| Abbott Laboratories Pakistan Ltd - 2010 |
|
Balance Sheet As at December 31, 2010
=============================================================================================
Note December 31, November 30, November 30
2010 2009 2008
=============================================================================================
(Restated) (Restated)
=============================================================================================
(Rupees '000)
=============================================================================================
SHARE CAPITAL AND RESERVES
Authorised capital 3 2,000,000 2,000,000 2,000,000
Issued, subscribed and paid-up capital 4 979,003 979,003 979,003
Reserves - capital 197,167 173,853 154,777
Reserves - revenue 2,736,369 2,085,604 2,434,732
Total Equity 3,912,539 3,238,460 3,568,512
NON-CURRENT LIABILITY
Deferred taxation 5 115,182 119,627 100,606
CURRENT LIABILITIES
Trade and other payables 6 1,762,700 1,606,489 1,380,592
Total Liabilities 1,877,882 1,726,116 1,481,198
CONTINGENCIES AND COMMITMENTS 7
TOTAL EQUITY AND LIABILITIES 5,790,421 4,964,576 5,049,710
NON-CURRENT ASSETS
Fixed assets - property, plant and equipment 8 1,877,596 1,662,785 1,560,835
Long-term loans and advances 9 39,203 31,779 23,580
Long-term deposits 10 2,801 4,393 4,393
Long-term prepayments 14,148 6,434 5,773
Total Non-current Assets 1,933,748 1,705,391 1,594,581
CURRENT ASSETS
Stores and spares 11 72,430 69,097 47,747
Stock-in-trade 12 2,069,633 1,675,000 1,696,200
Trade debts 13 263,267 234,185 172,825
Loans and advances - considered good 14 130,868 41,277 21,316
Trade deposits and short-term prepayments 15 134,170 90,634 164,785
Accrued profit 705 1,425 6,594
Other receivables 16 79,715 81,053 35,465
Taxation recoverable 286,798 295,730 258,708
Cash and bank balances 17 819,087 770,784 1,051,489
Total Current Assets 3,856,673 3,259,185 3,455,129
TOTAL ASSETS 5,790,421 4,964,576 5,049,710
=============================================================================================Profit and Loss Account For the thirteen months ended December 31, 2010=======================================================================================
Note Thirteen Twelve
months ended months ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
Sales - net 18 10,995,701 8,431,080
Service fee for toll manufacturing - 19,038
10,995,701 8,450,118
Cost of goods sold and services 19 7,308,663 6,128,987
Gross profit 3,687,038 2,321,131
Selling and distribution expenses 21 1,601,101 1,252,810
Administrative expenses 22 267,915 201,943
1,818,022 866,378
Other operating income 23 109,079 141,890
Other operating charges 24 182,314 129,765
1,744,787 878,503
Finance cost 25 3,530 2,525
Profit before taxation 1,741,257 875,978
Taxation - net 26 564,313 266,906
Profit for the period / year 1,176,944 609,072
(Rupees)
Earnings per share - basic / diluted 27 12.02 6.22
=======================================================================================Statement of Comprehensive Income For the thirteen months ended December 31, 2010=======================================================================================
Note Thirteen Twelve
months ended months ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
Profit for the period / year 1,176,944 609,072
Other comprehensive income for the period / year
- Actuarial (losses) / gains on
defined benefit pension plan 20.1.7 (50,426) 290,119
- Tax on actuarial losses / (gains) 13,749 (73,515)
Other comprehensive income - net of tax (36,677) 216,604
Total comprehensive income for the period / year 1,140,267 825,676
=======================================================================================Cash Flow Statement For the thirteen months ended December 31, 2010=======================================================================================
Thirteen Twelve
months ended months ended
Note December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 28 1,512,023 1,442,039
Income taxes paid (580,974) (358,422)
Long-term loans and advances - net (7,424) (8,199)
Long-term deposits - net 1,592 -
Long-term prepayments - net (7,714) (661)
Net cash inflow from operating activities 917,503 1,074,757
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed capital expenditure (492,839) (318,017)
Sale proceeds of fixed assets 38,823 20,475
Interest income 79,231 116,342
Net cash outflow from investing activities (374,785) (181,200)
CASH FLOWS FROM FINANCING ACTIVITIES
Finance cost paid (3,530) (2,525)
Dividends paid (490,885) (1,171,737)
Net cash outflow from financing activities (494,415) (1,174,262)
Net increase / (decrease) in cash and cash equivalents 48,303 (280,705)
Cash and cash equivalents at the beginning of the period/year 770,784 1,051,489
Cash and cash equivalents at the end of the period/year 819,087 770,784
=======================================================================================Statement of Changes in Equity For the thirteen months ended December 31, 2010================================================================================================================================================
Capital Reserves Revenue Reserves
================================================================================================================================================
Reserves
Share Reserve Other- General Un- Total
Capital arising on (Note Reserve appropriated Total Equity
merger 2.22) Profit
================================================================================================================================================
(Rupees '000)
================================================================================================================================================
Balance as at November 30, 2008 979,003 46,097 108,680 2,368,422 66,310 2,589,509 3,568,512
Transfer from general reserve to unappropriated profit
subsequent to the year ended November 30, 2008 - - - (230,000) 230,000 - -
Transfer from general reserve to unappropriated profit - - - (600,000) 600,000 - -
Total comprehensive income for the year ended
November 30, 2009 - restated
Profit for the year - restated (note 2.1.3 (b)) - - - - 609,072 609,072 609,072
Other comprehensive income for the year, net of
tax - restated (note 2.1.3 (b)) - - - - 216,604 216,604 216,604
Total comprehensive income for the year - restated - - - - 825,676 825,676 825,676
Transactions with owners, recorded directly in equity
Final dividend for the year ended November 30,
2008 declared subsequent to the year end - - - - (293,701) (293,701) (293,701)
Interim dividend for the year ended November 30, 2009 - - - - (881,103) (881,103) (881,103)
Capital contribution from Abbott International LLC, USA - - 19,076 - - 19,076 19,076
Balance as at November 30, 2009 979,003 46,097 127,756 1,538,422 547,182 2,259,457 3,238,460
Balance as at November 30, 2009 979,003 46,097 127,756 1,538,422 547,182 2,259,457 3,238,460
Transfer from unappropriated profit to general reserve made
subsequent to the year ended November 30, 2009 - - - 250,000 (250,000) - -
Total comprehensive income for the thirteen months
ended December 31, 2010
Profit for the thirteen months ended December 31, 2010 - - - - 1,176,944 1,176,944 1,176,944
Other comprehensive income for the thirteen
months ended December 31, 2010, net of tax - - - - (36,677) (36,677) (36,677)
Total comprehensive income for the thirteen
months ended December 31, 2010 - - - - 1,140,267 1,140,267 1,140,267
Transactions with owners, recorded directly in equity
Final dividend for the year ended November 30,
2009 declared subsequent to the year end - - - - (293,701) (293,701) (293,701)
Interim dividend for the thirteen months
ended December 31, 2010 - - - - (195,801) (195,801) (195,801)
Capital contribution from Abbott International LLC, USA - - 23,314 - - 23,314 23,314
Balance as at December 31, 2010 979,003 46,097 151,070 1,788,422 947,947 2,933,536 3,912,539
================================================================================================================================================Notes to the Financial Statements For the thirteen months ended December 31, 20101. 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 Karachi, Lahore and Islamabad stock exchanges. 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, molecular devices, hospital and consumer products and in providing toll manufacturing services. During the period ended December 31, 2010, the Company changed its financial year end from November 30 to December 31 to bring it in line with the financial year followed by Abbott International LLC, USA, the ultimate holding company. The current year figures pertain to thirteen months ended December 31, 2010 (period) and the corresponding figures pertain to twelve months (year) ended November 30, 2009, and therefore are not comparable. 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, of or directives issued under Companies Ordinance, 1984, shall prevail. 2.1.2. Accounting convention These financial statements have been prepared under the historical cost convention except certain financial instruments which are measured at fair value. 2.1.3. Changes in accounting policies and disclosure a).Adoption of new standard effective in the current year and adopted by the Company IFRS 8 'Operating Segments' - The standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. It is a disclosure based standard that has resulted in no change in previously identified reportable segments (refer note 2.21 and 33). b).Recognition of actuarial gains and losses on pension scheme directly in equity During the period, the accounting policy for recognition of actuarial gains / losses has been changed in accordance with option allowed by IAS 19 'Employee Benefits' to appropriately reflect the operating results of the Company. The actuarial gains and losses are now recognised in the period in which they occur in other comprehensive income and presented in the statement of comprehensive income. Previously actuarial gains / losses were recognized in profit and loss account. The change in accounting policy has been recognized retrospectively and comparative information has been restated in accordance with the requirements of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". The change in accounting policy has the following impact on these financial statements: =======================================================================================
Thirteen Twelve
months ended months ended
December 31, November 30,
2010 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Profit and loss account:
Increase / (decrease) in profit
for the period / year, net of tax 36,677 (216,604)
Increase / (decrease) in earnings per share Rupees 0.37 (2.21)
Statement of comprehensive income:
Increase / (decrease) in profit for the period / year, net of tax
(Decrease) / increase in other comprehensive income 36,677 (216,604)
for the period / year, net of tax (36,677) 216,604
- -
