Our Mission
Our Mission
do

more
feel

Our quest is to improve the quality of human life by enabling people to

& longer
live

better

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Our Vision Our Vision

to the lives of billions of people.
Our value system and operating principles provide the necessary guidance on how we work at

GlaxoSmithKline’s vision is the opportunity to make a difference

exciting :

GlaxoSmithKline.
The key to our success is our desire and passion to pursue GlaxoSmithKline’s priorities – expressed by our business drivers. We are aware that the work we do improves quality of people’s life. We take pride in this and in our commitment to produce products that benefit patients. Our success in meeting this challenge depends on people at GlaxoSmithKline doing their jobs with commitment to this vision, enthusiasm for and alignment with GlaxoSmithKline’s priorities, and an unmatched sense of urgency. While new medicines and products may originate in our international laboratories, bringing those medicines and products to patients requires the combined efforts of everyone else in the Company. Our manufacturing staff for example, turns chemicals into medicines that can be used easily and effectively, while our marketing and sales staff introduces those products to doctors for the benefit of their patients.

All of us have a responsibility to engage in this quest and to successfully deliver on our promise.

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Categories and Information Contact Details Proxy Form 4 .Pattern.Contents Contents 05 06 10 13 17 18 20 21 22 25 30 34 36 37 38 40 41 42 43 71 74 Corporate Information Highlights of the Year History of GlaxoSmithKline Corporate and Social Responsibility Our Products Notice of Annual General Meeting Financial Performance at a Glance Statement of Value Added Key Operating and Financial Data Directors’ Report to Shareholders Chairman / Chief Executive’s Review Statement of Compliance with the Code of Corporate Governance Review Report to the members on Statement of Compliance with best practices of Code of Corporate Governance Auditors’ Report to the Members Balance Sheet Profit and Loss Account Cash Flow Statement Statement of Changes in Equity Notes to and Forming Part of the Financial Statements Shareholding .

Shahid Mustafa Qureshi Dr. Chairman Member Member Chairman / Chief Executive Technical Director Finance and Information Technology Director Legal and Corporate Affairs Director Director Medical Services Head of Quality Head of Procurement Director Marketing and Business Development Sales Director Sales Director Country Manager . Dignam & Co. Registered Office 35 – Dockyard Road. Muzaffar Iqbal Ms. Maqbool ur Rehman Mr.com. West Wharf. Chartered Accountants Audit Committee Mr.D. Salman Burney Dr.Corporate Information Board of Directors Mr. M. Khan Haji Muhammad Hanif Ms. Naseer Chairman / Chief Executive Non-Executive Director Non-Executive Director Legal and Corporate Affairs Director Finance and Information Technology Director Technical Director Director Human Resources & O. Sohail Matin Company Secretary Mr. Rahim Mr. F. Ghulam Mustafa Aziz Mr. M. Ghulam Mustafa Aziz Dr. Ferguson & Co. Muzaffar Iqbal Mr. Afridi & Angell Mandviwalla & Zafar Surridge & Beecheno Vellani & Vellani Orr. Karachi – 74000. Tariq Iqbal Khan Mr. 2316071-73 & 2315101-08 Fax: 2314898 & 2311122 Website: www. Erum S.Consumer Healthcare A.gsk. Ghulam Mustafa Aziz Legal Advisors Bankers ABN Amro Bank (Pakistan) Limited Citibank NA Habib Bank Limited Standard Chartered Bank (Pakistan) Limited The HongKong and Shanghai Banking Corporation Limited Rizvi. Shahid Mustafa Qureshi Mr. Salman Burney Management Committee Mr. U. Rafique Dawood Mr. Salman Burney Mr. Shahid Mustafa Qureshi Auditors Chief Financial Officer Mr. Rafique Dawood Mr. Iffat Yazdani Dr. Tariq Iqbal Khan Mr. M. Pervaiz Iqbal Awan Mr. Talat A. Z.pk 5 . Telephones: 2315478-82. Isa.

Earth Week celebrated in June 2007. Effluent Treatment plant has been commissioned at F-268 site for environmental compliance. Quality and EHS drives.79 in this year. Profit before tax of Rs. Business Continuity Plan desktop exercise conducted against Pandemic Flu preparedness. Market capitalization of Rs. The Leading Edge program continued in 2007 to bring the cultural change. EPS of Rs. 2007. 9. 59 million during the year. Operational Excellence (OE) OE initiatives yielded a saving of Rs.Highlights of the Year Highlights Financial Performance Total turnover grew to Rs. Health and Safety (EHS) F-268 Site received “Respirator free tablet Compression award” in this year. 2.6 billion.659 million. Seminars conducted to create awareness about Global Warming & Green House Effects. This program compliment the OE.10. 6 . Environment. 33 billion as of December 31.

Key Learning Statistics People HR team visited 22 universities for career counseling to over 3500 students. movie show for employees to promote diversity. Cafe-Learning. Pakistan R&D in the top 10 countries internationally. (QMS) Quality leading edge has also been launched to create the desired quality mindset for QMS implementation. Research and Development R&D Pakistan conducted 15 Phase-II & III studies in the therapeutic areas of Oncology. Best Best Place. snooker tournament. Iffat Yazdani for outstanding achievement of bringing R&D Pakistan received award for "Best Country Highlights" in MENA. An automated system to log customer complaints. organized bowling events. Neurosciences. Certificate of recognition awarded to Dr. Psychiatry.of the Year Quality Management System Roll out of Customer Complaint System. Team Building events. & Best Work Total courses offered during 2007 Average number of participants / course Learning hours / employee 192 23 79 7 . Conducted Learning Fairs in 4 cities offering a range of courses for employees’ development and learning exposure. analyze data and provide greater visibility. New GSK Leadership Framework has been launched promoting a high performance culture. a forum introduced to promote self-learning and development for employees. Metabolic and Hematology.

New Launches .Highlights of the Year Highlights Marketing and Sales excellence # 8 1 GSK Pakistan: Multiple Firsts ! Pharma Company by Value! Product by Value! Product by Rx! Product by Volume! Rating from Customers! (According to medical representative satisfaction survey conducted by IMS in Pakistan in 2007).

packaging.of the Year NEW PENICILLIN FACILITY A state of the art new Penicillin facility has been built at F-268 site to cater for future supply requirements in Pakistan.000 square feet. The facility is validated and approved by the Ministry of Health. cafeteria and staff change rooms. with a total covered area of about 77. quality control. The facility is a self contained complex to house manufacturing. utilities. New manufacturing equipments and packaging lines have been acquired to provide higher efficiency and flexibility in operation. 9 . The facility was designed locally by the GSK Leadership team and constructed by the local contractors. Compact lay out and flat visual production floor provides added control on the operations. The total project cost is Rs 432 million. The facility has been designed and built to meet current GMP and Safety standards.

History of Gl History of GlaxoSmithKline Glaxo CELEBRATING 100 YEARS OF SERVICES Glaxo. Beecham and SmithKline Beckman became one and changed the name of the company to SmithKline Beecham plc. Since 2001. Burroughs Wellcome and Glaxo merged in 1995 and the new name of the company was GlaxoWellcome. SO WHAT IS THE HISTORY Burroughs Wellcome & Company was founded in 1880 in London and Glaxo was founded in Bunnythrope. SmithKline and French. the name of the company has been GlaxoSmithKline. its hard to keep all of it in mind at times. its actually pretty interesting. and opened new units in London in 1935. Glaxo Laboratories. To be a stronger force in the medicine market. so many names and so much history. And if you read closely. In 1988. The latest merger occurred in 2000 with GlaxoWellcome. Beecham. Beecham and SmithKline and French. Glaxo became Glaxo Laboratories. ? 10 . New Zealand. There are four main companies in the history of GSK: Burroughs Wellcome & Company. In 1830. SmithKline Beckman bought its biggest competitor. originally a baby food manufacturer processing local milk into an early baby food. John K. The next year. International Clinical Laboratories and enlarged by 50%. and to accomplish this they bought 7 more laboratories in Canada and US and changed its name to SmithKline Beckman. Yet looking at the bright orange logo sometimes makes you think this company is about more than someone who works for it can afford to forget. The company also wanted to spread all over the world to capture shares in various medicine markets. Smith opened its first pharmacy in Philadelphia. GlaxoSmithKline. Wellcome.

Smith opens a drugstore in Philadelphia 1842 Thomas Beecham launches Beecham’s Pills in England 1880 Burroughs Wellcome & Company was founded 1891 SmithKline & Co. acquires French.axoSmithKline GSK at a Glance 1830 John K. Richards & Company 1906 Glaxo is registered by Joseph Nathan & Company as a trademark for dried milk 1929 SmithKline & French becomes research focused 1989 SmithKline & Beecham merge 1995 Glaxo & Wellcome merge 2001 GlaxoSmithKline 11 .

The only pharmaceutical company tackling the three WHO ? "priority" diseases: HIV/AIDS...Did you know Did You Know GlaxoSmithKline Globally.000 people working to discover new drugs 65 million compounds screened every year A quarter of the world's vaccines supplied by GSK More than 100 countries benefit from our humanitarian product donations 12 . tuberculosis and malaria Four billion packs of medicines and healthcare products manufactured yearly Over 15.

Thus. GSK Pakistan has 2 non-profit partners: Concern for Children (CFC) & Trust for Health and Medical Sciences (THMS) in Pakistan. vaccines. corporate responsibility is an integral and embedded part of the way GSK does business. Local CSR initiatives: GSK is proud of being a good corporate citizen no matter where it does business around the world. Research and innovation The most important element of corporate responsibility for us is the contribution our products make to health. Commitment to corporate responsibility GSK is committed to connecting business decisions to ethical. SKMT & UNHCR (for Afghan Refugees in Pakistan). Following are some local CSR initiatives: Earthquake Disaster Relief contribution. 13 . time and equipment to support good causes.Corporate and Social Responsibility(CSR) We believe that our business makes a valuable contribution to society by developing and marketing medicines which improve people’s lives. Employee involvement GSK employees are encouraged to contribute to their local communities through employee volunteering schemes. medicines. GSK is involved in various public/private partnership projects researching new medicines and vaccines for diseases disproportionately affecting developing countries. social and environmental concerns. Our community investment strategy focuses on improving health and education in under-served communities. malaria and TB. Community initiatives GSK makes donations of money. including HIV/AIDS. GSK was a significant donor to National Commission for Human Development (NCHD) supporting Primary Health care Extension Programme.

Each day presents a new challenge.What is GSK What is GSK for you? GSK is a dynamic and global company. working in a superb environment with excellent people has always been an impetus for vigor and achievement. GSK is like a learning academy. feel better and live longer. The place to be with diversified jobs. where there is immense opportunity to apply. culture and a company that sincerely cares for its internal and external customers with a desire to do more. practice and grow! Plus. 14 . people.

and are ready to learn and grow. are presented with opportunities at GSK in an extremely motivated and pleasant environment. 15 . GSK provides ample career development opportunities to those who work hard and are open to change and learning. GSK provides a continuous learning environment. Those who have the willingness to face challenges and to excel in their profession are highly energetic.for you? A company where you get to learn a lot and it has opportunities for those who can improve & change with time.

Pyridoxine HCl & Cyanocobalamin (furazolidone + metronidazole) aspirin BP 300 mg. caffeine BP 30 mg (Furazolidone) Azathioprine (Polymyxin B sulphate.TM (fondaparinux sodium) Neomycin Sulphate & Bacitracin zinc Thiamine HCl. Lignocaine HCL & Propylene glycol Cloxacillin sodium monohydrate Ampicillin Chlorpheniramine maleate Polymyxin B sulphate & Bacitracin Zinc PAEDIATRIC MULTIVITAMINS salmeterol/fluticasone propionate Trimethoprim Thyroxine Atracurium Besylate Vitamin B-Complex with B12 Salbutamol Vitamin B-Complex with Lysine and Vitamin C Allopurinol . paracetamol BP 200 mg.

diphtheria. and nutritional drinks. and influenza.four of the five largest therapeutic areas worldwide. dermatological. The company also enjoys a leading position in vaccines and treats diseases including hepatitis A and B. gastrointestinal. respiratory. and analgesia. Antibiotics Augmentin Amoxil Ampiclox Ceporex Septran Penbritin Zinacef Fortum Floxy Orbenin Wellcodox Syraprim Timentin Floxapen Analgesics Panadol Calpol Dicofen Empirin Compound Iodex Respiratory Seretide Ventide Ventolin Flixonase Flixotide Aerolin Beconase Serevent Amphyll Anti-virals Zeffix Valtrex Zovirax Hepsera Gastro . gastrointestinal. manufactures and markets pharmaceuticals. cancer and cardiovascular medications. vitamins and naturals. vaccines. develops. antidepressant. Our broad pharmaceutical product line includes antibiotic. CNS. respiratory. alimentary and metabolic .Our Products OurProducts GlaxoSmithKline discovers. over-the-counter medicines and health-related consumer products. dermatologicals. GSK Consumer Healthcare focuses on over-the-counter medicines. oral care (GSK is a leader in oral care in Western Europe). with products in such therapeutic areas as smoking cessation/respiratory health. bacterial and viral infections.intestinal & Metabolic Avandia Zantac Tagamet Dyspamet Marzine Maxolon Phillips Milk of Magnesia ENO Central Nervous System Seroxat Imigran Requip Lamictal Kemadrin Migril Vaccines Engerix-B Havrix Infanrix Tritanrix-HB Fluarix Hiberix Typherix Varilrix Priorix Mencevax ACWY Rotarix Eye/Ear Cortisporin Polyfax Betnesol Otosporin Lidosporin Cough/Cold Actifed-P Actifed-DM Piriton Actidil Anticoagulants Fraxiparine Arixtra Haematinics & Vitamins Fefol Fefol Vit Fesovit Z Revitale B Revitale Multi Starvits Chewcal Cytacon Cytamen Uniplex Wellcosine Anthelmintics Zentel Nemazole Systemic Steroids Betnesol Betnelan Anti-diarrhoeals Dependal-M Furoxone Cardio-vasculars Lanoxin Angised Dermatologicals Cutivate Betnovate Dermovate Bactroban Polyfax Cicatrin Lotrix Pilzcin Furacin Silvate Oncology Hycamtin Zofran Other Products Zyloric Imuran Thyroxine Relifex Tracium Avodart Dyazide Halfan Horlicks Oral Care Aquafresh Macleans Sensodyne 17 . We are the world leader in anti-infectives. tetanus.

