MIRA INFORM REPORT

Report Date :

25.01.2008

IDENTIFICATION DETAILS

Name :	NOVARTIS PHARMA (PAKISTAN) LIMITED

Registered Office :	15, West Wharf Road, Karachi - 74000

Country :	Pakistan

Financials (as on) :	31.12.2005

Date of Incorporation :	1963

Com. Reg. No.:	0001679

Legal Form :	Public Unlisted Company

Line of Business :	Importers, Manufacturers and Distributors of Pharmaceutical Products

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory

Payment Behaviour :	No Complaints

Litigation :	Clear

Business Name

NOVARTIS PHARMA (PAKISTAN) LIMITED

Full Address

Registered Address & Factory

15, West Wharf Road, Karachi - 74000, Pakistan.

Tel	92 (21) 2313386 - 90, 2202071 - 80
Fax	92 (21) 2311009, 2310027
Email	Amin.ibrahim@pharma.novartis.com

Short Description Of Business

a.	Nature of Business	Importers, Manufacturers and distributors of Pharmaceutical Products.
b.	Year Established	1963
c.	Registration #	0001679 (Old Registration # was 1380/19630507)

Branches

In Islamabad, Lahore, Peshawar & Multan

Auditors

M/s A.F. Ferguson & Co.

(Chartered Accountants)

State Life Building 1-C, Off I.I. Chundrigar Road, Karachi-74000, Pakistan.

Legal Status

Novartis Pharma (Pakistan) Limited is a public unlisted company incorporated in Pakistan.

Authorized Capital	Rs. 100,000,000/- divided into 10,000,000 shares of 10/- each
Issued & Paid up Capital	Rs. 24,805,440/- divided into 2,480,544 shares of Rs. 10/- each

Details of Directors

Names

Nationality

Address

Designation

Dr. Farid Khan

Mr. Jean-Claude Dubos

Mr. Merajuddin

Mr. Stefan Ziegler

Mr. Badruddin Vellani

Mr. Christopher Snook

Mr. Gorazd Hladnik

Mr. Mohammad Tariq Moin

Pakistani

French

Pakistani

Swiss

Pakistani

British

Slovenian

Pakistani

10/A-1, 9^th Central Street, D.H.A., Karachi

3 Rue de la Fontaine, F-68300, Saint Louis, France

77/2, Street No.22, Khayaban-e-Badar, D.H.A., Karachi

C/O Novartis International AG, Basle, Switzerland

14, Khayaban-e-Janbaz, Phase V, DHA, Karachi

152, Prince Charles Crescent No. 13-11, Tower B, Tanglin View, Singapore-159013

Stihova 12, 1000 Ljubljana, Slovenia

A-6, Shangrila Appartments, Karachi

Chief Executive

Director

Categories of Shareholders

Parent Company

Novartis AG, a company organized and existing under the laws of Switzerland, is the Company’s parent company.

Business Activities

The Subject Company is engaged in the import, manufacture, sale and distribution of pharmaceutical products.

Number of Employees

688

Actual Capacity & Production

The capacity and production of the company’s plant is indeterminable as it is multi-product and involves varying processes of manufacture.

Annual Sales Volume

Years

(Rupees in ‘000)

2004

2005

3,311,218

3,740,954

Customers

All over in Pakistan.

Bankers

MCB Bank Limited, Pakistan.

ABN AMRO Bank, Pakistan.

Faysal Bank Limited, Pakistan.

Habib Metropolitan Bank Limited, Pakistan.

Habib Bank Limited, Pakistan.

Saudi Pak Commercial Bank Limited, Pakistan.

Soneri Bank Limited, Pakistan.

Business Review

Sales during the period increased by 13% compared with last year of 8.7%. In spite of no price adjustment by Government since last four years, the Company performed better in the year under review through its innovative marketing campaigns and new product launches, which resulted in sales volume growth in all the business areas. The Company has earned a profit before taxation of Rs. 371.1 million that is 91% higher than last year. Increase in operating profit is attributable to stability in foreign exchange rates, cost controls, productivity improvements and general improvement in the Country’s economy.

Future Prospects

Continuous efforts are being made, in conjunction with the other members of the Pharmaceutical Industry, to convince the Government to de-regulate the Pharma Industry and to allow a price adjustment, which is long overdue. Company is also in the process of securing registration of new products.

Foreign Exchange Rates

Currency	Unit	Pakistani Rupee
US Dollar	1	Rs. 62.70
UK Pound	1	Rs. 122.50
Euro	1	Rs. 91.45

Comments

Subject Company is well known and directors are resourceful and experienced businessmen. Trade relations are reported as fair. Payments to creditors etc are reported as normal. The Company can be considered for normal business dealings at usual trade terms and condit

NOVARTIS PHARMA (PAKISTAN) LIMITED
BALANCE SHEET AS AT DECEMBER 31, 2005



	Note	2005	2004		Note	2005		2004
		(Rupees '000)				(Rupees '000)

SHARE CAPITAL AND RESERVES				TANGIBLE FIXED ASSETS

Authorised capital				Operating assets		10	148,449		175,935
10,000,000 (2004 : 10,000,000)				Capital work-in-progress		11	33,102		8,880
ordinary shares of Rs 10 each		100,000	100,000
						181,551		184,815
Issued, subscribed and paid-up capital	4	24,805	24,805
Reserves	5	45,770	45,770	DEFERRED TAXATION		12	48,002		-
Accumulated loss		(253,803)	(528,251)
				LONG-TERM LOANS AND ADVANCES		13	8,227		8,433
		(183,228)	(457,676)
				LONG-TERM DEPOSITS			4,804		4,904
LONG-TERM LOANS	6	1,048,250	1,209,880
				CURRENT ASSETS

				Stores and spares		14	13,250		11,792
CURRENT LIABILITIES				Stocks	15	976,657		842,849
				Trade debts	16	55,896		46,703
Short-term finances utilised under				Loans and advances		17	13,176		13,233
mark-up arrangements	7	86,612	-	Trade deposits and short-term
Creditors, accrued and other liabilities	8	303,740	553,072	prepayments	18	15,784		15,133
Taxation		113100	28671	Other receivables		19	26,476		31,474
		503,452	581,743	Cash and bank balances		20	24,651		174,611

CONTINGENCIES & COMMITMENTS	8					1,125,890		1,135,795

		1,368,474	1,333,947			1,368,474		1,333,947

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

NOVARTIS PHARMA (PAKISTAN) LIMITED
PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2005



	Note	2005	2004
		(Rupees '000)


Net sales	21	3,740,954	3,311,218


- Cost of goods sold	22	2,433,474	2,218,801
- Administration and marketing expenses	23	907,912	852,417
		3,341,386	3,071,218

Operating result		399,568	240,000


Financial charges	25	11,715	7,133
Other charges	26	30,463	68,025
		42,178	75,158
		357,390	164,842

Other income	27	13,725	28,654

Profit before taxation		371,115	193,496

Taxation	28	96,667	112,030

Profit after taxation		274,448	81,466


Earnings per share	29	110.64	32.84

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

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions