ABBOTT PAKISTAN 2014 ANNUAL REPORT

KEY PERFORMANCE INDICATORS

2014 2013

Sales Revenue Rs in million 19,692 17,217

Return on Equity % 25.9% 28.9%
Earnings per share Rs. 28.77 25.83
Shareholders’ Equity Rs in million 10,872 8,747
Total Assets Turnover Ratio Times 1.58 1.68
Current Ratio 3.86 3.56
Market Capitalization Rs in million 69,576 38,524

KEY OPERATING AND FINANCIAL DATA

December 31, November 30,
2014 2013 2012 2011 2010 2009
Restated
Financial Position (Rupees in '000)

Balance Sheet
Fixed Assets
- property, plant and equipment 3,359,092 3,183,735 2,629,154 2,298,062 1,877,596 1,662,785
- intangible asset 24,395 41,615 58,835 76,055 - -
Other Non-Current Assets 62,980 44,064 54,509 55,449 56,152 42,606
Current Assets 10,319,128 7,898,590 6,587,364 4,975,763 3,856,673 3,259,185
Total Assets 13,765,595 11,168,004 9,329,862 7,405,329 5,790,421 4,964,576

Issued, subscribed and paid-up 979,003 979,003 979,003 979,003 979,003 979,003
capital
Capital Reserves 339,481 300,030 262,308 223,247 197,167 173,853
Revenue Reserves 9,553,116 7,468,232 5,466,083 3,983,933 2,736,369 2,085,604
Total Equity 10,871,600 8,747,265 6,707,394 5,186,183 3,912,539 3,238,460

Non-Current Liabilities 223,953 203,562 189,557 165,219 115,182 119,627

Current Liabilities 2,670,042 2,217,177 2,432,911 2,053,927 1,762,700 1,606,489
Total Liabilities 2,893,995 2,420,739 2,622,468 2,219,146 1,877,882 1,726,116

Total Equity and Liabilities 13,765,595 11,168,004 9,329,862 7,405,329 5,790,421 4,964,576

Balance Sheet Analysis - Equity and Liabilities Balance Sheet Analysis - Assets
10,872 224 2,670 3,446 10,319
2014 2014
8,747 204 2,217 3,269 7,899
2013 2013
6,707 190 2,433 2,742 6,587
2012 2012
5,186 165 2,053 2,430 4,976
2011 2011
3,913 115 1,763 1,934 3,857
2010 2010
3,238 120 1,606 1,705 3,259
2009 2009
0 3200 6400 9600 12800 16000 0 2000 4000 6000 8000 10000 12000 14000 16000

Rs. in Million
Rs. in Million

Total Equity Non-Current Liablities Current Liablities Non-Current Assets Current Assets

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

OPERATING AND FINANCIAL TRENDS

Twelve Twelve Twelve Twelve Thirteen Twelve
months ended months ended months ended months ended months ended months ended
December 31, December 31, December 31, December 31, December 31, November 30,
2014 2013 2012 2011 2010 2009
Restated
(Rupees in ‘000)
Profit and Loss
Net sales including toll manufacturing service fee 19,692,354 17,217,258 15,216,253 12,946,968 10,995,701 8,450,118
Gross profit 7,550,142 6,621,646 5,702,828 4,666,478 3,687,038 2,321,131
Operating profit 4,323,341 3,689,179 3,016,363 2,378,042 1,744,787 878,503
Profit before taxation 4,318,567 3,686,223 3,014,137 2,374,826 1,741,257 875,978
Taxation 1,502,255 1,157,374 924,042 730,240 564,313 266,906
Profit after taxation 2,816,312 2,528,849 2,090,095 1,644,586 1,176,944 609,072
Ordinary cash dividends * 763,622 685,302 685,302 587,402 489,502 1,174,804
EBTIDA ** 4,758,663 4,087,276 3,353,127 2,657,942 2,000,889 1,084,803

