17

Automobile Industry
In 2006-07, the local automotive industry for the fifth year running made an impressive
contribution towards the economic growth of the country. The market for locally assembled
passenger cars and light commercial vehicles grew by 9% to 204,212 units compared to
187,436 units sold in 2005-06. Continued import of used cars and rise in interest rates
restricted the growth rate compared to earlier years.

Positive impact of production increase by auto industry *

● Investment in the auto sector has risen to Rs 98 billion

● Direct employment is now 192,000 people
18 ● Indigenization of auto parts has reached high levels, as the local engineering industry
develops with more and more technology transfer
● Auto industry contributed Rs 63 billion to the government exchequer
● Saved the country Rs 22 billion in foreign exchange
* Daily Times, February 2, 2007
ECC (Economic Co-ordination Committee), Govt. Of Pakistan
Used Vehicles
Increase in local production to meet market demand and restriction on import of used vehicles that are more
than 5 years old led to a decline in used vehicle imports to 28,493 units compared to 46,278 units in 2005-06.
These imports are still 14% of the domestic passenger car and LCV production and continue to impede growth
of the local auto industry.

Vehicle Imports In the 2007-08 budget, the government had

announced a restriction on the age of imported used
vehicles, disallowing imports of vehicles older than 3
years. This is a welcome step. However, this restriction
has been waived till August 31, 2007 and vehicles
older than 3 years continue to find their way into the
Pakistani market.

In addition, the depreciation rate of 2% per month

amounting to 50% in two years, creates a further
anomaly as locally produced cars are allowed a
depreciation of only 15% per year. Compared to India,
Thailand and other countries in the region, our policies
for used car imports through Personal Baggage Rules
are quite liberal besides being prone to misuse.

The Engineering Development Board, in consultation with the industry, has finalized a long term policy
framework for the auto industry. This policy set out tariffs for CBUs, CKDs, and components looking forward six
years. This is a very welcome development and we commend the GOP for putting in place an environment that
is forward looking and provides the much needed framework in which the industry can confidently invest for the
future.

Company Review
The Company is pleased to report that 2006-07 was another record year. Significant milestones were achieved.
Your company crossed production of 250,000 units since its inception. We achieved over 50,000 units of sales
during the year. Our dealership network expanded from 25 to 29 dealers. In Product Quality and Safety, we
improved upon previous benchmarks.

Sales
Sales of locally manufactured vehicles and CBU variants for the year ended June 30, 2007 were 50,557 units,
compared to 42,406 units last year, up by 19%.

Toyota Corolla out-performed its competition and established a market segment leadership position in Pakistan
with 59% market share in the year 2006-07.

CKD Passenger Car Small-High Segment

19
 Daihatsu Cuore increased its share to 26% in 2006-07 from 18% last year in the economy car segment that
continues to show impressive growth.

CKD Passenger Car Economy Segment

The New Generation Camry introduced in the beginning of 2006-07 fiscal year showed impressive
performance. It increased its share from 16% last year, to 54% by June 2007, in its segment.

New CBU Passenger Car - Luxury Segment

In the new SUV category, we increased our market share from 62% to 88% this year, with increased focus on
fleet customers who are secure in the reliable performance, durability and after sales service and product
support capability of Indus.

New SUV (Land Cruiser/Prado)

20
Our Hiace and Hilux increased market share from an already impressive 63% last year to a market dominant
position of 84% this year.

New CBU 1 Ton CV (Van and Pickup) Segment

Preparations are underway to commence manufacture of the New Generation Hilux in Pakistan in late 2007.
This new generation model, which is featured in our Annual Report, has performed exceptionally well
throughout the world and is both powerful and stylish. It is a quantum upgrade over the previous model.