=======================================================================================The change in accounting policy has no impact on the balance sheet for the current and previous periods.2.1.4. New / revised standards and interpretations to existing standards effective from current period or early adopted but not relevant to the Company. The following standards (revised or amended) and interpretations became effective for the current financial period or early adopted, but are either not relevant or do not have any material effect on the financial statements of the Company: IFRS 3 (Revised) 'Business Combinations' IFRS 4 'Insurance Contracts' IFRS 5 (Amendments) 'Non-current Assets Held for Sale and Discontinued Operations' IAS 1 (Amendment) 'Presentation of financial statements' IAS 23 (Revised) 'Borrowing Costs' IAS 27 (Amended) 'Consolidated and Separate Financial Statements' IFRIC 9 (Amendment) 'Reassessment of embedded derivatives and IAS 39, Financial instruments: Recognition and measurement' IFRIC 15 'Agreement for Construction of Real Estate' IFRIC 16 'Hedges of a net investment in a foreign operation' IFRIC 17 'Distributions of Non-cash Assets to Owners' IFRIC 18 'Transfers of Assets from Customers' IAS 38 (Amendment) 'Intangible assets' IAS 36 (Amendment) 'Impairment of assets' IFRS 2 (Amendments) 'Share-based Payments' - 'Group cash-settled share-based payment transactions' 2.1.5. New / revised standards and interpretations to published accounting standards that are issued but not yet effective The following standards, amendments and interpretations to existing standards have been published and are mandatory for accounting periods beginning on or after January 1, 2011 or later periods: IFRS 7 (Amendment) 'Financial Instruments: Disclosures' (effective for annual periods beginning on or after July 1, 2011) - 'Transfers of financial assets' - This amendment increases the disclosure requirements for transactions involving transfer of financial assets. The amendment is intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset. IFRS 9 'Financial instruments' (effective for annual periods beginning on or after January 1, 2013). This standard is the first step in the process to replace IAS 39, 'Financial instruments: recognition and measurement'. IFRS.9 introduces new requirements for classifying and measuring financial assets. IAS 24 (Revised), 'Related party disclosures' (effective for annual periods beginning on or after January 1, 2011) - The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. IAS 32 (Amendment) 'Financial Instruments: Presentation' (effective for annual periods beginning on or after February 1, 2010) - 'Classification of rights issues' - The amendment addresses the accounting for rights issues that are denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, such rights issues are now classified as equity regardless of the currency in which the exercise price is denominated. Previously, these issues had to be accounted for as derivative liabilities. IAS 34 (Amendment) 'Interim Financial Reporting' (effective from annual periods on or after January 1, 2011). It adds further examples to the list of events or transactions that require disclosure under IAS 34 and remove references to materiality that describe other minimum disclosures. IFRIC Interpretation 14 - IAS 19 (Amendment) 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction' (effective for annual period s beginning on or after January 1, 2011) -'Prepayments of a minimum funding requirement'. The amendments correct an unintended consequence of IFRIC 14. Without the amendments, entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. This was not intended when IFRIC 14 was issued, and the amendments correct this. IFRIC 13 (Amendment) 'Customer Loyalty Programmes' (effective from annual periods on or after January 1, 2011). The amendment clarifies that the fair value of award credits take into account the amount of discounts or incentives that otherwise would be offered to customers that have not earned the award credits. IFRIC 19 'Extinguishing Financial Liabilities with Equity Instruments' (effective for annual periods beginning on or after July 1, 2010) - This Interpretation addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability. It requires a gain or loss to be recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. If the fair value of the equity instruments issued cannot be reliably measured, the equity instruments should be measured to reflect the fair value of the financial liability extinguished. The above mentioned new / revised standards, amendments and interpretations are either not relevant to the Company's operations or are not expected to have significant impact on the Company's financial statements other than increase in disclosures in certain cases. 2.1.6. 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 recognized 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).Property, plant and equipment (note 2.3 and note 8.1); ii).Provision for obsolete and slow moving stores and spares and stock-in-trade (note 2.4, note 2.5, note 11 and note 12); iii).Estimates of receivables and payables in respect of staff retirement benefit schemes (note 2.13 and note 20); iv).Provision for taxation (note 2.8, note 5 and note 26); and v).Share based compensation (note 2.22 and 29). 2.2. Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (the "functional currency"). The financial statements are presented in Pakistani Rupees, which is also the Company's functional currency. 2.3. Fixed assets Property, plant and equipment (a).Owned These assets are stated at cost less accumulated depreciation and impairment loss (if any) except freehold land, which is stated at cost. (b).Leased Leased asset comprises of leasehold land which is stated at cost less accumulated amortisation less 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 income equally over the period of the lease. (d).Gains or losses on disposal of fixed assets Gains or losses on disposal of fixed assets are taken to the profit and loss account in the period in which they arise. (e).Subsequent costs Subsequent costs are included in the assets' carrying amount and recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to income as and when incurred. (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. Stores and spares These are valued at cost determined on the 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. 2.5. 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 represents direct cost of materials, direct wages and an appropriate portion of production overheads. Cost in relation to items in transit represents 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. 2.6. Trade debts and other receivables Trade debts and other receivables are recognized initially at fair value and subsequently measured at amortised cost less provision for impairment. A provision for impairment of trade debts is estimated when there is objective evidence that the Company will not be able to collect all amount due according to the original terms of the receivables. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognized in the profit and loss account within 'other operating 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 operating income' in the profit and loss account. 2.7. 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 income 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. 2.8. Taxation Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into account tax credits and rebates available, if any, and taxes paid under the Final Tax Regime (FTR). The charge for current tax also includes adjustments for prior years or otherwise considered necessary for such years. Income tax paid at import stage under FTR is recognised as tax expense in the period in which related goods are sold as required by the Accounting Technical Release - 30 of the Institute of Chartered Accountants of Pakistan. Deferred Deferred tax is recognised using the balance sheet liability method, on all temporary differences between the carrying amount of assets and liabilities and their tax bases after adjusting for the impact of FTR. Deferred tax assets are recognised for all deductible temporary differences and carry forward of unused tax credits and losses, to the extent that it is probable the taxable profit will be available against which the deductible temporary differences and / or carry-forward of unused tax credits and losses can be utilised. The carrying amount of deferred tax asset is reviewed at each balance sheet date and is recognised only to the extent that it is probable that future taxable profits will be available against which the asset may be utilised. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. 2.9. 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. 2.10. Trade and other payables Short-term liabilities for trade and other amounts payable are recognised initially at fair value plus directly attributable cost, if any, and subsequently carried at amortised cost. 2.11. Dividend distribution Dividend distribution to the Company's shareholders is recognised as a liability in the financial statements in the period in which the dividends are approved by the Shareholders. 2.12. 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. 2.13. Staff retirement benefits The Company operates: - A recognised provident fund (defined contribution plan) for all permanent employees who have completed six months' service; and -An approved funded pension scheme (defined benefit plan) for all its permanent employees who have completed one year's 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. Previously actuarial gains / losses were recognised in profit and loss account (refer note 2.1.3 (b)). 2.14. Liability for employees' compensated absences The Company accounts for the liability in respect of employees' compensated absences in the year in which these are earned. Provisions to cover the obligations are made using the current salary levels of employees. 2.15. Foreign currency transactions Transactions denominated in foreign currencies are recorded in Pakistani Rupees at the foreign currency rates prevailing on the date of transaction. 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 currently. 2.16. Derivative financial instruments Derivative financial instruments held by the Company generally comprise of forward foreign exchange contracts. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivative instruments are recognised immediately in the profit and loss account. 2.17. Revenue recognition - Sales are recorded on dispatch of goods to customers. - 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. 2.18. Impairment Non-financial assets The carrying amount of non-financial assets other than inventories are assessed at each reporting date to ascertain whether there is any indication of impairment. If any such indication exists then the asset's recoverable amount is estimated. An impairment loss is recognised, as an expense in the profit and loss account, for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's 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 asset's 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 the 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. Financial instruments carried on the balance sheet include loans, deposits, trade debts, accrued profit, other receivables, cash and bank balances and trade and other payables. The particular recognition method adopted are disclosed in the individual policy statements associated with each item. 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 Company's other components. An operating segment's operating results are reviewed regularly by the Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. 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. 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 Ministry of Health and in providing toll manufacturing services. Nutritional The Nutritional segment is engaged in the manufacture, 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 and general healthcare products. 2.22. Share based compensation The economic cost of awarding shares to employees is reflected by recording a charge in the profit and loss account equivalent to the fair value of shares on the grant date over the vesting period. Since awarded shares relate to Group Companies, a corresponding reserve is created to reflect the equity component. 3. AUTHORISED CAPITAL =============================================================================================================
