101
501
1,001
5,001
10,001
15,001
20,001
25,001
30,001
35,001
40,001
45,001
60,001
65,001
70,001
95,001
100,001
115,001
125,001
155,001
195,001
225,001
230,001
335,001
345,001
365,001
410,001
415,001
435,001
440,001
465,001
490,001
635,001
745,001
780,001
830,001
1,085,001
1,130,001
1,135,001
2,570,001
2,650,001
76,255,001

100
500
1,000
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
65,000
70,000
75,000
100,000
105,000
120,000
130,000
160,000
200,000
230,000
235,000
340,000
350,000
370,000
415,000
420,000
440,000
445,000
470,000
495,000
640,000
750,000
785,000
835,000
1,090,000
1,135,000
1,140,000
2,575,000
2,655,000
76,260,000
TOTAL

2015 ANNUAL REPORT

As At December 31, 2015

Number of
Shareholders

Total Shares

811
592
243
480
82
22
5
6
2
4
5
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
2
1
1
1
1
1
2,287

31,202
162,914
186,677
1,018,525
565,661
269,897
85,174
135,480
58,500
127,349
186,324
88,276
46,275
60,000
68,000
73,250
97,300
103,200
115,472
128,650
157,003
195,200
227,390
230,150
336,834
347,100
369,889
410,000
415,772
438,689
442,105
467,583
490,926
639,800
746,093
781,350
1,665,624
2,176,914
1,131,977
1,135,918
2,574,870
2,651,538
76,259,451
97,900,302

143

Abbott Pakistan

2015 ANNUAL REPORT

CATEGORIES OF SHAREHOLDERS

Number of
shares held

3
27
7
30
1
25

77,189,066
4,339,577
41,641
21,346
830,624
419,125

78.84
4.43
0.04
0.02
0.85
0.43

75
2,119
2,287

5,813,661
9,245,262
97,900,302

5.95
9.44
100.00

M/S. ABBOTT ASIA INVESTMENTS LIMITED

TRUSTEES ABBOTT LABORATORIES (PAKISTAN) LIMITED STAFF PROVIDENT FUND
TRUSTEES ABBOTT LABORATORIES (PAKISTAN) LIMITED STAFF PENSION FUND

Holding
76,259,451
490,926
438,689
77,189,066

S.No
1
2
3
4
5
6
7
8

As At December 31, 2015

Shareholders category

Number of
shareholders

Associated Companies, Undertakings and Related Parties

Mutual Funds
Directors and their spouse(s) and minor children
Executives
Public Sector Companies and Corporations
Banks, Development Finance Institutions, Non-Banking Finance Institutions,
Insurance Companies, Takaful, Modaraba and Pension Funds
Others
Individuals
Total :

List of Associated Companies, Undertakings and Related Parties

S.No
1
2
3

Folio
4502
03277-7217
03277-2083

Name

Total :
List of Mutual Funds
S.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
25
26
27

144

Folio
3031
04010-22132
04010-22140
05645-24
05777-29
05991-23
06411-21
07062-23
07070-22
09449-25
09480-21
10397-29
10801-27
10900-25
11320-25
11486-27
13607-28
14514-28
14704-25
14902-21
14969-25
14977-24
15974-23
16139-23
16162-20
14415-21
14431-29