Sales Revenue, Profit

Sales revenues for the year 2006-07 increased by 11% to a record Rs 39 billion, compared to Rs 35 billion
achieved last year. Achievement of higher sales volumes, efficient operations and favorable foreign exchange
rates contributed to the overall earnings and enabled the Company to absorb cost push inflationary pressures
emanating from high fuel prices in order to provide maximum value and relief to our customers. The Company
posted a record profit before tax of Rs 4.2 billion, up 3.8% compared to Rs 4.1 billion achieved last year.

Dividend
The Company's Return on Equity for the year was 34.1% (2005-06 of 42.3%) while Earnings per Share rose
3.7% to Rs 34.9 and Shareholders Equity was up 28.5% to Rs 8 billion. A final payment of Rs 8 per share has
been proposed to shareholders, making the total payment for the year of Rs 13 per share, a 8.3% increase
compared to the Dividend payment in 2006. An amount of Rs 1,723.9 million is recommended for appropriation
to the General Reserves which will be utilized for continuing growth and capacity expansion.

21
 Visits by Toyota Senior Management
Mr Akio Toyoda, EVP, Toyota Motor Corporation

It was a matter of great honor and pride for us that Mr Akio Toyoda, the grandson of "Toyota's founder" and the
Executive Vice President, Toyota Motor Corporation, Japan visited Indus Motor Company on November 10,
2006. He was given a rousing welcome by our senior management followed by a tour of the plant and facilities,
where he was briefed on the manufacturing processes. The performance and milestones achieved by IMC were
highlighted during a presentation.

Mr Akio Toyoda, EVP, Toyota Motor Corporation visits IMC

Toyoda San praised IMC's performance and

congratulated the Company on increasing its
production capacity nearly four times in the last four
years to meet the tremendous demand of its vehicles.
He also commented on the growth of the automobile
market, "I am optimistic about Pakistan's Automobile
Industry which has developed substantially in recent
years and I anticipate that it will continue to grow in the
future."

Mr Akio Toyoda also inaugurated the modern, state of

the art Toyota Gymnasium at Habib Public School, Mr Akio Toyoda being briefed in Obeya Room
Karachi. At the ceremony he stated, "I am delighted to
visit Pakistan again and feel honored to launch this sports facility. Toyota Motor Corporation is proud to be
associated with the House of
Habib in not only making a
contribution to Pakistan's
automobile sector but also
being part of community
service as a good corporate
citizen". Mr Akio Toyoda is a
former national field hockey
22 player of Japan and has
played international hockey
matches in Pakistan in his
youth!

Mr Akio Toyoda inaugurating the Toyota Gymnasium

 Toyota Gymnasium Inauguration Ceremony

Mr Junzo Shimizu, President, Toyota Tsusho Corporation

We were also honored to welcome Mr Junzo Shimizu, President, Toyota Tsusho Corporation to Indus Motor
Company on May 3, 2007. Following a detailed plant visit and presentation, Shimizu San praised Indus's record
breaking sales and presented the Vehicle Sales Record Award to Indus and congratulated the Indus Team in

Mr Junzo Shimizu, President, Toyota Tsusho Corporation, presenting the Vehicle Sales Record Award
to Mr Parvez Ghias, CEO, Indus Motor Company
23
increasing production capacity to over 50,000 units per year. Expressing optimism on Pakistan's auto market,
Shimizu San mentioned that the Company will continue to expand capacity by enhancing investment in the
current plant as well as consider setting up an additional plant. He noted that the automobile industry has a key
role to play in increasing employment and transfer of technology and is the major contributor in the growth of
the engineering sector in Pakistan.
 Mr Junzo Shimizu, President, Toyota Tsusho Corporation during plant visit

Toyota Awards for Indus Motor Company

During the year, Toyota Motor Corporation conferred recogni-
tion awards to Indus Motor for our outstanding achievements.
These awards were presented by Mr Katsuaki Watanabe,
President, Toyota Motor Corporation to Chairman IMC.