December November December November
31, 2010 30, 2009 31, 2010 30, 2009
=============================================================================================================
Number of shares (Rupees '000)
=============================================================================================================
200,000,000 200,000,000 Ordinary shares of Rs. 10 each 2,000,000 2,000,000
=============================================================================================================4. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL=============================================================================================================
December November December November
31, 2010 30, 2009 31, 2010 30, 2009
=============================================================================================================
Number of shares (Rupees '000)
=============================================================================================================
5,832,196 5,832,196 Ordinary shares of Rs. 10 each issued as
fully paid for cash 58,322 58,322
18,479,640 18,479,640 Ordinary shares of Rs. 10 each issued as
fully paid for consideration other than cash 184,796 184,796
73,588,466 73,588,466 Ordinary shares of Rs. 10 each issued as
fully paid bonus shares 735,885 735,885
97,900,302 97,900,302 979,003 979,003
=============================================================================================================As at December 31, 2010, Abbott Asia Investments Limited, UK held 76,259,454 shares. The ultimate holding company is Abbott International LLC, USA.5. DEFERRED TAXATION =======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Deferred tax liability arising due
to accelerated tax depreciation allowance 155,295 156,496
Deferred tax asset arising in respect of provisions (40,113) (36,869)
115,182 119,627
=======================================================================================6. TRADE AND OTHER PAYABLES=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Creditors 112,490 114,466
Accrued liabilities 576,516 432,094
Advances from customers 120,438 98,913
Unclaimed dividends 8,640 10,023
Bills payable 6.1 250,494 340,924
Payable to related parties 6.2 34,938 25,551
Sales tax payable 23,328 20,415
Workers' Profit Participation Fund 6.3 3,526 62,615
Central Research Fund 20,672 20,353
Workers' Welfare Fund 48,302 47,452
Staff pension fund 20.1.1 552,580 425,315
Others 10,776 8,368
1,762,700 1,606,489
=======================================================================================6.1. Bills payable include the following amounts payable to related parties:=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Other related parties
Abbott Pharmaceuticals, Inc. Puerto Rico 52,747 65,253
Abbott GMBH Diagnostic 26,474 38,235
Abbott Logistics B.V. 111,318 152,458
Abbott Labs PTE Ltd., Singapore 22,924 36,602
Abbott International LLC., USA 22,992 25,796
Abbott International Malaysia - 275
Abbott International South Africa - 106
236,455 318,725
=======================================================================================6.2. Payable to related parties represents the following amounts payable to:=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Other related parties
Abbott Australasia Pty Limited 661 185
Abbott Mexico 1,873 -
Abbott International LLC., USA 30,419 21,021
Abbott Mearo - 2,583
Abbott Labs PTE Ltd., Singapore 1,618 -
Abbott China 367 -
Abbott International Japan - 1,762
34,938 25,551
=======================================================================================6.3. Workers' Profit Participation Fund=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Balance at the beginning of the period / year 62,615 29,218
Allocation for the period / year 24 93,526 62,615
156,141 91,833
Less: Amount paid to the fund 152,615 29,218
3,526 62,615
=======================================================================================7. CONTINGENCIES AND COMMITMENTS7.1. Contingencies The Company has given bank guarantees of Rs. 71.647 million (2009: Rs. 67.641 million) to the Customs Department, a utility company and other institutions against tenders. 7.2. Commitments 7.2.1. Commitments for capital expenditure aggregated approximately Rs. 130.028 million (2009: Rs. 49.517 million). 7.2.2. The Company has obtained short term financing facilities from various commercial banks amounting to Rs. 980 million (2009: Rs. 980 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. 335 million (2009: Rs. 335 million). The running finance / short term loan carries markup at rates ranging from KIBOR plus 1% to KIBOR plus 2% (2009: KIBOR plus 1.75%) 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. 317.535 million (2009: Rs. 401.054 million). 8. FIXED ASSETS - property, plant and equipment =======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Operating fixed assets 8.1 1,484,642 1,502,899
Capital work-in-progress 8.5 392,954 159,886
1,877,596 1,662,785
=======================================================================================8.1. Operating fixed assetsThe following is a statement of operating fixed assets: ===========================================================================================================================================================
Freehold Leasehold Buildings on Buildings on Plant and Vehicles Office Computers Demonstra- Total
land land freehold leasehold machinery equipment tion
land land equipments-
note 8.2
===========================================================================================================================================================
(Rupees '000)
===========================================================================================================================================================
At November 30, 2008
Cost 20,679 2,718 314,764 66,683 1,833,734 185,306 46,174 164,880 385,790 3,020,728
Accumulated depreciation /
amortisation - 687 154,179 57,698 968,091 79,813 37,463 139,930 224,512 1,662,373
Net book value 20,679 2,031 160,585 8,985 865,643 105,493 8,711 24,950 161,278 1,358,355
Year ended November 30, 2009
Opening net book value 20,679 2,031 160,585 8,985 865,643 105,493 8,711 24,950 161,278 1,358,355
Additions / transfer - - 9,853 - 182,281 75,764 6,321 10,128 76,264 360,611
Disposals / write off
Cost - - - - 4,721 39,659 - - 6,707 51,087
Depreciation - - - - 4,330 30,283 - - 6,707 41,320
- - - - 391 9,376 - - - 9,767
Depreciation / amortisation
charge for the year - 29 9,115 1,865 110,625 26,436 2,239 10,507 45,484 206,300
Closing net book value 20,679 2,002 161,323 7,120 936,908 145,445 12,793 24,571 192,058 1,502,899
At November 30, 2009
Cost 20,679 2,718 324,617 66,683 2,011,294 221,411 52,495 175,008 455,347 3,330,252
Accumulated depreciation /
amortisation - 716 163,294 59,563 1,074,386 75,966 39,702 150,437 263,289 1,827,353
Net book value 20,679 2,002 161,323 7,120 936,908 145,445 12,793 24,571 192,058 1,502,899
Thirteen months ended
December 31, 2010
Opening net book value 20,679 2,002 161,323 7,120 936,908 145,445 12,793 24,571 192,058 1,502,899
Additions / transfer - - - - 68,769 85,893 14,029 6,295 84,785 259,771
Disposals / write off
Cost - - - - 19,743 57,734 133 - 43,229 120,839
Depreciation - - - - 19,071 39,095 133 - 40,614 98,913
- - - - 672 18,639 - - 2,615 21,926
Depreciation / amortisation
charge for the year - 31 9,495 1,946 125,683 38,471 4,411 10,230 65,835 256,102
Closing net book value 20,679 1,971 151,828 5,174 879,322 174,228 22,411 20,636 208,393 1,484,642
At December 31, 2010
Cost 20,679 2,718 324,617 66,683 2,060,320 249,570 66,391 181,303 496,903 3,469,184
Accumulated depreciation /
amortisation - 747 172,789 61,509 1,180,998 75,342 43,980 160,667 288,510 1,984,542
Net book value 20,679 1,971 151,828 5,174 879,322 174,228 22,411 20,636 208,393 1,484,642
Annual rate of depreciation /
amortisation
2009 - 1.06 2-10 5-10 5-20 20-25 10-33 20-33 12.5-33
2010 - 1.06 2-10 5-10 5-20 20-25 10-33 20-33 12.5-33
===========================================================================================================================================================8.2. Demonstration equipments of the Company are in the possession of various hospitals and clinics.8.3. The depreciation charge for the period / year has been.allocated as follows: =======================================================================================
Thirteen Twelve
months ended months ended
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Cost of goods sold and services 19 138,900 121,007
Selling and distribution expenses 21 102,126 73,022
Administrative expenses 22 15,076 12,271
256,102 206,300
=======================================================================================8.4. Details of disposals of operating fixed assets.having book value exceeding Rs. 50,000:=====================================================================================================================================
Description Cost Accumu- Book Sale Mode of Particulars
lated value proceeds disposal of purchaser
deprecia-
tion
=====================================================================================================================================
(Rupees '000)
=====================================================================================================================================
Vehicles 630 504 126 425 Open Market Auction S.Muhammad Saeed
House No. B-213, Block-4A, Sahafi Colony,
Gulshan-e-Iqbal, Karachi.
610 496 114 400 Open Market Auction S.Muhammad Saeed
House No. B-213, Block-4A, Sahafi Colony,
Gulshan-e-Iqbal, Karachi.
1,025 820 205 727 Open Market Auction Wali A Khan
House No. 1184, Street No. 83, Sector G-9/4,
Islamabad.
1,048 839 209 717 Open Market Auction Wali A Khan
House No. 1184, Street No. 83, Sector G-9/4,
Islamabad.
982 785 197 872 Open Market Auction S.Ameer Ali
House No. B-380, Block-13, Federal B Area,
Karachi.
1,058 846 212 712 Open Market Auction Wali A Khan
House No. 1184, Street No. 83, Sector G-9/4,
Islamabad.
570 456 114 332 Open Market Auction Ameer Ali
House No. B-380, Block-13, Federal B Area,
Karachi.
1,025 820 205 738 Open Market Auction Wali A Khan
House No. 1184, Street No. 83, Sector G-9/4,
Islamabad.
1,025 820 205 737 Open Market Auction Wali A Khan
House No. 1184, Street No. 83, Sector G-9/4,
Islamabad.
1,084 893 191 722 Open Market Auction Wali A Khan
House No. 1184, Street No. 83, Sector G-9/4,
Islamabad
1,011 661 350 404 Negotiation Jamal Nasir
Employee
1,039 741 298 753 Open Market Auction Muhammad Irfan
Flat No. A-202, Block-D-13, Gulshan-e-Iqbal,
Karachi.
1,228 982 246 711 Open Market Auction Syed Riaz Ahmed
House No. 216-A, Block-3, Gulshan-e-Iqbal,
Karachi.
871 697 174 587 Open Market Auction Owais Ghaziani
House No. G-18/1 Cliton Quarters, Jahangir Road,
Karachi.