Name
M/S. GOLDEN ARROW SELECTED STOCK
TRUSTEE PAK QATAR FAMILY TAKAFUL LIMITED BALANCE FUND (BF)
TRUSTEE PAK QATAR FAMILY TAKAFUL LIMITED AGGRESSIVE FUND
CDC - TRUSTEE PICIC INVESTMENT FUND
CDC - TRUSTEE PICIC GROWTH FUND
CDC - TRUSTEE MEEZAN BALANCED FUND
CDC - TRUSTEE AKD INDEX TRACKER FUND
CDC - TRUSTEE AL MEEZAN MUTUAL FUND
CDC - TRUSTEE MEEZAN ISLAMIC FUND
CDC - TRUSTEE ATLAS ISLAMIC STOCK FUND
CDC - TRUSTEE NAFA STOCK FUND
CDC - TRUSTEE MEEZAN TAHAFFUZ PENSION FUND - EQUITY SUB FUND
CDC - TRUSTEE NAFA ISLAMIC ASSET ALLOCATION FUND
CDC - TRUSTEE APIF - EQUITY SUB FUND
B.R.R. GUARDIAN MODARABA
CDC - TRUSTEE JS ISLAMIC PENSION SAVINGS FUND-EQUITY ACCOUNT
CDC - TRUSTEE PICIC STOCK FUND
CDC - TRUSTEE FIRST CAPITAL MUTUAL FUND
CDC - TRUSTEE NAFA ISLAMIC PRINCIPAL PROTECTED FUND - I
CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST
CDC - TRUSTEE PICIC ISLAMIC STOCK FUND
CDC - TRUSTEE NAFA ISLAMIC PRINCIPAL PROTECTED FUND - II
CDC - TRUSTEE NAFA ISLAMIC STOCK FUND
CDC - TRUSTEE NIT ISLAMIC EQUITY FUND
CDC-TRUSTEE NITIPF EQUITY SUB-FUND
CDC - TRUSTEE NAFA PENSION FUND EQUITY SUB-FUND ACCOUNT
CDC - TRUSTEE NAFA ISLAMIC PENSION FUND EQUITY ACCOUNT
Total :

Holding
48
5,000
5,000
128,650
230,150
68,000
4,465
103,200
781,350
11,550
36,900
97,300
30,500
2,500
43,276
10,400
14,500
2,100
3,500
2,651,538
13,000
1,200
6,000
73,250
4,300
7,400
4,500
4,339,577

Abbott Pakistan

CATEGORIES OF SHAREHOLDERS

2015 ANNUAL REPORT

As At December 31, 2015

List of Directors and their spouse(s) and minor children

S.No
1
2
3
4
5
6
7

Folio
4487
4607
4700
4720 & 3277-90453
03277-144
06122-5280
04002-39038

Name
MR. MUNIR A. SHAIKH
SYED ANIS AHMED
MR. ARSHAD SAEED HUSAIN
MR. EHSAN ALI MALIK
MR. KAMRAN Y. MIRZA
MR. SHAMIM AHMAD KHAN
MS. ZEHRA NAQVI
Total :

Holding

Name
SHABBIR S NAJMEE
NASEEM AKHTAR
MOHAMMAD SHAMSUDDIN
RIAZ UL HASAN
MOHAMMAD SAEED
HUSSAIN ADAM
AFTAB AHMED SOOMRO
MUHAMMAD YOUSUF
SHAHEEN PERVEEN
AZHAR KHAN
MUHAMMAD SAEED
SHAHEEN PARVEEN
SAIRA SAEED
SHENAZ SHEZAD
AFSHAN MUSHEER
TALAT SULTANA
TEHSEEN FATIMA
TALAT NASREEN
NIGHAT SULTANA
NAJEEB UDDIN QURESHI
MOHAMMAD HAMEED ULLAH
MOHAMMAD JILANI
SHAHNAZ SHAHZAD
MOHIUDDIN ANSARI
ALTAF HUSSAIN
MUHAMMAD SHARIF
SHAHEEN SHOUKAT
MUHAMMAD YOUSUF
MUHAMMAD QASIM BHATTI
NOOR-UL-AMIN
Total :

Holding
1,269
3,840
1,610
112
2,018
23
866
548
295
518
2,932
96
200
414
200
100
42
30
200
300
200
100
96
200
500
300
793
792
200
2,552
21,346

1
1
1
3,900
36,098
1,140
500
41,641

List of Executives
S.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
25
26
27
28
29
30

Folio
2135
2238
2257
2270
3299
3924
4022
4072
4465
4478
4509
4511
4526
4527
4528
4529
4530
4531
4534
4535
4538
4566
4595
4616
4617
4620
4676
4677
4708
03277-86882

Public Sector Companies and Corporations

S.No Folio
1 02683-23

Name
STATE LIFE INSURANCE CORP. OF PAKISTAN
Total :

