2008, Sanofi Aventis

Sanofi-aventis
Pakistan limited
Rs 4.3 billion
Net sales 2008
11.56 %
employees
Double-digit growth
Over 1200*
Group Profile
Sanofi-aventis, a global leader in the pharmaceutical industry, researches and develops medicines and vaccines to help improve the lives of the greatest possible number of people. R&D explores a broad spectrum of innovative approaches, and develops new products in the key areas of therapeutic expertise: Thrombosis, Cardiovascular diseases, Diabetes, Vaccines, Oncology, Central Nervous System disorders and Internal Medicine. The Company's growth is attributable to a regional approach to business operations, backed by a comprehensive portfolio of innovative products, mature prescription medicines, consumer health products and generics, as well as vaccines. By virtue of its commitments, sanofi-aventis constantly adapts its development model to the world's emerging human and economic problems.
* Including temporary employees
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Theme
The Colors of Life
Vision
To create & sustain value by being recognized as a Pharmaceutical Industry Leader:
Valued by patients & healthcare providers Sought-after as an employer Respected by the scientific community & our competitors
Mission
Our core strategy is to:
The abundant color in our rich palette is drawn from the hues of the millions of lives saved and the quality of lives improved by our products. The liberal use of color in the 2008 sanofi-aventis annual report signifies good health and well-being while reflecting the vibrancy of life. Create value by rapidly launching and successfully marketing innovative pharmaceuticals that satisfy unmet medical needs in large patient populations. Focus commercial resources on strategic brands to drive sales growth and maximize the value of existing and new global brands. Aggressively recruit and retain top talent, enhancing our capabilities in drug innovation and commercialization.
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Respect
The key human and social component that links us all together, regardless of ethnic origin, culture or position, as we work for our mutual growth.
Courage
The power to control risks, the fighting spirit which helps us to both challenge ourselves and move forward to reach our objectives.
Audacity
The freedom to explore the unknown: acting with our hearts and not just our heads, as we bring the future alive.
Performance
The basis of our endeavors: a source of excellence, achievement and innovation, the key to our future!
Creativity
The capacity for imagination: using our intuition, making unexpected and productive connections, innovating in all our actions and communications.
Solidarity
The capacity to rally together as we drive back disease and give hope a chance: our mutual sense of responsibility when faced with adversity.
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Board of Directors
Syed Babar Ali Tariq Wajid Pir Ali Gohar Tariq Iqbal Khan Syed Hyder Ali J.L. Grunwald Eric Le-Bris Jean-Marc Georges M.Z. Moin Mohajir (Alternate Dr. Amanuallah Khan) (Alternate Shakeel Mapara) (Alternate Muhammad Amjad) Chairman Managing Director (Alternate Arshad Ali Gohar)
IS Steering Committee
Tariq Wajid Yasir Pirmuhammad M.Z. Moin Mohajir Murtaza Nooruddin
Ethics Committee
Yasir Pirmuhammad Dr. Amanullah Khan Salman Ahmed Masaud Ahmed Laila Khan
Contacts
Company Information laila.khan@sanofi-aventis.com Compliance yasir.pirmuhammad@sanofi-aventis.com Medical Affairs aman.khan@sanofi-aventis.com
Auditors
Ford Rhodes Sidat Hyder & Co. Chartered Accountants
Bankers
Citibank, N.A. Deutsche Bank AG Habib Bank Ltd. MCB Bank Ltd. Standard Chartered Bank The Royal Bank of Scotland Ltd.
Company Secretary
Muhammad Irfan
Board Audit Committee

Syed Hyder Ali Eric Le-Bris Dr. Amanullah Khan Yasir Pirmuhammad (Chairman) (Member) (Member) (Secretary) Non-Executive Director Non-Executive Director Executive Director Head of Audit & Compliance
Legal Advisors
Azfar & Azfar Haidermota & Co. Saadat Yar Khan & Co. Ghani Law Associates Bilal Law Associates Syed Qamaruddin Hassan Kundi & Kundi
Postal Address
P.O. Box No. 4962, Karachi - 74000
Board Share Transfer Committee

Tariq Wajid M.Z. Moin Mohajir
Registered Office
Plot 23, Sector 22, Korangi Industrial Area, Karachi - 74900 Shakeel Mapara Dr. Amanullah Khan M.Z. Moin Mohajir Muhammad Amjad Dr. Sohail Manzoor Yasir Pirmuhammad
URL
www.sanofi-aventis.com.pk
Management Committee
Tariq Wajid Masaud Ahmed Masood A. Khan Mamoona F. Naqvi Aslam Sheikh Aamer Waheed Zubair Rizvi Laila Khan
Registrars & Share Transfer Office

FAMCO Associates (Pvt.) Ltd. State Life Building No. 2-A, I.I. Chundrigar Road, Karachi - 74000.
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Innovation & investment in production

Production is a key element in the pharmaceutical sector. Our capacity to react to new demand depends on the flexibility and creative potential of our industrial facilities. Industrial facilities have to be both reactive and competitive.
Liquids Transfer Project: external view of building Liquids Transfer Project: installations in final phase Liquids Transfer Project: installations in final phase
The scope of the liquids transfer project is to relocate the manufacturing of all liquid products to Karachi and divest the Wah production site. A new ultra modern production facility is currently under development in Karachi. Upon the completion of this plant the annual production capacity will increase to 40 million bottles per year due to the installation of two state-of-the-art, highspeed filling lines. High-tech product manufacturing plant will also be installed in this plant to ensure production of larger batch sizes and improved cGMP. The plant is expected to commence commercial production by May 2010.
The Haemaccel plant produces 1.2 million packs per year. This is insufficient to meet market demand. The objective of the Haemaccel extension project was to increase the production capacity of the plant from 1.2 million packs per year to 1.9 million packs per year. The project included an extension to the plant area as well as the installation of new utility and production equipment. The project was completed on schedule in December 2008 and is now in production.
Haemaccel Extension Project: new WFI plant
Sanofi-aventis continued to make considerable investment in Pakistan during 2008. Industrial Affairs initiated 2 major projects in Karachi to: (i) modernize and upgrade production facilities & (ii) to enhance the production capability of Haemaccel.
Liquids Transfer Project: area finishing works in progress Haemaccel Extension Project: incubation area extension Haemaccel Extension Project: new air handling unit
Supporting scientific discovery

Throughout the world, more than 19,000 sanofi-aventis R&D employees are focused on major therapeutic areas: thrombosis, cardiometabolism, vaccines, oncology, central nervous system disorders and internal medicine. They work across disciplines, exploring all the potential therapeutic indications of each new compound, and investigating all possible links between the various expert therapeutic areas of the Company. Today, 30 to 40% of the R&D portfolio is made up of 'first-in-class' compounds, which are unrivalled in the market for their unique mechanism of action. This testifies to the considerable creativity of the teams involved. A large proportion of R&D activities are also dedicated to Life Cycle Management which involves identifying and confirming new indications and modes of administration for commercially available drugs.
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Changing the way we look at disease

In 2008, the Medical Department made significant progress, undertaking 13 clinical studies thereby putting Pakistan on the map of global medical science.
Acute urinary retention Developing an understanding of factors that contribute to the successful management of acute urinary retention associated with benign prostatic hyperplasia in men.
Breast cancer An initiative to help define standards of care: characterizing the clinical profile of patients with early stage breast cancer and their management at country and global level.
Psychiatric disorders Defining bipolar psychiatric disorders
Diabetes Identifying appropriate therapeutic options to control blood sugar and blood pressure
Deep Vein Thrombosis (DVT) Defining the magnitude and burden of DVT, a condition resulting from blood clotting in the deep veins and lungs
Sanofi-aventis is committed to the improvement of standards of health care in Pakistan. The department focused on disseminating scientific clinical data and findings of the most current published medical literature related to disease areas and new treatment modalities particularly in the fields of blood pressure control, heart ailments, diabetes and cancer.
Seminars & workshops

At sanofi-aventis, we believe in investing in our most valuable resource, our human capital. A multitude of training seminars and workshops were conducted throughout 2008 covering a diverse range of topics and areas. Employees of various seniorities and departments from all over Pakistan benefited from these opportunities. These activities are integral to keeping our personnel abreast of the latest trends and advances while honing skills in their respective areas of expertise.
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Major training programs

Sales Certification Olympics (for Sales Force)
Selling Model practical implementation process
Communication Skills (for Sales & Non-Sales Employees)

The importance of communication in an organization Communication Channels Communication Barriers
Business Management Development Program (for New / Promoted DMs)

Basic Management Skills People Management & Business Management Skills Coaching & Business Planning Skills
Cross Product Training (for Sales Force)

Training on different products for re-structuring and re-alignment of teams
Leadership Essentials (DM Competencies)

Competencies: What and Why Identified Core Competencies for District Managers Practical Behavioral demonstration of each competency through role-plays and practical learning activities
Initial Sales Training Program (for Newly Inducted Pharma Associates)

Company's orientation Basic Anatomy and Physiology and Disease Area Product and Competition Profile Selling Model
Gearing up for the Future (for Sr. Pharma Associates & Field Executives)
Team Skills Organizational Skills Mentoring and Guiding peers Giving and receiving feedback
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Leadership Quest (for Sales & Business Managers)

Leadership Challenges Leadership Styles Sales Force Management Change Management Business Communication
Licensed 2 Lead (Train the Trainer)

Regional Initiative for District Manager's Development Identifying your Leadership Style MBTI
Lantus Excellence (for Lantus Team)

Advanced Selling Skills Reinforcement of Adoption Pathway
Telfast Product Shoot 2007
Our people Our strength

Sanofi-aventis promotes diversity by providing a focused long-term career through crossfunctional exposure. I joined the organization in Industrial Supply Chain and as a development move, transferred to Business Development. Here, I get to explore and utilize my analytical and project management skills to the maximum. Taking steps for a stronger tomorrow while taking care of the present is one of the traits of a visionary organization. I feel fortunate to be in such a progressive environment. Syed Zeeshan Hasan
Assistant Manager, Business Development
For me, it was a moment of great pride when I joined sanofiaventis in 2007. I always envisioned myself at a dynamic organization with s t ro n g l e a d e r s h i p ; sanofi-aventis fits that description just right! The multinational aspect is great as I get to interact with my counterparts in other countries. The supportive and friendly environment adds to the experience and contributes to my personal and professional growth. Salman Raza
Assistant Industrial Affairs Controller B. Com; MA Economics Karachi University ACCA
I am thoroughly enjoying working at sanofi-aventis. I value the culture of teamwork in the company, where every member of the group plays an important role. After working at various companies in Pakistan, I can say with confidence that sanofi-aventis I joined offers the best working environment and sanofi-aventis ethical practices. as a District Manager in Sales. My four Asma Zuberi years in Sales were Assistant Manager, both exciting and Regulatory Affairs rewarding, but I wanted B.Pharmacy further professional Karachi University enrichment. Sanofi-aventis was extremely supportive in my decision and offered me a position in Human Resources, where Im learning something new every day! Thank you sanofi-aventis for giving me diversity in my career! Furqan Hussain
Field HR Manager (South) MBA - PIMSAT
I have been associated with the company for seven years. Although I worked in a multinational pharmaceutical in Canada, I returned to Pakistan and decided to rejoin sanofi-aventis. In order to progress, it is imperative to work for a dynamic and innovative organization. I feel privileged to work with a cohesive team of talented individuals and strategic thinkers. Dr. Syed Moin Hussain
Business Manager M.B;B.S.-DOW Medical University MBA-IQRA University CCRA-McMaster University, Canada
My internship at sanofiaventis has been invaluable; I I have acquired a have wealth of knowledge been and am more focused working about my future career at sanofigoals. As an intern, your aventis for time is divided between working the past with other members of the organization three years, and individual project time. Projects are and each year geared around your areas of interest and leaves me with can change as you get a feel for the different more skills and functions in a business and as you discover confidence than the your forte. Additionally, the opportunity last. My managers are easily to work with such a talented group of approachable and share their people was an incredible bonus for wealth of knowledge with me. I get to me. attend various trainings abroad which further contribute to my learning. It is Junaid Khan a privilege to work for a company that Student CBM invests in its people! Safdar Raza
Imports Specialist Masters in Urdu Advance Karachi University
BS - Engineering - GIKI
My experience interning at sanofi-aventis has been outstanding. I was given the opportunity to work on a project preparing CAPEX for 2009 which would become a part of the budget plan. This challenging project provided me with tremendous learning experience and helped me sharpen my skills. I found the employees very supporting and encouraging. I have interned at a few banks before, but learning opportunities were very limited. Samra Khan
Student IBA
My 3 years at sanofiaventis as a Medical Manager have provided me with endless learning opportunities. At the time, I was new to the pharma industry and the national and international exposure I got laid a strong foundation for me. Recently, I've been given the opportunity to join the Marketing Dept. as a Product Manager. I'm very thankful to the management for providing me with this crossfunctional exposure. This diverse experience will assist in the strengthening and further advancement of my career in this industry. Dr. S. Ali Hassan
Product Manager
While pursuing my M.B;B.S., I never imagined that one day Ill be working in a multinational pharmaceutical. Sanofi-aventis is all about corporate social responsibility; it stands firm on all moral and ethical grounds relating to the pharmaceutical industry. Since I am a firm believer in ethics and integrity, this is exactly the type of organization I would like to be associated with. Our team leaders recognize our individual strengths, nurture them and motivate us by providing a platform to excel. Dr. Maliha Zahir
Assistant Medical Manager M.B;B.S. - Hamdard College of Medicine MBA Health Management (ongoing) - CBM
Comprehensive treatment for people with diabetes

Sanofi-aventis offers a complete range of diabetes treatments that target each stage of the disease. Lantus, a long-acting insulin analog for patients with Type 1 and Type 2 diabetes. Apidra, a fast-acting human insulin analog taken before, during or after a meal by patients with Type 1 diabetes and advanced Type 2 diabetes. Amaryl, third-generation orally administered hypoglemic sulfonylurea indicated for the treatment of Type 2 diabetes. Aprovel, an anti-hypertensive agent, particularly suited for Type 2 diabetes.
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A portfolio addressing
product
With its extensive product portfolio, sanofi-aventis addresses the most urgent medical needs, bringing innovative, effective and welltolerated treatments to doctors for their patients. Innovative medicines: Lantus, the leading brand worldwide in the treatment of diabetes; Clexane, the leader in a growing market where prophylaxis is still under-developed; Taxotere, whose broad range of indications places it in the first rank among branded cytotoxic agents; and Plavix, whose potential with eligible yet still un-treated patients opens up opportunities for growth. Sanofi Pasteur, the Group's Vaccines division offers the industry's broadest range of products, from paediatric combination vaccines and vaccines against influenza and meningitis to booster shots, vaccines for travellers and for regions where diseases are endemic.
85 years
The most prescribed insulin in the world.
Lantus is the most widely prescribed insulin in the world. It is the only basal insulin offering 24-hour efficacy with no pronounced peak. It delivers genuine comfort to patients. One injection a day is sufficient to meet all basal insulin needs. Lantus is indicated for people with Type 1 (adults and children) and Type 2 (adults) diabetes.
of innovation in diabetes
1921 Insulin was identified for the first time in Canada by Frederick Banting and Charles Best, who used a raw pancreatic extract to save the life of a young boy in a diabetic coma. 1923 Hoechst, later to become part of sanofi-aventis, was the first company to produce insulin. 1936 Hoechst developed the crystallization process that improves the purification and tolerance of insulin. This marked the start of a long process of research into the disease. 1953 Hoechst launched the first insulin with 24-hour efficacy.
today's
challenges
Lantus SoloSTAR combines the best of Lantus, the most widely prescribed insulin in the world, with state-of-the-art sanofi-aventis technology to facilitate life for patients. Lantus SoloSTAR is a pre-filled, disposable pen that enables patients to inject up to 80 units of Lantus insulin, if necessary in one shot. It was designed to meet the everyday needs of
Simple and effective insulin therapy
Sales Rs.
people with diabetes. They can easily see the insulin dose and the injection is almost painless, as slight pressure suffices to inject the right dose (30% less force than similar devices). Patients tend to be frightened of insulin, and many physicians hesitate to start insulin therapy for Type 2 diabetes. They postpone the decision as long as possible, since patients are afraid of injections and the treatment's daily demands. In such conditions, glycemic control will deteriorate under oral treatment, since it is impossible to deliver a sufficient dose. This can increase the risk of cardiovascular (heart disease and stroke) and microvascular (kidney and ophthalmologic disorders, amputations) complications associated with diabetes due to the late onset of treatment. By combining a daily dose of Lantus with an intuitively easy-to-use injection pen that delivers a quick shot, Lantus SoloSTAR helps patients overcome the barrier to acceptance of insulin injections and makes it easier to manage diabetes on a daily basis. SoloSTAR was awarded the 2007 GOOD DESIGN prize by the Chicago Athenaeum Museum of Architecture and Design. Every year, this institution awards the world's most prestigious design prize, and singled out SoloSTAR's remarkable conception and leading-edge technology for improving the ability of patients to observe the most suitable treatment..
31% growth
87.2 million
1976 Researchers produced the first sample of human insulin. Genetic engineering drove considerable progress, up until the production of the glargine insulin - Lantus. 2000 The launch of Lantus using recombinant DNA, the first basal insulin analogous to slow-action human insulin, which acts with no pronounced peak and makes it possible to maintain a low, regular level of insulin for 24 hours using a single daily injection. 2006 Launch in the United States of Apidra, a new fastacting insulin analog, for the treatment of Type 1 and Type 2 diabetes in adults. 2007 Launch of Lantus SoloSTAR and Apidra SoloSTAR. 2008 Launch of Lantus SoloSTAR and Apidra SoloSTAR in Pakistan.
Amaryl continued to grow at a healthy rate of
First-line oral treatment for type 2 diabetes