Customer Service Prize

for Achievement 2006

24

Toyota Marketing Award 2006 (Overall) Toyota Marketing Award for Excellence
2006 (Vehicles)
Marketing
This year marked another milestone for Indus
Motor Company with record sales of 50,557 units in
a fiscal year.

Group photograph at the

50,000 units sales ceremony
The 50,000th invoice
was generated by
IMC dealers and
Chairman pressing a
button. This invoice was signed by one of the pioneers
of our Company, Mr Ayaz A Siddiqui who was retiring
the same day.

Corolla continues to dominate as the market leader in its segment, and overall, it is the second largest volume
seller in the country amongst all passenger cars. Corolla's popular 1.3 XLi, the powerful, fuel efficient 2.0
Diesel, and the high performance ALTIS have made Corolla the highest selling brand in the 1300-2000 cc car
segment.

Corolla Diesel, the only diesel sedan in Pakistan, is an extremely popular car liked by rural as well as urban
customers. Responding to customer feedback, a new variant, the Corolla 2.0D SE was launched in early 2007.
This variant is a mid-level entry in the Diesel Corolla lineup and comes with a wooden trim, CD Player, rear
headrests, power windows and power locks as standard options. Concurrent with this introduction, we also
increased our production, so that Corolla Diesel delivery times reduce further. Compared to the inconvenience
of frequent CNG refueling, Corolla Diesel is preferred by customers who are looking for both luxury with
economy and fueling convenience.

With its powerful, yet efficient 1.8 VVTI engine, Toyota ALTIS has established itself as the car of choice for
customers who desire top features and specs with solid drive and superior performance.

Cuore, giving the promise of quality, durability and reliability to its customers, has grown from strength to
strength, capturing a sizable share of the economy car segment. It is recognized as the small car with an
excellent drive, comfort, performance and resale. To add greater luxury to this popular car, known for its
comfortable ride and acceleration, an MP3 audio player has been offered in its Automatic variant, providing
more pleasure in driving. Cuore is the only automatic car amongst small cars.

Our Toyota Camry has scripted its own success story. Launched in mid-2006, this luxury car has overtaken
people's imagination and has become the dominant brand in its segment.

IMC participated in the AUTO ASIA

2007 held at the Expo Centre by a
display of our product range including a
concept car, CS&S (Compact Sports &
Specialty) car which was especially
brought to Pakistan for showcasing the 25
technological advancement and
commitment of Toyota to Pakistan's car
enthusiasts
 Parts
Another milestone achieved during the year 2006-07 was our Spare Parts business, where sales for the first
time crossed the One-Billion Rupee mark.

IMC is the only automobile company in Pakistan to achieve this milestone. We achieved 27% growth in the after
sales parts business compared to 2005-06, through aggressive marketing and increasing customer awareness
to use genuine parts for reliability and performance.

26 Annual After Sales Kaizen

Marathon was held jointly by
IMC’s Service and Parts
departments
Dealerships

Mr Yasuhiko Yokoi, Managing Officer, Toyota Motor Corporation and Mr Ali S. Habib, Chairman
Indus Motor Company present the overall Nationwide Best Dealership Performance Award to
Toyota Faisalabad Motors during the 16th Annual Dealer Conference

Kenya Trip - Our Dealer principals visited Kenya on their annual trip, mixing business with pleasure! 27
 Turkey Trip - Dealership and IMC staff on another trip to Istanbul which they enjoyed very much

Dealership Network Expansion

With increasing motorization, our auto market is expanding and Indus wants to continue to play a lead role.
Apart from introducing new products and auto solutions, we are enhancing the spatial presence of our
dealership network. During the year, four new 3S dealerships were added to our network in the cities of Sialkot,
Hyderabad, Rahim Yar Khan and Gujranwala. Besides these, all our existing dealerships are undergoing major
renovations and upgrade to offer customers and their families a friendly environment to conduct sales and
service business. We want our customers to have the best possible auto buying and ownership experience.