Holding
830,624
830,624

145

Abbott Pakistan

2015 ANNUAL REPORT

CATEGORIES OF SHAREHOLDERS

As At December 31, 2015

Shareholders Holding 5% or more Voting Rights in the Listed Company

S.No Folio
1

4502

Name
M/S. ABBOTT ASIA INVESTMENTS LIMITED
Total :

Holding
76,259,451
76,259,451

Banks, Development Finance Institutions, Non-Banking Finance Institutions, Insurance Companies, Takaful, Modaraba and
Pension Funds
S. 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
25

146

Folio
00307-40281
02832-32
03889-28
11353-22
03277-7520
07450-4077
3137
03277-10526
03277-69871
03277-8372
12666-882
13755-21
00521-3886
00521-6087
00547-6424
00695-10718
00695-10759
03277-21803
03277-21806
03277-78335
03277-86264
13748-592
13748-667
2405
4171

Name
INNOVATIVE INVESTMENT BANK LIMITED
MEEZAN BANK LIMITED
NATIONAL BANK OF PAKISTAN
NATIONAL INVESTMENT TRUST LIMITED
FIRST HABIB MODARABA
CRESCENT STANDARD MODARABA
UNITED INSURANCE CO OF PAK LTD
HABIB INSURANCE CO.LIMITED
ASIA CARE HEALTH & LIFE INSURANCE CO. LTD.
EXCEL INSURANCE CO.LTD.
HABIB INSURANCE COMPANY LIMITED
ADAMJEE INSURANCE COMPANY LIMITED
TRUSTEE-SANOFI AVENTIS PAKISTAN SENIOR-EXECUTIVE PENSION FD
TRUSTEE ENGRO CORP LTD MPT EMP DEFINED CONTRIBUTION PEN FUND
TRUSTEE - IBM ITALIA S.P.A. PAKISTAN EMPLOYEES PENSION FUND
TRUSTEE PAK TOBACCO CO LTD STAFF DEF CONTRI PEN FD (1384-1)
TRUSTEE PAK TOBACCO CO LTD STAFF PENSION FUND [1390-2]
TRUSTEES SHELL PAK STAFF PENSION FUND
TRUSTEES SHELL PAK MGMT STAFF PENSION FUND
TRUSTEE NATIONAL BANK OF PAKISTAN EMPLOYEES PENSION FUND
TRUSTEES OF SHELL PAKISTAN DC PENSION FUND
TRUSTEE-MILLAT TRACTORS LTD. EMPLOYEES PENSION FUND
TRUSTEE-THE KOT ADDU POWER CO. LTD. EMPLOYEES PENSION FUND
NATIONAL BANK OF PAKISTAN (TRUSTEE DEPARTMENT)
N. B. P. TRUSTEE DEPARTMENT
Total :

Holding
1,000
25,000
1,397
38,600
1,000
750
2
46,275
1,500
5,000
15,425
3,646
2,200
4,300
85
1,200
28,500
75
8,000
227,390
4,000
1,800
1,000
100
880
419,125

Abbott Pakistan

2015 ANNUAL REPORT

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the 67th Annual General Meeting of the Company will be held on Thursday April
21st, 2016, at 11:00 a.m. in the ICAP Hall, 1st Floor, Chartered Accountants Avenue, Clifton, Karachi, to transact the
following business:

ORDINARY BUSINESS
1.
2.
3.

To receive, consider and adopt the Audited Accounts together with the Directors and Auditors Reports
thereon for the year ended December 31st, 2015.
To approve a cash dividend.
To appoint the Auditors of the Company up to the next Annual General Meeting and to authorise the
Directors to fix their remuneration.

SPECIAL BUSINESS
4.