1,329 166 1,163 1,262 Insurance Claim EFU
EFU house, M.A. Jinnah road, Karachi
969 625 344 388 Negotiation Irfan Hafeez Malik
Employee
1,010 653 357 404 Negotiation Akbar Khan
Employee
4,293 3,435 858 1,717 Negotiation Habib Ahmed
Employee
967 657 310 386 Negotiation Sarmad Butt
Employee
932 606 326 373 Negotiation Uzma Qutub
Employee
1,329 1,063 266 891 Open Market Auction Syed Kashif
House No. 3f-8/5 Nazimabad-3,
Karachi.
969 586 383 388 Negotiation Mazhar Abbas
Employee
969 586 383 487 Negotiation Zafar Iqbal
Employee
969 608 361 388 Negotiation Amjad Ali
Employee
879 598 281 861 Open Market Auction Fayyaz M Khan
House No. 60 B, Block-6, PECHS,
Karachi.
1,010 646 364 404 Negotiation Asim Shafiq
Employee
1,010 640 370 404 Negotiation Aqeel Butt
Employee
978 593 385 391 Negotiation Ashfaq Pyar Ali
Employee
661 401 260 264 Negotiation Aurangzeb Khan
Employee
1,010 619 391 1,066 Open Market Auction Azam Mehmood
House No. 146-B, Millat Town, Malir
Karachi.
977 606 371 391 Negotiation Feroz Alam Shah
Employee
1,011 633 378 404 Negotiation Farrukh Amanat
Employee
977 606 371 391 Negotiation Syed Nasir
Employee
999 607 392 399 Negotiation Zahid Hussain
Employee
1,369 876 493 548 Negotiation Hassham Malik
Employee
1,282 878 404 988 Open Market Auction Zain Imtiaz Shaikh
Flat No. 2-A, Plot No. C-87,
12 Commercial Street Phase II
Extension DHA Karachi.
1,350 873 477 540 Negotiation Arshad Ahmed
Employee
937 592 345 374 Negotiation Shah Thames Shah
Employee
1,039 658 381 416 Negotiation Shehla Naseem
Employee
916 583 333 366 Negotiation Amjad Jamal
Employee
916 583 333 366 Negotiation Asif Ali
Employee
1,010 646 364 404 Negotiation Azam Khan Niazi
Employee
920 589 331 368 Negotiation Asif Husain
Employee
920 589 331 368 Negotiation Usman Ali
Employee
981 785 196 849 Open Market Auction Syed Kashif
House No. 3f-8/5 Nazimabad-3,
Karachi.
916 583 333 366 Negotiation Sher Afzal
Employee
1,010 619 391 986 Open Market Auction Syed Riaz Ahmed
House No. 216-A, Block-3, Gulshan-e-Iqbal,
Karachi.
1,010 633 377 404 Negotiation Abida Sultana
Employee
1,010 633 377 404 Negotiation Rana Anjum Lateef
Employee
977 619 358 391 Negotiation Yousuf Zaman Khan
Employee
557 84 473 501 Insurance Claim EFU
EFU house, M.A. Jinnah road,
Karachi
1,279 814 465 511 Negotiation Farrukh Hafeez
Employee
694 556 138 472 Open Market Auction S.Ameer Ali
House No. B-380, Block-13, Federal B Area,
Karachi.
466 319 147 429 Open Market Auction Eslam Sarwar
House No. 78, Block-6, PECHS,
Karachi.
1,010 727 283 957 Open Market Auction Fayyaz M Khan
House No. 60 B, Block-6, PECHS,
Karachi.
466 319 147 427 Negotiation Faiaz Ahmed
Plant and Employee
machinery 19,743 19,070 673 6,672 Open Market Auction Sold to Fayyaz & Co
Demonstration
equipment 23,895 23,034 861 - Written off
19,334 17,580 1,754 - Written off
=====================================================================================================================================8.5. Capital work-in-progress=================================================================================================
Buildings on Plant and Vehicles Others Total
freehold land machinery
=================================================================================================
(Rupees '000)
=================================================================================================
At December 1, 2008 8,129 182,856 10,359 1,136 202,480
Additions 1,724 134,221 83,849 21,959 241,753
Transferred to operating fixed assets (9,853) (182,281) (75,764) (16,449) (284,347)
At November 30, 2009 - 134,796 18,444 6,646 159,886
Additions - 247,025 78,357 83,113 408,495
Transferred to operating fixed assets - (68,769) (85,893) (20,765) (175,427)
At December 31, 2010 - 313,052 10,908 68,994 392,954
=================================================================================================9. LONG-TERM LOANS AND ADVANCES - considered good=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Long-term loans
Due from:
- Executives 9.1 1,944 1,122
- Employees 56,648 48,322
58,592 49,444
Less: recoverable within one year
- Executives 840 814
- Employees 21,262 18,719
14 22,102 19,533
36,490 29,911
Long-term advances
- Employees 2,713 1,868
39,203 31,779
=======================================================================================9.1. Reconciliation of carrying amount of long-term loans to executives:=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening balance 1,122 507
Disbursements 854 108
Transfer of balances of employee
cadre to executive cadre 1,712 1,580
Less: Repayments 1,744 1,073
Closing balance 1,944 1,122
=======================================================================================9.2. 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 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.9.3. The maximum aggregate amount of loans due from the chief executive and executives at the end of any month during the thirteen months were Rs. 0.450 million (2009: Rs. Nil) and Rs. 3.057 million (2009: Rs. 2.100 million) respectively. 10. LONG TERM DEPOSITE =======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Deposits 3,919 4,393
Less: Provision for doubtful deposits 10.1 1,118 -
2,801 4,393
=======================================================================================10.1. Reconciliation of provision=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening provision - -
Charge for the period / year 24 1,118 -
Closing provision 1,118 -
=======================================================================================11. STORES AND SPARES=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Stores 48,048 43,418
Spares [including spares-in-transit Rs. 2.264 million
(2009: Rs. 4.917 million)] 53,958 52,945
102,006 96,363
Less: Provision for slow moving and obsolete items 11.1 29,576 27,266
72,430 69,097
=======================================================================================11.1. Reconciliation of provision for slow moving and obsolete items=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening provision 27,266 24,651
Charge for the period / year 2,310 2,615
Closing provision 29,576 27,266
=======================================================================================12. STOCK-IN-TRADE=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Raw and packing materials [including stock-in-transit
Rs. 91.513 million (2009: Rs. 74.784 million)] 1,218,864 877,591
Work-in-process 95,785 192,913
Finished goods [including stock-in-transit
Rs. 82.343 million (2009: Rs. 81.749 million)] 862,932 701,419
2,177,581 1,771,923
Less: Provision for slow moving and obsolete items 12.3 107,948 96,923
2,069,633 1,675,000
=======================================================================================12.1. Write down of inventories recognised as an expense in the current period amounts to Rs. 14.886 million (2009: Rs. 19.649 million).12.2. Stock-in-trade includes finished goods costing Rs. 27.664 million (2009: Rs. 112.558 million) valued at net realisable value amounting to Rs. 22.016 million (2009: Rs. 100.864 million). 12.3. Reconciliation of provision for slow moving and obsolete items =======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening provision 96,923 146,838
Charge for the period / year 101,702 16,743
Write offs during the period / year (90,677) (22,042)
Write backs during the period / year - (44,616)
Closing provision 107,948 96,923
=======================================================================================13. TRADE DEBTS=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Considered good:
Secured
- Due from other related parties 13.1 7,746 5,846
- Others 30,070 35,535
37,816 41,381
Unsecured 225,451 192,804
263,267 234,185
Considered doubtful:
Unsecured 14,393 15,742
277,660 249,927
Less: Provision for doubtful debts 13.2 14,393 15,742
263,267 234,185
=======================================================================================13.1. Due from other related parties=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Abbott Logistics B.V. 7,746 5,044
Abbott Laboratories Indonesia - 684
Abbott Laboratories Mexico - 118
7,746 5,846
=======================================================================================13.2. Reconciliation of provision for doubtful debts=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening provision 15,742 11,135
(Reversal) / charge for the period / year (1,349) 4,607
Closing provision 14,393 15,742
=======================================================================================14. LOANS AND ADVANCES - considered good=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Current portion of long-term loans 9 22,102 19,533
Advances to:
- Executives 2,697 582
- Employees 454 508
3,151 1,090
- Suppliers 105,615 20,654
108,766 21,744
130,868 41,277
=======================================================================================14.1. The maximum aggregate amount of advances due from the chief executive, directors and executives at the end of any month during the thirteen months were Rs. 1.103 million, Rs. 0.179 million and Rs. 2.697 million (2009: Rs. 1.017 million, Rs. 0.160 million and Rs. 4.283 million) respectively.15. TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS =======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Considered good
Trade deposits 38,211 40,213
Prepayments [including sample inventory Rs. 34.972 million
(2009: Rs. 32.014 million)] 95,959 50,421
134,170 90,634
Considered doubtful
Trade deposits 2,161 2,161
136,331 92,795
Less: Provision for doubtful trade deposits 15.1 2,161 2,161
134,170 90,634
=======================================================================================15.1. Reconciliation of provision for doubtful trade deposits=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening provision 2,161 3,167
Reversal for the period / year 23 - (1,006)
Closing provision 2,161 2,161
=======================================================================================16. OTHER RECEIVABLES=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Considered good
Due from related parties 16.1 41,687 57,831
Material on loan 12,402 5,661
Insurance claim receivable 3,720 3,854
Service fee for toll manufacturing 163 163
Others 21,743 13,544
79,715 81,053
Considered doubtful 1,876 1,716
81,591 82,769
Less: Provision for doubtful other receivables 16.2 1,876 1,716
79,715 81,053
=======================================================================================16.1. Due from related parties=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Abbott Labs PTE Ltd. - Singapore 30,327 29,451
Abbott International LLC, USA 1,550 4,309
Abbott Laboratories Japan 259 245
Abbott Laboratories Maero 4,686 -
Abbott Laboratories Philippines 1,071 -
Abbott Laboratories Mature product USA - 21,189
Abbott Laboratories Indonesia 742 2,272
Abbott Laboratories Egypt 273 266
Abbott ALSA 2,779 -
Abbott Laboratories Saudi Arabia - 99
41,687 57,831
=======================================================================================16.2. Reconciliation of provision for doubtful other receivables=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening provision 1,716 1,646
Charge for the period / year 24 160 70
Closing provision 1,876 1,716
=======================================================================================17. CASH AND BANK BALANCES=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