Cash Flows
Operating activities 3,331,081 2,483,858 2,509,703 1,772,876 917,503 1,074,757
Investing activities (159,370) (690,491) (485,630) (643,800) (374,785) (181,200)
Financing activities (687,381) (686,528) (687,188) (494,836) (494,415) (1,174,262)
Cash and cash equivalents at the end of the year/period 6,381,381 3,897,051 2,790,212 1,453,327 819,087 770,784

* Includes final dividend amounting to Rs. 469.921 million proposed by the Board of Directors subsequent to the year end.
**EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation)

Profit and Loss Analysis - Sales and Other Income Profit and Loss Analysis - Expenses
12.1 3.0 0.4 0.4 1.5
19,692 476
2014
2014 10.6 2.5 0.4 0.4 1.2
17,217 273
2013
2013 9.5 2.2 0.3 0.3 1.0
15,216 183
2012
2012 8.3 1.9 0.3 0.2 1.0
12,947 142
2011
2011 7.3 1.6 0.3 0.2 1.0
10,996 109 2010
2010 6.1 1.3 0.2 0.1 0.3
8,450 142 2009
2009
0 2 4 6 8 10 12 14 16 18
0 5,000 10,000 15,000 20,000 25,000
Rs. in Million Rs. in Billion

Net sales including toll Other income Cost of goods sold and services Other operating charges
manufacturing service fee Selling and distribution expenses Taxation - net
Administrative expenses

Cash Flow Analysis

4,000
3,500 3,331
3,000 2,484 2,510
2,500
Rs. in Million

2,000 1,773
1,500 918 1,075
1,000
500
0
(500) (159) (181)
(375) (494)
(1,000) (687) (690) (687) (486) (687) (644) (495)
(1,500) (1,174)
2014 2013 2012 2011 2010 2009

Operating activities Investing activities Financing activities

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ABBOTT PAKISTAN 2014 ANNUAL REPORT

Twelve Twelve Twelve Twelve Thirteen Twelve

months ended months ended months ended months ended months ended months ended
December 31, December 31, December 31, December 31, December 31, November 30,
2014 2013 2012 2011 2010 2009

Restated
Ratios Unit

Profitability Ratios
Gross profit ratio % 38.3% 38.5% 37.5% 36.0% 33.5% 27.5%
Net profit to sales % 14.3% 14.7% 13.7% 12.7% 10.7% 7.2%
EBITDA** margin to sales % 24.2% 23.7% 22.0% 20.5% 18.2% 12.8%
Operating leverage ratio Times 0.22 0.21 0.20 0.18 0.16 0.10
Return on equity / Return on capital em-
% 25.9% 28.9% 31.2% 31.7% 30.1% 18.8%
ployed
Return on assets % 20.5% 22.6% 22.4% 22.2% 20.3% 12.3%

Liquidity Ratios
Current ratio Times 3.86 3.56 2.71 2.42 2.19 2.03
Quick / Acid test ratio Times 2.76 2.27 1.66 1.26 0.97 0.94
Cash to Current Liabilities Times 2.39 1.76 1.15 0.71 0.46 0.48
Cash flow from operations to Sales Times 0.17 0.14 0.16 0.14 0.08 0.13

Activity / Turnover Ratios

No. of days in inventory Days 83.95 89.38 90.99 96.67 101.19 100.38
No. of days in receivables Days 9.54 11.80 11.74 9.52 8.94 8.79
No. of days in payables Days 49.32 48.78 47.33 45.76 51.00 46.76
Inventory Turnover Times 4.35 4.08 4.01 3.78 3.61 3.64
Debtors Turnover Times 38.28 30.94 31.10 38.36 41.64 41.52
Creditors Turnover Times 7.40 7.48 7.71 7.98 15.00 7.81
Operating Cycle Days 44.17 52.39 55.40 60.43 59.12 62.41
Total assets turnover ratio Times 1.58 1.68 1.82 1.96 2.04 1.69
Fixed assets turnover ratio Times 5.96 5.82 6.01 6.09 6.21 5.24

