| Abbott Laboratories (Pakistan) Limited |
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| Annual
Report 2000 |
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| VISION |
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| Be
the world's |
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| premier
health care company |
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| MISSION |
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| To
improve lives by providing cost-effective health care products and services |
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| DEDICATED
TO: |
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| Employees |
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| Customers |
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| Sharesholders |
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| Suppliers |
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| Public |
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| WE VALUE: |
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| Innovation |
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| Excellence |
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| Productivity |
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| Respect |
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| Leadership |
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| Responsibility |
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| Quality |
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| Integrity |
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| Trust |
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| Contents |
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| Company
Information |
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| Notice
of Annual General Meeting |
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| Chairman's
Review |
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| Director's
Report |
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| Auditors'
Report to the Members |
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| Balance
Sheet |
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| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to and forming part of the Accounts |
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| Pattern
of Shareholding |
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| Statistical
Data |
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| List
of the Products |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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| KAMRAN
Y. MIRZA |
|
LORI O CARLSON |
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| Chairman
& Managing Director |
(Alternate Mohammad A.
Khan) |
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| GREG
W. LINDER |
|
GARY P. COUGHLAN |
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| (Alternate
Farhat Qadeer Dar) |
(Alternate Ishaque H.
Hashmi) |
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| IMRAN
A. HALAI |
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ALI SHABBIR |
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| MALLICK
HASEEB UR REHMAN |
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| SECRETARY |
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| MOHAMMAD
AMIN |
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| AUDITORS |
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| SIDAT
HYDER QAMAR & CO. |
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| Chartered
Accountants |
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| LEGAL
ADVISERS |
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| AZFAR
& AZFAR |
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| SURRIDGE
& BEECHENO |
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| BANKERS |
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| ABN
- AMRO BANK |
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DEUTSCHE BANK |
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| AMERICAN
EXPRESS BANK LTD. |
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HABIB BANK LIMITED |
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| BANK
OF AMERICA N.T. & S.A. |
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MUSLIM COMMERCIAL BANK |
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| STANDARD
CHARTERED |
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NATIONAL BANK OF PAKISTAN |
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| GRINDLAYS
BANK |
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CITIBANK N.A. |
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| REGISTERED
OFFICE AND FACTORY |
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| Opp:
RADIO PAKISTAN TRANSMISSION CENTRE |
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| HYDERABAD
ROAD, LANDHI, KARACHI - PAKISTAN |
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| DEPOTS |
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| ISLAMABAD |
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| PLOT
NO. 136, STREET NO.9, 1.10/3 INDUSTRIAL AREA |
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| ISLAMABAD
- PAKISTAN |
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| LAHORE |
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| SHAHPUR
KANJRA 16 K.M., MULTAN ROAD |
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| LAHORE
- PAKISTAN |
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| MULTAN |
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| HASSANABAD,
GATE NO.2, NEAR: PAK ARAB FERTILIZERS |
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| KHANWEWAL
ROAD, MULTAN - PAKISTAN |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| NOTICE
is hereby given that the Fifty Second Annual General Meeting of ABBOTT |
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| LABORATORIES
(PAKISTAN) LIMITED, will be held on Thursday May 17, 2001 at |
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| 11:30
a.m. in the Council Hall, of the Overseas Investors Chamber of Commerce and |
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| Industry,
Talpur Road, Karachi, to transact the following business:- |
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| ORDINARY
BUSINESS |
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| 1.
To receive, consider and adopt the Audited Accounts together with the |
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| Directors'
and Auditors' Reports thereon for the year ended November 30, 2000. |
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| 2.
To declare a Dividend |
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| 3.
To appoint Auditors of the Company upto the next Annual General Meeting and |
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| to
fix their remuneration. The retiring Auditors, being eligible, offer
themselves |
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| for
re-appointment. |
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| SPECIAL
BUSINESS |
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| 4.
To approve the Remuneration of the Directors as explained in Statement u/s
160 |
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| of
the Companies Ordinance.--Note 1. |
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BY ORDER OF THE BOARD |
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|
MOHAMMED AMIN |
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| Karachi:
March 12, 2001 |
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SECRETARY |
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| NOTES: |
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| 1.