With banks
Savings accounts:
- Local currency 123,890 137,966
- Foreign currency 75,428 46,482
17.1 199,318 184,448
Deposit accounts:
- Local currency 17.2 600,000 550,000
Current accounts:
- Local currency 2,089 2,195
801,407 736,643
In hand
- Foreign currency 1,502 892
- Local currency 2,415 1,568
Cheques and drafts in hand and in transit 13,763 31,681
819,087 770,784
=======================================================================================17.1. These savings accounts carry markup rate at the rate of 5% (2009: 5%). 17.2. These deposit accounts carry markup rates ranging from 10.45% to 11.95% (2009: 11.10% to 11.55%). 18. SALES � NET =======================================================================================
Note Thirteen Twelve
Months ended Months ended
December 31, November 30,
2010 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Local 10,728,882 8,267,177
Export - to related parties 31 54,130 52,155
Export - to others 571,384 368,339
625,514 420,494
11,354,396 8,687,671
Less:
Sales returns and discounts 125,619 101,430
Sales tax and excise duty 233,076 155,161
358,695 256,591
10,995,701 8,431,080
=======================================================================================19. COST OF GOODS SOLD AND SERVICES=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Opening work-in-process 192,913 125,519
Raw and packing materials consumed 4,136,863 3,133,634
4,329,776 3,259,153
Manufacturing expenses:
Salaries, wages, allowances and staff welfare 19.1 818,391 682,989
Stores and spares consumed 61,147 42,272
Fuel and power 184,272 124,949
Depreciation 8.3 138,900 121,007
Repairs and maintenance 66,393 47,739
Technical service fee 31 89,237 68,669
Insurance 6,389 5,327
Printing and stationery 3,449 2,269
Travelling and entertainment 5,399 3,508
Rent, rates and taxes 2,572 1,834
Laboratory testing supplies 24,264 11,883
Computer expenses 17,901 14,472
Postage, telephone and telegram 10,368 7,922
Others 19.2 85,950 59,558
1,514,632 1,194,398
5,844,408 4,453,551
Closing work-in-process (95,785) (192,913)
Cost of goods manufactured and services 5,748,623 4,260,638
Finished goods
Opening stock 701,419 979,424
Purchases 1,721,553 1,590,344
8,171,595 6,830,406
Closing stock (862,932) (701,419)
7,308,663 6,128,987
=======================================================================================19.1. Salaries, wages, allowances and staff welfare include a net charge of Rs. 101.051 million - note 20.3 (2009: net charge of Rs. 127.057 million - restated) in respect of staff retirement benefits.19.2. Details of other expenses =======================================================================================
Thirteen Twelve
Months ended Months ended
December 31, November 30,
2010 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Other fees and purchased services 33,138 26,719
Recruitment and training expenses 1,707 782
Membership and subscription 410 405
Conference expenses 51 186
Miscellaneous expenses 50,644 31,466
85,950 59,558
=======================================================================================20. STAFF RETIREMENT BENEFITS20.1. Defined benefit scheme As mentioned in note 2.13, the Company operates a funded pension scheme for all its permanent employees. Contributions are made to the scheme based on actuarial recommendations. The actuarial valuations were carried out as at November 30, 2010 and December 31, 2010 using the Projected Unit Credit method. 20.1.1. Amounts recognised in the balance sheet: =======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Present value of the defined benefit obligation 20.1.2 2,088,619 1,741,442
Less: Fair value of the plan assets 20.1.3 1,536,039 1,316,127
Deficit 552,580 425,315
=======================================================================================20.1.2. Movement in the present value of the defined benefit obligation:=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Obligation at beginning of the period / year 1,741,442 1,505,257
Current service cost 101,932 81,083
Interest cost 236,715 236,637
Benefits paid (65,509) (59,386)
Actuarial loss / (gain) 74,039 (22,149)
Obligation at end of the period / year 2,088,619 1,741,442
=======================================================================================20.1.3. Movement in the fair value of plan assets:=======================================================================================
Note December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Fair value at beginning of the period / year 1,316,127 931,597
Expected return on plan assets 175,902 90,996
Company contributions 31 85,906 84,950
Benefits paid (65,509) (59,386)
Actuarial gain 23,613 267,970
Fair value at end of the period / year 1,536,039 1,316,127
=======================================================================================20.1.4. Movement in liability:=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Staff Pension Fund at beginning of the period / year 425,315 573,660
Charge for the period / year 162,745 226,724
Actuarial loss / (gain) recognised in equity 50,426 (290,119)
Company contributions (85,906) (84,950)
Staff Pension Fund at end of the period / year 552,580 425,315
=======================================================================================20.1.5. Plan assets are comprised as follows:=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Debt 492,128 585,459
Equity 371,591 304,959
Mixed funds 241,068 232,812
Bank balances 431,252 192,897
1,536,039 1,316,127
=======================================================================================20.1.6. Amount recognised:=======================================================================================
Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
Current service cost 101,932 81,083
Interest cost 236,715 236,637
Expected return on plan assets (175,902) (90,996)
162,745 226,724
=======================================================================================20.1.7. Amount recognised in other comprehensive income:=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Actuarial losses / (gains) 50,426 (290,119)
=======================================================================================20.1.8.=======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Actual return on plan assets 199,515 358,966
=======================================================================================20.1.9. Principal actuarial assumptions used were as follows:=======================================================================================
Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
Percent per annum
=======================================================================================
Discount rate 14.00 12.50
Expected return on plan assets 14.00 12.50
Future salary increases 11.83 10.36
Future pension increases 5.56 4.17
=======================================================================================20.1.10. Pension plan assets include the Company's ordinary shares with a fair value of Rs. 48.100 million (2009: Rs. 42.300 million).20.1.11. The expected return on plan assets was taken as 14%, which is representative of yields on long-term Government bonds and term deposits with banks. 20.1.12. Expected contributions to the plan for the year ending December 31, 2011 is Rs. 89 million. 20.1.13. Five year data on the (surplus) / deficit of the plan is as follows: ======================================================================================
December November November November November
31, 2010 30, 2009 30, 2008 30, 2007 30, 2006
======================================================================================
(Rupees '000)
======================================================================================
Present value of defined
benefit obligation 2,088,619 1,741,442 1,505,257 1,259,971 1,148,449
Fair value of plan assets 1,536,039 1,316,127 931,597 1,427,285 1,154,297
Deficit / (surplus) 552,580 425,315 573,660 (167,314) (5,848)
======================================================================================20.1.14. Five year data on experience adjustments is as follows:======================================================================================
December November November November November
31, 2010 30, 2009 30, 2008 30, 2007 30, 2006
======================================================================================
Percentage
======================================================================================
Experience adjustments on
plan liabilities-loss/(gain) 4 (1) 6 (2) 5
Experience adjustments on
plan assets-gain/(loss) 2 20 (65) 12 (2)
======================================================================================The adjustments have been expressed as a percentage of the plan liabilities and plan assets at the balance sheet date.20.2. Defined contribution scheme An amount of Rs. 42.852 million (2009: Rs. 34.622 million) has been charged during the period in respect of the contributory provident fund maintained by the Company. 20.3. Staff retirement benefit cost recognised in the profit and loss account =======================================================================================
Note Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
Pension cost 162,745 226,724
Less: Reimbursement from related party (1,335) (3,026)
Provident fund contribution 31 42,852 34,622
E.O.B.I. 4,825 4,852
209,087 263,172
Allocated as:
Cost of goods sold and services 19.1 101,051 127,057
Selling and distribution expenses 21.1 82,971 105,192
Administrative expenses 22.1 25,065 30,923
209,087 263,172
=======================================================================================21. SELLING AND DISTRIBUTION EXPENSES=======================================================================================
Thirteen Months Twelve Months
Note ended ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
Salaries, wages, allowances and staff welfare 21.1 593,577 503,131
Rent, rates and taxes 24,180 9,330
Repairs and maintenance 17,691 12,529
Royalty 19,639 16,408
Insurance 4,930 4,655
Depreciation 8.3 102,126 73,022
Legal, professional and other services 19,698 18,938
Postage, telephone and telegram 17,139 14,250
Printing and stationery 9,413 7,286
Travelling, conveyance and entertainment 215,731 152,221
Advertising, samples and sales promotion 350,353 257,972
Forwarding expenses 143,360 100,175
Electricity 10,822 9,083
Computer expenses 16,113 13,461
Training and development expenses 14,733 13,404
Packing and miscellaneous supplies 14,905 11,611
Others 21.2 79,752 70,491
1,654,162 1,287,967
Less: Reimbursement from related party 31 53,061 35,157
1,601,101 1,252,810
=======================================================================================21.1. Salaries, wages, allowances and staff welfare include a net charge of Rs. 82.971 million - note 20.3 (2009: net charge of Rs. 105.192 million - restated) in respect of staff retirement benefits.21.2. Details of other expenses =======================================================================================
Thirteen Twelve
Months ended Months ended
December 31, November 30,
2010 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Other fees and purchased services 18,341 9,977
Security expenses 6,354 4,349