Investment / Market Ratios

Basic / Diluted Earnings per share Rs. 28.77 25.83 21.35 16.80 12.02 6.22
Price earning ratio Times 24.70 15.23 10.75 5.94 9.13 15.51
Dividend yield ratio % 1.1% 1.8% 3.1% 6.0% 4.6% 12.4%
Dividend pay out ratio Times 0.27 0.27 0.33 0.36 0.42 1.93
Dividend cover ratio Times 3.69 3.69 3.05 2.80 2.40 0.52
Cash dividend per share Rs. 7.80 7.00 7.00 6.00 5.00 12.00
Break-up value per share with / without
Rs. 111.05 89.35 68.51 52.97 39.96 33.08
surplus on revaluation of fixed assets
Bonus shares issued Number - - - - - -
No. of shares at end of year Number 97,900,300 97,900,300 97,900,300 97,900,300 97,900,300 97,900,300
Market Capitalization Rs in million 69,576 38,524 22,468 9,769 10,744 9,446
Market value per share at the end of the year Rs. 710.68 393.50 229.50 99.79 109.74 96.49
Market value per share (High) Rs. 913.50 456.00 234.00 103.00 126.50 126.42
Market value per share (Low) Rs. 355.00 197.25 90.00 79.25 77.00 65.00
Contribution to National Exchequer Rs in million 2,765 2,479 1,988 1,798 1,507 1,062

Capital Structure Ratios

Interest cover ratio Times 905.60 1,248.03 1,355.06 739.44 494.27 347.92

Note : Sales include toll manufacturing service fee

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

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

CASH FLOW STATEMENT - DIRECT METHOD

For The Year Ended December 31, 2014

2014 2013
(Rupees in ‘000)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 19,731,593 17,246,220
Cash paid to suppliers / service providers (12,091,832) (11,031,262)
Cash paid to employees (2,269,422) (1,841,413)
Payment of royalty and technical service fee (157,575) (156,057)
Payment to retirement funds (218,415) (189,612)
Income taxes paid (1,409,639) (1,115,769)
Payment of other statutory charges (249,020) (426,310)
Long-term deposits - net (3,502) (366)
Long-term prepayments - net (1,106) (1,574)
Net cash inflow from operating activities 3,331,081 2,483,858

CASH FLOWS FROM INVESTING ACTIVITIES

Fixed capital expenditure (661,443) (972,520)
Sale proceeds from disposal of fixed property, plant & equipment 75,531 35,367
Interest income 426,542 246,662
Net cash outflow from investing activities (159,370) (690,491)

CASH FLOWS FROM FINANCING ACTIVITIES

Finance cost paid (4,774) (2,956)
Dividends paid (682,607) (683,572)
Net cash outflow from financing activities (687,381) (686,528)
Net increase in cash and cash equivalents 2,484,330 1,106,839
Cash and cash equivalents at the beginning of the year 3,897,051 2,790,212
Cash and cash equivalents at the end of the year 6,381,381 3,897,051

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ABBOTT PAKISTAN 2014 ANNUAL REPORT

VERTICAL ANALYSIS

December 31, December 31,

2014 2013

Rupees in ‘000 % Rupees in ‘000 %

Balance Sheet

Total Equity 10,871,600 79.0 8,747,265 78.3

Non-Current Liabilities 223,953 1.6 203,562 1.8
Current Liabilities 2,670,042 19.4 2,217,177 19.9
Total Equity and Liabilities 13,765,595 100.0 11,168,004 100.0

Non-Current Assets 3,446,467 25.0 3,269,414 29.3

Current Assets 10,319,128 75.0 7,898,590 70.7
Total Assets 13,765,595 100.0 11,168,004 100.0