Statement under section 160 of the Companies Ordinance 1984. |
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| ITEM 4 |
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| The
last approval of Rs. 15.0 million for payment of annual aggregate directors |
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| remuneration
in respect of 1996 and for future years, was given by the shareholders |
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| in
the Annual General Meeting held on May 23, 1996. This approval needs to be |
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| revised
and shareholders approval is sought for aggregate directors remuneration for |
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| 2001
and for the future years at Rs. 20 Million per annum, for which the following |
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| resolution
will be moved. |
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| RESOLVED
THAT an aggregate sum not exceeding Rs. 20 million per annum be and |
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| is
hereby approved as the remuneration of directors working as full time
executives |
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| of
the Company. The working directors are interested in this resolution to the
extent |
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| of
their respective remuneration. |
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| 2.
The Share Transfer books of the Company will remain closed from Wednesday May |
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| 2,
2001 to Wednesday May 16, 2001 (both days inclusive). |
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| 3.
A member of the Company entitled to attend and vote at the meeting may
appoint |
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| a
proxy to attend, speak and vote instead of him/her. Proxies must be deposited
at |
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| the
Company's registered office not less than 48 hours before the time of holding
the |
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| meeting.
A proxy need not be a member of the Company. The proxy shall produce |
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| his/her
original NIC or Passport to prove his/her identity. A form of proxy is |
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| enclosed. |
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| 4.
Attested copies of NIC or Passport of the Beneficial Owner of the shares of
the |
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| Company
in the Central Depository System of the Central Depository Company |
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| (CDC)
and the proxy, entitled to attend and vote at this meeting, shall be
furnished |
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| with
the proxy form to the Company. |
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| 5.
The Beneficial Owner of shares of the Company in the Central Depository
System |
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| of
the Central Depository Company (CDC) or his/her proxy entitled to attend and |
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| vote
at this meeting, shall produce his/her original NIC or Passport to prove
his/her |
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| identity. |
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| 6.
In case of a corporate entity, the Board of Directors' resolution]power of
attorney |
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| with
specimen signature of the nominee shall be submitted with the proxy form to |
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| the
Company and the same shall be produced in original at the time of the meeting
to |
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| authenticate
the identity. |
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| 7.
Shareholders are requested to notify the Company of change in their
addresses, |
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| if
any, immediately. |
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| CHAIRMAN'S
REVIEW |
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| It
gives me great pleasure in welcoming you to the 52nd Annual General Meeting
of the |
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| Company. |
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| OPERATING
RESULTS: |
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| The
net sales of your Company increased from Rs.2,268 million in 1999 to Rs.2,542 |
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| million
in 2000, registering a growth of 12.1% which is considered satisfactory in
light of |
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| the
depressed economic environment. On June 19th, 2000, after a gap of over three
and |
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| a
half years, the government granted a price adjustment of 8% on controlled,
and 10% on |
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| decontrolled
products. Approximately 3.2% growth is attributed to price adjustment and |
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| 8.9
% to volume. This has also impacted the income favourably. |
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| Export
sales registered a growth of 42.1% in 2000.The Company exported fifty three |
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| products
to five countries in 2000. |
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| The
following are some of the major products which hold significant market share. |
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| Klaricid |
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A new generation
antibiotic for treatment of respiratory tract |
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infections. |
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| Klaricid |
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A new antibiotic which
provides excellent combination therapy for |
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| 500mg |
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cure and management of
peptic ulcer disease. |
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| Erythrocin |
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One of the most widely
used and safe antibiotics for every day |
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respiratory tract, skin /
soft tissue and dental infections. |
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| Hytrin |
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Provides symptomatic
treatment of BPH (Benign Prostate Hyperplasia) |
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| Epival |
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Anti-epileptic for safe
and effective control of wide ranging seizures and |
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migraine prophylaxis and
bipolar disease. |
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| Forane |
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Inhalation anesthetic
with proven superiority, versatility and safety for |
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a wide range of
procedures and patient types. |
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| Pediasure |
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Complete and balanced
medical nutrition for children 1-10 years of age. |
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Supports normal growth
and weight gain. |
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| Ensure |
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A complete and balanced
medical nutritional supplement for adults and |
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the elderly. |
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| HCV Kit |
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The reliable &
extremely accurate test for diagnosing hepatitis C. |
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| The
other major products groups - cough and cold, hematinics, NSAID as well as
vitamin |
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| preparations,
continue to hold their ground against competition. |
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| Profit
after tax increased from Rs.71.5 million in 1999 to Rs.179.5 million in 2000, |
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| registering
an increase of 151 percent. Major factors responsible for the significant |
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| improvement
in the profitability are sales volume, favourable product mix, price |
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| adjustments
allowed by the Government, manufacturing efficiencies, and savings in |
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| financial
charges as a result of reduced borrowings due to Rights Issue proceeds.