28

New Dealerships Signing Ceremony - (seated from left to right) Mr Zahid Jamil, CEO, Toyota Rahim
Yar Khan Motors, Mr Mohammad Ashraf, Chairman, Toyota Sialkot City Motors, and Mr Mohammad
Shoaib, CEO, Toyota Hyderabad Motors with IMC’s top management and Marketing Team
New Dealerships’ inauguration

Toyota Gujranwala Motors (Gujranwala)

Mr Abdullah Yousuf, Chairman CBR inaugurating Toyota Gujranwala Motors

Toyota Royal Motors (Rahim Yar Khan)

Mr Ali S. Habib, Chairman IMC inaugurating Toyota Royal Motors

Toyota Hyderabad Motors (Hyderabad)

Mr Yutaka Arae, Vice Chairman IMC inaugurating Toyota Hyderabad Motors

Toyota Sialkot City Motors (Sialkot)

29

Mr Ali S. Habib, Chairman IMC inaugurating Toyota Sialkot City Motors

 Service
IMC has embarked on the development of an Express Maintenance Program with the assistance of Toyota
Motor Corporation, for both increased service capacity at our dealerships as well as enhanced convenience for
our customers. This program, based on Toyota Production System provides for prompt maintenance of vehicles
and has strong customer appeal for speedy delivery of service vehicles with attention to quality detail.

There is a strong emphasis on After Sales Service at Indus and its dealerships. Our Service and Parts
Departments jointly organized the After Sales Kaizen Marathon on 20-21 February, 2007. This event was an
opportunity for dealers to share the best Kaizen practices implemented during the year at their dealerships
leading to improved performance.

30

After Sales Kaizen Award being presented to Toyota Islamabad Motors

To enhance the skill level of Service staff, our Service Department conducted a National Skill Contest for
Service Advisors, General Technicians and Paint Technicians of our dealership network. This contest was held
at the dealership level and regional level.

The award winners and IMC team at the National Skill Contest

Every year, our Service Department conducts T-TEP (Toyota Technical Education Program) Career Days at
the Govt. College of Technology, Lahore and St. Patrick's Technical Institute, Karachi. T-TEP, which is sponsored
by Indus Motor Company with the assistance of Toyota Motor Corporation, is a comprehensive three years
automobile diploma training program where students receive practical advanced training in the latest
automobile technology that enables them to find career opportunities upon graduation.

A memento being presented to the Chief

Guest, Capt. M Khurram Agha, Additional T-TEP students being trained on various
Secretary, Government of Punjab automotive components

Jishuken is a self learning process

based on the Japanese concept of
'Genchi Genbutsu', and is conducted
regularly by our Service Department. It
engages the service staff of our
different dealerships to physically visit
the model dealership as one team to 31
verify and authenticate the Kaizen
activity.
 Customer Relations
During the year, the CR team focused on putting in place customer-friendly policies
and procedures at Indus and its 3S dealerships to achieve quick turnaround on
customer inquiries and complaints to maximize Customer Satisfaction.

Our vision in CR, as per Toyota's CR Activity Ideals, is to create corporate

trust based on integrity and fair handling of Inquiries and Complaints by:

● Opening a larger window for customers

● Handling Inquiries and Complaints swiftly and surely
● Making the "Voice of the Customer" the basis for corporate renewal, and
● Improving our corporate image and educating customers to support Sales and
Service activities

In living up to this vision, we hope to achieve our long-term goal of becoming # 1 in Customer Satisfaction in
Pakistan by implementing CR strategies and policies that will motivate CR staff to perform at increasingly higher
standards.

Our Complaint Handling Procedure provides clear guidelines on how to achieve swift resolution of customer
complaints. Co-ordination with key departments at the plant and dealerships helps improve teamwork and instill
a customer focus that is quickly cascading throughout the Company and our Dealer network.

Dealerships’ CR Managers and Indus CR Team at the Quarterly CR Workshop held at Swat

32
Toyota. Since then, VOC has been implemented successfully at Indus and all 29 dealerships. It is used to
record, classify and analyse inquiries and complaints. Customer feedback is regularly studied by senior
management at Indus and our dealerships for continuous improvement.

The CR Performance Criteria and individual dealer Action Plans identify minimum operating standards for
CR. Relevant, transparent and measurable, this performance management tool allows us to evaluate progress,
identify performance gaps and provide feedback to management regularly.

This year, for the first time ever, the top-performing Dealership CR Managers, who achieved their CR
performance target of 80%, earned themselves an opportunity to visit Toyota Lanka, Colombo to undertake
Genchi Genbutsu and see first-hand the CR practices, processes and systems adopted by a leading
distributor and dealership in the region.

To reinforce our commitment to developing our people, CR regularly undertakes Training in Customer
Handling Skills and conducts Quarterly Workshops to keep a continuous dialogue with our dealership CR
teams. By doing so, we wish to bring about positive change in their knowledge, skills and behaviours and
improve the customer experience in their every interaction with us.

To promote visible demonstration of Customer First policies among our customers, CR staff at our Dealerships
conduct Free First Service and Regular Maintenance follow-ups and solicit Post-Service feedback to not
only highlight CR in a positive way, but also to build long-term relationships with customers while promoting
customer retention and loyalty.

At Indus, we introduce CR to our customers each time a car leaves our plant. A CR introduction letter with
contact details of our CR team is placed in every vehicle to encourage customers to call or write to us with any
complaints, inquiries or suggestions they may have.

Another way we engage customers is through the quarterly Customer Satisfaction Index and Product
Quality Surveys that is conducted through an independent research agency. More than 2500 customers are
randomly selected to provide feedback on the quality of our products as well as the quality of the Sales and 33
Service that they experience at our dealerships.

With the above initiatives already in place, CR has progressed in leaps and bounds in the last one year. This
is clearly evident from the numerous acknowledgements and appreciation letters that we receive from satisfied
customers.
 Operations
While your Company has continuously increased production to meet the growing demand for the products, our
capacity now is at an all time high of 200 cars/day or 53,000 cars/year. We have undertaken several measures
to further enhance our engineering capability, production quality, standardization of work processes, safety, skill
development of team members, etc.

For the first time in the history of IMC, M-Type Jig has been installed for Hilux production which is used in the
weld shop for assembly of the main body. This advanced jig has the flexibility of handling the main body of all
future IMV models.

As in other Toyota companies, KI-J activity has been initiated at IMC to further enhance the quality of product
while maintaining a safe working environment. KI-J stands for Kaizen Initiatives through Jiritsuka. Jiritsuka is a
Japanese concept that means self-reliance. KI-J involves hazards identification, visualization and fixing
problems on a priority basis. The basic concept of KI-J is to visualize and share weaknesses globally, by setting
common targets voluntarily, considering capability and built-in-quality and achieving these targets through team
work and cross functional support.

In order to achieve the desired targets results, training and awareness sessions were conducted to enhance
the capabilities of our members in the areas of Quality, Safety and Standardized Work, as these areas ensure
Built-in-Quality. A total of 550 man hours training was provided to staff. Furthermore, to enhance Safety at plant-
site, several display and message boards were installed at prominent locations to create greater awareness

34

Quality Audit by Toyota experts

through visualization. The activity has also enabled team members to identify hazard points and take
appropriate countermeasures to create a safer working environment in the plant.

A group photograph of Asia Pacific Skill Contest at APGPC. IMC secured the Gold Medal in Paint
(Team Leader) category and the Bronze Medal in Inspection (Team Member) category.

The quality of our products is

directly related to the skill level of
our Team Members and
supervisory staff. Therefore, there
are on-going and continuous multi
skill development programs. The
skill level of our workforce is quite
high. We took part for the first time
and excelled in the Asia Pacific
Skill Contest at APGPC (Asia
Pacific Global Production
Centre), Thailand.