To consider and, if thought fit, to pass the following resolution as a Special Resolution:

RESOLVED as and by way of Special Resolution THAT the Articles of Association of the Company, be
amended as follows:

(a) by inserting the following new article immediately after Article 61 as Article 61A, namely:

61 A Subject to any rules or regulations that may be made from time to time by the Commission
in this regard, Members may exercise voting rights at general meeting through electronic means if
the Company receives the requisite demand for poll in accordance with the applicable laws. The
Company shall facilitate the voting by electronic means in the manner and in accordance with the
requirements prescribed by the Commission.

A statement as required by Section 160(1)(b) of the Companies Ordinance, 1984, in respect of the special
business to be considered at the AGM is annexed.
By Order of the Board

Malik Saadatullah
Company Secretary
Karachi: dated February 19th, 2016

147

Abbott Pakistan

2015 ANNUAL REPORT

NOTICE OF ANNUAL GENERAL MEETING

Notes:
1. The Share Transfer books of the Company will remain closed from Thursday, April 14th, 2016 to Thursday,
April 21st, 2016 (both days inclusive). Transfer received in order by our Shares Registrar, FAMCO Associates
(Pvt) Limited, 8-F Next to Hotel Faran, Nursery, Block 6, PECHS, Shahrah-e-Faisal, Karachi at the close of
business on Wednesday, April 13th , 2016 will be considered in time for entitlement of cash dividend.
2. A member of the Company entitled to attend and vote at the meeting may appoint a proxy to attend, speak and
vote instead of him/her. Proxies must be deposited at the Companys registered office not less than 48 hours
before the time of holding the meeting. A proxy need, not be a member of the Company. The proxy shall
produce his/her original CNIC or Passport to prove his/her identity.
3. Form of proxy is attached in the Annual Report.
4. Members who have not yet submitted photocopy of their Computerized National Identity Cards (CNIC) to the
Company are requested to send the same at the earliest. The Securities and Exchange Commission of Pakistan
(SECP) vide Notification S.R.O. 19(I)/2014 dated 10th January 2014 read with Notification S.R.O. 831(1)/2012
dated July 5, 2012 require that the Dividend Warrant(s) should also bear the CNIC Number of the registered
shareholder or the authorized person, except in case of minor(s) and corporate shareholder(s). Henceforth,
issuance of dividend warrant(s) will be subject to submission of CNIC (individuals) / NTN (corporate entities)
by shareholders.
5. Shareholders are requested to notify the Company of any change in their addresses, if any immediately.
6. CDC Account Holders will further have to follow the under mentioned guidelines as laid down in Circular 1
dated January 26, 2000 issued by the Securities and Exchange Commission of Pakistan.
A. For Attending the Meeting:
(i) In case of individuals, 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, shall authenticate his/her
identity by showing his/her original Computerized National Identity Card (CNIC) or original passport at
the time of attending the meeting.
(ii) In case of corporate entity, the Board of Directors resolution/ power of attorney with specimen signature
of the nominee shall be produced (unless it has been provided earlier) at the time of the Meeting.
B. For Appointing Proxies:
(i) In case of individuals, 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, shall submit the proxy
form as per the above requirement.
(ii) The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be
mentioned on the form.
(iii) Attested copies of CNIC or the passport of the beneficial owners and of the Proxy shall be furnished with
the proxy form.

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2015 ANNUAL REPORT

(iv) The Proxy shall produce his/her original CNIC or original passport at the time of the Meeting.
(v) In case of corporate entity, the Board of Directors resolution/power of attorney with specimen signature
shall be submitted (unless it has been provided earlier) along with proxy form to the Company.
7. Withholding Tax on Dividend under Section 150 the Income Tax Ordinance, 2001
(i) Pursuant to the provisions of the Finance Act 2015 effective July 1, 2015, the rates of deduction of income
tax from dividend payments under the Income Tax Ordinance have been revised as follows:
1. Rate of tax deduction for filer of income tax return 12.5%
2. Rate of tax deduction for non-filers of income tax return 17.5%
To enable the company to make tax deduction on the amount of cash dividend @ 12.5% instead of
17.5%, shareholders whose names are not entered into the Active Tax-payers List (ATL) provided on
the website of FBR, despite the fact that they are filers, are advised to immediately make sure that their
names are entered in ATL, otherwise tax on their cash dividend will be deducted @ 17.5% instead of
12.5%.
(ii) Withholding Tax exemption from the dividend income, shall only be allowed if copy of valid tax exemption
certificate is made available to FAMCO Associates (Pvt) Ltd., by the first day of Book Closure.
(iii) Further, according to clarification received from Federal Board of Revenue (FBR), with-holding tax will be
determined separately on Filer/Non-Filer status of Principal shareholder as well as joint-holder(s) based
on their shareholding proportions, in case of joint accounts.
In this regard all shareholders who hold shares jointly are requested to provide shareholding proportions
of Principal shareholder and Joint-holder(s) in respect of shares held by them (only if not already provided)
to our Share Registrar, in writing as follows:
Principal Shareholder
Company
Name