Whilst |
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| the
2000 profits are substantial when compared with the previous year, the return
on |
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| equity
still remains modest, due to profits being depressed because of lack of
adequate |
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| price
adjustment in the last few years. |
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| NEW
PRODUCTS: |
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| The
following new products were launched during the year · |
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| ABOCAL |
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| Effervescent
calcium, vitamin D, C & B6 |
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| tablets
for pregnant / nursing mothers and |
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| growing
children. |
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| VIDAYLIN
- L |
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| A
multivitamin + lipotropic + lysine syrup for |
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| growing
children. |
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| PROMOD |
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| High
quality protein supplement for body building and weight gain. |
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| FLEXIFLO |
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| Easy
feed enteral nutrition bag |
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| to
be used for patrol pump. |
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| PATROL
PUMP |
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| Flexiflo
enteral nutrition pump |
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| used
for tube feeding. |
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| MANUFACTURING
AND TECHNOLOGY: |
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| Your
Company continues to invest in its manufacturing facilities, to ensure that
it |
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| maintains
its reputation as a manufacturer of the highest quality. During the year
under |
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| review,
your company acquired a highly sophisticated compact line which combines
three |
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| processes
namely washing, sterilizing and filling of injectable products, thereby
further |
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| raising
the standards of Good Manufacturing Practices (GMP) in the Company. The |
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| Company
also upgraded it's Quality Assurance Department, which is one of the most |
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| modern
and largest in the country. |
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| The
state of art of pharmaceutical manufacturing and standards of GMP (Good |
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| Manufacturing
Practices) are constantly changing, and every effort is made to keep |
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| abreast
of these changes as well as adhere to national and company's environmental, |
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| safety
and health standards. Abbott Pakistan continues to benefit from technical |
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| expertise
from Abbott USA and other affiliated companies around the world, enabling it |
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| to
keep up to date with the latest developments in the Pharmaceutical Industry. |
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| DIVIDEND |
|
| Board
of Directors are pleased to announce the following final dividend: |
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| -
Cash 30% |
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| DIRECTORS: |
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| Your
Board consists of: |
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| Mr.
Kamran Y Mirza |
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| Ms.
Lori 0 Carlson |
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| Mr.
Greg W. Linder |
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| Mr.
Gary P. Coughlan |
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| Mr.
Imran A. Halai |
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| Mr.
Ali Shabbir |
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| Mr.