Ghulam Mustafa Aziz. 3. being eligible. 2008 to March 31. 3. a notice that he. The shareholders are requested to notify the Company if there is any change in their address. to approve the payment of a dividend. 2. Mr. Tariq Iqbal Khan and Ms. Muzaffar Iqbal. Naseer. (b) 2. Mr. file with the Company not later than fourteen days before the date of the General Meeting at which Directors are to be elected. not being ineligible in accordance with section 178 of the Ordinance. March 31. (a) To receive and adopt the Report of the Directors and the Accounts for the year ended December 31. By Order of the Board Karachi March 7. Shahid Mustafa Qureshi Director / Secretary The Share Transfer Books of the Company will be closed from March 25. Mr. whether he is a retiring Director or not. Talat A. Article 66 of the Articles of Association of the Company states “The Members in General Meeting shall elect the Directors from amongst persons who. Dr. 4. Any person claiming to be eligible who desires to offer himself for election shall. Mr. To elect seven Directors of the Company as fixed by the Board for a term of three years commencing from May 7. offer themselves for election as Directors in accordance with this Article. 18 . 2008 in accordance with the provisions of Section 178(1) of the Companies Ordinance 1984.” A member entitled to attend and vote at the Meeting may appoint another member as his/her Proxy to attend. Karachi at 11:00 am on Monday. 2007 and the Auditors' Report thereon. M.Notice of Annual General Meeting Notice is hereby given that the SIXTY-FIRST Annual General Meeting of the Shareholders of the Company will be held at Beach Luxury Hotel. Retiring Directors are Mr. To appoint Auditors and fix their remuneration. Instrument appointing Proxy must be deposited at the Registered Office of the Company not less than 48 hours before the time of the Meeting. Shahid Mustafa Qureshi. Salman Burney. 2008 Notes: 1. Rafique Dawood. 2008 (both days inclusive) for the purpose of determining the entitlement for the payment of Final Dividend. speak and vote at the Meeting on his/her behalf. 2008 to transact the following business: 1. intends to offer himself for election as a Director at that meeting and that he consents to act as a Director if elected.

A. CDC Account Holders will further have to follow the under mentioned guidelines as laid down in Circular No. the Board of Directors’ resolution/power of attorney with specimen signature shall be submitted (unless it has been provided earlier) along with proxy form to the Company. the Board of Directors’ resolution/power of attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of the meeting. For Attending the Meeting: i) In case of individuals. the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations. The proxy shall produce his/her original NIC or original passport at the time of the meeting. In case of corporate entity. In case of corporate entity. shall authenticate his/her identity by showing his/her original National Identity Card (NIC) or original passport at the time of attending the meeting. 2000 issued by the Securities and Exchange Commission of Pakistan. shall submit the proxy form as per the above requirement. addresses and NIC numbers shall be mentioned on the form. the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations. The proxy form shall be witnessed by two persons whose names. Attested copies of NIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. For Appointing Proxies: i) In case of individuals.5. 1 of 2000 dated January 26. ii) B. ii) iii) iv) v) 19 .

in Million 3.9 3.706.Financial Performance at a Glance 2007 Rs.610.092.651.631.665.000 500 0 2.708 2.467 2.3 8.1 1.658.952 Rs.0 1.152 2.500 2.365.506 3.9 966.670 904 2002 2003 2004 2005 2006 2007 Gross Profit Operating Profit 20 .5 1.2 2.000 2.500 3.0 7.000 3.846 3.670.1 2. in million Net Sales Gross Profit Operating Profit Profit before Taxation Taxation Profit after Taxation Dividend – cash* – per share .866.500 4.9 1.280.088.000 1.0 1.1 2.5 341. Gross and Operating Profit 4.7 10.2 3.867 3.Rs.651 2.7 2. – issue of bonus shares Paid-up Capital 10.0 273.3 1.557 3.5 988.500 1.4 2006 * Represents final dividend declared by the Board of Directors subsequent to the year-end.148 1.952.670.

Revenue and its Disposal Bought-in-materials and Services Selling.581 1.4 3.1 10.280.4 8.212 100.254 59.203.0 10.0 14.143 1.4% 10.3 10.912 12.818 498.0 4.224.8% 59.210.365.9 2.0 6.9 11.344 1.0 0.388 456.142 11.4 100.1% 0.1 11.1 10.621.9% 14.221.137 966.263. Marketing and Distribution Expenses Administrative Expenses and Financial Charges Income tax Workers' funds and Central research fund Sales tax To Government Cash dividend* Issue of bonus shares To Shareholders Retained in the Business Retained in the business 6.662 14.658.4 0.0 * Represents final dividend declared by the Board of Directors subsequent to the year-end.4% 21 .8 4.3 9.254 100.039 341.6 12.4% 10.753 1.7 10.588 10.575 1.1 0.053.092.263.599.212 58.8 2.3 2.599.271 988.018 223.887 1.8 100.375 299.957 1. Marketing and Distribution Expenses Administrative Expenses and Financial Charges Government Retained in the Business Shareholders 4.906 221.383 49.1 2.300 273.075 1.0 Revenue Distributed Bought-in-materials and Services Selling.Statement of Value Added The statement below shows the amount of revenue generated by the Company during the year and the way this revenue has been distributed: 2007 2006 Rupees ‘000 % Rupees ‘000 % Revenue Generated Total revenue 11.

088 3.Rs.5 5.year end .6 7.1 6.0 25 17.707 6. Break-up value per share-without surplus on revaluation-Rs.152 1.1 39.9 63.316 4.2 50 4.0 71.417 3.119 648 1.051 3 3.9 1.560 506 3.146 3.Rs.461 63 3.665 1.148 2.0 37.092 5.252 6.0 6.585 8.548 522 1.high .5 69 4.1 61.6 3.560 6.0 151.5 176.758 8.2 20.740 66 137 203 7.7 3.548 8.350 60.3 3.854 3 4.708 2.2 1.092 5.2 55.Key Operating and Financial Data 2002 Assets employed Fixed assets .559 82.8 1.4 84.0 20 26.840 198 57 255 4.0 13. Market value per share .827 7.3 6.0 20 20.651 2.803 Less: Non-current liabilities Staff retirement benefits .846 2.3 162.5 25 19. Bonus shares (%) Price earning ratio (times) Market value per share .659 988 1.345 3.5 2007 2.** Cash dividend per share .952 2.6 22.1 244.877 5.2 157.7 63 4.5 2.2 2.7 35.9 181.0 20 31.Rs.118 10.4 3.738 1. Market price to Book value with surplus(times) Market capitalisation (Rs in million) Dividend payout (%) Dividend yield (%) Return on equity (%) Total assets turnover (times) Fixed assets turnover (times) Debtors turnover (days) Inventory turnover (days) Current ratio*** Acid test ratio*** Gross profit margin (%) Net margin (%) Notes: * Dividend includes final dividend declared by the Board of Directors subsequent to the year-end.7 61.026 631 4.773 149 76 225 5.101 3.774 96 43 5.1 4.9 15.0 32.670 2.2 2.2 15.365 6.5 1.5 9.503 192 47 5. Break-up value per share-with surplus on revaluation-Rs.1 3.8 19.0 5.Rs.property.4 52 2.0 47.467 904 886 344 542 404 3.5 4.0 55.8 7.611 3.537 10.5 16.Rs.0 70.506 2.9 21.6 38. 22 .4 5.6 4.0 26.7 22.867 2.537 1.765 8.0 63.7 3.8 148.0 3. *** Figures/ratios for 2002 include final dividend declared by the Board of Directors subsequent to the year-end.0 62.172 7.6 8. in million) 1.365 5.585 728 3.1 38.9 54 5.9 12.671 1.Staff gratuity Deferred taxation Long-term loan 242 1 243 2003 1.403 23 262 285 8.8 8. ** Earnings per share has been restated to reflect the impact of bonus shares issued subsequently.837 97.5 15. subscribed and paid-up capital Reserves Surplus on revaluation of fixed assets 3.1 1.3 7.118 1.2 6.0 7.112 6.0 236.6 1.471 757 4.6 40.674 5.0 25 16.low .6 26.2 5.2 2.994 159 97 256 6.3 240.916 61.6 1. Market value per share .695 881 1.817 51. plant and equipment Investments Deferred taxation Long-term loans and deposits Net current assets*** 1.7 51 4.8 77.3 1.0 20.3 2006 1.411 8.3 16.5 186.4 1.396 5 57 2.557 1.814 1.2 4.087 10.434 407 55 3.0 5.549 9.278 74.4 1.6 93.1 5.9 215.632 967 1.646 6.7 2004 2005 (Rs.6 47.621 5.8 Shareholders' equity Turnover and profit Net sales Gross profit Operating profit Profit before taxation Taxation Profit after taxation Dividend including bonus shares* Sales per employee (Rs.850 9.6 3.548 874 4.4 210.3 70.993 2.5 63.9 191. in '000) Ratios Earnings per share .867 3.6 192.738 9.237 347 61 5.4 5.7 2.7 Net assets employed Financed by Issued.

9 3.000 2.503 1.000 0 2.0 1.2 Rs.1 4.000 5.0 2.6 Times 22. in million 4 3 2 1 0 4.6 30 26.316 3.1 20.461 1.9 17.2 19. 23 . plant and equipment 2002 2003 2004 2005 2006 2007 Note: Figures/ratios for 2002 include final dividend declared by the Board of Directors subsequent to the year-end.5 25 20 15 10 5 0 26.3 Rs.434 1.7 2.000 5.877 1.000 243 62 1.774 256 239 2002 2003 2004 2005 203 139 2006 285 408 255 63 2007 2.758 6.8 Non-current Liabilities Non-current Assets Net Current Assets Property.5 16.4 4.0 80 Inventory Turnover Ratio 70 60 5. in million 4.Return on equity 30 35 Price Earning Ratio 31.0 5.4 15.396 225 462 1.5 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007 Assets & Liabilities 7.000 3.4 63 52 51 50 54 69 Number of days 4.827 5.2 25 20 15 10 5 0 Percentage 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007 Debtors Turnover Ratio 6.2 2.9 26.7 1.237 2.6 4.345 3.252 6 5 Current Ratio 5.9 22.000 5.0 3.4 20.0 0 Number of days 3.

Tariq Iqbal Khan Mr. Rafique Dawood Mr. Naseer 24 . Ghulam Mustafa Aziz Dr. M. Salman Burney Mr.Board of Dir Board of Directors Mr. Muzaffar Iqbal Ms. Shahid Mustafa Qureshi Mr. Talat A.

Operating results Rs.453.2% in 2007.671 million.Final dividend for the year ended December 31. grew by 5. 2002 2003 2004 2005 2006 2007 Holding company Corporate and social responsibility As at December 31. Basic earnings per share Basic earnings per share after taxation were Rs. We are deeply involved with our communities and are significant corporate donors to numerous NGOs and also the National Commission for Human Development (NCHD). • Future outlook and Challenges. CEO. and GSK is committed to connecting business decisions to ethical.6 8.670. Setfirst Limited UK held 134.2 3.5 1. in million Profit for the year before taxation Taxation Profit after taxation Un-appropriated profit brought forward Profit available for appropriation Appropriations: . social and environmental concerns.092. 2008. 9. The Directors.035. 10 each. 2007. • Significant plans and decisions.6 billion.3) (1.0 1.0 3.468. The Board of Directors is pleased to propose a final cash dividend of Rs. their spouses and minor children did not carry out any trade in the shares of the Company.50 per share amounting to Rs.5 988.798. Corporate responsibility is an integral and embedded part of the way GSK does business. 1984 and clause xix of the Code of Corporate Governance.588 shares of Rs.658. We consider it our responsibility to nurture the environment we operate in. Company Secretary and CFO. UK. Earnings per Share 12 10 8 10.76). Pattern of Shareholding The Company shares are traded in Karachi and Lahore stock exchanges.1 6 4 2 0 The Company achieved net sales of Rs 10. The shareholding information as at December 31.Directors’ Report to Shareholders The Board of Directors of GlaxoSmithKline Pakistan Limited is pleased to present the annual report and the Company’s audited financial statements for the year ended December 31. 9. to extend support to our community. 2006 Un-appropriated profit carried forward 2. The ultimate parent of the company is GlaxoSmithKline plc.6 6. 1.79 (2006: Rs.8 Rupees 2.3) The directors of the Company endorse the contents of the same.280. Profit after tax in this year was Rs 1. 2007. Chairman / Chief Executive’s review The Chairman / Chief Executive’s review on pages 30 to 33 deals with: • The performance of the Company during the year in comparison to last year with reasons for variances. 2007 and other related information are set out on pages 71 to 73.Issue of bonus shares .2 9. 7.8 9. This report is to be submitted to the members at Sixty first Annual General Meeting of the Company to be held on March 31st.04 million. The directors’ report is prepared under section 236 of the Companies Ordinance. 25 .7 (341.