Amaryl is the only sulfonylurea to have demonstrated 24-hour efficacy against both fasting and postprandial hyperglycemia in a once-daily dose, by stimulating the physiological mechanism of biphase insulin release.
10%
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Sales over Rs. million
66.9 102%
growth
Extensive experience on efficacy and tolerability
Millions of patients all over the world are being treated with Plavix for the prevention of ischemic events caused by atherothrombosis, confirming the favourable benefitto-risk ratio of long-term management of atherothrombosis. Launched in Pakistan in 2007, Plavix is rapidly consolidating its position as the foremost platelet antiaggregate agent for the secondary prevention of stroke.
A dynamic brand
In 1987, sanofi-aventis researchers working at the Montpellier research and development site discovered irbesartan, which eventually became Aprovel. Today, Aprovel has an impressive track record of over three billion tablets sold every year in more than 100 countries. Aprovel is indicated for the treatment of hypertension and diabetic nephropathy in patients with Type 2 diabetes. It acts by blocking the effect of angiotensin, the hormone responsible for the contraction of blood vessels, thereby permitting the normalization of arterial blood pressure. A new form of CoAprovel (irbesartan and hydrochlorothiazide) helps more at-risk hypertensive patients to reach their blood pressure goals. It is also indicated in cases of severe and moderate hypertension, the first fixed dose combination of a sartan and hydrochlorothiazide indicated as treatment for initial use in hypertensive patients who are likely to need multiple drugs to achieve their blood pressure goals.
The most widely prescribed low molecular weight heparin in the world
Clexane is the most widely studied and used low molecular weight heparin (LMWH) in the world. It has been used to treat an estimated 200 million patients in more than 115 countries after 20 years of development and is approved for more clinical indications than any other LMWH. Clexane is an anti-coagulant used to inhibit the formation of clots in veins and arteries, thereby preventing possible acute or chronic complications associated with deep vein or arterial thrombosis. Clexane delivered 2008 sales of over Rs. 159 million at a healthy growth rate of 16%.
An innovative antibiotic
Claforan is a third-generation Cephalosporin injectible antibiotic for the treatment of a wide range of infections including those of the respiratory tract, skin and soft tissues, urinary tract, and meningitis due to susceptible pathogens in both adults and children. It is also indicated for surgical prophylaxis (i.e. prevention of surgical infections). Claforan is manufactured in a state-of-the-art facility located in Karachi.
432.9 9%
growth
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16%
A life-saving essential
Double-digit growth
Haemaccel (Polygeline) is a plasma substitute for volume replacement used to correct or avert circulatory insufficiency due to plasma / blood volume deficiency, resulting from bleeding or from a shift in plasma volume between the circulatory compartments. It is a ready-for-use solution for intravenous infusion and can also be used as a carrier solution for various medicines.
829.9 23%
growth
Widely prescribed for gastroenteritis
Today a household name and among the top-selling drugs in the country, Flagyl is effective for the treatment of parasitic infections caused by Trichomonas vaginalis or Entamoeba histolytica known to cause diarrhoeal disease.
Telfast is an effective and potent antihistaminic agent, devoid of sedative effects and with a prolonged duration of action allowing administration once every 12 or 24 hours. It is indicated for the treatment of hay fever and chronic idiopathic urticaria. The Telfast-D formulation combines this antihistaminic with a prolonged-release decongestion agent.
Non-sedating allergy relief
Broad spectrum antibiotic

Tarivid (Ofloxacin) is a fluroquinolone antibiotic with a broad anti-bacterial spectrum. Tarivid is prescribed for acute, chronic or recurrent lower respiratory tract infections, skin and soft tissue infections, bone and joint infections, urinary tract infections and infections of the genital organs. Tarivid continued to grow at a rate of 6%. Phenergan (promethazine) is one of the most established antihistamines in the local market. It is useful in perennial and seasonal allergic rhinitis, allergic conjunctivitis, urticaria and pruritis. Phenergan also prevents motion sickness, and treats nausea and vomiting after surgery and is effective in the relief of apprehension and inducing light sleep from which a patient can easily be aroused.
Oncology
Attacking cancer on all fronts
Sanofi-aventis' vision is to attack cancer on all fronts, exploring innovative avenues to optimise patient management and care and entering into long term partnerships to discover and develop powerful new agents and strategies for prevention and treatment so as to provide all patients with the best possible solutions. Sanofi-aventis' commitment to oncology is demonstrated by a series of successes (docetaxel and oxaliplatin) and its research into new therapeutic mechanisms. Thanks to many years of research, sanofi-aventis now has a better understanding of the way cancer grows and spreads, and different processes have now been identified.
Since cancer is a multi-faceted disease, the research strategy consists in attacking cancer on all fronts by targeting most of the mechanisms of action involved in the development, growth, and spread of cancer cells. Cancer means an uncontrolled proliferation of cells due to genetic mutations. Apart from hormone therapy, which is aimed at specific types of cancer (such as prostate cancer), anti-cancer treatments are either used to destroy all cancer cells (in which case they are known as cytotoxic agents), or aiming at more targeted treatments that block the cancer cell's mechanisms of action. These two approaches are very often combined (and in some cases they include hormone therapy) to stop cell proliferation and the growth of the tumour. They either cause it to disappear or at least stabilize the tumour.
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A reference chemotherapeutic agent for several types of cancer
Taxotere is a drug in the taxoid class, which inhibits cancer cell division by essentially freezing the cell's internal skeleton, comprised of microtubules which assemble and disassemble during a cell cycle. Taxotere promotes assembly and blocks disassembly, thereby preventing cancer cells from dividing and resulting in their death.
A cornerstone of chemotherapy for metastatic colorectal cancer in combination with new, targeted therapies.
Eloxatin is a new-generation platinum salt that has brought major progress in the treatment of metastatic colorectal cancer by making surgery possible for a significant proportion of patients with isolated hepatic metastases by rapidly and significantly reducing metastasis size. Eloxatin holds out the hope of an extended lifespan and possible recovery for these patients.
Modest growth of 3.8% for Taxotere despite a challenging year.
201%
Remarkable growth
New launches
Bolstering our portfolio
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The initial response to the launch of Xerosec has been extremely encouraging.
Proton pump inhibitors (PPI) block the production of acid by the stomach. Xerosec (omeprazole) is a proton pump inhibitor used in the treatment of dyspepsia, peptic ulcer disease (PUD), gastroesophageal reflux disease (GORD/GERD) and Zollinger-Ellison syndrome, all caused by stomach acid. Omeprazole blocks the enzyme in the wall of the stomach that produces acid. By blocking the enzyme, the production of acid is decreased, and this allows the stomach and esophagus to heal.
Rhinathiol has been launched in different strengths for adults, children and infants.
Rhinathiol (carbocisteine) is a mucolytic agent for the adjunctive therapy of respiratory tract disorders characterized by excessive, viscous mucus, including otitis media with effusion (glue ear) and chronic obstructive airway disease.
Creating vaccines, protecting life

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During 2008, a new business unit was set up in sanofi-aventis Pakistan limited to handle the vaccines business in Pakistan. The product portfolio consists of the following:
Brand Name Generic Name
Tetanus Toxoid Vaccine Poliomyelitis Vaccine Inactivated Vaccine against measles(schwarz strain) Mumps (urabe AM-9 strand) and Rubella (wistar RA 27/3 strain) Pneumococcal Polysaccharide Vaccine Rabies Vaccine Oral Poliomyelitis Vaccine Type 1 Trivalent Oral Poliomyelitis Vaccine Typhoid Vaccine Haemophilus influenzae Type b Vaccine (conjugated) Yellow Fever Vaccine Hepatitis A Vaccine Hepatitis A Vaccine Anti Rabies Immunoglobulin Adsorbed Diphtheria, Tetanus,Pertussis and conjugated Haemophilus Type b Vaccine Influenza type b conjugate, Adsorbed Diptheria,Tetanus, Acellular Pertussis & Inactivated Poliomyelitis Vaccine Influenza Vaccine Hepatitis B recombinant Vaccine Hepatitis B recombinant Vaccine Live attenuated varicella virus Polysaccharide Meningococcal A + C Vaccine
Vaccines: A key strategic focus

Sanofi Pasteur, the vaccine division of sanofi-aventis group, is the largest company in the world devoted entirely to human vaccines. To prevent diseases in children, adolescents and adults around the world, the sanofi pasteur R&D team is developing new generations of vaccines. Sanofi Pasteur offers the widest range of vaccines for 20 diseases. With tomorrow's health challenges in view, the R&D team of sanofi pasteur, the Group's Vaccines division, is working on both innovation and improvement of vaccine delivery and modes of administration. Either alone or in partnership, the research team is attacking such major diseases as dengue, pneumococcal infections, cytomegalovirus, malaria, tuberculosis, Chlamydia and Type B meningitis. In addition, sanofi pasteur remains at the forefront of influenza pandemic preparedness. Vaccines provide an effective response to major diseases, generally as a preventive measure but sometimes as a therapeutic solution. Seasonal influenza, for example, is a constant concern for health authorities throughout the world, and sanofi pasteur is the undisputed leader in the field of influenza prevention. Sanofi Pasteur continued to bring innovative, effective and easier-to-use vaccines to market.
Tetavax Imovax Polio Trimovax Pneumo 23 Verorab Oral monovalent Type 1 Opvero Typhim Vi Act-HIB Stamaril Avaxim 160 Avaxim 180 Favirab TetraAct-HIB Pentaxim Vaxigrip Euvax B Injection 0.5 ml Euvax B Injection 1ml Okavax Injection Polysaccharide meningococcal A +C vaccine
2008 was an active year for sanofi-aventis Pakistan in terms of Corporate Social Responsibility (CSR). Several CSR activities and projects were implemented.
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Providing help, the responsibility

of a leader
programs for those most in need. To reduce inequalities and provide better access to health for different populations and countries, sanofi-aventis' humanitarian sponsorship is engaged today in building long term partnerships Innovative partnership programs include My child matters, which was launched jointly in 2004 by sanofi-aventis and the International Union Against Cancer. This unique partnership aims to step up the fight against childhood cancer in countries where paediatric oncology is still struggling to become established. Cancers in children show the widest gap in survival rates between rich and developing countries. My child matters supports hospitals, foundations and NGOs to develop pragmatic approaches to improve awareness, early diagnosis, access to care and treatment, pain control and better management of the social and cultural aspects of the disease for both children and their families.
Blood Camp
Blood Donation Drive was held in association with the Patients' Welfare Association (PWA), a WHO recognized organization that has a modern, well-equipped blood storage facility. The PWA provides blood to the underprivileged patients of Karachi free of cost. The blood camp received an enthusiastic response from employees and was a practical application of the value of respect as it demonstrated respect for human life and commitment to the motto: because health matters.
A long term humanitarian strategy

Organized around long term partnerships, sanofi-aventis' humanitarian sponsorship implements innovative, lasting support
Rabies Prevention
September 28 is World Rabies Day. Sanofi-aventis Pakistan collaborated with the Pakistan chapter of the Rabies in Asia Foundation to raise awareness and understanding about the importance of rabies prevention at an event held at the Indus Hospital providing free of cost rabies treatment round-the-clock. The President of the Infectious Disease Society and several doctors addressed the gathering, mostly comprising school children, cautioning them against contact with stray dogs and alerting them to the danger of rabies. A story was read out underlining the importance of washing the wound immediately with soap and cleaning it with an anti-septic ointment.
In 2008 this program was extended to 5 countries including Pakistan.
Considering the global safe drinking water crisis and its rapid escalation in Pakistan, sanofi-aventis' leading product Flagyl teamed up with Nestle Pure Life in a venture to spread awareness about health and hygiene. During the summer, when water-borne diseases are at their peak, almost 200 clinics throughout Pakistan were provided with Nestle hot and cold water dispensers along with three months of free water supply.
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Earthquake Relief Drive

The province of Balochistan was hit by a devastating earthquake claiming over 300 lives and displacing thousands. As a responsible corporate citizen, sanofi-aventis Pakistan organized an Earthquake Relief Drive. Employees contributed generously, displaying solidarity with their countrymen and respect for human life. The collection was presented to Dawn Relief, a leading social welfare organization working in the affected region.
Breast Cancer Awareness
Sanofi-aventis Pakistan collaborated with Shaukat Khanum Memorial Cancer Hospital & Research Centre (SKMCH) to support breast cancer awareness. An event was held at SKMCH (Lahore) where the importance of screening and early diagnosis was
Diversity Day
Diversity Day was organized to recognize and celebrate the contribution of women to the success of the company, during which an external speaker made a presentation on risk factors, signs and symptoms of breast cancer, emphasizing and demonstrating self-examination techniques and addressing common misconceptions to an audience of women.
stressed to an audience comprised of patients, university students and NGO representatives. A second program was organized in partnership with the Aga Khan University Hospital (AKUH) in Karachi, where free of cost breast cancer screening sessions were conducted. NIMRA, which is an institute in Jamshoro also collaborated with sanofiaventis Pakistan and AKUH by providing mobile mammography vans.
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Diabetes Awareness
World Diabetes Day was commemorated by spreading internal and external awareness about the disease. Key facts and data on the prevalence of diabetes & brochures on diabetic care were disseminated. BMI assessments, blood glucose testing and HbA1c analysis were conducted. A renowned doctor specializing in diabetic care gave a thorough and easy to understand talk on Diabetes and its Complications. Externally, sanofi-aventis supported two newspaper supplements commemorating World Diabetes Day by contributing articles delivering key messages on diabetes signs, symptoms, diagnosis, care, management and complications.
The 2007 corporate report

The sanofi-aventis Annual Report for 2007 won the 5th prize in the 'Chemical & Fertilizer' category in the 'Best Corporate Report Awards' (BCRA) competition, a prestigious annual event organized by a joint committee of the Institute of Chartered Accountants of Pakistan (ICAP) & the Institute of Cost and Management Accountants of Pakistan (ICMAP). International recognition of excellence came from the South Asian Federation of Accountants (SAFA) that holds an annual 'Best Presented Accounts Awards Competition'.
Amaryl patient awareness campaign entitled, Celebrating 10 Years of Performance. The campaign included a series of programs, which were run across the country in major public and private diabetic centers/clinics. In addition to free diabetes screening, public awareness lectures were organized with a comprehensive presentation on 'Diabetes Prevention' and 'Better Management Techniques' in order to improve the quality of diabetic patients' lives. Patient awareness literature was also distributed during these presentations. These presentations were usually made by the Professor/Head of the department at the center/clinic.
The awards, under different categories, are conferred on the basis of evaluation administered by SAFA's committee on improvement, transparency, accountability and governance of the published annual reports of entries from South-Asian countries. The sanofi-aventis Pakistan report was adjudged the winner of the bronze award in the hospitality, health, transport & shipping category.
Directors Report to the Shareholders