Twelve months Twelve months

ended December ended December
31, 2014 31, 2013

Rupees in ‘000 % Rupees in ‘000 %

Profit and Loss Account

Net sales including toll manufacturing service fee 19,692,354 100.0 17,217,258 100.0
Cost of goods sold and services 12,142,212 61.7 10,595,612 61.5
Gross Profit 7,550,142 38.3 6,621,646 38.5
Selling and distribution expenses 2,965,120 15.1 2,471,404 14.4
Administrative expenses 368,688 1.9 366,938 2.1
4,216,334 21.4 3,783,304 22.0
Other income 475,693 2.4 273,059 1.6
Other operating charges 368,686 1.9 367,184 2.1
4,323,341 22.0 3,689,179 21.4
Finance cost 4,774 0.0 2,956 0.0
Profit before taxation 4,318,567 21.9 3,686,223 21.4
Taxation - net 1,502,255 7.6 1,157,374 6.7
Profit for the year/period 2,816,312 14.3 2,528,849 14.7

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

December 31, December 31, December 31, November 30,

2012 2011 2010 2009

Restated
Rupees in ‘000 % Rupees in ‘000 % Rupees in ‘000 % Rupees in ‘000 %

6,707,394 71.9 5,186,183 70.0 3,912,539 67.6 3,238,460 65.2

189,557 2.0 165,219 2.2 115,182 2.0 119,627 2.4
2,432,911 26.1 2,053,927 27.7 1,762,700 30.4 1,606,489 32.4
9,329,862 100.0 7,405,329 100.0 5,790,421 100.0 4,964,576 100.0

2,742,498 29.4 2,429,566 32.8 1,933,748 33.4 1,705,391 34.4

6,587,364 70.6 4,975,763 67.2 3,856,673 66.6 3,259,185 65.6
9,329,862 100.0 7,405,329 100.0 5,790,421 100.0 4,964,576 100.0

Twelve months Twelve months Thirteen months Twelve months

ended December ended December ended December ended November
31, 2012 31, 2011 31, 2010 31, 2009
Restated
Rupees in ‘000 % Rupees in ‘000 % Rupees in ‘000 % Rupees in ‘000 %

15,216,253 100.0 12,946,968 100.0 10,995,701 100.0 8,450,118 100.0

9,513,425 62.5 8,280,490 64.0 7,308,663 66.5 6,128,987 72.5
5,702,828 37.5 4,666,478 36.0 3,687,038 33.5 2,321,131 27.5
2,212,421 14.5 1,894,390 14.6 1,601,101 14.6 1,252,810 14.8
344,494 2.3 295,823 2.3 267,915 2.4 201,943 2.4
3,145,913 20.7 2,476,265 19.1 1,818,022 16.5 866,378 10.3
183,430 1.2 142,466 1.1 109,079 1.0 141,890 1.7
312,980 2.1 240,689 1.9 182,314 1.7 129,765 1.5
3,016,363 19.8 2,378,042 18.3 1,744,787 15.8 878,503 10.4
2,226 0.0 3,216 0.0 3,530 0.0 2,525 0.0
3,014,137 19.8 2,374,826 18.3 1,741,257 15.8 875,978 10.4
924,042 6.1 730,240 5.6 564,313 5.1 266,906 3.2
2,090,095 13.7 1,644,586 12.7 1,176,944 10.7 609,072 7.2

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ABBOTT PAKISTAN 2014 ANNUAL REPORT

HORIZONTAL ANALYSIS

December 31, November 30,

2014 2013 2012 2011 2010 2009

Restated
(Rupees in ‘000)

Balance Sheet

Total Equity 10,871,600 8,747,265 6,707,394 5,186,183 3,912,539 3,238,460

Non-Current Liabilities 223,953 203,562 189,557 165,219 115,182 119,627
Current Liabilities 2,670,042 2,217,177 2,432,911 2,053,927 1,762,700 1,606,489
Total Equity and Liabilities 13,765,595 11,168,004 9,329,862 7,405,329 5,790,421 4,964,576