During the year, the Company

started the environment friendly
Abdul Riaz (Team Leader of Paint shop) receives Gold Medal and
Co-generation Power Plant. This
Award from Mr R Sasaki, President TMAP-EM. Abdul Riaz will
facility will help in reduction of
also honor IMC by representing Asia in the Global Skill Contest to
carbon dioxide emissions through
be held in TMC, Japan later this year.
the use of natural gas to operate
engines and turbines.

35

Co-generation Power Plant

 As part of our on-going plant expansion, several
other projects are also being implemented.
These include a new Jig Shop for making jigs for
future models, extensions to our CKD
Warehouse and CBU yard, a new Skill Training
Centre to develop world-class, quality-conscious
team members as well as expansion and
upgrading of our Canteen Block to cater to the
increasing members of our workforce.

Continuous improvement is a process that is

New Jig Shop
pursued, both at Indus and at its business
partners. We work very closely with our vendors
and hold Vendor Workshops regionally in Karachi and Lahore. These workshops discuss in detail the
Production Plan and Quality and Delivery performance against predetermined targets. This open and useful
interaction with our vendors has played a major role in enhancing the performance of our Product Development
Department.

The Annual Vendor

Convention, with the
theme "Go See the
World", was held in
December, 2006 at
Karachi, with the purpose of
highlighting the annual
achievements and activities
carried out during the year
in parts localization and skill
improvement. Automobile
vendors from all over the
country, representatives of
Toyota and Daihatsu from
Japan, and the Indus team
were present.

In order to enhance our

learning from global
Mr Shinichi Yasui, Chief Engineer, Toyota Motor Corporation, Japan, Chief
practices, our Product
Guest at the Annual Vendor Convention receiving a memento from
Development department
Chairman, IMC
organized study visits to
vendors in Thailand and
Indonesia during 2006 and 2007. The purpose of these visits was to support our local vendors in improving
their production, quality systems, tool/checking fixtures designing and development. The visits also helped in
learning the best practices of foreign parts manufacturers by understanding the implementation of 5S, Genchi
Genbutsu, and Visual Management Systems.

36

IMC vendors in Indonesia during study tour

Human Resource Development
Indus continued its thrust for fast paced employee and organization development programs consistent with its
present business needs and future growth plans. Meaningful upgrades were implemented in all key areas of
Human Resource Management and Organization Development to keep the processes current and aligned to
the best in the industry. Several initiatives materialized with full participation and support of line management.

Human Resource Department

During 2006-07, training at 112,000 man-hours was up 13% compared to the same period last year. On a
cumulative basis, Indus has completed around one million man-hours training since inception.

The trainings targeted technical skills as well as soft side competencies. On the infrastructure side, in addition
to the existing facilities, construction of an impressive Technical Training Building was undertaken. It is designed
to boost core and multi-skills trainings and refreshers for the production staff. The project is planned for
completion in September 2007.

The Apprenticeship Training Program continued to be pursued aggressively. Around 400 apprentices were
inducted during the year and given quality class room and on-the-job training.

IMC participated in the TMC Global Employee

Morale survey which covered all regional affiliates. 37
The survey results were encouraging in terms of
employee satisfaction, commitment and pride in the
brand. Interactive sessions with diverse employee
groups were held after the survey to work towards
continuous improvements. The Indus top team
participated in these sessions.
 Indus has excellent labor-management relations. The Collective Labor Agreement due for negotiations in
April 2007 was successfully concluded. Negotiations were held in a very cordial and professional environment.
The new agreement covers twenty four months period up to March 30, 2009.

The Company instituted its Hajj Policy for the team

Zulfiqar Ahmed, General Secretary of Indus People members. Two lucky team members, Salman
Workers Union and Tariq Quddusi Sr. GM Technical Ansari from PPMC and Noman-ul-Haq from
sign the Collective Labor Agreement Assembly Shop were selected through balloting.