36 37 We are pleased to present the Annual Report and the Company's audited financial statements for the year ended December 31, 2008. These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. The Directors' report is prepared under section 236 of the Companies Ordinance, 1984 and clause xix of the Code of Corporate Governance. 1. Overview We are pleased to inform that net sales for the year ended December 31, 2008 at Rs.4,347 million registered a growth of 11.56% over the last year. This is mainly volume growth as we were granted price increases for hardship cases in the last week of November 2008, on 4 products only, with the freeze on selling prices since December, 2001 continuing on the remaining products. The improved sales performance was mainly due to the restructuring of the sales and marketing organization in early 2008, to provide appropriate focus and increased coverage on all our products, especially on products with high turnover, strategic products and new brands. Whilst sales recorded a healthy growth rate, our gross margin, as a percentage of net sales has reduced to just over 24% from nearly 28% last year. This erosion in margins is mainly due to Pak Rupee depreciation, soaring inflation - especially in fuel and energy, increase in international prices of certain raw and packing materials, transportation costs, labour costs, etc. On August 18, 2008 a fire broke out at the electrical sub-station building situated at the Karachi manufacturing site of the Company. Immediately following this event, the Company launched its disaster recovery plan due to which there was only marginal operational impact of this incident. However, due to use of rented generators until restoration of the sub-station, fuel and power cost as well as labour costs increased considerably which also impacted the gross margin and administration expenses of the company during the year under report. Despite the high inflation and other cost increases we managed to contain the total costs of distribution, marketing and administrative expenses at more or less the same level as last year by taking several cost cutting measures, which included, reduction in headcount, termination of royalty and technical fee agreement with our associated company, reduction in travel entitlements, etc. Finance cost increased by 34% over last year, mainly due to increased borrowing cost on account of monetary measures taken by the State Bank of Pakistan to control the rising inflation. Furthermore, the borrowings of the Company have also increased significantly due to increase in investing activities as part of our expansion policy. Profit after tax at Rs.38.27 million was significantly lower than last year (2007: Rs.75.30 million) because of the reasons explained above. As mentioned last year, a separate Business Unit for vaccines was created during the year, however, due to some legal and procedural requirements vaccines private market business could not be started by the Company during the year. All such requirements have now been taken care of and our vaccines business unit has started functioning with participation in some of the Government tenders, positive outcome of which is expected to add value to the Companys business activities in 2009. In 2008 approx. 89% of our sales were on cash before delivery basis to 16 regional distributors. The remaining 11% sales were made on credit to large hospitals and institutions. Effective credit controls are in place and we were able to reduce debtors turnover ratio from 13 days to 12 days as compared to last year. 2. Industry Leadership According to the last IMS market report sanofi-aventis is now ranked 4th in the pharmaceutical industry of Pakistan, with a market share of 4.5%. sanofi-aventis S.A, is one of the worlds leading pharmaceutical companies and is ranked number one in Europe. 3. Marketing and Medical Activities The marketing team at sanofi-aventis Pakistan limited designed strategies and innovative marketing initiatives to drive sales growth and maximize the value of brands while operating within the medico-marketing ethical framework. Each brand team strived to introduce innovation to provide better management options of various diseases to clinicians. The activities were focused on major therapeutic areas throughout the year including medico marketing activities, diagnostic support for patients etc. These initiatives helped sanofi-aventis to maintain market leadership position in several therapeutic classes in a very competitive environment. sanofi-aventis participates in different scientific and medical congresses and workshops related to diabetes, infectious diseases, osteoporosis, oncology and cardiovascular diseases etc. Continuing Medical Education opportunities were extended to clinicians in different therapeutic areas like diabetes, infectious disease, cardiovascular disease, oncology and Deep Vein Thrombosis etc. - areas where major burden of disease lies in Pakistan. Flagyl, the no.1 brand of sanofi-aventis Pakistan limited, is moving rapidly towards the Billion landmark with double digit positive growth. This growth is a result of innovative marketing initiatives like local speaker programs, scientific product presentations, water for life campaign and intravenous medication programs for health professionals. Typhoid and Urinary Tract Infections are common infections affecting a large segment of the population. Through clinicians, 6000 patients were provided free early diagnostic facilities for detection of Typhoid and Urinary Tract Infections during the year. Maintaining the tradition of facilitating academic activities, various events such as lectures by experts and Key Opinion Leaders, round table discussions, seminars and symposia etc were organized during the year. Around 7000 doctors participated, thus enabling them to enrich and update their medical practice. Keeping in view the importance of paediatric segment, focused activities like round table discussions and local speaker programs were arranged covering indications like Sepsis, pneumonia and bacterial meningitis. In order to promote and highlight sanofi-aventis state of the art manufacturing facility and processes, Claforan and Haemaccael plant visits were arranged for the doctors to demonstrate quality of sanofi-aventis products. sanofi-aventis Pakistan limited, the leader in anti Diabetic market, offers a complete range of anti diabetics which include Amaryl, Daonil, Neodipar, Lantus and Apidra. General Practioners (GP) play a key role in the management of diabetes and are a primary contact point for the patient. GPs were updated on management on diabetes and standard of care. Educational materials were also developed for the benefit of diabetic patients. Further, diagnostic facilities like rapid HbA1c testing and diabetes detection drives were also organized free of cost for the patients at various clinics. Moreover, a campaign titled "Celebrating 10 years of Performance" was launched to commemorate the 10th anniversary of Amaryl launch. The campaign included Patient awareness and benefit programs at Diabetic clinics. We also organized an international level CME program "Mission Diabetes" involving two leading international speakers namely Prof. Anoop Misra from India and Dr. Radhakrishna Sothiratnam from Malaysia. The company also actively participated in a World Diabetes Day organized by various institutions across Pakistan. Lantus team is promoting the use of insulins with long acting insulin analogue Lantus and rapid acting insulin analogue Apidra for diabetes patients of Pakistan. The latest ADA guidelines support the use of basal insulin in the early stage of diabetes helping patients reach their glycemic goals effectively and safely. Some of the key events for the year included Key Opinion Leader development and engagement of doctors through CMEs and participation in major diabetes conference and APDLS meeting which emphasized on building the concept of early insulinazation. In order to educate doctors on drug quality, Lantus plant visit in Germany was arranged for Key Opinion Leaders followed by lectures from experts around the world on the subject. This event also provided the platform to launch SoloSTAR and SoloSTAR device registry in coordination with the Medical Department. With the introduction of Lantus SoloSTAR in December, 2008 we are confident to establish the ease of use of administering Insulin and helping more patients reaching their diabetes goal and therefore expects increase in sales of Lantus. As a part of creating awareness about venous thromboembolism, an ENDORSE seminar was arranged at the company Head Office in Karachi inviting 90 key doctors including ENDORSE investigators, DVT Advisory Board members and leading Key Opinion Leaders of Medicine, Surgery, Orthopedics, Urology, Gynecology, ICU and Anesthesiology. The VTE guidelines in different specialities were also presented by Clexane Key Opinion Leaders. Xatral indicated for the management of Benign Prostate Hyperplasia (BPH) is a growing brand of sanofi-aventis Pakistan limited. To assess the current practice of Urologists in the management of Acute Urinary Retention (AUR) a study was conducted globally including Pakistan by the name RETENWORLD. The interim results of the study showed that treatment with a 1- blocker before a TWOC consistently improves the chances of successful catheter removal, regardless of the duration of catheterization. Xatral was the most preferred alpha blocker in this study by Urologists. These results were shared with prominent Urologists of Pakistan. The cardiothrombosis team is responsible for promoting Plavix, Clexane and Cordarone. Key events for the year for Cardiothrombosis team included CMEs on Acute Coronary Syndrome (ACS) and participation in major cardiology conferences while clinical trials in acute coronary syndrome remained in progress. In order to curb the menace of counterfeit of Plavix, patient information material was also developed and delivered to doctors to help them understand and educate their patients about the difference between fake and original Plavix.

38 39 The Oncology Franchise which offers Taxotere and Eloxatine regularly arranges various programs to enable oncologists to discuss the most recent research findings in cancer treatment. The remarkable efficacy coupled with a good safety profile makes both Taxotere and Eloxatine the agent of choice in the treatment of cancer at every stage of the disease. Comprehensive training sessions for field force were organized at the launch of Xerosec and Rhinathiol. Further, participation in various conferences was also made to promote the generic products of the Company. To summarize our various initiatives, we were able to provide educational, diagnostic and promotional support to our clinicians, patients and brands respectively through well-planned initiatives to ensure a meaningful contribution to society from a medicomarketing perspective. During 2008, the Medical Department undertook 13 clinical studies to address various questions of the medical community. These clinical research projects, some of which are ongoing, were in the areas of diabetes, deep vein thrombosis, acute urinary retention, breast cancer and psychiatric disorders. Over 5000 patients were recruited to 13 studies across Pakistan involving approximately 150 investigators during the year. This includes two large scale studies recruiting over 1000 patients namely the SAVE study for Deep Vein Thrombosis (DVT) and PONDs study for Diabetes. Solostar study was also initiated to coincide with the launch of the new insulin delivery devise Lantus SoloSTAR. Two national seminars were held to disseminate findings from the ENDORSE study on DVT published in the LANCET and the World Reten study on Benign Prostate Hypertrophy published in the British Journal of Urology. Investigators presented local data to Key Opinion Leaders in the respective fields. This year too, presentations were made to leading oncologists highlighting the features and quality of Taxotere, the original research molecule docetaxel. The department also focused on disseminating findings of the most current published medical literature related to disease areas and new treatment modalities particularly in the fields of hypertension, cardiology, diabetes and cancer. Concern for safety is a corner stone at sanofi-aventis. Six SOPs were developed by the medical department that will help minimize patient related and business risks. Up-gradation of skills is an ongoing process at sanofi-aventis. Accordingly, a member of the medical team attended a six weeks course in medical ethics conducted by the Aga Khan University in collaboration with the Johns Hopkins University, USA. The medical director also attended a two week leadership training program conducted by the University of Chicago Graduate School of Business at Singapore campus. sanofi-aventis is determined to improving standards of health care in Pakistan. With sparse library facilities available in the country, access to cutting edge articles to the medical profession and post-graduate students is limited. sanofi-aventis through its global network has real-time access to over 1000 peer-reviewed indexed journals which facilitate the academia in their research and keeping abreast with the latest innovations in the medical field. Health care professionals rate this as one of the best services in the industry. This is evident from the fact that 4,500 medical related queries were received from the medical profession. The following new products, including line extensions, were added to our product portfolio in 2008: Xerosec (Omeprazole) - launched in January 2008: Xerosec (Omeprazole) is a later generation specific inhibitor of the gastric proton pump in the parietal cells indicated for the treatment of Acid Peptic Disease. Due to dietary habits and life styles in Pakistan, acid reflux and Gastro duodenal ulcers incidence are on the rise. Rhinathiol (Carbocystein) - launched in July 2008: Rhinathiol (Carbocystein) is for treatment of acute Bronchitis. Due to increasing environmental pollution and poverty the incidence of respiratory tract disorders is on the rise. LANTUS SoloSTAR (insulin glargine) - launched in December 2008: To help all patients with T1 and T2 diabetes achieve their treatment targets, Lantus SoloSTAR and Apidra SoloSTAR is the best combination of insulin and the easy to use pen that is easier to inject. Lantus SoloSTAR is now launched in Pakistan and Apidra SoloSTAR is to be launched in 2009. We will establish SoloSTAR as the preferred pen, supporting the Lantus & Apidra leadership position in the diabetes market. 8. 5. 4. Capital Expenditure Expansion of production facilities and modernization of plant and machinery remains a high priority of the Company. Capital expenditure of Rs.534.8 million (2007: Rs.186.8 million) was incurred during the year on expansion, facility improvement and rationalization. As part of its facility improvement & rationalization program, the Company has initiated a project for divestment of its Wah site. Accordingly work on a new liquid manufacturing facility at the Karachi site was initiated, which is progressing as per plan and the commercial production is expected to start in the second quarter of the year 2010. Other capital investments were also made including expansion of the Haemaccel plant and upgrading of the IQC laboratory etc which are expected to start commercial production in first quarter of 2009. In addition to the manufacturing facilities, we also invested in technology and infrastructure upgrading, as well as in equipment for improvement of GMP/EHS and security. Profit, Finance & Taxation As already mentioned earlier, profitability was lower than last year mainly on account of Pak Rupee depreciation, frozen selling prices and soaring inflation resulting in an across the board cost increase including depreciation due to significant capital expenditure. The profit, taxation and proposed appropriations are stated below: ( Rs. in '000' ) 84,365 47,414 1,284 (2,602) 46,096 38,269 (1,270) (628) 36,371
Profit for the year before taxation Taxation : Current - for the year Prior Period Deferred Total Profit after taxation Unappropriated loss brought forward - as restated Actuarial loss recognized directly in equity - net off deferred taxation Profit available for appropriations Appropriations : Proposed final dividend @14% out of profits for the year ended Dec 31, 2008 Unappropriated profit carried forward
(13,503) 22,868
A good return & payout to shareholders is one of the primary objectives of your Company. However, taking into account economic recession, higher level of our borrowings due to capital commitments and Pak Rupee depreciation, increased borrowings rates and lower profitability as compared with prior years, the Directors are pleased to recommend a dividend of Rs.1.40 per share of Rs.10 each, for approval by the shareholders. 6. Cashflow Pak Rupee depreciation, consequent impact on profitability for the year, increase in stocks, some other current assets, finance cost and capital expenditure etc has resulted in a significant increase of the running finance utilized under mark-up arrangements at the end of the year under report, as compared to the end of the previous year. 7. Related Party Transactions All related party transactions, during 2008, were approved by the Board and these are in line with the transfer pricing policy with related parties approved by the Board previously. The company maintains a full record of all such transactions, alongwith the terms and conditions. Financial Statements The financial statements of the Company have been audited and approved without qualification by the auditors of the Company, Ford Rhodes Sidat Hyder & Co. Chartered Accountants.

40 41 9. Awards for Best Practices and Corporate Reporting This year your Company has won national and international awards for the best presented corporate reporting for the year 2007. In July 2008, the joint committee of the Institute of Chartered Accountants of Pakistan and the Institute of Cost & Management Accountants of Pakistan selected the annual report of your company for the year 2007 as the fifth best report in the Chemical & Fertilizer Sector. We also won a bronze medal for the best presented accounts for the year 2007 in the Hospitality, Health, Transport & Shipping Category from the South Asian Federation of Accountants. These awards reflect our unrelenting emphasis on accountability through transparency, meeting timeliness and completeness of information, excellent governance framework and dedication to best practices, ethics and values. 10. Human Resource The principle of equal opportunity is central to our HR policies and we are committed to equipping all employees for their job roles and support them to realize their full potential. Training and development plans are integral part of performance review process and includes specific training events to develop new skills. During the year our human resources department was involved in a number of projects, which, inter-alia, included: - simplification of the appraisal process with a more user friendly format for field force performance appraisal; - participation in a job fair at Expo Centre to create awareness about sanofi-aventis; - Orientation Program for new employees (both at head office & industrial site); - Promoting Diversity - Women's Day was celebrated and a program was organized for all female employees which included presentation on Breast Cancer by an Oncologist; - Sales Certification course - conducted for field staff; - sessions on Leadership Essentials to roll out the District Manager Competencies; - Leadership Quest training for all Sales and Business Managers; - sessions on Communication skills for employees of Head Office / Sales; The management's relations with the Collective Bargaining Agent (CBA) remained cordial and industrial peace prevailed throughout the year. As of December 31, 2008, total numbers of permanent employees stood at 789 (2007: 846). 11. Contribution to National Exchequer During the year the company paid over Rs.279 million to the government and its agencies on account of various government levies including custom duty and income tax. 12. Corporate Social Responsibility The Company operates in a socially responsible manner and is committed to the highest standards of corporate behaviour. Accordingly, the Company's CSR program has a very wide scope encompassing initiatives in the areas of heath care, education, environment protection, water and sanitation, child welfare, infrastructure development and other social welfare activities. Following is a snapshot of the Company's CSR initiatives during the year: - donations to various institutions, primarily supporting health and education in the country; - blood donation drive in association with the Patients' Welfare Association (PWA), a WHO recognized organization providing blood to poor patients free of cost. Well over 80 employees registered to donate blood; 14. Website All our stakeholders and general public can log on to the sanofi-aventis Pakistan limited website at www.sanofi-aventis.com.pk b. a. 13. - collaborated with the Rabies in Asia Foundation to raise awareness about rabies prevention on World Rabies Day. Developing 'National Guidelines on Rabies Management' in collaboration with the President of the Pakistan chapter of the Rabies in Asia Foundation; - organized an Earthquake Relief Drive to support victims of the earthquake which claimed over 300 lives and displaced thousands in Balochistan, Pakistan. The collection was presented to 'Dawn Relief', a leading social welfare organization working in the affected region; - 'My Child Matters'; a UICC (International Union against Cancer) / sanofi-aventis partnership to improve the access to treatment care and support for children with cancer in low and middle income countries was also extended to Pakistan in 2008. We expect Pakistan shall be able to secure grant(s) for the humanitarian project(s) in 2009; - sponsored a Breast Cancer Awareness ad campaign with Shaukat Khanum Memorial Hospital during Breast Cancer Awareness month. This is part of an on-going effort to spread awareness about breast cancer; - the sacred trip to Makkah often uses up a Muslim's entire life's savings. Every year, sanofi-aventis sends a non-management staff member to perform Hajj. In 2008, two employees were sent for the pilgrimage as the person sponsored in 2007 was not able to go; - in a joint venture with Nestle Pure Life to spread awareness about health and hygiene, Flagyl provided 200 clinics with Nestle hot and cold water dispensers during the summer, when water-borne diseases are on the rise; - Amaryl patient awareness campaign entitled, Celebrating 10 Years of Performance. The campaign included a series of programs, which were run across the country in major public and private diabetic centers/clinics. In addition to free diabetes screening, public awareness lectures were organized with a comprehensive presentation on 'Diabetes Prevention' and 'Better Management Techniques' in order to improve the quality of diabetic patients' lives. Patient awareness literature was also distributed during these presentations. These presentations were usually made by the Professor/Head of the department at the center/clinic. Information Technology As part of our group strategies, we continue to invest more and more in IT and upgrade of related infrastructure, thereby continuously enhancing qualitative aspects of management reporting. This also involves enhancement of internal controls over information processing. IT spending during the year 2008 amounted to over Rs.8 million and following are some of the highlights relating to IT activities: Infrastructure: - upgraded all sales offices to DSL high speed connectivity; - connectivity of all sales offices to head office via secure VPN; - investments in new servers and Centralized Storage (SAN). These enhancements will increase retention of organizational data and facilitate efficient centralized storage for the entire organization; - investments in computers for District Managers in Sales department to enhance their productivity; Business Solutions: - workflow projects to improve productivity and create a paperless environment, such as electronic approvals (eAED) - enhancement of eTMS system that manages sales force monitoring, performance, incentives, primary and secondary sales consolidation, these include: dashboard application to enable sales personnel to review and monitor their sales performance and indicators; electronic expense system that automatically calculates sales re-imbursements based on system generated travel plans and call history; new reports for district managers to keep them updated with weekly sales summary customized for their team