Membership and subscription 530 682
Air conditioning expenses 8,047 7,958
Housekeeping expenses 2,517 2,293
Water charges 272 439
Purchased gas 524 141
Sales commission expenses 36,628 41,896
Miscellaneous expenses 6,539 2,756
79,752 70,491
=======================================================================================22. ADMINISTRATIVE EXPENSES=======================================================================================
Thirteen Months Twelve Months
Note ended ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
Salaries, wages, allowances and staff welfare 22.1 149,126 123,833
Rent, rates and taxes 7,065 1,674
Repairs and maintenance 5,354 4,064
Insurance 1,493 2,030
Depreciation 8.3 15,076 12,271
Legal, professional and other services 8,066 5,578
Postage, telephone and telegram 6,360 4,974
Printing and stationery 2,285 1,698
Travelling, conveyance and entertainment 17,431 12,696
Electricity 6,987 4,097
Computer expenses 12,596 5,199
Training and development expenses 1,148 674
Miscellaneous office supplies 2,519 1,725
Others 22.2 40,896 29,204
276,402 209,717
Less: Reimbursement from related party 31 8,487 7,774
267,915 201,943
=======================================================================================22.1. Salaries, wages, allowances and staff welfare include a net charge of Rs. 25.065 million - note 20.3 (2009: net charge of Rs. 30.923 million - restated) in respect of staff retirement benefits.22.2. Details of other expenses =======================================================================================
Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Other fees and purchased services 18,753 16,567
Security expenses 1,746 1,284
Membership and subscription 5,258 1,203
Air conditioning expenses 6,613 4,733
Housekeeping expenses 2,048 1,702
Water charges 190 232
Miscellaneous expenses 6,288 3,483
40,896 29,204
=======================================================================================23. OTHER OPERATING INCOME.=======================================================================================
Thirteen Months Twelve Months
Note ended ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
Gain on disposal of fixed assets 16,897 10,708
Interest income 23.1 78,511 111,173
Scrap sales 4,103 4,290
Provision for doubtful trade debts no longer
required written back 23.2 787 -
Provision for doubtful trade deposits no
longer required written back 15.1 - 1,006
Others 8,781 14,713
109,079 141,890
=======================================================================================23.1. Interest income include an amount of Rs. 10.231 million (2009: Rs. 10.277 million) on account of interest income earned from Abbott Labs PTE Ltd.-Singapore, a related party @ 15.6% (2009: 15.6%) of half of the written down value of assets deployed by the Company on their behalf in the Company's diagnostic division in Pakistan.23.2. The amount is net of claim of Rs. 0.562 million given to other related party against reversal of provision. 24. OTHER OPERATING CHARGES =======================================================================================
Note Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
Workers' Profit Participation Fund 6.3 93,526 62,615
Auditors' remuneration 24.1 1,582 1,550
Donations 24.2 3,752 855
Workers' Welfare Fund 35,747 23,588
Central Research Fund 17,589 11,777
Provision for doubtful other receivables 16.2 160 70
Provision for doubtful trade debts
less reimbursement from related party 24.3 - 2,126
Provision for doubtful deposit 10.1 1,118 -
Exchange loss 28,840 25,727
Others - 1,457
182,314 129,765
=======================================================================================24.1. Auditors' remuneration=======================================================================================
Thirteen Months Twelve Months
ended ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
Statutory audit fee 1,350 1,350
Special certifications 150 150
Out of pocket expenses 82 50
1,582 1,550
=======================================================================================24.2. Recipients of donations do not include any donee in whom a director or his spouse had any interest.(2009: None).24.3. The amount is net of reimbursement of Rs. 2.481 million from other related party against provision for doubtful debts. 25. FINANCE COST =======================================================================================
Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Bank charges 3,530 2,525
=======================================================================================26. TAXATION � net=======================================================================================
Thirteen Months Twelve Months
ended ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
Current tax charge
- Current year 535,904 241,173
- Prior year 32,854 6,712
568,758 247,885
Deferred (4,445) 19,021
564,313 266,906
=======================================================================================26.1. Relationship between tax expense and accounting profit=======================================================================================
Thirteen Months Twelve Months
ended ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
Accounting profit before taxation 1,741,257 875,978
Tax rate 35% 35%
Tax on accounting profit 609,440 306,592
Tax for prior years 32,854 6,712
Tax effect of:
- Expenses that are not deductible
in determining taxable profit 14,532 (10,121)
- Applying lower tax rates to certain income (100,354) (42,010)
- 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) 7,841 5,733
564,313 266,906
=======================================================================================27. EARNINGS PER SHARE - BASIC / DILUTED=======================================================================================
Thirteen Months Twelve Months
ended ended
December 31, November 30,
2010 2009
=======================================================================================
Profit for the period / year 1,176,944 609,072
=======================================================================================
Number of shares
=======================================================================================
Weighted average number of ordinary shares
in issue during the period / year 97,900,302 97,900,302
=======================================================================================
(Rupees)
=======================================================================================
(Restated)
=======================================================================================
Earnings per share 12.02 6.22
=======================================================================================27.1. There is no dilutive effect on the basic earnings per share of the Company.28. CASH GENERATED FROM OPERATIONS =======================================================================================
Note Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
Profit before taxation 1,741,257 875,978
Adjustment for:
Depreciation / amortisation 8.3 256,102 206,300
Gain on disposal of property plant and equipment 23 (16,897) (10,708)
Interest income 23 (78,511) (111,173)
Expense recognised in profit or loss in
respect of equity-settled share-based compensation 23,314 19,076
Pension retirement benefit 76,839 141,774
Finance cost 25 3,530 2,525
Working capital changes 28.1 (493,611) 318,267
1,512,023 1,442,039
=======================================================================================28.1. Working capital changes=======================================================================================
Thirteen Twelve
Months ended Months ended
December November
31, 2010 30, 2009
=======================================================================================
(Restated)
=======================================================================================
(Rupees '000)
=======================================================================================
(Increase) / decrease in current assets net of provision
Stores and spares (3,333) (21,350)
Stock-in-trade (394,633) 21,200
Trade debts (29,082) (61,360)
Loans and advances (89,591) (19,961)
Trade deposits and short-term prepayments (43,536) 74,151
Other receivables 1,338 (45,588)
(558,837) (52,908)
Increase in current liabilities
Trade and other payables - net 65,226 371,175
(493,611) 318,267
=======================================================================================29. SHARE BASED COMPENSATIONShare-based compensation plans As at December 31, 2010, the Company's 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 "Parent company"). The plan entitles eligible employees shares of the parent 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 options are recognized 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 option plans of the shares of the Abbott International LLC, USA and is charged against income on a straight-line basis over the vesting period of the plan. 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: =======================================================================================
2009 2008 2007
=======================================================================================
Volatility 22.00% 24.00% 25.00%
Dividend yield 3.00% 2.60% 2.50%
Risk free interest rate 2.70% 3.00% 4.50%
======================================================================================= A summary of options outstanding is given below:======================================================
December 31, November 30,
2010 2009
======================================================
Outstanding Weighted Outstanding Weighted
number of average number of average
options value per options value per
option option
======================================================
6,778 USD 48.18 12,783 USD 23.52
======================================================30. CAPACITYThe capacity and production of the Company's plants is indeterminable as these are multi-product plants involving varying processes of manufacture. The Company's production was according to market demand. 31. TRANSACTIONS WITH RELATED PARTIES The related parties of the Company comprises 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: =======================================================================================
Note Thirteen Twelve
Months ended Months ended
December 31, November 30,
2010 2009
=======================================================================================
(Restated)
=======================================================================================
Other related parties (Rupees '000)
=======================================================================================
Sale of goods 18 54,130 52,155
Purchase of materials 2,297,507 1,943,546
Technical service fee 19 89,237 68,669
Reimbursements from a related party on account of:
Other operating income 562 -
Other operating charges - 2,481
Selling and distribution expenses 21 53,061 35,157
Administrative expenses 22 8,487 7,774
Pension Fund 1,335 3,026
Interest income earned 23.1 10,231 10,277
Contributions paid in respect of staff retirement benefit plans
Pension Fund 20.1.3 85,906 84,950
Provident Fund 20.3 42,852 34,622
Key management personnel
Short-term employee benefits 109,129 79,933
Post-employment benefits 14,369 12,717