Malik Haseeb ur Rehman |
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| EMPLOYEES |
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| The
Company is managed by highly skilled and qualified personnel in all
departments. |
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| It
is the Company*s policy to develop human resources and to this effect,
continuous |
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| efforts
are made to upgrade the skills of personnel employed by way of on-job
training, |
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| as
well as, courses and seminars in and outside Pakistan. During the year Abbott |
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| Pakistan
provided technical support to the Abbott operations in India, South Africa, |
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| Thailand,
Turkey, Syria and China. |
|
|
| The
relationship between staff and management continues to be satisfactory, and I
wish |
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| to
take this opportunity to thank all of them, on behalf of the Board, for their
loyal |
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| service
and good work during the year 2000. |
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| The
Union agreement which expired on December 31st, 1999 was negotiated in a
cordial |
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| atmosphere
and signed on March 01,2000, for a further period of 2 years upto 31st |
|
| December
2001. |
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|
| FUTURE
PROSPECTS |
|
| It
should be noted that whilst the Company will strive hard to maintain
profitability by |
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| managing
the factors in it's control, it's and the pharmaceutical industry's financial |
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| health,
is critically dependent on regular price adjustments (as mentioned above, |
|
| granted
this year, after a gap of over three and a half years) as well as
registration of |
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| new
products at realistic prices. Further the MOH must rationalise its drug
registration |
|
| policy,
which at present is inconsistent as well as confusing. Abbott has several
exciting |
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| new
products under development or under registration, which once marketed, will |
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| contribute
to growth as well as provide benefit of the latest medical research to the |
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| public. |
|
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| The
Company appreciates the efforts of the Government to revive the economy and |
|
| create
a more conducive environment for investors in general. It is sincerely hoped,
that |
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| the
pharmaceutical industry will also be a beneficiary of the government's
progressive |
|
| policies,
most important of which is realistic and timely price adjustments. Whilst the |
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| bulk
of the Company's business will continue to be accounted for by sales of |
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| pharmaceutical
products, the Company will accelerate diversification and expansion of |
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| other
business, most notably nutritionals and diagnostics. The Company will also |
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| endeavour
to increase exports, and as at November 30,2000 there are 59 products |
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| pending
registration in 7 different countries. |
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| The
Company has successfully completed the Rights Issue of Rs 260 Million in June |
|
| 2000,
reflecting continued confidence of the share holders in the Company's future. |
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| In
December 2000, Abbott Laboratories Inc. (Abbott Pakistan's Parent Company) |
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| announced
that they had entered into an agreement with BASF to purchase BASF's |
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| Pharmaceutical
Division. In Pakistan BASF's Pharmaceutical Division operates as |
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| Knoll
Pharmaceutical, which is a publicly listed Company. |
|
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| In
the light of Pakistani Law, your Company is evaluating options to ascertain
what |
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| would
be the best way to proceed with integration / merger of the two Companies in |
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| Pakistan. |
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|
| DIRECTOR'S
REPORT |
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| The
Directors of ABBOTT LABORATORIES (PAKISTAN) LIMITED, have pleasure in |
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| submitting
their report together with Audited Accounts of the Company for the year |
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| ended
November 30, 2000 |
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|
Rs.000's |
Rs.000's |
|
| Net
Profit of the Company for the year before taxation |
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| but
after providing for all expenses, interest |
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| and
depreciation |
|
304,499 |
|
|
| LESS:
Provisions for: |
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| Workers'
Profits Participation Fund |
|
15,225 |
|
|
| Workers
Welfare Fund |
|
5,053 |
20,278 |
|
|
------------ |
------------ |
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|
|
284,221 |
|
|
| LESS:
Provision for taxation |
|
104,733 |
|
|
------------ |
|
|
179,488 |
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| ADD:
Unappropriated profit b/f. |