Folio/CDS
Account #

Total
Shares

Name and
CNIC #

Shareholding
Proportion
(No. of Shares)

Joint Shareholder
Name and
CNIC #

Shareholding
Proportion
(No. of Shares)

The required information must reach our Share Registrar within 10 days of this notice; otherwise it will be
assumed that the shares are equally held by Principal shareholder and Joint Holder(s).
(iv) For any query/problem/information, the investors may contact the Company and/or the Share Registrar,
FAMCO Associates (Pvt.) Ltd. at phone 021-34380101-5 and email address: [email protected].

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2015 ANNUAL REPORT

(v) The corporate shareholders having CDC accounts are required to have their National Tax Number (NTN)
updated with their respective participants, whereas corporate physical shareholders should send a copy
of their NTN certificate to the company or FAMCO Associates (Pvt.) Ltd. The shareholders while sending
NTN or NTN certificates, as the case may be, must quote company name and their respective folio numbers.
8. Electronic Transmission of Audited Financial Statements & Notices
The Securities and Exchange Commission of Pakistan (SECP) through its Notification S.R.O. 787(I)/2014 dated
8th September 2014 has permitted companies to circulate Audited Financial Statements along with Notice of
Annual General Meeting to its members through e-mail. Accordingly, members are hereby requested to convey
their consent and e-mail address for receiving Audited Financial Statements and Notice through e-mail. In
order to avail this facility a Standard Request Form is available at the Companys website www.abbott.com.pk,
to be sent to the Companys Share Registrar.
Please note that giving email address for receiving of Annual Financial Statements instead of receiving the
same by post is optional, in case you do not wish to avail this facility please ignore this notice. Annual Financial
Statements will be sent at your registered address, as per normal practice.
Statement under Section 160(1)(b) Of the Companies Ordinance, 1984
This statement sets out the material facts concerning the Special Business to be transacted at the Annual General
Meeting of the company to be held on, April 21st, 2016.
Item 4 of the Agenda:
The Companies (E-Voting) Regulations, 2016 provides the members of the company an option to vote electronically
and a member may in this regard appoint another member or a non-member as their proxy to vote on their behalf
through electronic voting. As such, in order to enable electronic voting shareholders approval is being sought to
amend the Articles of Association of the Company.
The resolution required for the above purpose is set forth in the notice convening the Annual General Meeting and
that resolution will be proposed and passed as a Special Resolution.
None of the directors of the Company have any direct or indirect interest in the above said special business.

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2015 ANNUAL REPORT

C alendar of F inancial events

Tentative dates for announcement of financial results for the Financial Year 2016:
1st quarter ending March 31, 2016
2nd quarter ending June 30, 2016
3rd quarter ending September 30, 2016
Year ending December 31, 2016

3rd week of April, 2016

3rd week of August, 2016
3rd week of October, 2016
2nd week of February, 2017

Actual dates for announcement of financial results for the financial year 2015:

1st quarter ended March 31, 2015

2nd quarter ended June 30, 2015
3rd quarter ended September 30, 2015
Year ended December 31, 2015

April 24, 2015

August 17, 2015
October 22, 2015
February 19, 2016

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2014 ANNUAL REPORT

GLOSSARY
Annual General Meeting (AGM)
Annual General Meeting of shareholders of the Company

