Sanofi aventis Pakistan : Transmission of Financial Statements for the Half Year Ended June 30, 2023

sanofi-aventis Pakistan Limited

CONDENSED INTERIM

FINANCIAL STATEMENTS

FOR THE QUARTER ENDED JUNE 30, 2023 (UN-AUDITED)

Contents

1. Company Information
2. Directors' Report to the Shareholders
3. Auditors' Report to the Members on Review of Condensed Interim Financial Statements
4. Condensed Interim Statement of Financial Position
5. Condensed Interim Statement of Profit or Loss
6. Condensed Interim Statement of Other Comprehensive Income
7. Condensed Interim Statement of Cash Flows
8. Condensed Interim Statement of Changes in Equity
9. Notes to the Condensed Interim Financial Statements

Company Information

Board of Directors

Syed Babar Ali	Chairman
Sajjad Iftikhar	Chief Executive Officer
Syed Hyder Ali
Arshad Ali Gohar
Syed Anis Ahmad Shah
Imtiaz Ahmed Husain Laliwala
Muhammad Salman Burney
Saadia Naveed

Chief Financial Officer	URL
Yasser Pirmuhammad	www.sanofi.com.pk
Company Secretary
Mir Zulfiqar Hussain Khan
Auditors	Bankers
A.F. Fergusons & Co.	Citibank, N.A.
Chartered Accountants	Deutsche Bank AG
	MCB Bank Limited
Legal Advisors	Allied Bank Limited
Khalid Anwer & Co.	Habib Bank Limited
Saadat Yar Khan & Co.	National Bank of Pakistan
Ghani Law Associates	Standard Chartered Bank (Pakistan) Limited
THS & Co.
Registrars & Share Transfer Office	Registered Office
FAMCO Associates (Private) Limited	Plot 23, Sector 22, Korangi Industrial Area,
8-F, Near Hotel Faran, Nursery,	Karachi - 74900
Block-6, P.E.C.H.S., Shahrah-e-Faisal, Karachi
Tel: [phone]	Postal Address
URL: www.famco.com.pk	P.O. Box No. 4962, Karachi - 74000
Contact
Tel: [phone]
Email: [e-mail]

Directors' Report to the Shareholders

The Directors are pleased to present the un-audited condensed interim financial statements of your Company, for the six-month period ended June 30, 2023. These financial statements have been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - "Interim Financial Reporting" and the provisions of and the directives issued under the Companies Act, 2017. In case requirements differ, the provisions of directives issued under the Companies Act, 2017 have been followed.

Total net sales for the six-month period ended June 30, 2023, stand at Rs. 10,048 million, which grew by 6% compared to the same period last year. This growth was mainly driven by Clexane®, Enterogermina® and Lantus® which grew by 38%, 36% and 16% respectively.

The gross margin has declined from 28% to 25% as compared to the same period last year primarily on account of high imported raw material costs and unprecedented inflation. Distribution and marketing expenses decreased to 12% of net sales from 14% in last year's comparative period mainly on account of curtailment of travelling and promotional activities. Administrative expenses remained stable at 4% of net sales; as they were in the same period last year.

Other expenses increased significantly to 12% of net sales from 3.26% in last year's comparative period primarily on account of adverse exchange rate movement resulting from an exchange loss of PKR 1,070 million.

Furthermore, the challenging socio-political and macroeconomic factors including surging inflation, increasing policy rates and reduction in economic activity have a cascading impact on your Company's performance during the period under review. The cumulative impact of aforementioned factors has transpired into a loss after tax for the six-month period ended June 30, 2023, amounting to PKR 522 million as compared to a profit after tax of Rs. 189 million during corresponding period of the year 2022.

During the year, an Investor Consortium led by Packages Limited (comprising Packages Limited, IGI Investments (Private) Limited and affiliates of Arshad Ali Gohar Group) acquired entire 52.87% shares held by Sanofi Foreign Participations B.V in the Company on April 28, 2023 in accordance with the terms of the Share Purchase Agreement executed between the parties on April 29, 2022. Earlier, Packages Limited also acquired a 6.07% shareholding in the Company as a result of mandatory tender offer on August 23, 2022, in accordance with the applicable Takeover Laws.

The management of the Company is committed to navigate through the challenging economic conditions through enhanced focus on portfolio optimization, cost control, better working capital management and operations management.

The Board of Directors of your Company, in its meeting held on August 08, 2023, has considered, and approved to change the name of the Company from "Sanofi - Aventis Pakistan Limited" to "Hoechst Pakistan Limited", subject to applicable corporate and regulatory approvals and completion of necessary legal formalities under applicable laws.

The Registrar of Companies has issued name availability confirmation in respect of "Hoechst Pakistan Limited". Please note that this proposed change of name will not have any impact on the principal line of business of the Company and is being carried out in accordance with the terms of Share Purchase Agreement executed between Sanofi Foreign Participations B.V and the Investor Consortium.

The proposed name encapsulates the rich legacy of the Company since making its footprint in Pakistan. The Company was incorporated in 1967, started manufacturing pharmaceuticals and specialty chemicals in 1972 and went public in 1977.

The Board of Directors would like to acknowledge the efforts and commitment of the employees.

By order of the Board

Syed Babar Ali	Sajjad Iftikhar
Chairman	Chief Executive Officer
Karachi: August 25, 2023