=======================================================================================31.1. Disposals of property, plant and equipment to key management personnel are disclosed in note 8.431.2. Outstanding balances in respect of related party sales and purchases, reimbursements and staff retirement benefits are included in notes 6, 13, 16 and 20. 31.3. 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 9 and note 14. 32. 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: ===================================================================================================================
Thirteen Months ended Twelve Months ended
December 31, 2010 November 30, 2009
===================================================================================================================
Chief Directors Executives Chief Directors Executives
Executive Executive
===================================================================================================================
(Rupees '000)
===================================================================================================================
Short-term employee benefits
Managerial remuneration 24,314 23,864 230,178 19,358 16,419 156,982
Leave passage / encashment 1,030 2,694 16,195 719 609 9,359
Medical expenses 101 339 13,527 18 217 4,831
Rent / utility / maintenance / furnishing - 165 716 - 109 473
25,445 27,062 260,616 20,095 17,354 171,645
Retirement benefits 3,335 3,477 36,614 2,584 2,477 24,941
28,780 30,539 297,230 22,679 19,831 196,586
Number of persons (At December 31 /
November 30) 1 *2 115 1 *2 93
=================================================================================================================== * Includes 1 alternate Director32.1. In addition, Rs 23.314 million (2009 Rs: 19.076 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 note 2.22. 32.2. Managerial remuneration includes Rs 50.188 million (2009 Rs: 35.655 million) charged in the profit and loss account in respect of bonus to chief executive, directors and certain executives of the Company. 32.3. Directors and certain other executives are provided with free use of Company maintained cars, club membership and telephone facilities as per terms of employment. 32.4. The aggregate amount charged in these financial statements for fees to non-executive directors is Rs. 0.240 million (2009: Rs. 0.340 million). 33. SEGMENT WISE OPERATING RESULTS ================================================================================================================================================================
Thirteen Months ended Twelve Months ended
December 31, 2010 November 30, 2009 (Restated)
================================================================================================================================================================
Pharma- Nutritional Others Total Pharma- Nutritional Others Total
ceuticals ceuticals
================================================================================================================================================================
(Rupees '000)
================================================================================================================================================================
Sales 8,765,444 1,514,898 1,074,054 11,354,396 6,807,586 1,083,268 796,817 8,687,671
Less: Sales returns and discounts 78,155 20,297 27,167 125,619 61,263 16,979 23,188 101,430
Less: Sales tax and excise duty - 140,947 92,129 233,076 - 95,526 59,635 155,161
Sales - net 8,687,289 1,353,654 954,758 10,995,701 6,746,323 970,763 713,994 8,431,080
Service fee for toll manufacturing - - - - 19,038 - - 19,038
8,687,289 1,353,654 954,758 10,995,701 6,765,361 970,763 713,994 8,450,118
Cost of goods sold and services - note 33.3 5,823,315 866,528 618,820 7,308,663 4,783,743 803,628 541,616 6,128,987
Gross profit 2,863,974 487,126 335,938 3,687,038 1,981,618 167,135 172,378 2,321,131
Selling and distribution expenses - note 33.4 1,175,626 219,563 205,912 1,601,101 966,705 181,297 104,808 1,252,810
Administrative expenses - note 33.5 235,871 22,890 9,154 267,915 176,514 15,204 10,225 201,943
1,411,497 242,453 215,066 1,869,016 1,143,219 196,501 115,033 1,454,753
Segment result 1,452,477 244,673 120,872 1,818,022 838,399 (29,366) 57,345 866,378
Unallocated corporate expenses / income
Other operating income 109,079 141,890
Other operating charges 182,314 129,765
Profit before finance cost and taxation 1,744,787 878,503
Other Information
Segment assets employed 3,818,535 226,638 402,855 4,448,028 3,128,380 168,794 367,158 3,664,332
Unallocated corporate assets 1,342,393 1,300,244
Total assets 5,790,421 4,964,576
Segment liabilities 981,704 81,453 60,269 1,123,426 1,031,840 15,054 3,859 1,050,753
Unallocated corporate liabilities 754,456 675,363
Total liabilities 1,877,882 1,726,116
Capital expenditure during the period / year 375,955 15,433 101,451 492,839 232,971 2,995 82,051 318,017
Unallocated corporate capital expenditure - -
Total capital expenditure 492,839 318,017
Depreciation / amortisation 186,048 7,523 62,531 256,102 160,479 6,479 39,342 206,300
Unallocated depreciation / amortisation - -
Total depreciation / amortisation 256,102 206,300
================================================================================================================================================================33.1. Geographical information=======================================================================================
Thirteen Twelve
Months ended Months ended
December 31, November 30,
2010 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Sales to external customers
Pakistan 10,370,187 8,010,586
Afghanistan 434,772 266,097
Sri Lanka 129,510 90,314
Holland 54,130 47,956
Bangladesh 3,361 4,423
Egypt 3,674 -
Hong Kong - 4,199
Nigeria - 3,776
Syria - 67
Singapore - 3,729
10,995,701 8,431,080
Service fee for toll manufacturing
Pakistan - 19,038
10,995,701 8,450,118
=======================================================================================33.2. 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.33.3. Segment wise cost of goods sold and services ==================================================================================================================================================
Thirteen Months ended Twelve Months ended
December 31, 2010 November 30, 2009 (Restated)
==================================================================================================================================================
Pharma- Nutritional Others Total Pharma- Nutritional Others Total
ceuticals ceuticals
==================================================================================================================================================
(Rupees '000)
==================================================================================================================================================
Opening work-in-process 186,174 4,105 2,634 192,913 118,175 3,737 3,607 125,519
Raw and packing materials consumed 3,932,644 20,595 183,624 4,136,863 2,994,534 23,619 115,481 3,133,634
4,118,818 24,700 186,258 4,329,776 3,112,709 27,356 119,088 3,259,153
Manufacturing expenses:
Salaries, wages, allowances and staff welfare 778,723 19,056 20,612 818,391 654,436 14,141 14,412 682,989
Stores and spare parts consumed 58,184 1,422 1,541 61,147 40,045 1,103 1,124 42,272
Fuel and power 175,340 4,291 4,641 184,272 118,365 3,261 3,323 124,949
Depreciation / amortisation 132,168 3,234 3,498 138,900 114,631 3,158 3,218 121,007
Repairs and maintenance 63,175 1,546 1,672 66,393 45,223 1,246 1,270 47,739
Technical service fee 87,159 2,078 - 89,237 66,877 1,792 - 68,669
Insurance 6,079 149 161 6,389 5,046 139 142 5,327
Printing and stationery 3,282 80 87 3,449 2,150 59 60 2,269
Travelling and entertainment 5,137 126 136 5,399 3,323 92 93 3,508
Rent, rates and taxes 2,447 60 65 2,572 1,737 48 49 1,834
Laboratory testing supplies 23,088 565 611 24,264 11,257 310 316 11,883
Computer expenses 17,033 417 451 17,901 13,709 378 385 14,472
Postage, telephone and telegram 9,866 241 261 10,368 7,504 207 211 7,922
Others 80,621 1,480 3,849 85,950 54,628 3,346 1,584 59,558
1,442,302 34,745 37,585 1,514,632 1,138,931 29,280 26,187 1,194,398
5,561,120 59,445 223,843 5,844,408 4,251,640 56,636 145,275 4,453,551
Closing work-in-process (92,153) (135) (3,497) (95,785) (186,174) (4,105) (2,634) (192,913)
Cost of goods manufactured and services 5,468,967 59,310 220,346 5,748,623 4,065,466 52,531 142,641 4,260,638
Finished goods
Opening stock 340,082 244,658 116,679 701,419 572,462 275,414 131,548 979,424
Purchases 512,170 760,414 448,969 1,721,553 485,897 720,341 384,106 1,590,344
6,321,219 1,064,382 785,994 8,171,595 5,123,825 1,048,286 658,295 6,830,406
Closing stock (497,904) (197,854) (167,174) (862,932) (340,082) (244,658) (116,679) (701,419)
5,823,315 866,528 618,820 7,308,663 4,783,743 803,628 541,616 6,128,987
==================================================================================================================================================33.4. Segment wise selling and distribution expenses==============================================================================================================================================
Thirteen Months ended Twelve Months ended
December 31, 2010 November 30, 2009 (Restated)
==============================================================================================================================================
Pharma- Pharma-
ceuticals Nutritional Others Total ceuticals Nutritional Others Total
==============================================================================================================================================
(Rupees '000)
==============================================================================================================================================
Salaries, wages, allowances and
staff welfare 464,146 69,098 60,333 593,577 399,533 61,587 42,011 503,131
Rent, rates and taxes 20,139 2,007 2,034 24,180 7,660 10 1,660 9,330
Repairs and maintenance 14,365 1,096 2,230 17,691 10,242 654 1,633 12,529
Royalty 19,639 - - 19,639 16,408 - - 16,408
Insurance 4,088 339 503 4,930 3,779 390 486 4,655
Depreciation 40,834 3,217 58,075 102,126 34,885 2,901 35,236 73,022
Legal, professional and other services 18,821 758 119 19,698 18,174 634 130 18,938
Postage, telephone and telegram 11,357 2,097 3,685 17,139 8,894 2,518 2,838 14,250
Printing and stationery 8,186 918 309 9,413 6,352 633 301 7,286
Travelling, conveyance and entertainment 160,089 26,694 28,948 215,731 110,697 20,830 20,694 152,221
Advertising, samples and sales promotion 187,670 69,120 93,563 350,353 173,473 55,514 28,985 257,972
Forwarding expenses 107,355 32,158 3,847 143,360 68,814 28,521 2,840 100,175
Electricity 9,902 658 262 10,822 8,166 561 356 9,083
Computer expenses 13,243 1,609 1,261 16,113 10,840 1,330 1,291 13,461
Training and development expenses 10,506 4,154 73 14,733 12,582 800 22 13,404
Packing and miscellaneous supplies 12,385 1,659 861 14,905 9,810 1,252 549 11,611
Others 72,901 3,981 2,870 79,752 66,396 3,162 933 70,491
1,175,626 219,563 258,973 1,654,162 966,705 181,297 139,965 1,287,967
Less: Reimbursement from related party - - 53,061 53,061 - - 35,157 35,157
1,175,626 219,563 205,912 1,601,101 966,705 181,297 104,808 1,252,810