HS&E
Health, Safety and Environment

CIR
Commissioner Inland Revenue

IASB
International Accounting Standards Board

CEO
Chief Executive Officer

IFRS
International Financial Reporting Standards

CFO
Chief Financial Officer

ITO
Income Tax Ordinance, 2001

Company
Abbott Laboratories (Pakistan) Limited

IFAC
International Federation of Accountants

Companies Ordinance
Companies Ordinance, 1984

KIBOR
Karachi Inter Bank Offer Rate

CSR
Corporate Social Responsibility

KPI
Key Performance Indicator

CIR(A)
Commissioner Inland Revenue (Appeals)

OICCI
Overseas Investors Chamber of Commerce and Industry

Earnings per share (EPS)

SECP
Securities and Exchange Commission of Pakistan

Calculated by dividing the profit after interest, tax by the weighted average
number of Ordinary Shares in issue
EOBI
Employees Old Age Benefits Institution
FBR
Federal Board of Revenue
FTR
Final Tax Regime
GOP
Government of Pakistan

152

SRO
Statutory Regulatory Order
WPPF
Workers Profit Participation Fund
WWF
Workers Welfare Fund

ABBOTT LABORATORIES (PAKISTAN) LIMITED

P.O. Box 7229, Landhi 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.

and Sub Account No.
and/or CDC Participant I.D. No.
hereby appoint
(Name)
of
or falling him
(Name)
as my / our proxy to vote for me/us and on my/our behalf at the 67th Annual General Meeting of the Company to be held
on Thursday, April 21st, 2016 at 11:00 a.m. and at any adjournment thereof.
day of
2016
As witnessed given under my/our hand(s)

1. Witness:
Signature:

Name:

CNIC No.

Affix Revenue
stamps of Rs. 5/-

Address

2. Witness:
Signature:

Name:

CNIC No.

Address

Signature of Member

Shareholders Folio No.

CDC A/c No.
CNIC No.

Note:
1. Proxies in order to be effective, must be received by the Company Secretary, Abbott Laboratories (Pakistan)
Limited P.O. Box 7229, Landhi, not later than 48 hours before the time for holding the meeting and must be duly
stamped, signed and witnessed.
2. 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, entitled to attend and vote at this meeting, shall
be furnished along with the proxy form to the Company.
3. 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, shall produce his/her original
CNIC or passport to prove his/her identity.
4. 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 meeting to authenticate the identity.

AFFIX
CORRECT
POSTAGE

ABBOTT LABORATORIES (PAKISTAN) LIMITED

P.O. Box 7229, landhi
KARACHI-74400

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____________________

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AFFIX
CORRECT
POSTAGE

ABBOTT LABORATORIES (PAKISTAN) LIMITED

P.O. Box 7229, landhi
KARACHI-74400

157

CONTACT DETAILS
Registered Office
Opposite Radio Pakistan
Transmission Centre,
Hyderabad Road, Landhi,
P.O. Box. 7229, Karachi, Pakistan.
Tel: (92-21) 111-ABBOTT (111-222-688)
Fax: (92-21) 35001903
City Office
8th Floor, Faysal House
St-02, Shahrah-e-Faisal, Karachi, Pakistan.
Tel: (92-21) 32799018, 32799019
Fax: (92-21) 32800244
Distribution Offices
Multan
Hassan Abad Gate # 2
Near Pak Arab Fertilizers
Khanewal Road
Multan 60650, Pakistan.
Tel: (92-61) 4551818, (92-61) 4556145
Fax: (92-61) 4551817
Lahore
16-Km Shah Pur Kanjran Multan Road
Lahore 53700, Pakistan.
Tel: (92-42) 37512188, (92-42) 37512199
Fax: (92-42) 37511171
Islamabad
Plot # 136
Street # 9, 1-10/3
Industrial Area
Islamabad 44800, Pakistan.
Tel: (92-51) 34445020, (92-51) 34447464, (92-51) 34448278
Fax: (92-51) 34449868
Website
www.abbott.com.pk

ABBOTT.COM.PK