Non-Current Assets 3,446,467 3,269,414 2,742,498 2,429,566 1,933,748 1,705,391

Current Assets 10,319,128 7,898,590 6,587,364 4,975,763 3,856,673 3,259,185
Total Assets 13,765,595 11,168,004 9,329,862 7,405,329 5,790,421 4,964,576

Twelve Twelve Twelve Twelve Thirteen Twelve

months ended months ended months ended months ended months ended months ended
December 31, December 31, December 31, December 31, December 31, November 30,
2014 2013 2012 2011 2010 2009
Restated
(Rupees in ‘000)

Profit and Loss Account

Net sales including toll manufactur-

19,692,354 17,217,258 15,216,253 12,946,968 10,995,701 8,450,118
ing service fee
Cost of goods sold and services 12,142,212 10,595,612 9,513,425 8,280,490 7,308,663 6,128,987
Gross Profit 7,550,142 6,621,646 5,702,828 4,666,478 3,687,038 2,321,131
Selling and distribution expenses 2,965,120 2,471,404 2,212,421 1,894,390 1,601,101 1,252,810
Administrative expenses 368,688 366,938 344,494 295,823 267,915 201,943
4,216,334 3,783,304 3,145,913 2,476,265 1,818,022 866,378
Other income 475,693 273,059 183,430 142,466 109,079 141,890
Other operating charges 368,686 367,184 312,980 240,689 182,314 129,765
4,323,341 3,689,179 3,016,363 2,378,042 1,744,787 878,503
Finance cost 4,774 2,956 2,226 3,216 3,530 2,525
Profit before taxation 4,318,567 3,686,223 3,014,137 2,374,826 1,741,257 875,978
Taxation - net 1,502,255 1,157,374 924,042 730,240 564,313 266,906
Profit for the year/period 2,816,312 2,528,849 2,090,095 1,644,586 1,176,944 609,072

* Compared with restated figures except for 2011, 2012, 2013 and 2014

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ABBOTT PAKISTAN 2014 ANNUAL REPORT

BALANCE SHEET As At December 31, 2014

2014 2013
Note (Rupees ‘000)

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorised capital 3 2,000,000 2,000,000

Issued, subscribed and paid-up capital 4 979,003 979,003

Reserves - capital 339,481 300,030

- revenue 9,553,116 7,468,232

Total Equity 10,871,600 8,747,265

NON-CURRENT LIABILITY

Deferred taxation 5 223,953 203,562

CURRENT LIABILITIES

Trade and other payables 6 2,670,042 2,217,177

Total Liabilities 2,893,995 2,420,739

CONTINGENCIES AND COMMITMENTS 7

TOTAL EQUITY AND LIABILITIES 13,765,595 11,168,004

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

2014 2013
Note (Rupees ‘000)

ASSETS
NON-CURRENT ASSETS

Fixed assets

- Property, plant and equipment 8 3,359,092 3,183,735

- Intangible asset 9 24,395 41,615

Long-term loans and advances 10 46,204 31,896

Long-term deposits 11 7,605 4,103

Long-term prepayments 9,171 8,065

Total Non-current Assets 3,446,467 3,269,414

CURRENT ASSETS

Stores and spares 12 120,158 107,238

Stock-in-trade 13 2,823,007 2,762,690

Trade debts 14 482,771 546,093

Loans and advances 15 81,259 172,205

Trade deposits and short-term prepayments 16 177,948 154,613

Accrued profit 17,351 5,922

Other receivables 17 192,610 79,269

Taxation recoverable 42,643 173,509

Cash and bank balances 18 6,381,381 3,897,051

Total Current Assets 10,319,128 7,898,590

TOTAL ASSETS 13,765,595 11,168,004

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

Chief Executive Director

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ABBOTT PAKISTAN 2014 ANNUAL REPORT

PROFIT AND LOSS ACCOUNT For The Year Ended December 31, 2014

2014 2013
Note (Rupees ‘000)

Sales - net 19 19,692,354 17,217,258

Cost of goods sold and services 20 12,142,212 10,595,612
Gross profit 7,550,142 6,621,646