5 5. health and safety (EHS) is a key element of corporate responsibility for the GSK and has a high priority. enabling us to: • Attract and retain best people. Sales per Employee 7 6 Rs. Diversity GSK Pakistan believes that a diverse workforce is essential to the Company’s leadership in the Pharmaceutical industry in Pakistan.8 4.e.GSK is also an active supporter of charitable activities which include supporting medical camps. which work in the underserved communities of Landhi and Mohammadi (Machar) Colony in Karachi and are involved in the design. Environment. healthy environment where our employees can learn. This gives us the opportunity to thrive on diverse ideas and perspectives. grow and develop. GSK is committed to working towards designing a workplace that minimizes workrelated risks to occupational health and safety. skills and competencies. GSK is proud to promote an open culture. GSK Earth week was celebrated in June 2007. Environmental targets are monitored on a continuous basis and environmental impacts identified and managed in line with required standards. The HR team provides learning activities that compliment staffing practices to provide skill enhancement and opportunities for development. implementation and replication of models for the sustainable development with specific emphasis on primary healthcare and education. West Wharf site achieved over 2 million man hours without Lost Time Injury and Illness. 26 . Health & Safety Week Celebrations were carried out in October 2007. Faced with challenges such as an increasingly diverse workforce in a complex and competitive environment. grow and contribute meaningfully to the organization’s overall strategy. GSK Pakistan continues to provide a fulfilling. Health and Safety Environment. GSK is an equal opportunity employer Human resource Attracting and retaining the best people is critical in enhancing and sustaining any company’s performance. In a community partnership project with Concern for Children Trust. Concern for Children Trust (CFC ) and Trust for Health and Medical Sciences. school children were provided with pots which they painted and planted saplings for environmental awareness. An “Ergo tool” project was also launched in this year and training provided to 100 employees. The company has set up and supports two community trusts/ NGOs i. GSK Pakistan was awarded first prize in the poster competition on EHS. encouraging people to be themselves and giving their ideas a chance to flourish.8 2002 2003 2004 2005 2006 2007 GSK’s HR function contributes to organizational performance by aligning people and processes in line with GSK’s strategic policy and mission whilst recognizing the importance of human knowledge.1 5. in million 5 4 3 2 1 0 4. • Work effectively with other public and private sector organizations. welfare organizations and donating to sponsoring various medical institution and hospitals. We encourage and practice an inclusive corporate culture where every employee has the opportunity to learn. GSK Pakistan also received “Respirator free tablet Compression” award in this year. Moreover.1 5.1 3. Seminar conducted during earth week celebrations at F-268 site inorder to create awareness about Global warming and Green House effect among the employees. • Enhancing customer intimacy by meeting their needs in a highly customized manner. GSK Pakistan in its efforts for environmental compliance has commissioned a compliant effluent treatment plant at its F268 Site.

Audit Committee An Audit Committee has been in existence since May 2002. Chartered Accountants. issues and progress made in their functions. Naseer was appointed as Director with effect from November 30. Muzaffar Iqbal Syed Masood Abbas Jaffery * Meetings attended 5 2 5 5 5 4 - Auditors The present auditors. offer themselves for reappointment. Tariq Iqbal Khan Mr. Board of Directors meetings and attendance The Board of Directors met five times in 2007. Value of investments of provident and gratuity funds The Company maintains retirement benefits plans for their employees.098 * Ms Talat A. Ferguson & Co. with each member attending as follows: Name Mr. at a fee to be mutually agreed. M. retire and being eligible. The Committee held four meetings during the year. 2008. Ghulam Mustafa Aziz Dr. Messrs A. Leave of absence was granted to the Directors who could not attend some of the board meetings. All employees are informed and aware of this and are required to observe these rules of conduct in relation to business and regulations. Shahid Mustafa Qureshi Mr. The Board of Directors endorses recommendation of the Audit Committee for their re-appointment as auditors of the Company for the financial year ending December 31. The committee consists of three members.Statement of ethics and business practices Performance with integrity is central to operating at GSK. 2007 (audit in progress) was as follows: 2007 Rupees ‘000 Provident fund 875. Management Committee The Management Committee comprises of 11 senior members who meet and discuss important business plans.671 Gratuity fund 386. of whom two are non-executive directors including the chairman of the committee. Rafique Dawood Mr. Significant matters to be put forth in the Board are discussed for onward approval by the Board. 2007 to fill the casual vacancy caused by the resignation of Syed Masood Abbas Jaffery from the Board.F. Subsequent events No material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company and the date of this report. and utilizes the services of independent audit firms for continuous reviews of internal controls and management of risks. The terms of reference of the Committee have been determined by the Board of Directors in accordance with the guidelines provided in the Listing Regulations and advised to the Committee for compliance. Investment in Funds-2007 31% 69% Provident fund Gratuity fund 27 . An independent Internal Audit function reporting to the Board’s Audit Committee reviews risks and controls across the organization. The Board of Directors of the Company has adopted a statement of ethics and business practices. Salman Burney Mr. Value of investments of provident and gratuity funds based on their un-audited accounts as on December 31.

This has been formalized by the Board’s Audit Committee and is updated as and when needed.Following a reorganization of retirement benefit schemes. e. b. The Company maintains a sound internal control system which gives reasonable assurance against any material misstatement or loss. The key operating and financial data for the six years are set out on page 22. The internal control system is regularly reviewed. Corporate and financial reporting framework a. the company has discontinued its pension scheme through commutation or the provision for annuities to the beneficiaries. The financial statements are prepared in accordance with International Financial Reporting Standards. as applicable in Pakistan. Proper books of account of the Company have been maintained. h. cash flows and changes in equity. d. i. There has been no departure from the best practices of transfer pricing. Salman Burney Chairman / Chief Executive Karachi February 22. 2008 Ghulam Mustafa Aziz Director 28 . present fairly its state of affairs. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. There are no significant doubts upon the Company’s ability to continue as a going concern. prepared by the management of the Company. By order of the Board M. c. The financial statements. the result of its operations. f. g. There has been no material departure from the best practices of Corporate Governance as detailed in the listing regulations.

Macleans won the Consumer Choice Award by Consumer Association of Pakistan for GlaxoSmithKline Pakistan is also one of the eight companies out of ninety who have been given by Employers’ Federation of Pakistan in National Employers’ Convention held on December 10. “People as Key Resource Award” In Consumer Healthcare.Excellence It proved to be yet Excellence Awards 2007 another year of extensive external with independent bodies presenting the company with recognition for GlaxoSmithKline Pakistan. “Best Toothpaste” 29 . GlaxoSmithKline Pakistan was awarded the “24th Corporate Excellence Award” in Business and Industrial category by the Management Association of Pakistan (MAP) on 22nd March 2007. Engage Human Resources in collaboration with the Pakistan Society for Human Resources Management (PSHRM) selected GlaxoSmithKline Pakistan as winner of its Most Preferred Pharmaceutical Company 2007 Award. prestigious awards. 2007.

993 8.000 10.611 2002 2003 2004 2005 2006 2007 30 . The Pakistan’s pharmaceutical industry with market size of around Rs 85 billion(US$ 1. in million 8. The pharmaceutical industry is a highly competitive and challenging business in Pakistan. prescription and volume shares. an increase of Rs 523 million (5. Economy & Market Pakistan’s economy continued to perform well and despite political turmoil consolidated the growth achieved in past years. Pharmaceutical Turnover Your Company delivered a good financial performance in 2007 despite rising inflation which impacted costs and margins. Sales growth was constrained due to raw material supply shortages for a few major products due to import restrictions.2%). Antivirals and CNS portfolios. the year 2007 witnessed rising inflation and high oil prices which adversely affected our operating margins. We also saw good momentum in the growth of new products that were launched in recent years. Review of Operating results As mentioned earlier.417 10.4 billion).Chairman/Chief Executive’s Review It gives me immense pleasure to present the Annual Report of your Company for the financial year ended December 31.000 4. Sales growth was driven over a wide portfolio despite issues with raw material availability which constrained production of a few key products. Economic growth was maintained at approximately 7% in fiscal year 200607 on the back of robust growth in agriculture.088 10.000 0 6.6 billion for the year. 2007. The company remained focused on continuous improvement in business processes and sustained investment in product promotion to offset the negative impact on margins through productivity improvements and sales growth.867 9. However inflation remained a challenge for the Government and also particularly to our industry by impacting costs.000 6. has shown growth of approximately 9% in this year with over 400 manufacturing and importing companies competing in a highly genericised market. manufacturing and services and also increase in foreign investment.000 Rs. These have now been resolved and should positively impact sales in 2008.000 2. GSK Pakistan achieved a turnover of Rs 10. Dermatology. This increase in sales was driven by double digit growth in the Vaccines. Out of top fifteen products in Pharmaceutical industry. Net Sales 12. The Company continued to retain it’s position as the largest research based pharmaceutical company in Pakistan in terms of value.101 8. eight are manufactured and sold by GlaxoSmithKline.

5% in this period.000 1. marketing and distribution expenses increased by 15%. in million Profit after Tax 2. Selling.The export business grew by 19. increasing by Rs 143 million mainly due to income from pension fund receivable. Major export markets include Afghanistan and Sri Lanka. Rs. Administrative expenses increased by 11%. The Company commissioned this manufacturing facility in S. However operational excellence and cost containment initiatives continue in manufacturing operations.671 2002 2003 2004 2005 2006 2007 The Company continues to use its strong cash flows to make the required levels of investments in business necessary to sustain long term growth.471 1.4% to Rs 256 million. Capital expenditure in this year was Rs. commercial and procurement to mitigate rising costs. 2. Capital Expenditure 700 600 500 646 472 Rs.814 1. The gross margin for the year was 37. The total cost incurred on the project is Rs 432 million and it will provide higher quality.000 800 600 400 200 0 1. This is due to higher inflation and increased raw and packing material prices. Other operating income was recorded at Rs 639 million.600 1. The Animal Health portfolio maintained a positive trend and achieved sales of Rs 99 million.T. 988 million amounted to Rs.665 1. however product improvements and investments in product promotion coupled with a renewed distribution setup should be able to bring overall improvement in the business during 2008.I. 472 million) of which a significant proportion relates to the new Penicillin manufacturing facility. Increases under these heads reflect the impact of overall general inflation.200 1.026 542 1.E Karachi this year.800 1. Consumer Healthcare product sales decreased by 24.25 % compared to 38. Profit before tax of Rs.659 million.400 1.671 million. 646 million (2006: Rs. 1.33% in 2006. Net profit for the year after accounting for tax charges of Rs. was achieved during the year reflecting an increase of 1% from previous year. in million 400 300 200 100 0 189 247 172 265 2002 2003 2004 2005 2006 2007 31 . efficiency and flexibility in manufacturing operations of our largest products.

200 700 200 (300) Cash Dividend Bonus Shares per share.817 21. This is in addition to the interim issue of 1 bonus share for every four shares held (25%) which took place in August 2007. 2007 was Rs.000 15.000 30. The Board of Directors in its meeting held on February 22. Payout to Shareholders 2. 7.253 million reflecting a decline of Rs 414 million mainly due to increased dividend payouts and capital expenditure.000 25.559 0 2006 2007 32 .837 Rs. An area of particular focus for the company in Pakistan is the area of preventive healthcare & vaccines. raw and packing material costs and devaluation. 4.000 10. GSK is the world’s leading developer and manufacturer of vaccines. in million 1. The potential to cost effectively prevent disease and protect health in Pakistan is significant.280 2007 146 Rs. which will be able to create value for our shareholders in the future and provide new and affordable healthcare solution to patients.000 - 20.0) Company’s sustained business success.350 13.700 341 273 218 121 101 303 2002 510 2003 612 2004 874 2005 1. 2008 proposed a cash dividend of Rs. with the need for affordable healthcare. This is clearly unsustainable for any business and a price increase is now essential if this industry is to develop in the future. payout as well as shareholder value has increased significantly as a result of Market Capitalisation 35. Over the last few years. The Company’s market capitalization has increased over the last 5 years from Rs 4 billion in 2002 to Rs 33 billion as at December 31.200 1. 2007.000 32. However.The Cash position recorded as at December 31. its sustained success depends on a regulatory environment which is able to balance the interests of this research based industry. in million 20.278 2002 2003 2004 2005 15. and the company sees this as an area of great opportunity for adding value to the healthcare sector in the country. Prices of pharmaceutical products have now remained unchanged since 2001 and there has been no offset given to account for the adverse impact of increasing inflation (particularly in energy and fuel costs). The pharmaceutical industry in Pakistan has great potential for growth.916 4. The Company has maintained its history of good return and payout to shareholders.092 2006 1.000 5. Future outlook and Challenges We continue to see good progress in the launching of new products.50 (2006: Rs 8.