==============================================================================================================================================33.5. Segment wise administrative expenses==================================================================================================================================================
Thirteen Months ended Twelve Months ended
December 31, 2010 November 30, 2009 (Restated)
==================================================================================================================================================
Pharma- Pharma-
ceuticals Nutritional Others Total ceuticals Nutritional Others Total
==================================================================================================================================================
(Rupees '000)
==================================================================================================================================================
Salaries, wages, allowances and staff welfare 130,079 13,101 5,946 149,126 106,449 10,406 6,978 123,833
Rent, rates and taxes 5,376 779 910 7,065 325 14 1,335 1,674
Repairs and maintenance 4,681 197 476 5,354 3,401 - 663 4,064
Insurance 1,182 44 267 1,493 1,352 41 637 2,030
Depreciation 13,046 1,072 958 15,076 10,885 420 966 12,271
Legal, professional and other services 7,402 635 29 8,066 5,578 - - 5,578
Postage, telephone and telegram 5,625 578 157 6,360 4,568 107 299 4,974
Printing and stationery 2,048 3 234 2,285 1,431 15 252 1,698
Travelling, conveyance and entertainment 12,194 4,618 619 17,431 9,000 3,418 278 12,696
Electricity 4,949 183 1,855 6,987 3,930 - 167 4,097
Computer expenses 9,158 407 3,031 12,596 2,651 49 2,499 5,199
Training and development expenses 1,006 77 65 1,148 645 8 21 674
Miscellaneous office supplies 1,960 483 76 2,519 1,524 178 23 1,725
Others 37,165 713 3,018 40,896 24,775 548 3,881 29,204
235,871 22,890 17,641 276,402 176,514 15,204 17,999 209,717
Less: Reimbursement from related party - - 8,487 8,487 - - 7,774 7,774
235,871 22,890 9,154 267,915 176,514 15,204 10,225 201,943
==================================================================================================================================================34. Financial Risk ManagementThe Company's 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 Company's overall risk management programme focuses on minimizing potential adverse effects on the Company's financial performance. The overall risk management of the Company is carried out by the Company's finance department under policies approved by the Board of Directors. Such policies entail identifying, evaluating and addressing financial risks of the Company. The Company's overall risk management procedures to minimize the potential adverse affects of financial market on the Company's performance are as follows: 34.1. 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 Company's 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 limite d because the counter parties are banks with reasonably high credit ratings. The maximum exposure to credit risk at the reporting date is as follows: =======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Loans 64,456 52,402
Deposits 41,012 44,606
Trade debts 263,267 234,185
Accrued profit 705 1,425
Other receivables 67,313 75,392
Balances with banks 815,170 768,324
1,251,923 1,176,334
=======================================================================================The Company is not exposed to concentrations of credit risk in respect of trade debts because the Company's sales are primarily against advance payment / collection on delivery (COD) terms,The maximum exposure to credit risk for loans and receivables at the reporting date are: Ageing of trade debts past due but not impaired: =======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
61-90 days 10,789 28,576
91-180 days 18,221 29,892
181-360 days 27,619 7,532
Over 360 days 18,188 7,886
=======================================================================================The impaired trade debts and the basis of impairment are disclosed in notes 13 and 2.6 respectively.The credit quality of balances with banks can be assessed with reference to external credit ratings as follows: ====================================================================================================
Rating Short Ratings Date of December November
Agency -term Long-term Rating 31, 2010 30, 2009
====================================================================================================
(Rupees '000)
====================================================================================================
Name of Banks
Royal Bank of Scotland Limited* PACRA A1+ AA Jun 2010 - 89
Deutsche Bank AG Standard &
Poor's (S&P) A-1 A+ Feb 2010 14,832 3,110
MCB Bank Limited PACRA A1+ AA+ Jun 2010 33 465
Standard Chartered Bank
(Pakistan) Limited PACRA A1+ AAA Jun 2010 283,872 730,749
HSBC Bank Middle East Limited Moody's P-1 Aa3 May 2010 30 47
Bank of Tokyo-Mitsubishi UFJ Limited S&P A-1 A+ Jun 2010 500,002 85
Citibank N.A. S&P A-1 A+** Aug 2010 88 44
National Bank of Pakistan JCR-VIS A-1+ AAA Jun 2010 1,987 2,054
Faysal Bank Limited* JCR-VIS A-1+ AA Jun 2010 563 -
==================================================================================================== * Placed on Rating Watch** Rating Outlook Negative 34.2. Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. 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 Company's 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, 2010, the Company's financial liabilities of Rs. 993.854 million (2009: Rs. 931.426 million) are all current and due in next financial year. 34.3. Market Risk Market risk is the risk that the value of financial instrument may fluctuate as a result of changes in market interest rates or the market price due to a change in credit rating of the issuer or the instrument, change in market sentiments, speculative activities, supply and demand of securities and liquidity in the market. 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: 34.4. Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. It arises mainly where receivables and payables exist due to transactions entered into foreign currencies. The Company's exposure to foreign currency risk at the reporting date was as follows: ===============================================================================
December 31, 2010 November 30, 2009
===============================================================================
Rupees US Dollars Rupees US Dollars
===============================================================================
('000)
===============================================================================
Cash and cash equivalents 76,930 897 47,374 566
Due from related parties 49,433 576 63,677 761
Bills payable to related parties (236,455) (2,756) (318,725) (3,808)
Payable to related parties (34,938) (407) (25,551) (305)
(145,030) (1,690) (233,225) (2,786)
=============================================================================== The following significant exchange rates were applied.during the period / year:======================================================================
Balance sheet date rate Average rate
======================================================================
December 31, November 30, Thirteen Twelve
2010 2009 Months ended Months ended
December November
31, 2010 30, 2009
======================================================================
(Rupees)
======================================================================
US Dollar 85.8 83.7 85.2 81.3
======================================================================A ten percent strengthening / weakening of the Pakistani Rupee against the US Dollar at the reporting date would increase / decrease post tax profit for the period / year by Rs. 9.803 million (2009: Rs. 16.216 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.34.5. Interest rate risk Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Majority of the interest rate exposure arises from savings and deposit accounts with banks. Fixed rate instruments =======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Financial assets 799,318 734,448
=======================================================================================The Company has not designated any financial assets or liabilities as "at fair value through profit or loss". Therefore, a change in interest rate at the reporting date would not affect profit and loss account.34.6. Fair value of financial assets and liabilities The carrying amounts of all financial assets and liabilities reflected in the financial statements approximate their fair values. 35. CAPITAL RISK MANAGEMENT The Company's objective when managing capital is to safeguard the Company's ability to remain as a going concern and continue to provide returns for shareholders and benefits for other stakeholders. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders or issue new shares. The current capital structure of the company is equity based with no financing through borrowings. 36. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE In their meeting held on February 22, 2011, the Board of Directors of the Company have proposed a final cash dividend for the thirteen months ended December 31, 2010 of Rs. 3.0 per share (2009: cash dividend of Rs. 3.0 per share). This is in addition to interim cash dividend of Rs. 2.0 per share (2009: Rs. 9.0 per share). The total dividend declared during the period / year and dividend per.share has been summarised below: =======================================================================================
December November
31, 2010 30, 2009
=======================================================================================
(Rupees '000)
=======================================================================================
Cash dividend Rupees 489,502 1,174,804
Cash dividend per share 5.00 12.00
=======================================================================================In addition, the Board has proposed a transfer of Rs.650.000 million from Unappropriated Profit to General Reserve (2009: Rs. 250.000 million from Unappropriated Profit to General Reserve). The financial statements for the thirteen months ended December 31, 2010 do not include the effect of the final cash dividend nor the effect of the proposed transfer between reserves which will be accounted for in the financial statements for the year ending December 31, 2011.37. CORRESPONDING FIGURES Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison. Significant reclassifications made are as follows: ============================================================================================================
From To Nature Amount
re-classified
============================================================================================================
Rupees '000
============================================================================================================
Administrative expense Other operating charges Reimbursement of debt from other
provision for doubtful related party 2,481
============================================================================================================38. DATE OF AUTHORISATIONThese financial statements were authorised for issue on February 22, 2011 by the Board of Directors.of the Company. |