The traditional IMC Family Day was organized with its usual enthusiasm and excitement at the PAF
Museum lawns. Over 3600 employees and their family members attended this event. The occasion was
also used to recognize employees with the Best Attendance Award.

38
Corporate Social Responsibility
Our slogan, "Concern Beyond Cars", reflects what we really are. We are not just a Company that makes cars.
We go beyond. While doing our utmost to satisfy customers, as a good corporate citizen, we also serve in many
areas of Pakistani society. The Company sets aside 1% of profit before tax for social projects and contributions.

People from several villages get relief goods and medical treatment

We are amongst the first to respond when natural calamities affect our beloved country. In the recent floods
that hit Balochistan and Sindh after cyclone "Yemyin", we immediately responded by not only donating dry
food rations for airlift to Balochistan, but as after the earthquake of Oct 8, 2005, we also conducted relief
operations working with an NGO, HOPE, in interior Sindh and set up a medical camp treating over 1000
patients and providing food and temporary shelter to 100 families.

Your Company provides 50 Scholarships each year

to deserving, under privileged students and assists
over two dozen schools and educational institutions.
This year, construction of the TCF - Indus Motor
Company Campus II School Complex at Deh
Mehrani near Hyderabad was completed. In the first
phase, the project has started a Primary School that is
currently providing education to over 360 students
from rural villages in the vicinity. The project is planned
to expand to Secondary Level in the near future.

In November 2006, a state-of-the-art gymnasium-

cum-auditorium was inaugurated at the Habib Public
School. This facility, which was constructed with the
assistance of IMC and Toyota Motor Corporation, is School at Deh Mehrani, near Hyderabad 39
used by Habib Public School for its own events as well
as for inter-school tournaments and extra curricular
Activities.

At Indus, we run a very successful Apprenticeship Program that has done over 400,000 man-hours of training
since inception. We provide internships in different departments of the Company to engineering, business,
accounts and IT students of various universities from within and outside Pakistan.
 In continuation of our commitment
towards spreading technology, we
have started an All Pakistan
Engineering Students Design
Competition in which engineering
students from different universities
will work on real engineering
problems and design technical
solutions, particularly in the area of
robotics.

As a leading Company in the auto

sector, we have taken several Engineering students participate in the Design Competition at IMC
initiatives to try to improve Road
Safety. Our Road Traffic Injury Research Project with JPMC and NED for evaluating the nature, location and
magnitude of traffic injuries in Karachi has generated invaluable data that is very useful for traffic police, road
designers, hospitals, road users, etc.

The Road Traffic Injury Research Project Team collecting data from road accident victims and
entering into the database

In order to promote road safety amongst school children, your Company, in partnership with WWF and Family
Educational Services Foundation (FESF) conducted an extensive Toyota Road Safety Campaign targeting
around 25,000 children in nearly 100 schools.

40

Toyota Road Safety Walk in which about 1500 school children, their parents, NGOs, the Indus
Team and other safety conscious citizens participated
During the UN Global Road Safety Week (April 23~29, 2007) as a member of United Nations Global
Compact, we also undertook a number of other activities. These included the 1st National Road Safety
Conference which was organized with the help of Sindh Education Foundation on April 24, 2007. With
participation of about 500 people, the conference aimed at initiating a dialogue with different stakeholders on
road safety issues and developing
recommendations through five working
sessions on Corporate Sector,
Engineering Sector, Health Sector,
Education Sector and Road Traffic
System.

To encourage auto journalism in

Pakistan and to develop
professionalism and capacity building
in the field of Auto Journalism, we held
Pakistan's First National Auto
Journalists Workshop on May 29,
2007. The workshop was conducted by
Chief Guest, Mr Salahuddin Haider, Advisor Information, an international expert on Auto
Government of Sindh addressing the final session of the Journalism. We announced the launch
National Auto Journalists Workshop of the National Auto Journalists Annual
Award at the event.