|
966 |
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|
------------ |
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| Available
for appropriations |
|
180,454 |
|
|
| LESS:
Appropriations: |
|
| -
Interim Cash Dividend |
|
10.00% |
19,277 |
|
| -
Proposed Final Cash Dividend |
|
30.00% |
57,831 |
|
|
| -
Transfer to General Reserve |
|
103,000 |
180,108 |
|
|
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------------ |
|
| Unappropriated
profit c/f. |
|
346 |
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| The
pattern of shareholdings is given on page 50 of this report. |
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------------ |
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| Abbott
Laboratories, a Company incorporated in the State of Illinois, USA is the |
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| majority
shareholder of the Company. |
|
|
| Earnings
per Share |
|
| Earnings
per share after taxation-Rupees 8.27 (1999: Rupees 3.71) |
|
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|
BY THE ORDER OF THE BOARD |
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|
KAMRAN Y. MIRZA |
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| Karachi:
March 12, 2001 |
|
CHAIRMAN & MANAGING DIRECTOR |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ABBOTT LABORATORIES (PAKISTAN)
LIMITED as at |
|
| 30
November 2000 and the related profit and loss account and cash flow statement
and statement of |
|
| changes
in equity together with the notes forming pad thereof, for the year then
ended and we state that we |
|
| have
obtained all the information and explanations which, to the best of our
knowledge and belief, were |
|
| necessary
for the purposes of our audit. |
|
|
| It
is the responsibility of the Company's management to establish and maintain a
system of internal control, |
|
| and
prepare and present the above said statements in conformity with the approved
accounting standards |
|
| and
the requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on |
|
| these
statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and pe8orm the audit to obtain reasonable assurance
about whether the |
|
| above
said statements are free of any material misstatement. An audit includes
examining on a test basis, |
|
| evidence
supposing the amounts and disclosures in the above said statements. An audit
also includes |
|
| assessing
the accounting policies and significant estimates made by management, as well
as, evaluating the |
|
| overall
presentation of the above said statements. We believe that our audit provides
a reasonable basis for |
|
| our
opinion and, after due verification, we report that: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| b)
in our opinion: |
|
|
| i)
the balance sheet and profit and loss account, together with the notes
thereon, have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with
the |
|
| books
of account and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; |
|
| and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year |
|
| were
in accordance with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the |
|
| balance
sheet, profit and loss account, cash flow statement and statement of changes
in equity |
|
| together
with the notes forming pad thereof conform with approved accounting standards
as |
|
| applicable
in Pakistan, and, give the information required by the Companies Ordinance,
1984 in the |
|
| manner
so required and respectively give a true and fair view of the state of the
Company's affairs |
|
| as
at 30 November 2000 and of the profit, its cash flows and changes in equity
for the year then |
|
| ended; and |
|
|
| d)
in our opinion, zakat deductible at spume under the Zakat and Ushr Ordinance,
1980 was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under section
7 of that |
|
| Ordinance. |
|
|
|
SIDAT HYDER QAMAR & CO. |
|
| KARACHI:
12 MARCH 2001 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT NOVEMBER 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees
'000) |
|
| SHARE
CAPITAL AND RESERVES |
|
| Share capital |
|
| Authorised
capital |
|
| 30,000,000
(1999: 30,000,000) ordinary |
|
| shares
of Rs. 10/- each |
|
300,000 |
300,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
244,818 |
192,770 |
|
| Capital
reserves |
|
|
207,218 |
-- |
|
|
|
|
|
| Revenue
reserves |
|
|
547,239 |
444,859 |
|
|
|
----------- |
----------- |
|
|
|
999,275 |
637,629 |
|
|
|
|
|
| DEFERRED
LIABILITY |
|
|
|
|
| Deferred
taxation |
|
4 |
18,256 |
12,788 |
|
|
| CURRENT
LIABILITIES |
|
| Short-term
finances under mark-up |
|
| arrangements |
|
5 |
73,965 |
361,868 |
|
| Creditors,
accrued and other liabilities |
|
6 |
424,721 |
305,982 |
|
| Proposed
dividend |
|
|
57,831 |
33,735 |
|
|
|
----------- |
----------- |
|
|
|
556,517 |
701,585 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
7 |
-- |
-- |
|
|
|
----------- |
----------- |
|
|
1,574,048 |
1,352,002 |
|
|
========== |
========== |
|
| FIXED
ASSETS - Tangible |
|
| Operating
assets |
|
8 |
499,790 |
388,224 |
|
| Capital
work-in-progress |
|
9 |
38,006 |
35,568 |
|
|
----------- |
----------- |
|
|
537,796 |
423,792 |
|
|
|
|
| LONG-TERM
LOANS |
|
10 |
14,288 |
15,641 |
|
|
| LONG-TERM
DEPOSITS - Considered good |
|
4,714 |
2,250 |
|
|
| CURRENT
ASSETS |
|
| Stores
and spare parts |
|
11 |
40,621 |
48,182 |
|
| Stock-in-trade |
|
12 |
636,138 |
539,667 |
|
| Trade debts |
|
13 |
66,162 |
64,846 |
|
| Loans
and advances |
|
14 |
13,520 |
17,038 |
|
| Trade
deposits and short-term prepayments |
15 |
62,833 |
62,502 |
|
| Other
receivables |
|
16 |
155,817 |
148,823 |
|
| Cash
and bank balances |
|
17 |
42,159 |
29,261 |
|
|
----------- |
----------- |
|
|
1,017,250 |
910,319 |
|
|
----------- |
----------- |
|
|
1,574,048 |
1,352,002 |
|
|
========== |
========== |
|
| Auditors'
Report Annexed |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED NOVEMBER 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
|
(Rupees
'000) |
|
| Sales - net |
|
18 |
2,542,548 |
2,268,540 |
|
| Cost
of goods sold |