42 43 15. Environment, Health & Safety The Company recognizes safety as the key component of operational excellence and gives utmost importance to training of employees and contractors to enhance safety awareness and actively incorporate industry best practices in the overall operating setup. Following are some of the key activities undertaken during the year with an objective to attain highest safety standards: - training of 300 employees on first aid, fire fighting, learning experiences, contractor safety and other key safety elements; - Infra Red Thermography conducted for workers; - emergency drill conducted for industrial affairs and head office employees; - office safety inspection conducted for head office employees with company doctor as auditor; and - addition of sugar and cholesterol testing facility in our medical centre; Our commitment to Environment, Health & Safety is manifested in all our activities as no major accident was reported in 2008. 16. Directors There was no change in the Board of Directors after the election of Directors in the last AGM. 17. Compliance with the Code of Corporate Governance The Stock Exchanges have included in their listing rules the Code of Corporate Governance (Code) issued by the Securities & Exchange Commission of Pakistan. The Company has adopted the Code and is implementing the same in letter and spirit. 18. Statement of Ethics and Business Practices The Board has adopted the Statement of Ethics and Business Practices. All employees are informed of this Statement and are required to observe these rules of conduct in relation to customers, suppliers and regulations. A confirmation that these rules have been followed is obtained from all employees every year. 19. Audit Committee There was no change in the composition of audit committee during the year. In compliance with the requirements of the Code for Corporate Governance, audit committee is composed of the following 2 non-executive directors and one alternate Director: 1. Mr. Syed Hyder Ali 2. Mr. Eric Le-Bris 3. Dr. Amanullah Khan Mr. Yasir Pirmuhammad (Head of Internal Audit) 20. Pattern of Shareholding A statement of the pattern of shareholding is shown on page 81. 21. Earnings Per Share Earnings per share after tax was Rs.3.97 (2007: Rs.7.81). 22. Holding Company The Company is a subsidiary of SECIPE, France and the ultimate parent of the Group is sanofi-aventis S.A., France. During the year SECIPE acquired 3,479,469 and 1,620,000 ordinary shares from its associated undertakings viz. Hoechst GmbH, Germany and Plasma Investments (U.K.) Limited respectively as part of global restructuring program. 23. Auditors The Audit Committee and Directors recommend retention of the retiring Auditors Messrs Ford Rhodes Sidat Hyder and Co., Chartered Accountants, for the year ending on December 31, 2009. Secretary Chairman 24. Corporate and Financial Reporting Framework The financial statements prepared by the management of the Company present fairly its state of affairs, the result of its operations, cash-flows and changes in equity. Proper books of accounts of the Company have been maintained. Appropriate accounting policies have been consistently applied in preparation of financial statements except for change arising from amendments of applicable accounting standards or interpretations and accounting estimates are based on reasonable and prudent judgment. During the year, the Company has reassessed the useful lives of the EDP equipments included within factory and office equipment and decided to write off the cost of all EDP equipments with the exception of computer servers over 4 years instead of 3 years to reflect more accurately the relationship between the effective useful life of the assets and depreciation charge. International Accounting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure therefrom has been adequately disclosed. The system of internal control which is in place, is being continuously reviewed by internal audit. The process of review will continue and any weakness in controls will be removed. There are no significant doubts upon the Companys ability to continue as a going concern. There has been no material departure from the best practices of Corporate Governance as detailed in the listing regulations. Key operating and financial data for the last 6 years is shown on page 84. The value of investments of provident, gratuity and pension funds based on their accounts as on December 31, 2008 (audit in progress) was as follows : Provident Fund Gratuity Fund Pension Fund Rs.246,041,374 Rs.169,513,752 Rs.214,924,628
The outstanding duties, statutory charges and taxes, if any, have been duly disclosed in the financial statements. During the last business year four meetings of the Board of Directors were held. Attendance by each Director was as follows : Name of Director Messrs : 1. 2. 3. 4. 5. 6. 7. 8. 9. Syed Babar Ali Tariq Wajid Pir Ali Gohar Syed Hyder Ali Tariq Iqbal Khan Jean Louis Grunwald Eric Le-Bris Jean-Marc Georges M. Z. Moin Mohajir - Arshad Ali Gohar (Alternate for Mr Pir Ali Gohar) - Mohammad Amjad (Alternate for Carmelo D'Ancona / Jean- Mark Georges) - Shakeel Mapara (Alternate for Mr. Eric Le-Bris) - Dr. Amanullah Khan (Alternate for Mr J.L.Grunwald) No. of Meetings Attended 4 4 1 3 1 none none none 4 1 3
3 3

44 Leave of absence was granted to Directors who could not attend the Board Meetings and they were represented by their respective alternates. 25. a) No trade in the shares of the Company was carried out by the Directors, CEO, CFO, Company Secretary, Executives and their spouses & minor children. Statement of Ethics and Business Practices has been approved by the Board and signed by all Directors and employees of the Company as per the requirement in the Code of Corporate Governance.
Statement of Compliance with the Code of Corporate Governance

for the year ended December 31, 2008
45 This statement is being presented to comply with the Code of Corporate Governance contained in Regulation No. 37, 43 and 36 of listing regulations of the Karachi Stock Exchange (Guarantee) Limited, Lahore Stock Exchange (Guarantee) Limited and Islamabad Stock Exchange (Guarantee) Limited respectively, for the purpose of establishing a framework of good governance, whereby a listed company is managed in compliance with the best practices of corporate governance. The Company has applied the principles contained in the Code in the following manner: 1) The Company encourages representation of independent non-executive directors and directors representing minority interest on its Board of Directors. At present the Board includes 7 non-executive Directors, out of which 4 directors represent minority shareholders. The directors have confirmed that none of them is serving as a Director in more than ten listed companies including this Company, except for one director, who has been given special relaxation by SECP in this matter. All the resident Directors of the Company are registered as tax payers and none of them has defaulted in payment of any loan to a banking company, DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange. Casual vacancies occurring in the Board during the year were duly filed up by the Directors within 30 days thereof. The Company has prepared a Statement of Ethics and Business Practices, which has been signed by all the directors and employees of the Company. The Board has developed a vision / mission statement, overall corporate strategy and significant policies of the Company. A complete record of particulars of the significant policies along with the dates on which they were approved or amended has been maintained. All the powers of Board have been duly exercised and decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive Directors, have been taken by the Board. The meetings of the Board were presided over by the Chairman and, in his absence, by the Director elected by the Board for this purpose and the Board met atleast once in every quarter. Written notices of the Board meetings, along with the agenda and working papers, were circulated atleast seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated. All the Directors on the Board are fully conversant with their duties and responsibilities. For incoming Directors the orientation course will be arranged in due course.
Future Outlook New line of business, product launches and line extensions in 2009 - Vaccine Business integration: As mentioned earlier, for over 20 years, sanofi pasteur vaccines have been marketed in Pakistan through a distributor and your Company is ranked number 4th in the vaccine business although globally sanofi pasteur is the largest in vaccine business and serves nearly a quarter of the global market providing protection from 20 infectious diseases. In March, the vaccines registrations were transferred to sanofi-aventis Pakistan limited and a separate Business Unit was formed together with plans to initiate various programs including vaccine awareness, vaccine-economics, and educational activities. A synergy is being developed between sanofi-aventis and sanofi pasteur products through joint planning and implementation. These initiatives will help build the concept of vaccines for all age groups and eventually make the sanofi pasteur brand synonymous with vaccines in Pakistan. - New Products and Line Extensions in Pharmaceuticals Business: During the year 2008, sanofi-aventis group has launched acquisition projects concerning a couple of leading generic companies in a move to accelerate sales growth and further extend its pharmaceutical portfolio in emerging markets. Thus, showing groups commitment not only in the pharmacy field but also in the generic field. We also plan to launch few more new products, including line extensions to our existing portfolio of products and generics, during the year 2009 which we believe shall also contribute to our top line.
2)
3)
4) 5)
6)
7)
b)
Capital Expenditure As mentioned last year, we had a planned capital expenditure of over Rs.1 billion starting from 2008, out of which Rs.534.8 million were expanded during the year under report. Most of the expenditure relates to expansion, modernization, balancing, and upgrading of our production facilities. The continuously high level of capital expenditure every year demonstrates a vote of confidence of the main shareholders of the company to the country and its economic management. 8)
c)
Sales & Profitability We believe your company has the potential to maintain sales growth in the year 2009, notwithstanding the events described above and expect good growth potential for the pharmaceutical industry in Pakistan. However, these expectations are subject to future events and are subject to change. Although the sales volume growth is expected to contribute positively to the bottom line, growth in profitability will be largely dependent on, continued cost controls, stability of the Pak Rupee and control of inflationary trend in the country. 9)
10) There were no new appointments of CFO, Company Secretary and Head of Internal Audit during the year. 11) The Directors Report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. 12) The financial statements of the Company were duly endorsed by CEO and CFO before approval of the Board. 13) The Directors, CEO and executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding. 14) The Company has complied with all the corporate and financial reporting requirements of the Code. 15) The Board has formed an audit committee. It comprises of three members, two of whom are non-executive directors including the chairman of the Audit Committee. 16) The meetings of the audit committee were held once in every quarter prior to approval of interim and final results of the Company and as required by the Code. The terms of reference of the committee has been formed and advised to the committee for compliance.
26.
General The Board looks forward to the forthcoming Annual General Meeting of the shareholders to discuss Company performance in 2008, and is profoundly thankful for the trust and confidence reposed in the Board by the shareholders. We are exceedingly grateful to our employees as good results are first and foremost due to people, and thank all the employees whose efforts played a major role in the results achieved in 2008. By order of the Board
Syed Babar Ali Chairman Karachi: 13th February, 2009
Tariq Wajid Chief Executive
17) The Board has set-up an effective internal audit function.
Statement of Compliance with the Code of Corporate Governance

46 18) The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan. 19) The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. 20) We confirm that all other material principles contained in the code have been complied with. By order of the Board
Review Report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance
47
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of sanofi-aventis Pakistan limited to comply with the Listing Regulation No. 37, 43 and 36 of Karachi, Lahore and Islamabad Stock Exchanges, respectively, where the Company is listed. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of the Companys compliance with the provisions of the Code of Corporate Governance and report if it does not. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code. As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Boards statement on internal control covers all controls and the effectiveness of such internal controls. Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Companys compliance, in all material respects, with the best practices contained in the Code of Corporate Governance as applicable to the Company for the year ended 31 December 2008.
Syed Babar Ali Chairman
Karachi: 13th February, 2009
Ford Rhodes Sidat Hyder & Co. Chartered Accountants Karachi: 13th February, 2009
A member firm of Ernst & Young Global Limited
Auditors Report to the Members

48
Balance Sheet
as at December 31, 2008
49 December 31, December 31, 2008 2007 -------------Rupees in '000------------(Restated)
Note ASSETS NON-CURRENT ASSETS Fixed assets Property, plant and equipment Intangible asset Long-term loans Long-term deposits CURRENT ASSETS Stores and spares Stock-in-trade Trade debts Short term loans and advances Trade deposits and short-term prepayments Other receivables Taxation - payment less provision Cash at banks
We have audited the annexed balance sheet of SANOFI-AVENTIS PAKISTAN LIMITED as at 31 December 2008 and the related profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereof for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. It is the responsibility of the 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 perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that: (a) (b) (i) in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984; in our opinion: the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied except for the change, as stated in note 3, with which we concur; the expenditure incurred during the year was for the purpose of the Company's business; and the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company; 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 part 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 31 December 2008 and of the profit, its cash flows and changes in equity for the year then ended; and in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under Section 7 of that Ordinance.
4 5 6 7
1,195,249 729 6,361 3,325
790,624 1,384 8,944 3,425
8 9 10 11 12 13 14
40,912 1,104,944 151,951 24,188 40,585 135,252 269,802 2,186 1,769,820 8,871 2,984,355
42,278 1,077,021 137,920 24,543 26,789 100,136 212,887 2,102 1,623,676 2,428,053
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE TOTAL ASSETS EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Share Capital Reserves NON-CURRENT LIABILITY Deferred taxation CURRENT LIABILITIES Trade and other payables Accrued mark-up on short term borrowing Short-term borrowing
15
(ii) (iii) (c)
16 17
96,448 1,020,164 1,116,612 70,147
96,448 1,017,676 1,114,124 73,087
18
19 20
(d)
892,998 32,086 872,512 1,797,596
688,130 10,527 542,185 1,240,842
CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES The annexed notes 1 to 39 form an integral part of these financial statements. Ford Rhodes Sidat Hyder & Co. Chartered Accountants Karachi: 13th February, 2009
21 2,984,355 2,428,053
A member firm of Ernst & Young Global Limited
Profit and Loss Account

50 December 31, December 31, 2008 2007 -------------Rupees in '000------------(Restated)
Cash Flow Statement

51 December 31, December 31, 2008 2007 -------------Rupees in '000------------(Restated) 366,877 (65,554) (105,613) 2,583 100 198,393 209,070 (47,537) (132,309) (2,616) 3,565 (103) 30,070
Note
Note CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Finance costs paid Income tax paid Retirement benefits paid Long-term loans and advances (net) Long-term deposits (net) Net cash generated from operating activities CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure Sale proceeds from disposals of operating fixed assets Interest received Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES Repayment of long-term finances Repayment of short-term loans Dividends paid Net cash used in financing activities NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 29
NET SALES Cost of sales GROSS PROFIT Distribution and marketing expenses Administrative expenses Other operating expenses Other operating income
22 23
4,346,528 (3,290,705) 1,055,823
3,896,267 (2,811,542) 1,084,725 (756,301) (105,403) (63,781) 21,638 (903,847) 180,878 (64,987) 115,891 (40,589) 75,302
23 23 24 25
(757,135) (122,627) (57,392) 52,809 (884,345)
(534,800) 48,060 375 (486,365)
(186,824) 1,947 1,003 (183,874)
OPERATING PROFIT Finance costs PROFIT BEFORE TAXATION Taxation NET PROFIT FOR THE YEAR 27 26
171,478 (87,113) 84,365 (46,096) 38,269
(42,271) (42,271) (330,243) (540,083) 30 (870,326)
(62,500) (100,000) (68,278) (230,778) (384,582) (155,501) (540,083)
BASIC EARNINGS PER SHARE (Rs. per share)
28
3.97
7.81
CASH AND CASH EQUIVALENTS AT END OF THE YEAR The annexed notes 1 to 39 form an integral part of these financial statements.
The annexed notes 1 to 39 form an integral part of these financial statements.
Statement of Changes in Equity

52
Capital Reserves
Issued, subscribed and paid-up share capital Difference of share capital under scheme of arrangement for amalgamation
Notes to the Financial Statements

53 1. THE COMPANY AND ITS OPERATIONS The Company was incorporated in Pakistan in 1967 under the Companies Act, VII of 1913, as a public limited company. The shares of the Company are listed on Karachi, Lahore and Islamabad Stock Exchanges. It is engaged in the manufacturing and selling of pharmaceutical products. The registered office of the Company is located at Plot No. 23, Sector 22, Korangi Industrial Area, Karachi. 2. 2.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Statement of Compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail. 2.2 Significant accounting judgements and estimates The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The matters involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are as follows: (i) Provision for doubtful debts and stocks The Company has used judgements, based on the history of the transactions, for making provisions for the doubtful debts whereas provision for stocks is based on the current market conditions. Management believes that the changes in the outcome of estimates will not have significant effect on the financial statements. (ii) Post retirement benefits The Company has post retirement benefit obligations, which are determined through actuarial valuations using various assumptions as disclosed in note 13.3 below. Management believes that the changes in assumptions will not have significant effect on the financial statements. (iii) Taxation The Company takes into account the current income tax laws and decisions taken by appellate authorities while recognising provision for income tax. The amounts are not provided for matters, disclosed in note 21.1(c) below, where the Company's view differs from the view taken by the income tax department at the assessment stage and where the Company considers that the matters in appeals will be decided in favour of the Company. Management believes that if the final outcome of the cases differs from the management's assessment, such differences will impact the income tax provision in the period in which such determination is made. (iv) Share based compensation plans The Company has share-based transactions involving group companies shares accounted for using various assumptions as disclosed in note 17.1 below. Management believes that the changes in assumptions will not have significant effect on the financial statements.
Revenue Reserves
Long term liabilities forgone
Other (note 3)
General reserve
Unappropriated profit
Total
--------------------------------------------------Rupees in '000-------------------------------------------------Balance as at January 01, 2007 as previously reported Effect of change in accounting policy on account of recognition of Employees Benefit Cost under IFRS-2 Share-based Payment and IFRIC-11 Group and Treasury Share Transactions- [note 3] Balance as at January 01, 2007 as restated Actuarial gains / (losses) taken directly to equity [note 13.3] Deferred tax on actuarial gain recognised Net profit for the year ended December 31, 2007 as restated Employee benefit cost under IFRS 2 Share-based Payment- [note 3] Final dividend for the year ended December 31, 2006 Transfer to general reserve Balance as at December 31, 2007 as restated Actuarial gains / (losses) taken directly to equity [note 13.3] Deferred tax on actuarial loss recognised Net profit for the year ended December 31, 2008 Employee benefit cost under IFRS 2 Share-based Payment- [note 3] Final dividend for the year ended December 31, 2007 Transfer to general reserve Balance as at December 31, 2008
96,448
5,935
18,000
685,538
310,220
1,116,141
96,448 96,448 96,448
5,935 5,935 5,935
18,000 18,000 18,000
6,842 6,842 10,194 17,036 7,284 24,320
685,538 150,000 835,538 100,000 935,538
(6,842) 303,378 13,736 (32,771) 75,302 (68,478) (150,000) 141,167 (966) 338 38,269 (42,437) (100,000) 36,371
1,116,141 13,736 (32,771) 75,302 10,194 (68,478) 1,114,124 (966) 338 38,269 7,284 (42,437) 1,116,612
The annexed notes 1 to 39 form an integral part of these financial statements.