IMC is a major promoter of sports and during the year sponsored a number of sporting events across Pakistan.

The Prime Minister presenting the key of a Toyota Corolla to the winner of Hole-in-One at the
Pakistan Open Golf Championship

41

Mr Jahangir Khan Tareen, Minister of Industries, Production and Special Initiatives with the winning team
at Toyota Polo Cup, Lahore
 During the year, altogether, we welcomed over a thousand visitors including senior management from TMC,
TTC and DMC, shareholders, customers, delegations from government organizations, educational institutions,
engineering companies, defense organizations, shareholders, financial analysts, press and media, regulatory
departments, banks, associations and trade bodies, companies from the private sector, etc.

Mr Choudhry Amir Hussain (Speaker National Assembly) does a plant tour

Dr Ashfaq Hassan Khan (Economic Advisor to Prime Minister) observes our manufacturing processes

42

In recognition of the efforts to protect the

environment, IMC received the Environment
Excellence Award for the fourth consecutive
year. Mr M. Mohiyuddin, Sr GM, QA & SHE
Mr Arif Nizami, Editor of The Nation during receiving the award.
the plant visit
 Mr Parvez Ghias, CEO, Indus Motor Company receiving the PCP Award for the 3rd Largest
Corporate Donor in Pakistan, from Mr Shaukat Aziz, Prime Minister of Pakistan

In appreciation of its CSR initiatives, Indus Motor received the Pakistan Centre for Philanthropy (PCP)
Award for the third largest donor in Pakistan. The Award was presented by the Prime Minister.

Mr Saeed Jung, Director LAC receiving the

CSR Award from Mr Mian Muhammad Corporate Excellence Award in Engineering
Soomro, Chairman Senate & Allied Sector from MAP

Indus Motor received the First Helpline Trust CSR Award for its "commitment to customers as well as the
community within which it operates". The Management Association of Pakistan presented us a Corporate 43
Excellence Award in the Engineering and Allied Sector.

In consonance with our Company's vision of being the most respected and successful enterprise, we reaffirm
our commitment to demonstrate responsible corporate conduct in all our activities and operations, and to do
our best to meet societal expectations.
 Future Outlook
The success of any sector is largely dependent upon the economy as well as the policies that govern the sector.
Our country has witnessed economic growth in recent years and we are pleased that this year the Auto Industry
Development Plan has been finalized. This is a positive step which will enhance the confidence of local auto
manufacturers and auto parts assemblers and will encourage further investment, employment and
sustainability of the domestic auto industry.

We are grateful to the government for its efforts to reduce the inflow of used cars into the country by restricting
imports of vehicles older than three years. However, this decision, announced in June 2007 has been
postponed for implementation till September 2007.

There are challenges ahead for us from the perspective of rising interest rates also. For the auto industry and,
indeed for the country to grow, we pray that the political and business environment continues to remain stable.
On our part, we continue to increase capacity to meet the requirements of our customers and will make full
efforts in being competitive in both cost and quality, in delivering maximum value to our customers, and in
working very closely with the industry, our business partners and other stakeholders.

As a member of the UN Global Compact and a Concern Beyond Cars, we will strive to be the most respected
Corporate Citizen and will continue to enhance our social initiatives. Our CSR projects, particularly in the areas
of Road Safety, Education and Health, are making a significant impact.

I thank our Board of Directors and the management team for steering the Company towards another successful
year.

We are grateful to our customers for buying and driving our vehicles. We continue to do our best in providing
them the best designed, most durable and high quality products as well as efficient after sales service.

I would also like to thank our Indus Team, our shareholders, our dealers and vendors and business partners.

We bow to Allah and pray for His blessings and guidance.

Ali S. Habib
Chairman

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