Selling and distribution expenses 22 2,965,120 2,471,404

Administrative expenses 23 368,688 366,938
4,216,334 3,783,304

Other income 24 475,693 273,059

Other operating charges 25 368,686 367,184
4,323,341 3,689,179

Finance cost 26 4,774 2,956

Profit before taxation 4,318,567 3,686,223

Taxation-net 27 1,502,255 1,157,374

Profit for the year 2,816,312 2,528,849

(Rupees)

Earnings per share - basic / diluted 28 28.77 25.83

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

Chief Executive Director

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

S TAT E M E N T O F CO M P R E H E N S I V E I N CO M E For The Year Ended December 31, 2014

2014 2013
Note (Rupees ‘000)

Profit for the year 2,816,312 2,528,849

Other comprehensive income for the year

- Actuarial (losses) / gains on defined benefit pension plan 21.1.2 (62,451) 218,379

- Tax on actuarial losses / (gains) 16,325 (59,777)

Other comprehensive income - net of tax (46,126) 158,602

Total comprehensive income for the year 2,770,186 2,687,451

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

Chief Executive Director

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ABBOTT PAKISTAN 2014 ANNUAL REPORT

CASH FLOW STATEMENT For The Year Ended December 31, 2014

2014 2013
Note (Rupees ‘000)

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 29 4,759,636 3,589,182

Income taxes paid (1,409,639) (1,115,769)
Long-term loans and advances - net (14,308) 12,385
Long-term deposits - net (3,502) (366)
Long-term prepayments - net (1,106) (1,574)

Net cash inflow from operating activities 3,331,081 2,483,858

CASH FLOWS FROM INVESTING ACTIVITIES

Fixed capital expenditure (661,443) (972,520)

Sale proceeds from disposal of property, plant and equipment 75,531 35,367
Interest income 426,542 246,662

Net cash outflow from investing activities (159,370) (690,491)

CASH FLOWS FROM FINANCING ACTIVITIES

Finance cost paid (4,774) (2,956)

Dividends paid (682,607) (683,572)

Net cash outflow from financing activities (687,381) (686,528)

Net increase in cash and cash equivalents 2,484,330 1,106,839

Cash and cash equivalents at the beginning of the year 3,897,051 2,790,212

Cash and cash equivalents at the end of the year 6,381,381 3,897,051

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

Chief Executive Director

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

S TAT E M E N T O F C H A N G E S I N E Q U I T Y For The Year Ended December 31, 2014

Reserves
Capital Reserves Revenue Reserves

Share Reserve Other Un- Total

General Total
Capital Arising on - (Note appropriated Equity
Reserves
Merger 2.23) Profit

(Rupees ‘000)

Balance as at January 1, 2013 979,003 46,097 216,211 3,588,422 1,877,661 5,728,391 6,707,394

Transfer from unappropriated profit to general reserve made

subsequent to the year ended December 31, 2012 - - - 1,750,000 (1,750,000) - -

Total comprehensive income for the year ended December 31, 2013

Profit for the year - - - - 2,528,849 2,528,849 2,528,849

Other comprehensive income for the year, net of tax - - - - 158,602 158,602 158,602
Total comprehensive income for the year - - - - 2,687,451 2,687,451 2,687,451

Transactions with owners, recorded directly in equity

Final dividend for the year ended December 31,

2012 @ Rs. 4 per share - - - - (391,601) (391,601) (391,601)

Interim dividend for the year ended December 31,

2013 @ Rs. 3 per share - - - - (293,701) (293,701) (293,701)

Capital contribution from Abbott International LLC., USA - - 37,722 - - 37,722 37,722

Balance as at December 31, 2013 979,003 46,097 253,933 5,338,422 2,129,810 7,768,262 8,747,265

Balance as at January 1, 2014 979,003 46,097 253,933 5,338,422 2,129,810 7,768,262 8,747,265

