EXERCISE 2

Identify a company which you admire and provide following information and opinion about the
company :

1 .History of the organisation.

Aventis Pharma Company

Sanofi-aventis has a rich history of innovation dating back over 100 years.

Sanofi-aventis was formed in 2004 when Sanofi-Synthélabo (created from 1999 merger of Sanofi
and Synthélabo) acquired Aventis (the result of the 1999 merger of Hoechst and Rhône-Poulenc).
Sanofi was founded in 1973 by the French oil company Elf Aquitaine, when it acquired the
pharmaceutical group Labaz. Sanofi expanded through a combination of international acquisitions
and internal product development epitomized by the launch of its first major product, Ticlid. Sanofi
entered the American market in 1994 with the acquisition of Sterling Winthrop. Innovation
remained centre stage and in 1986 the prestigious Prix Galien was awarded for Sanofi’s work on
the anti-coagulant heparin and in 1987 for the anti-platelet drug Ticlid.
Synthélabo was formed in 1970 with the merger of two French pharmaceutical laboratories, the
Laboratoires Dausse (founded in 1834) and the Laboratoires Robert & Carrière (founded in 1899).
Aventis was created in 1999, via the merger of the French company Rhône Poulenc and Hoechst
Marion Roussel. Hoechst’s history mirrors the expansion of the chemicals industry. Hoechst
strengthened its existing drug-development engagement with the 1974 acquisition of Roussel-
Uclaf, followed by its merger with the American pharmaceutical company Marion Merrell in 1995.
As a result, Aventis had global reach and a strong foundation in innovative life science
technologies. The company was one of the first to invest in the emerging “new wave” technologies
of genomics, immunology and gene therapy.
Rhône-Poulenc was created in 1928 when it was active in chemicals, textiles and
pharmaceuticals. In the 1990s the company acquired the American pharmaceutical company
Rorer (in two steps, 1990 and 1997), the vaccine laboratory Pasteur Mérieux Connaught (1994)
and the British pharmaceuticals company Fisons (1995) to become an important global player in
pharmaceuticals.
Since 2004, sanofi-aventis has developed as a diversified global healthcare company using
innovation to meet the needs of patients throughout the world.
Today, the core strengths of sanofi-aventis comprise a worldwide presence, market
leadership in vaccines with sanofi pasteur, major biological products and a strong and
long-established presence in emerging markets. Company business activities also include
consumer healthcare products, generics and animal health products.

March 19, 2010

2 . Management of the company and brief about the key person of the company

Board of Directors
(as on February 24, 2010)

Dr. Vijay Malya Registered Office

Aventis House
Chairman 54/A Sir Mathurdas
VasnjiRoad
Andheri (East), Mumbai
4000093

Dr. Shailesh Ayyangar Manufacturing

Sites
3501-15,6310,B-14,GISC
Estate
Managing Director Ankleshwar
393002

Mr. O. Charmeil GIDC, Plot No. L-12

Phase 3,Verna Industrial
Estate
Verna, Goa
403722

Mr. J.M.Gandhi Registors & Transfer

Agents
Link Intime, India Private
Limited,
C-13,Pannnalal Silk Mills
Compou
L.B.S. Marg, Bhandup (West)
Mumbai
400078

Mr. S.R.Gupte
Auditors
M/s S.R. Batliboi & Co.

Mr. A.K.R. Nedungadi Solicitors

M/s Crawford Bayley & Co.

Mr. M. Dargentolle Bankers

Citi Bank
Deutsche Bank
Hongkong & Sanghai Banikng Corp Ltd.
State Bank of INDIA
HDFC Bank Limited

Company Secretary
Mr. K. Subramani
3. Product or the Services the company offers

Cardiovascular Disease

Cardace® (ramipril)

Clexane® (enoxaparin sodium)

Lasix® (frusemide)

Diabetes

Amaryl® (glimepiride)

Cetapin® XR (metformin)

Daonil® (glibenclamide)

Daonil® M (glibenclamide, metformin)

Insuman® (NPH Human Insulin)

Lantus® (insulin glargine)

Trental® 400 (pentoxifylline)

Oncology

Granocyte® (lenograstim, rHUG-CSF)

Taxotere® (docetaxel)

Respiratory System

Allegra® (fexofenadine hydrochloride)

 Allegra® suspension (fexofenadine hydrochloride)

Avil® (pheniramine maleate)

Cosavil® (paracetamol, phenylephrine, chlorpheniramine maleate)

Levohext® (levocetirizine)

Central Nervous System

Frisium® (clobazam)