In the recent past Pakistan has made some progress in this regard. On behalf of the Board I would like to acknowledge the contribution of all the company’s employees towards the continued success of company. industrial relations remained cordial and GSK is committed to maintain a good working environment where employee contributes their best as a team reflecting a common spirit. much more needs to be done to discourage both piracy and counterfeiting. M. At a practical level however. Acknowledgment The company’s sustained success has been due to the strong commitment and dedication of its employees. by updating its IPR laws to the levels required by global conventions. 2008 33 . as well as industry and also lead to a quality and researchoriented culture which is vital for the future progress of this industry. the best people do their best work with great enthusiasm and commitment and produce phenomenal results in the face of many challenges. At GlaxoSmithKline.Intellectual Property The protection of intellectual capital and property is important to ensure returns for the very substantive costs of researching and commercializing new treatments. Effective implementation will protect consumers. Salman Burney Chairman / Chief Executive Karachi February 22. Throughout the year.

Statement of Compliance with the Code of Corporate Governance
for the year ended December 31, 2007
This statement is being presented to comply with the Code of Corporate Governance contained in the listing regulations of Karachi and Lahore Stock Exchanges 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 as follows: 1. The Company encourages representation of independent non-executive directors and representation of minority interests on its Board of Directors. At present, the board includes two non-executive directors one of whom represents minority shareholders’ interests. 2. The directors have confirmed that none of them is serving as a director in more than ten listed companies including this company, except for Mr. Tariq Iqbal Khan representing NIT, who has been specifically exempted by the Securities and Exchange Commission of Pakistan for holding directorship in more than ten listed companies. 3. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company, a DFI or a NBFI or, being a member of Stock Exchange, has been declared as a defaulter by that Stock Exchange. 4. The Company has a vision/ mission statement and overall corporate strategy. All policies of the Company are governed by the “Corporate Governance Charter” which has been approved by the Board. 5. The Company has prepared a “Statement of Ethics and Business Practices” which has been signed by all the directors and employees of the Company. 6. One casual vacancy occurred in the Board of Directors during the year ended December 31, 2007. 7. The powers of the Board have been duly exercised and decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of CEO and other executive directors have been taken by the Board, and significant matters are documented by a resolution passed by the Board. 8. The meetings of the Board were presided over by the Chairman and the Board met at least once in every quarter. Written notices of the Board meetings, along with the agenda were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated. 9. There was no new appointment of CFO or Company Secretary during the year. 10. All the directors on the Board are fully conversant with their duties and responsibilities as directors of corporate bodies. The Board had previously arranged an orientation course of the Code of Corporate Governance for its directors to apprise them of their role and responsibilities. 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 the CEO and CFO before the 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.

34

REPORT

15. The Audit Committee has been in existence since May 2002. It comprises of three members, of whom two are non-executive directors including the chairman of the committee. 16. The Board has outsourced the internal audit function to Ford Rhodes Sidat Hyder & Co. who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Company and they are involved in the internal audit function on a full time basis. 17. The meetings of the audit committee were held at least once in every quarter prior to approval of interim and final results of the Company as required by the Code. The terms of reference of the committee have been formed and advised to the committee for compliance. 18. The statutory auditors of the Company have confirmed that they have been given satisfactory rating under the Quality Control Review Program 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 the 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.

M. Salman Burney Chairman / Chief Executive Karachi February 22, 2008

REPORT

35

Review report to the members on Statement of Compliance with best practices of Code of Corporate Governance
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 GlaxoSmithKline Pakistan Limited to comply with the Listing Regulation No. 37 of the Karachi Stock Exchange and chapter XIII of Lahore Stock Exchange 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 Company’s 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 Board’s statement on internal controls 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 Company’s 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 December 31, 2007.

A. F. Ferguson & Co. Chartered Accountants Karachi February 22, 2008

36

REPORT

(ii) (iii) (c) in our opinion and to the best of our information and according to the explanations given to us. F. It is the responsibility of the company’s management to establish and maintain a system of internal control. 1984. as well as. and the business conducted. 2007 and the related profit and loss account. investments made and the expenditure incurred during the year were in accordance with the objects of the company. evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and. its cash flows and changes in equity for the year then ended. 1984. cash flow statement and statement of changes in equity together with the notes forming part thereof. and in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance. proper books of account have been kept by the company as required by the Companies Ordinance. (d) A. on a test basis. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. for the year then ended and we state that we have obtained all the information and explanations which. 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. Our responsibility is to express an opinion on these statements based on our audit. the expenditure incurred during the year was for the purpose of the company's business. we report that: (a) (b) in our opinion. were necessary for the purposes of our audit. evidence supporting the amounts and disclosures in the above said statements. to the best of our knowledge and belief. the balance sheet. in our opinion: (i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance. was deducted by the company and deposited in the Central Zakat Fund established under section 7 of that Ordinance. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. 1984. 2008 REPORT 37 . and. 1980 (XVIII of 1980). in the manner so required and respectively give a true and fair view of the state of the company's affairs as at December 31. profit and loss account. Chartered Accountants Karachi February 22. give the information required by the Companies Ordinance. 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 are in agreement with the books of account and are further in accordance with accounting policies consistently applied. 2007 and of the profit. 1984. Ferguson & Co. An audit also includes assessing the accounting policies and significant estimates made by management.Auditors’ Report to the Members We have audited the annexed balance sheet of GlaxoSmithKline Pakistan Limited as at December 31. after due verification.

Balance Sheet as at December 31.543 7.000 1. 2007 Note 2007 Rupees ‘000 SHARE CAPITAL AND RESERVES Authorised capital 250.365.806 66.375 6.192 262.117.432 105.000) ordinary shares of Rs.500.410.218 1.641 1.706.041 203.000.844 1.822 M. subscribed and paid-up capital Reserves 3 4 2006 2.staff gratuity Deferred taxation 5 6 23.000 (2006: 150.922 8. 10 each Issued.761.918 NON-CURRENT LIABILITIES C Staff retirement benefits .509 9.000 1.500.698.598.000.374 1.458 285.098 CONTINGENCIES AND COMMITMENTS 8 10. Salman Burney Chairman / Chief Executive Ghulam Mustafa Aziz Chief Financial Officer 38 .164.719 6.650 CURRENT LIABILITIES Trade and other payables Taxation 7 1.057 137.536.171.443.703.374 62.

Salman Burney Chairman / Chief Executive Ghulam Mustafa Aziz Chief Financial Officer 39 .416 99.755 6.697 64.470 7.229 4.808 346.199 2.252.898 378.530.420 189.720 53. M.property.851 14.425 10.520.277.808 96.509 9.449 35.Note 2007 Rupees ‘000 2006 NON-CURRENT ASSETS C Fixed assets .829 39.745 7.236.443.666.402 64.774.348 109.164.195.786 6.354 11 9 10 2.824 1.175 116.071 98. plant and equipment Long-term loans to employees t Long-term deposits t Investments CURRENT ASSETS Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and prepayments Accrued return on investments and bank deposits Refunds due from the government Other receivables Investments Cash and bank balances 17 18 11 19 12 13 14 15 16 107.847 81.039 84.589 76.407 84.430 49.100 4.996 2.822 The annexed notes 1 to 38 form an integral part of these financial statements.

869 (966.670.753) 3.821) (221.658.651.129 10.912) 639.415 2.390 2.088.550) 2.631.664.906) 1. M.721) (223.952.247 (6.053.210.666 (1. 9.963 22 23 24 25 (1.185 (19.018) 1.316) 2.79 Rs.525 Earnings per share 28 Rs.882 (6. 2007 Note 2007 Rupees ‘000 2006 Net sales Cost of goods sold Gross profit Selling.76 The annexed notes 1 to 38 form an integral part of these financial statements.610. marketing and distribution expenses Administrative expenses Other operating expenses Other operating income Operating profit Financial charges Profit before taxation Taxation Profit after taxation 20 21 10.658.662) 496.818) (486.866.543 27 (988.221.670.Profit and Loss Account for the year ended December 31. Salman Burney Chairman / Chief Executive Ghulam Mustafa Aziz Chief Financial Officer 40 .581) 3.093 26 (11.388) (436. 9.

147 (823.368) 29 2.000 32. 2007 Note 2007 Rupees ‘000 2006 CASH FLOW FROM OPERATING ACTIVITIES Cash generated from operations Staff gratuity paid Taxes paid (Increase)/Decrease in long-term loans to employees Decrease in long-term deposits Net cash from operating activities CASH FLOW FROM INVESTING ACTIVITIES Fixed capital expenditure Proceeds from sale of operating assets Investments purchased Investments encashed Return received on investments Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES Dividend paid Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 19 19 (1.320 3.000 25.890 3. M.969) _ 1.Cash Flow Statement for the year ended December 31.772) 26.470 (646.874 The annexed notes 1 to 38 form an integral part of these financial statements.725) 4.101) 36.666. Salman Burney Chairman / Chief Executive Ghulam Mustafa Aziz Chief Financial Officer 41 .476) (17.086.550) (1.765.186) 676.087.966 (129.355 (91.963) (471.404 200.512.652) (413.745 (869.666.990.252.150 4.000 (220.394) 100.470 4.020) (906.385 (346.782 200 1.196.496.524) 3.

2007 Share capital Share premium Capital reserve Exchange loss on issue of shares Reserve arising on amalgamation For issue of bonus shares Rupees ‘000 Fair value reserve General reserve Unappropriated profit Total Balance at January 1.563 - (1.999.300) (341.150) 3.918 - - - - 341.840) - 273.409 9 375.498 - - 2.963 1.365. 2007 1.117.833 (3. 2006 @ Rs 8.670.075) (873.525 - - - - - 2.664.344 - - - (341.670.344) (1.481) 3.798.563 (11.409 9 375.00 per share Transfer to reserve for issue of bonus shares Issue of 1 bonus share for every 4 shares held Profit after taxation for the year ended December 31.121 8.970 2.706. 2006 Surplus on revaluation of available-for-sale investments Balance at December 31.075) - - - - - - - - - - - 1.075 - - (873.840) (273. Salman Burney Chairman / Chief Executive Ghulam Mustafa Aziz Chief Financial Officer 42 .536.962 - - - - 273.999.035. 2007 Surplus on revaluation of available-for-sale investments 1.192 6.00 per share Transfer to reserve for issue of bonus shares Issue of 1 bonus share for every 4 shares held Profit after taxation for the year ended December 31.641 The annexed notes 1 to 38 form an integral part of these financial statements.344) - - - - - - - - - - - 1.075 - - - (273. M.664.092.375 1.563 - 7.963 1. 2005 @ Rs 8.737.525 1. 2006 Final dividend for the year ended December 31.833 7.648) 3.970 1.Statement of Changes in Equity for the year ended December 31.344 - - (1.280.498 Balance at December 31.409 9 375.300) - 341.092.970 1. 2006 Final dividend for the year ended December 31.999.240 7.300 1.719 1.092.