Total comprehensive income for the year ended December 31, 2014

Profit for the year - - - - 2,816,312 2,816,312 2,816,312

Other comprehensive income for the year, net of tax - - - - (46,126) (46,126) (46,126)
Total comprehensive income for the year - - - - 2,770,186 2,770,186 2,770,186

Transactions with owners, recorded directly in equity

Final dividend for the year ended December 31,

2013 @ Rs. 4 per share - - - - (391,601) (391,601) (391,601)

Interim dividend for the year ended December 31,

2014 @ Rs. 3 per share - - - - (293,701) (293,701) (293,701)

Capital contribution from Abbott International LLC., USA - - 39,451 - - 39,451 39,451

Balance as at December 31, 2014 979,003 46,097 293,384 5,338,422 4,214,694 9,892,597 10,871,600

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

Chief Executive Director

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

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, general healthcare products and providing toll manufacturing
services.

2.23 Share based compensation

The cost of awarding shares to employees is reflected by recording a charge in the profit and loss account
equivalent to the fair value of shares on the grant date over the vesting period. Since awarded shares relate
to the ultimate holding company, a corresponding reserve is created to reflect the equity component.

3. AUTHORISED CAPITAL

2014 2013 2014 2013

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

2014 2013 2014 2013

Number of shares (Rupees ‘000)
5,832,196 5,832,196 Ordinary shares of Rs. 10 each issued as 58,322 58,322
fully paid for cash

18,479,640 18,479,640 Ordinary shares of Rs. 10 each, determined 184,796 184,796

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

73,588,466 73,588,466 Ordinary shares of Rs. 10 each issued as 735,885 735,885

fully paid bonus shares
97,900,302 97,900,302 979,003 979,003

As at December 31, 2014, Abbott Asia Investments Limited, UK held 76,259,454 shares. The ultimate holding
company is Abbott International LLC., USA.

2014 2013
(Rupees ‘000)
5. DEFERRED TAXATION

Deferred tax liability arising due to accelerated tax

depreciation allowance 257,547 260,058
Deferred tax asset arising in respect of provisions (33,594) (56,496)

223,953 203,562
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NOTES TO THE FINANCIAL STATEMENTS For The Year Ended December 31, 2014

2014 2013
(Rupees ‘000)
27.1 Relationship between tax expense and accounting profit
Accounting profit before taxation 4,318,567 3,686,223

Tax rate 33% 34%

Tax on accounting profit 1,425,127 1,253,316

Tax for prior years 218,085 95,420

Tax effect of:

- Expenses that are not deductible in determining taxable profit 13,284 13,123
- Applying lower tax rates to certain income (113,830) (153,829)
- BMR tax credit (23,949) (45,106)
- Tax rate adjustment (11,987) -
- 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) (4,475) (5,550)
1,502,255 1,157,374

28. EARNINGS PER SHARE - BASIC / DILUTED

Profit for the year 2,816,312 2,528,849

Number of shares

Weighted average number of ordinary shares in issue during the year 97,900,302 97,900,302

(Rupees)

Earnings per share 28.77 25.83

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

2014 2013
Note (Rupees ‘000)

29. CASH GENERATED FROM OPERATIONS

Profit before taxation 4,318,567 3,686,223

Adjustment for:
Depreciation 8.3 418,102 380,877
Amortisation on intangible asset 9 17,220 17,220
(Gain) / loss on disposal of property, plant and equipment 24 & 25 (7,547) 1,695
Interest income 24 (437,971) (249,611)
Expense recognised in profit or loss in respect of
equity-settled share-based compensation 30 39,451 37,722
Pension retirement benefit 31,753 50,749
Finance cost 26 4,774 2,956
Working capital changes 29.1 375,287 (338,649)
4,759,636 3,589,182
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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

2014 2013
(Rupees ‘000)

