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Un-Audited Financial Statements for the Quarter and Nine Months Ended September 30, 2013
Corporate Information
Board Of Directors
Munir A. Shaikh (Chairman) Arshad Saeed Husain (Chief Executive Ofcer) Kamran Y. Mirza Thomas C. Freyman (Alternate Director Anis A. Shah) Syed Anis Ahmed Angelo Kondes Shamim Ahmad Khan
Share Registrar
FAMCO Associates (Pvt) Ltd. 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 HSBC Bank Middle East Limited The Bank of Tokyo-Mitsubishi UFJ Limited Barclays Bank PLC
Audit Committee
Shamim Ahmad Khan (Chairman) Munir A. Shaikh Kamran Y. Mirza Maria Memon (Chief Internal Auditor by Invitation) Syed Anis Ahmed (CFO by Invitation)
City Office
8th Floor, Faysal House, St-02, Shahrah-e-Faisal, Karachi
Registered Office
Opposite Radio Pakistan Transmission Centre, Hyderabad Road, Landhi, P.O. Box 7229, Karachi
Website
www.abbott.com.pk
Banking Committee
Munir A. Shaikh (Chairman) Arshad Saeed Husain Anis A. Shah (Alternate Director to Thomas C. Freyman) Syed Anis Ahmed
Company Secretary
Malik Saadatullah
Auditors
M. Yousuf Adil Saleem & Co. Chartered Accountants
Legal Advisors
Orr, Dignam & Co. Surridge & Beecheno
2
Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
Directors Report
The directors have pleasure in presenting their Report with the accounts of the Company for the third quarter ended September 30th, 2013.
FINANCIAL RESULTS
Sales for the quarter increased by 17% compared to the same quarter last year mainly driven by Pharmaceutical and Nutritionals. Gross prot to sales ratio remained at 39%. Selling and distribution expenses increased 19% mainly due to ination and escalation in energy cost. Administration expenses increased by 6% due to domestic ination. Higher provision for Workers Prots Participation Fund, Workers Welfare Fund and Central Research Fund, in line with increased prot, led to an increase in other charges.
FUTURE OUTLOOK
The pharmaceutical industry is facing various challenges such as ination. The continuous devaluation of the Pak Rupee and higher energy prices are of particular concern to the industry. Considering ination and the creeping devaluation of the Pak Rupee, we expect the Government of Pakistan to adopt a rational and transparent pricing mechanism in order to ensure continued access of pharmaceutical products to the market. We look forward to the Government adopting a pragmatic approach, facilitating the industry to address its long outstanding issues.
Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
Note Non-Current Assets Fixed Assets - Property, plant and equipment - Intangible asset Long-term loans and advances Long-term deposits Long-term prepayments Total Non-Current Assets Current Assets Stores and spares Stock-in-trade Trade debts Loans and advances - considered good Trade deposits and short-term prepayments Accrued prot Other receivables Taxation recoverable Cash and bank balances Current Liabilities Trade and other payables Net Current Assets Total Assets Less Current Liabilities Non-Current Liability Deferred taxation Contingencies and Commitments NET ASSETS FINANCED BY: Share Capital and Reserves Authorised capital 200,000,000 ordinary shares of Rs.10 each Issued, subscribed and paid-up capital Reserves - capital - revenue SHAREHOLDERS EQUITY 5 4
115,479 2,944,777 472,091 286,996 214,395 4,121 96,496 137,242 3,460,091 7,731,688 2,883,550 2,883,550 4,848,138 7,970,842 168,227
121,844 2,426,561 566,734 123,308 151,781 2,973 80,766 323,185 2,790,212 6,587,364 2,432,911 2,432,911 4,154,453 6,896,951 189,557
7,802,615
6,707,394
The annexed notes 1 to 9 form an integral part of this condensed interim nancial information.
ARSHAD SAEED HUSAIN CHIEF EXECUTIVE 2 Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
Cost of goods sold and services Gross profit Selling and distribution expenses Administrative expenses
Finance cost Profit before taxation Taxation - current - deferred Profit for the period
---------------------------- (Rupees) ---------------------------Earnings per share - basic / diluted 6.28 17.92 5.00 15.42
The annexed notes 1 to 9 form an integral part of this condensed interim nancial information.
Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
614,898
1,753,990
489,641
1,509,162
614,898
1,753,990
489,641
1,509,162
The annexed notes 1 to 9 form an integral part of this condensed interim nancial information.
ARSHAD SAEED HUSAIN CHIEF EXECUTIVE 4 Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
Note
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 Net cash inow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure Sale proceeds from disposal of xed assets Interest income Net cash outow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Finance cost paid Dividend paid Net cash outow from nancing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period (2,058) (678,585) (680,643) 669,879 2,790,212 3,460,091 (1,437) (653,523) (654,960) 274,687 1,453,327 1,728,014 (713,894) 22,863 169,632 (521,399) (418,657) 20,606 113,230 (284,821) 6 2,548,125 (683,080) 6,437 (425) 864 1,871,921 1,950,749 (732,481) (5,697) 1,897 1,214,468
The annexed notes 1 to 9 form an integral part of this condensed interim nancial information.
Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
-------------------------------------------- (Rupees 000) -------------------------------------------Balance as at December 31, 2011 Transfer from unappropriated prot to general reserve made subsequent to the year ended December 31, 2011 Total comprehensive income for the nine months ended September 30, 2012 Prot for the period Other comprehensive income for the period, net of tax Total comprehensive income for the period Transactions with owners, recorded directly in equity Final dividend for the year ended December 31, 2011 declared subsequent to the year end @ Rs. 4 per share Interim dividend for the year ending, December 31, 2012 @ Rs. 3 per share Capital contribution from Abbott International LLC, USA in relation to share based compensation Balance as at September 30, 2012 Balance as at December 31, 2012 Transfer from unappropriated prot to general reserve made subsequent to the year ended December 31, 2012 Total comprehensive income for the nine months ended September 30, 2013 Prot for the period Other comprehensive income for the period, net of tax Total comprehensive income for the period Transactions with owners, recorded directly in equity Final dividend for the year ended December 31, 2012 declared subsequent to the year end @ Rs. 4 per share Interim dividend for the year ending, December 31, 2013 @ Rs. 3 per share Capital contribution from Abbott International LLC, USA in relation to share based compensation Balance as at September 30, 2013 1,753,990 1,753,990 1,753,990 1,753,990 1,753,990 1,753,990 1,509,162 1,509,162 1,509,162 1,509,162 1,509,162 1,509,162 979,003 46,097 177,150 2,438,422 1,545,511 4,207,180 5,186,183
1,150,000
(1,150,000)
(391,601)
(391,601)
(391,601)
979,003 979,003
46,097 46,097
3,588,422 3,588,422
1,750,000
(1,750,000)
(391,601)
(391,601)
(391,601)
979,003
46,097
26,533 242,744
5,338,422
(293,701) -
(293,701) 26,533
1,196,349 - 6,823,612
The annexed notes 1 to 9 form an integral part of this condensed interim nancial information.
ARSHAD SAEED HUSAIN CHIEF EXECUTIVE 6 Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
4. CONTINGENCIES AND COMMITMENTS 4.1 Contingencies 4.1.1 The Company has given bank guarantees of Rs. 119.793 million (December 31, 2012: Rs 110.557 million) to the Customs Department, a utility company and other institutions against tenders. 4.1.2 The returns of total income for four tax years (Tax Years 2005 - 2008) were selected for audit by the tax authority. The Taxation Ofcer disallowed certain expenses claimed by the Company against which the Company led appeals before the Commissioner Inland Revenue (Appeals) [CIR(A)]. The CIR(A) allowed certian expenses, however, maintained majority of the disallowances resulting in tax demand of Rs. 239.695 million. The Company has now led the appeals before the Appellate Tribunal Inland Revenue (ATIR) which are pending adjudication. Management is of the view that the position of the Company is sound and eventual outcome is expected to be in Companys favour. Therefore, no provision has been made in the condensed interim nancial statements.
4.1.3 The Company has led a reference application before the High Court of Sindh for assessment years 1997-98, 1999-00 to 2002-03 in respect of certain disallowances resulting in a tax demand of Rs 154.500 million, which is pending adjudication. Management is of the view that the position of the Company is sound and eventual outcome is expected to be in Companys favour. However, being prudent, management has made a total provision of Rs. 140 million in this respect as of September 30, 2013 (December 31, 2012: Rs. 80 million).
8 Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
6.
2,601,683
2,196,451
6.1
Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
90,824 44,529
79,422 38,888
116,544 13,807
123,343 12,885
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Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
1,266,694 12,380,605 6,900 8,214 1,273,594 12,388,819 824,218 7,580,604 449,376 250,962 10,909 187,505 4,808,215 1,846,855 265,288 2,696,072
1,233,130 10,982,423 7,002 14,038 1,240,132 10,996,461 712,090 6,811,454 528,042 207,039 10,458 310,545 4,185,007 1,640,458 246,562 2,297,987
8.3
Reconciliation of segment results with profit before taxation UNAUDITED UNAUDITED UNAUDITED UNAUDITED Jul - Sep Jan - Sep Jul - Sep Jan - Sep 2013 2013 2012 2012 ----------------------------(Rupees '000)---------------------------Total segment results Other operating income Other operating charges Finance cost Prot before taxation 925,938 66,578 98,938 667 892,911 2,696,072 190,098 282,429 2,058 2,601,683 721,449 44,120 74,042 740 690,787 2,297,987 132,656 232,755 1,437 2,196,451
8.4
Geographical information Sales to external customers UNAUDITED UNAUDITED Jan - Sep Jan - Sep 2013 2012 ---------(Rupees 000)--------Pakistan Afghanistan Srilanka Netherland Bangladesh Switzerland 11,859,468 408,576 42,777 66,680 8,600 2,718 12,388,819 10,520,247 365,179 59,827 47,641 3,567 10,996,461
Abbott Pakistan Quarter and Nine Months Ended September 30, 2013
11
9.
DATE OF AUTHORISATION This condensed interim nancial information was authorised for issue on October 21, 2013 by the Board of Directors of the Company.
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Abbott Pakistan Quarter and Nine Months Ended September 30, 2013