1 Basis of preparation Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. It introduces new disclosure relating to company's objectives. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. 2. 2007. 1984. policies and processes for managing capital. THE COMPANY AND ITS OPERATIONS The company is incorporated in Pakistan as a limited liability company and is listed on the Karachi and Lahore Stock Exchanges. other pharmaceutical. Adoption of this amendment only impacts the format and extent of the disclosure presented in note 34 to the financial statements. 2007 1. the provisions or directives of the Companies Ordinance. animal health and consumer products. The matters involving a higher degree of judgement or complexity. In case requirements differ. 1984 shall prevail. 'Presentation of Financial Statements .Capital Disclosures'. is mandatory for the company's accounting period beginning on or after January 1. 43 . It also requires management to exercise its judgement in the process of applying the Company's accounting policies. There have been no critical judgments made by the company's management in applying the accounting policies that would have effect on the amounts recognised in the financial statements. 1984. It is engaged in manufacture and marketing of research based ethical specialities.Notes to and Forming Part of the Financial Statements for the year ended December 31. Critical accounting estimates and judgements The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. 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. Recent accounting developments Standard and amendment effective in 2007 IAS 1 (Amendment). including expectations of future events that are believed to be reasonable under the circumstances. or areas where assumptions and estimates are significant which have been disclosed in the respective notes to the financial statements are: i) Provision for retirement benefits ii) Impairment of property. provisions of and directives issued under the Companies Ordinance. plant and equipment iii) Provision for obsolete and slow moving stock iv) Provision for doubtful receivables v) Taxation Estimates and judgments are continually evaluated and are based on historical experience and other factors. 2.

the arrangement is multiple . IFRIC 14 provides guidance on assessing the limit in IAS 19 on the amount of pension asset or liability may be affected by a statutory or contractual minimum funding requirement. 2009). IFRIC 13 'Customer loyalty programs' (effective from 1 July 2008). 2007 but are considered not to be relevant and have no significant effect to the company's operations and are therefore not detailed in these financial statements.The limit on a defined benefit asset. 2. loyalty points or free products).Group and treasury share transaction'. 44 . IFRIC 13 clarifies that where goods and services are sold together with a customer loyalty incentive (for example. (effective from March 1. IFRIC 11 provides guidance on how share-based transactions involving group companies shares are accounted for in the stand alone financials of the subsidiary companies.2 Overall valuation policy These financial statements have been prepared under the historical cost convention except as otherwise disclosed in the accounting policies below. 'Borrowing costs' (effective from January 1.3 Staff retirement benefits 2. It requires an entity to capitalise borrowing costs directly attributable to the acquisition."Share-based Payment" issued by the International Accounting Standards Board to be followed with regard to the preparation of financial statements. The latest actuarial valuations of the schemes were carried out as at December 31. presentation of transactions with owners in the statements of changes in equity and with non-owners in the Comprehensive Income statement.element arrangement and the consideration receivable from the customer is allocated between the components of the arrangement using fair values. Standards. Contributions to the funded gratuity schemes are based on actuarial recommendations. 'Presentation of financial statements'.1 Defined benefit plans The Company operates approved funded gratuity schemes for all its employees. The revised standard will be effective from January 1. 2007).3. Standards interpretations effective in 2007 but not relevant There are other accounting standards and new interpretations that are mandatory for accounting periods beginning on or after January 1. issued in September 2007 revises the existing IAS 1 and requires apart from changing the names of certain financial statements.The Securities & Exchange Commission of Pakistan has directed the application of IFRS 2 . The option of immediately expensing those borrowing costs will be withdrawn. 2.'IFRS 2 . IFRIC 11 . 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. minimum funding requirements and their interaction' (effective from 1 January 2008). IAS 23 (Amendment). amendment and interpretations not yet effective but relevant Following accounting standard. Adoption of the above standard will only impact the presentation of the financial statements. 2009. 2007 using the Projected Unit Credit method. IFRIC 14. amendment and interpretations to approved accounting standards have been published that are mandatory for the company's accounting periods beginning on the dates mentioned below: IAS 1. 'IAS 19 .

under which the beneficiaries of the scheme. Accordingly. 2.6 Taxation 2.3. 2. and taxes paid under the final tax regime. plant and equipment are stated at cost less accumulated depreciation / amortisation and impairment loss except freehold land and capital work-in-progress which are stated at cost. 45 . 2007. based on an actuarial recommendation. 2. and a reliable estimate of the amount can be made. Deferred tax is charged or credited in the profit and loss account except for deferred tax arising on revaluation of investments which is charged or credited directly to equity. if any.6. plant and equipment Property. 94. unused tax losses and tax credits can be utilised.2 Defined contribution plan The company also operates approved contributory provident funds for all employees.property.6.71 million has been recognised as a settlement loss and the amount of actuarial gain as a consequence of discontinuance of pension scheme amounting to Rs 222.2 Deferred Deferred tax is accounted for using the balance sheet liability method on all temporary differences arising between tax bases of assets and liabilities and their carrying amounts in the financial statements.7 Fixed assets . 2. 2. In this respect.e.4 Compensated absences The company provides for compensated absences of its employees on unavailed balance of leave in the period in which the leave is earned.1 Current The charge for current taxation is based on taxable income at the current rates of taxation after taking into account tax credits and rebates available. Retirement benefits are payable to employees on completion of prescribed qualifying period of service under gratuity schemes. employees currently in service) amounting to Rs. the loss arising due to additional benefits to nonpensioner beneficiaries (i. based on actuarial recommendation. Deferred tax liability is generally recognised for all taxable temporary differences and deferred tax asset is recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences. 2.05 million has been recognised as income in these financial statements.5 Provisions Provisions are recognised when the company has a present legal or constructive obligation as a result of past events. the fair value of respective fund’s assets are amortised over the average remaining working lives of the employees. The Pension Fund will be wound up in due course after the liabilities have been paid and assets of the Fund are realised. would either be paid a lump sum amount or an annuity would be provided to them through an insurance arrangement. The company has discontinued the pension scheme effective January 1. a Supplemental Trust Deed was executed by the Trustees and approved by the Commissioner of Income Tax. it is probable that an outflow of resources will be required to settle the obligation.Cumulative net unrecognised actuarial gains and losses at the beginning of the year which exceed 10% of the greater of the present value of the obligations and if applicable.

balances with banks on current and deposit accounts and running finance under mark-up arrangements. Major renewals and improvements are capitalised and the assets so replaced. is written off over its estimated useful life. The assets' residual values and useful lives are reviewed and adjusted.8 Investments . Provision is made for items which are obsolete or slow moving. Depreciation / amortisation on assets is charged at the normal rates from the month of addition to the month of disposal. Cost of work-in-process and finished goods includes cost of raw and packing materials. which may be sold in response to needs for liquidity or changes in the interest rates. 2. 2. are retired. 46 . Provision is made against debts considered doubtful of recovery. are classified as available-for-sale.12 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. Gains and losses on disposal of fixed assets are included in income currently. if not insignificant. Cost of raw and packing materials comprises purchase price including directly related expenses less trade discounts. cash and cash equivalents comprise cash and cheques in hand and in transit. 2.9 Stores and spares These are valued at lower of cost using moving average method and estimated recoverable amount. Maintenance and normal repairs are charged to income as and when incurred. Net realisable value signifies the estimated selling price in the ordinary course of business less cost of completion and cost necessarily to be incurred in order to make the sale. direct labour and related production overheads.10 Stock-in-trade i t These are valued at lower of cost and net realisable value except goods-in-transit which is stated at cost. Company accounts for impairment. Also assets costing up to Rs 25 thousand are charged to income. by reducing its carrying value to the estimated recoverable amount. Available for sale investments are initially recognised at fair value plus transaction cost and subsequently recognised at fair value. 2. Gains and losses arising from changes in fair value are recognised in equity under fair value reserve. at each balance sheet date.11 Trade debts Trade debts are valued at the invoice value. 2. Cost of leasehold land is amortised equally over the period of the lease. Items in transit are valued at cost comprising invoice value plus other charges incurred thereon. where indications exist. if any. Cost is determined using first-in first-out method. For the purposes of cash flow statement. Bad debts are written off when considered irrecoverable.Depreciation is charged using the straight line method whereby the cost of an asset less estimated residual value.Available-for-sale f s Securities intended to be held for an indefinite period of time. if appropriate.

47 . The ultimate parent of the company is GlaxoSmithKline plc.453.588 (2006: 107.336 1. 3. ISSUED.825 Shares allotted for consideration paid in cash 26. These financial assets and liabilities are subsequently measured at fair value or amortised cost as the case may be.515 1. SUBSCRIBED AND PAID-UP CAPITAL U Ordinary shares of Rs. Returns on deposits and investments are recognised on accrual basis. 2.515 1.127 Shares allotted as bonus shares 170.537.951.365.868 269.871) shares. 2.2. The financial statements are presented in Pakistan Rupees.523 5. 2007 Setfirst Limited UK and its nominees held 134.14 Revenue recognition Sales are recorded on despatch of goods to customers and in case of export when the goods are shipped.951.475 3.041.496 104. Assets and liabilities in foreign currencies are recorded into Rupees at the rates of exchange prevailing on transaction date. 2.523 Shares allotted for consideration other than cash 2007 2006 Rupees ‘000 53.386.992 1.1 As at December 31.333.562.386. 10 each 2007 2006 5.825 26. Exchange gains and losses are included in income currently except the exchange loss referred to in note 4 which has been recognised in equity.15 Financial assets and liabilities All financial assets and liabilities are initially measured at cost which is the fair value of the consideration given or received as appropriate.383.706.868 269.13 Foreign currencies Monetary assets and liabilities in foreign currencies are reported using the rates of exchange approximating those prevailing on the balance sheet date. which is the company's functional and presentation currency.375 138.844 136.671.16 Dividend Dividend is recognised as a liability in the period in which it is declared. UK.199.719 53.

171.563 376.1 General reserve Unappropriated profit (1.035.note 4.922 1.769) (5.999.150) 1.563 376.999. RESERVES Capital reserves Share premium Exchange loss on issue of shares Reserve arising on amalgamation 1.409 9 375.150) 3.648) 48 .2007 Rupees ‘000 2006 4.981 (3.543 4.648) 3.798.964 (3.970 1.981 Fair value reserve .410.121 6.409 9 375.1 This represents deficit arising on revaluation of available-for-sale investments as follows: 2007 Rupees ‘000 Deficit on revaluation (1.240 6.970 2.612) 2006 Deferred tax 619 (1.

910 129.3.756 34.205) 222.585 (27.441 (27.625) (9.151) (127.634 (372.090 75.634 34.500 158.155 920.600) 656.3.909) (11.151) 5.473 47.841) 372.280 38.654 (529.596 48.054 (42.5.504 25. STAFF RETIREMENT BENEFITS Funded gratuity 2007 Funded pension Rupees ‘000 66.550 (27.138 (129.4) Payments to the fund Amount transferred to other receivable Balance at December 31 (30.056) (169.498 20.242) (42.2 The movement in the fair value of plan assets during the year is as follows: Balance at January 1 Expected return on plan assets Actuarial gain Employer contributions Benefits paid Settlement of liabilities Amount transferred to other receivable Balance at December 31 5.528 2.168 23.589 53.020) 23.192 (42.556 20.550) 66.634 595.690) 529.155 (91.5.589 53.556) (264.756) 44.351 (920.596 48.279 14.3 Movement in the present value of defined benefit obligation and fair value of plan assets 5.898 (21.056) - 428.920 21.082 (18.473) 2.351 94.141 90.841) 482.500) (222.151) 656.057 482.279 (75.654 656.556 (751.705 (127.528 (37.310) 37.192 574.625 18.485) (11.1 Movement in liability / (asset) Balance at January 1 Charge / (Reversal) for the year (note .1 The movement in the present value of defined benefit obligation during the year is as follows: Balance at January 1 Current service cost Interest cost Prior years service cost Actuarial loss Benefits paid Settlement loss Settlement of liabilities Balance at December 31 5.983 (18.600) 920.054) 94.947 20.849) 109.242) 49 .310 8.849 37.504 48.057 Funded gratuity 2006 Funded pension 5.280 38.785 (43.138 854.349) 169.057 48.705 (751.351 372.2 Balance sheet reconciliation as at December 31 Present value of obligations Less: Fair value of assets Unrecognised actuarial (loss) / gain 5.849 20.080 (27.4 Charge / (Reversal) for the year Service cost Interest cost Expected return on assets Net actuarial gain recognised during the year Recognition of prior years service cost Recognition of actuarial gain Settlement loss 482.349) 240.168 (21.728) 66.706) 23.469 37.690) 574.

027) 11.348) (20.066 10 10 5 10 60 As per actuarial recommendation.080 (8.5 5.614 10 10 10 60 N/A N/A N/A N/A N/A N/A 30.77 100.6 Actual return on plan assets Principal actuarial assumptions Expected return on plan assets (% per annum) Expected rate of increase in salaries (% per annum) Expected rate of increase in pension (% per annum) Discount factor used (% per annum) Retirement age (years) 84.9 For the year ending December 31.026) (6.28 6.898) 25.00 20.685) (6.634) (109.00 5.78 22.808) 2007 2006 2005 Rupees ‘000 2004 2003 50 .087 (373.55 4.082 (47.68 61.910) 240.932) 215.220 10 10 10 60 94.2007 Funded gratuity Funded pension 2006 Funded gratuity Funded pension Rupees ‘000 5.920 (428.05 73.44 million.094) (176. Comparison for five years Funded gratuity scheme Fair value of plan assets Present value of defined benefit obligation Deficit Experience loss / (gain) on plan liabilities Experience (gain) on plan assets 529.756 (574.947) (188.7 Plan assets Plan assets are comprised of the following: Equity & Mutual Funds Bonds Others Funded pension % Funded gratuity % 2006 Funded pension % 48.141) 372. the expected return on plan assets was determined by considering the expected risk adjusted returns available on the assets underlying the current investment policy. 2008 expected contribution to funded gratuity schemes would be Rs 42.387 (392. 2007 Funded gratuity % 5.435) (155.17 29.67 100.884 (11.8 5.05 100.00 N/A N/A N/A N/A 33.654) (44.846) 218.849 (482.707) (4.785) 23.