54 55 Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future event that are believed to be reasonable under the circumstances. There have been no critical judgements made by the Company's management in applying the accounting policies that would have the most significant effect on the amounts recognised in the financial statements. 2.3 Standards, interpretations and amendments to published approved accounting standards that are not yet effective The following revised standards and interpretations with respect to approved accounting standards as applicable in Pakistan would be effective from the dates mentioned below against the respective standard or interpretations. Standard or Interpretation Effective date (accounting periods beginning on or after) (ii) IAS 1 - Presentation of Financial Statements (Revised) IAS 23 - Borrowings Costs (Revised) IAS 27 - Consolidated and Separate Financial Statements (Revised) IFRS 3 - Business Combinations IFRS 8 - Operating Segments IFRIC 12 - Service Concession Arrangements IFRIC 13 - Customer Loyalty Programs January 01, 2009 January 01, 2009 January 01, 2009 July 01, 2009 January 01, 2009 January 01, 2008 July 01, 2008 2.6 Intangible asset computer software Computer software licences acquired by the Company are stated at cost less amortisation. Cost represents the cost incurred to acquire the software licences and bring them to use. The cost of computer software is amortised over the estimated useful life as disclosed in note 5 to the financial statements. The useful lives of intangible assets are reviewed at each reporting date. The effect of any adjustment to useful lives is recognised prospectively as a change of accounting estimate. Cost associated with maintaining computer softwares are charged to profit and loss account. 2.7 Long term loans and deposits Long term loans and deposits are stated at cost. 2.8 Stores and spares These are valued at cost less provision for slow moving and obsolete stores and spares. Cost is determined on moving average basis except for the stores and spares in transit which are stated at invoice price plus other charges incurred thereon up to the balance sheet date. Value of items are reviewed at each balance sheet date to record provision for any slow moving items, where necessary. 2.9 Stock-in-trade These are valued at lower of cost and net realisable value. Goods in transit are valued at cost, comprising invoice values plus other charges incurred thereon accumulated to the balance sheet date. Cost signifies standard costs adjusted by variances. Cost in relation to work-in-process and finished goods represent direct cost of materials, direct wages and appropriate manufacturing overheads. Net realisable value signifies the estimated selling price in the ordinary course of business less estimated costs necessarily to be incurred to make the sale. Provision is made for slow moving and expired stock where necessary. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company accounts for impairment by reducing its carrying value to the recoverable amount. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profit and loss account in the year the asset is derecognised. Subsequent costs are not recognised as assets unless it is probable that future economic benefits associated with these costs will flow to the Company and the cost can be measured reliably. Maintenance and normal repairs are charged to profit and loss account as and when incurred. Capital work-in-progress Capital work-in-progress is stated at cost less impairment in value. It consists of expenditure incurred and advances made in respect of tangible fixed assets in the course of their construction and installation.
The Company expects that the adoption of the above standards and interpretations will have no material impact on the Company's financial statements in the period of initial application except for IAS 23 - Borrowings Costs, which requires an entity to capitalize borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be withdrawn. 2.4 Basis of measurement These financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies herein below. 2.5 (i) Property, plant and equipment Operating fixed assets These are stated at cost less accumulated depreciation, except for freehold land and capital work-in-progress, which are stated at cost. Cost of leasehold land is amortised over the period of the lease. Depreciation on all other assets is charged to profit and loss account applying the straight-line method whereby the cost of an asset less residual value, if not insignificant, is written off over its estimated useful life. The rates used are stated in note 4.1 to the financial statements. In respect of additions depreciation is charged from the month in which asset is put to use and on disposal up to the month the asset is in use. Additional depreciation at the rate of fifty percent of the normal rate is charged on such machinery which is operated on double shift during the year. The assets residual values, useful lives and methods are reviewed, and adjusted if appropriate, at each financial year end. The effect of any adjustment to residual values, useful lives and methods is recognised prospectively as a change of accounting estimate.

56 57 2.10 Trade debts and other receivables These are recognised and carried at original invoice amount, being the fair value, less an allowance for any uncollectible amounts, if any. An estimate for doubtful debts is made when collection is no longer probable. Bad debts are written-off when identified. 2.11 Non-current assets classified as held for sale Non-current assets are classified as held for sale if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use. These assets are available for sale in their present condition subject only to terms that are usual and customary for sales of such assets and their sale is highly probable. Previously such assets were included as a part of property, plant and equipment under non-current assets. The Company measures its non-current assets classified as held for sale at the lower of carrying amount and fair value less costs to sell. Costs to sell signify the incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense. 2.12 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand, balances with banks on current and deposit account and outstanding balance of running finance facilities availed by the Company. 2.13 Trade and other payables Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Company. 2.14 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. 2.15 Employees benefits Defined benefit plans The Company operates an approved funded gratuity scheme and an approved funded non-contributory pension scheme in respect of all permanent employees and senior management staff respectively excluding expatriates. The schemes define the amounts of benefit that an employee will receive on or after retirement subject to a minimum qualifying period of service under the schemes. The amounts of retirement benefits are usually dependent on one or more factors such as age, years of service and salary. The liabilities recognised in respect of gratuity and pension schemes are the present values of the defined benefit obligations under each scheme at the balance sheet date less the fair value of respective plan assets. The gratuity and pension obligations are calculated annually by independent actuaries using the Projected Unit Credit Method. The most recent valuation in this regard was carried out as at December 31, 2008. The present values of the obligations are determined by discounting the estimated future cash outflows using interest rates of high quality government securities that have terms to maturity approximating to the terms of the related obligations. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised directly in equity in the statement of changes in equity in the period in which they arise. The Company provides for compensated absences of its employees on unavailed leave balances in the period in which the leave is earned on the basis of accumulated leaves and the last drawn pay. 2.17 Taxation Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into account tax credits and tax rebates available, if any, and tax under the final tax regime. Deferred Deferred tax is recognised using the liability method, on all major temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax assets are recognised for all deductible temporary differences and carry-forward of unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and/or carry-forward of unused tax losses can be utilised. The carrying amount of all deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax assets to be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the profit and loss account except for deferred tax arising on recognition of actuarial loss or gain which is charged or directly credited to equity. 2.18 Foreign currency translation These financial statements are presented in Pak Rupee, which is the Company's functional and presentation currency. Foreign currency transactions during the year are recorded at the exchange rates approximating those ruling on the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange which approximate those prevailing on the balance sheet date. Gains and losses on translation are taken to income currently. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. 2.19 Revenue recognition Sales and toll manufacturing income are recorded on despatch of goods; Return on deposits is recognised on accrual basis; and Licence fee is recognised on accrual basis. Defined contribution plan The Company also operates a recognised provident fund scheme for all permanent employees excluding expatriates. Equal monthly contributions are made, both by the Company and the employees, to the fund at the rate of 10 percent of basic salary. 2.16 Compensated absences

58 59 2.20 Borrowing Cost Borrowing cost is recognised as an expense in the period in which it is incurred. 2.21 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 profit and loss account currently. 2.22 Derivative financial instruments and hedging activities Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value at each reporting date. The Company enters into derivative transactions mainly to hedge foreign currency liabilities or firm commitments and these are designated as fair value hedge. Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the profit and loss account, together with any changes in the fair value of the hedged liability that are attributable to the hedged risk. 2.23 Off-setting of financial instruments
Year 2008
Note
December 31, December 31, 2008 2007 -------------Rupees in '000-------------
4.
PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets Capital work-in-progress
4.1 4.2
644,858 550,391 1,195,249
646,912 143,712 790,624
4.1
Operating fixed assets

Written down value
Cost
Transfers to non-current assets classified as held As at Disposals / for sale January 01, Additions Writeoff* (note 15)
Accumulated depreciation / amortisation
Note
As at December 31, Rate
As at January 01,
Transfers to non-current assets classified as held Charge for Disposals / for Sale As at As at the year Writeoff* (note 15) December 31, December 31,
-------------------------- Rs. in '000 --------------------------
------------------------------ Rs. in '000 ------------------------------
A financial asset and a financial liability is offset and the net amount is reported in the balance sheet if the Company has a legally enforceable right to set-off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. 2.24 Dividends and appropriation to general reserve Dividends and appropriation to general reserve are recognised in the financial statements in the period in which these are approved. 2.25 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. Where awarded shares relate to Group Companies, a corresponding reserve is created to reflect the equity component. 3. CHANGE IN ACCOUNTING POLICY ON ADOPTION OF IFRS 2 - SHARE-BASED PAYMENT AND IFRIC 11 - IFRS-2 GROUP AND TREASURY SHARE TRANSACTIONS Upon adoption of IFRS 2 - Share-based Payment and IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions, as referred to in note 2.25 above, the Company has adopted the accounting policy with respect to the recognition of employee benefits cost, arising from the award of shares of sanofi-aventis S.A., France. Such cost had not been previously recognised. The above adoption has been applied retrospectively and accordingly comparative amounts in respect of profit for the year and equity have been restated for all the prior periods presented through adjustment to the opening balance of unappropriated profit in accordance with the transitional provisions of IFRS 2. Had the Company not adopted the said policy, amounts in respect of profit after tax for the year and unappropriated profit would have been higher by Rs.7.284 million and Rs.24.320 million, respectively, (December 31, 2007: Rs.10.194 million and Rs.17.036 million respectively) and other reserves would have been lower by the amount of unappropriated profit, stated above.
Freehold land Leasehold land Building on freehold land Building on leasehold land Plant and machinery Furniture and fixtures Motor vehicles Factory and office equipment 4.1.2 4.1.1
8,350 480 42,200 439,238 756,792 25,128 50,749 130,390 1,453,327
32,339 37,374 176 45,905 12,327 128,121
4,617 5,051 18,287 1,917 29,872
8,201 1,247 9,448
149 480 40,953 466,960 789,115 25,304 78,367 140,800 1,542,128
1.23 5 5 10 10 20 7-33
130 34,681 107,871 544,144 7,574 18,882 93,133 806,415
5 1,461 20,138 56,272 2,233 12,193 13,175 105,477
176 2,910 9,144 1,815 14,045
577 577
135 35,565 127,833 597,506 9,807 21,931 104,493 897,270
149 345 5,388 339,127 191,609 15,497 56,436 36,307 644,858
Year 2007 Freehold land Leasehold land Building on freehold land Building on leasehold land Plant and machinery Furniture and fixtures Motor vehicles Factory and office equipment 4.1.1 8,350 480 42,200 242,979 659,037 20,335 29,159 109,088 1,111,628 196,259 98,787 4,793 22,626 26,873 349,338 1,032 1,036 4,789 782* 6,857 782* 8,350 480 42,200 439,238 756,792 25,128 50,749 130,390 1,453,327 1.23 5 5 10 10 20 7-33 124 33,140 89,830 493,587 5,406 12,067 83,624 717,778 6 1,541 18,041 51,589 2,168 7,221 14,728 95,294 1,032 406 4,780 439* 6,218 439* 130 34,681 107,871 544,144 7,574 18,882 93,133 806,415 8,350 350 7,519 331,367 212,648 17,554 31,867 37,257 646,912
*Assets written off primarily represent items that are obsolete or redundant and have no economic value to the Company.

60 61 4.1.1 The Company has granted to Bayer Crop Science (Private) Limited, Karachi, an associated undertaking, two exclusive licences for the use of the land for a period of 20 years, commencing April 12, 1997 and October 1, 1997, respectively. The fee for each licence for the first three years was Rs.2.60 million and Rs.0.82 million, respectively. Thereafter, the fee is to be enhanced every year on the anniversary of the agreements on the basis of the rate of inflation in Pakistan calculated on a twelve months moving average in the official Consumer Price Index published prior to the relevant anniversary of the agreement. 4.1.2 During the current year, the Company reassessed the useful lives of its Electronic Data Processing (EDP) equipment (included in factory and office equipment) to reflect more accurately the relationship between the effective useful lives of the assets and resulting depreciation charge. As a result, all EDP equipment, with the exception of computer servers, are depreciated over a period of 4 years, instead of depreciating the same over 3 years. The said change in estimate has resulted in depreciation charge for the current year to be lower by Rs.2.663 million and profit before taxation for the year to be higher by the same sum. 4.1.3 The details of operating fixed assets disposed off, having net book value in excess of Rs.50,000 each, are as follows: 184 976 Description Cost Accumulated Net book Sale depreciation value proceeds -------------------- Rs. in '000 --------------------857 888 504 245 504 393 390 50 886 1,561 864 886 142 237 370 37 168 85 136 384 156 417 458 715 651 134 208 336 308 254 50 502 1,405 447 428 966 766 307 1,770 423 350 350 450 733 1,375 468 690 Mode of disposal Tender Bid -do-do-doInsurance Claim -do-do-doTender Bid Company Policy Tender Bid Company Policy Tender Bid Particulars of buyers 504 Malik Muhammad Khaliq A-19, Block-I, North Nazimabad, Karachi -do-do-doInternational General Insurance Ltd. D-32, Block-2, Kehkashan, Clifton, Karachi -do-do-doWasim Mirza A-32, Block-10/A, Gulshan-e-Iqbal, Karachi Syed Viqar Haider (Ex-Executive) A-48, Block-H, North Nazimabad, Karachi Muhammad Irfan (Employee) A-531, Sector 11-B, North Karachi Munzar Ishaq (Ex-Executive) Shaharyar House, D-39, Block 4, Kehkashan, Clifton, Karachi Afzal Hameed (Employee) House No. B-20, Central Govt. Housing Society, Gulshan-e-Iqbal, Karachi Saddar ul Islam (Employee) House No.94-A, Sindhi Muslim Society, Darwashia Mosque, Azad Jamhoria Colony, Karachi Kamran Yamin (Executive) A-57, City Homes, Block 13-D-2, Gulshan-e-Iqbal, Karachi Items having book value of less than Rs.50,000 each 94 6 88 635 130 39 91 335 Company Policy Company Policy Tender Bid Yasir Pirmuhammad (Executive) 306 Suleman Arcade, Jamaluddin Afghani Road, Karachi Moin Mohajir (Executive) 108/11/11 Khayaban-e-Hilal, DHA Phase VI Karachi Afzal Yar Khan (Employee) 25-J, Block-2, P.E.C.H.S., Karachi-29 130 39 91 355 Company Policy Masaud Ahmad (Executive) D-179/1, Block-7, Gulshan-e-Iqbal, Karachi 742 491 686 417 56 74 465 256 -doTender Bid 76 97 370 1 2 134 75 95 368 377 421 Tender Bid -doTender Bid 3 828 181 148 396 478 Company Policy Company Policy Description Cost Accumulated Net book Sale depreciation value proceeds ------------------ Rs. in '000 ------------------9,831 195 195 3,593 4 4 6,238 191 191 9,725 440 442 Tender Bid Tender Bid Muhammad Usman (Employee) H.No. 2/590, Shah Faisal Colony, Karachi-2 Siddique Balauch (Ex-Employee) House No. T-533/B, Near KMC Primary School, Chanesar Goth, Karachi Mamoona Firdous Naqvi (Executive) House No. 2 & 3, Shah Faisal Town, Karachi Asim Jamal (Ex-Executive) 111-A, 16th Street, Main Khayaban-e-Nishat, Phase VI, D.H.A., Karachi Muhammad Yamin House # 875/3, Block-3, F. B. Area, Karachi -doZahid Qadri House # 15 A -4, R-536, Bufferzone, Karachi -doArif Ali (Employee) House No. B-252, Lala Rukh, WAH Cantt. Mode of disposal Particulars of buyers
balance b/f Vehicles - continued
Vehicles
1,320
1,320
402
504
126
378
344
3,322 18,287
1,832 9,144
1,490 9,143
8,900 23,995
Various
Various
795
583
212
457
Tender Bid
504 balance c/f 9,831
294 3,593
210 6,238
276 9,725
Company Policy

62 63 Description Accumulated Net book Sale depreciation value proceeds -------------------- Rs. in '000 --------------------Cost Mode of disposal Particulars of buyers Note 6. LONG-TERM LOANS Considered good - unsecured Employees Current maturity shown under current assets December 31, December 31, 2008 2007 -------------Rupees in '000-------------
Plant & Machinery Items having book value of less than Rs.50,000 each Factory & Office equipment
621 365
621 294
71
97 37
Negotiations Company Policy
Various Mohammad Amjad (Executive) House No.56/1, 5th Street, Off Khayaban-e-Momin, Phase-V Defence Housing Authority, Karachi 6.1 Various
6.1 11
11,367 (5,006) 6,361
14,209 (5,265) 8,944
Items having book value of less than Rs.50,000 each
1,552 1,917
1,521 1,815 176 2,289 2,465 14,045
31 102 4,441 2,141 6,582 15,827
56 93 7,513 16,362 23,875 48,060
Negotiations
Gain due to fire: Building Plant & Machinery
Loans to employees have been given for the purchase of motor cars, motor cycles and personal expenses, in accordance with the Company's policy. Loans for the purchase of motor cars and motor cycles are interest free whereas personal loans, representing capital goods funds and housing scheme, carry mark-up / interest at the rate of 9.00% and 16.50% (2007: 9.00%) per annum, respectively. These are repayable within five years in equal monthly installments, except for capital goods funds which is repayable over a period of three years. Note December 31, December 31, 2008 2007 -------------Rupees in '000------------3,439 (114) 3,325 3,539 (114) 3,425
4,617 4,430 9,047
Insurance Claim
Adamjee Insurance Company Limited I.I Chundrigar Road, Karachi 7. December 31, December 31, 2008 2007 -------------Rupees in '000------------LONG-TERM DEPOSITS Long-term deposits Provision against deposits considered doubtful STORES AND SPARES Stores Provision against obsolete stores
Grand Total
29,872
4.2
Capital work-in-progress
8.
Building on leasehold land Plant and machinery Others Advances to contractors and suppliers
155,060 329,423 7,836 492,319 58,072 550,391
31,246 41,756 3,566 76,568 67,144 143,712 9.
14,906 (20) 14,886 27,196 (1,170) 26,026 40,912
14,449 (17) 14,432 28,947 (1,101) 27,846 42,278
Spares Provision against obsolete spares
5.
INTANGIBLE ASSET
Cost Accumulated amortisation Written down value
STOCK-IN-TRADE Raw & packing material and auxiliaries In hand In transit 9.1 Work-in-process
As at As at January 01, Addition December 31, --------------- Rs. in '000 --------------Year 2008 Computer software 1,965 1,965
Rate %
Charge As at for As at As at January 01, the year December 31, December 31, ------------------------ Rs. in '000 ------------------------
545,693 25,831 571,524 30,614
514,345 60,535 574,880 34,862
33
581
655
1,236
729
Year 2007 Computer software 1,450 515 1,965 33 40 541 581 1,384
Finished goods In hand In transit Provision against slow moving finished goods
9.2 & 9.3
519,284 14,272 533,556 (30,750) 502,806 1,104,944
482,642 25,351 507,993 (40,714) 467,279 1,077,021

64 65 9.1 This includes raw and packing material held with third parties, aggregating to Rs.4.601 (2007: Rs.6.200) million, at the end of the current year. This includes cost of physician samples, aggregating to Rs.13.082 (2007: Rs.15.749) million, at the end of the current year. This includes finished goods costing Rs.197.999 (2007: Rs.174.088) million valued at net realisable of Rs.171.205 (2007: Rs.147.019) million, at the end of the current year. TRADE DEBTS - unsecured December 31, December 31, 2008 2007 -------------Rupees in '000------------4,720 147,231 151,951 15,008 166,959 (15,008) 151,951 902 137,018 137,920 15,008 152,928 (15,008) 137,920 13. 12. TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS Trade deposits Tender deposits Margin against letters of credit Provision against tender deposits considered doubtful Short-term prepayments Note December 31, December 31, 2008 2007 -------------Rupees in '000-------------
9.2 9.3
10.
Note
22,297 10,634 32,931 (2,284) 30,647 9,938 40,585
11,054 9,090 20,144 (2,563) 17,581 9,208 26,789
Considered good Related parties Others Considered doubtful Others
10.1
OTHER RECEIVABLES Due from related parties Employees' pension fund Employees' gratuity fund Insurance claim Amounts due from ex-employees Provision against loans due from ex-employees 13.1 & 13.2 13.3 13.3 13.6 & 13.7 33,969 77,547 23,335 2,522 (2,522) 1,623 (1,623) 401 135,252 15,141 75,449 6,895 2,445 2,696 (2,696) 7,229 (7,229) 206 100,136
Provision against debts considered doubtful
10.1 Included herein are the following related parties: Pakistan Telecommunication Company Limited Telephone Industries of Pakistan Packages Limited sanofi-aventis (Thailand) limited 1,757 13 2,950 4,720 792 87 23 902
Sales tax refundable Provision against sales tax refundable considered doubtful Miscellaneous
10.2 The maximum amount due from related parties at the end of any month during the year was Rs.4.721 (2007: Rs.1.269) million.
11.
SHORT TERM LOANS AND ADVANCES Considered good - unsecured Loans Current maturity of long-term loans to employees Advances Executives Employees Contractors and suppliers
13.1 Included herein are the following reimbursements due from the related parties: AGP (Private) Limited Bayer CropScience (Private) Limited Aventis Pharma Deutschland GmbH Sanofi Winthrop Industries Fisons UK 1,088 552 32,329 33,969 5,119 56 9,634 332 15,141
5,006
5,265
11.1
135 5,571 13,476 19,182 24,188
2,411 6,775 10,092 19,278 24,543
13.2 The maximum amount due from related parties at the end of any month during the year was Rs.62.976 (2007: Rs.17.672) million.
11.1
The maximum aggregate amount due from executives at the end of any month during the year was Rs.1.817 (2007: Rs.2.411) million.

66 67 13.3 The status of the funds and principal assumptions used in the actuarial valuation as of December 31, 2008 were as follows: Rs. in 000 Pension Fund 2008 2007 ---------- Rs. in '000 ---------Balance sheet reconciliation as at December 31, Present value of defined benefit obligations Fair value of plan assets Net assets / (liability) in balance sheet Movement in asset / (liability) Prepayment as at January 1, Credit / (charge) for the year Contribution during the year Actuarial gain / (loss) recognised in equity Prepayment / (liability) as at December 31, (Credit) / Expense recognised Service cost Interest cost Expected return on plan assets Annual amortisation of unrecognised Past service cost Gratuity Fund 2008 2007 ---------- Rs. in '000 ---------Plan assets comprise of: Funded pension plan Debt Others (includes cash and bank balances) 2008 % Rs. in 000 2007 %
89,413 166,053 255,466
35 65 100
182,414 54,487 236,901
77 23 100
(177,919) 255,466 77,547
(161,452) 236,901 75,449
(171,279) 166,410 (4,869)
(144,111) 151,006 6,895
75,449 967 1,131 77,547
62,803 1,291 166 11,189 75,449
6,895 (9,667) (2,097) (4,869)
11,697 (9,799) 2,450 2,547 6,895
Funded gratuity plan Debt Others (includes cash and bank balances)
101,510 64,900 166,410
61 39 100
134,395 16,611 151,006
89 11 100
Comparison for five years: 2008 2007 2006 2005 2004 --------------------------------- Rupees in '000 ---------------------------------
6,955 16,611 (24,533) (967) 25,518
4,463 14,347 (20,101) (1,291) 28,568
10,898 14,393 (15,624) 9,667 20,731
10,026 12,220 (13,245) 798 9,799 16,772
Funded pension plan Present value of defined benefit obligations Fair value of plan assets Surplus Experience adjustments Actuarial gain on obligations Actuarial gain on plan assets Funded gratuity plan Present value of defined benefit obligations Fair value of plan assets (Deficit) / surplus
(177,919) 255,466 77,547
(161,452) 236,901 75,449
(151,813) 214,616 62,803
(145,345) 194,352 49,007
(137,866) 174,731 36,865
Actual return on plan assets Movement in the defined benefit obligation Obligation as at January 1, Service cost Interest cost Benefits paid Actuarial (gain) / loss Obligation as at December, 31 Movement in fair value of plan assets Fair value as at January 1, Expected return on plan assets Employer contributions Benefits paid Actuarial gain Fair value as at December 31, Key actuarial assumptions used are as follows: Discount factor used Expected rate of returns per annum on plan assets Expected rate of increase in future salaries per annum Indexation of pension Retirement age
146 985
2,999 8,467
6,474 10,513
864 8,889
3,887 2,526
161,452 6,955 16,611 (6,953) (146) 177,919
151,813 4,463 14,347 (6,449) (2,722) 161,452
144,111 10,898 14,393 (5,327) 7,204 171,279
126,742 10,026 12,220 (5,857) 980 144,111
(171,279) 166,410 (4,869)
(144,111) 151,006 6,895
(126,742) 137,641 10,899
(118,975) 115,955 (3,020)
(101,196) 107,841 6,645
236,901 24,533 (6,953) 985 255,466
214,616 20,101 166 (6,449) 8,467 236,901
151,006 15,624 (5,327) 5,107 166,410
137,641 13,245 2,450 (5,857) 3,527 151,006
Experience adjustments Actuarial loss/(gain) on obligation Actuarial gain/(loss) on plan assets
7,204 5,107
721 3,528
(9,039) 6,288
(11,158) (1,240)
(6,786) 1,707
13.4 The expected return on plan assets is based on the market expectations and depends upon the asset portfolio of the plan, at the beginning of the period, for returns over the entire life of the related obligation. 13.5 Based on actuarial advice, the amount of expected contribution to gratuity and pension funds in 2009 will be Rs 12.176 million and negative Rs 2.062 million, respectively.
13.0% 13.0% 12.5% 8.5% 58 yrs
10.5% 10.5% 10.0% 6.0% 58 yrs
13.0% 13.0% 12.5% 58 yrs
10.5% 10.5% 10.0% 58 yrs 13.6 Included herein is a sum of Rs. 20.671 million due from an insurance company in respect of electric panels and cables damaged during the current year on account of fire at the Karachi manufacturing site. The excess of amount claimed over written down value of electronic panels and cables has been recorded under other operating income (note 25). 13.7 Included herein is a sum of Rs.1.416 (2007: Rs.1.308) million due from an insurance company, which is a related party.

68 69 Note 14. CASH AT BANKS In current accounts 14.1 Included herein is a sum of Rs.0.595 (2007: Rs.0.345) million, representing refundable deposits received from distributors, transporters and suppliers. 15. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE Freehold land Building on freehold land - at written down value 15.1 15.1 8,201 670 8,871 Revenue reserves General reserve Unappropriated profit 14.1 2,186 2,102 December 31, December 31, 2008 2007 -------------Rupees in '000------------17. RESERVES Capital reserves Long term liabilities forgone Difference of share capital under scheme of arrangement for amalgamation Other Note December 31, December 31, 2008 2007 -------------Rupees in '000------------(Restated)
5,935 18,000 24,320 48,255 935,538 36,371 971,909 1,020,164
5,935 18,000 17,036 40,971 835,538 141,167 976,705 1,017,676
17.1
15.1 The Company in its fortieth Annual General Meeting, held on March 19, 2008, resolved to dispose freehold land and building located at 87-A, Satellite Town, Rawalpindi, with the approval of shareholders of the Company. The agreement in this regard has been executed, with necessary related formalities expected to be completed by February 16, 2009. These are measured at the lower of carrying amount and fair value less cost to sell.
17.1 Share-based compensation plans As at December 31, 2008, the Company had following equity settled share-based compensation plans: (a) Stock Option Plans: sanofi-aventis S.A., France (the Parent Company) granted a number of equity-settled share-based payment plans (stock option plans) to some of its employees, including employees of sanofi-aventis Pakistan limited (the Subsidiary Company). These plans entitled the eligible employees to acquire shares of the parent company by exercising options granted to them, subject to the fulfillment of the vesting conditions. In accordance with IFRS 2 (Share-Based Payment), services received from employees as consideration for stock options 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 option plans of the shares of the parent company and is charged against income on a straight-line basis over the four-year vesting period of the plan. The fair value of stock option plans is measured at the date of grant, using the Black & Scholes valuation model, taking into account the expected life of the options. The benefit cost recognised therefore relates to rights that vested during the reporting period for all plans granted by sanofiaventis S.A., France. Details of the terms of exercise of stock subscription options granted under the various plans are presented below in sanofiaventis S.A., France, share equivalents. These options have been granted to certain corporate officers and employees of the Group companies, including sanofi-aventis Pakistan limited. The table shows stock subscription option plans granted by sanofi-aventis S.A., France to the employees of sanofi-aventis Pakistan limited and accounted for under IFRS-2, which are still outstanding.
Options outstanding at December 31, 2008 (number)
16.
SHARE CAPITAL December 31, December 31, 2008 2007 ------------Number of Shares-----------December 31, December 31, 2008 2007 -------------Rupees in '000-------------
Origin
Date of grant
Vesting period (years)
Options granted (number)
Start date of exercise period
Expiration date
Exercise price ()
During the current year, a group restructuring exercise was carried by the Parent Company. As a result thereof, a total of 5,099,469 Ordinary shares of Rs.10 each, aggregating to Rs.50,994,690, constituting 52.88% of issued share capital of the Company, were transferred to SECIPE (a wholly owned subsidiary of sanofi-aventis S.A.) from Hoechst GmbH,Germany (36.08%) and Plasma investments UK Limited (16.80%). However, sanofi-aventis S.A., France, has remained the ultimate parent company.
sanofi-aventis S.A., France sanofi-aventis S.A., France sanofi-aventis S.A., France
31/05/2005 14/12/2006 13/12/2007
4 4 4
13,500 13,300 13,900 40,700
01/06/2009 15/12/2010 14/12/2011
31/05/2015 14/12/2016 13/12/2017
70.38 66.91 62.33
10,500 11,800 13,400 35,700
The exercise of each option will result in the issuance of one share of sanofi-aventis S.A., France.

70 71 Summary of stock option plans: A summary of stock options outstanding at each balance sheet date, and of changes during the relevant periods, is presented below: Number of options Options outstanding at January 1, 2007 of which exercisable Options granted Options exercised Options cancelled Options forfeited Options outstanding at December 31, 2007 of which exercisable Options granted Options exercised Options cancelled Options forfeited Options outstanding at December 31, 2008 of which exercisable Measurement of stock option plans Stock options plans were not granted during the year 2008. The fair value of the plan awarded in 2007 to the employees of sanofi-aventis Pakistan limited amounted to Rs.14.548 million at the grant date. The following assumptions were used in determining the fair value of the plan awarded in 2007: Dividend yield: 3.08% Residual life: 6 years Volatility of sanofi-aventis S.A., France, shares, computed on a historical basis: 19.36% Risk-free interest rate: 4.21% 26,800 13,900 40,700 (5,000) 35,700 Weighted average exercise price per share ( ) 68.66 62.33 66.50 68.53 66.21 18. DEFERRED TAXATION Credit balances arising from: Accelerated tax depreciation allowance Recognition of actuarial gain on retirement benefit plans Debit balances resulting from: Short-term provisions against: - trade debts - stock in trade - stores & spares - Others Liabilities outstanding for more than three years 19. TRADE AND OTHER PAYABLES Trade Creditors Related parties Other trade creditors Other payables Accrued liabilities Royalty and technical fee Advances from customers Workers' Profit Participation Fund Workers' Welfare Fund Central Research Fund Compensated absences Security deposits Contractors' retention money Employees gratuity fund Unclaimed dividend Unrealised loss on re-measurement of forward exchange contract 19.1 19.2 491,222 102,882 594,104 226,301 5,771 4,615 1,726 853 24,299 10,595 14,188 4,869 1,701 3,976 298,894 892,998 337,848 72,836 410,684 191,797 29,276 3,928 6,936 2,592 1,273 18,254 345 4,209 1,535 17,301 277,446 688,130 Note December 31, December 31, 2008 2007 -------------Rupees in '000------------66,148 27,326 66,757 30,708
(4,301) (8,811) (341) (5,923) (3,951) 70,147
(4,396) (11,923) (327) (3,692) (4,040) 73,087
19.3 13.3
The fair value of the options granted in 2007 at grant date is 11.92 per option. The expense recognised for stock option plans, and the corresponding entry taken to equity, amounted to Rs.7.284 million during the current year and Rs.8.195 million during the year ended December 31, 2007. As of December 31, 2008, the total cost related to non-vested share-based compensation arrangements amounted to Rs.18.333 million to be recognised over a weighted average period of 3 years. (b) Employee share ownership plans: The sanofi-aventis Group may offer its employees the opportunity to subscribe to reserved share issues at a discount to the reference market price. Shares allotted to employees under these plans fall within the scope of IFRS 2. The discount is measured at the subscription date and recognised as an expense, with no reduction for any lock-up period. At the end of 2007, sanofi-aventis S.A., France offered its employees, including employees of the subsidiary companies an employee share ownership plan, Action 2007. Under the plan, employees could acquire shares ranking for dividend from January 1, 2007 at a 20% discount to the average quoted market price for the 20 trading days preceding the date on which the Board of Directors of sanofi-aventis S.A., France approved the plan (October 30, 2007) i.e. discounted price at 48.55 per share. Further, the shares acquired under the above scheme have a locked-up period of 5 years i.e. are nontradable for a period of 5 years. The subscription period was from November 19, 2007 through November 30, 2007, and a total of 1,884 shares were subscribed by the employees of sanofi-aventis Pakistan limited. An expense of Rs.1.999 million was recognised in respect of this share issue in the profit & loss account for the year ended December 31, 2007. There were no share issues reserved for employees during the year 2008.
19.1 Included herein is a sum of Rs.5.081 (2007: Rs.3.508) million due to related parties on account of expenses incurred by them on behalf of the Company. 19.2 Workers' Profit Participation Fund Balance at the beginning of the year Allocation for the year Interest on funds utilised in Company's business Amount paid to the Trustees of the Fund 19.3 Included herein is a sum of Rs.10 million (2007: Nil), representing non-refundable security deposit received from the buyer during the current year in respect of non-current assets held-for-sale, as discussed in note 15. 20. SHORT-TERM BORROWING Running finances utilised under mark-up arrangements - secured 872,512 542,185 24 26 6,936 4,615 11,551 94 11,645 (7,030) 4,615 19,336 6,936 26,272 931 27,203 (20,267) 6,936