Dermatology

Proctosedyl® (framycetin sulphate, gramicidin, dexamethasone)

Sofradex® (framycetin sulphate, dexamethasone)

Sofradex® F (framycetin sulphate, dexamethasone, clotrimazole)

Soframycin® (framycetin sulphate)

Analgesics

Baralgan M™ (analgin)

Combiflam® (ibuprofen, paracetamol)

Combiflam® Cream (Methyl Salicylate, Menthol & Camphor)

Combihext® (aceclofenac, paracetamol)

Hextradol® (tramadol)

Novalgin® (analgin)

Anti-infectives
 Cefrom® (cefpirome sulphate)

Claforan® O (cefixime)

Hostacycline® (tetracycline hydrochloride)

Quinhext® (gemifloxacin)

Rulide® AZ (azithromycin)

Tacehext® (ceftriaxone, tazobactam)

Targocid® (teicoplanin)

Tarivid® (ofloxacin)

Tavanic® (levofloxacin)

Bone and Joint

Actonel® (risedronate sodium)

Arava® (leflunomide)

Gastrointestinal Disorders

Baralgan® D (drotaverine)

Baralgan® DM (drotaverine, mefenamic acid)

Nausehext® (ondansetron)

Prazohext® (rabeprazole)

Prazohext® D (rabeprazole, domperidone)

4 . How the product was identified

All of these products were identified as different types of medicines. For the different diseases.
These are the all branches of the different types of medicines offered by Aventis cardiovascular
disease, diabetes, oncology, respiratory system, central nervous system, dermatology, analgesics,
anti-infectives, bone and Joint, gastrointestinal disorders

5 . Existing competitors ( companies offering similar products)

Ranbaxy

The Indian pharmaceutical industry is the second-fastest growing industry sector in the country. It
has shown a revenue growth of 27.32 per cent (as per the latest data available) to touch Rs
25,196.48 crore (Rs 251.96 billion) in 2006-07.
Dr. Reddy’s Laboratories
Dr Reddy's Labs, with a 2007 turnover of Rs 4,162.25 crore (Rs 41.622 billion), is India's second
largest drug firm by sales.
Cipla
Pharma major Cipla is India's third largest pharmaceutical firm. Its 2007 revenues stood at Rs
3,763.72 crore (Rs 37.637 billion).
Sun Pharma Industries
Sun Pharma is the nation's 4th largest pharma company at a 2007 revenue Rs 2,463.59 crore (Rs
24.635 billion).
Lupin Labs
Lupin Labs is India’s 5th largest drugs firm. Its 2007 revenue was at Rs 2,215.52 crore (Rs 22.155
billion).
Aurobindo Pharma
Aurobindo is India’s 6th largest pharma firm by sales. Its 2007 revenues stood at Rs 2,080.19
crore (Rs 20.801 billion).
GlaxoSmithKline Pharma
GSK is India’s 7th largest drug company with a turnover of Rs 1,773.41 crore (Rs 17.734 billion)
for 2007
Cadila Healthcare
Cadila’s 2007 revenue was Rs 1,613.00 crore (Rs 16.13 billion), which makes it India’s 8th largest
pharma firm.
Ipca Laboratories
At a revenue of Rs 980.44 crore (Rs 9.804 billion), Ipca is India’s 10th largest pharma firm by sales
6. Financial Status of the company

Profit loss account

Dec ' 09 Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05

Income
Operating income 1,027.27 1,031.34 890.03 891.74 815.74

Expenses
Material consumed 484.90 490.05 424.22 430.77 380.90
Manufacturing expenses 49.83 45.74 40.22 39.60 36.29
Personnel expenses 143.95 119.20 103.72 78.51 73.48
Selling expenses 96.19 93.51 44.83 50.99 50.19
Adminstrative expenses 51.64 60.65 83.51 58.83 47.07
Expenses capitalised - - - - -
Cost of sales 826.52 809.15 696.50 658.70 587.92
Operating profit 200.75 222.19 193.54 233.04 227.83
Other recurring income 47.25 52.25 40.98 34.87 21.90
Adjusted PBDIT 247.99 274.44 234.52 267.91 249.73
Financial expenses 0.07 0.34 0.19 0.18 0.05
Depreciation 17.34 18.21 18.45 17.85 17.18
Other write offs - - - - -
Adjusted PBT 230.58 255.88 215.87 249.88 232.50
Tax charges 82.59 93.44 77.37 80.41 79.91
Adjusted PAT 147.99 162.44 138.51 169.47 152.59
Non recurring items 1.93 0.87 1.98 -0.18 3.48
Other non cash adjustments 7.50 2.89 3.94 - -10.99
Reported net profit 157.41 166.20 144.42 169.29 145.08
Earnigs before 767.97 670.29 562.20 518.81 406.81
appropriation
Equity dividend 46.06 36.85 36.85 73.70 36.85
Preference dividend - - - - -
Dividend tax 7.83 6.26 6.26 10.34 5.44
Retained earnings 714.08 627.17 519.09 434.77 364.52
7.Asset and Liabilities of the company