533 7.Others Accrued liabilities Royalty and technical fee payable .1 These include Rs 96.09 million ) due to an associated company .584 19.664 5.2007 Rupees ‘000 2006 6.698.635 619 (26.857 14.041 7.1 Advances from customers Contractors' earnest / retention money Taxes deducted at source and payable to statutory authorities Workers' Profits Participation Fund – note 7.006.339 54.840 Debit balances arising in respect of: Provision for staff gratuity Provision for doubtful debts Provision for slow moving and obsolete stock Provision for slow moving and obsolete stores and spares Provision for doubtful government receivables Deficit on revaluation of investments 7.674 775.458 22.326 177.868) 262.432 7.077 886 6.952 4.987 5.777 60.859 26.Note 7.799) 137.801 54.985 311 9.2 Workers’ Welfare Fund Central Research Fund Unclaimed dividend Others 72.000 78.845 212. TRADE AND OTHER PAYABLES Creditors Bills payable .964 (40.889 12.212 1.UK.552 380.256 26.209 14.072 11.699 5.689 76.232 76.747 44.598.909 15.Related parties . DEFERRED TAXATION Credit balances arising in respect of: Accelerated tax depreciation allowances 289.798 122.374 99.854 24.586 1.Glaxo Group Limited .6 million (2006: Rs 56. 51 .257 2.323 1.181 659 1.

plant and equipment Operating assets Capital work-in-progress 52 .720 1. the department.2002 and 2002 .2001 (accounting years ended December 31. 1998 through 2001) the Deputy Commissioner of Income Tax (DCIT) made additions to income raising tax demands of Rs 74.560 146.774 276.2000 and 2000 .5 1.959. 2007 Note 2006 Rupees ‘000 9.2001 the company. the DCIT made addition to income raising tax demands of Rs 4.801 2006 14. 1998 and 1999) while the addition made in assessment years 2001 .2 Commitments Commitments for capital expenditure outstanding as at December 31.339 142.1 9. CONTINGENCIES AND COMMITMENTS 8. FIXED ASSETS .366 156. 8.737 1. Such addition was made on the contention that the company had allegedly paid excessive amount for importing raw materials.708 141.4 million.2000 and 2000 .444 145.074 370 156. and in respect of assessment years 2001 . The company has filed an appeal with the ITAT.759 7.2 Workers' Profits Participation Fund At the beginning of the year Allocation for the year – note 24 Interest on funds utilised in Company's business – note 26 Less: Amount paid to the Fund’s Trustees At the end of the year Rupees ‘000 11. In finalising the assessment of former Smith Kline & French of Pakistan Limited for the assessment year 2002 .354.2007 7.236.2000 through 2002 .614 9.85 million. 2001).2003 (accounting years ended December 31.339 8.2002 and 2002 . 2000 and 2001) were deleted.2003 (accounting year ended December 31. 2007 amounted to Rs 69.141 419 154. Upon company's appeal. have filed respective appeals with the Income Tax Appellate Tribunal (ITAT).712 419.51 million (December 31.774.2003.033 77.property.105 11.802 154. hence no provision has been made in respect of the aforementioned additional tax demands.946 2. The management is confident that the ultimate decisions will be in favour of the company.449 289. Such additions were made on the contention that the company had allegedly paid excessive amounts for importing raw materials.88 million). 2006: Rs 137. Upon company's appeals the Commissioner of Income Tax (Appeals) (CITA) maintained the addition to income for assessment years 1999 .2003 (accounting years ended December 31. the CITA maintained the addition to income.1 a) b) Contingencies Claims against the Company not acknowledged as debt Taxation In finalising the company's assessments for the years 1999 . In respect of assessment years 1999 .

425.720 1.5 to 10 Vehicles 203.262) Furniture and fixtures 86.143) 105. 2007 Impairment loss as at December 31.516 1.799.958 5.030 23.768 2.747 29.937 174 52.214 159.339 25 Office equipments 368.515 908.456 27.405 733.076) 242.866 (2.712 53 .086 96.698 60.663) 278. 2007 (Note 9.169 174 38.530 81.884) 3.653 14.196 5 to 10 524.605 142 70.5 174 52.507.617.610 2. 2007 % Rupees ‘000 Freehold land Leasehold land Buildings on freehold land Buildings on leasehold land Plant and machinery 1.171 54.648.518 172.892 (84.026 10 2.448 27.747 - 136.680) 2.930 12.390 938 30.495 (827) 108.955. 2007 2. 2007 Accumulated depreciation/ amortisation as at January 1.074 40.434 (18.124 235.802 67.5 70.024 1.937 12.148 1.128) 1.941 152.354.764 (2.016 1.579 92.773 (40.419 2.019.175 236 153.328 40.624 (52.242 10 to 33.014.016 788.282 (748) 65.506 65.362 (62.492 180 43.659.4) Net book Rate of value as at depreciation/ December amortisation 31.955.959.411) 1.1 Operating Assets Cost as at January 1.153 423.572 (79.725 1. 2007 Additions/ (Disposals) Cost as at December 31.809 208.360 (29.579 172.9.766 (71.255 83.507. 2007 Depreciation / Amortisation for the year / (on disposals) Accumulated depreciation / amortisation as at December 31.857) 951. 2006 2.33 December 31.653 240.719) 431.774 December 31.156 533.

2007 Rupees ‘000 Freehold land 174 174 174 Leasehold land 52.9.005 1.074) (236) 128.354.360 (10.242 December 31.624 (11.405) (83.507.456) - 107.473) (172.892 (22.764) - 153. 2007 NBV Cost of additions during the year NBV of disposals during the year Depreciation/ Amortisation for the year Reversal of Impairment loss / on disposals* (Note 9.2 Reconciliation of opening and closing Net Book Value (NBV) Cost Accumulated Impairment depreciation/ loss amortisation (Note 9.723 208.959.4) NBV as at December 31.930) (27.933) (27.610 Plant and machinery 1.339 Office equipments 368.156) 337.030 (60.419 Buildings on leasehold land 524.653) - 38.892 23.764* 1.026 Vehicles 203.346 67.579) (92.866 (56) (40.215 142 - (938) - 40.405 - (12.153) 674.255) (65.421 - - (1.774 54 .725) 1.495 (79) (5.518) - 533.506 (240.773) 1.196 Furniture and fixtures 86. 2007 2.196 65.745 423.768 Buildings on freehold land 70.802 (96.4) As at January 1.241 9.955.605 (29.648.434) - 136.516) - 40.937 (12.390) - 41.016 (1.809 (159.958) (180) 24.362) 11.014.153 (908.282) - 43.712 788.

KDA Centre View Appartment. Mr.B.M.Ex-Executive Haji Muhammad Hanif .Area. Fahim Sultana . Javed Aslam . " " " " Mr. Naila Hassan . F.Executive Mr. Nadeem ur Rehman. Sultan Hasan. North Nazimabad.Executive Mr. Karachi. 3E-92.Executive Mr.Executive Mr. Javed Akhtar . Sector 15-A/1. Qamaruddin Khan . Karachi.Executive Dr. Wajid Ali Qureshi . Ali Hasani . Farooq Gogan . A-19. Atiq-ur-Rehman -Ex-Executive Mr. M.Executive Mr. Maqbool ur Rehman . Jamil Akhtar . North Nazimabad. " Mr.003 1.9.Ex-Executive Ms. Khawaja Abdul Hameed . Ashiq Hussain . Rizwanullah Qureshi Ex-Executive Mr. Jalali .3 The following items of operating assets were disposed of during the year: Cost Accumulated depreciation Impairment loss Book value Sale proceeds Mode of disposal Particulars of purchaser Description Rupees ‘000 Office equipments Vehicles 65 292 451 451 451 464 464 550 550 555 555 555 555 560 560 560 609 621 849 849 879 985 985 1. S.Executive Mr. Sector 15/A-4. Bashir Ahmed. Block 12.Executive Ms. Nadia Hussain . E-14.Ex-Executive Mr. W-S/3 Block II.Block I. R-536. Qaiser Aziz . Islam Khan. Khalid M Sethi .Ex Executive Mr. S.Ex-Executive Mr. Bufferzone Karachi. Fazal ul Aziz Durrani .Executive Mr. Clifton.158 1.Ex-Executive Ms.Block R. 55 .Executive Mr.Executive Mr. Malik A Khalid. Imtiaz Ahmed .288 18 19 116 144 246 464 102 116 116 138 464 464 464 555 116 246 64 98 171 171 171 325 325 385 385 388 388 388 388 348 365 305 151 217 594 594 231 689 689 249 749 902 18 18 41 50 86 325 67 41 41 48 325 325 325 388 41 87 1 194 280 280 280 139 139 165 165 167 167 167 167 212 195 255 458 404 255 255 648 296 296 754 409 386 1 75 94 160 139 34 75 75 90 139 139 139 167 75 159 139 212 212 212 210 104 322 167 139 139 139 149 425 167 410 525 292 212 212 725 305 305 525 289 386 315 217 266 263 256 263 222 271 264 322 219 227 262 343 272 291 Company policy Company policy " " " " " " " " " " " " " " " " " " " " " " " " Tender " " " " " " " " " " " " " " " Mr.Executive Mr.Bufferzone Karachi.Executive Mr. M.Executive Mr.Executive Mr. A-908..Executive Ms. Zainab Chagla . Karachi.Executive Mr.Ex-Executive Syed Muied Ahmed . Karachi Mr. Tanveer Aslam . Sohail Mirza . Muhammad Tariq . " " " " " Mr. Gulberg. Zahid Qadri.

385 * Assets scrapped primarily include items that are obsolete or redundant and have no economic value to the company.Description Cost Accumulated depreciation Impairment loss Book value Sale proceeds Mode of disposal Particulars of purchaser Rupees ‘000 464 325 139 258 Tender Mr. Mr. North Nazimabad. E-30. Karachi. Islam Nagar. Lahore M/S.422 381 288 60 168 168 1 313 198 334 - 354 379 427 336 700 405 1.2-28 III.279 557 110 613 8. A149. Sector 11B. Karachi. Bufferzone. Nazimabad.884 4. Bangladesh M/S. Hakeem Khan.Sector 15-A-4. A-427. Ravi Chemical Complex Lahore M/s. Karachi. Hafiz Brothers & Co. A-223.660 845 170 Aggregate amount of assets disposed of having book value less than Rs 50.411 9. Karachi Mr.199 1.) Limited Lahore 464 464 464 464 464 464 464 464 464 325 325 325 325 325 325 325 325 325 - 139 139 139 139 139 139 139 139 139 285 267 267 283 246 277 280 209 213 " " " " " " " " " 560 560 689 727 849 464 Plant & Machinery 3.812 18.Sector 4D.576 1.134 84. B-49. Mr. Ovais Gaziani.599 - 614 79 55 14. R-536. 56 . M B Dyer & Chemicals Lahore M/S. Zahid Qadri. Altaf Hussain.451 748 2.000 each Plant and machinery Furniture and fixtures Office equipments Assets scrapped * Plant and machinery 392 392 688 727 536 266 2.225 2.865 10.154 1. E-14. North.000 693 80 " " " " Insurance Claim " Negotiation Tender " " " 22.441 62. Sector 15-A/1.065 827 2. Block 18. Nadeem ur Rehman. Mr. Karachi Mr. Muhammad Akbar. Rashid ul Hameed H. Al-Rizwan Appartment Block 14. Bufferzone. Synergy Pharmaceuticals (Pvt. Gulshan-e-Iqbal.709 36. Kammal Ahmed Siddiqui. Karachi. KDA Centre View Apartment. Karachi " " " " " " Mr. EFU General Insurance Limited " GlaxoSmithKline Limited. Gulshan-e-Iqbal. Mr.378 418 11 5.654 21. Shahdara. Block D.764 693 12. Karachi.

899 267.148 180 180 236 236 2007 9.725 (1.720 53.133 35.382) 1.865 170.060) (38.860 419.175) 624 84.298 (1.038) (43.285) 92.153 (1.156 65.131 66.543) 291 52.400) (41.493 276.725 2006 Rupees ‘000 95.802 63.976 1.241) (9.secured.224 12.879 62.925 53.802 62.764) (26.737 10.4 Impairment loss Buildings on lease hold land Plant and machinery Furniture and fixtures Office equipments Total 2007 Total 2006 Rupees ‘000 As at January 1 (Reversal)/Charge during the year Reversal on disposals As at December 31 27.049 67.156 27.038 35.786 57 . considered good T 10.580 33.342 577 1.345) 526 35.036 (909) 704 (482) 222 1.625 59 59.131 (333) (32.404 (1.241) (9.726 (1.023) (33.9.618 40.099) (24.764) 54.733) (41.260 70.625 59.5 Capital work-in-progress i p Civil work Plant and machinery Furniture and fixtures Office equipments Advances to contractors and suppliers 92.764) 81.717 13.345 (1.037 8.187) 539 1.392 (1.347) 1.1 Reconciliation of the carrying amount of loans to executives and other employees: 2007 Executives Noninterest bearing Other Employees Interest bearing Other Employees Non-iinterest bearing Total Executives Noninterest bearing 2006 Other Other Employees Employees Interest Non-interest bearing bearing Total Rupees ‘000 Balance at January 1 Disbursements Repayments Balance at December 31 Current portion included in note 15 704 2.747 841 9.946 117.755 (1. LONG-TERM LOANS .948 87.