29.1 Working capital changes

(Increase) / decrease in current assets net of provision

Stores and spares (12,920) 14,606

Stock-in-trade (60,317) (336,129)
Trade debts 63,322 20,641
Loans and advances 90,946 (48,897)
Trade deposits and short-term prepayments (23,335) (2,832)
Other receivables (113,341) 1,497
(55,645) (351,114)
Increase in current liabilities

Trade and other payables - net 430,932 12,465

375,287 (338,649)

30. SHARE BASED COMPENSATION

Share-based compensation plans

As at December 31, 2014, 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 ultimate holding company). The plan entitles eligible employees shares of
the ultimate holding company which are vested equally over next three years, subject to certain vesting
conditions.
In accordance with IFRS 2 (Share-Based Payments), services received from employees as consideration
for stock units are recognised as an expense in the profit and loss account, with the corresponding entry
recorded as equity. The expense corresponds to the fair value of the stock unit of the Abbott International
LLC., USA and is charged against income on a straight-line basis over the vesting period of the plan.

An expense of Rs. 39.451 million (2013: Rs. 37.722 million) was recognized for this plan during the year.

The fair value of restricted stock units plan is measured at the date of grant using the Black-Scholes option
pricing model with the following assumptions:
2013 2012 2011

Volatility 20.00% 21.00% 21.00%

Dividend yield 1.60% 3.60% 4.10%
Risk free interest rate 1.10% 1.20% 2.70%

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35.3.2 Interest rate risk

Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Majority of the interest rate exposure arises from savings and
deposit accounts with banks.

2014 2013
(Rupees ‘000)

Fixed rate instruments

Financial assets 6,220,227 3,883,133

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.

35.4 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.

36. 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.

37. NON - ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

In their meeting held on February 24, 2015, the Board of Directors of the Company have proposed a final
cash dividend for the year ended December 31, 2014 of Rs. 4.8 per share (2013: cash dividend of Rs. 4.0 per
share). This is in addition to interim cash dividend of Rs. 3.0 per share (2013: Rs. 3.0 per share). The total
dividend declared for the year and dividend per share have been summarised below:

2014 2013
(Rupees ‘000)

Cash dividend 763,622 685,302

(Rupees)

Cash dividend per share 7.80 7.00

The financial statements for the year ended December 31, 2014 do not include the effect of the final cash
dividend which will be accounted for in the financial statements for the year ending December 31, 2015.

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 ABBOTT PAKISTAN 2014 ANNUAL REPORT

PAT TERN OF SHAREHOLDING As At December 31, 2014

Size of Holding Number of

Total Shares
Rs. 10 Shares Shareholders

1 100 860 34,796

101 500 634 175,803
501 1,000 269 210,941
1,001 5,000 502 1,063,724
5,001 10,000 75 525,386
10,001 15,000 17 212,101
15,001 20,000 5 84,803
20,001 25,000 7 157,580
25,001 30,000 2 58,646
30,001 35,000 6 193,049
35,001 40,000 4 149,274
40,001 45,000 3 134,276
45,001 50,000 1 45,619
50,001 55,000 1 51,200
60,001 65,000 4 246,300
100,001 105,000 1 101,746
130,001 135,000 1 133,500
155,001 160,000 1 157,003
195,001 200,000 1 195,200
215,001 220,000 1 216,000
225,001 230,000 1 227,390
335,001 340,000 1 336,834
345,001 350,000 1 347,100
365,001 370,000 1 369,889
395,001 400,000 2 795,400
410,001 415,000 1 410,000
425,001 430,000 1 428,600
435,001 440,000 1 438,689
440,001 445,000 2 882,577
490,001 495,000 1 490,926
635,001 640,000 1 639,800
745,001 750,000 1 746,093
830,001 835,000 2 1,665,624
1,085,001 1,090,000 2 2,176,914
1,130,001 1,135,000 1 1,131,977
1,135,001 1,140,000 1 1,135,918
2,615,001 2,620,000 1 2,617,135
2,650,001 2,655,000 1 2,653,038
76,255,001 76,260,000 1 76,259,451

TOTAL 2,418 97,900,302

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