ASSETS (€ million) 12/31/0 12/31/0

9 8
Property, plant and equipment 7,830 6,961
Intangible assets 43,480 43,423
(including goodwill)
Non-current financial assets, investments in associates, and deferred 4,865 6,200
taxes
Non-current assets 56,175 56,584
Inventories, accounts receivable and other current assets 12,840 11,177
Cash and cash equivalents 4,692 4,226
Current assets 17,532 15,403
Assets held for sale or held for exchange 6,342 -
Total assets 80,049 71,987

LIABILITIES & EQUITY (€ million) 12/31/09 12/31/08

Equity attributable to equity-holders of the company 48,188 44,866
Minority interests 258 205
Total equity 48,446 45,071
Long-term debt 5,961 4,173
Provisions and other non-current liabilities 8,311 7,730
Deferred tax liabilities 4,933 5,668
Non-current liabilities 19,205 17,571
Accounts payable and other current liabilities 8,099 7,512
Short-term debt 2,866 1,833
Current liabilities 10,965 9,345
Liabilities related to assets held for sale or held for exchange 1,433 -
Total liabilities & equity 80,049 71,987

8. Annual sales and net profit of the company

RS. IN MILLION

2009 2008

NET SALES 9,744.0

9,832.7

Net Profit before tax 2,414,595 2,595,458

9.Last three years financial performance of the company

Balance sheet
Dec ' 09 Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05

Sources of funds
Owner's fund
Equity share capital 23.03 23.03 23.03 23.03 23.03
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 895.14 791.61 668.52 569.04 483.78
Loan funds
Secured loans - - - - -
Unsecured loans - - - - -
Total 918.17 814.64 691.55 592.07 506.81

Uses of funds
Fixed assets
Gross block 334.57 320.92 304.30 284.11 279.44
Less : revaluation reserve 13.63 14.46 15.30 16.14 16.97
Less : accumulated depreciation 189.68 178.09 168.64 151.69 138.95
Net block 131.26 128.36 120.37 116.29 123.53
Capital work-in-progress 27.14 6.25 9.32 13.20 1.34
Investments 5.19 5.19 5.31 5.31 5.31

Net current assets

Current assets, loans & advances 1,043.35 923.96 779.26 721.33 563.31
Less : current liabilities & 288.78 249.12 222.70 264.05 186.68
provisions
Total net current assets 754.57 674.84 556.56 457.28 376.63
Miscellaneous expenses not written - - - - -
Total 918.17 814.64 691.55 592.07 506.81

10. How does the company market the product

The company has a perfect marketing policy they says that “no small countries, no small
products”. Presently in over 100 countries with one of the most diversified drug portfolios in the
world, their strategy takes into account the different needs of populations and the economic
resources they have available. This diversity-oriented strategy allows them to best meet different
populations’ needs. It is also, of course, their choice to ensure the long-term growth of them and
activities and the Group’s development.
11. What are the unique features of its marketing practices

Aventis executives provide innovation and customise solution to the targeted groups it is
companies unique marketing strategy.

They take guidance from medical authorities and the reputed doctors and research about the exact
need and launch the according product it is also unique

In the field sales professionals promote their products to as wide an audience as possible and
work to maximize sales, in strict compliance with their rules of ethics.

12. What is the strategy of the business organization

As a leading player in the pharmaceutical industry this has core strengths in the field of
healthcare: a global presence, market leadership in vaccines, major biological products (such as
Lovenox® and Lantus®) and a strong and long-established presence in emerging markets, as well
as a track record of adapting cost structures and a solid financial situation.
However, although these are solid foundations, they, like most of their competitors, were faced
with the foreseen competition from generics for some of their major products. Their environment is
also subject to cost containment pressures from healthcare authorities, and increased regulatory
barriers. Given the significant challenges facing the pharmaceutical industry, they need to develop
new platforms for growth. Our response to these challenges is an ambitious one: to deliver
sustainable growth, we need to transform ourselves into a diversified global healthcare leader.

This is the strategy of Aventis.