827 16.190 2.61 million) 998.053 98.229 346.106 123.505 2. All loans are secured against the retirement fund balances.277.2 The loans have been given in accordance with the terms of employment for purchase of house.525 99.57 million). 2007 2006 Rupees ‘000 445.195. 263. 2007 Rupees ‘000 2006 12.9% per annum and these bonds will be maturing between October 2008 to May 2011.1 Stock-in-trade includes Rs.306 1.226.912 31.241 188.854 2.1 11.2 The above balances include items costing Rs.04 million). These loans are interest free except certain loans which carry interest ranging from 5% to 8% per annum (2006: 5% to 8% per annum).302 118. 46.425 11.407 58 .824 195.255. The yield of these bonds is 9.1 Pakistan Investment Bonds are held by company's banker for safe custody. 42.7% to 9. STOCK-IN-TRADE I T Raw and packing materials including in transit Rs.66 million (2006: Rs 50. 13.10.13 million) held with third parties.85 million) Work-in-process Finished goods including in transit Rs.108 81. 136. INVESTMENTS .831 64. 96.182 107. 35.available-for-sale f s Less: Current portion Pakistan Investment Bonds . The maximum aggregate amount of loans due from executives at the end of any month during the year was Rs 3.01 million (2006: Rs.175 13. 122.note 11.537 1.381 1.275 122. motor cars.01 million (2006: Rs. 218.367.199 13.46 million (2006: Rs.996 Less: Provision for slow moving and obsolete items 16.00 million (2006: Rs 1.73 million) valued at net realisable value of Rs. STORES AND SPARES Stores Spares 1.49 million (2006: Rs. computers and for the purpose of staff welfare and are repayable in 12 to 60 equal monthly installments depending upon the type of the loan. 783.719 80.250.100. 96.029 Less: Provision for slow moving and obsolete items 89. 98.365 2. motor cycles.

903 116.697 14.348 13. TRADE DEPOSITS AND PREPAYMENTS Trade deposits Prepayments Staff pension fund Others 68.921 81.considered good Loans due from: Executives Other employees } Note 15.2007 Rupees ‘000 2006 14.520 76. TRADE DEBTS Considered good GSK Trading Services Limited .1 The maximum aggregate amount due from related party at the end of any month during the year was Rs 12.575 29.722 2. 2007 Rupees ‘000 2006 16.829 15.345 20.034 64.1 These represent current portion of loans referred to in note 10.356 33.903 119.81 million (2006: Rs 8.420 59 .010 85.1 1.750 Less: Provision for doubtful debts 2.151 20.210 18.187 32.010 84. 2007 Rupees ‘000 2006 15.039 15.863 26.33 million).543 482 25.125 107.589 Advances to employees Advances to suppliers 17.707 1.Related party Others Considered doubtful 9.770 79.749 42.927 1. LOANS AND ADVANCES .847 4.519 84.

419 8.689 5. UK GSK Services Corporation SB R&D Upper Merion Due from staff provident fund Due from pension fund Claims recoverable from suppliers Others 24.028 4.335 6.75% (2006: 0.471 4.430 18.045 1.640.6 % (2006: 9% to 11.249 378.666.644 7.6%) per annum respectively.5%) and 7.024 1.5% to 2. OTHER RECEIVABLES Due from related parties – note 18. Bangladesh GlaxoSmithKline Export Limited.089 4.83 million).967 24.224 593 323.75 % to 11. UK GlaxoSmithKline Limited.2007 2006 Rupees ‘000 17.18 million (2006: Rs 25.363 (18.971 21.465 33.895 (18.990 10.712 4.465) 39.416 18.465 57.563 2.871 1.745 4.470 19. CASH AND BANK BALANCES With banks on deposit accounts on current accounts Cash in hand 4. 2007 2006 Rupees ‘000 19.1 At December 31.951 49.071 22.252.1 The maximum aggregate amount due from related parties at the end of any month during the year was Rs 366.898 39.222. REFUNDS DUE FROM THE GOVERNMENT Custom duty and sales tax considered good considered doubtful Less: Provision for doubtful receivables 14. 2007 the rates of mark-up on PLS savings accounts and on term deposit accounts range from 0. 60 .430 18.465) 14.898 18.5% to 2.225 642 11.1 GlaxoSmithKline Services Unlimited.

273 20. marketing and distribution expenses 4.198 212.648 151 45.330 10.288 126.784.957 10.1 and 21.741 1.514 78.237 99.2 Fuel and power Rent.658 8.134 15.241) 61. COST OF GOODS SOLD Raw and packing materials consumed Manufacturing charges to third party Stores and spares consumed Salaries.822 42.882 10.306) 5.838 4.243 14.025.753 6.401 (188.2007 20.563 90.538 7.996 21.507 5.789) 6.802 160.554 24. NET SALES Gross sales Local Export Less: Commissions.387 (1.496 5.032 8.250 152.293 878.575 10. benefits and staff welfare .658.482 9.392 21.644.831 2.610.646. wages.250.620.701 7.439 128. returns.512 (1.528.611 103.306 (118.389 15.026.365) (72.229 165.946 7.221.576.notes 21.362 9.154 775.963 12.453 214.472 256.681 19.980 651.240.463 47.011 1.903 (648) 50.247 21.985.735 (1.404 8.065 137.088.083.365 1.237 12.569) 6.946 40.255.549.612 10.493 2. rates and taxes Royalty and technical fee Insurance Repairs and maintenance Training expenses Travelling and entertainment Vehicle running Depreciation / Amortisation (Reversal of) / charge for impairment Provision for slow moving and obsolete stock charged (Reversal of) / Provision for slow moving and obsolete stores and spares charged-net Canteen expenses Laboratory expenses Communication and stationery Security expenses Other expenses Opening stock of work-in-process Closing stock of work-in-process Cost of goods manufactured Opening stock of finished goods Purchase of finished goods Closing stock of finished goods Cost of samples shown under selling.074.255.621 92.537) 5. discounts and rebates Sales tax Rupees ‘000 2006 10.252 93.753 4.190) (76.201 1.432 188.581 61 .057.

897 395.580 13. benefits and staff welfare is net of recovery of Rs 57.143 2.3 Salaries.98 million (2006: Nil) from pension fund as disclosed in note 2.1 Salaries.769 885 13. benefits and staff welfare include Rs 29.42 million and Rs 10.186 14.07 million and Rs 19. 2007 2006 Rupees ‘000 22.388 22.2 Salaries.276 8. benefits and staff welfare – notes 22. 22. benefits and staff welfare is net of recovery of Rs 45. SELLING.624 21.291 1.484 7.053. 21.974 9.519 101. wages.905 8.649 21.79 million and Rs 17.99 million) in respect of defined benefit plans and contributory provident fund respectively. benefits and staff welfare include Rs 16.3.371 2. 62 .3 Handling.210. benefits and staff welfare include staff severance cost of Rs 111.339 59.818 1.11 million) in respect of gratuity schemes and contributory provident fund respectively.617 14.506 7.617 1. wages. wages.937 7. rates and taxes Training expenses Fuel and power Publication and subscriptions Insurance Repairs and maintenance Stationery Communication Security expenses Provision for doubtful debts Other expenses 509.2 Salaries.768 298.3.21.60 million and Rs 13.478 28.844 461 6. wages.742 18.1.1.837 86.37 million (2006: Rs 9.03 million (2006: Rs 12.727 303.272 92. freight and transportation Advertising Sales promotion Travelling and entertainment Vehicle running Depreciation / Amortisation Canteen expenses Rent.1.557 12. MARKETING AND DISTRIBUTION EXPENSES Salaries.206 6.733 2.412 635 6.844 66.684 5.008 12.1 Salaries. wages.8 million (2006: Nil).2 and 22.39 million (2006: Nil) from pension fund as disclosed in note 2. wages. 22.108 6. 22.321 86.

3 Salaries.581 18.086 14. benefits and staff welfare include Rs 2. wages.25 million and Rs 6.2 Salaries.1 Salaries.1.820 8. 23.5 Communication Security expenses Other expenses [net of recovery from related parties of Rs 78.4 Donations – note 23.821 23.285 8.361 9.095 15.180 42.758 7.152 234. 23.5 million (2006: Rs 19.754 5.740 7. ADMINISTRATIVE EXPENSES Salaries.3 Travelling and entertainment Vehicle running Depreciation / Amortisation Canteen expenses Rent. wages. wages.87 million (2006: Rs 38.2007 Rupees ‘000 2006 23.627 21.933 12.2 and 23.296 3.47 million (2006: Rs 14. 23. wages.918 6.42 million). 63 .97 million)] 264.620 18.531 3.195 9.54 million) in respect of defined benefits plans and contributory provident fund respectively.500 16.536 29.3.417 9.99 million (2006: Rs 11.429 486.622 10.509 11. benefits and staff welfare – notes 23.24 million) from pension fund as disclosed in note 2.850 2. rates and taxes Training expenses Publication and subscriptions Insurance Repairs and maintenance Stationery Legal and professional charges Auditors’ remuneration – note 23.1.721 436.606 16.93 million and Rs 5.872 47.793 8. benefits and staff welfare include staff severance cost of Rs 53.568 20. benefits and staff welfare is net of recovery of Rs 23.843 4.976 3.563 2.940 4.586 20.

T.2 Workers' Welfare Fund Central Research Fund 142.627 23.256 26. Talat A. special certifications and others Taxation services Out-of-pocket expenses 2.373 13.105 154.086 Donations include a sum of Rs 653 thousand and 892 thousand (2006: Rs 200 thousand and Nil) paid to Concern for Children Trust.212 23.802 54. Karachi and Trust for Health & Medical Sciences respectively in which Mr.854 223.415 22.Chairman / Chief Executive.385 2.5 Donations 2006 2.4 Auditors' remuneration Audit fee Fee for review of half yearly financial statements.390 64 . Naseer . Mr.662 25. 5. 2007 Rupees ‘000 2006 24. OTHER OPERATING EXPENSES Workers' Profits Participation Fund – note 7.712 26. are the trustees. Estate Avenue. Salman Burney .800 398.500 4. Mr. Shahid Mustafa Qureshi and Ms. Ghulam Mustafa Aziz. S.584 221. OTHER OPERATING INCOME Income from financial assets Return on investments Income on deposit accounts Income on receivable from pension fund Income from non-financial assets f Gain on disposal of operating assets Others Scrap sales Liabilities no longer payable written back Insurance commission Service fee Others 34.129 496.I. B/63.736 3.944 218 639.137 12.676 9.542 1.948.767 314 8.034 708 9.366 53.912 141.650 2.E.724 14.140 419.Directors.200 2.471 19.805 2.2007 Rupees ‘000 23.

373 (15.906 944.631.469 19.525 170.327 8.000) 988. 9.150 370 8.543 930.2007 Rupees ‘000 2006 26.76 28.net 709 419 8.1 Basic earnings per share 1.2 Bank charges Exchange loss . 9.072 988.018 2. FINANCIAL CHARGES Amortisation of premium on investments Interest on Workers' Profits Participation Fund .000).1 Number of ordinary shares outstanding at December 31.018 27.249 (15.664.906 28. 2006 has been increased to reflect the bonus shares issued during the year.1 Relationship between tax expense and accounting profit Profit before taxation Tax at the applicable rate of 35% (2006: 35%) Tax effect of permanent differences Effect of final tax regime Reversal of prior years’ tax 2.658. 2006 and 2007 which would have any effect on the earnings per share if the option to convert is exercised.869 921.946 (14.670. 28.036 11. 966.550 2.note 7.316 27.79 1.672 Rs. EARNINGS PER SHARE Profit for the year after taxation Number of ordinary shares outstanding at the end of year (in thousands) – note 28.490 3.963 170.2 A diluted earnings per share has not been presented as the company does not have any convertible instruments in issue as at December 31.503 50. 37.000) 124.533 966.672 Rs. 65 .125 68.386 2.403 (14.000).154 10. TAXATION Current for the year prior years Deferred 877.

532 (328.150 191.757 264.823.140) 40.543 2.658.362 (34. CASH GENERATED FROM OPERATIONS Profit before taxation Add / (Less): Adjustments for non-cash charges and other items Depreciation / Amortisation Return on investments (Reversal of) / charge for impairment Gain on disposal of operating assets Provision for staff gratuity Amortisation of premium on investments 2.038 Profit before working capital changes Effect on cash flow due to working capital changes (Increase) / Decrease in current assets Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and prepayments Accrued return on term deposits Refunds due from the government Other receivables 2.768) (32.137) 37.512.169 2.816) (1.828) (126.155 709 161.631.740) (29.820.808) (13.150) (16.928) 82.052 (42.2007 Rupees ‘000 2006 29.991) 94.454) (19.766 (22.241) (23.800) (1.631 24.087.999) (428.655) (401.119) (222.966 Increase in trade and other payables 66 .509 152.676) 48.869 172.392 (19.928 3.355 (12.065) (2.138 2.829) 693.450) (7.294 (307.697) 2.203) (81.