72 The facilities for running finances available from various banks under mark-up arrangements aggregated to Rs.1,255 (2007: Rs.1,320) million. These facilities expire on various dates, latest by December 31, 2008. The rates of mark-up range between Rs.0.4115 and Rs.0.48657 (2007: Rs.0.2753 and Rs.0.2904) per Rs.1,000 per day. The facilities are secured against first pari passu charges on stock-in-trade and book debts of the Company. Out of the facilities of Rs.784 (2007: Rs.804) million for opening the letters of credit, guarantees and bill discounting, the unutilised amount was Rs.556 (2007: Rs.725) million as at the end of the year.
21. CONTINGENCIES AND COMMITMENTS
23. OPERATING COST Cost of Sales 2008 Distribution and marketing expenses Administrative expenses
73
Total
2007 2008 2007 2008 2007 2008 2007 (Restated) (Restated) (Restated) (Restated) ----------------------------------------- Rupees in '000 ----------------------------------------Raw, auxiliary and packing material consumed 2,238,719 1,839,126 Stores and spares consumed 11,898 6,584 Stationery and supplies consumed 3,899 3,517 Staff costs (note 23.1) 267,836 237,840 Fuel and power 108,772 80,090 Rent, rates and taxes 3,199 3,314 Lease rentals 1,758 2,137 Royalty and technical fee (note 23.2) Insurance 2,835 2,276 Repairs and maintenance 42,482 42,455 Raw, auxiliary and packing material written off 6,422 Provision for slow moving stores and spares - net 72 Depreciation / amortisation 77,107 70,413 Traveling and conveyance 35,204 32,828 Handling, freight and transportation Communication 3,700 2,148 Security and maintenance 3,981 3,282 Publication and subscription 97 1,031 Advertising, samples and sales promotion Commission expenses Software license / maintenance fee Provision against loans to ex-employees written back Provision for doubtful trade deposits written back Provision for doubtful trade debts written back Bad debts written off / (recovered) Other expenses 5,143 9,253 2,813,124 2,336,294 Recovery of service charges from outside parties (8,011) (8,327) 2,805,113 2,327,967 Opening work in process Closing work in process Cost of goods manufactured Opening stock of finished goods Finished goods purchased Finished goods written off Cost of samples issued under distribution and marketing expenses (Reversal of) / provision against slow moving finished goods Closing stock of finished goods 23.1 Staff costs Salaries, wages and other benefits - note 23.1.1 Training expenses Defined benefit plan Defined contribution plan Share based payments 255,727 324 3,836 6,926 1,023 267,836 225,967 573 3,834 6,119 1,347 237,840 228,242 4,846 3,995 8,489 2,328 247,900 216,640 6,570 3,938 1,847 3,334 232,329 53,342 84 869 2,328 3,933 60,556 37,446 55 736 7,171 5,513 50,921 537,311 5,254 8,700 17,743 7,284 576,292 480,053 7,198 8,508 15,137 10,194 521,090 34,862 (30,614) 19,261 (34,862) 5,545 247,900 1,796 5,061 7,244 5,709 4,876 1,692 15,936 178,570 32,198 10,011 1,078 123 203,963 21,863 2,904 (174) (279) 70 11,049 757,135 757,135 5,840 232,329 1,792 5,045 12,895 28,813 4,063 660 11,801 165,648 23,808 11,600 1,180 164 212,910 22,631 2,597 (283) (398) (540) (21) 13,767 756,301 756,301 462 60,556 6,490 386 1,860 636 9,094 13,089 13,877 11,172 1,821 628 1,737 819 122,627 122,627 2,238,719 1,839,126 11,898 6,584 304 9,906 9,661 50,921 576,292 521,090 5,973 117,058 87,855 370 8,646 8,729 1,862 10,862 16,894 5,709 28,813 591 8,347 6,930 10,783 53,268 53,898 13,621 8,574 9,773 1,710 14 201 6,422 72 106,132 227,651 32,198 24,883 6,880 848 203,963 21,863 4,641 (174) (279) 95,835 207,050 23,808 23,521 6,172 1,209 212,910 22,631 2,798 (283) (398)
21.1 Contingencies (a) Bank guarantees, aggregating to Rs.69.328 million, as at the end of the current year (2007: Rs.60.139) million have been given to the Collector of Customs in respect of exemption of levies on import of specified pharmaceutical materials, subject to the consumption of such raw materials within the specified period and to various other parties. Claims not acknowledged as debt amounted to Rs.26.287 (2007: Rs.15.391) million at the end of the current year. In finalising the tax assessment of former Rhone Poulenc Rorer Pakistan (Private) Limited for the assessment years 1994 - 95 to 1997-98, the Taxation Officer (TO) made additions mainly on the alleged contention that the Company had paid excessive amounts for importing certain raw materials, disallowances out of sales promotion, royalty paid to an associated company and certain other expenses.The said additions and disallowances have been set aside by the Income Tax Appellate Tribunal (ITAT). However, the department has filed appeals against the decision of the ITAT before the High Court. For the assessment years 1998-99 to 2002-03, the TO had again made similar additions. For the assessment years 1998-99 and 1999-2000, the ITAT has maintained the CIT (Appeals) order of setting aside the additions except of transfer pricing and certain selling expenses which have been deleted by CIT (Appeals). The Company has filed miscellaneous application before the ITAT against the order of ITAT. For assessment years 2000-01 to 2002-03, the ITAT has set-aside the sole issue of Transfer pricing which was deleted by CIT (Appeals). The TO has started fresh assessment for all the years i.e. from assessment years 1998-99 through 2002-03. The management of the Company is of the view that the final outcome of the above referred matters will be in favour of the Company and, hence, no provision of approximately Rs.217 million has been made in these financial statements, pending a final decision in these matters. 21.2 Commitments (a) (b) Commitments in respect of capital expenditure contracted for amounted to Rs.209.76 (2007: Rs. 251.545) million as at the end of the year. Commitments for rentals under operating lease agreements in respect of vehicles amounted to Rs.3.520 (2007: Rs.13.570) million at the end of the year, payable over the next five years, are as follows: December 31, December 31, 2008 2007 Years -------------Rupees in '000------------2008 9,997 2009 2,458 2,511 2010 708 708 2011 354 354 3,520 13,570 Commitments in respect of foreign exchange forward contracts with banks as at December 31, 2008 amounted to Rs.79.016 (2007: Rs.566.70) million. NET SALES Gross sales Local Export Toll manufacturing Returns Discounts 4,620,095 27,805 4,647,900 28,642 4,676,542 (46,266) (283,748) (330,014) 4,346,528 4,179,500 13,406 4,192,906 10,721 4,203,627 (21,577) (285,783) (307,360) 3,896,267
(b) (c)
(540) 70 (21) 706 17,011 23,726 105,403 3,692,886 3,197,998 (8,011) (8,327)
105,403 3,684,875 3,189,671
2,809,361 2,312,366 507,993 522,989 35,640 (41,758) 421,502 600,228 9,776 (41,936)
(c) 22.
(9,964) 17,599 (533,556) (507,993) 3,290,705 2,811,542

74 75 23.1.1 The Company as a result of voluntary separation scheme, has paid a sum of Rs.2.430 million and Rs.7.558 million to the workers at Wah Cantt and to the sales and marketing personnel, respectively, to achieve rationalisation and corporate restructuring. 23.2 The licence and technical assistance agreement dated September 11, 1997 between Aventis Pharma S.A., France (formerly Rhone Poulenc Rorer S.A., France) and sanofi-aventis Pakistan limited [formerly Rhone Poulenc Rorer Pakistan (Private) Limited] was terminated effective April 1, 2008. December 31, December 31, Note 2008 2007 -------------Rupees in '000------------24. OTHER OPERATING EXPENSES Auditors' remuneration Workers' Profits Participation Fund Workers' Welfare Fund Fixed assets written-off Contribution for research and development fund Legal and consultancy charges Donations Exchange losses - net Miscellaneous 24.1 Auditors' remuneration Audit fee Review of half yearly financial statements Special certification and reportings Out-of-pocket expenses 24.2 Names of donees in which a director or his spouse has an interest: LUMS School of Science & Engineering D.H.A, Lahore (Syed Babar Ali, Chairman, and Mr.Tariq Wajid, Chief Executive, are the members of the Board of Trustees of Lahore University of Management Sciences) World Wide Fund for Nature Fortune Centre, P.E.C.H.S, Karachi (Syed Babar Ali, Chairman, is a member of the Fund) 25. OTHER OPERATING INCOME Income from financial assets Interest on loans to employees Income from related parties License fee Interest income Income from non-financial assets Gain on sales of operating fixed assets Others Scrap sales Liabilities no longer payable written back Export rebate claims Miscellaneous 4.1.1 28. 375 5,772 5,772 32,233 11,452 1,149 314 1,514 14,429 52,809 204 5,781 799 6,580 1,308 Weighted average number of Ordinary shares 5,007 7,832 530 177 13,546 21,638 Earnings per share - Basic and Diluted BASIC EARNINGS PER SHARE There is no dilutive effect on the basic earnings per share of the Company, which is based on: Net profit for the year 38,269 Number of shares 9,644,760 9,644,760 75,302 560 190 254 60 1,064 533 172 288 130 1,123 24.1 19.2 1,064 4,615 1,726 853 7,803 430 38,527 2,374 57,392 1,123 6,936 3,495 343 1,273 4,748 846 44,312 705 63,781 25.1 Included herein a sum of Rs.17.293 million, representing excess amount claimed over written down value from an insurance company in respect of fixed assets damaged due to a fire as explained in note 13.6. Note 26. FINANCE COSTS Mark-up on: - long term financing - short term running finances - short term loans December 31, December 31, 2008 2007 -------------Rupees in '000-------------
83,594 83,594 19.2 94 3,425 3,519 87,113
2,599 35,798 22,902 61,299 931 2,757 3,688 64,987
Interest on Workers' Profit Participation Fund Bank charges
24.2
27.
TAXATION Current Prior Deferred 47,414 1,284 (2,602) 46,096 35,395 (20,018) 25,212 40,589
27.1 Explanation of relationship between accounting profit and tax expense: Accounting profit before taxation Income tax at the applicable tax rate 35% (2007: 35%) Effect of tax under presumptive tax regime and other adjustments - net Effect of share-based payments Effect of prior years' tax charge 84,365 29,528 12,735 2,549 1,284 46,096 115,891 40,562 16,477 3,568 (20,018) 40,589
600
25
30
December 31, December 31, 2008 2007 -------------Rupees in '000------------(Restated)
25.1
December 31, December 31, 2008 2007 -----------------Rupees ----------------(Restated) 3.97 7.81

76 77 Note December 31, December 31, 2008 2007 -------------Rupees in '000------------(Restated) 31. TRANSACTIONS WITH RELATED PARTIES The related parties of the Company comprise associated undertakings, employees' provident fund, employees' gratuity fund, employees' pension fund, directors and key management personnel of the Company. The Company in the normal course of business carries out transactions with various related parties. Amounts due from and to related parties, remuneration of Executives and the Chief Executive are disclosed in the relevant notes. There are no transactions with key management personnel other than under the terms of employment. Terms and conditions of transactions with related parties 106,132 (32,233) 7,284 8,700 (375) 87,113 105,891 366,877 95,835 343 (1,308) 10,194 8,508 (1,003) 64,987 (84,377) 209,070
i) ii) iii) iv) v) vi) vii) viii)
29.
CASH GENERATED FROM OPERATIONS Profit before taxation Adjustment for non-cash charges and other items: Depreciation Operating fixed assets written-off Gain on sales of operating fixed assets Expenses arising from equity settled share-based payment plans Retirement benefits Interest income Financial charges Working capital changes 84,365 115,891
The transactions with the related parties are made at normal market prices. There have been no guarantees provided or received for any related party receivables or payables. Other material transactions with related parties are given below:
December 31, 2008 December 31, 2007
29.1
Associated Associated undertaking undertaking by virtue of Retirement by virtue of Retirement Common Benefits Common Benefits Group Group Directorship Plans Plans Companies Total Companies Directorship Total ---------------------------------------------- Rs. in 000 --------------------------------------------------Gross sales Purchase of goods Purchase of services Recovery of service charges and other expenses Licence fee of land received Interest income earned Royalty and technical fee Contributions paid - Pension Fund - Gratuity Fund - Provident Fund 32,275 1,421,600 6,172 8,215 4,321 9,107 5,772 17,743 32,275 1,429,815 4,321 9,107 5,772 6,172 17,743 16,907 1,720,680 799 28,813 38,363 3,817 8,051 5,364 166 2,450 15,137 16,907 1,759,043 3,817 8,051 5,364 799 28,813 166 2,450 15,137
29.1 Working capital changes Decrease / (increase) in current assets: Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and short-term prepayments Other receivables - net Increase in current liabilities: Creditors, accrued and other liabilities - net (excluding accruals for financial charges and unclaimed dividend) 1,366 (27,923) (14,031) 355 (13,796) (39,913) (93,942) (2,718) (279,735) 9,173 (3,542) 20,954 24,601 (231,267)
31.1 Further, the impact of benefits available to the Chief Executive and Others recognised by the Company in the expenses during the year on account of share-based payment plans aggregate Rs.2.506 (2007: Rs.2.608) million and Rs.4.778 (2007: Rs.7.586) million respectively. 31.2 The related party status of outstanding balances as at December 31, 2008 are included in trade and other payables, trade debts and other receivables. The balances are unsecured and are settled in accordance with the terms and conditions of the transactions. 32. REMUNERATION OF THE CHIEF EXECUTIVE, A DIRECTOR AND EXECUTIVES The aggregate amounts charged in the financial statements for the year in respect of remuneration, including benefits, to the Chief Executive, Director and Executives of the Company are as follows:
Chief Executive Director Executives Total
199,833 105,891
146,890 (84,377)
Note
December 31, December 31, 2008 2007 -------------Rupees in '000-------------
30.
CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise of the following items: Cash at bank - current accounts Running finances utilised under mark-up arrangements 14 20 2,186 (872,512) (870,326) 2,102 (542,185) (540,083)
Managerial remuneration Profit sharing bonus Retirement benefits Perquisites and benefits: Rent and utilities Medical expenses Club subscription
2008 2007 2008 2007 2008 2007 2008 2007 ----------------------------------------- Rupees in '000 ----------------------------------------8,041 2,910 1,474 4,423 21 53 16,922 1 7,377 2,914 1,352 4,057 68 41 15,809 1 3,593 842 659 1,976 151 76 7,297 1 3,296 818 604 1,813 70 38 6,639 1 49,596 8,505 8,816 26,453 1,765 37 95,172 48 37,440 7,637 6,465 20,180 1,185 52 72,959 39 61,230 12,257 10,949 32,852 1,937 166 119,391 50 48,113 11,369 8,421 26,050 1,323 131 95,407 41
Number of person

78 34.2 Capital risk management The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may regulate the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The Company monitor its capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total bank borrowings less cash and bank balances. Total capital is calculated as equity, as shown in the balance sheet plus net debt. The gearing ratio as at December 31, 2008 and 2007 were as follows: December 31, December 31, 2008 2007 -------------Rupees in '000------------(Restated)
Total
79
In addition to the above remuneration, the Chief Executive, a Director and certain Executives are also provided with free use of the Company maintained cars. Further, the impact of benefits available to the Chief Executive, a Director and certain Executives recognised by the Company in the expenses during the year on account of share-based payment plans aggregated to Rs.2.506 (2007: Rs.2.608) million, Rs.1.250 (2007: Rs.1.443) million and Rs.3.528 (2007: Rs.5.921) million, respectively. The above remuneration of Director does not include amounts paid or provided by the related parties. Aggregate amount charged in the financial statements for fee to Directors other than working Directors was Rs.4,000 (2007: Rs.4,500). 33. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
33.1 Financial assets and liabilities

Interest / mark-up bearing Effective Rate of interest %
December 31, 2008 Financial assets Trade debts Loans to employees 9.00 & 16.50 Deposits Other receivables Cash at bank - current accounts Financial liabilities Running finances utilised under mark-up arrangements Trade and other payables Accrued mark-up 1,726 1,726 872,512 872,512 2,531 2,531 4,257 4,257 872,512 872,512 151,951 3,280 30,647 57,705 2,186 245,769 840,865 32,086 872,951 3,830 3,325 7,155 151,951 7,110 33,972 57,705 2,186 252,924 840,865 32,086 872,951 151,951 11,367 33,972 57,705 2,186 257,181 872,512 840,865 32,086 1,745,463
Non-interest / mark-up bearing Maturity upto one year Maturity after one Sub-total year
Maturity upto one year
Maturity after one year
Sub-total
------------------------------------- Rs. in 000 ---------------------------------------------
Total borrowings Less: cash and bank balances - note 14 Net Debt Total equity
872,512 (2,186) 870,326 1,116,612 1,986,938 44%
542,185 (2,102) 540,083 1,114,124 1,654,207 33%
Gearing ratio 34.3 Foreign exchange risk
15.02-17.76 -
Foreign exchange is the risk of loss through changes in foreign currency exchange rates. The Company is exposed to foreign exchange risk due to transactions denominated in foreign currencies. The Company uses forward contracts to hedge its exposure to foreign currency risk, where appropriate, however, due to the suspension of forward contracts by the State Bank of Pakistan effective July 8, 2008, the transactions of the Company are exposed to foreign exchange risks. 34.4 Interest rate risk Rates on both short term and long term finances vary with the changes in KIBOR rate.
December 31, 2007
34.5 Liquidity risk

Financial assets Trade debts Loans to employees Deposits Other receivables Cash at bank - current accounts Financial liabilities Running finances utilised under mark-up arrangements Trade and other payables Accrued mark-up 9 1,462 1,462 542,185 542,185 2,867 2,867 4,329 4,329 542,185 542,185 137,920 3,803 17,581 17,792 2,102 179,198 655,147 10,527 665,674 6,077 3,425 9,502 137,920 9,880 21,006 17,792 2,102 188,700 655,147 10,527 665,674 137,920 14,209 21,006 17,792 2,102 193,029 542,185 655,147 10,527 1,207,859
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Due to effective cash management and planning policy, the Company aims at maintaining flexibility in funding by keeping committed credit lines available. 34.6 Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values.
10.05-10.60 -
35.
CAPACITY AND PRODUCTION The capacity and production of the Company's manufacturing facility is undeterminable as it is a multi product plant involving varying processes of manufacture.
34.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
36.
DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue on February 13, 2009 by the Board of Directors of the Company.
34.1 Credit risk Credit risk represents the risk of a loss if the counter parties fail to perform as contracted. The Company's credit risk is primarily attributable to its receivables. Out of the total financial assets of Rs.257.181 (2007: Rs.193.029) million, the financial assets which are subject to credit risk amounted to Rs.254.995 (2007: Rs.190.927) million. The Company has no significant concentrations of credit risk. To manage exposure to credit risk, the Company applies credit limits to its customers and ensures that sales of products and services are made to customers with appropriate credit history and credit worthiness. 37.
MOVEMENT BETWEEN RESERVES AND PROPOSED DIVIDEND The Board of Directors in its meeting held on February 13, 2009 proposed a final dividend of Rs.1.40 per share for the year ended December 31, 2008, amounting to Rs. 13.503 million for approval of members at the Annual General Meeting to be held on March 25, 2009. These financial statements do not include the effect of the aforementioned proposed dividend.