DIRECTORS AND EXECUTIVES The aggregate amounts charged in the financial statements for remuneration.333 50.633 3.745 13.330 186.836 7. Directors and Executives were as follows: Chief Executive 2007 2006 Directors 2007 2006 Executives 2007 2006 Rupees ‘000 Managerial remuneration Bonus Retirement benefits House rent Utilities Medical expenses Others 9. including all benefits to the Chief Executive.3 million and Rs 14. Rs 5.134 2.498 244.044 1 14.315 959 92 599 29. Rs 4.6 million. Bonus includes amount payable in cash to Chief Executive.075 2.385 752 79 524 26.360 4.30.286 6. Directors and certain executives Rs 7.039 1.348 9. Directors and certain executives are also provided with free use of company maintained cars and certain items of fixtures and household furniture in accordance with the company policy.363 3.422 2.923 13.932 4 10.62 million) respectively on completion of qualifying period of service. 67 .617 Number of person (s) 1 8.192 14.356 12. based on share value of ultimate parent company. REMUNERATION OF CHIEF EXECUTIVE.026 1.692 3.370 216 788 39.5 million.037 3.742 831 116 601 30. The Chief Executive.601 43.6 million and Rs 8.331 111 79.5 thousand (2006: Rs 26 thousand).114 49.286 80 In addition to the above.573 11.784 23.707 3 111. fee to two non-executive Directors during the year amounted to Rs 52.367 2.317 31.164 1.5 million (2006: Rs 5.

materials and services c.082 4.174. RUNNING FINANCE UNDER MARK-UP ARRANGEMENTS U The facilities for running finance available from various banks amounted to Rs 560 million (2006: Rs 506.255 688. 32.200 78. The rate of mark-up ranges from one month KIBOR plus 0.456 53. 2007 are included in trade and other payables. The facilities for export refinance available from various banks amounted to Rs. trade debts and other receivables respectively. Sale of goods and services d. Post employment benefits 106. Recovery of expenses from related party e.674 38. 68 .545 1.72 billion (2006: Rs 1. Donation g.271 8. The arrangements are secured by way of pari-passu charge against hypothecation of company's stock-in-trade and book debts. 200 89 Holding company: Dividend paid Associated companies: a.6 million (2006: Rs 746.2007 Rupees ‘000 2006 31. Salaries and other employee benefits b.77 billion) of which unutilised balances at the year end amounted to Rs 960.251 35.889 80.5 million).6 million).439 Key management personnel: a.222 1. 2007 amounted to Rs 1.785 The related parties balances as at December 31.873 3. These facilities carry mark-up at 1% (2006: 1%) above the State Bank of Pakistan Export Refinance rate per annum. The facilities for opening letters of credit and guarantees as at December 31.923. Purchase of goods.5% to three month KIBOR plus 0.402 59. Royalty paid b. 10 million (2006: Rs 10 million).5% (2006: from one month KIBOR plus 0. Sale of operating asset Staff retirement funds: Expense charged for retirement benefits plans 86.5%).969 1.5% to three month KIBOR plus 0. Service fee f.693 2.944 1. TRANSACTIONS WITH RELATED PARTIES Relationship Nature of transactions 860.948.797 59.503 58.

546.071 29.115 96.021 1.464 6.646 53.053 4.835 - - - 1.021 1.546. 2006 Financial liabilities Trade and other payables December 31.951 624 445.785 68.546.021 .1.529 4.170 291 346. (iii) Interest rate risk management Interest risk arises from the possibility that changes in interest rate will affect the value of financial instruments.689 .483.745 814. The company does not expect to be materially exposed to interest rate changes.824 347.546.714 5.829 116. borrowings and management of working capital with a view to maintaining an appropriate mix between various sources of finance to minimise risk.053 116.847 109.077 450.321.222.433 5. To reduce exposure to credit risk the company applies credit limits to its customers. (iv) Concentration of credit risk Credit risk represents the accounting loss that would be recognised at the reporting date if counterparts failed to perform as contracted.068 104.456.741.1.161 408. 69 .021 .778 754.229 4.021 1.456.851 378.021 1.456.668. (ii) Financial risk management objectives and policies The company finances its operations through equity.071 378.847 109.644 4.847 104.808 60. The company does not have significant exposure to any individual customer.546.851 109.121 50. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (i) Financial assets and liabilities Interest bearing Maturity up to one year Maturity after one year Total Non-interest bearing i Maturity up to one year Rupees '000 Maturity after one year Total Total Financial Assets Loans and advances to employees Deposits Investments Trade debts Accrued return on investments and bank deposits Other receivables Cash and bank balances December 31.33.071 29.222.689 1. 2007 December 31.838.778 4.851 378.689 The effective mark-up rates for the monetary financial assets and liabilities are mentioned in respective notes to the financial statements.637 116.249 75. 2007 December 31.288.637 445.967 4.1.546. 2006 333 98.272 42.873 75.252.967 4.

(vii) Fair values of financial instruments The carrying values of all the financial instruments reported in the financial statements approximate their fair values.67 million). (vi) Liquidity risk The company manages liquidity risk by maintaining sufficient cash and the availability of financing through banking arrangements. CORRESPONDING FIGURES Prior year's figures have been reclassified for the purpose of better presentation. Payables exposed to foreign currency risks included in bills payable as at December 31.90 million (2006: Rs 458. 2008 by the Board of Directors of the company. DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue on February 22.092.04 million (2006: Rs 1. 35. The current capital structure of the company is equity based with no financing through borrowings. 2007 amounted to Rs 288. 36. Changes made during the year are as follows: Reclassification from component Other receivable Customs duty and sales tax refundable Other receivable Provision for doubtful receivables Reclassification to component Refunds due from the government Refunds due from the government Provision for doubtful receivables Rupees '000 57.0 per share) amounting to Rs 1.895 18. CAPITAL RISK MANAGEMENT The company's objectives when managing capital are to safeguard the company's ability to continue as a going concern so that it can continue to provide adequate returns for shareholders and benefits for other stakeholders and to maintain an optimal returns on capital employed.(v) Foreign exchange risk management Foreign currency risk arises mainly where receivables and payables exist due to transactions with foreign undertakings.465 38. M. 34. Salman Burney Chairman / Chief Executive Ghulam Mustafa Aziz Chief Financial Officer 70 . 37.50 per share (2006: Rs 8.30 million). DIVIDEND The Board of Directors in its meeting held on February 22. 2008 proposed a cash dividend of Rs 7.280. CAPACITY AND PRODUCTION The capacity and production of the company's plant are indeterminable as it is multi-product and involves varying processes of manufacture.

001 60.653 70.000 Shares 6.828 1.001 705.916 391.000 Shares 35.000 Shares 200.000 Shares 265.001 75.000 Shares 134.438 136.265.000 Shares 210.000 Shares 20.000 Shares 95.001 45.001 155.000 Shares 75.945.362 974.000 Shares 33.296 206.001 395.001 115.181 197.846.157 235.000 Shares 25.945.000 Shares 15.393 213.000 Shares 160.001 665.001 65.001 80.370.751 463.000 Shares 400.657 196.844 REPORT 71 .743 397.129 89.001 55.357 294.000 Shares 5.000 Shares 5.672 537.421 6.228 2.001 100.050 457.682 206.062 305.434 1 101 501 1.000 Shares 295.118 831 1.001 260.001 30.001 100 Shares 500 Shares 1.000 Shares 55.000 Shares 140.671.000 Shares 120.001 25.380 466.950.000 Shares 10.371.442.001 20.450.400 262.000 Shares 65.001 290.001 5.001 134.250 190.001 105.243 472.865 545.001 250.001 195.000 Shares 100.000 Shares 80.000 Shares 60.375.000 Shares 255.001 6.056 264 103 56 33 17 14 8 11 10 4 9 2 4 1 5 2 1 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 4.000 Shares 670.000 Shares 6.000 Shares 105.001 205.000 Shares 195.000 Shares 45.001 35.976 5.001 85.000 Shares 90.001 15.235.001 90.001 6.001 535.881 6.199 1.545 707.209 214.518 434.000 Shares 110.508 530.674 749.001 40.001 190.883 134.000 Shares 50.673 315.000 Shares 710.Form 34 Pattern of Shareholding Number of Shareholders From Shareholding To Total Shares Held 858 1.230.515 165.747 666.000 Shares 435.000 Shares 70.455.157 251.453.588 170.001 95.233.001 5.001 10.000 Shares 40.001 50.001 70.001 135.122 123.806 186.000 Shares 30.001 430.000 Shares 85.093 156.000 Shares 540.636 266.

437 48.222 6.Categories of Shareholders (a) Sr.363 0.00 0.295 4 2 11 3 1 2.17 18.093 293.587. Dinshaw Charity Trust 1 1 1 1 1 1 1 7 67.E.00 0.844 Percentage (%) 3.113 5 4.187 3.01 0.479 30.175.02 0.20 8.17 72 REPORT .657 46.234 19.03 0.02 100.78 18.875 2. Hosh vii Trustees D.03 0. 2007 Number of Shareholders 2.02 0.283 2.89 1.00 0.819 2.113 Shares Held 6.048 7.27 4.453.993.16 0.143.006 20 12 52 12 3 1 7 2.04 0.500 38.671.13 0.00 1 1 1 1 1 5 17.718 1 218 10.02 (b) Categories of Account holders and Sub-Account holders as per Central Depository Company of Pakistan as at December 31. Categories of No.588 30.631.609 13.363 170.00 0.544 0.187 134.01 0.00 0.01 0. Categories of No.01 0. Shareholders 1 2 3 4 5 6 7 8 Individuals Investment Companies Insurance Companies Joint Stock Companies Financial Institutions Modarbas Foreign Company Others (see below) Others: i Trustees Mohammad Amin WAKF Estate ii Trustees Saeeda Amin WAKF iii Trustees Kandawala Trust iv The Pakistan Memon Educational & Welfare Society v Managing Committee Karachi Zorthosti Banu Mandal vi Trustees Mrs.45 0.01 78.544 30.993.876. Khorshed H.00 0.05 0.02 0.750 44.952 22.944 90.210 35. Dinshaw & Mr.375 293.897 334.143 30.02 0.434 Others: i Mohsin Trust ii The Al-Malik Charitable Trust iii Securities Exchange Commission of Pakistan iv Punjabi Saudagar Co-operative Society v The Anjuman Wazifa Sadat-o-Momineen Pakistan Shares Held 5.N.479 Percentage (%) 3.897 12.16 Sr. Shareholders 1 2 3 4 5 6 7 8 Individuals Investment Companies Insurance Companies Joint Stock Companies Financial Institutions Associated Company Central Depository Company (b) Others (see below) Number of Shareholders 2.

329 1 1 1 1 6 3. Shareholders holding 10% or more voting interest: Setfirst Limited U.T.453.I.588 2 3 320 12.453. Insurance Companies.713 52 11.445 1 134. Rafique Dawood Executives Public sector companies and corporation: Banks. of Shares Held Holding company: Setfirst Limited U. Salman Burney Mr. N.K. Modarabas and Mutual Funds.Shareholding information Categories of Shareholders No.158.125 3 1 1 2. of Shareholders No.K. : Investment Corporation of Pakistan National Bank of Pakistan (Trustee Department) Directors.C. Non-Banking Finance Institutions. Shahid Mustafa Qureshi Dr.P.558 Distribution of Shares 9% 4% Holding company Individuals 7% Insurance companies Financial Instituions Others 1% 79% REPORT 73 . Muzaffar Iqbal Mr. Development Finance Institutions.605. 1 134. M. and I. CEO and their spouses and minor children: Mr.

Plot No. P.75700 Telephones: 2564355-65. 2570665-69. Multan. Lahore Telephones: 5111061-64 and 5111066-69 Fax: 5111065 and 5111067 Islamabad Aleem House. Kot Lakhpat. Mehmood Kot. Friends Cooperative Housing Society. Box No.T. S. Telephones: 6222061-63 and 6221730-33 Fax: 6222064 Lahore Cordeiro House. Nasirpur. Karachi-75120 Telephones: 5015040-44 Fax: 5015515 F-268. 2574120-23. Kot Lakhpat Industrial Estate. Telephones: 2261451-52 and 2650115-16 Fax: 2261457 74 REPORT .T. Block-B. Akwut Nagar. 77/80.5 km.. Road. Karachi-75700 Telephones: 2570665-69 and 2564355-65 Fax: 2572613 and 2564373 Distribution / Sales offices Karachi F/268. 27.E. Industrial Area. Sector I – 9. Ferozepur Road.I.T. West Wharf. 2572200 and 2564366 Fax: 2570119 Sukkur Plot No. Telephones: 5811931-35 Fax: 5820821 Islam-ud-din House. Bosan Road. 5630144 and 5632177 Fax: 5630755 Multan Lahore 18. 2316071-73 and 2202701-82 Fax: 2311120 and 2314898 94.E. Sukkur Telephones: 5630668. Near Abid Flour Mills. Islamabad Telephones: 4435701-03 4435695 and 4435589 Fax: 4433706 and 4433708 Peshawar D’Souza House. Dockyard Road. Peshawar. Lahore.I. S. G. Karachi.. Plot No. Deh Landhi.O. Karachi-74000 Telephones: 2315478-82. 409. Near Labour Square. Near Labour Square. 244.Contact Details Factories Karachi 35. Airport Road.