80 38. COMPARATIVE FIGURES Prior year's material figures have been reclassified as follows for better presentation: From Property, plant and equipment (note 4.1) Trade and Other Payables (note 19) Accrued liabilities Finance costs (note 26) Exchange losses - net Cost of Sales (note 23) Others Intangible assets (note 5) Trade and Other Payables (note 19) Other trade creditors Retention money Other operating expenses (note 24) Exchange losses - net Cost of Sales (note 23) Repairs and maintenance To Rupees in 000 458 5,683 4,209 44,312 900
Pattern of shareholding
81 Shareholding From 1 101 501 1001 5001 10001 15001 20001 50001 55001 135001 200001 225001 235001 340001 510001 1075001 1160001 5095001 To 100 500 1000 5000 10000 15000 20000 25000 55000 60000 140000 205000 230000 240000 345000 515000 1080000 1165000 5100000 Number of Shareholders 312 357 81 74 7 2 4 2 1 1 1 1 1 1 1 1 1 1 1 850 Number of Shares Held 15,430 110,685 62,338 149,294 50,604 26,800 74,228 46,742 51,442 55,896 137,200 204,099 229,461 236,364 342,602 510,212 1,080,000 1,161,894 5,099,469 9,644,760
39.
GENERAL Figures presented in these financial statements have been rounded off to the nearest thousand rupees.
Shareholders Category
Number of Shareholders
Number of Shares held
Associated Companies, Undertakings and Related Parties NIT and ICP Directors, CEO and their Spouses Public Sector Companies and Corporations Banks, Development Finance Institutions, Non-Banking Finance Institutions Insurance Companies Others Individuals
3 2 12 2 2 1 21 807 850
6,312,805 465,825 1,120,002 1,284,099 140 19,200 46,757 395,932 9,644,760
65.45 4.83 11.61 13.31 0.20 0.49 4.11 100.00
Pattern of shareholding
82
Statement of Value Added

83 2008 Rs.000 % 2007 Rs.000 (Restated) %
Under clause (i) of sub-regulation (XIX) of Regulation 37 of chapter (XI) of the Listing Regulations of Karachi Stock Exchange (Guarantee) Ltd.
Shareholder Category
Number of Shareholders
Number of Shares held WEALTH GENERATED Net sales Materials and services Other income
Associated Companies, Undertakings and Related Parties SECIPE of Paris, France IGI Insurance Limited Ali Gohar & Co. (Pvt) Ltd. 1 1 1 5,099,469 1,161,894 51,442
4,346,528 (3,394,850) 951,678 52,809 1,004,487
100
3,896,267 (2,966,213) 930,054 21,638 951,692
100
NIT and ICP (name wise detail) National Bank of Pakistan,Trustee Deptt. Directors, CEO and their spouse and minor children (name wise detail) Mr. Pir Ali Gohar Mr. Arshad Ali Gohar Mr. Syed Babar Ali Mr. Syed Hyder Ali Mrs. Naiyar Zamani Gohar Mrs. Perwin Babar Ali Syeda Henna Babar Ali Public Sector Companies and Corporations Banks, Development Finance Institutions, Non-Banking Finance Institutions Insurance Companies Shareholders holding 10% or more voting interest SECIPE of Paris, France IGI Insurance Limited National Fertilizer Corporation 1 1 1 5,099,469 1,161,894 1,080,000 3 3 1 1 1 1 2 2 535,698 8,340 510,212 16,914 7,434 22,690 18,714 1,284,099 2 465,825
WEALTH DISTRIBUTION TO EMPLOYEES Staff cost Workers' Profit Participation Fund
576,292 4,615 580,907
58 58
521,090 6,936 528,026
53 1 54
TO GOVERNMENT Income tax Custom duty & sales tax Workers' Welfare Fund
46,096 231,357 1,726 279,179
5 23 28
40,589 208,445 3,495 252,529
4 22 1 27
TO SHAREHOLDERS Dividend RETAINED IN BUSINESS Depreciation Retained profit
13,503
42,437
2 1
140 19,200
106,132 24,766 130,898 1,004,487
11 2 13 100
95,835 32,865 128,700 951,692
11 3 14 100
Wealth Distribution
2008
TO EMPLOYEES TO GOVERNMENT TO SHAREHOLDERS RETAINED IN BUSINESS
28% 27% 1% 13% 58% 5% 14%
2007
54%
Note: Previous year's figures have been restated in accordance with the audited financial statements.
Operating & Financial Highlights

84
2003 2004 2005 2006 2007 (Restated) 2008 Ratio Analysis Liquidity Ratios
Current Ratio Quick Ratio Net Working Capital Net Assets Current Assets / Total Assets Inventory / Current Assets Inventory / Total Assets Times Times Rs. 000 Rs. 000 % % % 1.0 0.5 27,028 500,594 70.1 48.6 34.1 1.4 0.4 229,342 668,357 57.8 73.2 42.3 1.3 0.3 352,915 940,717 70.0 73.2 51.2 1.5 0.5 413,844 1,116,141 63.9 65.9 42.1 1.3 0.4 382,834 1,114,124 66.9 68.9 46.1 1.0 0.3 (27,776) 1,116,612 59.3 64.7 38.4
85
2003 2004 2005 2006 2007 (Restated) 2008
(Rupees in thousand) FINANCIAL POSITION Balance Sheet Fixed assets Other non-current assets Current assets Non-current assets classified as available for sale Total assets Ordinary share capital Reserves Total equity Non-current liabilities Current liabilities Total liabilities Total equity and liabilities 446,229 38,392 1,134,774 1,619,395 96,448 404,146 500,594 11,055 1,107,746 1,118,801 1,619,395 597,592 28,923 857,339 1,483,854 96,448 571,909 668,357 187,500 627,997 815,497 1,483,854 632,195 18,107 1,516,694 2,166,996 96,448 844,269 940,717 62,500 1,163,779 1,226,279 2,166,996 702,001 15,400 1,270,601 1,988,002 96,448 1,019,693 1,116,141 15,104 856,757 871,861 1,988,002 792,008 12,369 1,623,676 2,428,053 96,448 1,017,676 1,114,124 73,087 1,240,842 1,313,929 2,428,053 1,195,978 9,686 1,769,820 8,871 2,984,355 96,448 1,020,164 1,116,612 70,147 1,797,596 1,867,743 2,984,355
Activity Ratios
Inventory Turnover Average No. of Days Inventory in Stock Accounts Receivable Turnover Average Collection Period Fixed Assets Turnover Operating Fixed Assets Turnover Total Assets Turnover Times Days Times Days Times Times Times 2.9 125 29.5 12 6.5 19.1 1.8 3.7 98 46.9 8 5.3 9.8 2.1 2.6 137 47.5 8 5.5 8.9 1.6 2.6 137 33.1 11 5.4 9.7 1.9 2.9 125 27.3 13 4.9 6.0 1.6 2.9 124 30.0 12 3.6 6.7 1.5
Leverage
Debt to Equity Ratio Interest Earned Fixed Assets to Equity Financial Leverage Times Times Times Times 1.2 4.8 0.9 1.9 0.4 17.3 0.9 1.7 0.7 9.3 0.7 1.6 0.3 7.4 0.6 1.8 0.5 2.8 0.7 2.4 0.8 2.0 1.1 4.5
Net current assets / (liabilities) OPERATING AND FINANCIAL TRENDS Profit and loss Net sales Gross profit Operating profit Profit before tax Profit after tax Ordinary cash dividend Capital expenditure Cash flows Operating activities Investing activities Financing activities Cash and cash equivalents at the end of the year NUMBER OF EMPLOYEES Number of permanent employees at year end
27,028
229,342
352,915
413,844
382,834
(27,776) Profitability Ratios

Sales Growth COGS as a % of Net Sales Profit before tax as a % of Net Sales Net Profit Margin Gross Profit Margin Operating Profit Margin Return on Assets Return on Equity Admin. Dist. & Mktg. Exp./Net Sales Admin. Dist. & Mktg. Exp. Increase Financial Charges / Net Income % % % % % % % % % % % 14.3 70.5 8.1 5.3 29.5 10.2 9.6 30.9 19.2 -20.3 40.0 9.7 69.0 12.1 7.7 31.0 12.8 16.5 36.6 17.2 -1.5 9.6 8.4 66.2 11.6 8.0 33.8 13.0 12.7 29.4 19.5 23.1 17.4 10.8 67.4 9.3 5.9 32.6 10.8 11.4 20.3 20.7 17.4 24.4 2.0 72.2 3.0 1.9 27.8 4.6 3.1 6.8 22.1 9.0 86.3 11.6 75.7 1.9 0.9 24.3 3.9 1.3 3.4 20.2 2.1 227.6
2,896,603 854,167 296,060 234,149 154,673 57,869 153,470
3,178,776 984,735 406,974 383,484 244,922 72,336 212,292
3,445,958 1,163,125 446,982 398,920 276,239 83,909 95,749
3,818,425 1,264,342 411,062 355,568 227,022 68,478 140,448
3,896,267 1,084,725 180,878 115,891 75,302 42,437 186,824
4,346,528 1,055,823 171,478 84,365 38,269 13,503 534,800
Market Value
Market Value Per Share Market / Book Ratio Earnings Per Share (before tax) Earnings Per Share (after tax) Price Earning Ratio Dividend Per Share Dividend Yield Payout Ratio (after tax) Market Capitalisation Break-up Value Rs. Times Rs. Rs. Times Rs. % % Rs. M Rs. 120 2.3 24.28 16.04 7.5 6.00 5.0 37.4 1,157 51.90 232 3.3 39.76 25.39 9.1 7.50 3.2 29.5 2,238 69.30 295 3.0 41.36 28.64 10.3 8.70 2.9 30.4 2,845 97.54 252 2.2 36.87 23.54 10.7 7.10 2.8 30.2 2,431 115.72 276 2.4 12.02 7.81 35.4 4.40 1.6 56.4 2,662 115.52 211 1.8 8.75 3.97 53.2 1.40 0.7 35.3 2,035 115.77
716,372 (143,839) (70,044) (306,618)
694,599 (206,480) (141,912) 39,589
(259,917) (89,494) 154,660 (155,162)
510,413 (132,128) (378,624) (155,501)
30,070 (183,874) (230,778) (540,083)
198,393 (486,365) (42,271) (870,326)
709
779
829
847
846
789
Operating & Financial Highlights

86
Application of Revenue 2008
0.30% 0.70% 20.20% 1.10%
Notice of Meeting
87 Notice is hereby given that the forty first Annual General Meeting of the Company will be held on Wednesday, 25th March, 2009 at 10:00 hours in the Conference Hall of the Overseas Investors Chamber of Commerce and Industry, Talpur Road, Karachi to transact the following business:
Current Ratio
1.6 1.4 1.2 1.0 Times 1.0 0.8 0.6 0.4 0.2 1.0 1.3 1.3 1.5 1.4
ORDINARY BUSINESS: 1. To confirm the minutes of the last Annual General Meeting held on March 19, 2008. 2. To receive and adopt the Balance Sheet and Profit & Loss Account for the year ended December 31, 2008 together with the Directors and Auditors reports thereon.
75.70%
2.00%
Cost of Sales Finance Cost
Taxation Dist. Mkt. & Admin. Exp.
Retained Profit Dividend
0.0 03 04 05 06
07
08
3. To approve and declare dividend on the ordinary shares of the Company. The Directors have recommended a cash dividend of Rs.1.40 (14%) per share. 4. To appoint Auditors for the year ending December 31, 2009 and to fix their remuneration. The present auditors, M/s. Ford Rhodes Sidat Hyder & Co., Chartered Accountants being eligible, have offered themselves for re-appointment. The Audit Committee and Board of Directors have also recommended appointment of M/s. Ford Rhodes Sidat Hyder & Co., Chartered Accountants, as Auditors for the year ending December 31, 2009. SPECIAL BUSINESS: 5. To approve the disposal of the Companys manufacturing site including plant & machinery and all other assets located at WAH Cantt. as part of restructuring plan, by passing the following resolution as an ordinary resolution:
Debt to Equity
100 55
24 39 22 33 44
Price Earning Ratio

55 50 45
76 78 53.2
80 Percentage
67 56
40 35 Times 30 25 20 15 10 5 0 7.5
9.1 10.3 10.7
35.4
60 45
61
40
20
RESOLVED that the Company is hereby authorized to dispose the manufacturing site including plant & machinery and all other assets, located at G.T Road, Wah Cantt.
05 06
07
03
04
05
06
07
08
03
04
08
Sales Growth
15 12 Percentage 9 6 3 0 14
12 10 8 11
Market Share Price

300 250 200 Rupees 150 100
2 232
295 252
6. To consider the recommendation of the Board of Directors for transmission of quarterly accounts through Compays website in compliance with Section 245 of the Companies Ordinance, 1984 and Securities & Exchange Commission of Pakistan (SECP) vide its circular No.19 of 2004 and if deemed fit pass the following resolution as a special resolution:
276
RESOLVED that the Company is hereby authorized to place its quarterly accounts on its website instead of sending the same to members by post, as allowed by the Securities & Exchange Commission of Pakistan (SECP) vide its circular No.19 of 2004.
211
120
By Order of the Board
50
Karachi: 4th March, 2009

03 04 05 06
07
08
03
04
05
06
07
08
Muhammad Irfan Company Secretary Notes:
Average Collection Period

15 12 12 9 Days 6 3 0
11 13
Return on Equity
40 12 35 30 Percentage 25
20 37
31
1. The Share Transfer Books of the Company shall remain closed from March 12, 2009 to March 25, 2009 (both days inclusive).
30
20 15 10 5
7
2. A member entitled to attend and vote at the above meeting may appoint a Proxy to attend and vote on his behalf. No person shall act as a proxy (except for a Corporation) unless he is entitled to be present and vote in his own right. Instrument appointing proxy must be deposited at the Registered Office of the Company at least 48 hours before the time of the Meeting. 3. Shareholders whose shares are deposited with Central Depository Company (CDC) are requested to bring their original Computerized National Identity Card and account number in the CDC for verification.
3
03
04
05
06
07
08
03
04
05
06
07
08
4. CDC Account Holders will further have to follow the guidelines as laid down in Circular No.1, dated 26 January 2000 issued by the Securities and Exchange Commission of Pakistan.
Notice of Meeting
88 Statement under Section 160 (1) (b) of the Companies Ordinance, 1984 This statement sets out the material facts concerning the special business to be transacted at the forty first Annual General Meeting of sanofi-aventis Pakistan limited to be held on March 25, 2009 - Wednesday. In respect of item 5 of the agenda Approval of the shareholders will be sought for the disposal of WAH manufacturing site together with the plant & machinery and all other assets located therein. In order to improve the manufacturing facility, benchmarking with GMP standards and as part of rationalization program, the company has initiated a project for divestment of its WAH site and shifting its entire production facility to one site - at Karachi. Accordingly, investment on new liquid manufacturing facility at Karachi site was initiated, which is progressing as per plan and is expected to start commercial production in the second quarter of the year 2010. This new state of the art manufacturing facility will not only automate the manufacturing of the liquid products but will also increase production efficiencies by reducing cost of production via economies of scale and lesser man-power cost. Moreover, considering the high turnover of the Company's liquid products, increase in the production capacity of the liquid manufacturing facility is also expected to add value to the Company's top line. Further, proceeds from the divestment of WAH site shall reduce the borrowings and consequent borrowings costs of the Company to earn better returns for the shareholders as a whole. In respect of item 6 of the agenda Section 245 of the Companies Ordinance, 1984 (the Ordinance) provides that every listed company shall transmit to its members the accounts of each quarter. The SECP, vide its Circular No. 19 of 2004 dated April 14, 2004, permitted that the placement of such quarterly accounts on their websites by the listed companies shall be treated as compliance of Section 245 of the Ordinance. Pakistan limited hereby appoint of (full address) or failing him of (full address) as my / our proxy to attend and vote for me / us and on my / our behalf at the 41st Annual General Meeting of the company to be held on Wednesday, March 25, 2009 and at any adjournment thereof. PROXY FORM I/We of (full address) being a member of sanofi-aventis
As witness my / our hand this
day of
2009.
Witness No.1 Name Address C.N.I.C. No.
Rs.5/Revenue Stamp
Signature of Member(s) Witness No.2 Name Address C.N.I.C. No. Folio No. Participant ID No. Account No. in CDS
Important 1. CDC Account Holders are requested to strictly follow the guidelines mentioned in Circular No.1 of 2000 of SECP. 2. A member entitled to attend a General Meeting is entitled to appoint a proxy to attend and vote instead of him/her, no person shall act as a proxy, who is not a member of the Company except that a Corporation may appoint a person who is not a member. 3. The instrument appointing a proxy, together with the Board of Directors' resolution/Power of Attorney (if any) under which it is signed or a notarially certified copy thereof, should be deposited at the Registered Office not less than 48 hours before the time for holding the meeting. 4. The instrument appointing a proxy should be signed by the member or by his attorney duly authorized in writing. If the member is corporation it's common seal should be affixed to the instrument.
(Name in Block Letters)

2008, Sanofi Aventis

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Sanofi-aventis

* Including temporary employees

Board Audit Committee

Board Share Transfer Committee

Registrars & Share Transfer Office

Innovation & investment in production

Supporting scientific discovery

Changing the way we look at disease

Psychiatric disorders Defining bipolar psychiatric disorders

Seminars & workshops

Major training programs

Communication Skills (for Sales & Non-Sales Employees)

Business Management Development Program (for New / Promoted DMs)

Cross Product Training (for Sales Force)

Leadership Essentials (DM Competencies)

Initial Sales Training Program (for Newly Inducted Pharma Associates)

Leadership Quest (for Sales & Business Managers)

Licensed 2 Lead (Train the Trainer)

Lantus Excellence (for Lantus Team)

Telfast Product Shoot 2007

Our people Our strength

Comprehensive treatment for people with diabetes

Simple and effective insulin therapy

Amaryl continued to grow at a healthy rate of

First-line oral treatment for type 2 diabetes

Sales over Rs. million

Sales over Rs. million

Sales over Rs. million

Widely prescribed for gastroenteritis

Non-sedating allergy relief

Broad spectrum antibiotic

A reference chemotherapeutic agent for several types of cancer

Modest growth of 3.8% for Taxotere despite a challenging year.

Creating vaccines, protecting life

Vaccines: A key strategic focus

Providing help, the responsibility

A long term humanitarian strategy

In 2008 this program was extended to 5 countries including Pakistan.

Earthquake Relief Drive

Breast Cancer Awareness

The 2007 corporate report

Directors Report to the Shareholders

Directors Report to the Shareholders

Directors Report to the Shareholders

Directors Report to the Shareholders

Directors Report to the Shareholders

Statement of Compliance with the Code of Corporate Governance

Syed Babar Ali Chairman Karachi: 13th February, 2009

Tariq Wajid Chief Executive

17) The Board has set-up an effective internal audit function.

Statement of Compliance with the Code of Corporate Governance

Syed Babar Ali Chairman

Tariq Wajid Chief Executive

Karachi: 13th February, 2009

A member firm of Ernst & Young Global Limited

Auditors Report to the Members

1,195,249 729 6,361 3,325

790,624 1,384 8,944 3,425

(ii) (iii) (c)